10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended September 30, 2019

☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the Transition Period From              to             .

Commission file number 001-32336 (Digital Realty Trust, Inc.)

000-54023 (Digital Realty Trust, L.P.)

DIGITAL REALTY TRUST, INC.

DIGITAL REALTY TRUST, L.P.

(Exact name of registrant as specified in its charter)

Maryland	(Digital Realty Trust, Inc.)					26-0081711
Maryland	(Digital Realty Trust, L.P.)					20-2402955
(State or other jurisdiction of incorporation or organization)						(IRS employer identification number)
		Four Embarcadero Center, Suite 3200
		San Francisco	,	California	94111
		(Address of principal executive offices)

(415) 738-6500

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common Stock	DLR	New York Stock Exchange
Series C Cumulative Redeemable Perpetual Preferred Stock	DLR Pr C	New York Stock Exchange
Series G Cumulative Redeemable Preferred Stock	DLR Pr G	New York Stock Exchange
Series I Cumulative Redeemable Preferred Stock	DLR Pr I	New York Stock Exchange
Series J Cumulative Redeemable Preferred Stock	DLR Pr J	New York Stock Exchange
Series K Cumulative Redeemable Preferred Stock	DLR Pr K	New York Stock Exchange
Series L Cumulative Redeemable Preferred Stock	DLR Pr L	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. 

Digital Realty Trust, Inc.	Yes	☒      No   ☐
Digital Realty Trust, L.P.	Yes	☒      No   ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Digital Realty Trust, Inc.	Yes	☒      No   ☐
Digital Realty Trust, L.P.	Yes	☒      No   ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Digital Realty Trust, Inc.:

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

Digital Realty Trust, L.P.:

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Digital Realty Trust, Inc.	☐
Digital Realty Trust, L.P.	☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Digital Realty Trust, Inc.	Yes	☐	No   ☒
Digital Realty Trust, L.P.	Yes	☐	No   ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Digital Realty Trust, Inc.:

Class	Outstanding at November 4, 2019
Common Stock, $.01 par value per share	208,720,408

EXPLANATORY NOTE

This report combines the quarterly reports on Form 10-Q for the quarter ended September 30, 2019 of Digital Realty Trust, Inc., a Maryland corporation, and Digital Realty Trust, L.P., a Maryland limited partnership, of which Digital Realty Trust, Inc. is the sole general partner. Unless otherwise indicated or unless the context requires otherwise, all references in this report to “we,” “us,” “our,” “our Company” or “the Company” refer to Digital Realty Trust, Inc. together with its consolidated subsidiaries, including Digital Realty Trust, L.P. Unless otherwise indicated or unless the context requires otherwise, all references to “our Operating Partnership” or “the Operating Partnership” refer to Digital Realty Trust, L.P. together with its consolidated subsidiaries.

Digital Realty Trust, Inc. is a real estate investment trust, or REIT, and the sole general partner of Digital Realty Trust, L.P. As of September 30, 2019, Digital Realty Trust, Inc. owned an approximate 95.8% common general partnership interest in Digital Realty Trust, L.P. The remaining approximate 4.2% of the common limited partnership interests of Digital Realty Trust, L.P. are owned by non-affiliated third parties and certain directors and officers of Digital Realty Trust, Inc. As of September 30, 2019, Digital Realty Trust, Inc. owned all of the preferred limited partnership interests of Digital Realty Trust, L.P. As the sole general partner of Digital Realty Trust, L.P., Digital Realty Trust, Inc. has the full, exclusive and complete responsibility for the Operating Partnership’s day-to-day management and control.

We believe combining the quarterly reports on Form 10-Q of Digital Realty Trust, Inc. and Digital Realty Trust, L.P. into this single report results in the following benefits:

• enhancing investors’ understanding of our Company and our Operating Partnership by enabling investors to view the business as a whole in the same manner as management views and operates the business;

• eliminating duplicative disclosure and providing a more streamlined and readable presentation since a substantial portion of the disclosure applies to both our Company and our Operating Partnership; and

• creating time and cost efficiencies through the preparation of one combined report instead of two separate reports.

There are a few differences between our Company and our Operating Partnership, which are reflected in the disclosure in this report. We believe it is important to understand the differences between our Company and our Operating Partnership in the context of how we operate as an interrelated consolidated company. Digital Realty Trust, Inc. is a REIT, whose only material asset is its ownership of partnership interests of Digital Realty Trust, L.P. As a result, Digital Realty Trust, Inc. does not conduct business itself, other than acting as the sole general partner of Digital Realty Trust, L.P., issuing public equity from time to time and guaranteeing certain unsecured debt of Digital Realty Trust, L.P. and certain of its subsidiaries and affiliates. Digital Realty Trust, Inc. itself does not issue any indebtedness but guarantees the unsecured debt of Digital Realty Trust, L.P. and certain of its subsidiaries and affiliates, as disclosed in this report. Digital Realty Trust, L.P. holds substantially all the assets of the Company and holds the ownership interests in the Company’s joint ventures. Digital Realty Trust, L.P. conducts the operations of the business and is structured as a partnership with no publicly traded equity. Except for net proceeds from public equity issuances by Digital Realty Trust, Inc., which are generally contributed to Digital Realty Trust, L.P. in exchange for partnership units, Digital Realty Trust, L.P. generates the capital required by the Company’s business through Digital Realty Trust, L.P.’s operations, by Digital Realty Trust, L.P.’s direct or indirect incurrence of indebtedness or through the issuance of partnership units.

The presentation of noncontrolling interests in operating partnership, stockholders’ equity and partners’ capital are the main areas of difference between the condensed consolidated financial statements of Digital Realty Trust, Inc. and those of Digital Realty Trust, L.P. The common limited partnership interests held by the limited partners in Digital Realty Trust, L.P. are presented as limited partners’ capital within partners’ capital in Digital Realty Trust, L.P.’s condensed consolidated financial statements and as noncontrolling interests in operating partnership within equity in Digital Realty Trust, Inc.’s condensed consolidated financial statements. The common and preferred partnership interests held by Digital Realty Trust, Inc. in Digital Realty Trust, L.P. are presented as general partner’s capital within partners’ capital in Digital Realty Trust, L.P.’s condensed consolidated financial statements and as preferred stock, common stock, additional paid-in capital and accumulated dividends in excess of earnings within stockholders’ equity in Digital Realty Trust, Inc.’s condensed consolidated financial statements. The differences in the presentations between stockholders’ equity and partners’ capital result from the differences in the equity issued at the Digital Realty Trust, Inc. and the Digital Realty Trust, L.P. levels.

2

To help investors understand the significant differences between the Company and the Operating Partnership, this report presents the following separate sections for each of the Company and the Operating Partnership:

• Condensed consolidated financial statements;

• the following notes to the condensed consolidated financial statements:

• "Debt of the Company" and "Debt of the Operating Partnership";

• "Income per Share" and "Income per Unit"; and

• "Equity and Accumulated Other Comprehensive Loss, Net" and "Capital and Accumulated Other Comprehensive Loss";

• Part I, Item 2. "Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources of the Parent Company" and "—Liquidity and Capital Resources of the Operating Partnership"; and

• Part II, Item 2. "Unregistered Sales of Equity Securities and Use of Proceeds".

This report also includes separate Part I, Item 4. "Controls and Procedures" sections and separate Exhibit 31 and 32 certifications for each of the Company and the Operating Partnership in order to establish that the Chief Executive Officer and the Chief Financial Officer of each entity during the period covered by this report have made the requisite certifications and that the Company and the Operating Partnership are compliant with Rule 13a-15 or Rule 15d-15 of the Securities Exchange Act of 1934 and 18 U.S.C. §1350.

In order to highlight the differences between the Company and the Operating Partnership, the separate sections in this report for the Company and the Operating Partnership specifically refer to the Company and the Operating Partnership. In the sections that combine disclosure of the Company and the Operating Partnership, this report refers to actions or holdings as being actions or holdings of the Company. Although the Operating Partnership is generally the entity that enters into contracts and joint ventures and holds assets and debt, reference to the Company is appropriate because the business is one enterprise and the Company operates the business through the Operating Partnership.

As general partner with control of the Operating Partnership, Digital Realty Trust, Inc. consolidates the Operating Partnership for financial reporting purposes, and it does not have significant assets other than its investment in the Operating Partnership. Therefore, the assets and liabilities of Digital Realty Trust, Inc. and Digital Realty Trust, L.P. are the same on their respective condensed consolidated financial statements. The separate discussions of Digital Realty Trust, Inc. and Digital Realty Trust, L.P. in this report should be read in conjunction with each other to understand the results of the Company on a consolidated basis and how management operates the Company.

3

DIGITAL REALTY TRUST, INC. AND DIGITAL REALTY TRUST, L.P.

FORM 10-Q

FOR THE QUARTER ENDED SEPTEMBER 30, 2019

TABLE OF CONTENTS 

		Page  Number
PART I.	FINANCIAL INFORMATION
ITEM 1.	Condensed Consolidated Financial Statements of Digital Realty Trust, Inc.:
	Condensed Consolidated Balance Sheets as of September 30, 2019 (unaudited) and December 31, 2018 (unaudited)	5
	Condensed Consolidated Income Statements for the three and nine months ended September 30, 2019 and 2018 (unaudited)	6
	Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2019 and 2018 (unaudited)	7
	Condensed Consolidated Statement of Equity for the three and nine months ended September 30, 2019 and 2018 (unaudited)	8
	Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2019 and 2018 (unaudited)	12
	Condensed Consolidated Financial Statements of Digital Realty Trust, L.P.:
	Condensed Consolidated Balance Sheets as of September 30, 2019 (unaudited) and December 31, 2018 (unaudited)	15
	Condensed Consolidated Income Statements for the three and nine months ended September 30, 2019 and 2018 (unaudited)	16
	Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2019 and 2018 (unaudited)	17
	Condensed Consolidated Statement of Capital for the three and nine months ended September 30, 2019 and 2018 (unaudited)	18
	Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2019 and 2018 (unaudited)	22
	Notes to Condensed Consolidated Financial Statements of Digital Realty Trust, Inc. and Digital Realty Trust, L.P. (unaudited)	26
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	68
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	94
ITEM 4.	Controls and Procedures (Digital Realty Trust, Inc.)	95
	Controls and Procedures (Digital Realty Trust, L.P.)	95
PART II.	OTHER INFORMATION	97
ITEM 1.	Legal Proceedings	97
ITEM 1A.	Risk Factors	97
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	101
ITEM 3.	Defaults Upon Senior Securities	101
ITEM 4.	Mine Safety Disclosures	101
ITEM 5.	Other Information	102
ITEM 6.	Exhibits	103
	Signatures	104

4

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited, in thousands, except share and per share data)

	September 30, 2019			December 31, 2018
ASSETS
Investments in real estate:
Properties:
Land	$	790,821		$	859,113
Acquired ground leases	10,133			10,575
Buildings and improvements	14,998,062			15,610,992
Tenant improvements	608,064			574,336
Total investments in operating properties	16,407,080			17,055,016
Accumulated depreciation and amortization	(4,298,629		)	(3,935,267		)
Net investments in operating properties	12,108,451			13,119,749
Construction in progress and space held for development	1,647,130			1,621,928
Land held for future development	150,265			162,941
Net investments in properties	13,905,846			14,904,618
Investments in unconsolidated joint ventures	1,035,861			175,108
Net investments in real estate	14,941,707			15,079,726
Operating lease right-of-use assets, net	634,085			—
Cash and cash equivalents	7,190			126,700
Accounts and other receivables, net	304,712			299,621
Deferred rent, net	471,516			463,248
Acquired above-market leases, net	84,315			119,759
Goodwill	3,338,168			4,348,007
Acquired in-place lease value, deferred leasing costs and intangibles, net	2,245,017			3,144,395
Assets held for sale and contribution	967,527			—
Other assets	178,528			185,239
Total assets	$	23,172,765		$	23,766,695
LIABILITIES AND EQUITY
Global revolving credit facilities, net	$	1,833,512		$	1,647,735
Unsecured term loans, net	796,232			1,178,904
Unsecured senior notes, net	8,189,138			7,589,126
Secured debt, including premiums	105,153			685,714
Operating lease liabilities	699,381			—
Accounts payable and other accrued liabilities	938,740			1,164,509
Accrued dividends and distributions	—			217,241
Acquired below-market leases, net	153,422			200,113
Security deposits and prepaid rents	203,708			209,311
Obligations associated with assets held for sale and contribution	23,534			—
Total liabilities	12,942,820			12,892,653
Redeemable noncontrolling interests – operating partnership	19,090			15,832
Commitments and contingencies
Equity:
Stockholders’ Equity:
Preferred Stock: $0.01 par value per share, 110,000,000 shares authorized; 44,450,000 and 50,650,000 shares issued and outstanding as of September 30, 2019 and December 31, 2018, respectively	1,099,534			1,249,560
Common Stock: $0.01 par value per share, 315,000,000 shares authorized, 208,583,244 and 206,425,656 shares issued and outstanding as of September 30, 2019 and December 31, 2018, respectively	2,069			2,051
Additional paid-in capital	11,540,980			11,355,751
Accumulated dividends in excess of earnings	(3,136,668		)	(2,633,071		)
Accumulated other comprehensive loss, net	(68,625		)	(115,647		)
Total stockholders’ equity	9,437,290			9,858,644
Noncontrolling Interests:
Noncontrolling interests in operating partnership	731,216			906,510
Noncontrolling interests in consolidated joint ventures	42,349			93,056
Total noncontrolling interests	773,565			999,566
Total equity	10,210,855			10,858,210
Total liabilities and equity	$	23,172,765		$	23,766,695

See accompanying notes to the condensed consolidated financial statements.

5

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED INCOME STATEMENTS

(unaudited, in thousands, except share and per share data)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
Operating Revenues:
Rental and other services	$	802,472		$	603,833		$	2,413,888		$	1,792,457
Tenant reimbursements	—			163,104			—			468,906
Fee income and other	3,994			1,987			7,890			6,848
Total operating revenues	806,466			768,924			2,421,778			2,268,211
Operating Expenses:
Rental property operating and maintenance	259,431			245,971			766,417			701,933
Property taxes and insurance	41,358			37,524			126,587			106,408
Depreciation and amortization	286,718			293,957			888,766			887,534
General and administrative	49,985			41,642			156,427			124,264
Transactions and integration	4,115			9,626			10,819			19,410
Impairment of investments in real estate	—			—			5,351			—
Other	92			1,139			12,129			1,722
Total operating expenses	641,699			629,859			1,966,496			1,841,271
Operating income	164,767			139,065			455,282			426,940
Other Income (Expenses):
Equity in (losses) earnings of unconsolidated joint ventures	(19,269		)	8,886			(3,090		)	23,734
Gain on deconsolidation / sale of properties, net	—			26,577			67,497			80,042
Interest and other income, net	16,842			(981		)	55,266			2,375
Interest expense	(84,574		)	(80,851		)	(272,177		)	(236,646		)
Tax expense	(4,826		)	(2,432		)	(13,726		)	(7,927		)
Loss from early extinguishment of debt	(5,366		)	—			(39,157		)	—
Net income	67,574			90,264			249,895			288,518
Net income attributable to noncontrolling interests	(1,077		)	(2,667		)	(6,418		)	(8,831		)
Net income attributable to Digital Realty Trust, Inc.	66,497			87,597			243,477			279,687
Preferred stock dividends, including undeclared dividends	(16,670		)	(20,329		)	(54,283		)	(60,987		)
Issuance costs associated with redeemed preferred stock	—			—			(11,760		)	—
Net income available to common stockholders	$	49,827		$	67,268		$	177,434		$	218,700
Net income per share available to common stockholders:
Basic	$	0.24		$	0.33		$	0.85		$	1.06
Diluted	$	0.24		$	0.33		$	0.85		$	1.06
Weighted average common shares outstanding:
Basic	208,421,470			206,118,472			208,173,995			205,931,031
Diluted	209,801,771			206,766,256			209,199,535			206,555,627

See accompanying notes to the condensed consolidated financial statements.

6

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(unaudited, in thousands)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
Net income	$	67,574		$	90,264		$	249,895		$	288,518
Other comprehensive income (loss):
Foreign currency translation adjustments	24,668			2,368			44,824			(8,608		)
Reclassification of foreign currency translation adjustment due to deconsolidation of Ascenty	—			—			21,687			—
(Decrease) increase in fair value of interest rate swaps and foreign currency hedges	(1,000		)	2,925			(11,379		)	16,336
Reclassification to interest expense from interest rate swaps	(1,805		)	(1,271		)	(6,055		)	(2,289		)
Comprehensive income	89,437			94,286			298,972			293,957
Comprehensive income attributable to noncontrolling interests	(1,953		)	(2,820		)	(8,426		)	(9,039		)
Comprehensive income attributable to Digital Realty Trust, Inc.	$	87,484		$	91,466		$	290,546		$	284,918

See accompanying notes to the condensed consolidated financial statements.

7

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF EQUITY

(unaudited, in thousands, except share data)

Three Months Ended September 30, 2019	Redeemable Noncontrolling Interests -- Operating Partnership			Preferred Stock		Number of Common Shares	Common Stock		Additional Paid-in Capital			Accumulated Dividends in Excess of Earnings			Accumulated Other Comprehensive Loss, Net			Total Stockholders’ Equity			Noncontrolling Interests in Operating Partnership			Noncontrolling Interests in Consolidated Joint Ventures			Total Noncontrolling Interests			Total Equity
Balance as of June 30, 2019	$	17,344		$	1,099,534	208,324,538	$	2,067	$	11,511,519		$	(2,961,307	)	$	(89,588	)	$	9,562,225		$	756,050		$	155,445		$	911,495		$	10,473,720
Conversion of common units to common stock	—			—		218,752	2		18,753			—			—			18,755			(18,755		)	—			(18,755		)	—
Issuance of unvested restricted stock, net of forfeitures	—			—		1,414	—		—			—			—			—			—			—			—			—
Payment of offering costs	—			—		—	—		(282		)	—			—			(282		)	—			—			—			(282		)
Shares issued under employee stock purchase plan	—			—		38,540	—		3,203			—			—			3,203			—			—			—			3,203
Amortization of share-based compensation	—			—		—	—		9,913			—			—			9,913			—			—			—			9,913
Reclassification of vested share-based awards	—			—		—	—		(250		)	—			—			(250		)	250			—			250			—
Adjustment to redeemable noncontrolling interests—operating partnership	1,876			—		—	—		(1,876		)	—			—			(1,876		)	—			—			—			(1,876		)
Dividends declared on preferred stock	—			—		—	—		—			(16,670		)	—			(16,670		)	—			—			—			(16,670		)
Dividends and distributions on common stock and common and incentive units	(169		)	—		—	—		—			(225,188		)	—			(225,188		)	(9,490		)	—			(9,490		)	(234,678		)
Distributions from noncontrolling interests in consolidated joint ventures, net of contributions	—			—		—	—		—			—			—			—			—			(1,787		)	(1,787		)	(1,787		)
Deconsolidation of consolidated joint venture	—			—		—	—		—			—			—			—			—			(110,086		)	(110,086		)	(110,086		)
Net income (loss)	39			—		—	—		—			66,497			—			66,497			2,261			(1,223		)	1,038			67,535
Other comprehensive income (loss)—foreign currency translation adjustments	—			—		—	—		—			—			23,652			23,652			1,016			—			1,016			24,668
Other comprehensive loss—fair value of interest rate swaps	—			—		—	—		—			—			(958		)	(958		)	(42		)	—			(42		)	(1,000		)
Other comprehensive loss—reclassification of accumulated other comprehensive income to interest expense	—			—		—	—		—			—			(1,731		)	(1,731		)	(74		)	—			(74		)	(1,805		)
Balance as of September 30, 2019	$	19,090		$	1,099,534	208,583,244	$	2,069	$	11,540,980		$	(3,136,668	)	$	(68,625	)	$	9,437,290		$	731,216		$	42,349		$	773,565		$	10,210,855

See accompanying notes to the condensed consolidated financial statements.

