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): March 6, 2006

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))

Forward Looking Statements

The information included and incorporated by reference in this Current Report on Form 8-K contains forward-looking statements within the meaning of the federal securities laws, including statements and projections related to 2006 funds from operations, growth in the e-commerce market, the digital communication and distribution market and the data storage market, the market effects of regulatory requirements, the disaster recovery market, the replacement cost of our assets, redevelopment costs in our buildings, capitalization rates for our properties and other properties, the 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 funds from operations, funds from operations payout ratio and implied cap rates and our implied valuation using these cap rates and other metrics. Such statements are based on management’s beliefs and assumptions based on information currently available to management. 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. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated or projected. Some of the risks and uncertainties that may cause our actual results, performance or achievements to differ materially from those expressed or implied by forward-looking statements 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; inability to acquire new properties (including those which we are in the process of acquiring); difficulty acquiring or operating properties in foreign jurisdictions and changes in foreign laws and regulations, including those related to taxation and real estate ownership and operation; 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; our failure to successfully operate acquired properties and operations; our failure to maintain our status as a REIT; possible adverse changes to tax law; environmental uncertainties and risks related to natural disasters; financial market fluctuations; changes in foreign currency exchange rates; 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. We discussed a number of additional material risks in our annual report on Form 10-K for the year ended December 31, 2004 and other filings with the Securities and Exchange Commission. Those risks continue to be relevant to our performance and financial condition. Moreover, we operate in a very competitive and rapidly changing environment. New risk factors emerge from time to time and it is not possible for management to predict all such risk factors, nor can it assess the impact of all such risk factors on the business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. We expressly disclaim any responsibility to update forward-looking statements, whether as a result of new information, future events or otherwise.

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 March 6, 7 and 9, 2006, we will present materials at investor meetings. A copy of the materials is attached hereto as Exhibit 99.1 and incorporated herein by reference.

Item 9.01  Financial Statements and Exhibits.

(c) Exhibits

Exhibit No.	Description
99.1	Material to be presented by Digital Realty Trust, Inc. on March 6, 7 and 9, 2006 at investor meetings.

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: March 6, 2006

Exhibits

Exhibit No.	Description
99.1	Material to be presented by Digital Realty Trust, Inc. on March 6, 7 and 9, 2006 at investor meetings.

EX-99.1

March 2006 Investor Presentation

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 2006 FFO, growth

in the e-commerce market, the digital communication and distribution market, and the data storage market, the

market

effects

of

regulatory

requirements,

the

disaster

recovery

market,

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; 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; our failure to successfully operate acquired properties and operations; our failure to maintain our

status as a REIT; possible adverse changes to tax law; environmental uncertainties and risks related to natural

disasters; financial market fluctuations; changes in foreign currency exchange rates; 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, 2004 and other 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.

Digital Realty Trust overview

Tenants consist of leading global

companies diversified across various

industries

Own 45 properties comprising 9.3

million rentable sq ft which includes

1.2 million sq ft of additional space

held

for

redevelopment

(1)

Portfolio occupancy of 93.9% and

“same store”

occupancy of 94.5%

(2)

Assets strategically located in top

technology markets in US and Europe

DLR is a leading institutional owner focused on

mission critical technology properties in the US and Western Europe

350 East Cermak

Road

Chicago, IL

(1)

Includes

property

acquisitions

announced

in

our

Earnings

Release

dated

March

1,

2006.

(2)

Occupancy is as of our last reporting period, December 31, 2005 net of redevelopment space.

DLR investment highlights

Specialized focus in dynamic and

growing industries

High quality portfolio that is difficult

to replicate

Experienced industry consolidator

with proven ability to acquire assets

below replacement cost

Acquisition and leasing pace creates

potential for strong FFO growth

Uniquely positioned as both a value

and growth REIT

2323 Bryan Street

Dallas, TX

DLR properties feature advanced technical systems

Power backup/redundancy

Power management/conversion

Precision air cooling/handling

Systems and security controls

Between

$500

and

$1,000

psf

typically

invested

in

DLR

buildings,

creating

a

barrier

to

exit for tenants and discouraging speculative new supply

DLR is unique in its focus on technology properties

Data Centers (36%

(1)

)

Internet Gateways (42%

(1)

)

Financial

Health/Insurance

Communications

Internet Enterprise

•

Storage/server intensive buildings

•

Provide a secure 24 x 7

environment for the storage and

processing of mission-critical

electronic information

•

Used to house the primary IT

operations of leading companies,

transaction processing and

disaster recovery purposes

•

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)  Calculated based on annualized rents using in place leases as of December 31, 2005.

IT Services

Strong trends drive sustained demand for DLR space

Other Growth Drivers

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

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

E-Commerce¹

Digital

Communication

& Distribution²

Data

Storage³

14%

73%

60%

Primary Drivers –

Estimated Annual Growth Rates

1 –

As per Forrester Research estimate of US online sales growth from 2005 -2010.

