8-K/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K/A

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 5, 2007

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))

This Form 8-K/A amends our Form 8-K, dated March 2, 2007, to furnish a copy of the materials to be presented at the series of investor meetings at the Citigroup Global Property CEO Conference on March 5, 2007.

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 5, 2007, management will make a presentation at a series of investor meetings at the Citigroup Global Property CEO Conference. A copy of the materials to be presented at the investor meetings is attached hereto as Exhibit 99.1 and is incorporated herein by reference, and may also be found on the company’s website at http://investor.digitalrealtytrust.com.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit Number	Description
99.1	Materials to be presented at a series of investor meetings on March 5, 2007.

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 5, 2007

EXHIBITS

Exhibit Number	Description
99.1	Materials to be presented at a series of investor meetings on March 5, 2007.

EX-99.1

2007 Global Property CEO Conference

March 2007

Foundation of the Digital World

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 growth in the

Software as a Service (SaaS) and e-commerce market, the digital communication and distribution market, and

the data storage market, online advertising, the market effects of regulatory requirements, the disaster recovery

market, estimates of sufficiency of power and cooling in existing datacenters, 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; environmental or contamination issues at our buildings; 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,

2006

and

subsequent

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 63 properties comprising 11.7

million rentable sq ft which includes

1.5 million sq ft of space held for

redevelopment

(1)

Portfolio occupancy of 95.0% and

“same store”

occupancy of 97.0%

(2)

Assets strategically located in 25 top

technology markets throughout North

America and Europe

DLR is a leading institutional owner focused on mission critical

technology properties throughout North America and Europe

4025 Midway Road

Dallas, TX

(1) Includes property acquisitions as of March 1, 2007

(2) Occupancy is as of December 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

Proven track record of creating

shareholder value

Conservative and flexible capital

structure

Industry leading domestic and

international datacenter development

and critical facilities management

capabilities

2323 Bryan Street

Dallas, TX

4

DLR properties feature advanced technical systems

Between $500 and $1000 psf typically invested in DLR buildings, creating a barrier to

exit for tenants and discouraging speculative new supply

Power backup/redundancy

Power management/conversion

Precision air cooling/handling

Systems and security controls

5

DLR presence in 25 top markets

(1)

11,736,000

84

63

Total

866,000

10

8

International

10,879,000

74

55

Domestic

Total Rentable

Square Feet

# of Buildings

# of Properties

(1) Includes  properties owned as of March 1, 2007

6

DLR properties serve a variety of industry verticals

DLR offers corporate enterprise tenants, IT service providers, and network

carriers flexible, cost-effective and reliable datacenter solutions

Technology

Internet

Enterprise

Communications

Manufacturing/

Energy/Retail

Financial

7

DLR is unique in its focus on technology properties

Corporate Datacenters

–

Storage/server intensive buildings

–

Provide a secure 24x7 environment

for the storage and processing of

mission-critical electronic

information

–

Used to house primary IT

operations: transaction processing,

data storage, disaster recovery,

CRM and email

Internet Gateways

–

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

Internet

Gateways

37%

Non

Technical

12%

Corporate

Datacenters

51%

(1)  Calculated based on average annualized GAAP rents using in place leases as of December 31, 2006.

Portfolio Distribution

(1)

8

Strong trends drive sustained demand for DLR space

Other Growth Drivers

By 2008, 50% of existing

corporate data centers will

have insufficient power and

cooling capacity to meet the

demands of high-density

equipment

(4)

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 2006;

expected 19% increase in

2007

(5)

U.S. e-commerce spending

increased

24%

during

2006

(6)

(1)

(2)

(3)

