8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): September 11, 2006

DIGITAL REALTY TRUST, INC.

(Exact name of registrant as specified in its charter)

Maryland	001-32336	26-0081711
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification Number)

560 Mission Street, Suite 2900 San Francisco, California	94105
(Address of principal executive offices)	(Zip Code)

(415) 738-6500

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 7.01 Regulation FD Disclosure.

The information furnished in this Item 7.01 of this Current Report on Form 8-K, including the exhibit attached hereto, shall not be deemed “filed” for any purpose, including for the purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that Section. The information in this Item 7.01 of this Current Report on Form 8-K, including the exhibit attached hereto, shall not be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act regardless of any general incorporation language in such filing.

On September 11-12, 2006, management will make a presentation at a series of investor meetings. A copy of the materials to be presented at the investor meetings is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit Number	Description
99.1	Materials to be presented at a series of investor meetings on September 11-12, 2006.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Digital Realty Trust, Inc.
By:	/s/ Joshua A. Mills
	Joshua A. Mills
	General Counsel and Assistant Secretary

Date: September 11, 2006

EXHIBITS

Exhibit Number	Description
99.1	Materials to be presented at a series of investor meetings on September 11-12, 2006.

EX-99.1

Investor Meetings

September 2006

Exhibit 99.1

1

Forward Looking Statements

The information included in this presentation contains forward-looking statements. Such statements are based

on management’s beliefs and assumptions made based on information currently available to

management.

Such forward looking statements include statements and projections related to proposed terms of 

the exchangeable senior notes, growth in the e-commerce market, the digital communication and distribution

market, and the data storage market, the market effects of regulatory requirements, the disaster recovery

market, the replacement cost of our assets, redevelopment costs in our buildings, and time periods to

stabilization of our development space, the effect new leases will have on our rental revenues and results of

operations, lease expiration rates, the effect of leasing and acquisition on our FFO, and annualized GAAP rent.

Such statements are subject to risks, uncertainties and assumptions and are not guarantees of future

performance and may be affected by known and unknown risks, trends, uncertainties and factors that are

beyond our control that may cause actual results to vary materially. Some of the risks and uncertainties include,

among others, the following: adverse economic or real estate developments in our markets or the technology

industry; general and local economic conditions; defaults on or non-renewal of leases by tenants; difficulty

acquiring or operating properties in foreign jurisdictions, changes in foreign laws and regulations, including those

related to taxation and real estate ownership and operation, increased interest rates and operating costs; inability

to acquire

new

properties

(including

those

we

are

in

the

process

of

acquiring);

our

failure

to

obtain

necessary

outside financing; increased construction costs; decreased rental rates or increased vacancy rates; difficulties in

identifying properties to acquire and completing acquisitions; our failure to successfully operate acquired

properties and

operations;

our

failure

to

maintain

our

status

as

a

REIT;

possible

adverse

changes

to

tax

law;

environmental uncertainties and risks related to natural disasters; environmental or contamination issues at our

buildings; financial market fluctuations; changes in foreign currency exchange rates; and changes in real estate

and zoning

laws

and

increases

in

real

property

tax

rates. The

risks

described

above

are

not

exhaustive,

and

additional factors could adversely affect our business and financial performance, including those discussed in

our annual report on Form 10-K for the year ended December 31, 2005 and other filings with the Securities and

Exchange Commission. We expressly disclaim any responsibility to

update forward-looking statements, whether

as a result of new information, future events or otherwise.

2

Digital Realty Trust overview

•

Tenants consist of leading global

companies diversified across various

industries

•

Own 51 properties comprising 10.3

million rentable sq ft which includes

1.2 million sq ft of additional space

held for redevelopment

(1)

•

Portfolio occupancy of 94.7% and

“same store”

occupancy of 96.4%

(2)

•

Assets strategically located in top

technology markets in the US,

Canada and Europe

DLR is a leading institutional owner focused on

mission critical technology properties in the US and Europe

350 East Cermak

Road

Chicago, IL

(1) Includes property acquisitions announced in our Earnings Release dated August 3, 2006.