2 –

As per IDC estimate of US VOIP subscriber growth from 2005 to 2009.

3 –

As per Wall Street Journal estimate of corporate data storage capacity growth.

0%

10%

20%

30%

40%

50%

60%

Q1'02

Q2'02

Q3'02

Q4'02

Q1'03

Q2'03

Q3'03

Q4'03

Q1'04

Q2'04

Q3'04

Q4'04

Q1'05

Q2'05

Q3'05

Q4'05

$0

$100

$200

$300

$400

$500

$600

Source:

Estimated based on reported cabinet (available 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 December 31, 2005.  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)

Revenue PSF (Total)

Utilization Rate

$518 psf

$532 psf

$148 psf

$301 psf

29%

57%

•

Former General Manager of Critical Facilities for EDS

•

18+ years of technology infrastructure experience

Ted Martin

Director of Operations

•

Former Director of Sales, Nortel Networks

•

13+ years of technology business experience

Christopher Crosby

SVP Sales & Tech Svcs

•

Former Head of GI Partners real estate acquisitions

•

17+ years of real estate experience

Scott Peterson

SVP Acquisitions

•

Former President & CFO of TriNet

•

24+ years of finance and real estate experience

A. William Stein

CFO/CIO

•

Co-founder of Digital Realty Trust

•

25+ years of real estate and technology experience

Michael Foust

CEO

•

Co-founder of Digital Realty Trust

•

23+ years of real estate and technology experience

Richard Magnuson

Executive Chairman

Senior management leads a complete REIT team

•

Relevant

experience

•

Proven track

record

•

Public

markets

background

DLR is organized and managed to deliver growth

Management

is

supported

by

a

team

of

over

60

professionals

in

the

US

and

Europe

focused on executing DLR’s core strategy

23.2%

13.6%

10.8%

77.9%

20.8%

12.1%

0%

20%

40%

60%

80%

100%

DLR

Peer Group Composite

RMS

FY 2005 Total Return

2006 YTD Total Return

DLR continues to outperform its peers and the RMS

DLR is a top performing REIT

Note: YTD 2006 Total Return as of March 1, 2006 assuming dividend reinvestment as per SNL Financial.

(1) Peer Group Composite includes ARE, BMR, OFC and SLG.

(1)

Leading presence in US and Europe

Boston

Boston

San Francisco

Los Angeles

Dallas

Chicago

NY Metro

DLR Regional Office

DLR Market

Note:

Reflects

all

owned

assets

as

reported

in

our

Earnings

Release

dated

March

1,

2006.

Charlotte

St. Paul

Philadelphia

Phoenix

Denver

Sacramento

Geneva

Dublin

Austin

Silicon Valley

Northern

Virginia

Atlanta

Miami

Boston

London

Amsterdam

9,318,924

55

45

Total

254,895

4

4

International

9,064,029

51

41

Domestic

Total Rentable

Square Feet

# of

Buildings

# of

Properties

DLR is increasingly well diversified by sector

Industry Distribution

Communications

38%

IT Services

29%

Other

Technology

18%

Financial &

Professional

Services

12%

Non-Technology

3%

Note:

Calculated

based

on

annualized

rents

using

in

place

leases

as

of

December

31,

2005.

2005 & YTD 2006 Acquisitions

(1)

Net rentable square feet figures include space held for redevelopment.

(2)

Savvis Portfolio includes 2401 & 2403 Walsh Street, 4605 & 4700 Old Ironsides Drive and 200 North Nash Street.

(3)

Charlotte

Portfolio

includes

113

&

125

North

Meyers

and

731

East

Trade

Street.

DLR acquired approximately $489M in new properties

contributing approximately $42M in run-rate NOI

Net Rentable

Redevelopment

Occupancy

Property

Location

Sq Ft (1)

Sq Ft

(Net of Redev)

833 Chestnut East

Philadelphia

654,758

119,660

91%

1125 Energy Park Drive

St. Paul

88,134

-

100%

350 East Cermak Road

Chicago

1,133,391

263,208

92%

8534 Concord Center Drive

Denver

82,229

-

100%

Savvis Portfolio (2)

Santa Clara & Los Angeles

560,000

-

100%

600-780 South Federal

Chicago

161,547

-

84%

Paul van Vlissingenstraat 16

Amsterdam

112,472

-

62%

Charlotte Portfolio (3)

Charlotte

95,490

23,743

98%

115 Second Avenue

Waltham, MA

68,069

55,569

N/A

Chemin de l'Epinglier 2

Geneva

59,190

-

100%

251 Exchange Place

Herndon, VA

70,982

-

100%

7500 &7620 Metro Center Drive

Austin

119,962

74,962

100%

3 Corporate Place

Piscataway, NJ

283,124

283,124

N/A

2005 Acquisitions

3,489,348

820,266

4025 Midway Road

Carrollton, TX

101,174

101,174

N/A

Clonshaugh Industrial Estate

Dublin, Ireland

20,000

-

100%

Clonshaugh Development Site

Dublin, Ireland

4 acres

-

N/A

YTD 2006 Acquisitions

121,174

101,174

Total 2005 & YTD 2006

3,610,522

921,440

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

(1)

Infrastructure

only.

