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): July 25, 2007

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 July 25, 2007, management will make a presentation at an investor meeting at the Baron Capital Management Conference. A copy of the materials to be presented at the investor meeting 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 an investor meeting on July 25, 2007.

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: July 24, 2007

EXHIBITS

Exhibit Number	Description
99.1	Materials to be presented at an investor meeting on July 25, 2007.

EX-99.1

Baron Capital Management

July 25, 2007

Foundation of the Digital World

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

growth

in

the

Software

as

a

Service

(SaaS)

and

e-

commerce

market,

the

digital

communication

and

distribution

market,

and

the

data

storage

market,

online

advertising,

the

market

effects

of

regulatory

requirements,

the

disaster

recovery

market,

estimates

of

sufficiency

of

power

and

cooling

in

existing

datacenters,

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;

increased

interest

rates

and

operating

costs;

our

inability

to

manage

domestic

and

international

growth

effectively;

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

at

acceptable

return

levels;

our

failure

to

successfully

operate

acquired

properties

and

operations;

failure

of

acquired

properties

to

perform

as

expected;

our

failure

to

successfully

redevelop

properties

acquired

for

that

purpose

or

unexpected

costs

related

to

redevelopment;

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;

risks

of

operating

in

foreign

countries;

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,

2006

and

subsequent

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

63

properties

(1)

comprising

11.8

million sq ft which includes 1.7 million

sq

ft

of

space

held

for

redevelopment

(2)

Portfolio occupancy of 94.8% and

“same

store”

occupancy

of

94.4%

(3)

Assets strategically located in 25 top

technology markets throughout North

America and Europe

DLR is a leading institutional owner focused on mission critical

technology properties throughout North America and Europe.

11830 Webb Chapel Road

Dallas, TX

(1)

Includes one property held in an unconsolidated joint venture.

(2)

Includes property acquisitions as of June 30, 2007.

(3)

Occupancy is as of March 31, 2007, net of redevelopment space.  Same Store occupancy includes properties acquired before December 31, 2005,

excluding properties sold in 2006 and 2007.

3

DLR Investment Highlights

Specialized focus in dynamic and

growing industries

High quality portfolio that is difficult to

replicate

Proven track record of creating

shareholder value

Conservative and flexible capital

structure

Industry leading domestic and

international datacenter development

and critical facilities management

capabilities

2323 Bryan Street

Dallas, TX

4

DLR Properties Feature Advanced Technical Systems

Between $500 and $1000 psf typically invested in DLR buildings, creating a barrier to

exit for tenants and discouraging speculative new supply.

Power backup/redundancy

Power management/conversion

Precision air cooling/handling

Systems and security controls

5

DLR Presence in 25 Top Markets

(1)

11,768,000

83

63

Total

866,000

10

9

International

10,902,000

73

54

Domestic

Total Rentable

Square Feet

# of Buildings

# of Properties

(2)

(1)

Includes properties owned as of May 8, 2007

(2)

Includes one property held in an unconsolidated joint venture

6

DLR Properties Serve a Variety of Industry Verticals

DLR offers corporate enterprise tenants, IT service providers, and network

carriers flexible, cost-effective and reliable datacenter solutions.

Technology

Internet

Enterprise

Communications

Manufacturing/

Energy/Retail

Financial

7

DLR

Tenant

Distribution

(1)

Communications Services

31%

IT Services and Internet

Enterprise

40%

Professional & Financial

Services

10%

Other

7%

Non-Technology

12%

(1) Calculation based on average annualized GAAP rents using in place leases as of March 31, 2007, excluding one property held in an unconsolidated

joint venture.

8

DLR is Unique in its Focus on Technology Properties

Corporate Datacenters

–

Storage/server intensive buildings

–

Provide a secure 24x7 environment

for the storage and processing of

mission-critical electronic

information

–

Used to house primary IT

operations: transaction processing,

data storage, disaster recovery,

CRM and email

Internet Gateways

–

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) Calculation based on average annualized GAAP rents using in place leases as of March 31, 2007.