(2) Occupancy is as of June 30, 2006 net of redevelopment space.

3

DLR investment highlights

•

Specialized focus in dynamic and

growing industries

•

High quality portfolio that is difficult

to replicate

•

Experienced industry consolidator

with proven ability to acquire assets

below replacement cost

•

Acquisition and leasing pace creates

potential for strong FFO growth

•

Uniquely positioned as both a value

and growth REIT

2323 Bryan Street

Dallas, TX

4

DLR properties feature advanced technical systems

Power backup/redundancy

Power management/conversion

Precision air cooling/handling

Systems and security controls

Between $500 and $1,000 psf typically invested in DLR buildings,

creating a barrier to

exit for tenants and discouraging speculative new supply

5

DLR is unique in its focus on technology properties

Data Centers (37%

(1)

)

Internet Gateways (42%

(1)

)

Financial

Health/Insurance

Communications

Internet Enterprise

•

Storage/server intensive buildings

•

Provide a secure 24 x 7

environment for the storage and

processing of mission-critical

electronic information

•

Used to house the primary IT

operations of leading companies,

transaction processing and

disaster recovery purposes

•

Internet and telecom network

intensive buildings

•

Serve as the hub for Internet and

data communications within and

between major metropolitan areas

•

Market-dominant position in their

respective MSAs

•

Frequently serve as a super-

regional connection point with

multiple anchor tenants

(1)  Calculated based on gross annualized rents using in place leases as of June 30, 2006.

IT Services

6

Strong trends drive sustained demand for DLR space

Other Growth Drivers

Increased federal

regulatory and legislative

requirements for business

continuity and records

retention

Disaster Recovery

initiatives prioritized as a

result of Hurricanes Katrina

and Rita

HIPAA patient records

security and retention

regulations

Significant growth in online

advertising; up 30% in

2005 to $12.5 billion

(4)

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

E-Commerce

(1)

Digital

Communication

& Distribution

(2)

Data

Storage

(3)

14%

73%

60%

Primary Drivers –

Estimated Annual Growth Rates

(1) Forrester Research estimate of US online sales growth from 2005 -2010

(2) IDC estimate of US VOIP subscriber growth from 2005 to 2009

(3) Wall Street Journal estimate of corporate data storage capacity growth

(4) PriceWaterhouseCoopers

7

0%

10%

20%

30%

40%

50%

60%

70%

Q1'02

Q2'02

Q3'02

Q4'02

Q1'03

Q2'03

Q3'03

Q4'03

Q1'04

Q2'04

Q3'04

Q4'04

Q1'05

Q2'05

Q3'05

Q4'05

Q1'06

Q2'06

$0

$100

$200

$300

$400

$500

$600

Source:

Estimated based on reported cabinet (available and billing), square feet and revenue data from Equinix and Savvis as per press releases, SEC filings, research

reports and internal DLR estimates as of June 30, 2006.  Assumes

35 sq ft per cabinet throughout period if square feet not reported. 

Equinix and Savvis, two leading managed service providers that “resell”

space

leased directly from DLR, are experiencing strong growth in revenues and utilization

Bill rates and utilization rates are escalating

Revenue PSF

Utilization Rate

Revenue PSF (Utilized)

Revenue PSF (Total)

