Digital Realty Trust (DLR) Bank of America’s 2024 Media, Communications and Entertainment Conference summary

Financial performance and growth outlook

• Net leverage reduced from 7x to 5.3x, improving financial flexibility and capital access.

• AFFO per share growth targeted at 0–1% for 2024, with a baseline of 5% growth expected in 2025, and potential for acceleration beyond that.

• Positive pricing trends and renewal spreads across major markets have driven stabilized portfolio growth for two years.

• Development pipeline yields are increasing, supported by strong supply-demand fundamentals.

• Management prioritizes bottom-line growth when considering funding options for development.

Capital structure and funding strategy

• Balance sheet improvements allow access to a full range of capital sources, including debt, equity, and cash flow.

• Equity issuance is now demand-driven, mainly to fund high-yield development opportunities.

• Long-term net debt to EBITDA target remains at 5.5x, balancing rating agency expectations and business model stability.

• $1B+ in maturities for 2025/2026 expected to be refinanced, with rates in the low 4% to mid-5% range for 10-year debt.

Joint ventures and strategic partnerships

• $7B Blackstone JV covers three markets and 500MW capacity, with 20% expected online in 2025; full deployment will take several years.

• JVs are used to manage capital needs and accelerate development amid large hyperscale demand.

• JV strategy includes both financial partners (e.g., Blackstone) and operationally strategic partners (e.g., Ascenty, Teraco, Mitsubishi).

• Management fees and promote opportunities from JVs add incremental returns, typically a few hundred basis points.

• JV activity likely to moderate in 2025 compared to the past 18 months.