Internet

Gateways

36%

Non

Technical

11%

Corporate

Datacenters

51%

Portfolio Distribution

(1)

9

0%

20

40

60

80

100%

SaaS

Digital

Communication

& Distribution

Data Storage

Strong Trends Drive Sustained Demand for DLR Space

Other Growth Drivers

By 2008, 50% of existing

corporate data centers will

have insufficient power and

cooling capacity to meet the

demands of high-density

equipment

(4)

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 2006;

expected 19% increase in

2007

(5)

U.S. e-commerce spending

increased 24% during 2006

(6)

(1)

(2)

(3)

Primary Drivers –

Estimated Annual Growth Rates

(1) Gartner (May 2006) estimated growth in Software as a Service

(SaaS) from 2006 to 2009

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

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

(4) Gartner 25th

Annual Datacenter Conference 2006

(5) eMarketer.com, February 2007

(6) comScore

Networks, 2007

73%

60%

57%

10

0%

10%

20%

30%

40%

50%

60%

70%

80%

1Q02

1Q03

1Q04

1Q05

1Q06

1Q07

$0

$100

$200

$300

$400

$500

$600

$700

Source:

Estimates

based

on

reported

cabinet

(net

sellable

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

March

31,

2007.

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)

$518 psf

Revenue PSF (Total)

$148 psf

Utilization Rate

29%

$574 psf

$438 psf

74%

11

DLR Offers Sustained Growth

Acquisitions

Leasing of Turn-Key

Datacenter™

Space

Redevelopment Inventory

DLR growth is derived from three sources.

12

$847.2

$1,044.3

$1,137.4

$1,413.4

$1,508.5

$1,593.6

$1,648.2

$1,794.4

$2,066.2

$2,298.7

$2,457.5

$500

$1,000

$1,500

$2,000

$2,500

9/30/2004

12/31/2004

3/31/2005

6/30/2005

9/30/2005

12/31/2005

3/31/2006

6/30/2006

9/30/2006

12/31/2006

3/31/2007

Proven Track Record: Strong Acquisition Activity

Since its IPO, DLR has more than doubled its total assets through

property acquisitions.

Total Undepreciated

Assets

($000s)

13

2005 Through YTD 2007 Acquisitions

Acquired 40+ properties

(1)

totaling over $1.2 billion

Added approximately 6.9 million square feet to total portfolio, including

over 1.7 million square feet of redevelopment inventory

New markets include:

–

Philadelphia

–

St. Paul

–

Chicago

–

Charlotte

–

Amsterdam, Netherlands

–

Geneva, Switzerland

–

Northern Virginia

–

Austin

–

Dublin, Ireland

–

Toronto, Canada

–

Houston

–

Seattle

–

Paris, France

Chicago, Illinois

Paris, France

(1)

Includes

one

property

held

as

an

investment

in

an

unconsolidated

joint

venture

14

(1)

Net rentable square feet figures excludes space held for redevelopment.

(2)

AboveNet Portfolio includes 1807 Michael Faraday Court, 8100 Boone Boulevard (VA) and 111 8th Ave.  (NY).

(3)

Held as an investment in an unconsolidated joint venture in which DLR has a 49% interest.

(4)

A

leasehold

interest

consisting

of

two

suites

in

111

8th

Ave.

(NY)

acquired

from

NYC

Connect.

(5)

Loudoun Exchange Portfolio consists of 43881, 43831 & 43791 Devin Shafron Drive (VA).

(6)

9.4

acre

development

site

in

suburban

London,

England

with

planning

permission

for

up

to

a

200,000

sf

data

center

facility.

DLR has acquired approximately $1.2 billion in new properties.

2005 Through YTD 2007 Acquisitions

Purchase

Total Rentable

Net Rentable

Redevelopment

Occupancy

Property

Location

Price (M)

Sq Ft

Sq Ft

(1)

Sq Ft

(Net of Redev)

2005 Acquisitions

$466

3,490,685

2,658,433

832,252

4025 Midway Road

Carrollton, TX

100,590

36,856

63,734

100%

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

98%

14901 FAA Boulevard

Dallas

263,700

263,700

-

100%

120 E. Van Buren Street

Phoenix

287,514

206,359

81,155

97%

Gyroscoopweg 2E-2F

Amsterdam, Netherlands

55,585

55,585

-

100%

600 Winter Street

Waltham, MA

30,400

30,400

-

100%

2300 NW 89th Place

Miami

64,174

64,174

-

100%

AboveNet Portfolio

(2)

