Digital Realty Trust, Inc.

Digital Realty Trust, Inc. is a global data center real estate investment trust that owns, develops, and operates carrier-neutral data centers, providing colocation, hyperscale, and interconnection solutions to more than 5,000 customers across six continents. With 310 data centers, approximately 2.9 gigawatts of in-place IT capacity, and $6.1 billion in annual revenue as of fiscal 2025, it is one of the two largest publicly traded data center landlords in the world alongside Equinix.

This is a story about a business that sits at the intersection of two of the most powerful secular trends in technology — cloud computing and artificial intelligence — and has reshaped its capital structure to ride them without over-levering its balance sheet. The central tension is straightforward: demand for data center capacity is accelerating at a pace the industry has never seen, but the capital required to build into that demand is enormous. Digital Realty's answer has been to evolve from a balance-sheet-financed REIT into a hybrid operator and asset manager, raising third-party capital through joint ventures and a closed-end fund to supplement its own equity and debt. The question the file turns on is whether the returns on that capital — currently implying development yields in the low double digits — will hold up as the industry builds more capacity than it ever has, or whether the supply response eventually overwhelms demand and compresses returns.

The operating momentum is as strong as it has ever been. Leasing volumes are at all-time highs, the development pipeline has doubled in six months to 1.4 gigawatts, renewal spreads on expiring leases hit 25% in the most recent quarter, and management is guiding to multiple years of double-digit core FFO per share growth. But the shares, at roughly 30 times trailing FFO and 33 times trailing GAAP EBITDA, already price in a lot of that optimism. The debate is less about whether Digital Realty is a good business — it demonstrably is — and more about what the right multiple is for a capital-intensive growth REIT at the peak of a demand cycle.