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): May 30, 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))

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 May 31, 2006, management will make a presentation at the 34^th Annual Cowen and Company Technology Conference. A copy of the materials to be presented. Stein at the estate conference is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

Exhibit No.	Description
99.1	Materials to be presented on May 31, 2006 at the 34th Annual Cowen and Company Technology Conference.

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: May 30, 2006

Exhibit Index

Exhibit No.	Description
99.1	Materials to be presented on May 31, 2006 at the 34th Annual Cowen and Company Technology Conference

EX-99.1

34

th

Annual Technology Conference

May 31, 2006

EXHIBIT 99.1

1

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,

2005

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.

2

Digital Realty Trust overview

•

Tenants consist of leading global

companies diversified across various

industries

•

Own 49 properties comprising 10.0

million rentable sq ft which includes

1.2 million sq ft of additional space

held for redevelopment (1)

•

Portfolio occupancy of 93.3% and

“same store”

occupancy of 94.6%

(2)

•

Assets strategically located in top

technology markets in the U.S.,

Canada and Europe

DLR is a leading institutional owner focused on

mission critical technology properties in the US and Europe

350 East Cermak

Road

Chicago, IL

(1)

Includes

property

acquisitions

announced

in

our

Earnings

Release

dated

May

4,

2006.

(2)

Occupancy

is

as

of

our

last

reporting

period,

March

31,

2006

net

of

redevelopment

space.

3

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

4

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

5

DLR is unique in its focus on technology properties

Data Centers (35%

(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 March 31, 2006.

IT Services

6

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

Significant growth in online

advertising; up 30% in

2005 to $12.5 billion

(4)

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

E-Commerce

(1)

Digital

Communication

& Distribution

(2)

Data

Storage

(3)

14%

73%

60%

Primary Drivers –

Estimated Annual Growth Rates

(1) Forrester Research estimate of US online sales growth from 2005 -2010

(2) IDC estimate of US VOIP subscriber growth from 2005 to 2009

(3) Wall Street Journal estimate of corporate data storage capacity growth

(4) PriceWaterhouseCoopers

7

•

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

•

26+ 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

8

8.5%

5.1%

2.7%

77.9%

12.1%

4.9%

0%

20%

40%

60%

80%

100%

DLR

RMS

S&P 500

FY 2005 Total Return

2006 YTD Total Return

DLR continues to outperform the RMS and S&P 500

DLR is a top performing REIT

Note:

YTD

2006

Total

Return

as

of

May

25,

2006

assuming

dividend

reinvestment

as

per

SNL

Financial.

.

9

DLR Presence in 23 Top Markets

Boston

Boston

San Francisco

Los Angeles

Dallas

Chicago

NY Metro

DLR Regional Office

DLR Market

Note:

Reflects

all

owned

assets

as

of

April

30,

2006.

Charlotte

St. Paul

Philadelphia

Phoenix

Denver

Sacramento

Geneva

Dublin

Austin

Toronto

Silicon Valley

Northern

Virginia

Atlanta

Miami

Boston

London

Amsterdam

Houston

# of

Properties

# of

Buildings

Total Rentable

Square Footage

Domestic

44

58

9,691,886

International

5

5

338,653

Total

49

63

10,030,539

10

DLR is well diversified by sector

Industry Distribution

Communications

38%

IT Services

30%

Other

Technology

8%

Financial &

Professional

Services

13%

Non-Technology

11%

Note:

Calculated

based

on

annualized

rents

using

in

place

leases

as

of

March

31,

2006.

11

2005 & YTD 2006 Acquisitions

(1) Net rentable square feet figures excludes 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 $561M in new properties

Total

Net Rentable

Redevelopment

Occupancy

Property

Location

Sq Ft.

Sq Ft. (1)

Sq Ft.