New York & N. Virginia

119,389

119,389

-

100%

2055 East Technology Circle

Tempe, AZ

76,350

-

76,350

N/A

2001 Sixth Avenue

(3)

Seattle, WA

389,460

389,460

-

90%

114 Rue Ambroise Croizat

Paris, France

352,146

122,627

229,519

56%

Blanchardstown Corporate Park

Dublin, Ireland

120,000

120,000

86%

2006 Acquisitions

$553

2,577,352

2,107,315

470,037

21110 Ridgetop Circle

Sterling, VA

135,000

-

135,000

100%

3011 Lafayette Street

Santa Clara, CA

90,780

90,780

N/A

44470 Chillum Place

Ashburn, VA

95,440

-

95,440

100%

NYC Connect (111 8th Ave)

(4)

New York

33,700

33,700

94%

Loudoun Exchange Portfolio

(5)

Ashburn, VA

432,071

167,071

265,000

39%

Garden Shed Mundells

(6)

London, England

-

-

-

N/A

YTD 2007 Acquisitions

$198

786,991

291,551

495,440

Total 2005 through YTD2007 Acquisitions

$1,217

6,855,028

5,057,299

1,797,729

15

Leasing Drives Internal Growth

DLR commenced 211 leases during 2006, contributing approximately

$30.0 million in annualized GAAP rental revenues.

(1)

(1)

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

(2)

Excludes leases for parking garages and rooftops.

$0.3 million

$28.00

11,600

7

Non Technical

(2)

$12.0 million

$39.00

308,000

6

Redevelopment

$4.0 million

$70.00

57,000

16

Datacenter

Annualized

GAAP Rent

Annualized

GAAP Rent PSF

Total SF

Leased

# of Leases

Type of Space

In

the

first

quarter

of

2007

DLR

executed

leases

for

87,000

sf

of

space,

including

60,000

sf

of

datacenter

and

18,000

sf

of

redevelopment

space.

First Quarter 2007 Leases Commenced:

16

Same Store Growth

(1)

52,000

54,000

56,000

58,000

60,000

62,000

64,000

66,000

68,000

Mar-06

Jun-06

Sep-06

Dec-06

Mar-07

93.0%

93.2%

93.4%

93.6%

93.8%

94.0%

94.2%

94.4%

94.6%

94.8%

95.0%

Quarterly Operating Revenue

Occupancy

($000)

Same Store Quarterly Operating

Revenue

(3)

Increase = 16.6%

Same Store Occupancy

(2)

Increase = 70 bps

(1)

Same store properties were acquired before December 31, 2005, excluding properties sold in 2006 and 2007.

(2)

Same store occupancy excludes redevelopment space until leased.

(3)

Quarterly operating revenue includes rental and tenant reimbursement revenue.

(4)

Calculation

based

on

reported

1Q07

operating

revenue

of

$66.3M

less

$4.1M

straight

line

rent

and

less

$0.7M

for

below/above

rent

amortization.

First quarter 2007 same store cash rent was $61.5 million

(4)

17

Case Studies:  DLR’s Value-add Leasing

(1)  Calculation based on IPO date of November 2004 and actual annualized net operating income (NOI) as of March 31, 2007. See page 30 for a discussion of NOI.

350 East Cermak Road

1100 Space Park Drive

200 Paul Avenue

300 Boulevard East

Property Name

Location

Acquisition /

IPO Date

% Change in NOI

from later of

Acquisition or IPO

As of 1Q 07

(1)

200 Paul Avenue

San Francisco, CA

Nov-04

71.8%

1100 Space Park Drive

Santa Clara, CA

Nov-04

97.2%

350 East Cermak Road

Chicago, IL

May-05

44.6%

300 Boulevard East

Weehawken, NJ

Nov-04

98.2%

18

DLR Redevelopment Inventory

Redevelopment inventory totals 1.7

million sf

of vacant space with

potential

for

up

to

1.0

million

sf

of

datacenter:

