Oppenheimer reports lighter than expected revenues for Digital Reality Trust

Oppenheimer has published a report on Digital Reality Trust DLR. According to the report, DLR reported lighter than expected revenues and continued deceleration in organic growth. However, they also said that demand trends appear to be healthy, with pipelines continuing to fill and renewals generally coming in at healthy rate increases (21+%). “The weaker revenue was driven in part by redevelopment work on properties vacated after lease expiration (subsequently re-leased at healthy increases). Supply of competing space remains constrained, given capital costs/expertise required to develop such space. We believe industry fundamentals should remain favorable but remain on the sidelines on premium valuation (16x our '11E FFO/shr). Our 2011 estimates are under review.” Digital Reality Trust closed yesterday at $57.52.