Primary Drivers –

Estimated Annual Growth Rates

(1) Gartner (May 2006) estimated growth in Software as a Service

(SaaS) from 2006 to 2009

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

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

(4) Gartner 25th

Annual Datacenter Conference 2006

(5) eMarketer.com, February 2007

(6) comScore

Networks, 2007

73%

60%

57%

20

40

60

80

SaaS

Digital

Communication

& Distribution

Data Storage

100%

0%

9

0%

10%

20%

30%

40%

50%

60%

70%

80%

1Q02

4Q02

3Q03

2Q04

1Q05

4Q05

3Q06

$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, 2006.  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)

$518 psf

Revenue PSF (Total)

$148 psf

Utilization Rate

29%

$542 psf

$360 psf

69%

10

DLR offers sustained growth

Acquisitions

Leasing of Turn-Key Datacenter™

Space

Redevelopment Inventory

DLR growth is derived from three sources

11

$847.2

$1,044.3

$1,137.4

$1,413.4

$1,508.5

$1,593.6

$1,648.2

$1,794.4

$2,066.2

$2,298.7

$600

$800

$1,000

$1,200

$1,400

$1,600

$1,800

$2,000

$2,200

$2,400

9/30/2004

12/31/2004

3/31/2005

6/30/2005

9/30/2005

12/31/2005

3/31/2006

6/30/2006

9/30/2006

12/31/2006

Proven track record: strong acquisition activity

Since its IPO, DLR has more than doubled its total assets through

property acquisitions

Total Undepreciated

Assets

($000)

12

2005, 2006 & YTD 2007 acquisitions

Acquired 40 properties

(1)

totaling over $1.1 billion

Added approximately 6.4 million square feet to total portfolio, including

1.5 million square feet of redevelopment inventory

New markets include:

–

Philadelphia

–

St. Paul

–

Chicago

–

Charlotte

–

Amsterdam, Netherlands

–

Geneva, Switzerland

–

Northern Virginia

–

Austin

–

Dublin, Ireland

–

Toronto, Canada

–

Houston

–

Seattle

–

Paris, France

Chicago, Illinois

Paris, France

(1)

Includes

one

property

held

as

an

investment

in

an

unconsolidated

joint

venture

13

Purchase

Total Rentable

Net Rentable

Redevelopment

Occupancy

Property

Location

Price (M)

Sq Ft

Sq Ft

(1)

Sq Ft

(Net of Redev)

2005 Acquisitions

$466

3,490,685

2,658,433

832,252

4025 Midway Road

Carrollton, TX

100,590

36,856

63,734

100%

Clonshaugh Industrial Estate

Dublin, Ireland

20,000

20,000

-

100%

Clonshaugh Industrial Estate

Dublin, Ireland

2.6 acres

-

-

N/A

6800 Millcreek Drive

Toronto, Canada

83,758

83,758

-

100%

101 Aquila Way

Atlanta

313,581

313,581

-

100%

12001 North Freeway

Houston

300,705

281,426

19,279

98%

14901 FAA Boulevard

Dallas

263,700

263,700

-

100%

120 E. Van Buren Street

Phoenix

287,514

206,359

81,155

97%

Gyroscoopweg 2E-2F

Amsterdam, Netherlands

55,585

55,585

-

100%

600 Winter Street

Waltham, MA

30,400

30,400

-

100%

2300 NW 89th Place

Miami

64,174

64,174

-

100%

AboveNet Portfolio

(2)

New York & N. Virginia

119,389

119,389

-

100%

2055 East Technology Circle

Tempe, AZ

76,350

-

76,350

N/A

2001 Sixth Avenue

(3)

Seattle, WA

389,460

389,460

-

90%

114 Rue Ambroise Croizat

Paris, France

352,146

122,627

229,519

56%

Blanchardstown Corporate Park

Dublin, Ireland

120,000

86%

2006 Acquisitions

$553

2,577,352

1,987,315

470,037

21110 Ridgetop Circle

Sterling, VA

135,000

-

135,000

100%

3011 Lafayette Street

Santa Clara, CA

90,780

90,780

N/A

44470 Chillum Place

Ashburn, VA

95,440

-

95,440

100%

YTD 2007 Acquisitions

$74

321,220

90,780

230,440

Total 2005, 2006 & YTD2007 Acquisitions

$1,093

6,389,257

4,736,528

1,532,729

(1)

Net rentable square feet figures excludes space held for redevelopment.