–

Approximately 65% of inventory in

income-producing properties

–

Remaining 35% of inventory in 6

vacant buildings

Redevelopment costs vary by building

–

Base building power, structural

upgrades: $35 -

$50 psf

–

Custom datacenter:  $350 to $800

psf

(funding available through

DLR)

Growth Opportunity

19

Redevelopment Program Progress Report

Construction projects underway in 11 U.S. and European markets totaling over

500,000 rentable square feet of Turn-Key Datacenter™

and build-to-suit space

DLR’s Turn-Key Datacenters™

–

Move-in ready, physically secure facilities with redundant power and cooling

capabilities

–

Measuring 10,000 –

12,000 square feet of raised-floor featuring DLR’s    

POD Architecture™

Strong interest from prospective tenants

Stabilized income projected over the next 36 months

Turn-Key Datacenter™

Built-to-suit

20

DLR’s Competitive Advantage: Dedicated Technical Professionals

Staff of over 50 DLR technical professionals:

–

IT sales team

Focus on end-user, IT professionals (CIO or CTO)

–

Datacenter sales engineers

Provide value engineering and custom design expertise

–

Design and construction experts

Disciplined approach to project management

Volume purchase agreements for equipment and services

Best-in-class engineering and contracting

–

Datacenter facilities management team

Best-in-class operating policies and procedures

Fully-integrated Building Automation Systems

Global preventative maintenance agreements

Operating scale and process-based approach result in significant cost

savings and added value for tenants

DLR possesses the necessary scale to support these specialized professionals

21

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

(1)

Infrastructure only. Does not include electronic equipment. Assumes 60% ratio of datacenter to total building with all cost allocated to raised floor area.

(2)

DLR estimate based on Equinix press release dated September 19, 2006.

(3)

Reflects all owned properties as of May 8, 2007.

Replacement Cost Estimate

Replacement Cost Illustrates the Value of DLR’s Portfolio

DLR owns over 7.6 million sq ft of improved datacenter space.

(3)

Cost per Square Foot

Equinix

(2)

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

$1,250

Base Building

Data Center

Improvements

(1)

22

1.5%

4.8%

5.5%

7.8%

11.3%

6.2%

6.0%

5.4%

16.8%

7.9%

21.6%

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

Thereafter

DLR’s Model Features Long-term, Stable Leases

The stability of our long-term leases complements our growth.

Note:

Excludes

vacant

square

footage

of

0.5

million

square

feet

and

1.7

million

square

feet

of

space

held

for

redevelopment

as

of

March

31,

2007.

Lease expiration as a percentage of net rentable square feet

11.8% in through 2009

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

Leases typically contain 3% annual rent bumps.

23

DLR Financial Overview

Strong

and

consistent

FFO

(1)

growth

–

$1.63 per diluted share and unit for 2006, +19% from 2005

–

$0.50 per diluted share and unit for 1Q07, +39% from 1Q06

and +4% from 4Q06

Increasing

NOI

(1)

–

$58.8 million in 1Q07, +7% from $54.7 million in 4Q06 and

+54% from $38.2 million in 1Q06

Well supported dividend

–

3.0%

yield

(2)

–

FFO

/

AFFO

(1)

payout

ratio

of

57%

/

70%(3)

for

1Q07

–

Increased quarterly common dividend in 4Q06, +8%

(1)

FFO, AFFO and NOI are non GAAP financial measures. For a description of FFO, AFFO and NOI see page 30.

(2)

Based on most recent quarterly dividend annualized.  Dividend yield based on July 19, 2007 closing stock price of $37.86.

(3)

FFO

payout

ratio

is

dividend

declared

per

common

share

and

unit

divided

by

diluted

FFO

per

share

and

unit.

AFFO

payout

ratio

is

dividend

declared

per

common

share

and unit divided by diluted AFFO per share and unit. For a description of FFO and AFFO see page 30. For a reconciliation to net income see page 31.