8

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF EQUITY

(unaudited, in thousands, except share data)

Three Months Ended September 30, 2018	Redeemable Noncontrolling Interests -- Operating Partnership			Preferred Stock		Number of Common Shares	Common Stock		Additional Paid-in Capital			Accumulated Dividends in Excess of Earnings			Accumulated Other Comprehensive Loss, Net			Total Stockholders’ Equity			Noncontrolling Interests in Operating Partnership			Noncontrolling Interests in Consolidated Joint Ventures			Total Noncontrolling Interests			Total Equity
Balance as of June 30, 2018	$	52,805		$	1,249,560	206,055,117	$	2,047	$	11,310,132		$	(2,314,291	)	$	(107,070	)	$	10,140,378		$	654,261		$	2,289		$	656,550		$	10,796,928
Conversion of common units to common stock	—			—		161,153	2		13,867			—			—			13,869			(13,869		)	—			(13,869		)	—
Issuance of unvested restricted stock, net of forfeitures	—			—		13,146	—		—			—			—			—			—			—			—			—
Payment of offering costs	—			—		—	—		(640		)	—			—			(640		)	—			—			—			(640		)
Shares issued under employee stock purchase plan	—			—		37,639	—		3,365			—			—			3,365			—			—			—			3,365
Shares repurchased and retired to satisfy tax withholding upon vesting	—			—		—	—		(234		)	—			—			(234		)	—			—			—			(234		)
Amortization of share-based compensation	—			—		—	—		7,755			—			—			7,755			—			—			—			7,755
Reclassification of vested share-based awards	—			—		—	—		(784		)	—			—			(784		)	784			—			784			—
Adjustment to redeemable noncontrolling interests—operating partnership	(35,252		)	—		—	—		(426		)	—			—			(426		)	35,678			—			35,678			35,252
Dividends declared on preferred stock	—			—		—	—		—			(20,329		)	—			(20,329		)	—			—			—			(20,329		)
Dividends and distributions on common stock and common and incentive units	—			—		—	—		—			(208,166		)	—			(208,166		)	(8,438		)	—			(8,438		)	(216,604		)
Contributions from noncontrolling interests in consolidated joint ventures, net of distributions	—			—		—	—		—			—			—			—			—			63,683			63,683			63,683
Net income (loss)	—			—		—	—		—			87,597			—			87,597			2,700			(33		)	2,667			90,264
Other comprehensive income—foreign currency translation adjustments	—			—		—	—		—			—			2,278			2,278			90			—			90			2,368
Other comprehensive income—fair value of interest rate swaps	—			—		—	—		—			—			2,814			2,814			111			—			111			2,925
Other comprehensive loss—reclassification of accumulated other comprehensive income to interest expense	—			—		—	—		—			—			(1,223		)	(1,223		)	(48		)	—			(48		)	(1,271		)
Balance as of September 30, 2018	$	17,553		$	1,249,560	206,267,055	$	2,049	$	11,333,035		$	(2,455,189	)	$	(103,201	)	$	10,026,254		$	671,269		$	65,939		$	737,208		$	10,763,462

See accompanying notes to the condensed consolidated financial statements.

9

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF EQUITY

(unaudited, in thousands, except share data)

Nine Months Ended September 30, 2019	Redeemable Noncontrolling Interests -- Operating Partnership			Preferred Stock			Number of Common Shares	Common Stock		Additional Paid-in Capital			Accumulated Dividends in Excess of Earnings			Accumulated Other Comprehensive Loss, Net			Total Stockholders’ Equity			Noncontrolling Interests in Operating Partnership			Noncontrolling Interests in Consolidated Joint Ventures			Total Noncontrolling Interests			Total Equity
Balance as of December 31, 2018	$	15,832		$	1,249,560		206,425,656	$	2,051	$	11,355,751		$	(2,633,071	)	$	(115,647	)	$	9,858,644		$	906,510		$	93,056		$	999,566		$	10,858,210
Conversion of common units to common stock	—			—			1,841,692	18		163,843			—			—			163,861			(163,861		)	—			(163,861		)	—
Issuance of unvested restricted stock, net of forfeitures	—			—			252,122	—		—			—			—			—			—			—			—			—
Payment of offering costs	—			—			—	—		(1,258		)	—			—			(1,258		)	—			—			—			(1,258		)
Shares issued under employee stock purchase plan	—			—			63,774	—		5,462			—			—			5,462			—			—			—			5,462
Issuance of series K preferred stock, net of offering costs	—			203,264			—	—		—			—			—			203,264			—			—			—			203,264
Redemption of series H preferred stock	—			(353,290		)	—	—		—			(11,760		)	—			(365,050		)	—			—			—			(365,050		)
Amortization of share-based compensation	—			—			—	—		28,774			—			—			28,774			—			—			—			28,774
Reclassification of vested share-based awards	—			—			—	—		(7,962		)	—			—			(7,962		)	7,962			—			7,962			—
Adjustment to redeemable noncontrolling interests—operating partnership	3,630			—			—	—		(3,630		)	—			—			(3,630		)	—			—			—			(3,630		)
Dividends declared on preferred stock	—			—			—	—		—			(54,283		)	—			(54,283		)	—			—			—			(54,283		)
Dividends and distributions on common stock and common and incentive units	(507		)	—			—	—		—			(674,713		)	—			(674,713		)	(29,315		)	—			(29,315		)	(704,028		)
Contributions from noncontrolling interests in consolidated joint ventures, net of distributions	—			—			—	—		—			—			—			—			—			60,961			60,961			60,961
Deconsolidation of consolidated joint venture	—			—			—	—		—			—			—			—			—			(110,086		)	(110,086		)	(110,086		)
Cumulative effect adjustment from adoption of new accounting standard	—			—			—	—		—			(6,318		)	—			(6,318		)	—			—			—			(6,318		)
Net income (loss)	135			—			—	—		—			243,477			—			243,477			7,865			(1,582		)	6,283			249,760
Other comprehensive income (loss)—foreign currency translation adjustments	—			—			—	—		—			—			63,725			63,725			2,786			—			2,786			66,511
Other comprehensive loss—fair value of interest rate swaps	—			—			—	—		—			—			(10,901		)	(10,901		)	(478		)	—			(478		)	(11,379		)
Other comprehensive loss—reclassification of accumulated other comprehensive income to interest expense	—			—			—	—		—			—			(5,802		)	(5,802		)	(253		)	—			(253		)	(6,055		)
Balance as of September 30, 2019	$	19,090		$	1,099,534		208,583,244	$	2,069	$	11,540,980		$	(3,136,668	)	$	(68,625	)	$	9,437,290		$	731,216		$	42,349		$	773,565		$	10,210,855

See accompanying notes to the condensed consolidated financial statements.

10

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF EQUITY

(unaudited, in thousands, except share data)

 

Nine Months Ended September 30, 2018	Redeemable Noncontrolling Interests -- Operating Partnership			Preferred Stock		Number of Common Shares		Common Stock			Additional Paid-in Capital			Accumulated Dividends in Excess of Earnings			Accumulated Other Comprehensive Loss, Net			Total Stockholders’ Equity			Noncontrolling Interests in Operating Partnership			Noncontrolling Interests in Consolidated Joint Ventures			Total Noncontrolling Interests			Total Equity
Balance as of December 31, 2017	$	53,902		$	1,249,560	205,470,300		$	2,044		$	11,261,461		$	(2,055,552	)	$	(108,432	)	$	10,349,081		$	698,126		$	2,243		$	700,369		$	11,049,450
Conversion of common units to common stock	—			—		567,792		6			49,690			—			—			49,696			(49,696		)	—			(49,696		)	—
Issuance of unvested restricted stock, net of forfeitures	—			—		206,264		—			—			—			—			—			—			—			—			—
Payment of offering costs	—			—		—		—			(1,292		)	—			—			(1,292		)	—			—			—			(1,292		)
Shares issued under employee stock purchase plan	—			—		69,532		—			5,874			—			—			5,874			—			—			—			5,874
Shares repurchased and retired to satisfy tax withholding upon vesting	—			—		(46,833	)	(1		)	(4,951		)	—			—			(4,952		)	—			—			—			(4,952		)
Amortization of share-based compensation	—			—		—		—			25,213			—			—			25,213			—			—			—			25,213
Reclassification of vested share-based awards	—			—		—		—			(3,631		)	—			—			(3,631		)	3,631			—			3,631			—
Adjustment to redeemable noncontrolling interests—operating partnership	(36,349		)	—		—		—			671			—			—			671			35,678			—			35,678			36,349
Dividends declared on preferred stock	—			—		—		—			—			(60,987		)	—			(60,987		)	—			—			—			(60,987		)
Dividends and distributions on common stock and common and incentive units	—			—		—		—			—			(624,252		)	—			(624,252		)	(25,558		)	—			(25,558		)	(649,810		)
Contributions from noncontrolling interests in consolidated joint ventures, net of distributions	—			—		—		—			—			—			—			—			—			63,745			63,745			63,745
Cumulative effect adjustment from adoption of new accounting standard	—			—		—		—			—			5,915			—			5,915			—			—			—			5,915
Net income (loss)	—			—		—		—			—			279,687			—			279,687			8,880			(49		)	8,831			288,518
Other comprehensive loss—foreign currency translation adjustments	—			—		—		—			—			—			(8,272		)	(8,272		)	(336		)	—			(336		)	(8,608		)
Other comprehensive income—fair value of interest rate swaps	—			—		—		—			—			—			15,705			15,705			631			—			631			16,336
Other comprehensive loss—reclassification of accumulated other comprehensive income to interest expense	—			—		—		—			—			—			(2,202		)	(2,202		)	(87		)	—			(87		)	(2,289		)
Balance as of September 30, 2018	$	17,553		$	1,249,560	206,267,055		$	2,049		$	11,333,035		$	(2,455,189	)	$	(103,201	)	$	10,026,254		$	671,269		$	65,939		$	737,208		$	10,763,462

See accompanying notes to the condensed consolidated financial statements.

11

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited, in thousands)

	Nine Months Ended September 30,
	2019			2018
Cash flows from operating activities:
Net income	$	249,895		$	288,518
Adjustments to reconcile net income to net cash provided by operating activities:
Gain on deconsolidation / sale of properties, net	(67,497		)	(80,042		)
Unrealized gain on equity investment	(34,931		)	(2,005		)
Impairment of investments in real estate	5,351			—
Equity in losses (earnings) of unconsolidated joint ventures	3,090			(23,734		)
Distributions from unconsolidated joint ventures	26,739			15,487
Write-off due to early lease terminations	9,633			1,723
Depreciation and amortization of buildings and improvements, tenant improvements    and acquired ground leases	612,678			570,179
Amortization of acquired in-place lease value and deferred leasing costs	276,088			317,355
Amortization of share-based compensation	25,966			21,177
Non-cash amortization of terminated swaps	785			858
Allowance for doubtful accounts	1,871			2,594
Amortization of deferred financing costs	10,299			8,926
Loss from early extinguishment of debt	4,090			—
Amortization of debt discount/premium	1,671			2,590
Amortization of acquired above-market leases and acquired below-market leases, net	12,988			20,008
Changes in assets and liabilities:
Accounts and other receivables	(37,510		)	(37,498		)
Deferred rent	(40,356		)	(29,474		)
Deferred leasing costs	(20,960		)	(18,986		)
Other assets	(25,397		)	(20,794		)
Accounts payable, operating lease liabilities and other accrued liabilities	100,495			3,671
Security deposits and prepaid rents	(3,044		)	(6,704		)
Net cash provided by operating activities	1,111,944			1,033,849
Cash flows from investing activities:
Improvements to investments in real estate	(1,125,772		)	(946,118		)
Acquisitions of real estate	(74,973		)	(116,990		)
Proceeds from sale of properties, net of sales costs	—			286,204
Proceeds from the Ascenty joint venture transaction	702,439			—
Deconsolidation of Ascenty cash	(97,081		)	—
Contributions to unconsolidated joint ventures	(81,423		)	(463		)
Prepaid construction costs and other investments	(2,598		)	(13,514		)
Deposits paid for acquisitions of real estate	(12,474		)	—
Improvement advances to tenants	(37,785		)	(35,223		)
Collection of improvement advances to tenants	21,611			32,328
Net cash used in investing activities	(708,056		)	(793,776		)

 See accompanying notes to the condensed consolidated financial statements.

12

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)

(unaudited, in thousands)

	Nine Months Ended September 30,
	2019			2018
Cash flows from financing activities:
Borrowings on global revolving credit facilities	$	2,876,819		$	1,079,673
Repayments on global revolving credit facilities	(2,674,931		)	(1,045,816		)
Repayments on unsecured term loans	(375,000		)	(39,095		)
Borrowings on unsecured senior notes	2,325,566			649,038
Repayments on unsecured senior notes	(1,539,613		)	—
Principal payments on mortgage loans	(478		)	(440		)
Payment of loan fees and costs	(16,843		)	(6,272		)
Premium paid for early extinguishment of debt	(35,067		)	—
Capital contributions from noncontrolling interests in consolidated joint ventures, net	60,961			63,745
Taxes paid related to net settlement of stock-based compensation awards	—			(4,952		)
Proceeds from common and preferred stock offerings, net	202,006			(1,292		)
Redemption of preferred stock	(365,050		)	—
Proceeds from equity plans	5,462			5,874
Proceeds from forward swap contract	—			1,560
Payment of dividends to preferred stockholders	(54,283		)	(60,987		)
Payment of dividends to common stockholders and distributions to     noncontrolling interests in operating partnership	(921,776		)	(849,571		)
Net cash used in financing activities	(512,227		)	(208,535		)
Net (decrease) increase in cash, cash equivalents and restricted cash	(108,339		)	31,538
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(11,479		)	9,591
Cash, cash equivalents and restricted cash at beginning of period	135,222			13,181
Cash, cash equivalents and restricted cash at end of period	$	15,404		$	54,310

See accompanying notes to the condensed consolidated financial statements.

13

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)

(unaudited, in thousands)

	Nine Months Ended September 30,
	2019			2018
Supplemental disclosure of cash flow information:
Cash paid for interest, net of amounts capitalized	$	262,532		$	247,652
Cash paid for income taxes	13,187			7,861
Operating cash paid used in the measurement of operating lease liabilities	67,162			—
Supplementary disclosure of noncash operating activities:
Right-of-use assets obtained in exchange for new operating lease liabilities	$	671,822		$	—
Supplementary disclosure of noncash investing and financing activities:
Change in net assets related to foreign currency translation adjustments	$	66,511		$	(8,608	)
(Decrease) increase in other assets related to change in fair value of interest rate swaps	(11,379		)	16,336
Decrease to goodwill and deferred tax liability (classified within accounts payable and other accrued liabilities)	(9,436		)	—
Noncontrolling interests in operating partnership converted to shares of common stock	163,861			49,696
Accrual for additions to investments in real estate and tenant improvement advances    included in accounts payable and accrued expenses	171,670			193,615
Addition to leasehold improvements pursuant to capital lease obligation	—			73,873
Deconsolidation of Ascenty:
Investment in real estate	$	(362,951	)	$	—
Account receivables	(24,977		)	—
Acquired in-place lease value, deferred leasing costs and intangibles	(480,128		)	—
Goodwill	(967,189		)	—
Other assets	(31,099		)	—
Secured debt	571,873			—
Accounts payable and other accrued liabilities	72,449			—
Accumulated other comprehensive loss	(21,687		)	—
Deconsolidation of Ascenty cash	(97,081		)	—
Net carrying value of Ascenty assets and liabilities deconsolidated	$	(1,340,790	)	$	—
Recognition of retained equity investment in unconsolidated Ascenty joint venture	$	727,439		$	—
Deconsolidation of consolidated joint venture:
Investment in real estate	$	(199,063	)	$	—
Account receivables	(14,545		)	—
Acquired in-place lease value, deferred leasing costs and intangibles	(23		)	—
Other assets	(13		)	—
Accounts payable and other accrued liabilities	1,316			—
Non-controlling interest in consolidated joint venture	110,086			—
Deconsolidation of cash and cash equivalents	(7,844		)	—
Net carrying value of assets, liabilities and equity deconsolidated	$	(110,086	)	$	—
Recognition of retained equity investment in unconsolidated joint venture	$	110,086		$	—

See accompanying notes to the condensed consolidated financial statements.

14

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited, in thousands, except unit data)

	September 30, 2019			December 31, 2018
ASSETS
Investments in real estate:
Properties:
Land	$	790,821		$	859,113
Acquired ground leases	10,133			10,575
Buildings and improvements	14,998,062			15,610,992
Tenant improvements	608,064			574,336
Total investments in operating properties	16,407,080			17,055,016
Accumulated depreciation and amortization	(4,298,629		)	(3,935,267		)
Net investments in operating properties	12,108,451			13,119,749
Construction in progress and space held for development	1,647,130			1,621,928
Land held for future development	150,265			162,941
Net investments in properties	13,905,846			14,904,618
Investments in unconsolidated joint ventures	1,035,861			175,108
Net investments in real estate	14,941,707			15,079,726
Operating lease right-of-use assets, net	634,085			—
Cash and cash equivalents	7,190			126,700
Accounts and other receivables, net	304,712			299,621
Deferred rent, net	471,516			463,248
Acquired above-market leases, net	84,315			119,759
Goodwill	3,338,168			4,348,007
Acquired in-place lease value, deferred leasing costs and intangibles, net	2,245,017			3,144,395
Assets held for sale and contribution	967,527			—
Other assets	178,528			185,239
Total assets	$	23,172,765		$	23,766,695
LIABILITIES AND CAPITAL
Global revolving credit facilities, net	$	1,833,512		$	1,647,735
Unsecured term loan, net	796,232			1,178,904
Unsecured senior notes, net	8,189,138			7,589,126
Secured debt, including premiums	105,153			685,714
Operating lease liabilities	699,381			—
Accounts payable and other accrued liabilities	938,740			1,164,509
Accrued dividends and distributions	—			217,241
Acquired below-market leases, net	153,422			200,113
Security deposits and prepaid rents	203,708			209,311
Obligations associated with assets held for sale and contribution	23,534			—
Total liabilities	12,942,820			12,892,653
Redeemable limited partner common units	19,090			15,832
Commitments and contingencies
Capital:
Partners’ capital:
General Partner:
Preferred units, 44,450,000 and 50,650,000 units issued and outstanding as of September 30, 2019 and December 31, 2018, respectively	1,099,534			1,249,560
Common units, 208,583,244 and 206,425,656 units issued and outstanding as of September 30, 2019 and December 31, 2018, respectively	8,406,381			8,724,731
Limited Partners, 9,143,981 and 10,580,884 units issued and outstanding as of September 30, 2019 and December 31, 2018, respectively	733,907			911,256
Accumulated other comprehensive loss	(71,316		)	(120,393		)
Total partners’ capital	10,168,506			10,765,154
Noncontrolling interests in consolidated joint ventures	42,349			93,056
Total capital	10,210,855			10,858,210
Total liabilities and capital	$	23,172,765		$	23,766,695

See accompanying notes to the condensed consolidated financial statements.