Does

not

include

electronic

equipment.

Assumes

60%

ratio

of

data

center

to

total

building

with

all

cost

allocated

to

raised

floor

area.

(2)

Reflects

all

owned

properties

and

properties

under

contract

as

of

March

1,

2006. 

Replacement Cost Estimate

Replacement cost illustrates the value of DLR’s

portfolio

DLR owns over 3.3M sq ft of improved data center space

(2)

Cost per Square Foot

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

Base Building

Data Center

Improvements

(1)

DLR’s

Value-Add Redevelopment Program

Growing demand for data centers

Limited supply of existing facilities

Existing data centers often do not satisfy electrical and

HVAC requirements of current web hosting, data storage

and IT applications

Robust demand from diverse industry sectors:

–

Financial services

–

Internet enterprises

–

Telecom applications providers

–

Energy companies

–

Healthcare

Objective:  Achieve attractive returns by providing corporate tenants with

custom data center solutions

DLR’s

competitive advantage

Inventory totals 1.2 million sf

of vacant, redevelopment space:

–

Primarily located in Internet Gateway income producing

properties

•

Approximately 735,000 sf

–

Stand alone, vacant buildings that posses electrical and

structural infrastructure necessary for conversion to data

center operations

•

Approximately 500,000 sf

located in Boston, NY metro, Dallas and

Austin

Redevelopment costs vary by building

–

Base building power, structural upgrades: $35 -

$50 psf

–

Custom Data Center:  $450 to $650 psf

(often funded by

tenants)

Stabilized income projected within 12 to 24 months

DLR’s

unmatched sales and technical team offers tenants design, construction

management, engineering and facilities management expertise

(1)

Occupancy percentages exclude 1.1 million square feet of space held for redevelopment.

(2)

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

Leasing drives internal growth

DLR

executed

137

US

leases

(new

and

renewals)

in

2005

contributing

approximately $15.1M in GAAP rental revenues

(2)

2005 DLR Leasing Statistics

As

of

December

31,

2005,

portfolio

occupancy

was

93.9%

and

“same

store”

was

94.5%

(1)

$20.00 psf

263,000

52

Non-Technical

$28.00 psf

82,000

2

Redevelopment

$78.00 psf

98,000

83

Data Center

Annualized

GAAP Rent

Total SF Leased

# of Leases

Type of Space

Case studies: DLR’s value-add leasing

Recent leasing illustrates effectiveness of DLR’s leasing and engineering team

•

Executed new 10,000 sf

suite

lease with IT services

company at approx. $100 psf

for 10 yr term

•

Executed new 22,300 sf

lease

with financial institution at an

average of $79 psf for 2.5 yr

term

•

Invested approx. $2.5M to

fully condition 10,000 sq. ft.

on a speculative basis

•

Designed and constructed

custom data center facility

for major international

finance institution

•

35,000 sf

previously vacant

•

Prior rate approx. $25 psf

•

Executed new 60,000 sf

lease

with global internet services

company at an average of

$22 psf NNN for 10 yr term

•

Provided tenant improvement

allowance of $10 psf; in

addition to significant

investment in space by

tenant

•

Designed and constructed

custom data center solution

•

60,000 sf

vacant shell

redevelopment space

•

Executed new 10,000 sf

lease

with international telecom at

approx. $57 psf for 10 yr term

•

Executed new 22,500 sf

lease

with software company at

approx. $62 psf for 3 yr term

•

Invested approx. $10 psf to

enhance space

•

40,000 sf

suite previously

vacant

•

Space substantially

conditioned by prior tenant

for data center operations

•

Prior rate approx. $36 psf

Result

DLR Action

Opportunity

34.3%

6.8%

8.8%

1.7

14.9%

12.6%

6.3%

3.7%

1.9%

2.9%

2006

2007

2008

2009

2010

2011

2012

2013

2014

Thereafter

DLR’s model features long-term, stable leases

•

The average lease term is in excess of 12 years with over 7 years remaining

•

Leases typically contain 3% annual rent bumps

8.5% in next 3 yrs

The stability of our long-term leases complements our growth

Note: 

Excludes

vacant

square

footage

of

0.5

million

square

feet

and

space

held

for

redevelopment

as

of

December

31,

2005.