24

DLR Capital Raising Activity

Proven access to capital

–

YTD 2007

Raised $175.0 million of 4.375% convertible preferred stock:

20% premium

Completed two mortgage financings totaling $127 million

$70 million construction financing closed

Sold two non-core assets for estimated total gain on sale of

$18.0 million

–

$900.2 million of capital raised in 2006

Amended credit facility

–

Increased facility size from $350 to $500 million; changed financial

covenants to enhance financial flexibility; added redevelopment

assets to borrowing base to support redevelopment program

Raised $172.5 million of 4.125% convertible debt: 18% premium

Completed 10 mortgage financings totaling $349.4 million

Raised $228.3 million in net proceeds from two common stock

offerings

Increased float by 121.5% from 27.4 million to 60.7 million

shares of common stock outstanding

25

DLR 2007 Guidance -

Update

2007 projected funds from operations (FFO) per share guidance:

(1)(2)

$1.91 to $1.96

(1)

Based on Company guidance revised in our May 9, 2007 conference call.

(2)

FFO and AFFO are non GAAP financial measures. For a description of FFO and AFFO see page 30. For a reconciliation to net income see page 31.

Internal Growth 

11.2% to 13.0%

FFO

(2)

Per Share Growth

Leasing 

475,000 to  600,000 sq ft of turn-

key & redevelopment space

(gross rent $70 / sq ft)

100,000 to 125,000 sq ft of basic

commercial space (gross rent

$19 / sq ft)

Acquisitions

$300 - $400 million 

o

$110 million of vacant

for redevelopment

o

$190 to $290 million of

income producing at

an average cap rate of

8.25%

External Growth

6.0% to 7.0%

FFO Per Share Growth

17.2% to 20.0%

Overall FFO Per Share Growth

•

Capital Expenditure for redevelopment of $251 million

•

Total G&A of $28.5 million

26

Improving Overall Credit Quality of DLR Portfolio

+

=

+

=

Approximately $18 million of base rental income, or over 8% 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)

27

DLR’s

top

tenants

have

experienced

a

robust

increase

in

equity

capitalization

(1)

Significant Equity Capitalization Improvement in Top Tenants

(1) Increase in equity capitalization calculated as of May 17, 2007 from DLR IPO date of November 1, 2004.

28

Variable Rate

Debt (3)

3.2%

Fixed Rate

Debt (2)(6)

26.4%

Preferred (4)

8.5%

Equity (1)

61.9%

DLR Employs a Conservative Capital Structure

Wtd

average cost of debt:

5.84%

(5)

; approximately 87%

fixed

rate

debt

(6)

Coverage

ratios

(7)

:

–

Debt service: 3.1x

–

Fixed charge: 2.4X

Periodically refinancing high

cost debt with lower rate,

longer term, fixed rate

financing

Total Enterprise Value

(1)

$4,036.0 million

Dividend Yield / Rate:    3.1% / $1.145

(1)

Based

on

closing

price

of

$36.77

at

July

20,

2007and

shares

outstanding

of

DLR

common

stock

at

June

30,

2007.

(2)

Excludes $1.9 million of unamortized debt premium for 1125 Energy Park Drive & 731 East Trade Street.

(3)

Unsecured credit facility as of June 30, 2007; fluctuates based on amount drawn on credit facility.

(4)

Includes $175 million of 4.375% convertible preferred stock issued in April 2007.

(5)

Excluding the equity component of the convertible debt, the weighted average cost of debt is 5.66%.

(6)

Includes $172.5M of convertible debt and $250.0M of swapped floating rate debt.

(7)

As of 3/31/07 and ignoring the effect from the gain on sale of two properties, debt service coverage ratio is Adjusted EBITDA divided by cash interest expense; fixed

charge

coverage

ratio

is

Adjusted

EBITDA

divided

by

fixed

charges.

See

p.

30

for

a

description

of

Adjusted

EBITDA

and

p.

31

for

a

reconciliation

of

Adjusted

EBITDA,

cash interest expense and fixed charge coverage ratio.

30

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

awidely

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.

Net Operating Income (NOI)

NOI represents rental revenue and tenant reimbursement revenue less rental property operating and maintenance, property taxes and insurance expenses (as reflected

in statement of operations). NOI is commonly used by stockholders, company management and industry analysts as a measurement of operating performance of the

company’s

rental

portfolio.