15

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED INCOME STATEMENTS

(unaudited, in thousands, except unit and per unit data)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
Operating Revenues:
Rental and other services	$	802,472		$	603,833		$	2,413,888		$	1,792,457
Tenant reimbursements	—			163,104			—			468,906
Fee income and other	3,994			1,987			7,890			6,848
Total operating revenues	806,466			768,924			2,421,778			2,268,211
Operating Expenses:
Rental property operating and maintenance	259,431			245,971			766,417			701,933
Property taxes and insurance	41,358			37,524			126,587			106,408
Depreciation and amortization	286,718			293,957			888,766			887,534
General and administrative	49,985			41,642			156,427			124,264
Transactions and integration	4,115			9,626			10,819			19,410
Impairment of investments in real estate	—			—			5,351			—
Other	92			1,139			12,129			1,722
Total operating expenses	641,699			629,859			1,966,496			1,841,271
Operating income	164,767			139,065			455,282			426,940
Other Income (Expenses):
Equity in (losses) earnings of unconsolidated joint ventures	(19,269		)	8,886			(3,090		)	23,734
Gain on deconsolidation / sale of properties, net	—			26,577			67,497			80,042
Interest and other income, net	16,842			(981		)	55,266			2,375
Interest expense	(84,574		)	(80,851		)	(272,177		)	(236,646		)
Tax expense	(4,826		)	(2,432		)	(13,726		)	(7,927		)
Loss from early extinguishment of debt	(5,366		)	—			(39,157		)	—
Net income	67,574			90,264			249,895			288,518
Net loss attributable to noncontrolling interests in consolidated joint ventures	1,223			33			1,582			49
Net income attributable to Digital Realty Trust, L.P.	68,797			90,297			251,477			288,567
Preferred units distributions, including undeclared distributions	(16,670		)	(20,329		)	(54,283		)	(60,987		)
Issuance costs associated with redeemed preferred units	—			—			(11,760		)	—
Net income available to common unitholders	$	52,127		$	69,968		$	185,434		$	227,580
Net income per unit available to common unitholders:
Basic	$	0.24		$	0.33		$	0.85		$	1.06
Diluted	$	0.24		$	0.33		$	0.85		$	1.06
Weighted average common units outstanding:
Basic	217,375,296			214,289,384			217,254,811			214,199,414
Diluted	218,755,597			214,937,168			218,280,351			214,824,010

See accompanying notes to the condensed consolidated financial statements.

16

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(unaudited, in thousands)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
Net income	$	67,574		$	90,264		$	249,895		$	288,518
Other comprehensive income (loss):
Foreign currency translation adjustments	24,668			2,368			44,824			(8,608		)
Reclassification of foreign currency translation adjustment due to deconsolidation of Ascenty	—			—			21,687			—
(Decrease) increase in fair value of interest rate swaps and foreign currency hedges	(1,000		)	2,925			(11,379		)	16,336
Reclassification to interest expense from interest rate swaps	(1,805		)	(1,271		)	(6,055		)	(2,289		)
Comprehensive income	$	89,437		$	94,286		$	298,972		$	293,957
Comprehensive loss attributable to noncontrolling interests in consolidated joint ventures	1,223			33			1,582			49
Comprehensive income attributable to Digital Realty Trust, L.P.	$	90,660		$	94,319		$	300,554		$	294,006

See accompanying notes to the condensed consolidated financial statements.

17

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF CAPITAL

(unaudited, in thousands, except unit data)

	Redeemable Limited Partner Common Units			General Partner								Limited Partners					Accumulated Other Comprehensive Loss			Total Partners' Capital			Noncontrolling Interests in Consolidated Joint Ventures			Total Capital
				Preferred Units				Common Units				Common Units
Three Months Ended September 30, 2019				Units	Amount			Units	Amount			Units		Amount
Balance as of June 30, 2019	$	17,344		44,450,000	$	1,099,534		208,324,538	$	8,552,279		9,370,049		$	759,641		$	(93,179	)	$	10,318,275		$	155,445		$	10,473,720
Conversion of limited partner common units to general partner common units	—			—	—			218,752	18,755			(218,752	)	(18,755		)	—			—			—			—
Issuance of unvested restricted common units, net of forfeitures	—			—	—			1,414	—			—		—			—			—			—			—
Payment of offering costs	—			—	—			—	(282		)	—		—			—			(282		)	—			(282		)
Issuance of common units, net of forfeitures	—			—	—			—	—			(7,316	)	—			—			—			—			—
Units issued in connection with employee stock purchase plan	—			—	—			38,540	3,203			—		—			—			3,203			—			3,203
Amortization of share-based compensation	—			—	—			—	9,913			—		—			—			9,913			—			9,913
Reclassification of vested share-based awards	—			—	—			—	(250		)	—		250			—			—			—			—
Adjustment to redeemable partnership units	1,876			—	—			—	(1,876		)	—		—			—			(1,876		)	—			(1,876		)
Distributions	(169		)	—	(16,670		)	—	(225,188		)	—		(9,490		)	—			(251,348		)	—			(251,348		)
Distributions from noncontrolling interests in consolidated joint ventures, net of contributions	—			—	—			—	—			—		—			—			—			(1,787		)	(1,787		)
Deconsolidation of consolidated joint venture	—			—	—			—	—			—		—			—			—			(110,086		)	(110,086		)
Net income (loss)	39			—	16,670			—	49,827			—		2,261			—			68,758			(1,223		)	67,535
Other comprehensive income—foreign currency translation adjustments	—			—	—			—	—			—		—			24,668			24,668			—			24,668
Other comprehensive loss—fair value of interest rate swaps	—			—	—			—	—			—		—			(1,000		)	(1,000		)	—			(1,000		)
Other comprehensive loss—reclassification of accumulated other comprehensive income to interest expense	—			—	—			—	—			—		—			(1,805		)	(1,805		)	—			(1,805		)
Balance as of September 30, 2019	$	19,090		44,450,000	$	1,099,534		208,583,244	$	8,406,381		9,143,981		$	733,907		$	(71,316	)	$	10,168,506		$	42,349		$	10,210,855

See accompanying notes to the condensed consolidated financial statements.

18

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF CAPITAL

(unaudited, in thousands, except unit data)

	Redeemable Limited Partner Common Units			General Partner								Limited Partners					Accumulated Other Comprehensive Loss			Total Partners' Capital			Noncontrolling Interests in Consolidated Joint Ventures			Total Capital
				Preferred Units				Common Units				Common Units
Three Months Ended September 30, 2018				Units	Amount			Units	Amount			Units		Amount
Balance as of June 30, 2018	$	52,805		50,650,000	$	1,249,560		206,055,117	$	8,997,888		8,498,032		$	658,659		$	(111,468	)	$	10,794,639		$	2,289		$	10,796,928
Conversion of limited partner common units to general partner common units	—			—	—			161,153	13,869			(161,153	)	(13,869		)	—			—			—			—
Issuance of unvested restricted common units, net of forfeitures	—			—	—			13,146	—			—		—			—			—			—			—
Payment of offering costs	—			—	—			—	(640		)	—		—			—			(640		)	—			(640		)
Issuance of common units, net of forfeitures	—			—	—			—	—			3,708		—			—			—			—			—
Units issued in connection with employee stock purchase plan	—			—	—			37,639	3,365			—		—			—			3,365			—			3,365
Units repurchased and retired to satisfy tax withholding upon vesting	—			—	—			—	(234		)	—		—			—			(234		)	—			(234		)
Amortization of share-based compensation	—			—	—			—	7,755			—		—			—			7,755			—			7,755
Reclassification of vested share-based awards	—			—	—			—	(784		)	—		784			—			—			—			—
Adjustment to redeemable partnership units	(35,252		)	—	—			—	(426		)	—		35,678			—			35,252			—			35,252
Distributions	—			—	(20,329		)	—	(208,166		)	—		(8,438		)	—			(236,933		)	—			(236,933		)
Contributions from noncontrolling interests in consolidated joint ventures, net of distributions	—			—	—			—	—			—		—			—			—			63,683			63,683
Net income (loss)	—			—	20,329			—	67,268			—		2,700			—			90,297			(33		)	90,264
Other comprehensive income—foreign currency translation adjustments	—			—	—			—	—			—		—			2,368			2,368			—			2,368
Other comprehensive income—fair value of interest rate swaps	—			—	—			—	—			—		—			2,925			2,925			—			2,925
Other comprehensive loss—reclassification of accumulated other comprehensive income to interest expense	—			—	—			—	—			—		—			(1,271		)	(1,271		)	—			(1,271		)
Balance as of September 30, 2018	$	17,553		50,650,000	$	1,249,560		206,267,055	$	8,879,895		8,340,587		$	675,514		$	(107,446	)	$	10,697,523		$	65,939		$	10,763,462

See accompanying notes to the condensed consolidated financial statements.

19

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF CAPITAL

(unaudited, in thousands, except unit data)

	Redeemable Limited Partner Common Units			General Partner									Limited Partners					Accumulated Other Comprehensive Loss			Total Partners' Capital			Noncontrolling Interests in Consolidated Joint Ventures			Total Capital
				Preferred Units					Common Units				Common Units
Nine Months Ended September 30, 2019				Units		Amount			Units	Amount			Units		Amount
Balance as of December 31, 2018	$	15,832		50,650,000		$	1,249,560		206,425,656	$	8,724,731		10,580,884		$	911,256		$	(120,393	)	$	10,765,154		$	93,056		$	10,858,210
Conversion of limited partner common units to general partner common units	—			—		—			1,841,692	163,861			(1,841,692	)	(163,861		)	—			—			—			—
Issuance of unvested restricted common units, net of forfeitures	—			—		—			252,122	—			—		—			—			—			—			—
Payment of offering costs	—			—		—			—	(1,258		)	—		—			—			(1,258		)	—			(1,258		)
Issuance of common units, net of forfeitures	—			—		—			—	—			404,789		—			—			—			—			—
Units issued in connection with employee stock purchase plan	—			—		—			63,774	5,462			—		—			—			5,462			—			5,462
Issuance of series K preferred units, net of offering costs	—			8,400,000		203,264			—	—			—		—			—			203,264			—			203,264
Redemption of series H preferred units	—			(14,600,000	)	(353,290		)	—	(11,760		)	—		—			—			(365,050		)	—			(365,050		)
Amortization of share-based compensation	—			—		—			—	28,774			—		—			—			28,774			—			28,774
Reclassification of vested share-based awards	—			—		—			—	(7,962		)	—		7,962			—			—			—			—
Adjustment to redeemable partnership units	3,630			—		—			—	(3,630		)	—		—			—			(3,630		)	—			(3,630		)
Distributions	(507		)	—		(54,283		)	—	(674,713		)	—		(29,315		)	—			(758,311		)	—			(758,311		)
Contributions from noncontrolling interests in consolidated joint ventures, net of distributions	—			—		—			—	—			—		—			—			—			60,961			60,961
Deconsolidation of consolidated joint venture	—			—		—			—	—			—		—			—			—			(110,086		)	(110,086		)
Cumulative effect adjustment from adoption of new accounting standard	—			—		—			—	(6,318		)	—		—			—			(6,318		)	—			(6,318		)
Net income (loss)	135			—		54,283			—	189,194			—		7,865			—			251,342			(1,582		)	249,760
Other comprehensive income—foreign currency translation adjustments	—			—		—			—	—			—		—			66,511			66,511			—			66,511
Other comprehensive loss—fair value of interest rate swaps	—			—		—			—	—			—		—			(11,379		)	(11,379		)	—			(11,379		)
Other comprehensive loss—reclassification of accumulated other comprehensive income to interest expense	—			—		—			—	—			—		—			(6,055		)	(6,055		)	—			(6,055		)
Balance as of September 30, 2019	$	19,090		44,450,000		$	1,099,534		208,583,244	$	8,406,381		9,143,981		$	733,907		$	(71,316	)	$	10,168,506		$	42,349		$	10,210,855

See accompanying notes to the condensed consolidated financial statements.

20

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF CAPITAL

(unaudited, in thousands, except unit data)

	Redeemable Limited Partner Common Units			General Partner									Limited Partners					Accumulated Other Comprehensive Loss			Total Partners' Capital			Noncontrolling Interests in Consolidated Joint Ventures			Total Capital
				Preferred Units				Common Units					Common Units
Nine Months Ended September 30, 2018				Units	Amount			Units		Amount			Units		Amount
Balance as of December 31, 2017	$	53,902		50,650,000	$	1,249,560		205,470,300		$	9,207,953		8,489,095		$	702,579		$	(112,885	)	$	11,047,207		$	2,243		$	11,049,450
Conversion of limited partner common units to general partner common units	—			—	—			567,792		49,696			(567,792	)	(49,696		)	—			—			—			—
Issuance of unvested restricted common units, net of forfeitures	—			—	—			206,264		—			—		—			—			—			—			—
Payment of offering costs	—			—	—			—		(1,292		)	—		—			—			(1,292		)	—			(1,292		)
Issuance of common units, net of forfeitures	—			—	—			—		—			419,284		—			—			—			—			—
Units issued in connection with employee stock purchase plan	—			—	—			69,532		5,874			—		—			—			5,874			—			5,874
Units repurchased and retired to satisfy tax withholding upon vesting	—			—	—			(46,833	)	(4,952		)	—		—			—			(4,952		)	—			(4,952		)
Amortization of share-based compensation	—			—	—			—		25,213			—		—			—			25,213			—			25,213
Reclassification of vested share-based awards	—			—	—			—		(3,631		)	—		3,631			—			—			—			—
Adjustment to redeemable partnership units	(36,349		)	—	—			—		671			—		35,678			—			36,349			—			36,349
Distributions	—			—	(60,987		)	—		(624,252		)	—		(25,558		)	—			(710,797		)	—			(710,797		)
Contributions from noncontrolling interests in consolidated joint ventures, net of distributions	—			—	—			—		—			—		—			—			—			63,745			63,745
Cumulative effect adjustment from adoption of new accounting standard	—			—	—			—		5,915			—		—			—			5,915			—			5,915
Net income (loss)	—			—	60,987			—		218,700			—		8,880			—			288,567			(49		)	288,518
Other comprehensive loss—foreign currency translation adjustments	—			—	—			—		—			—		—			(8,608		)	(8,608		)	—			(8,608		)
Other comprehensive income—fair value of interest rate swaps	—			—	—			—		—			—		—			16,336			16,336			—			16,336
Other comprehensive loss—reclassification of accumulated other comprehensive income to interest expense	—			—	—			—		—			—		—			(2,289		)	(2,289		)	—			(2,289		)
Balance as of September 30, 2018	$	17,553		50,650,000	$	1,249,560		206,267,055		$	8,879,895		8,340,587		$	675,514		$	(107,446	)	$	10,697,523		$	65,939		$	10,763,462

See accompanying notes to the condensed consolidated financial statements.

21

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited, in thousands)

	Nine Months Ended September 30,
	2019			2018
Cash flows from operating activities:
Net income	$	249,895		$	288,518
Adjustments to reconcile net income to net cash provided by operating activities:
Gain on deconsolidation / sale of properties, net	(67,497		)	(80,042		)
Unrealized gain on equity investment	(34,931		)	(2,005		)
Impairment of investments in real estate	5,351			—
Equity in losses (earnings) of unconsolidated joint ventures	3,090			(23,734		)
Distributions from unconsolidated joint ventures	26,739			15,487
Write-off due to early lease terminations	9,633			1,723
Depreciation and amortization of buildings and improvements, tenant improvements    and acquired ground leases	612,678			570,179
Amortization of acquired in-place lease value and deferred leasing costs	276,088			317,355
Amortization of share-based compensation	25,966			21,177
Non-cash amortization of terminated swaps	785			858
Allowance for doubtful accounts	1,871			2,594
Amortization of deferred financing costs	10,299			8,926
Loss from early extinguishment of debt	4,090			—
Amortization of debt discount/premium	1,671			2,590
Amortization of acquired above-market leases and acquired below-market leases, net	12,988			20,008
Changes in assets and liabilities:
Accounts and other receivables	(37,510		)	(37,498		)
Deferred rent	(40,356		)	(29,474		)
Deferred leasing costs	(20,960		)	(18,986		)
Other assets	(25,397		)	(20,794		)
Accounts payable, operating lease liabilities and other accrued liabilities	100,495			3,671
Security deposits and prepaid rents	(3,044		)	(6,704		)
Net cash provided by operating activities	1,111,944			1,033,849
Cash flows from investing activities:
Improvements to investments in real estate	(1,125,772		)	(946,118		)
Acquisitions of real estate	(74,973		)	(116,990		)
Proceeds from sale of properties, net of sales costs	—			286,204
Proceeds from the Ascenty joint venture transaction	702,439			—
Deconsolidation of Ascenty cash	(97,081		)	—
Contributions to unconsolidated joint ventures	(81,423		)	(463		)
Prepaid construction costs and other investments	(2,598		)	(13,514		)
Deposits paid for acquisitions of real estate	(12,474		)	—
Improvement advances to tenants	(37,785		)	(35,223		)
Collection of improvement advances to tenants	21,611			32,328
Net cash used in investing activities	(708,056		)	(793,776		)

 See accompanying notes to the condensed consolidated financial statements.

22

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)

(unaudited, in thousands)

	Nine Months Ended September 30,
	2019			2018
Cash flows from financing activities:
Borrowings on global revolving credit facilities	$	2,876,819		$	1,079,673
Repayments on global revolving credit facilities	(2,674,931		)	(1,045,816		)
Repayments on unsecured term loans	(375,000		)	(39,095		)
Borrowings on unsecured senior notes	2,325,566			649,038
Repayments on unsecured senior notes	(1,539,613		)	—
Principal payments on mortgage loans	(478		)	(440		)
Payment of loan fees and costs	(16,843		)	(6,272		)
Premium paid for early extinguishment of debt	(35,067		)	—
Capital contributions from noncontrolling interests in consolidated joint ventures, net	60,961			63,745
Taxes paid related to net settlement of stock-based compensation awards	—			(4,952		)
General partner contributions	207,468			4,582
General partner distributions	(365,050		)	—
Proceeds from forward swap contract	—			1,560
Payment of distributions to preferred unitholders	(54,283		)	(60,987		)
Payment of distributions to common unitholders	(921,776		)	(849,571		)
Net cash used in financing activities	(512,227		)	(208,535		)
Net (decrease) increase in cash, cash equivalents and restricted cash	(108,339		)	31,538
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(11,479		)	9,591
Cash, cash equivalents and restricted cash at beginning of period	135,222			13,181
Cash, cash equivalents and restricted cash at end of period	$	15,404		$	54,310

See accompanying notes to the condensed consolidated financial statements.