Utilization Rate

29%

$518 psf

$540psf

$148 psf

$329 psf

64%

8

•

Former General Manager of Critical Facilities for EDS

•

18+ years of technology infrastructure experience

Ted Martin

Director of Operations

•

Former Director of Sales, Nortel Networks

•

13+ years of technology business experience

Christopher Crosby

SVP Sales & Tech Svcs

•

Former Head of GI Partners real estate acquisitions

•

17+ years of real estate experience

Scott Peterson

SVP Acquisitions

•

Former President & CFO of TriNet

•

24+ years of finance and real estate experience

A. William Stein

CFO/CIO

•

Co-founder of Digital Realty Trust

•

25+ years of real estate and technology experience

Michael Foust

CEO

•

Co-founder of Digital Realty Trust

•

23+ years of real estate and technology experience

Richard Magnuson

Executive Chairman

Senior management leads a complete REIT team

•

Relevant

experience

•

Proven track

record

•

Public

markets

background

DLR is organized and managed to deliver growth

Management is supported by a team of over 70

professionals in the US and Europe

focused on executing DLR’s core strategy

9

36.8%

20.9%

24.7%

77.9%

12.1%

29.4%

0%

20%

40%

60%

80%

100%

DLR

RMS

Peer Group Composite

FY 2005 Total Return

2006 YTD Total Return

DLR continues to outperform its Peer Group and the RMS

DLR is a top performing REIT

Note: YTD 2006 Total Return as of September 7, 2006 assuming dividend reinvestment as per SNL Financial.

(1) Peer Group Composite includes ARE, BMR, GSL and OFC.

(1)

10

DLR Presence in 23 Top Markets

Boston

Boston

San Francisco

Los Angeles

Dallas

Chicago

NY Metro

DLR Regional Office

DLR Market

Note:

Reflects

all

owned

assets

as

of

August

3,

2006.

Charlotte

St. Paul

Philadelphia

Phoenix

Denver

Sacramento

Geneva

Dublin

Austin

Toronto

Silicon Valley

Northern

Virginia

Atlanta

Miami

Boston

London

Amsterdam

Houston

# of

Properties

# of

Buildings

Total Rentable

Square Feet

Domestic

45

61

9,950,141

International

6

7

338,653

Total

51

68

10,288,794

11

Communications

38%

IT Services

28%

Other Technology

6%

Professional & Financial

Services

13%

Non-Technology

15%

DLR is increasingly well diversified by sector

Industry Distribution

Note: Calculated based on gross annualized rents using in place leases as of June 30, 2006.

12

2005 & YTD 2006 Acquisitions

(1) Net rentable square feet figures excludes space held for redevelopment.

(2) Savvis Portfolio includes 2401 & 2403 Walsh Street, 4605 & 4700 Old Ironsides Drive and 200 North Nash Street.

(3) Charlotte Portfolio includes 113 & 125 North Meyers and 731 East Trade Street.

(4) Estimated occupancy based on information provided by the seller.

DLR acquired approximately $881M in new properties

Total

Net Rentable

Redevelopment

Occupancy

Property

Location

Sq. Ft.

Sq Ft

(1)

Sq Ft

(Net of Redev)

833 Chestnut East

Philadelphia

654,758

535,098

119,660

76%

1125 Energy Park Drive

St. Paul

112,827

112,827

-

100%

350 East Cermak Road

Chicago

1,133,391

870,183

263,208

93%

8534 Concord Center Drive

Denver

82,229

82,229

-

100%

Savvis Portfolio

(2)

Santa Clara & Los Angeles

560,000

560,000

-

100%

600-780 South Federal

Chicago

161,547

161,547

-

84%

Paul van Vlissingenstraat 16

Amsterdam

112,472

77,472

35,000

90%

Charlotte Portfolio

(3)

Charlotte

95,499

72,550

22,949

100%

115 Second Avenue

Waltham, MA

66,730

10,494

56,236

N/A

Chemin de l'Epinglier 2

Geneva

59,190

59,190

-

100%

251 Exchange Place

Herndon, VA

70,982

70,982

-

100%

7500 &7620 Metro Center Drive

Austin

119,962

45,000

74,962

100%

3 Corporate Place

Piscataway, NJ

283,124

-

283,124

N/A

2005 Acquisitions

3,512,711

2,657,572

855,139

4025 Midway Road

Carrollton, TX

99,947

49,947

50,000

40%

Clonshaugh Industrial Estate

Dublin, Ireland

20,000

20,000

-

100%

Clonshaugh Industrial Estate

Dublin, Ireland

2.6 acres

-

-

N/A

6800 Millcreek Drive

Toronto, Canada

83,758

83,758

-

100%

101 Aquila Way

Atlanta

313,581

313,581

-

100%

12001 North Freeway

Houston

300,705

281,426

19,279

99%

14901 FAA Boulevard

Dallas

263,700

263,700

-

100%

120 E. Van Buren Street

(4)

Phoenix

347,000

275,227

71,773

73%

Gyroscoopweg 2E-2F

Amsterdam, Netherlands

55,585

55,585

-

100%

YTD 2006 Acquisitions

1,484,276

1,343,224

141,052

Total 2005 & YTD 2006

4,996,987

4,000,796

996,191

13

Source:  Independent study by CCG Facilities Integration Inc. based on data center projects with improvements similar to DLR.