However,

because

NOI

excludes

depreciation

and

amortization

and

captures

neither

the

changes

in

the

value

of

our

properties

that

result

fro

m 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 NOI as a measure of our performance is limited. Other

REITs

may not calculate

NOI

in

the

same

manner

we

do

and,

accordingly,

our

NOI

may

not

be

comparable

to

such

other

REITs’

NOI.

Accordingly,

NOI

should

be

considered

only

as

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

Earnings Before Interest Taxes Depreciation and Amortization (EBITDA)

We present Earnings Before Interest Taxes Depreciation and Amortization or EBITDA as a supplemental operating measure because, because in excluding interest,

taxes,

depreciation

and

amortization,

it

permits

investors

to

view

income

from

operations

without

the

impact

of

the

cost

of

debt,

noncash

depreciation

and

amortization

and taxes.

We also believe that, as a widely recognized measure of the performance of other companies in the data center industry that will be used by investors as a

basis

to

compare

our

operating

performance

with

that

of

others

in

that

industry.

However,

because

EBITDA

excludes

interest,

taxes,

depreciation

and

amortization

and

captures

neither

the

changes

in

the

value

of

our

properties

that

result

from

use

or

market

conditions,

nor

the

current

level

of

capital

expenditures

and

other

capitalized

items, all of which have real economic effect and could materially impact our results from operations, the utility of EBITDA as a measure of our performance is

limited.

Accordingly, EBITDA should be considered only as a supplement to net income as a measure of our performance.

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

or

confirm

the

earnings,

FFO

or

acquisition

guidance

we

confirmed

on

our

Earnings

Conference

Call

held

on

May

9,

2007

and

available

on

our

website

at

www.digitalrealtytrust.com.

31

Reconciliation of non-GAAP items to their closest GAAP

2007 FFO  Reconciliation

(in millions, except per share and unit data)

Low end of

range

High end of

range

Net income before minority interest in operating partnership

$26.4

—

$28.9

Plus: Real estate related depreciation and amortization

126.9

—

128.0

Funds from operations

$153.3

—

$156.9

Less:  Preferred stock dividends

(19.3)

(19.3)

FFO available to common stockholders and unit holders

$134.0

—

$137.6

FFO per diluted share of common stock and unit outstanding

$1.91

—

$1.96

Funds from operations

(1)

Cash interest expense and fixed charges (including discontinued operations)

Q107

Q406

Q306

Q206

Q106

FY2006

FY2005

Q107

Q406

Q306

Q206

Q106

FY2006

FY2005

Net income available to common stockholders

$18,641

$2,978

$11,342

$1,650

$1,642

$17,612

$6,087

Total GAAP interest expense (including

discontinued operations)

$17,323

$14,569

$14,533

$12,181

$11,388

$52,671

$39,122

Capitalized interest

1,507

1,114

917

1,058

762

3,851

279

Minority interests in operating partnership including

discontinued operations

3,762

1,276

8,464

1,340

1,846

12,926

8,268

Change in accrued interest and other noncash

amounts

(948)

(3,206)

(2,590)

57

(1,906)

(7,645)

(4,345)

Real estate related depreciation and amortization

(2)

29,643

28,055

24,454

20,238

18,185

90,932

62,171

Cash interest expense

17,882

12,477

12,860

13,296

10,244

48,877

35,056

Real estate related depreciation and amortization related

to investment in unconsolidated joint venture

1,036

796

-

-

-

796

-

Scheduled debt principal payments and preferred

dividends

5,085

5,063

4,960

4,567

4,869

19,458

17,275

Gain on sale of assets

(18,049)

(80)

(18,016)

-

-

(18,096)

-

Total fixed charges

$22,967

$17,540

$17,820

$17,863

$15,113

$68,335

$52,331

Funds from operations (FFO)

$35,033

$33,025

$26,244

$23,228

$21,673

$104,170

$76,526

Funds from operations (FFO) per diluted share

$       0.50

$       0.48

$       0.41

$       0.38

$       0.36

$       1.63

$       1.37

Reconciliation of EBITDA

Net income per diluted share available to common

stockholders

$       0.32

$       0.06

$       0.30

$       0.05

$       0.06

$       0.47

$       0.25

Q107

Q406

Q306

Q206

Q106

FY2006

FY2005

Funds from operations (FFO)

