Digital Realty Buys 365 Main

In a $725M deal, datacenter REIT Digital Realty Trust (NYSE:DLR, news, filings) has agreed to purchase the datacenters managed by 365 Main from joint ventures controlled by Rockwood Capital.  In total, the properties cover some 919K square feet of built out space, which is leased out to some 200 tenants right now.  For them of course, the ownership change probably won’t mean much more than a new place to send the rent checks.  The portfolio also includes another 250K square feet of potential space in Arizona waiting for development, as well as some $13M in ‘uninstalled datacenter infrastructure improvements’.

The five properties that Digital Realty is purchasing are:

• 365 Main Street in San Francisco, CA (image)
• 2260 East El Segundo Boulevard in El Segundo, CA
• 720 2nd Street in Oakland, CA
• 2121 South Price Road in Chandler, AZ
• 4030-4050 Lafayette Center Drive in Chantilly, VA

Digital Realty will be paying for the purchase with some combination of existing cash, borrowings under their credit facility, and the sale of new debt or equity.  That ambiguity is another way of saying they’ll tell us later, so I expect we will see a new debt offering of some sort hit the market soon.

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Categories: Datacenter · Mergers and Acquisitions