(1)  Infrastructure only. Does not include electronic equipment.

Assumes 60% ratio of data center to total building with all cost allocated to raised floor area.

(2)  Reflects all owned properties and properties under contract. 

Replacement Cost Estimate

Replacement cost illustrates the value of DLR’s

portfolio

DLR owns over 5.0M sq ft of improved data center space

(2)

Cost per Square Foot

Cost Components

Low

High

Land

$40

$70

Building Shell

60

150

Electrical Systems

$297

$396

Mechanical Systems (HVAC)

92

122

Fire Protection

21

29

Other Construction and Fees

130

173

Sub Total

$540

$720

Total Development Costs

$640

$940

Base Building

Data Center

Improvements

(1)

14

DLR’s

Value-Add Redevelopment Program

Robust demand from diverse industry sectors:

–

Financial services

–

Internet enterprises

–

Telecom applications providers

–

Energy companies

–

Healthcare

Limited supply of existing facilities

Existing corporate data centers often do not satisfy

electrical and HVAC requirements of current web hosting,

data storage and IT applications

Objective:  Achieve attractive returns by providing corporate tenants with

custom data center solutions

15

DLR’s

competitive advantage

Inventory totals

1.2

million

sf

of

vacant,

redevelopment

space, potential

for

740,000

sf

of

data

center:

–

Approximately 735,000

sf

in

income

producing

properties; potential

for

440,000

sf

of

data

center

–

Approximately 500,000

sf

of

redevelopment

space

in

recently acquired vacant buildings in Boston, NY Metro,

Dallas and

Austin;

potential

for

300,000

sf

of

data

center

Redevelopment costs vary by building

–

Base building

power,

structural

upgrades:

$35

-

$50

psf

–

Custom data

center:

$450

to

$650

psf

(often

funded

by

tenants)

Stabilized income projected within 24 to 36 months

DLR’s

unmatched sales and technical team offers tenants design, construction

management, engineering and facilities management expertise

16

Leasing Drives Internal Growth

DLR executed 71 leases in SECOND QUARTER 2006, contributing approximately

$11.6M in annualized GAAP rental revenues

(1)

As of

June

30,

2006,

portfolio

occupancy

was

94.7%

and

“same

store”

was

96.4%

(2)

(1) GAAP rental revenues include total rent for both renewals and expansions.

(2) Occupancy percentages exclude 1.2 million square feet of space held for redevelopment.

$88,700

$24.00

3,742

6

Non Technical

$1.7 million

$39.00

44,993

3

Redevelopment

$9.7 million

$85.00

115,092

62

Data Center

Annualized

GAAP Rent

Annualized

GAAP Rent PSF

Total SF

Leased

# of Leases

Type of

Space

DLR commenced 47 leases during the second quarter 2006, contributing

approximately $7.4

M

in

annualized

GAAP

rental

revenues

(1)

17

Leasing Drives Internal Growth

DLR has executed 113 leases YEAR-TO-DATE 2006, contributing approximately

$17.5M

in

annualized

GAAP

rental

revenues

(1)

(1) GAAP rental revenues include total rent for both renewals and expansions.

$0.5 million

$25.00

20,844

13

Non Technical

$3.9 million

$54.00

71,971

5

Redevelopment

$13.1 million

$85.00

154,645

95

Data Center

Annualized

GAAP Rent

Annualized

GAAP Rent PSF

Total SF

Leased

# of Leases

Type of

Space

DLR commenced 94 leases during the YTD 2006, contributing approximately

$11.7 M in annualized GAAP rental revenues

(1)

