Digital Realty Plans For Expansion

In a signal that they expect a thaw in the credit markets, datacenter developer Digital Realty Trust (NYSE:DLR, news, filings) is buying more land.  The tract covers 34.2 acres and is adjacent to their other assets in Ashburn VA, and if fully developed it would add some 400K square feet in that market – roughly doubling their Ashburn footprint if I recall correctly.  Much of the space already being constructed in the region has already been spoken for, but brand new projects largely remain on hold with funding so hard to come by.

Would Digital Realty be snapping up land to build on if they felt the credit markets would remain closed for a long time?  Well, perhaps they might – the land is likely cheaper now than it will be later on and a long term view makes now a good time to buy if you can manage it.  But I think they are probably just doing the math.  The slowdown in buildouts caused by the credit crunch has to be a temporary thing, if only because demand will force it open eventually due to basic economics.

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Categories: Datacenter