23

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)

(unaudited, in thousands)

	Nine Months Ended September 30,
	2019			2018
Supplemental disclosure of cash flow information:
Cash paid for interest, net of amounts capitalized	$	262,532		$	247,652
Cash paid for income taxes	13,187			7,861
Operating cash paid used in the measurement of operating lease liabilities	67,162			—
Supplementary disclosure of noncash operating activities:
Right-of-use assets obtained in exchange for new operating lease liabilities	671,822			$	—
Supplementary disclosure of noncash investing and financing activities:
Change in net assets related to foreign currency translation adjustments	$	66,511		$	(8,608	)
Increase (decrease) in accounts payable and other accrued liabilities related to change in fair value of interest rate swaps and foreign currency hedges	(11,379		)	16,336
Decrease to goodwill and deferred tax liability (classified within accounts payable and other accrued liabilities)	(9,436		)	—
Limited Partner common units converted to General Partner common units	163,861			49,696
Accrual for additions to investments in real estate and tenant improvement advances    included in accounts payable and accrued expenses	171,670			193,615
Addition to leasehold improvements pursuant to capital lease obligation	—			73,873
Deconsolidation of Ascenty:
Investment in real estate	$	(362,951	)	$	—
Account receivables	(24,977		)	—
Acquired in-place lease value, deferred leasing costs and intangibles	(480,128		)	—
Goodwill	(967,189		)	—
Other assets	(31,099		)	—
Secured debt	571,873			—
Accounts payable and other accrued liabilities	72,449			—
Accumulated other comprehensive loss	(21,687		)	—
Deconsolidation of Ascenty cash	(97,081		)	—
Net carrying value of Ascenty assets and liabilities deconsolidated	$	(1,340,790	)	$	—
Recognition of retained equity investment in unconsolidated Ascenty joint venture	$	727,439		$	—
Deconsolidation of consolidated joint venture:
Investment in real estate	$	(199,063	)	$	—
Account receivables	(14,545		)	—
Acquired in-place lease value, deferred leasing costs and intangibles	(23		)	—
Other assets	(13		)	—
Accounts payable and other accrued liabilities	1,316			—
Non-controlling interest in consolidated joint venture	110,086			—
Deconsolidation of cash and cash equivalents	(7,844		)	—
Net carrying value of assets, liabilities and capital deconsolidated	$	(110,086	)	$	—
Recognition of retained equity investment in unconsolidated joint venture	$	110,086		$	—

24

See accompanying notes to the condensed consolidated financial statements.

25

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Organization and Description of Business

Digital Realty Trust, Inc. through its controlling interest in Digital Realty Trust, L.P. (the Operating Partnership) and the subsidiaries of the Operating Partnership (collectively, we, our, us or the Company) is a leading global provider of data center, colocation and interconnection solutions for customers across a variety of industry verticals ranging from cloud and information technology services, communications and social networking to financial services, manufacturing, energy, healthcare, and consumer products. The Operating Partnership, a Maryland limited partnership, is the entity through which Digital Realty Trust, Inc., a Maryland corporation, conducts its business of owning, acquiring, developing and operating data centers.  Digital Realty Trust, Inc. operates as a REIT for federal income tax purposes. A summary of our data center portfolio as of September 30, 2019 and December 31, 2018 is as follows:

	Data Centers
	As of September 30, 2019				As of December 31, 2018
Region	Operating	Held for Sale and Contribution (1)	Unconsolidated Joint Ventures	Total	Operating	Unconsolidated Joint Ventures	Total
United States	119	14	14	147	131	14	145
Europe	41	—	—	41	38	—	38
Latin America	—	—	19	19	16	—	16
Asia	3	—	5	8	3	4	7
Australia	5	—	—	5	5	—	5
Canada	2	1	—	3	3	—	3
Total	170	15	38	223	196	18	214

(1) Includes 10 Powered Base Building® properties, which comprise 12 data centers, that are held for sale to a third party and three data centers that are held for contribution to a joint venture as of September 30, 2019 (see Note 3).

On December 20, 2018, the Operating Partnership and Stellar Participações Ltda., a Brazilian subsidiary of the Operating Partnership, completed the acquisition of Ascenty, a leading data center provider in Brazil, for cash and equity consideration of approximately $2.0 billion, including cash purchased. We refer to this transaction as the Ascenty Acquisition. In March 2019, we formed a joint venture with Brookfield Infrastructure, an affiliate of Brookfield Asset Management, one of the largest owners and operators of infrastructure assets globally. Brookfield invested approximately $702 million in exchange for approximately 49% of the total equity interests in the joint venture which owns and operates Ascenty. A subsidiary of the Operating Partnership retained the remaining equity interest in the Ascenty joint venture. The power to control the Ascenty joint venture is shared equally between the Operating Partnership and Brookfield and as a result of losing control, the Operating Partnership deconsolidated Ascenty on March 29, 2019. See Note 5 for additional information.

We are diversified in major metropolitan areas where data center and technology customers are concentrated, including the Atlanta, Boston, Chicago, Dallas, Los Angeles, New York, Northern Virginia, Phoenix, San Francisco, Seattle, Silicon Valley and Toronto metropolitan areas in North America, the Amsterdam, Dublin, Frankfurt, London and Paris metropolitan areas in Europe, the Fortaleza, Rio de Janeiro, Santiago and São Paulo metropolitan areas in Latin America, and the Hong Kong, Melbourne, Osaka, Seoul, Singapore, Sydney, and Tokyo metropolitan areas in the Asia Pacific region. The portfolio consists of data centers, Internet gateway facilities and office and other non-data center space.

The Operating Partnership was formed on July 21, 2004 in anticipation of Digital Realty Trust, Inc.’s initial public offering (IPO) on November 3, 2004 and commenced operations on that date. As of September 30, 2019, Digital Realty Trust, Inc. owned a 95.8% common interest and a 100.0% preferred interest in the Operating Partnership. As of December 31, 2018, Digital Realty Trust, Inc. owned a 95.1% common interest and a 100.0% preferred interest in the Operating Partnership. As sole general partner of the Operating Partnership, Digital Realty Trust, Inc. has the full, exclusive and complete responsibility for the Operating Partnership’s day-to-day management and control. The limited partners of the Operating Partnership do not have

26

rights to replace Digital Realty Trust, Inc. as the general partner nor do they have participating rights, although they do have certain protective rights.

As used in these Notes: “DFT” refers to DuPont Fabros Technology, Inc.; “DFT Merger” refers to the Company’s acquisition of DuPont Fabros Technology, Inc.; “DFT Operating Partnership” refers to DuPont Fabros Technology, L.P.; “European Portfolio Acquisition” refers to the Company’s acquisition of a portfolio of eight data centers in Europe; and “Telx Acquisition” refers to the Company’s acquisition of Telx Holdings, Inc.

2. Summary of Significant Accounting Policies

(a) Principles of Consolidation and Basis of Presentation

The accompanying interim condensed consolidated financial statements include all of the accounts of Digital Realty Trust, Inc., the Operating Partnership and their subsidiaries. Intercompany balances and transactions have been eliminated.

The accompanying interim condensed consolidated financial statements are unaudited, but have been prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP) for interim financial information and in compliance with the rules and regulations of the U.S. Securities and Exchange Commission. Accordingly, they do not include all of the disclosures required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments necessary for a fair presentation have been included. All such adjustments are considered to be of a normal recurring nature, except as otherwise indicated. The results of operations for the interim periods are not necessarily indicative of the results to be obtained for the full fiscal year. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in our annual report on Form 10-K for the year ended December 31, 2018.

The notes to the condensed consolidated financial statements of Digital Realty Trust, Inc. and the Operating Partnership have been combined to provide the following benefits:

• enhancing investors’ understanding of the Company and the Operating Partnership by enabling investors to view the business as a whole in the same manner as management views and operates the business;

• eliminating duplicative disclosure and providing a more streamlined and readable presentation since a substantial portion of the disclosure applies to both the Company and the Operating Partnership; and

• creating time and cost efficiencies through the preparation of one set of notes instead of two separate sets of notes.

There are few differences between the Company and the Operating Partnership, which are reflected in these condensed consolidated financial statements. We believe it is important to understand the differences between the Company and the Operating Partnership in the context of how we operate as an interrelated consolidated company. Digital Realty Trust, Inc.’s only material asset is its ownership of partnership interests of the Operating Partnership. As a result, Digital Realty Trust, Inc. generally does not conduct business itself, other than acting as the sole general partner of the Operating Partnership, issuing public securities from time to time and guaranteeing certain unsecured debt of the Operating Partnership and certain of its subsidiaries and affiliates. Digital Realty Trust, Inc. itself has not issued any indebtedness but guarantees the unsecured debt of the Operating Partnership and certain of its subsidiaries and affiliates, as disclosed in these notes.

The Operating Partnership holds substantially all the assets of the Company and holds the ownership interests in the Company’s joint ventures. The Operating Partnership conducts the operations of the business and is structured as a partnership with no publicly traded equity. Except for net proceeds from public equity issuances by Digital Realty Trust, Inc., which are generally contributed to the Operating Partnership in exchange for partnership units, the Operating Partnership generally generates the capital required by the Company’s business primarily through the Operating Partnership’s operations, by the Operating Partnership’s or its affiliates’ direct or indirect incurrence of indebtedness or through the issuance of partnership units.

The presentation of noncontrolling interests in operating partnership, stockholders’ equity and partners’ capital are the main areas of difference between the condensed consolidated financial statements of Digital Realty Trust, Inc. and those of the Operating Partnership. The common limited partnership interests held by the limited partners in the Operating Partnership are presented as limited partners’ capital within partners’ capital in the Operating Partnership’s condensed consolidated financial statements and as noncontrolling interests in operating partnership within equity in Digital Realty Trust, Inc.’s condensed consolidated financial statements. The common and preferred partnership interests held by Digital Realty Trust, Inc. in the Operating Partnership are presented as general partner’s capital within partners’ capital in the Operating Partnership’s condensed consolidated financial statements and as preferred stock, common stock, additional paid-in capital and accumulated dividends in excess of earnings within stockholders’ equity in Digital Realty Trust, Inc.’s condensed consolidated financial

27

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

statements. The differences in the presentations between stockholders’ equity and partners’ capital result from the differences in the equity issued at the Digital Realty Trust, Inc. and the Operating Partnership levels.

To help investors understand the significant differences between the Company and the Operating Partnership, these consolidated financial statements present the following separate sections for each of the Company and the Operating Partnership:

• condensed consolidated face financial statements; and

• the following notes to the condensed consolidated financial statements:

• "Debt of the Company" and "Debt of the Operating Partnership";

• "Income per Share" and "Income per Unit"; and

• "Equity and Accumulated Other Comprehensive Loss, Net of the Company" and "Capital and Accumulated Other Comprehensive Loss of the Operating Partnership".

In the sections that combine disclosure of Digital Realty Trust, Inc. and the Operating Partnership, these notes refer to actions or holdings as being actions or holdings of the Company. Although the Operating Partnership is generally the entity that enters into contracts and joint ventures and holds assets and debt, reference to the Company is appropriate because the business is one enterprise and the Company generally operates the business through the Operating Partnership.

(b) Cash Equivalents

For the purpose of the condensed consolidated statements of cash flows, we consider short-term investments with original maturities of 90 days or less to be cash equivalents. As of September 30, 2019, cash equivalents consist of investments in money market instruments.

(c) Investments in Unconsolidated Joint Ventures

The Company’s investments in unconsolidated joint ventures are accounted for using the equity method, whereby our investment is increased for capital contributed and our share of the joint venture's net income and decreased by distributions we receive and our share of any losses of the joint ventures. We do not record losses of the joint ventures in excess of our investment balances unless we are liable for the obligations of the joint venture or are otherwise committed to provide financial support to the joint venture. Likewise, and as long as we have no explicit or implicit obligations to the joint venture, we will suspend equity method accounting to the extent that cash distributions exceed our investment balances until those unrecorded earnings exceed the excess distributions previously recognized in income. In this case, we will apply cost accounting concepts which tie income recognition to the receipt of cash.  Cost basis accounting concepts will apply until earnings exceed the excess distributions previously recognized in income.

We amortize the difference between the cost of our investments in the joint ventures and the book value of the underlying equity into income on a straight-line basis consistent with the lives of the underlying assets. The amortization of this difference was immaterial for the three and nine months ended September 30, 2019 and 2018, respectively.

(d) Impairment of Long-Lived and Finite-Lived Intangible Assets

We review each of our properties for indicators that its carrying amount may not be recoverable. Examples of such indicators may include a significant decrease in the market price of the property, a change in the expected holding period for the property, a significant adverse change in how the property is being used or expected to be used based on the underwriting at the time of acquisition, an accumulation of costs significantly in excess of the amount originally expected for the acquisition or development of the property, or a history of operating or cash flow losses of the property. When such impairment indicators exist, we review an estimate of the future undiscounted net cash flows (excluding interest charges) expected to result from the real estate investment’s use and eventual disposition and compare that estimate to the carrying value of the property. We consider factors such as future operating income, trends and prospects, as well as the effects of leasing demand, competition and other factors. If our future undiscounted net cash flow evaluation indicates that we are unable to recover the carrying value of a real estate investment, an impairment loss is recorded to the extent that the carrying value exceeds the estimated fair value of the property. These losses have a direct impact on our net income because recording an impairment loss results in an immediate negative adjustment to net income. The evaluation of anticipated cash flows is highly subjective and is based in part on assumptions regarding future occupancy, rental rates and capital requirements that could differ materially from actual results

28

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

in future periods. Since cash flows on properties considered to be long-lived assets to be held and used are considered on an undiscounted basis to determine whether the carrying value of a property is recoverable, our strategy of holding properties over the long-term directly decreases the likelihood of their carrying values not being recoverable and therefore requiring the recording of an impairment loss. If our strategy changes or market conditions otherwise dictate an earlier sale date, an impairment loss may be recognized and such loss could be material. If we determine that the asset fails the recoverability test, the affected assets must be reduced to their fair value.

We generally estimate the fair value of rental properties utilizing a discounted cash flow analysis that includes projections of future revenues, expenses and capital improvement costs that a market participant would use based on the highest and best use of the asset, which is similar to the income approach that is commonly utilized by appraisers. In certain cases, we may supplement this analysis by obtaining outside broker opinions of value.

In considering whether to classify a property as held for sale or contribution, the Company considers whether: (i) management has committed to a plan to sell or contribute the property; (ii) the property is available for immediate sale or contribution in its present condition; (iii) the Company has initiated a program to locate a buyer or joint venture partner; (iv) the Company believes that the sale or contribution of the property is probable; (v) the Company is actively marketing the property for sale or contribution at a price that is reasonable in relation to its current value; and (vi) actions required for the Company to complete the plan indicate that it is unlikely that any significant changes will be made to the plan.

If all the above criteria are met, the Company classifies the property as held for sale or contribution. Assets classified as held for sale are expected to be sold to a third party and assets classified as held for contribution are expected to be contributed to an unconsolidated joint venture or to a third party within twelve months. At such time, the respective assets and liabilities are presented separately in the condensed consolidated balance sheets and depreciation is no longer recognized. Assets held for sale or contribution are reported at the lower of their carrying amount or their estimated fair value less the costs to sell or contribute. Only those assets held for sale or contribution that constitute a strategic shift that has or will have a major effect on our operations are classified as discontinued operations.  To date we have had no property dispositions or assets classified as held for sale or contribution that would meet the definition of discontinued operations.

If impairment indicators arise with respect to intangible assets with finite useful lives, we evaluate impairment by comparing the carrying amount of the asset to the estimated future undiscounted net cash flows expected to be generated by the asset. If estimated future undiscounted net cash flows are less than the carrying amount of the asset, then we estimate the fair value of the asset and compare the estimated fair value to the intangible asset’s carrying value. We recognize any shortfall from carrying value as an impairment loss in the current period.

(e) Capitalization of Costs

Direct and indirect project costs that are clearly associated with the development of properties are capitalized as incurred. Project costs include all costs directly associated with the development of a property, including construction costs, interest, property taxes, insurance, legal fees and costs of personnel working on the project. Indirect costs that do not clearly relate to the projects under development are not capitalized and are charged to expense as incurred.

Capitalization of costs begins when the activities necessary to get the development project ready for its intended use begins, which include costs incurred before the beginning of construction. Capitalization of costs ceases when the development project is substantially complete and ready for its intended use. Determining when a development project commences and when it is substantially complete and ready for its intended use involves a degree of judgment. We generally consider a development project to be substantially complete and ready for its intended use upon receipt of a certificate of occupancy. If and when development of a property is suspended pursuant to a formal change in the planned use of the property, we will evaluate whether the accumulated costs exceed the estimated value of the project and write off the amount of any such excess accumulated costs. For a development project that is suspended for reasons other than a formal change in the planned use of such property, the accumulated project costs are evaluated for impairment consistent with our impairment policies for long-lived assets. During the development period, all costs including the associated land are classified to construction in progress and space held for development. Upon completion of the development period for a project, accumulated construction in progress costs including the land related to a project are allocated to the specific components of a project that are benefited.

29

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

Construction in progress and space held for development includes the cost of land, the cost of construction of buildings, improvements and fixed equipment, and costs for design and engineering. Other costs, such as interest, legal, property taxes and corporate project supervision, which can be directly associated with the project during construction, are also included in construction in progress and space held for development. Land held for development includes parcels of land owned by the Company, upon which the Company intends to develop and own data centers, but has yet to commence development. 

During the three months ended September 30, 2019 and 2018, we capitalized interest of approximately $9.9 million and $9.7 million, respectively, and approximately $30.3 million and $25.3 million during the nine months ended September 30, 2019 and 2018, respectively. We capitalized amounts relating to compensation and other overhead expense of employees direct and incremental to construction activities of approximately $12.9 million and $10.8 million during the three months ended September 30, 2019 and 2018, respectively, and approximately $37.4 million and $31.1 million during the nine months ended September 30, 2019 and 2018, respectively.

(f) Goodwill

Goodwill represents the excess of the purchase price over the fair value of net tangible and intangible assets acquired and tangible and intangible liabilities assumed in a business combination. Goodwill is not amortized.  We perform an annual impairment test for goodwill and between annual tests, we evaluate goodwill for impairment whenever events or changes in circumstances occur that would more likely than not reduce the fair value of a reporting unit below its carrying value.  In our impairment tests of goodwill, we first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value.  If based on this assessment, we determine that the fair value of the reporting unit is not less than its carrying value, then performing the additional two-step impairment test is unnecessary. If our qualitative assessment indicates that goodwill impairment is more likely than not, we perform a two-step impairment test. We test goodwill for impairment under the two-step impairment test by first comparing the book value of net assets including goodwill to the fair value of the reporting unit. If the fair value is determined to be less than the book value of the net assets, including goodwill, a second step is performed to compute the amount of impairment as the difference between the implied fair value of goodwill and its carrying value. We estimate the fair value of the reporting unit using discounted cash flows. If the carrying value of goodwill exceeds its implied fair value, an impairment charge is recognized. We have not recognized any goodwill impairments since our inception. Since some of the goodwill is denominated in foreign currencies, changes to the goodwill balance occur over time due to changes in foreign exchange rates.