18

Case studies: DLR’s value-add leasing

Recent leasing illustrates effectiveness of DLR’s leasing and engineering team

•

Executed new 10,000 sf

suite

lease with IT services

company at approx. $100 psf

for 10 yr term

•

Executed new 22,300 sf

lease

with financial institution at an

average of $79 psf for 2.5 yr

term

•

Invested approx. $2.5M to

fully condition 10,000 sq. ft.

on a speculative basis

•

Designed and constructed

custom data center facility

for major international

finance institution

•

35,000 sf

previously vacant

•

Prior rate approx. $25 psf

•

Executed new 60,000 sf

lease

with global internet services

company at an average of

$22 psf NNN for 10 yr term

•

Provided tenant improvement

allowance of $10 psf; in

addition to significant

investment in space by

tenant

•

Designed and constructed

custom data center solution

•

60,000 sf

vacant shell

redevelopment space

•

Executed new 10,000 sf

lease

with international telecom at

approx. $57 psf for 10 yr term

•

Executed new 22,500 sf

lease

with software company at

approx. $62 psf for 3 yr term

•

Invested approx. $10 psf to

enhance space

•

40,000 sf

suite previously

vacant

•

Space substantially

conditioned by prior tenant

for data center operations

•

Prior rate approx. $36 psf

Result

DLR Action

Opportunity

19

2.7%

1.2%

3.2%

5.7%

10.5%

15.2%

1.7%

9.0%

4.6%

14.2%

26.7%

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

Thereafter

DLR’s model features long-term, stable leases

•

The average lease term is approximately 12 years with 7 years remaining

•

Leases typically contain 3% annual rent bumps

<7.1% in next  3 yrs

The stability of our long-term leases complements our growth

Note:

Excludes

vacant

square

footage

of

0.5

million

square

feet

and

space

held

for

redevelopment

as

of

June

30,

2006.

Lease Expiration as a % of Net Rentable Square Feet

20

Digital Realty’s financial results

Reported FFO

(1)

of $23.2 million for 2Q06, up 18% from $19.6 million for

2Q05; or $0.38 per diluted share and unit for 2Q06, up 3% from $0.37

per diluted share and unit for 2Q05

2Q06 FFO payout ratio was  71%; 2Q06 AFFO

(1)

payout ratio was 100%

DLR’s

stock generated a total return to common shareholders of 78% in

2005; YTD 2006 DLR stock has generated a total return of 37%

(2)

Increased quarterly common dividend 8.7% on an annualized basis to

$1.06 per share in November 2005

Priced follow on offering of 4 million shares of common stock for

approximately $95 million of net proceeds on May 23, 2006

Priced a private placement of $150 million of 4.125% Exchangeable

Senior Debentures due 2026 on August 9, 2006

(1)

FFO and AFFO is a non GAAP financial measure. For a description of FFO and AFFO see page 25.

(2)

Based on closing price of DLR common stock ($30.30) as of September 7, 2006.

21

17.2x

18.7x

20.7x

15.9x

15.5x

18.1x

3.9%

3.5%

3.3%

10.0x

12.0x

14.0x

16.0x

18.0x

20.0x

22.0x

RMS

DLR

Peer Group Composite

3.0%

4.0%

5.0%

6.0%

2006E FFO Multiple

2007E FFO Multiple

Dividend Yield

(2)

Note: Based on closing price of DLR common stock ($30.30) and other securities as of September 7, 2006.

(1) Based on First Call consensus estimates for indicative purposes.  DLR does not endorse the First Call consensus estimate.

(2) Peer Group Composite includes ARE, BMR, GSL and OFC.

DLR trades at a discount to public peers

DLR’s FFO multiples remain at a discount to its Peer Group

Dividend Yield

FFO Multiple

(1)

22

Improving overall credit quality of DLR portfolio

+

=

+

=

Approximately

$18

million

of

base

rental

income,

or

over

11%

of

overall

income,

has

experienced an improvement in credit quality.

(1)

As a result of a sublease relationship with Microsoft for 200,000 sq ft of space that is leased directly by Savvis.

(2)

On June 30, 2006, SAVVIS completed the exchange of its Series A Preferred stock for 37.4 million shares of common stock.

