The preferred shares will be convertible, at the holder'soption, at an initial conversion rate of 0.5955 common shares per$25.00 liquidation preference per preferred share (or an initialconversion price of $41.98 per common share), subject to adjustmentupon the occurrence of certain events. The initial conversion pricerepresents a 17.5% conversion premium over the closing sale priceof the company's common shares on Jan. 31, 2008 on the New YorkStock Exchange, which was $35.73 per share.

Assuming underwriters Citi and Credit Suisse Securities (USA)LLC need the additional 1.8 million shares that will be offered upto cover over-allotments, the estimated net proceeds will be $333.6million. The proceeds will be used to repay borrowings under itscredit facility. It will then use the freed-up credit to forupcoming acquisitions, developments and redevelopment. The companysays it is "actively pursuing multiple opportunities for potentialacquisitions, with due diligence and negotiations at differentstages of advancement."

At Dec. 31, Digital Realty's revolving credit facility had atotal outstanding balance of $299.7 million, excluding committedletters of credit, consisting of $111.0 million bearing interest atLibor plus 1.2% per annum, which equaled a rate of 6.12%; €57.7million bearing interest at Euribor plus 1.2% per annum, whichequaled a rate of 5.86%; and £51.5 million bearing interest at GBPLibor plus 1.2% per annum, which equaled a rate of 7.55%.