Lease Expiration as a % of Net Rentable Square Feet

Reported FFO of $0.36 per diluted share and unit for Q405 and $1.37

per diluted share and unit for fiscal year 2005

Significantly reduced our ratio of debt to total market capitalization to

33.3% at year-end 2005 from 42.1% at year-end 2004

Improved our fixed charge coverage ratio

(1)

to 2.5x for 4Q05 from 2.2x

for 3Q05 and our debt service coverage ratio

(2)

to 3.7x for 4Q05 versus

3.4x for 3Q05

Increased common dividend 8.7% on an annualized basis to $1.06 per

share

DLR’s

stock generated a total return to common shareholders of 78%

in 2005

Digital Realty’s financial results

(1)  Adjusted EBITDA divided by Cash Interest Expense at December 31, 2005.

(2)  Adjusted EBITDA divided by Fixed Charges at December 31, 2005.  Fixed Charges include Cash Interest Expense, Scheduled Debt

Principal Payments, and Preferred Dividends.

DLR recently released its preliminary 2006 forecast

Internal Growth 

2006 projected FFO Per Share Guidance

(1)

:

$1.65 -

$1.75

External Growth

(1)  Based on Company guidance confirmed on our March 2, 2006 Earnings Conference Call.

10 –

14%

FFO Per Share Growth

10 –

14%

FFO Per Share Growth

20 –

28%

Overall FFO Per Share Growth

Lease-Up 

125,000 – 150,000 sq ft of basic

commercial space (gross rent

$19 / sq ft)

200,000 -  300,000 sq ft of highly

improved tech space (gross rent

$40 / sq ft)

Acquisitions

$200 - $400 million at 8.0% -

9.0% cap rate

Improving overall credit quality of DLR portfolio

+

=

+

=

Approximately

$18

million

of

base

rental

income,

or

over

11%

of

overall

income,

has

experienced an improvement in credit quality.

(1) As a result of a sublease relationship with Microsoft for 300,000 sq ft of space that is leased directly by Savvis.

(1)

DLR employs a conservative capital structure

Wtd

Average Cost of Debt: 5.8%

Approximately 73% fixed rate debt

Recently executed $350M credit facility

which reduced borrowing cost and

increased flexibility

$181M outstanding on the credit facility

at December 30, 2005

Periodically refinancing high cost debt

with lower rate, longer term, fixed rate

financing

No debt maturing through 2008

(assuming extensions)

Total Market

Capitalization

(2)

$2,558.2M

Note:

Based on December 31, 2005 financial statements.

(1)  Based on most recent company guidance for 2006 FFO per share ($1.65 -

$1.75) confirmed on our Earnings Conference Call on March 2, 2006.

(2)  Based on closing price of DLR common stock ($27.83) at March 1, 2006.

Dividend Yield / Rate:    3.8% / $1.06

Projected FFO Payout Ratio

(1)

:

60.6% -

64.2%

Fixed Rate Debt

$550.5M

Variable Rate

Debt $198.5M

Preferred Stock

$166.8M

Equity

(4)

$1,642.4M

22%

7%

64%

7%

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.

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 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 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.

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 a widely 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.

Definition of Non-GAAP Financial Measures

(continued)

EBITDA and Adjusted EBITDA 

We believe that earnings before interest, income taxes, depreciation and amortization, or EBITDA and Adjusted EBITDA (as defined

below), are useful supplemental performance measures because they allow investors to view our performance without the impact of

noncash

depreciation and amortization or the cost of debt and with respect to Adjusted EBITDA preferred dividends and minority

interests. Adjusted EBITDA is EBITDA excluding minority interests and preferred stock dividends. In addition, we believe EBITDA and

adjusted EBITDA are frequently used by securities analysts, investors and other interested parties in the evaluation of REITs. Because

EBITDA and adjusted EBITDA are calculated before recurring cash charges including interest expense and income taxes, and are not

adjusted for capital expenditures or other recurring cash requirements of our business, their utility as a measure of our performance is

limited. Accordingly, EBITDA and Adjusted EBITDA should be considered only as supplements to net income (computed in accordance

with GAAP) as a measure of our financial performance. Other equity REITs may calculate EBITDA and Adjusted EBITDA differently than

we

do;

accordingly,

our

EBITDA

and

Adjusted

EBITDA

may

not

comparable

to

such

other

REITs’

EBITDA

and

Adjusted

EBITDA.

Each of FFO,NOI, and Adjusted EBITDA exclude items that have real economic effect and could materially impact our results from

operations, and therefore the utility of FFO, NOI, and Adjusted EBTIDA as a measure of our performance is limited.

Nothing

contained

herein

is

intended

to

revise

the

earnings,

FFO

or

acquisition

guidance

we

confirmed

on

our

Earnings

Conference

Call

dated March 2, 2006 and available on our website at www.digitalrealtytrust.com.