(Net of Redev)

833 Chestnut East

Philadelphia

654,778

535,098

119,680

76%

1125 Energy Park Drive

St. Paul

112,827

112,827

-

100%

350 East Cermak Road

Chicago

1,133,391

870,183

263,208

92%

85374 Concord Center Drive

Denver

82,229

82,229

-

100%

Savvis Portfolio (2)

Santa Clara & Los Angeles

560,000

560,000

-

100%

600-780 South Federal

Chicago

161,547

161,547

-

86%

Paul van Vlissingenstraat 16

Amsterdam

147,472

112,472

35,000

62%

Charlotte Portfolio (3)

Charlotte

95,489

71,746

23,743

98%

115 Second Avenue

Waltham, MA

68,069

12,500

55,569

N/A

Chemin de l'Epinglier 2

Geneva

59,190

59,190

-

100%

251 Exchange Place

Herndon, VA

70,982

70,982

-

100%

7500 & 7520 Metro Center Drive

Austin

119,962

45,000

74,962

100%

3 Corporate Place

Piscataway, NJ

283,124

-

283,124

N/A

2005 Acquisitions

3,549,060

2,693,774

855,286

4025 Midway Road

Carrollton, TX

99,947

49,947

50,000

N/A

Clonshaugh Industrial Estate

Dublin, Ireland

20,000

20,000

-

100%

Clonshaugh Development Site

Dublin, Ireland

2.6 acres

-

-

N/A

6800 Millcreek Drive

Toronto

83,758

83,758

-

100%

101 Aquila Way

Atlanta

313,581

313,581

-

100%

12001-12245 North Freeway

Houston

300,705

300,705

-

93%

YTD 2006 Acquisitions

817,991

767,991

50,000

Total 2005 & YTD 2006

4,367,051

3,461,765

905,286

Redevelopment

space

has

the

potential

to

convert

to

approx.

540,000

sf

of

raised

floor.

12

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. 

Replacement Cost Estimate

Replacement cost illustrates the value of DLR’s

portfolio

DLR owns over 4.7M 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)

13

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

14

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

has the potential to convert to approx.

440,000 sf

of raised floor

–

Stand alone, vacant buildings that possess electrical and

structural infrastructure necessary for conversion to data

center operations

•

Approximately 500,000 sf

located in Boston, NY Metro, Dallas and

Austin

has

the

potential

to

convert

to

approx.

300,000

sf

of

raised

floor

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

15

1.8%

2.4%

3.0%

6.3%

11.9%

11.7%

1.7%

11.2%

6.8%

16.6%

19.9%

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

Thereafter

DLR’s model features long-term, stable leases

•

The average lease term is 12 years with over 7 years remaining

•

Leases typically contain 3% annual rent bumps

7.3% 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

March

31,

2006.

Lease Expiration as a % of Net Rentable Square Feet

16

Digital Realty’s financial results

Reported FFO

(1)

of $21.7 million for 1Q06, up 37% from $15.8 million for

1Q05; or $0.36 per diluted share and unit for 1Q06, up 20% from $0.30

per diluted share and unit for 1Q05

Reported 1Q06 EBIDTA of $36.6 million, or approx. $146.2 million

on an

annualized basis

DLR’s

stock generated a total return to common shareholders of 78% in

2005

Increased quarterly common dividend 8.7% on an annualized basis to

$1.06 per share in November 2005

Priced follow on offering of 4 million shares of common stock for

approximately $95 million of net proceeds on May 23, 2006

(1) FFO and AFFO  is a non GAAP financial measure. For a description of FFO and AFFO see page 23.

17

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)

18

DLR employs a conservative capital structure

Reduced ratio of debt to total market

capitalization to 30.8% as of 1Q06

from 33.3% at year-end 2005

Improved debt service coverage

ratio

(2)

to 3.6x for 1Q06 versus 3.4x

for the same period in 2005 and

maintained our fixed charge

coverage ratio

(3)

at 2.4x for 1Q06

consistent with the same period in

2005

Wtd

Average Cost of Debt: 5.9%;

Approximately 75% fixed rate debt

$204M outstanding on the $350M

credit facility at March 31, 2006

No debt maturing through 2008

(assuming extensions)

Total Market

Capitalization

(1)

$2,511.1M

Note:

Based on March 31,2006 financial statements.

(1)

Based

on

closing

price

and

shares

outstanding

of

DLR

common

stock

($24.31) at May 25, 2006.

(2)

Adjusted

EBITDA

divided

by

Fixed

Charges

at

March

31,

2006.

Fixed

Charges include Cash Interest Expense, Scheduled Debt Principal Payments,

and Preferred Dividends.

See page 24 for a reconciliation of this ratio using cash

interest expense and GAAP interest expense.

(3) Adjusted EBITDA divided by Cash Interest Expense at March 31, 2006. See

page 24 for a reconciliation of cash interest expense to GAAP interest expense.