The following is a summary of goodwill activity for the nine months ended September 30, 2019 (in thousands):

	Balance as of December 31, 2018		Deconsolidation			Goodwill Adjustments (1)			Impact of Change in Foreign Exchange Rates			Balance as of September 30, 2019
Merger / Portfolio Acquisition
Telx Acquisition	$	330,845	$	—		$	—		$	—		$	330,845
European Portfolio Acquisition	442,349		—			(9,436		)	(17,736		)	415,177
DFT Merger	2,592,146		—			—			—			2,592,146
Ascenty Acquisition	982,667		(982,667		)	—			—			—
Total	$	4,348,007	$	(982,667	)	$	(9,436	)	$	(17,736	)	$	3,338,168

(1) As a result of a subsequent change to an acquired deferred tax liability that would not have impacted consideration paid, goodwill was adjusted.

(g) Leases

We lease real estate, including corporate and regional offices, data center space, and land, along with IT equipment. When we receive substantially all economic benefits from and direct use of specified property, plant and equipment, we account for those transactions as leases under ASU No. 2016-02 Leases (Topic 842). See Note 2(t) for further discussion regarding the adoption of Topic 842 on January 1, 2019.

30

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

We have elected the practical expedient within Topic 842 to not separate lease and non-lease components within lease transactions for all asset classes within our existing lease portfolio and, therefore, account for non-lease components combined with related lease components under Topic 842. For transactions involving leases of buildings and land, we have also elected to not separate land components from leases of specified property, plant, and equipment, as it was determined to have no effect on lease classification for any lease component, and the amounts recognized for land lease components would not have been material.

Additionally, we have elected the short-term lease exception for all classes of assets, and do not apply the recognition and measurement requirements for leases of 12 months or less, and recognize lease payments for short-term leases as expense either straight-line over the lease term or as incurred depending on whether the lease payments are fixed or variable. These elections are applied consistently for all leases.

When discount rates implicit in leases cannot be readily determined, we use the applicable incremental borrowing rate at lease commencement to perform lease classification tests on lease components and to measure lease liabilities and right-of-use assets. We assigned a collateralized interest rate to each lease based on the term and the currency in which each lease is denominated. To the extent there are leases in foreign countries, rates were adjusted based on local yields in those particular markets. Further, we apply the “bright-line” thresholds within Topic 840 for lease classification for all classes of assets.

(h) Share-Based Compensation

The Company measures all share-based compensation awards at fair value on the date they are granted to employees and directors, and recognizes compensation cost, net of forfeitures, over the requisite service period for awards with only a service condition. The estimated fair value of the long-term incentive units and Class D units (discussed in Note 14) granted by us is being amortized on a straight-line basis over the expected service period.

The fair value of share-based compensation awards that contain a market condition is measured using a Monte Carlo simulation method and not adjusted based on actual achievement of the market condition.

(i) Assets and Liabilities Measured at Fair Value

Fair value under U.S. GAAP is a market-based measurement, not an entity-specific measurement. Therefore, our fair value measurements are determined based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair-value measurements, we use a fair-value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy).

Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access. Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability (other than quoted prices), such as interest rates, foreign exchange rates, and yield curves that are observable at commonly quoted intervals. Level 3 inputs are unobservable inputs for the asset or


liability which are typically based on an entity’s own assumptions, as there is little, if any, related market activity. In instances where the determination of the fair-value measurement is based on inputs from different levels of the fair-value hierarchy, the lowest level input that is significant would be used to determine the fair-value measurement in its entirety. Our assessment of the significance of a particular input to the fair-value measurement in its entirety requires judgment, and considers factors specific to the asset or liability.

(j) Derivative Instruments

Derivative financial instruments are employed to manage risks, including foreign currency and interest rate exposures and are not used for trading or speculative purposes. As part of the Company’s risk management program, a variety of financial instruments, such as interest rate swaps and foreign exchange contracts, may be used to mitigate interest rate exposure and foreign currency exposure. The Company recognizes all derivative instruments in the balance sheet at fair value.

31

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

Changes in the fair value of derivatives are recognized periodically either in earnings or in stockholders’ equity as a component of accumulated other comprehensive income (loss), depending on whether the derivative financial instrument is undesignated or qualifies for hedge accounting, and if so, whether it represents a fair value, cash flow, or net investment hedge. Gains and losses on derivatives designated as cash flow hedges, to the extent they are included in the assessment of effectiveness, are recorded in other comprehensive income (loss) and subsequently reclassified to earnings to offset the impact of the hedged items when they occur. In the event it becomes probable the forecasted transaction to which a cash flow hedge relates will not occur, the derivative would be terminated and the amount in other comprehensive income (loss) would be recognized in earnings. Changes in the fair value of derivatives that are designated and qualify as a hedge of the net investment in foreign operations, to the extent they are included in the assessment of effectiveness, are reported in other comprehensive income (loss) and are deferred until disposal of the underlying assets. Gains and losses representing components excluded from the assessment of effectiveness for cash flow and fair value hedges are recognized in earnings on a straight-line basis in the same caption as the hedged item over the term of the hedge. Gains and losses representing components excluded from the assessment of effectiveness for net investment hedges are recognized in earnings on a straight-line basis over the term of the hedge.

The net interest paid or received on interest rate swaps is recognized as interest expense. Gains and losses resulting from the early termination of interest rate swap agreements are deferred and amortized as adjustments to interest expense over the remaining period of the debt originally covered by the terminated swap.

See Note 15 for further discussion on derivative instruments.

(k) Income Taxes

Digital Realty Trust, Inc. has elected to be treated as a real estate investment trust (a “REIT”) for federal income tax purposes. As a REIT, Digital Realty Trust, Inc. generally is not required to pay federal corporate income tax to the extent taxable income is currently distributed to its stockholders. If Digital Realty Trust, Inc. fails to qualify as a REIT in any taxable year, it will be subject to federal corporate income tax (including any applicable alternative minimum tax for taxable years prior to 2018) on its taxable income.

The Company is subject to foreign, state and local income taxes in the jurisdictions in which it conducts business. The Company’s taxable REIT subsidiaries are subject to federal, state, local and foreign income taxes to the extent there is taxable income. Accordingly, the Company recognizes current and deferred income taxes for its taxable REIT subsidiaries, including for federal, state, local and foreign jurisdictions, as appropriate.

We assess our significant tax positions in accordance with U.S. GAAP for all open tax years and determine whether we have any material unrecognized liabilities from uncertain tax benefits. If a tax position is not considered “more-likely-than-not” to be sustained solely on its technical merits, no benefits of the tax position are to be recognized (for financial statement purposes). As of September 30, 2019 and December 31, 2018, we had no assets or liabilities for uncertain tax positions. We classify interest and penalties from significant uncertain tax positions as interest expense and operating expense, respectively, in our condensed consolidated income statements. For the three and nine months ended September 30, 2019 and 2018, we had no such interest or penalties. The tax year 2016 and thereafter remain open to examination by the major taxing jurisdictions with which the Company files tax returns.

See Note 11 for further discussion on income taxes.

(l) Presentation of Transactional-based Taxes

We account for transactional-based taxes, such as value added tax, or VAT, for our international properties on a net basis.

(m) Redeemable Noncontrolling Interests

Redeemable noncontrolling interests include amounts related to partnership units issued by consolidated subsidiaries of the Company in which redemption for equity is outside the control of the Company.  Partnership units which are determined to be contingently redeemable for cash under the Financial Accounting Standards Board’s "Distinguishing Liabilities from Equity" guidance are classified as redeemable noncontrolling interests and presented in the mezzanine section between total liabilities and stockholder’s equity on the Company’s condensed consolidated balance sheets. The amounts of consolidated net income

32

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

attributable to the Company and to the noncontrolling interests are presented on the Company’s condensed consolidated income statements.

(n) Revenue Recognition

The majority of our revenue is derived from lease arrangements, which we account for in accordance with Topic 842 commencing on January 1, 2019 and “Leases (Topic 840)” prior to 2019. We account for the non-lease components within our lease arrangements, as well as other sources of revenue, in accordance with “Revenue from Contracts with Customers (Topic 606)”. Revenue recognized as a result of applying Topics 842 and 840, as applicable, was 99% and 97% and Topic 606 was less than 1% and 3% of total operating revenue for the three and nine months ended September 30, 2019 and 2018, respectively.

Our leases are classified as operating leases and minimum rents are recognized on a straight-line basis over the terms of the leases, which may span multiple years. The excess of rents recognized over amounts contractually due pursuant to the underlying leases is included in deferred rent in the accompanying condensed consolidated balance sheets and contractually due but unpaid rents are included in accounts and other receivables.

Tenant reimbursements for real estate taxes, common area maintenance, and other recoverable costs under our leases are recognized in the period that the expenses are incurred. Lease termination fees are recognized over the remaining term of the lease, effective as of the date the lease modification is finalized, assuming collection is not considered doubtful. As discussed above, we recognize amortization of the value of acquired above or below-market tenant leases as a reduction of rental revenue in the case of above-market leases or an increase to rental revenue in the case of below-market leases.

Interconnection services are included in rental and other services on the condensed consolidated income statements and are generally provided on a month-to-month, one-year or multi-year term. Interconnection services include port and cross-connect services. Port services are typically sold on a one-year or multi-year term and revenue is recognized on a recurring monthly basis (straight-line). The Company bills customers on a monthly basis and recognizes the revenue over the period the service is provided. Revenue for cross-connect installations is generally recognized in the period the cross-connect is installed. Interconnection services that are not specific to a particular space are accounted for under Topic 606 and have terms that are generally one year or less.

Occasionally, customers engage the Company for certain services. The nature of these services historically involves property management and construction management. The proper revenue recognition of these services can be different, depending on whether the arrangements are service revenue or contractor type revenue.

Service revenues are typically recognized on an equal monthly basis based on the minimum fee to be earned. The monthly amounts could be adjusted depending on if certain performance milestones are met.

Fee income arises primarily from contractual management agreements with entities in which we have a noncontrolling interest. The management fees are recognized as earned under the respective agreements. Management and other fee income related to partially owned noncontrolled entities are recognized to the extent attributable to the unaffiliated interest.

We make subjective estimates as to when our revenue is earned and the collectability of our accounts receivable related to minimum rent, deferred rent, expense reimbursements, lease termination fees and other income. We specifically analyze accounts receivable and historical bad debts, customer concentrations, customer creditworthiness and current economic trends when evaluating the adequacy of the allowance for bad debts. These estimates have a direct impact on our net revenue because a higher bad debt allowance would result in lower net revenue, and recognizing rental revenue as earned in one period versus another would result in higher or lower net revenue for a particular period. The allowance for doubtful accounts as of September 30, 2019 and December 31, 2018 was approximately $13.2 million and $11.6 million, respectively.

33

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

(o) Transaction and Integration Expense

Transaction and integration expense includes business combination expenses, other business development expenses and other expenses to integrate newly acquired investments, which are expensed as incurred. Transaction expenses include closing costs, broker commissions and other professional fees, including legal and accounting fees related to business combinations or acquisitions that were not consummated. Integration costs include transition costs associated with organizational restructuring (such as severance and retention payments and recruiting expenses), third-party consulting expenses directly related to the integration of acquired companies (in areas such as cost savings and synergy realization, technology and systems work), and internal costs such as training, travel and labor, reflecting time spent by Company personnel on integration activities and projects. Recurring costs are recorded in general and administrative expense. 

(p) Gain on Sale of Properties

We account for the sale of real estate properties under Financial Accounting Standards Board, or FASB, Accounting Standards Update, or ASU, No. 2017-05, Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20), which provides for revenue recognition based on transfer of ownership. During the nine months ended September 30, 2018, the Company sold real estate properties for gross proceeds of $291.7 million, and recorded a net gain of $80.4 million. The Company did not sell any real estate properties during the nine months ended September 30, 2019.

(q) Gain on Deconsolidation

We deconsolidate our subsidiaries in accordance with ASC 810, Consolidation, as of the date we cease to have a controlling financial interest in our subsidiaries. We account for the deconsolidation of our subsidiaries by recognizing a gain or loss in accordance with ASC 810. This gain or loss is measured at the date our subsidiaries are deconsolidated as the difference between (a) the aggregate of the fair value of any consideration received, the fair value of any retained non-controlling interest in our subsidiaries being deconsolidated, and the carrying amount of any non-controlling interest in our subsidiaries being deconsolidated, including any accumulated other comprehensive income/loss attributable to the non-controlling interest, and (b) the carrying amount of the assets and liabilities of our subsidiaries being deconsolidated. During the nine months ended September 30, 2019, the Company deconsolidated Ascenty (see Note 5) and recorded a gain of $67.5 million.

(r) Management’s Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates made. On an on-going basis, we evaluate our estimates, including those related to the valuation of our real estate properties, tenant relationship value, goodwill, contingent consideration, accounts receivable and deferred rent receivable, performance-based equity compensation plans and the completeness of accrued liabilities. We base our estimates on historical experience, current market conditions, and various other assumptions that are believed to be reasonable under the circumstances. Actual results may vary from those estimates and those estimates could vary under different assumptions or conditions.

(s) Segment and Geographic Information

The Company is managed on a consolidated premise, based on customer demand considerations.  Deployment of capital is geared to satisfy this demand.  In this regard, the sale and delivery of our products is consistent throughout the portfolio.  Services are provided to customers typical of the data center industry.  Rent and the cost of services are billed and collected.  The Company has one operating segment and therefore one reporting segment.

Operating revenues from properties in the United States were $659.8 million and $629.3 million and outside the United States were $146.7 million and $139.7 million for the three months ended September 30, 2019 and 2018, respectively. Operating revenues from properties in the United States were $1.9 billion and $1.8 billion and outside the United States were $475.9 million and $421.3 million for the nine months ended September 30, 2019 and 2018, respectively. We had investments in real estate located in the United States of $10.5 billion and $11.1 billion, and outside the United States of $3.4 billion and $3.8 billion, as of September 30, 2019 and December 31, 2018, respectively.

34

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

Operating revenues from properties located in the United Kingdom were $68.9 million and $72.6 million, or 8.5% and 9.4% of total operating revenues, for the three months ended September 30, 2019 and 2018, respectively. Operating revenues from properties located in the United Kingdom were $215.8 million and $221.9 million, or 8.9% and 9.8% of total operating revenues, for the nine months ended September 30, 2019 and 2018, respectively. No other foreign country comprised more than 10% of total operating revenues for each of these periods. We had investments in real estate located in the United Kingdom of $1.6 billion and $1.6 billion, or 11.4% and 10.9% of total long-lived assets, as of September 30, 2019 and December 31, 2018, respectively. No other foreign country comprised more than 10% of total long-lived assets as of September 30, 2019 and December 31, 2018.

(t) New Accounting Pronouncements

New Accounting Standards Adopted

In February 2016, the FASB issued ASU No. 2016-02 Leases (Topic 842). The standard introduces new requirements to increase transparency and comparability among organizations for leasing transactions for both lessees and lessors. Topic 842 requires a lessee to record a right-of-use asset and a lease liability for all leases with terms longer than 12 months. These leases will be either finance or operating, with classification affecting the pattern of expense recognition.

We adopted Topic 842, on January 1, 2019 and elected to apply the modified retrospective transition method prospectively from the effective date of adoption.

As part of applying the transition method, we elected to apply the package of transition practical expedients within the new guidance. As required by the new standard, these expedients have been elected as a package, and consistently applied across our lease portfolio. Accordingly, we need not reassess the following:

◦Whether any expired or existing contracts are or contain leases

◦The lease classification for any expired or existing leases

◦Treatment of initial direct costs relating to any existing leases

We have decided not to elect the transition practical expedient to use hindsight in determining lease term and in assessing impairment of right-of-use assets.

In applying the modified retrospective transition method to operating leases, we measured lease liabilities at the present value of the sum of remaining minimum rental payments (as defined under Topic 840) as the leases contained no residual value guarantees. These lease liabilities have been measured using our incremental borrowing rates as of the date of adoption. Additionally, right-of-use assets for these operating leases have been measured as the initial measurement of applicable lease liabilities adjusted for other related lease balances at transition.

In applying the modified retrospective transition method to capital leases, at the effective date, we measured lease liabilities and right of use assets at the carrying amount of capital lease obligations and capital lease assets under Topic 840, respectively.

In addition, we applied the modified retrospective transition method to build-to-suit leases for which assets and liabilities have been recognized solely as a result of the transactions’ build-to-suit designation in accordance with Topic 840. Therefore, we derecognized those assets and liabilities at the effective date of adoption for build-to-suit leases where construction had completed, with the difference of approximately $6.3 million recorded as an increase to accumulated dividends in excess of earnings at the adoption date. We accounted for the leases therefrom, following lessee transition guidance.

New Accounting Standards Issued but not yet Adopted

In August 2018, the FASB issued ASU No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement.” This ASU amends existing fair value measurement disclosure requirements by adding, changing, or removing certain disclosures. ASU No. 2018-13 will be effective for us as of January 1, 2020, and earlier adoption is permitted. We are currently reviewing the impact this ASU will have on our financial statements.

We determined that all other recently issued accounting pronouncements will not have a material impact on our consolidated financial statements or do not apply to our operations.

35

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

3. Real Estate

Acquisitions

We acquired the following real estate during the nine months ended September 30, 2019:

Location	Market	Date Acquired	Amount (in millions)
Land parcels (1)	Various	Various	$	44.3
21780 Filigree Court	Northern Virginia	May 2, 2019	28.0
			$	72.3

(1) Represents five currently vacant land parcels in total located in the United States, Europe and Asia which are not included in our operating property count. Purchase price in U.S. dollars and excludes capitalized closing costs.

Assets Held For Sale / Contribution

On September 16, 2019, we announced the proposed sale of 10 Powered Base Building® properties, which comprise 12 data centers, in North America to Mapletree Investments Pte Ltd (“Mapletree Investments”) and Mapletree Industrial Trust (“MIT” and together with Mapletree Investments, “Mapletree”), at a purchase consideration of approximately $557.0 million. As of September 30, 2019, these 12 data centers had an aggregate carrying value of $224.2 million within total assets and $2.5 million within total liabilities and are shown as assets held for sale and contribution and obligations associated with assets held for sale and contribution on the condensed consolidated balance sheet. The 12 data centers are not representative of a significant component of our portfolio, nor does the potential sales represent a significant shift in our strategy.

On September 16, 2019, we also announced a contribution of three Turn-Key Flex® data centers, valued at approximately $1.0 billion, to a new joint venture with Mapletree in exchange for a 20% interest in the joint venture and approximately $0.8 billion of cash, net of closing costs. An entity jointly owned by Mapletree Investments and MIT will contribute such cash to the joint venture in exchange for an 80% interest in the joint venture. The carrying value of the three data centers is classified as assets held for sale and contribution on our condensed consolidated balance sheet as of September 30, 2019. The disposition of a portion of our interest in the three data centers met the criteria under ASC 360 for the assets to qualify as held for sale and contribution. However, the operations are not classified as discontinued operations as a result of our continuing interest in the venture. As of September 30, 2019, these three data centers had an aggregate carrying value of $743.3 million within total assets and $21.0 million within total liabilities and are shown as assets held for sale and contribution and obligations associated with assets held for sale and contribution on the condensed consolidated balance sheet.

36

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

4. Leases

We lease space at certain of our data centers from third parties, primarily data centers acquired as part of the Telx Acquisition and European Portfolio Acquisition, and certain equipment under noncancelable lease agreements. Leases for our data centers expire at various dates through 2074. As of September 30, 2019, certain of our data centers, primarily in Europe and Singapore, are subject to ground leases. The termination dates of these ground leases range from 2024 to 2982. In addition, our corporate headquarters along with several regional office locations are subject to leases with termination dates ranging from 2021 to 2027.