(1) (2)

23

DLR employs a conservative capital structure

Wtd

Average Cost of Debt:

5.55%; Approximately 80%

fixed rate debt

(4)

Expanded credit facility to

$500M from $350M,

increasing liquidity and

financial flexibility

Periodically refinancing high

cost debt with lower rate,

longer term, fixed rate

financing

No debt maturing through

2008 (assuming extensions)

Total Market

Capitalization

(1)

$3,067.2M

(1) Based on closing price and shares outstanding of DLR common stock

($30.30) at September 7, 2006.

(2) Excludes $2.1 million of unamortized debt premium for 1125 Energy Park

Drive & 731 East Trade Street.

(3) Unsecured credit facility as of August 31, 2006.

(4) Includes $172.5 million of convertible debt.

Dividend Yield / Rate:    3.5% / $1.06

Fixed Rate Debt,

$788.1

Variable Rate Debt,

$201.8

Preferred Stock,

$166.8

Equity, $1,910.5

(2)(4)

(3)

24

Definition of Non-GAAP Financial Measures

This presentation includes certain non-GAAP financial measures that management believes are helpful in understanding our business, as further

described below. Our definition and calculation of non-GAAP financial measures may differ from those of other REITs, and, therefore, may not be

comparable. The non-GAAP financial measures should not be considered an alternative to net income or any other GAAP measurement of

performance and should not be considered an alternative to cash flows from operating, investing or financing activities as a measure of liquidity.

Funds from Operations (FFO)

We calculate Funds from Operations, or FFO, in accordance with the standards established by the National Association of Real Estate Investment

Trusts, or NAREIT.  FFO represents net income (loss) (computed in accordance with GAAP), excluding gains (or losses) from sales of property, real

estate related depreciation and amortization (excluding amortization of deferred financing costs) and after adjustments for unconsolidated partnerships

and joint ventures.  Management uses FFO as a supplemental performance measure because, in excluding real estate related depreciation and

amortization

and

gains

and

losses

from

property

dispositions,

it

provides

a

performance

measure

that,

when

compared

year

over

year,

captures

trends

in occupancy rates, rental rates and operating costs.  We also believe that, as a widely recognized measure of the performance of REITs, FFO will be

used by investors as a basis to compare our operating performance with that of other REITs.  However, because FFO excludes depreciation and

amortization and captures neither the changes in the value of our properties that result from use or market conditions, nor the level of capital

expenditures and leasing commissions necessary to maintain the operating performance of our properties, all of which have real economic effect and

could

materially

impact

our

results

from

operations,

the

utility

of

FFO

as

a

measure

of

our

performance

is

limited.

Other

REITs

may

not

calculate

FFO

in

accordance

with

the

NAREIT

definition

and,

accordingly,

our

FFO

may

not

be

comparable

to

such

other

REITs’

FFO.

Accordingly,

FFO

should

be

considered only as a supplement to net income as a measure of our performance.

Adjusted Funds From Operations (AFFO)

We present adjusted funds from operations, or AFFO, as a supplemental operating measure because, when compared year over year, it assesses our

ability to fund dividend and distribution requirements from our operating activities. We also believe that, as a widely recognized measure of the

operations of REITs, AFFO will be used by investors as a basis to assess our ability to fund dividend payments in comparison to other REITs. We

calculate adjusted funds from operations, or AFFO, by adding to or subtracting from FFO (i) non-real estate depreciation, (ii) amortization of deferred

financing

costs

(iii)

non

cash

compensation

(iv)

loss

from

early

extinguishment

of

debt

(v)

straight

line

rents

(vi)

fair

value

of

lease

revenue

amortization

(vii) capitalized leasing payroll (viii) recurring tenant improvements and (ix) capitalized leasing commissions. Other equity REITs may not calculate

AFFO in a consistent manner. Accordingly, our AFFO may not be comparable to other equity REITs’

AFFO. AFFO should be considered only as a

supplement to net income computed in accordance with GAAP as a measure of our operations.

EBITDA and Adjusted EBITDA 

We believe that earnings before interest, income taxes, depreciation and amortization, or EBITDA and Adjusted EBITDA (as defined

below), are useful

supplemental performance measures because they allow investors to view our performance without the impact of non cash depreciation and

amortization

or

the

cost

of

debt

and

with

respect

to

Adjusted

EBITDA

preferred

dividends

and

minority

interests.