(4) Excludes $2.1 million of unamortized debt premium for 1125 Energy Park

Drive & 731 East Trade Street.

Dividend Yield / Rate:    4.4% / $1.06

Fixed Rate Debt

(4)

$607.1M

Variable Rate

Debt $204.4M

Preferred Stock

$166.8M

Equity

$1,532.8M

24%

7%

61%

8%

19

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.

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.

Adjusted

Funds

From

Operations

(AFFO)

We

present

adjusted

funds

from

operations,

or

AFFO,

as

a

supplemental

operating

measure

because,

when

compared

year

over

year,

it

assesses

our

ability

to

fund

dividend

and

distribution

requirements

from

our

operating

activities.

We

also

believe

that,

as

a

widely

recognized

measure

of

the

operations

of

REITs,

AFFO

will

be

used

by

investors

as

a

basis

to

assess

our

ability

to

fund

dividend

payments

in

comparison

to

other

REITs.

We

calculate

adjusted

funds

from

operations,

or

AFFO,

by

adding

to

or

subtracting

from

FFO

(i)

non-real

estate

depreciation,

(ii)

amortization

of

deferred

financing

costs

(iii)

noncash

compensation

(iv)

loss

from

early

extinguishment

of

debt

(v)

straight

line

rents

(vi)

fair

value

of

lease

revenue

amortization

(vii)

capitalized

leasing

payroll

(viii)

recurring

tenant

improvements

and

(ix)

capitalized

leasing

commissions.

Other

equity

REITs

may

not

calculate

AFFO

in

a

consistent

manner.

Accordingly,

our

AFFO

may

not

be

comparable

to

other

equity

REITs’

AFFO.

AFFO

should

be

considered

only

as

a

supplement

to

net

income

computed

in

accordance

with

GAAP

as

a

measure

of

our

operations.

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

and

Adjusted

EBITDA

exclude

items

that

have

real

economic

effect

and

could

materially

impact

our

results

from

operations,

and

therefore

the

utility

of

FFO

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.

20

Reconciliation of non GAAP items to their closest GAAP

Q106

Q105

FY 2005

Q106

Q105

FY 2005

Interest expense per financial statements

11,388

8,121

39,122

Amortization of deferred financing costs

(754)

(754)

(2,921)

Net income available to common stockholders

$1,642

$1,468

$6,087

Noncash

items

(390)

49

(1,145)

Cash interest expense

$10,244

$7,416

$35,056

Minority interests in operating partnership

1,846

2,159

8,268

Real estate related depreciation and amortization

18,185

12,143

62,171

Funds from operations (FFO)

$21,673

$15,770

$76,526

Adjusted EBITDA

36,562

25,159

125,711

Non real estate depreciation

71

-

61

Fixed charges including GAAP interest

expense

16,257

11,230

56,397

Amortization of deferred financing costs

795

675

2,965

Fixed charges including cash interest

expense

15,113

10,525

52,331

Non cash compensation

431

52

481

Fixed charge coverage ratio including

GAAP interest expense

2.2

2.2

2.2

Loss from early extinguishment of debt

57

125

1,021

Fixed charge coverage ratio including cash

interest expense

2.4

2.4

2.4

Straight line rents

(3,843)

(2,553)

(13,023)

Above and below market rent amortization

(433)

(439)

(1,717)

Capitalized leasing compensation

(764)

-

(781)

Recurring capital expenditures and tenant improvements

(904)

(519)

(2,897)

Capitalized leasing commissions

(265)

(180)

(3,051)

Adjusted funds from operations (AFFO)

$16,818

$12,931

$59,585

Q106

Q105

FY 2005

Net income available to common stockholders

$1,642

$1,468

$6,087

Interest

11,388

8,121

39,122

Depreciation and amortization

18,256

12,143

62,232

Earnings before interest, taxes and depreciation and

amortization (EBITDA)

$31,286

$21,732

$107,441

Minority interests

1,831

2,156

8,256

Preferred stock dividends

3,445

1,271

10,014

Adjusted Earnings before interest, taxes and

depreciation and amortization (Adjusted EBITDA)

$36,562

$25,159

$125,711

Funds

from

operations

and

Adjusted

Funds

from

Operations

Cash

interest

expense

Fixed

charge

coverage

ratio

EBITDA

and

Adjusted

EBITDA