Digital Realty Gets Awarded - Analyst Blog

Digital Realty Trust Inc. (DLR), a niche real estate investment trust (REIT), was recently awarded the National Association of Industrial and Office Properties (NAIOP) 2010 Award of Excellence from the Northern Virginia Chapter for its new datacenter facility in Ashburn, Virginia.

The award was recognition of the unique technological design features, superior infrastructure and best-in-class asset management services employed in the facility. The property spanning 138,000 square feet of space also achieved a 100% lease-up prior to its delivery – a novel feat in itself. 

Digital Realty operates datacenters and digital storage facilities, which are primarily used by telecommunication companies to maintain their internet presence or augment their data networks. Datacenters usually incur high costs for building and maintenance, and as such supply is relatively inelastic.

Digital Realty provides flexible and cost effective datacenter facilities to a wide range of customers, including domestic and international companies across multiple industry verticals. Its portfolio includes 95 properties throughout Europe and North America spanning approximately 16.4 million square feet of space (including 1.9 million square feet of redevelopment space).

With demand for digital storage facilities increasing in recent years, Digital Realty has benefited greatly by negotiating favorable lease terms and maintaining strong occupancy rates. The long-term lease agreements have also insulated the company from short-term volatility and unfavorable market swings experienced during the recession. This has enabled Digital Realty to continue to pay out solid dividends to its shareholders.

The rating on Digital Realty is currently ‘Neutral' and the stock presently has a Zacks #3 Rank, which translates into a short-term ‘Hold' recommendation and indicates that the stock is expected to perform in line with the overall U.S. equity market for the next 1−3 months. Meanwhile, MPG Office Trust Inc. (MPG), one of the peers of Digital Realty, has an ‘Outperform' recommendation and has a Zacks #1 Rank translating into a short-term ‘Strong Buy' rating.

 
DIGITAL RLTY TR (DLR): Free Stock Analysis Report
 
MPG OFFICE TRST (MPG): Free Stock Analysis Report
 
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