Adjusted

EBITDA

is

EBITDA

excluding

minority interests and preferred stock dividends. In addition, we believe EBITDA and adjusted EBITDA are frequently used by securities analysts,

investors and other interested parties in the evaluation of REITs. Because EBITDA and adjusted EBITDA are calculated before recurring cash charges

including interest expense and income taxes, and are not adjusted for capital expenditures or other recurring cash requirements of our business, their

utility

as

a

measure

of

our

performance

is

limited.

Accordingly,

EBITDA

and

Adjusted

EBITDA

should

be

considered

only

as

supplements

to

net

income

(computed

in

accordance

with

GAAP)

as

a

measure

of

our

financial

performance.

Other

equity

REITs

may

calculate

EBITDA

and

Adjusted

EBITDA

differently than we do; accordingly, our EBITDA and Adjusted EBITDA may not comparable to such other REITs’

EBITDA and Adjusted EBITDA.

Each of FFO and Adjusted EBITDA exclude items that have real economic effect and could materially impact our results from operations, and therefore

the utility of FFO and Adjusted EBTIDA as a measure of our performance is limited.

Nothing contained

herein

is

intended

to

revise

the

earnings,

FFO

or

acquisition

guidance

we

confirmed

on

our

Earnings

Conference

Call

dated

August 3, 2006 and available on our website at www.digitalrealtytrust.com.

25

Reconciliation of non GAAP items to their closest GAAP

Funds from operations

(1)

Q206

Q106

FY2005

Q206

Q106

FY2005

Net income available to common stockholders

$1,650

$1,642

$6,087

Net income available to common stockholders

$1,650

$1,642

$6,087

Interest

12,181

11,388

39,122

Minority interests in operating partnership including

discontinued operations

1,340

1,846

8,268

Depreciation and amortization

20,275

18,256

62,232

Real estate related depreciation and amortization

(2)

20,238

18,185

62,171

and amortization (EBITDA)

$34,106

$31,286

$107,441

Funds from operations (FFO)

$23,228

$21,673

$76,526

Minority interests

1,340

1,831

8,256

Non real estate depreciation

37

71

61

Preferred stock dividends

3,445

3,445

10,014

Amortization of deferred financing costs

937

795

2,965

Adjusted Earnings before interest, taxes and

depreciation and amortization (Adjusted

EBITDA)

$38,891

$36,562

$125,711

Non cash compensation

435

431

481

Loss from early extinguishment of debt

425

57

1,021

Cash paid for interest (including discontinued operations)

Straight line rents

(4,233)

(3,843)

(13,023)

Above and below market rent amortization

(1,504)

(433)

(1,717)

Total GAAP interest expense (including

discontinued operations)

$12,181

$11,388

$39,122

Capitalized leasing compensation

(888)

(764)

(781)

Amortization of deferred financing costs

(749)

(754)

(2,921)

Recurring capital expenditures and tenant improvements

(338)

(904)

(2,897)

Capitalized interest

1,058

762

279

Capitalized leasing commissions

(1,682)

(265)

(3,051)

Noncash

interest

806

(1,152)

(1,424)

Adjusted funds from operations

(1)

$16,417

$16,818

$59,585

Cash paid for interest

$13,296

$10,244

$35,056

(2) Real estate depreciation and amortization was computed as follows:

Q206

Q106

FY2005

Depreciation and amortization per income statement

$19,511

$17,513

$59,616

Depreciation and amortization of discontinued operations

at 7979 East Tufts Avenue

764

743

2,616

Non real estate depreciation

(37)

(71)

(61)

$20,238

$18,185

$62,171

(1) Funds

from

operations

and

Adjusted

Funds

from

operations

for

all

periods

presented

above

includes

the

results

of

7979

East

Tufts

Avenue,

a

property

which

we

classify

as

held

for

sale

and

which

we

sold

on

July

12,

2006.

EBITDA and Adjusted EBITDA (including discontinued operations)