$35,033

$33,025

$26,244

$23,228

$21,673

$104,170

$76,526

Net income available to common stockholders

$18,641

$2,978

$11,342

$1,650

$1,642

$17,612

$6,087

Non real estate depreciation

135

118

285

37

71

511

61

Amortization of deferred financing costs

1,389

1,115

916

937

795

3,763

2,965

Interest

17,323

14,569

14,533

12,181

11,388

52,671

39,122

Non cash compensation

507

491

430

435

431

1,787

481

Depreciation and amortization

29,778

28,173

24,739

20,275

18,256

91,443

62,232

Loss from early extinguishment of debt

-

6

40

425

57

528

1,021

Straight line rents

(5,111)

(5,810)

(3,856)

(4,233)

(3,843)

(17,742)

(13,023)

EBITDA

65,742

45,720

50,614

34,106

31,286

161,726

107,441

Above and below market rent amortization

(2,338)

(2,238)

(2,837)

(1,504)

(433)

(7,012)

(1,717)

Capitalized leasing compensation

(175)

(217)

(185)

(888)

(764)

(2,054)

(781)

Gain on sale of assets, net of minority interests

15,019

56

10,318

-

-

10,374

-

Recurring capital expenditures and tenant improvements

(393)

(2,574)

(344)

(338)

(904)

(4,160)

(2,897)

Capitalized leasing commissions

(439)

(3,716)

(1,523)

(1,682)

(265)

(7,186)

(3,051)

EBITDA, less effect of gain on sale of assets

$50,723

$45,664

$40,296

$34,106

$31,286

$151,352

$107,441

Adjusted funds from operations

(1)

$28,608

$20,200

$19,170

$16,417

$16,818

$72,605

$59,585

Reconciliation of Adjusted EBITDA

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

Q107

Q406

Q306

Q206

Q106

FY2006

FY2005

EBITDA

$65,742

$45,720

$50,614

$34,106

$31,286

$161,726

$107,441

Q107

Q406

Q306

Q206

Q106

FY2006

FY2005

Depreciation and amortization per income statement

$29,399

$27,290

$23,768

$18,534

$16,537

$86,129

$59,616

Minority interests

3,762

1,276

8,464

1,340

1,846

12,926

8,268

Depreciation and amortization of discontinued operations

379

883

971

1,741

1,719

5,314

2,616

Preferred stock dividends

3,445

3,445

3,445

3,445

3,445

13,780

10,014

Non real estate depreciation

(135)

(118)

(285)

(37)

(71)

(511)

(61)

$29,643

$28,055

$24,454

$20,238

$18,185

$90,932

$62,171

Adjusted EBITDA

72,949

50,441

62,523

38,891

36,577

188,432

125,723

Weighted-average shares outstanding - diluted

69,831

69,213

64,397

60,959

59,874

63,870

55,761

Gain on sale of assets

18,049

80

18,016

-

-

18,096

-

Adjusted EBITDA, less effect of gain on sale of

assets

$54,900

$50,361

$44,507

$38,891

$36,577

$170,336

$107,441

Reconciliation of Net Operating Income (NOI)

Q107

Q406

Q306

Q206

Q106

FY2006

FY2005

Operating income

21,965

$  

20,943

$  

18,451

$  

17,787

$  

17,388

$  

74,569

$  

59,587

$  

Less:

Other revenue

-

(197)

-

-

(168)

(365)

(5,829)

Add:

Depreciation and amortization

29,399

27,290

23,768

18,534

16,537

86,129

55,701

General and administrative

7,210

6,535

4,986

4,674

4,246

20,441

12,615

Other expenses

188

173

607

150

181

1,111

1,617

Net Operating Income

58,762

$  

54,744

$  

47,812

$  

41,145

$  

38,184

$  

181,885

$

123,691

$

(1) Funds from operations and Adjusted Funds from operations for all periods presented above includes the results of properties

sold in 2006 and 2007; 7979 East Tufts Avenue (July 2006), 100 Technology Center Drive (March 2007) and 4055 Valley View

Lane (March 2007).