Thank you for sharing!

Your article was successfully shared with the contacts you provided.

(To read more on the debt and equity markets, click here.)

SAN FRANCISCO-Digital Realty Trust on Tuesday sold seven million shares of its 4.375% series C cumulative convertible preferred stock at $25 apiece. Including a 1.05-million-share over-allotment option held by underwriter Credit Suisse Securities (USA) LLC that is expected to be exercised, gross proceeds from the offering are expected to be just over $200 million.

After deducting discounts, commissions and estimated expenses, Digital Realty estimates its proceeds from this offering will range from $169.1 million to $194.6 million depending on the extent to which the over-allotment option is exercised. The company intends to utilize the net proceeds from the offering to pay down borrowings under its unsecured credit facility, to fund acquisitions, to fund redevelopment activities and for general corporate purposes.

The preferred stock will pay dividends quarterly at a rate of 4.375% per year. The preferred shares will be convertible, at the holder’s option, at an initial conversion rate of 0.5164 common shares per $25 liquidation preference per preferred share (or an initial conversion price of $48.41 per common share), subject to adjustment upon the occurrence of certain events. The initial conversion price represents a 20% conversion premium over the $40.34 closing sale price of the company’s common shares when the sale was announced on April 3.

One day earlier, Digital Realty Trust reported to the SEC that it sold an office building in Texas and another in Massachusetts as part of its ongoing strategy to focus on its core data center product. The locally based technology REIT sold the two properties for $78.5 million, resulting in an $18.1-million gain.

“The sale…allows us to redeploy capital to support our acquisition and redevelopment programs,” said Michael Foust, CEO of Digital Realty Trust. Digital Realty’s total portfolio includes 11.8 million sf in 62 properties. During the first quarter of the year, Digital Realty acquired 787,000 sf for $160.7 million.

Most recently, March 30, it announced the $62.5-million acquisition of a 432,000-sf complex in Ashburn, VA that was previously known as the Loudoun Exchange. The property, which is 40% occupied, consists of three single-story buildings located at 43881, 43831 and 43791 Devin Shafron Dr. The seller was an affiliate of the Archon Group.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 3 free articles* across the ALM subscription network every 30 days
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?


Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.