Raises $220 million of net proceeds for Digital Realty

Strengthens Digital Core REIT's customer credit profile and raises $160 million of proceeds

AUSTIN, Texas, Nov. 1, 2023 /PRNewswire/ -- Digital Realty (NYSE: DLR), the largest global provider of cloud- and carrier-neutral data center, colocation and interconnection solutions, announced today definitive agreements with Brookfield Infrastructure Partners L.P. and its institutional partners ("Brookfield"), Cyxtera Technologies ("Cyxtera") and Digital Core REIT that successfully resolves the relationships with Cyxtera. These agreements were completed in conjunction with Brookfield's announced agreement to acquire Cyxtera, pursuant to its Plan of Reorganization under its Chapter 11 proceedings and remain subject to bankruptcy court and regulatory approval, and include:

Brookfield to acquire Digital Realty's interest in four data centers for approximately $275 million.
Digital Realty to redeploy $55 million to buy out Cyxtera's leases in three colocation data centers in Singapore and Frankfurt.
Digital Realty to use $220 million of remaining net proceeds to repay debt and fund development.
Brookfield to assume the leases on three facilities previously leased to Cyxtera and amend the leases on three additional data centers in New Jersey and Los Angeles, accelerating the expiration date to September 2024.
Brookfield has granted Digital Realty a purchase option to acquire a colocation data center outside of London, in the Slough Trading Estate.

In aggregate, these agreements are expected to result in approximately $0.02 per share of annualized Core Funds from Operations (CFFO) dilution in the year following the transaction close, with upside anticipated in year two and beyond. The transactions are anticipated to close simultaneously in early 2024.

"We are pleased to have worked with Digital Core REIT and Brookfield to successfully resolve our relationship with Cyxtera. This agreement mitigates the financial impact related to their bankruptcy, while also enhancing our financial position, and demonstrating our commitment to and sponsorship of Digital Core REIT," said Digital Realty Chief Investment Officer Greg Wright. "Digital Realty will benefit from an improved overall customer credit profile, additional capital to fund new investment, and be better positioned to deliver sustainable value to all of our stakeholders."

Separately, Digital Core REIT today announced entry into agreements that, among other things, will generate $160 million of proceeds.

"By partnering with our sponsor, Digital Core REIT realized a comprehensive resolution to our relationship with our second-largest customer," said Digital Core REIT CEO John Stewart. "In the process, we were able to remain insulated against a broader financial impact, while improving our customer credit quality with approximately 85% of our annualized rent coming from investment grade customers and positioning our balance sheet to execute on our strategy, through $160 million of asset sales at attractive valuations."

Weil, Gotshal & Manges LLP served as legal advisor, while Evercore served as financial advisor to Digital Realty on the transaction.

About Digital Realty

Digital Realty brings companies and data together by delivering the full spectrum of data center, colocation and interconnection solutions. PlatformDIGITAL®, the company's global data center platform, provides customers with a secure data meeting place and a proven Pervasive Datacenter Architecture (PDx®) solution methodology for powering innovation and efficiently managing Data Gravity challenges. Digital Realty gives its customers access to the connected data communities that matter to them with a global data center footprint of 300+ facilities in 50+ metros across +25 countries on six continents. To learn more about Digital Realty, please visit digitalrealty.com or follow us on LinkedIn and X.

For Additional Information

Investor Relations
Jordan Sadler / Jim Huseby
Digital Realty
+1 737 281 0101
InvestorRelations@digitalrealty.com

Media Contacts
Helen Bleasdale
Digital Realty
+1 737 267 6822
hcbleasdale@digitalrealty.com

Safe Harbor Statement

This press release contains forward-looking statements which are based on current expectations, forecasts and assumptions that involve risks and uncertainties that could cause actual outcomes and results to differ materially, including statements related to Cyxtera's bankruptcy, acquisition and related transactions, expected cash flow, impact on Digital Core REIT's outlook and the related impact on Digital Realty and its outlook. For a list and description of risks and uncertainties, see the reports and other filings by the company with the U.S. Securities and Exchange Commission. The company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

SOURCE Digital Realty

Digital Realty Successfully Resolves Relationship with Cyxtera