The leases may contain renewal and/or early termination options that are not reasonably certain of exercise as of September 30, 2019. Also, the leases generally require us to make fixed rental payments that increase at defined intervals during the term of the lease plus pay our share of common area, real estate and utility expenses as incurred. The leases neither contain residual value guarantees nor impose material restrictions or covenants on us. Further, the leases have been classified and accounted for as either operating or finance leases.

Supplemental balance sheet information related to leases as of September 30, 2019 was as follows (in thousands):

	Balance Sheet Classification	Balance as of September 30, 2019
Assets:
Operating lease assets	Operating lease right-of-use assets, net (1)	$	634,085
Finance lease assets	Buildings and improvements, net (2)	124,477
Total leased assets		$	758,562
Liabilities:
Operating lease liabilities	Operating lease liabilities	$	699,381
Finance lease liabilities	Accounts payable and other accrued liabilities	168,266
Total lease liabilities		$	867,647

(1) Net of accumulated depreciation and amortization of $37.7 million as of September 30, 2019.

(2) Net of accumulated depreciation and amortization of $3.4 million as of September 30, 2019.

The components of lease expense for the three and nine months ended September 30, 2019 were as follows (in thousands):

Lease cost	Income Statement Classification	Three Months Ended September 30, 2019		Nine Months Ended September 30, 2019
Finance lease cost:
Amortization of right-of-use    assets	Depreciation and amortization	$	1,264	$	3,771
Interest on lease liabilities	Interest expense	1,435		4,566
Operating lease cost	Rental property operating and maintenance / General and administrative	22,633		68,503
Total lease cost		$	25,332	$	76,840

As of September 30, 2019, the weighted average remaining lease term for our operating leases and finance leases was 12 years and 24 years, respectively. We do not include renewal options in the lease term for calculating the lease liability unless we are reasonably certain we will exercise the option or the lessor has the sole ability to exercise the option. The weighted average incremental borrowing rate was 4.1% for operating leases and 3.5% for finance leases at September 30, 2019. We assigned a collateralized interest rate to each lease based on the term of the lease and the currency in which the lease is denominated.

37

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

The minimum commitment under operating leases, excluding fully prepaid ground leases, as of December 31, 2018 was as follows (in thousands):

2019	$	84,712
2020	87,396
2021	86,212
2022	81,976
2023	80,707
Thereafter	539,047
Total	$	960,050

Future minimum lease payments and their present value for property under capital lease obligations as of December 31, 2018, are as follows (in thousands):  

2019	$	11,657
2020	13,108
2021	13,207
2022	13,706
2023	14,219
Thereafter	285,774
	351,671
Less amount representing interest	(137,827		)
Present value	$	213,844

Maturities of lease liabilities as of September 30, 2019 were as follows (in thousands):

	Operating lease liabilities			Finance lease liabilities
Remainder of 2019	$	21,135		$	2,075
2020	85,013			8,343
2021	83,824			8,389
2022	79,522			8,829
2023	78,265			9,262
Thereafter	546,530			221,854
Total undiscounted future cash flows	894,289			258,752
Less: Imputed interest	(194,908		)	(90,486		)
Present value of undiscounted future cash flows	$	699,381		$	168,266

38

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

Lessor accounting

We recognized revenue from our lease agreements aggregating $3.0 billion for the year ended December 31, 2018. This revenue consisted primarily of rental revenues and tenant recoveries for the year ended December 31, 2018, aggregating $2.1 billion and $0.6 billion, respectively.

Prior to January 1, 2019, we recognized rental revenue from our operating leases on a straight-line basis over the respective lease terms. We commenced recognition of rental revenue at the date the property was ready for its intended use and the tenant took possession of, or controlled the physical use of, the property.

Prior to January 1, 2019, we considered tenant recoveries related to payments of real estate taxes, insurance, utilities, repairs and maintenance, common area expenses, and other operating expenses as lease components. We recognized these tenant recoveries as revenue when services were rendered in an amount equal to the related operating expenses incurred that were recoverable under the terms of the applicable lease and classified as tenant reimbursements revenue.

Effective January 1, 2019

Under the new lease ASUs, each lease agreement is evaluated to identify the lease and nonlease components at lease inception. The total consideration in the lease agreement is allocated to the lease and nonlease components based on their relative stand-alone selling prices. The new lease ASUs govern the recognition of revenue for lease components, and revenue related to nonlease components is subject to the revenue recognition ASU. Tenant recoveries for utilities, repairs and maintenance, and common area expenses are considered nonlease components. If a lessee makes payments for taxes and insurance directly to a third party on behalf of a lessor, lessors are required to exclude them from variable payments and from recognition in the lessors’ income statements. Otherwise, tenant recoveries for taxes and insurance are classified as additional lease revenue recognized by the lessor on a gross basis in their income statements.

On January 1, 2019, we adopted the practical expedient that allowed us to not separate expenses reimbursed by our customers (“rental recoveries”) from the associated rental revenue if certain criteria were met. We assessed these criteria and concluded that the timing and pattern of transfer for rental revenue and the associated rental recoveries are the same and as our leases qualify as operating leases, we accounted for and presented rental revenue and rental recoveries as a single component under rental and other services in our condensed consolidated income statements for the three and nine months ended September 30, 2019.

Costs to execute leases

The new lease ASUs require that lessors and lessees capitalize, as initial direct costs, only incremental costs of a lease that would not have been incurred if the lease had not been obtained. Effective January 1, 2019, costs that we incur to negotiate or arrange a lease regardless of its outcome, such as fixed employee compensation, tax, or legal advice to negotiate lease terms, and costs related to advertising or soliciting potential tenants will be expensed as incurred.

We estimate that approximately $37 million of initial direct costs that were capitalized in 2018 would have been expensed if the new lease ASUs that are effective on January 1, 2019 had been in effect during 2018. Future expenses as a result of the change in the accounting for initial direct costs will depend on the future events that are not yet known; therefore, the ultimate impact on initial direct leasing costs from the adoption of the lease ASUs might differ from our estimate.

Under the package of practical expedients that we elected on January 1, 2019, we were not required to reassess whether initial direct leasing costs capitalized prior to the adoption of the new lease ASUs in connection with the leases that commenced prior to January 1, 2019, qualify for capitalization under the new lease ASUs. Therefore, we continue to amortize these initial direct leasing costs.

39

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

We lease our operating properties to customers under agreements that are classified as operating leases. We recognize the total minimum lease payments provided for under the leases on a straight-line basis over the lease term if we determine that it is probable that substantially all of the lease payments will be collected over the lease term. Otherwise, rental revenue is recognized based on the amount contractually due. Generally, under the terms of our leases, the majority of our rental expenses, including common area maintenance, real estate taxes and insurance, are recovered from our customers. We record amounts reimbursed by customers in the period that the applicable expenses are incurred, which is generally ratably throughout the term of the lease. The reimbursements are recognized in rental and other services revenue in the condensed consolidated income statements as we are the primary obligor with respect to purchasing and selecting goods and services from third-party vendors and bearing the associated credit risk. The following table summarizes the minimum lease payments due from our customers on leases with lease periods greater than one year for space in our operating properties, prestabilized development properties and leases of land subject to ground leases at September 30, 2019 (in thousands):    

	Operating leases
Remainder of 2019	$	625,824
2020	2,220,209
2021	1,852,760
2022	1,527,560
2023	1,328,487
Thereafter	5,158,479
Total	$	12,713,319

These amounts do not reflect future rental revenues from the renewal or replacement of existing leases unless we are reasonably certain we will exercise the option or the lessor has the sole ability to exercise the option. We exclude reimbursements of operating expenses and rental increases that are not fixed.

5. Investments in Unconsolidated Joint Ventures

As of September 30, 2019 and December 31, 2018, our investments in unconsolidated joint ventures accounted for under the equity method of accounting presented in our condensed consolidated balance sheets consist of the following (in thousands):

Joint Venture	Metropolitan Area	% Ownership		Balance as of September 30, 2019		Balance as of December 31, 2018
Ascenty (1)	Brazil / Chile	51%	(2)	$	737,727	$	—
Digital MC	Osaka / Tokyo	50%		185,525		66,835
Chun Choi	Hong Kong	50%		98,706		96,094
Other				13,903		12,179
Total				$	1,035,861	$	175,108

(1) Our maximum exposure to loss related to this unconsolidated variable interest entity (VIE) is limited to our equity investment in this VIE.

(2) Includes an approximate 2% ownership interest held by a non-controlling interest in our entity that holds the investment in the Ascenty joint venture, which has a carrying value of approximately $25.0 million.

The debt of our unconsolidated joint ventures generally are non-recourse to us, except for customary exceptions pertaining to such matters as intentional misuse of funds, environmental conditions, and material misrepresentations.

40

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

Ascenty Joint Venture

We completed the acquisition of Ascenty on December 20, 2018 for total cash and equity consideration of approximately $2.0 billion, including approximately $116.0 million of assumed cash and cash equivalents. The transaction was initially funded with $600.0 million of proceeds from a non-recourse, five-year secured term loan; the issuance of approximately $254 million of Operating Partnership common units in exchange for the substantial majority of the Ascenty management's equity interests; and approximately $1.0 billion of unsecured corporate borrowings. On March 29, 2019, we formed a joint venture with Brookfield Infrastructure, an affiliate of Brookfield Asset Management. Brookfield invested approximately $702 million in exchange for approximately 49% of the total equity interests and a subsidiary of the Operating Partnership retained the remaining 51% equity interests (including an approximate 2% ownership interest held by a non-controlling interest in our entity that holds the investment in the Ascenty joint venture) in the joint venture which owns and operates Ascenty. The governing documents related to the Ascenty joint venture provide Brookfield and the Company shared power to direct the activities of the Ascenty joint venture that most significantly impact the Ascenty joint venture's economic performance. As a result of the formation of the joint venture, the Company determined that the joint venture is a variable interest entity (VIE) since the Ascenty joint venture's equity investment at risk is not sufficient to finance the Ascenty joint venture's ongoing data center development activities without additional subordinated financial support. The Company concluded that it is not the primary beneficiary because power is shared and it does not have substantive kick-out rights to obtain control and deconsolidated Ascenty. We recognized a gain of approximately $67.5 million (net of the accumulated foreign currency translation loss related to Ascenty) on the deconsolidation and subsequent recognition of our subsidiary's 51% equity investment in the Ascenty joint venture at its estimated fair value of $727 million on March 29, 2019. The fair value of the Company’s retained equity investment is based on Level 2 measurements within the fair value hierarchy based on the cash price paid by Brookfield for their 49% interest. The gain was calculated based on the: (i) the sum of the cash proceeds of $702 million received from Brookfield for its 49% interest and the estimated fair value of $727 million for our 51% retained interest less (ii) the carrying value of the Ascenty assets and liabilities deconsolidated as of March 29, 2019. The gain related to the remeasurement of the Company's retained equity interests to fair value was approximately $89.2 million. The reported gain of $67.5 million was net of a foreign currency translation loss of approximately $21.7 million previously included in accumulated other comprehensive loss, net, which accumulated during the period the Company consolidated Ascenty and translated the Brazilian Real, Ascenty's functional currency, into the Company's functional currency. The Company has no other subsidiaries or businesses with the Brazilian Real as its functional currency and, therefore, the deconsolidation of Ascenty resulted in the reclassification out of accumulated other comprehensive loss into a component of income from continuing operations in the condensed consolidated income statement. The Ascenty deconsolidation did not meet the criteria to be presented as a discontinued operation in accordance with ASC 205-20, Presentation of Financial Statements Discontinued Operations, because the deconsolidation of Ascenty does not represent a strategic shift in and does not have a major effect on the Company's operations, as defined by ASC 205-20.

41

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

6. Acquired Intangible Assets and Liabilities

The following summarizes our acquired intangible assets (real estate intangibles, comprised of acquired in-place lease value and tenant relationship value along with acquired above-market lease value) and intangible liabilities (acquired below-market lease value) as of September 30, 2019 and December 31, 2018.

	Balance as of
(Amounts in thousands)	September 30, 2019			December 31, 2018
Real Estate Intangibles:
Acquired in-place lease value:
Gross amount (1)(2)	$	1,348,534		$	1,569,401
Accumulated amortization	(864,578		)	(795,033		)
Net	$	483,956		$	774,368
Tenant relationship value:
Gross amount (1)(2)	$	1,831,554		$	2,339,606
Accumulated amortization	(368,857		)	(291,818		)
Net	$	1,462,697		$	2,047,788
Acquired above-market leases:
Gross amount	$	276,309		$	277,796
Accumulated amortization	(191,994		)	(158,037		)
Net	$	84,315		$	119,759
Acquired below-market leases:
Gross amount (2)	$	393,546		$	442,535
Accumulated amortization	(240,124		)	(242,422		)
Net	$	153,422		$	200,113

(1) In connection with the deconsolidation of Ascenty, $120.0 million of acquired in-place lease value and $375.0 million of tenant relationship value were written off during the nine months ended September 30, 2019.

(2) In connection with the transactions with Mapletree (see Note 3), $93.0 million of acquired in-place lease value and $122.7 million of tenant relationship value were reclassified to assets held for sale and contribution, and $22.7 million of acquired below-market leases was reclassified to obligations associated with assets held for sale and contribution during the three months ended September 30, 2019.

Amortization of acquired above-market leases, net of acquired below-market leases, resulted in a decrease in rental revenues of $2.8 million and $6.8 million for the three months ended September 30, 2019 and 2018, respectively. Amortization of acquired above-market leases, net of acquired below-market leases, resulted in a decrease in rental revenues of $13.0 million and $20.6 million for the nine months ended September 30, 2019 and 2018, respectively. The expected average remaining lives for acquired below-market leases and acquired above-market leases is 8.1 years and 2.6 years, respectively, as of September 30, 2019. Estimated annual amortization of acquired below-market leases, net of acquired above-market leases, for each of the five succeeding years and thereafter, commencing October 1, 2019 is as follows:

(Amounts in thousands)
Remainder of 2019	$	(4,105	)
2020	(10,693		)
2021	(3,590		)
2022	4,619
2023	9,384
Thereafter	73,492
Total	$	69,107

42

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

Amortization of acquired in-place lease value (a component of depreciation and amortization expense) was approximately $32.4 million and $50.2 million for the three months ended September 30, 2019 and 2018, respectively, and approximately $114.7 million and $162.3 million for the nine months ended September 30, 2019 and 2018, respectively. The expected average amortization period for acquired in-place lease value is 5.9 years as of September 30, 2019. The weighted average remaining contractual life for acquired leases excluding renewals or extensions is 5.6 years as of September 30, 2019. Estimated annual amortization of acquired in-place lease value for each of the five succeeding years and thereafter, commencing October 1, 2019 is as follows:

(Amounts in thousands)
Remainder of 2019	$	28,176
2020	98,331
2021	77,848
2022	58,210
2023	47,109
Thereafter	174,282
Total	$	483,956

Amortization of tenant relationship value (a component of depreciation and amortization expense) was approximately $30.7 million and $30.8 million for the three months ended September 30, 2019 and 2018, respectively, and approximately $99.3 million and $92.8 million for the nine months ended September 30, 2019 and 2018, respectively. As of September 30, 2019, the weighted average remaining contractual life for tenant relationship value was 13.3 years. Estimated annual amortization of tenant relationship value for each of the five succeeding years and thereafter, commencing October 1, 2019 is as follows:

(Amounts in thousands)
Remainder of 2019	$	28,970
2020	115,879
2021	115,879
2022	115,879
2023	115,879
Thereafter	970,211
Total	$	1,462,697

43

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

7. Debt of the Company

In this Note 7, the “Company” refers only to Digital Realty Trust, Inc. and not to any of its subsidiaries.

The Company itself does not currently have any indebtedness. All debt is currently held directly or indirectly by the Operating Partnership.

Guarantee of Debt

The Company guarantees the Operating Partnership’s obligations with respect to its 3.950% notes due 2022 (3.950% 2022 Notes), 3.625% notes due 2022 (3.625% 2022 Notes), 2.750% notes due 2023 (2.750% 2023 Notes), 4.750% notes due 2025 (4.750% 2025 Notes), 3.700% notes due 2027 (2027 Notes), 4.450% notes due 2028 (2028 Notes) and 3.600% notes due 2029 (3.600% 2029 Notes). The Company and the Operating Partnership guarantee the obligations of Digital Stout Holding, LLC, a wholly owned subsidiary of the Operating Partnership, with respect to its 4.750% notes due 2023 (4.750% 2023 Notes), 2.750% notes due 2024 (2.750% 2024 Notes), 4.250% notes due 2025 (4.250% 2025 Notes), 3.300% notes due 2029 (3.300% 2029 Notes) and 3.750% notes due 2030 (2030 Notes) and the obligations of Digital Euro Finco, LLC, an indirect wholly owned subsidiary of the Operating Partnership, with respect to its 2.625% notes due 2024 (2.625% 2024 Notes) and 2.500% notes due 2026 (2026 Notes). The Company is also the guarantor of the Operating Partnership’s and its subsidiary borrowers’ obligations under the global revolving credit facilities and unsecured term loans.