(2)

AboveNet Portfolio includes 1807 Michael Faraday Court, 8100 Boone Boulevard (VA) and 111 Eighth Street (NY).

(3)

Held as an investment in an unconsolidated joint venture in which DLR has a 49% interest.

DLR has acquired approximately $1.1 billion in new properties

2005,2006 & YTD 2007 acquisitions

14

Leasing drives internal growth

DLR commenced 211 leases during 2006, contributing approximately

$30.0 million in annualized GAAP rental revenues

(1)

(1)

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

(2)

Excludes leases for parking garages

$2.7 million

$17.00

155,000

33

Non Technical

(2)

$4.8 million

$42.00

114,000

5

Redevelopment

$22.6 million

$121.00

186,000

173

Datacenter

Annualized

GAAP Rent

Annualized

GAAP Rent PSF

Total SF

Leased

# of Leases

Type of Space

DLR executed 231 leases during 2006, contributing approximately $41.2 million

in annualized GAAP rental revenues

(1). 

In the fourth quarter of 2006 DLR

executed

leases

for

302,000

sf

of

datacenter

space

that

will

commence

in

2007

15

Same store growth

36,000

37,000

38,000

39,000

40,000

41,000

42,000

43,000

44,000

45,000

Dec-05

Mar-06

Jun-06

Sep-06

Dec-06

93.0%

93.5%

94.0%

94.5%

95.0%

95.5%

96.0%

96.5%

97.0%

97.5%

Quarterly Operating Revenue

Occupancy

($000)

Same Store Quarterly Operating

Revenue

(2)

Increase = 11.5%

Same Store Occupancy

(1)

Increase = 250 bps

(1)

Same store occupancy excludes redevelopment space until leased

(2)

Quarterly operating revenue includes rental and tenant reimbursement revenue.

(3)

Calculated based on reported 4Q06 operating revenue of $35,744 less $2,498 straight line rent and less $394k for below/above rent amortization

Fourth quarter 2006 same store cash was $32,852

(3)

16

Case studies:  DLR’s

value-add leasing

(1)  Calculation based on IPO date of November 2004 and actual Net Operating Income (NOI) as of December 31,2006. See page 29 for a discussion of NOI.

350 East Cermak Road

1100 Space Park Drive

200 Paul Avenue

300 Boulevard East

Property Name

Location

Acquisition /

IPO Date

% Change in NOI

from later of

Acquisition or

IPO

(1)

200 Paul Avenue

San Francisco, CA

Nov-04

41.5%

150 South First Street

San Jose, CA

Sep-04

18.0%

1100 Space Park Drive

Santa Clara, CA

Nov-04

50.9%

350 East Cermak Road

Chicago, IL

May-05

18.8%

300 Boulevard East

Weehawken, NJ

Nov-04

52.5%

150 South First Street

17

DLR redevelopment inventory

Redevelopment inventory totals 1.5 million

sf

of vacant space with potential for up to

1.1 million sf

of datacenter:

–

Approximately 40% of inventory in

income-producing properties

–

Remaining 60% of inventory in 7

recently acquired vacant buildings

Redevelopment costs vary by building

–

Base building power, structural

upgrades: $35 -

$50 psf

–

Custom datacenter:  $350 to $800 psf

(funding available through DLR)

Total capital investment of $312.2 million

(1)

–

Approximately $148.9 million invested

in income-producing properties

–

Approximately $163.3 million invested

in vacant buildings

(2)

Growth Opportunity

(1)

Capital

investment

as

of

December

31,

2006

(2)

