DLR Reopens Renovated Facility - Analyst Blog

By Zacks | October 01, 2012 AAA

Digital Realty Trust Inc. (DLR), a niche real estate investment trust (REIT), has recently unveiled its renovated data center facility at 210 N. Tucker in downtown St. Louis. The $30 million renovation program was part of a larger overhaul of the 18-storeyed building. On completion, the facility will have about 500,000 square feet of digital storage space and will carry about 90% of the Internet traffic in the region.   

As part of the current refurbishment, Digital Realty installed new backup generators, improved wiring and electricity fittings, and installed a new freight elevator in the building. Located in the heart of downtown St. Louis, the data center facility offers design flexibility that customers need to support their unique data center requirements.

The facility is powered by the underground power grid of Ameren UE, a subsidiary of Ameren Corporation (AEE), with multiple feeds and back-up on-site generation. The data center is further serviced by multiple fiber providers that offer the best array of connectivity options in St. Louis.  

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

Digital Realty primarily focuses on investment in institutional quality data center facilities in high barriers-to-entry markets with significant potential to generate attractive risk-adjusted return on investments (ROI).

The company provides flexible and cost effective data center facilities to a wide range of customers, including domestic and international companies across multiple industry verticals. Its portfolio includes 109 properties throughout Europe, North America, Asia, and Australia spanning approximately 21.1 million square feet (including 2.2 million square feet of redevelopment space).

We presently have a Neutral recommendation for Digital Realty, which currently has a Zacks #3 Rank that translates into a short-term Hold rating.

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