44

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

8. Debt of the Operating Partnership

A summary of outstanding indebtedness of the Operating Partnership as of September 30, 2019 and December 31, 2018 is as follows (in thousands):

Indebtedness	Interest Rate at September 30, 2019		Maturity Date		Principal Outstanding at September 30, 2019				Principal Outstanding at December 31, 2018
Global revolving credit facilities	Various	(1)(4)	Jan 24, 2023	(1)	$	1,846,026		(2)	$	1,663,156		(2)
Deferred financing costs, net					(12,514		)		(15,421		)
Global revolving credit facilities, net					1,833,512				1,647,735
Unsecured Term Loans
2019 Term Loan	Base Rate + 1.000%		Jan 19, 2019		—				375,000
2023 Term Loan	Various	(3)(4)	Jan 15, 2023		300,000			(5)	300,000			(5)
2024 Term Loan	Various	(3)(4)	Jan 24, 2023	(3)	499,533			(5)	508,120			(5)
Deferred financing costs, net					(3,301		)		(4,216		)
Unsecured term loans, net					796,232				1,178,904
Floating rate notes due 2019	EURIBOR + 0.500%		May 22, 2019		—			(11)	143,338			(6)
5.875% notes due 2020	5.875%		Feb 1, 2020		—			(8)	500,000
3.400% notes due 2020	3.400%		Oct 1, 2020		—			(12)	500,000
5.250% notes due 2021	5.250%		Mar 15, 2021		—			(12)	400,000
3.950% notes due 2022	3.950%		Jul 1, 2022		500,000				500,000
3.625% notes due 2022	3.625%		Oct 1, 2022		300,000				300,000
2.750% notes due 2023	2.750%		Feb 1, 2023		350,000				350,000
4.750% notes due 2023	4.750%		Oct 13, 2023		368,670			(7)	382,620			(7)
2.625% notes due 2024	2.625%		Apr 15, 2024		653,940			(6)	688,020			(6)
2.750% notes due 2024	2.750%		Jul 19, 2024		307,225			(7)	318,850			(7)
4.250% notes due 2025	4.250%		Jan 17, 2025		491,560			(7)	510,160			(7)
4.750% notes due 2025	4.750%		Oct 1, 2025		450,000				450,000
2.500% notes due 2026	2.500%		Jan 16, 2026		1,171,642			(6)	—
3.700% notes due 2027	3.700%		Aug 15, 2027		1,000,000				1,000,000
4.450% notes due 2028	4.450%		Jul 15, 2028		650,000				650,000
3.600% notes due 2029	3.600%		Jul 1, 2029		900,000				—
3.300% notes due 2029	3.300%		Jul 19, 2029		430,115			(7)	446,390			(7)
3.750% notes due 2030	3.750%		Oct 17, 2030		675,895			(7)(9)	510,160			(7)
Unamortized discounts, net of premiums					(11,183		)		(19,859		)
Total senior notes, net of discount					8,237,864				7,629,679
Deferred financing costs, net					(48,726		)		(40,553		)
Total unsecured senior notes, net of discount and deferred financing costs					8,189,138				7,589,126

45

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

Indebtedness	Interest Rate at September 30, 2019		Maturity Date	Principal Outstanding September 30, 2019				Principal Outstanding December 31, 2018
Secured Debt:
731 East Trade Street	8.22%		Jul 1, 2020	$	1,299			$	1,776
Secured note due March 2023	LIBOR + 1.000%	(4)	Mar 1, 2023	104,000				104,000
Secured note due December 2023	Base Rate + 4.250%		Dec 20, 2023	—			(10)	600,000
Unamortized net premiums				78				148
Total mortgage loans, including premiums				105,377				705,924
Deferred financing costs, net				(224		)		(20,210		)
Total secured debt, including premiums and net of deferred financing costs				105,153				685,714
Total indebtedness				$	10,924,035			$	11,101,479

_________________________________ 

(1) The interest rate for borrowings under the global revolving credit facility equals the applicable index plus a margin of 90 basis points, which is based on the current credit rating of our long-term debt. An annual facility fee of 20 basis points, which is based on the credit rating of our long-term debt, is due and payable quarterly on the total commitment amount of the facility. Two six months extensions are available, which we may exercise if certain conditions are met. The interest rate for borrowings under the Yen revolving credit facility equals the applicable index plus a margin of 50 basis points, which is based on the current credit rating of our long-term debt.

(2) Balances as of September 30, 2019 and December 31, 2018 are as follows (balances, in thousands):

Denomination of Draw	Balance as of September 30, 2019			Weighted-average interest rate			Balance as of December 31, 2018			Weighted-average interest rate
Floating Rate Borrowing (a)(e)
U.S. dollar ($)	$	960,000	(b)	3.00	%	(b)	$	890,000	(b)	3.37	%	(b)
British pound sterling (£)	44,240		(c)	1.61	%		8,290		(d)	1.61	%
Euro (€)	438,685		(c)	0.90	%		451,800		(d)	0.90	%
Australian dollar (AUD)	31,725		(c)	1.94	%		27,632		(d)	2.82	%
Hong Kong dollar (HKD)	11,851		(c)	2.85	%		8,797		(d)	3.14	%
Japanese yen (JPY)	—			—	%		4,105		(d)	0.90	%
Singapore dollar (SGD)	75,182		(c)	2.55	%		77,112		(d)	2.79	%
Canadian dollar (CAD)	90,863		(c)	2.85	%		60,856		(d)	3.16	%
Total	$	1,652,546		2.36	%		$	1,528,592		2.57	%
Yen Revolving Credit Facility (a)	$	193,480	(f)	0.50	%		$	134,564	(f)	0.50	%
Total borrowings	$	1,846,026		2.16	%	(b)	$	1,663,156		2.41	%	(b)

(a) The interest rates for floating rate borrowings under the global revolving credit facility currently equal the applicable index plus a margin of 90 basis points, which is based on the credit rating of our long-term debt. The interest rate for borrowings under the Yen revolving credit facility equals the applicable index plus a margin of 50 basis points, which is based on the current credit rating of our long-term debt.

46

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

(b) As of September 30, 2019 and December 31, 2018, approximately $306.9 million of the U.S. dollar tranche was subject to interest rate swaps. As of September 30, 2019, the weighted-average interest rate reflecting interest rate swaps was 2.79% (U.S. dollar) and 2.05% (Total borrowings). As of December 31, 2018, the weighted-average interest rate reflecting interest rate swaps was 2.99% (U.S. dollar) and 2.20% (Total borrowings).

(c) Based on exchange rates of $1.23 to £1.00, $1.09 to €1.00, $0.68 to 1.00 AUD, $0.13 to 1.00 HKD, $0.72 to 1.00 SGD and $0.76 to 1.00 CAD, respectively, as of September 30, 2019.

(d) Based on exchange rates of $1.28 to £1.00, $1.15 to €1.00, $0.70 to 1.00 AUD, $0.13 to 1.00 HKD, $0.01 to 1.00 JPY, $0.73 to 1.00 SGD and $0.73 to 1.00 CAD, respectively, as of December 31, 2018.

(e) As of September 30, 2019, approximately $44.3 million of letters of credit were issued.

(f) Based on exchange rates of $0.01 to 1.00 JPY for September 30, 2019 and December 31, 2018.

(3) Interest rates are based on our current senior unsecured debt ratings and are currently 100 basis points over the applicable index for floating rate advances for the 2023 Term Loan and the 2024 Term Loan. Two six months extensions are available for the 2024 Term Loan, which we may exercise if certain conditions are met.

(4) We have entered into interest rate swap agreements as a cash flow hedge for interest generated by a portion of U.S. dollar borrowings under the global revolving credit facility, a portion of U.S. dollar and Canadian dollar borrowings under the 2023 Term Loan and 2024 Term Loan, and the secured note due March 2023. See Note 15 "Derivative Instruments" for further information. 

(5) Balances as of September 30, 2019 and December 31, 2018 are as follows (balances, in thousands):

Denomination of Draw	Balance as of September 30, 2019			Weighted-average interest rate			Balance as of December 31, 2018			Weighted-average interest rate
U.S. dollar ($)	$	300,000		3.03	%	(b)	$	300,000		3.46	%	(d)
Singapore dollar (SGD)	144,069		(a)	2.68	%		146,080		(c)	2.76	%
Australian dollar (AUD)	195,952		(a)	2.06	%		204,632		(c)	2.94	%
Hong Kong dollar (HKD)	85,115		(a)	2.99	%		85,188		(c)	3.32	%
Canadian dollar (CAD)	74,397		(a)	2.95	%	(b)	72,220		(c)	3.24	%	(d)
Total	$	799,533		2.72	%	(b)	$	808,120		3.17	%	(d)

(a) Based on exchange rates of $0.72 to 1.00 SGD, $0.68 to 1.00 AUD, $0.13 to 1.00 HKD and $0.76 to 1.00 CAD, respectively, as of September 30, 2019.

(b) As of September 30, 2019, the weighted-average interest rate reflecting interest rate swaps was 2.44% (U.S. dollar), 1.78% (Canadian dollar) and 2.38% (Total). See Note 15 "Derivative Instruments" for further discussion on interest rate swaps.

(c) Based on exchange rates of $0.73 to 1.00 SGD, $0.70 to 1.00 AUD, $0.13 to 1.00 HKD and $0.73 to 1.00 CAD, respectively, as of December 31, 2018.

(d) As of December 31, 2018, the weighted-average interest rate reflecting interest rate swaps was 2.44% (U.S. dollar), 1.78% (Canadian dollar) and 2.66% (Total).

(6) Based on exchange rates of $1.09 to €1.00 as of September 30, 2019 and $1.15 to €1.00 as of December 31, 2018.

(7) Based on exchange rates of $1.23 to £1.00 as of September 30, 2019 and $1.28 to £1.00 as of December 31, 2018.

(8) The 5.875% 2020 Notes were paid in full in January 2019 (by tender offer) and February 2019 (by redemption of the remaining balance after the tender offer). The tender offer and redemption resulted in an early extinguishment charge of approximately $12.9 million during the three months ended March 31, 2019.

(9) On March 5, 2019, Digital Stout Holding, LLC, a wholly owned subsidiary of the Operating Partnership, issued and sold an additional £150.0 million aggregate principal amount of 2030 Notes. The terms of the 2030 Notes are governed by an indenture, dated as of October 17, 2018, among Digital Stout Holding, LLC, Digital Realty Trust, Inc., the Operating Partnership, Deutsche Trustee Company Limited, as trustee, Deutsche Bank AG, London Branch, as paying agent and a transfer agent, and Deutsche Bank Luxembourg S.A., as registrar and a transfer agent (the “GBP Notes Indenture”), pursuant to which Digital Stout Holding, LLC previously issued £400.0 million in aggregate principal amount of its 2030 Notes. The 2030 Notes are treated as a single series with the notes previously issued under the GBP Notes Indenture.

(10) The debt was deconsolidated as a result of the Ascenty joint venture formed with Brookfield.

(11) Paid in full at maturity in May 2019.

47

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

(12) The 3.400% 2020 Notes and 2021 Notes were paid in full in June 2019 (by tender offer) and July 2019 (by redemption of the remaining balances after the tender offer). The tender offer resulted in an early extinguishment charge of approximately $5.4 million and $26.3 million during the three and nine months ended September 30, 2019, respectively.

The indentures governing our debt contain certain covenants, including (1) a leverage ratio not to exceed 60%, (2) a secured debt leverage ratio not to exceed 40% and (3) an interest coverage ratio of greater than 1.50, and also requires us to maintain total unencumbered assets of not less than 150% of the aggregate principal amount of unsecured debt. At September 30, 2019, we were in compliance with each of these financial covenants.

2.500% Notes due 2026

On January 16, 2019, Digital Euro Finco, LLC, a wholly owned indirect finance subsidiary of the Operating Partnership, issued and sold €850 million aggregate principal amount of 2.500% Guaranteed Notes due 2026 denominated in Euros, which we refer to as the 2026 Notes. The 2026 Notes are senior unsecured obligations of Digital Euro Finco, LLC and are fully and unconditionally guaranteed by Digital Realty Trust, Inc. and the Operating Partnership. The terms of the 2026 Notes are governed by an indenture, dated as of January 16, 2019, among Digital Euro Finco, LLC, Digital Realty Trust, Inc., the Operating Partnership, Deutsche Trustee Company Limited, as trustee, Deutsche Bank AG, London Branch, as paying agent and a transfer agent, and Deutsche Bank Luxembourg S.A., as registrar and a transfer agent (the “2026 Notes Indenture”). Net proceeds from the offering were approximately €843.5 million (approximately $960.9 million based on the exchange rate on January 16, 2019) after deducting managers’ discounts and estimated offering expenses. We intend to allocate an amount equal to the net proceeds from the offering of the 2026 Notes to finance or refinance, in whole or in part, certain green building, energy and resource efficiency and renewable energy projects (collectively, “Eligible Green Projects”), including the development and redevelopment of such projects. Pending the allocation of an amount equal to the net proceeds of the 2026 Notes to Eligible Green Projects, all or a portion of an amount equal to the net proceeds were used for the payment of outstanding indebtedness or other capital management activities. Such indebtedness to be redeemed or repaid included the Operating Partnership’s 5.875% Senior Notes due 2020 pursuant to a previously announced tender offer for such notes.

On March 6, 2019, Digital Euro Finco, LLC issued and sold an additional €225.0 million aggregate principal amount of 2026 Notes. The terms of the additional 2026 Notes are governed by the 2026 Notes Indenture pursuant to which Digital Euro Finco, LLC previously issued €850.0 million in aggregate principal amount of its 2026 Notes. The 2026 Notes issued in March 2019 are treated as a single series with the notes previously issued under the 2026 Notes Indenture.

3.600% Notes due 2029

On June 14, 2019, the Operating Partnership issued $900.0 million in aggregate principal amount of notes, maturing on July 1, 2029 with an interest rate of 3.600% per annum, which we refer to as the 3.600% 2029 Notes. The purchase price paid by the initial purchasers was 99.823% of the principal amount. The 3.600% 2029 Notes are general unsecured senior obligations of the Operating Partnership, rank equally in right of payment with all other senior unsecured indebtedness of the Operating Partnership and are fully and unconditionally guaranteed by Digital Realty Trust, Inc. Interest on the 3.600% 2029 Notes is payable on January 1 and July 1 of each year, beginning on January 1, 2020. The net proceeds from the offering after deducting the original issue discount of approximately $1.6 million and underwriting commissions and expenses of approximately $7.8 million was approximately $890.6 million. We used the net proceeds from this offering to finance the tender offer for, and redemption of, our 3.400% 2020 Notes and 2021 Notes, temporarily repay borrowings under our global revolving credit facility and for general corporate purposes. The 3.600% 2029 Notes have been reflected net of discount and deferred financing costs in the condensed consolidated balance sheet.

1.125% Notes due 2028

On October 9, 2019, Digital Euro Finco, LLC, a wholly owned indirect finance subsidiary of the Operating Partnership, issued and sold €500.0 million aggregate principal amount of 1.125% Guaranteed Notes due 2028 denominated in Euros, which we refer to as the 2028 Notes. The 2028 Notes are senior unsecured obligations of Digital Euro Finco, LLC and are fully and unconditionally guaranteed by Digital Realty Trust, Inc. and the Operating Partnership. The terms of the 2028 Notes are governed by an indenture, dated as of October 9, 2019, among Digital Euro Finco, LLC, Digital Realty Trust, Inc., the Operating Partnership, Deutsche Trustee Company Limited, as trustee, Deutsche Bank AG, London Branch, as paying agent and a transfer agent, and Deutsche Bank Luxembourg S.A., as registrar and a transfer agent (the “2028 Notes Indenture”). Net

48

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

proceeds from the offering were approximately €491.9 million (approximately $539.7 million based on the exchange rate on October 9, 2019) after deducting managers’ discounts and estimated offering expenses. We used the net proceeds from the offering to repay borrowings outstanding under the operating partnership’s global revolving credit facility and for other general corporate purposes.

The table below summarizes our debt maturities and principal payments as of September 30, 2019 (in thousands): 

	Global Revolving Credit Facilities(1)		Unsecured Term Loans (1)		Senior Notes			Secured Debt		Total Debt
Remainder of 2019	$	—	$	—	$	—		$	166	$	166
2020	—		—		—			1,133		1,133
2021	—		—		—			—		—
2022	—		—		800,000			—		800,000
2023	1,652,546		799,533		718,670			104,000		3,274,749
Thereafter	193,480		—		6,730,377			—		6,923,857
Subtotal	$	1,846,026	$	799,533	$	8,249,047		$	105,299	$	10,999,905
Unamortized discount	—		—		(17,578		)	—		(17,578		)
Unamortized premium	—		—		6,395			78		6,473
Total	$	1,846,026	$	799,533	$	8,237,864		$	105,377	$	10,988,800

(1) The global revolving credit facility and 2024 Term Loan are subject to two six-month extension options exercisable by us. The bank group is obligated to grant the extension options provided we give proper notice, we make certain representations and warranties and no default exists.

49

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

9. Income per Share

The following is a summary of basic and diluted income per share (in thousands, except share and per share amounts): 

	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
Net income available to common stockholders	$	49,827	$	67,268	$	177,434	$	218,700
Weighted average shares outstanding—basic	208,421,470		206,118,472		208,173,995		205,931,031
Potentially dilutive common shares:
Unvested incentive units	181,064		169,100		142,670		160,117
Forward equity offering	1,013,970		37,884		705,720		1,847
Market performance-based awards	185,267		440,800		177,150		462,632
Weighted average shares outstanding—diluted	209,801,771		206,766,256		209,199,535		206,555,627
Income per share:
Basic	$	0.24	$	0.33	$	0.85	$	1.06
Diluted	$	0.24	$	0.33	$	0.85	$	1.06

We have excluded the following potentially dilutive securities in the calculations above as they would be antidilutive or not dilutive: 

	Three Months Ended September 30,		Nine Months Ended September 30,
	2019	2018	2019	2018
Weighted average of Operating Partnership common units not owned by Digital Realty Trust, Inc.	8,953,826	8,170,912	9,080,816	8,268,382
Potentially dilutive Series C Cumulative Redeemable Perpetual Preferred Stock	1,614,005	1,727,724	1,678,511	1,864,489
Potentially dilutive Series G Cumulative Redeemable Preferred Stock	2,001,277	2,142,282	2,081,260	2,311,864
Potentially dilutive Series H Cumulative Redeemable Preferred Stock	—	3,139,291	1,053,127	3,387,795
Potentially dilutive Series I Cumulative Redeemable Preferred Stock	2,003,619	2,144,789	2,083,696	2,314,569
Potentially dilutive Series J Cumulative Redeemable Preferred Stock	1,598,556	1,711,186	1,662,444	1,846,643
Potentially dilutive Series K Cumulative Redeemable Preferred Stock	1,680,969	—	1,232,711	—
Total	17,852,252	19,036,184	18,872,565	19,993,742

50

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

10. Income per Unit

The following is a summary of basic and diluted income per unit (in thousands, except unit and per unit amounts):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
Net income available to common unitholders	$	52,127	$	69,968	$	185,434	$	227,580
Weighted average units outstanding—basic	217,375,296		214,289,384		217,254,811		214,199,414
Potentially dilutive common units:
Unvested incentive units	181,064		169,100		142,670		160,117
Forward equity offering	1,013,970		37,884		705,720		1,847
Market performance-based awards	185,267		440,800		177,150		462,632
Weighted average units outstanding—diluted	218,755,597		214,937,168		218,280,351		214,824,010
Income per unit:
Basic	$	0.24	$	0.33	$	0.85	$	1.06
Diluted	$	0.24	$	0.33	$	0.85	$	1.06

We have excluded the following potentially dilutive securities in the calculations above as they would be antidilutive or not dilutive: 

	Three Months Ended September 30,		Nine Months Ended September 30,
	2019	2018	2019	2018
Potentially dilutive Series C Cumulative Redeemable Perpetual Preferred Units	1,614,005	1,727,724	1,678,511	1,864,489
Potentially dilutive Series G Cumulative Redeemable Preferred Units	2,001,277	2,142,282	2,081,260	2,311,864
Potentially dilutive Series H Cumulative Redeemable Preferred Units	—	3,139,291	1,053,127	3,387,795
Potentially dilutive Series I Cumulative Redeemable Preferred Units	2,003,619	2,144,789	2,083,696	2,314,569
Potentially dilutive Series J Cumulative Redeemable Preferred Units	1,598,556	1,711,186	1,662,444	1,846,643
Potentially dilutive Series K Cumulative Redeemable Preferred Units	1,680,969	—	1,232,711	—
Total	8,898,426	10,865,272	9,791,749	11,725,360

51

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

11. Income Taxes

Digital Realty Trust, Inc. has elected to be treated and believes that it has been organized and has operated in a manner that has enabled it to qualify as a REIT for federal income tax purposes. As a REIT, Digital Realty Trust, Inc. is generally not subject to corporate level federal income taxes on taxable income distributed currently to its stockholders. Since inception, Digital Realty Trust, Inc. has distributed at least 100% of its taxable income annually. As such, no provision for federal income taxes has been included in the Company's accompanying condensed consolidated financial statements for the nine months ended September 30, 2019 and 2018.