Includes

acquisition

costs,

including

vacant

Paris

building

18

Redevelopment program progress report

Construction projects underway in 11 U.S. and European markets totaling over

500,000 rentable square feet of Turn-Key Datacenter™

and build-to-suit space

DLR’s

Turn-Key Datacenters™

–

Move-in ready, physically secure facilities with redundant power and cooling

capabilities

–

Measuring 10,000 –

12,000 square feet of raised-floor featuring DLR’s

POD Architecture™

Strong interest from prospective tenants

Stabilized income projected over the next 36 months

Turn-Key Datacenter™

Built-to-suit

19

DLR’s

competitive advantage: Dedicated technical professionals

Staff of over 50 DLR technical professionals:

–

IT sales team

Focus on end-user, IT professionals (CIO or CTO)

–

Datacenter sales engineers

Provide value engineering and custom design expertise

–

Design and construction experts

Disciplined approach to project management

Volume purchase agreements for equipment and services

Best-in-class engineering and contracting

–

Datacenter facilities management team

Best-in-class operating policies and procedures

Fully-integrated Building Automation Systems

Global preventative maintenance agreements

Operating scale and process-based approach result in significant cost

savings and added value for tenants

DLR possesses the necessary scale to support these specialized professionals

20

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

(1)

Infrastructure only. Does not include electronic equipment. Assumes 60% ratio of datacenter to total building with all cost allocated to raised floor area.

(2)

DLR estimate based on Equinix press release dated September 19, 2006

(3)

Reflects all owned properties and revised as of February 28, 2007 

Replacement Cost Estimate

Replacement cost illustrates the value of DLR’s

portfolio

DLR

owns

over

6.1

million

sq

ft

of

improved

datacenter

space

(3)

Cost per Square Foot

Equinix

(2)

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

$1,250

Base Building

Data Center

Improvements

(1)

21

2.0%

4.5%

5.4%

9.2%

13.5%

5.6%

6.0%

5.8%

17.5%

7.9%

17.6%

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

Thereafter

DLR’s model features long-term, stable leases

The stability of our long-term leases complements our growth

Note:  Excludes vacant square footage of 0.5 million square feet

and 1.6 million square feet of space held for redevelopment as of December 31, 2006

Lease expiration as a percentage of net rentable square feet

11.9% in through 2009

The average lease term is approximately 12 years with 7 years remaining.

Leases typically contain 3% annual rent bumps.

22

2006 actual results compared to guidance

$552.5 million

9.0%

cap

rate

(3)

300K @ $91.00 psf

155K @ $17.00 psf

$1.63

Actual 2006

$300 -

$400 million

8%

to

9%

cap

rate

(3)

Acquisitions

200K –

300K sf

@ $40.00 psf

100K –

125K @ $19.00

Leasing: Datacenter

Non Technical

(2)

$1.57 –

$1.59

FFO

(2)

per share

Guidance 2006

(1)

(1)

Based on Company guidance updated on December 7, 2006

(2)

FFO

and

AFFO

are

non

GAAP

financial

measures.

For

a

description

of

FFO

and

AFFO

see

page

29.

For

a

reconciliation

to

net

income

see

page

30.

(3)

Excludes leases for parking garages

(4)

Excludes vacant properties

2006 FFO per diluted share and unit was up 19.0% over 2005; fourth quarter

2006 FFO was $0.48 per share, up 33.0% over fourth quarter 2005.

23

DLR 2007 guidance

2007 projected funds from operations (FFO) per share guidance:

(1)(2)

$1.85 to $1.95

(1)

Based on Company guidance confirmed in our February 28, 2006 conference call.

(2)

FFO

and

AFFO

are

non

GAAP

financial

measures.

For

a

description

of

FFO

and

AFFO

see

page

29.

For

a

reconciliation

to

net

income

see

page

30.

