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SAN FRANCISCO-Digital Realty Trust’s is reporting this week strong first quarter leasing activity. The locally based REIT controls about 12 million sf of corporate and Internet gateway datacenters located mostly in the US.Digital Realty says leases commenced on 334,800 sf of its space in the first three months of the year and that leases were signed for another 260,200 sf. In the same 2007 period, leases commenced for 375,000 sf while new lease signings totaled just 87,000 sf. In fourth quarter of 2007 the reverse occurred, as leases commenced for just 150,000 sf while new lease signings totaled 429,000 sf.

The annualized rates for leases that commenced in the first quarter of 2008 were $119.25 per sf for its turn-key datacenter space, $52.42 per sf for “powered base building” space (datacenter space in shell condition) and $19.31 for non-technical space. In the fourth quarter, the respective comparable numbers were $126.70 per sf, $42.90 and $22.30. The respective comparable numbers for the first quarter of 2007 were not immediately available.

The annualized rates for leases that were signed in the first quarter of 2008 were $100.05 per sf for turn-key data center space, $52.42 for its “powered base building” space and $25.93 for its on-technical space. The respective comparable fourth quarter rates were $125 per sf, $40.65 per sf and $20.90 per sf. The respective comparable numbers for the first quarter of 2007 were not immediately available.

A company source tells GlobeSt.com that the drop in the rental rate for signed datacenter leases was caused by one expansion deal with an existing tenant. Without that deal, the source say the annualized rate for new leases in the first quarter of 2008 would have been closer to $120 per sf.

“It really depends on where we are signing leases that quarter,” the source says. “There is a lot of fluctuation on a market-by-market basis.”

That is why the company chief executive Michael Foust says he is focusing redevelopment efforts on its top 10 markets. Those markets include New York Metro, Northern Virginia, Chicago, Dallas, Phoenix, San Francisco and Silicon Valley in the US, and London, Dublin and Paris in Europe.

Digital Realty will release its financial results and occupancy for the first quarter 2008 before the market opens on Thursday, May 8.

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