Internal Growth 

8.8% to 12.7%

FFO

(2)

Per Share Growth

Leasing 

475,000 to  600,000 sq ft of turn-

key & redevelopment space

(gross rent $80 / sq ft)

100,000 to 125,000 sq ft of basic

commercial space (gross rent

$19 / sq ft)

Acquisitions

$300 - $400 million 

o

$75 million of vacant

for redevelopment

o

$225 to $325 million of

income producing at

an average cap rate of

8.25%

External Growth

4.7% to 6.9%

FFO Per Share Growth

13.5% to 19.6%

Overall FFO Per Share Growth

•

Capital Expenditure for redevelopment of $273 million

•

Total G&A of $24 million

24

DLR financial overview

Strong

and

consistent

FFO

(1)

growth

–

$1.63 per diluted share and unit for 2006, +19% from 2005

–

$0.48 per diluted share and unit for 4Q06, +33% from 4Q05 and +17% from 3Q06

Well supported dividend

–

2.9% yield

(2)

–

FFO

/

AFFO

payout

ratio

of

60%

/

99%

(3)

for

4Q06

–

Increased quarterly common dividend in 4Q06, +8%

Proven access to capital:  $900.2 million of capital raised in 2006

–

Amended credit facility twice

Increased facility size from $350 to $500 million

Changed financial covenants to enhance financial flexibility

Added redevelopment assets to borrowing base to support redevelopment program

–

Raised $172.5 million of 4.125% convertible debt

–

Completed 10 mortgage financings totaling $349.4 million

–

Raised $228.3 million in net proceeds from two common stock offerings

Increased float by 98.3% from 27.4 million to 54.3 million shares of common stock

outstanding

(1)

FFO and AFFO is a non GAAP financial measure. For a description of FFO and AFFO see page 29.

(2)

Based on most recent quarterly dividend annualized.  Dividend yield based on March 1, 2007 closing stock price of $39.12

(3)

FFO

payout

ratio

is

dividend

declared

per

common

share

and

unit

divided

by

diluted

FFO

per

share

and

unit.

AFFO

payout

ratio

is

dividend

declared

per

common

share

and

unit

divided

by

diluted

AFFO

per

share

and

unit.

For

a

description

of

FFO

and

AFFO

see

page

29.

For

a

reconciliation

to

net

income

see

page

30.

25

Improving overall credit quality of DLR portfolio

+

=

+

=

Approximately

$18

million

of

base

rental

income,

or

over

8%

of

overall

income,

has

experienced an improvement in credit quality.

(1)

As a result of a sublease relationship with Microsoft for 200,000 sq ft of space that is leased directly by Savvis.

(2)

On June 30, 2006, SAVVIS completed the exchange of its Series A Preferred stock for 37.4 million shares of common stock.

(1)(2)

26

$0.6

$0.4

$1.8

$2.2

$0.7

$1.2

$2.2

$2.5

$16.3

$15.9

$10.6

$6.1

0.0

2.0

4.0

6.0

8.0

DLR’s

top

tenants

have

experienced

a

robust

increase

in

equity

capitalization

(1)

Significant equity capitalization improvement in top tenants

(1) Increase in equity capitalization calculated as of March 1, 2007 from DLR IPO date of November 1, 2004

$18.0

12.0

6.0

2.0

0.0

27

DLR employs a conservative capital structure

Wtd

average cost of debt:

5.87%; approximately 89%

fixed rate debt

(4)

Coverage ratios

(5)

:

–

Debt service: 4.0x

–

Fixed charge: 2.9X

Periodically refinancing high

cost debt with lower rate,

longer term, fixed rate

financing

No debt maturing through

2009 (assuming extensions)

Total Enterprise Value

(1)

$4,084.3M

Dividend Yield / Rate:    2.9% / $1.145

Total Fixed Rate

Debt

27.4%

Total Variable Rate

Debt

3.4%

Preferred

4.1%

Equity

65.0%

(2)(4)

(1)

(3)

(1)

Based on closing price of $39.12 and shares outstanding of DLR common stock at March 1, 2007

(2)

Excludes $2.0 million of unamortized debt premium for 1125 Energy Park Drive & 731 East Trade Street

(3)

Unsecured credit facility as of March 1, 2007; will fluctuate based on amount drawn on credit facility from time to time.

(4)

Includes $172.5 million of convertible debt

(5)

Debt  service coverage ratio is Adjusted EBITDA divided by cash interest expense.  Fixed charge coverage ratio is Adjusted EBITDA divided by fixed charges

30

Reconciliation of non GAAP items to their closest GAAP

2007 FFO Reconcilliation

(in millions, except per share and unit data)

Low end of

range

High end

of range

$43.10

—

$50.40

Plus: Real estate related depreciation and amortization

109.8

—

111.2

Funds from operations

$152.90

—

$161.20

Less:  Preferred stock dividends

-19.2

-19.2

FFO available to common stockholders and unit holders

$133.70

—

$142.40

FFO per share of common stock and unit outstanding

$1.85

—

$1.95

Net income before minority interest in operating partnership but

after minority interest in consolidated joint ventures

Funds from operations

(1)

Cash interest expense (including discontinued operations)

Q406

Q306

Q405

FY2006

FY2005

Q406

Q306

Q405

FY2006

FY2005

Net income available to common stockholders

$2,978

$11,342

$1,157

$17,612

$6,087

Total GAAP interest expense (including

discontinued operations)

$14,569

$14,533

$10,988

$52,671

$39,122

Capitalized interest

1,114

917

279

3,851

279

Minority interests in operating partnership including

discontinued operations

1,276

8,464

1,338

12,926

8,268

Change in accrued interest and other

noncash

amounts

(3,206)

(2,590)

(1,660)

(7,645)

(4,345)

Real estate related depreciation and amortization

(2)

28,055

24,454

18,781

90,932

62,171

Cash interest expense

$12,477

$12,860

$9,607

$48,877

$35,056

Real estate related depreciation and amortization related

to investment in unconsolidated joint venture

796

-

-

796

-

Gain on sale of assets

(80)

(18,016)

-

(18,096)

-

Funds from operations (FFO)

$33,025

$26,244

$21,276

$104,170

$76,526

Funds from operations (FFO) per diluted share

$          0.48

$          0.41

$          0.36

$          1.63

$        1.37

Net income per diluted share available to common

stockholders

$          0.06

$          0.30

$          0.04

$          0.47

$        0.25

Funds from operations (FFO)

$33,025

$26,244

$21,276

$104,170

$76,526

Non real estate depreciation

118

285

23

511

61

Amortization of deferred financing costs

1,115

916

793

3,763

2,965

Non cash compensation

491

430

335

1,787

481

Loss from early extinguishment of debt

6

40

896

528

1,021

Straight line rents

(5,810)

(3,856)

(4,172)

(17,742)

(13,023)

Above and below market rent amortization

(2,238)

(2,837)

(632)

(7,012)

(1,717)

Capitalized leasing compensation

(217)

(185)

(105)

(2,054)

(781)

Recurring capital expenditures and tenant improvements

(2,574)

(344)

(1,406)

(4,160)

(2,897)

Capitalized leasing commissions

(3,716)

(1,523)

(1,535)

(7,186)

(3,051)

Adjusted funds from operations

(1)

$20,200

$19,170

$15,473

$72,605

$59,585

(2) Real estate depreciation and amortization was computed as follows:

Q406

Q306

Q405

FY2006

FY2005

Depreciation and amortization per income statement

$28,173

$24,739

$18,040

$89,936

$59,616

Depreciation and amortization of discontinued operations

at 7979 East Tufts Avenue

-

-

764

1,507

2,616

Non real estate depreciation

(118)

(285)

(23)

(511)

(61)

$28,055

$24,454

$18,781

$90,932

$62,171

Weighted-average

shares

outstanding

-

diluted

69,213

64,397

59,248

63,870

55,761

(1) Funds from operations and Adjusted Funds from operations for

all periods presented above includes the results of 7979

East Tufts Avenue, a property which we sold on July 12, 2006.