The Operating Partnership is a partnership and is not required to pay federal income tax. Instead, taxable income is allocated to its partners, who include such amounts on their federal income tax returns. As such, no provision for federal income taxes has been included in the Operating Partnership’s accompanying condensed consolidated financial statements.

We have elected taxable REIT subsidiary (“TRS”) status for some of our consolidated subsidiaries. In general, a TRS may provide services that would otherwise be considered impermissible for REITs to provide and may hold assets that REITs cannot hold directly. Income taxes for TRS entities were accrued, as necessary, for the nine months ended September 30, 2019 and 2018.

For our TRS entities and foreign subsidiaries that are subject to U.S. federal, state, local and foreign income taxes, deferred tax assets and liabilities are established for temporary differences between the financial reporting basis and the tax basis of assets and liabilities at the enacted tax rates expected to be in effect when the temporary differences reverse. A valuation allowance for deferred tax assets is provided if we believe it is more likely than not that the deferred tax asset may not be realized, based on available evidence at the time the determination is made. An increase or decrease in the valuation allowance that results from the change in circumstances that causes a change in our judgment about the realizability of the related deferred tax asset is included in the income statement. Deferred tax assets (net of valuation allowance) and liabilities for our TRS entities and foreign subsidiaries were accrued, as necessary, for the nine months ended September 30, 2019 and 2018. As of September 30, 2019 and December 31, 2018, we had deferred tax liabilities net of deferred tax assets of approximately $140.6 million and $146.6 million, respectively, primarily related to our foreign properties, classified in accounts payable and other accrued expenses in the consolidated balance sheet. The majority of our net deferred tax liability relates to differences between tax basis and book basis of the assets acquired in the Sentrum portfolio acquisition during 2012 and the European Portfolio Acquisition in July 2016. The valuation allowance against the deferred tax assets at September 30, 2019 and December 31, 2018 relate primarily to net operating loss carryforwards that we do not expect to utilize attributable to certain foreign jurisdictions and from the Telx Acquisition.

The federal tax legislation enacted in December 2017, commonly known as the Tax Cuts and Jobs Act (the “TCJA”), reduced the corporate federal tax rate in the U.S. to 21%, generally effective on January 1, 2018. As such, deferred tax assets and liabilities were remeasured using the lower corporate federal tax rate at December 31, 2017. While we do not expect other material impacts, the new tax rules are complex and, in some respects, lack developed administrative guidance. We continue to work with our tax advisors to analyze and determine the full impact that the TCJA as a whole will have on us.

52

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

12. Equity and Accumulated Other Comprehensive Loss, Net

(a) Equity Distribution Agreements

On January 4, 2019, Digital Realty Trust, Inc. and Digital Realty Trust, L.P. entered into equity distribution agreements, which we refer to as the 2019 Equity Distribution Agreements, with each of Merrill Lynch, Pierce, Fenner & Smith Incorporated, Barclays Capital Inc., BTIG, LLC, Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., J.P. Morgan Securities LLC, Mizuho Securities USA LLC, Morgan Stanley & Co. LLC, MUFG Securities Americas Inc., PNC Capital Markets LLC, Raymond James & Associates, Inc., RBC Capital Markets, LLC, Scotia Capital (USA) Inc., SMBC Nikko Securities America, Inc., SunTrust Robinson Humphrey, Inc., TD Securities (USA) LLC, and Wells Fargo Securities, LLC, or the Agents, under which it can issue and sell shares of its common stock having an aggregate offering price of up to $1.0 billion from time to time through, at its discretion, any of the Agents as its sales agents or as principals. Sales may also be made on a forward basis pursuant to separate forward sale agreements. The sales of common stock made under the 2019 Equity Distribution Agreements will be made in “at the market” offerings as defined in Rule 415 of the Securities Act. No sales were made under the program during the nine months ended September 30, 2019.

(b) Forward Equity Sale

On September 27, 2018, Digital Realty Trust, Inc. completed an underwritten public offering of 9,775,000 shares of its common stock (including 1,275,000 shares from the exercise in full of the underwriters' option to purchase additional shares), all of which were offered in connection with forward sale agreements it entered into with certain financial institutions acting as forward purchasers. The forward purchasers borrowed and sold an aggregate of 9,775,000 shares of Digital Realty Trust, Inc.’s common stock in the public offering. Digital Realty Trust, Inc. did not receive any proceeds from the sale of our common stock by the forward purchasers in the public offering. The Company expects to receive net proceeds of approximately $1.1 billion (net of fees and estimated expenses) upon full physical settlement of the forward sale agreements, which was anticipated to be no later than September 27, 2019. On September 17, 2019, the Company amended the forward sale agreements to extend the maturity date of such forward sales agreements from September 27, 2019 to September 25, 2020.

(c) 5.850% Series K Cumulative Redeemable Preferred Stock

On March 13, 2019, Digital Realty Trust, Inc. issued 8,000,000 shares of its 5.850% series K cumulative redeemable preferred stock, or the series K preferred stock, for net proceeds of approximately $193.7 million. In addition, on March 15, 2019, Digital Realty Trust, Inc. issued an additional 400,000 shares of series K preferred stock pursuant to a partial exercise of the underwriters’ over-allotment option for net proceeds of approximately $9.7 million. Dividends are cumulative on the series K preferred stock from the date of original issuance in the amount of $1.46250 per share each year, which is equivalent to 5.850% of the $25.00 liquidation preference per share. Dividends on the series K preferred stock are payable quarterly in arrears. The first dividend paid on the series K preferred stock on June 28, 2019 was a pro rata dividend from and including the original issue date to and including June 30, 2019 in the amount of $0.43875 per share. The series K preferred stock does not have a stated maturity date and is not subject to any sinking fund or mandatory redemption provisions. Upon liquidation, dissolution or winding up, the series K preferred stock will rank senior to Digital Realty Trust, Inc. common stock and rank on parity with Digital Realty Trust, Inc.’s series C cumulative redeemable perpetual preferred stock, series G cumulative redeemable preferred stock, series I cumulative redeemable preferred stock, series J cumulative redeemable preferred stock and series L cumulative redeemable preferred stock with respect to the payment of distributions and other amounts. Digital Realty Trust, Inc. is not allowed to redeem the series K preferred stock before March 13, 2024, except in limited circumstances to preserve its status as a REIT. On or after March 13, 2024, Digital Realty Trust, Inc. may, at its option, redeem the series K preferred stock, in whole or in part, at any time or from time to time, for cash at a redemption price of $25.00 per share, plus all accrued and unpaid dividends on such series K preferred stock up to but excluding the redemption date. Holders of the series K preferred stock generally have no voting rights except for limited voting rights if Digital Realty Trust, Inc. fails to pay dividends for six or more quarterly periods (whether or not consecutive) and in certain other circumstances. Upon the occurrence of specified changes of control, as a result of which neither Digital Realty Trust, Inc.’s common stock nor the common securities of the acquiring or surviving entity (or American Depositary

53

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

Receipts representing such securities) is listed on the New York Stock Exchange, the NYSE MKT, LLC or the NASDAQ Stock Market or listed or quoted on a successor exchange or quotation system, each holder of series K preferred stock will have the right (unless, prior to the change of control conversion date specified in the Articles Supplementary governing the series K preferred stock, Digital Realty Trust, Inc. has provided or provides notice of its election to redeem the series K preferred stock) to convert some or all of the series K preferred stock held by it into a number of shares of Digital Realty Trust, Inc.’s common stock per share of series K preferred stock to be converted equal to the lesser of:

• the quotient obtained by dividing (i) the sum of (x) the $25.00 liquidation preference plus (y) the amount of any accrued and unpaid dividends to, but not including, the change of control conversion date (unless the change of control conversion date is after a record date for a Series K Preferred Stock dividend payment and prior to the corresponding Series K Preferred Stock dividend payment date, in which case no additional amount for such accrued and unpaid dividend will be included in this sum) by (ii) the common stock price specified in the Articles Supplementary governing the series K preferred stock; and

• 0.43611 (i.e., the share cap), subject to certain adjustments;

subject, in each case, to provisions for the receipt of alternative consideration as described in the Articles Supplementary governing the series K preferred stock. Except in connection with specified change of control transactions, the series K preferred stock is not convertible into or exchangeable for any other property or securities of Digital Realty Trust, Inc.

(d) 5.200% Series L Cumulative Redeemable Preferred Stock

On October 10, 2019, Digital Realty Trust, Inc. issued 13,800,000 shares of its 5.200% series L cumulative redeemable preferred stock, or the series L preferred stock, for net proceeds of approximately $334.6 million. Dividends are cumulative on the series L preferred stock from the date of original issuance in the amount of $1.30000 per share each year, which is equivalent to 5.200% of the $25.00 liquidation preference per share. Dividends on the series L preferred stock are payable quarterly in arrears. The first dividend payable on the series L preferred stock on December 31, 2019 will be a pro rata dividend from and including the original issue date to and including December 31, 2019 in the amount of $0.29250 per share. The series L preferred stock does not have a stated maturity date and is not subject to any sinking fund or mandatory redemption provisions. Upon liquidation, dissolution or winding up, the series L preferred stock will rank senior to Digital Realty Trust, Inc. common stock and rank on parity with Digital Realty Trust, Inc.’s series C cumulative redeemable perpetual preferred stock, series G cumulative redeemable preferred stock, series I cumulative redeemable preferred stock, series J cumulative redeemable preferred stock and series K cumulative redeemable preferred stock with respect to the payment of distributions and other amounts. Digital Realty Trust, Inc. is not allowed to redeem the series L preferred stock before October 10, 2024, except in limited circumstances to preserve its status as a REIT. On or after October 10, 2024, Digital Realty Trust, Inc. may, at its option, redeem the series L preferred stock, in whole or in part, at any time or from time to time, for cash at a redemption price of $25.00 per share, plus all accrued and unpaid dividends on such series L preferred stock up to but excluding the redemption date. Holders of the series L preferred stock generally have no voting rights except for limited voting rights if Digital Realty Trust, Inc. fails to pay dividends for six or more quarterly periods (whether or not consecutive) and in certain other circumstances. Upon the occurrence of specified changes of control, as a result of which neither Digital Realty Trust, Inc.’s common stock nor the common securities of the acquiring or surviving entity (or American Depositary Receipts representing such securities) is listed on the New York Stock Exchange, the NYSE MKT, LLC or the NASDAQ Stock Market or listed or quoted on a successor exchange or quotation system, each holder of series L preferred stock will have the right (unless, prior to the change of control conversion date specified in the Articles Supplementary governing the series L preferred stock, Digital Realty Trust, Inc. has provided or provides notice of its election to redeem the series L preferred stock) to convert some or all of the series L preferred stock held by it into a number of shares of Digital Realty Trust, Inc.’s common stock per share of series L preferred stock to be converted equal to the lesser of:

• the quotient obtained by dividing (i) the sum of (x) the $25.00 liquidation preference plus (y) the amount of any accrued and unpaid dividends to, but not including, the change of control conversion date (unless the change of control conversion date is after a record date for a Series L Preferred Stock dividend payment and prior

54

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

to the corresponding Series L Preferred Stock dividend payment date, in which case no additional amount for such accrued and unpaid dividend will be included in this sum) by (ii) the common stock price specified in the Articles Supplementary governing the series L preferred stock; and

• 0.38518 (i.e., the share cap), subject to certain adjustments;

subject, in each case, to provisions for the receipt of alternative consideration as described in the Articles Supplementary governing the series L preferred stock. Except in connection with specified change of control transactions, the series L preferred stock is not convertible into or exchangeable for any other property or securities of Digital Realty Trust, Inc.

(e) Noncontrolling Interests in Operating Partnership

Noncontrolling interests in the Operating Partnership relate to the interests that are not owned by Digital Realty Trust, Inc. The following table shows the ownership interests in the Operating Partnership as of September 30, 2019 and December 31, 2018:

	September 30, 2019			December 31, 2018
	Number of units	Percentage of total		Number of units	Percentage of total
Digital Realty Trust, Inc.	208,583,244	95.8	%	206,425,656	95.1	%
Noncontrolling interests consist of:
Common units held by third parties	4,762,394	2.2	%	6,297,272	2.9	%
Issuance of units in connection with Ascenty Acquisition	2,338,874	1.1	%	2,338,874	1.1	%
Incentive units held by employees and directors (see Note 14)	2,042,713	0.9	%	1,944,738	0.9	%
	217,727,225	100.0	%	217,006,540	100.0	%

Limited partners have the right to require the Operating Partnership to redeem part or all of their common units for cash based on the fair market value of an equivalent number of shares of Digital Realty Trust, Inc. common stock at the time of redemption. Alternatively, Digital Realty Trust, Inc. may elect to acquire those common units in exchange for shares of Digital Realty Trust, Inc. common stock on a one-for-one basis, subject to adjustment in the event of stock splits, stock dividends, issuance of stock rights, specified extraordinary distributions and similar events. Pursuant to authoritative accounting guidance, Digital Realty Trust, Inc. evaluated whether it controls the actions or events necessary to issue the maximum number of shares that could be required to be delivered under the share settlement of the noncontrolling Operating Partnership common and incentive units. Based on the results of this analysis, we concluded that the common units and incentive units of the Operating Partnership met the criteria to be classified within equity, except for certain common units issued to certain former DFT Operating Partnership unitholders in the DFT Merger, which are subject to certain restrictions and, accordingly, are not presented as permanent equity in the condensed consolidated balance sheet.

In connection with the initial public offering of DFT in 2007, DFT, the DFT Operating Partnership and certain DFT Operating Partnership unitholders entered into a tax protection agreement to assist such unitholders in deferring certain U.S. federal income tax liabilities that may have otherwise resulted from the contribution transactions undertaken in connection with the initial public offering and the ownership of interests in the DFT Operating Partnership and to set forth certain agreements with respect to other tax matters. In connection with the DFT Merger, certain DFT Operating Partnership unitholders entered into a new tax protection agreement with Digital Realty Trust, Inc. and the Operating Partnership that replaced and superseded the DFT tax protection agreement, effective as of the closing of the DFT Merger. Pursuant to the new tax protection agreement, such DFT Operating Partnership unitholders entered into a guarantee of certain debt of a subsidiary of the Operating Partnership. The Operating

55

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

Partnership must offer such DFT Operating Partnership unitholders a new guarantee opportunity in the event any guaranteed debt is repaid prior to March 1, 2023. If the Operating Partnership fails to offer the guarantee opportunity or to allocate guaranteed debt to any such DFT Operating Partnership unitholder as required under the new tax

protection agreement, the Operating Partnership generally would be required to indemnify each such DFT Operating Partnership unitholder for the tax liability resulting from such failure, as determined under the new tax protection agreement.

The redemption value of the noncontrolling Operating Partnership common units and the vested incentive units was approximately $1,121.8 million and $1,076.9 million based on the closing market price of Digital Realty Trust, Inc. common stock on September 30, 2019 and December 31, 2018, respectively.

The following table shows activity for the noncontrolling interests in the Operating Partnership for the nine months ended September 30, 2019:

	Common Units		Incentive Units		Total
As of December 31, 2018	8,636,146		1,944,738		10,580,884
Redemption of common units for shares of Digital Realty Trust, Inc. common stock (1)	(1,534,878	)	—		(1,534,878	)
Conversion of incentive units held by employees and directors for shares of Digital Realty Trust, Inc. common stock (1)	—		(306,814	)	(306,814	)
Incentive units issued upon achievement of market performance condition	—		308,308		308,308
Grant of incentive units to employees and directors	—		119,397		119,397
Cancellation / forfeitures of incentive units held by employees and directors	—		(22,916	)	(22,916	)
As of September 30, 2019	7,101,268		2,042,713		9,143,981

(1) Redemption of common units / conversion of incentive units was recorded as a reduction to noncontrolling interests in the Operating Partnership and an increase to common stock and additional paid-in capital based on the book value per unit in the accompanying condensed consolidated balance sheet of Digital Realty Trust, Inc.

(f) Dividends

We have declared and paid the following dividends on our common and preferred stock for the nine months ended September 30, 2019 (in thousands, except per share data): 

Date dividend declared	Dividend payment date	Series C Preferred Stock		Series G Preferred Stock		Series H Preferred Stock			Series I Preferred Stock		Series J Preferred Stock		Series K Preferred Stock			Common Stock
February 21, 2019	March 29, 2019	$	3,333	$	3,672	$	6,730		$	3,969	$	2,625	$	—		$	224,802
May 13, 2019	June 28, 2019	3,333		3,672		—		(1)	3,969		2,625		3,686		(2)	224,895
August 13, 2019	September 30, 2019	3,333		3,672		—			3,969		2,625		3,071			225,188
		$	9,999	$	11,016	$	6,730		$	11,907	$	7,875	$	6,757		$	674,885
Annual rate of dividend per share		$	1.65625	$	1.46875	$	1.84375		$	1.58750	$	1.31250	$	1.46250		$	4.32000

56

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

(1) Redeemed on April 1, 2019 for $25.00 per share, or a redemption price of $25.00 per share, plus accrued and unpaid dividends up to but not including the redemption date. In connection with the redemption, the previously incurred offering costs of approximately $11.8 million were recorded as a reduction to net income available to common stockholders.

(2) Represents a pro rata dividend from and including the original issue date to and including June 30, 2019.

Distributions out of Digital Realty Trust, Inc.’s current or accumulated earnings and profits are generally classified as dividends whereas distributions in excess of its current and accumulated earnings and profits, to the extent of a stockholder’s U.S. federal income tax basis in Digital Realty Trust, Inc.’s stock, are generally classified as a return of capital. Distributions in excess of a stockholder’s U.S. federal income tax basis in Digital Realty Trust, Inc.’s stock are generally characterized as capital gain. Cash provided by operating activities has generally been sufficient to fund all distributions, however, in the future we may also need to utilize borrowings under the global revolving credit facility to fund all or a portion of distributions.

(g) Accumulated Other Comprehensive Loss, Net

The accumulated balances for each item within other comprehensive income (loss), net are as follows (in thousands):

	Foreign currency translation adjustments			Cash flow hedge adjustments			Foreign currency net investment hedge adjustments		Accumulated other comprehensive  income (loss), net
Balance as of December 31, 2018	$	(158,649	)	$	17,264		$	25,738	$	(115,647	)
Net current period change	42,038			(10,901		)	—		31,137
Reclassification of foreign currency translation adjustment due to deconsolidation of Ascenty	21,687			—			—		21,687
Reclassification to interest expense from interest rate swaps	—			(5,802		)	—		(5,802		)
Balance as of September 30, 2019	$	(94,924	)	$	561		$	25,738	$	(68,625	)

13. Capital and Accumulated Other Comprehensive Loss

(a) 5.850% Series K Cumulative Redeemable Preferred Units

On March 13, 2019 and March 15, 2019, the Operating Partnership issued in the aggregate a total of 8,400,000 of its 5.850% series K cumulative redeemable preferred units, or the series K preferred units, to Digital Realty Trust, Inc. (the General Partner) in conjunction with the General Partner’s issuance of an equivalent number of shares of its 5.850% series K cumulative redeemable preferred stock, or the series K preferred stock. Distributions are cumulative on the series K preferred units from the date of original issuance in the amount of $1.46250 per unit each year, which is equivalent to 5.850% of the $25.00 liquidation preference per unit. Distributions on the series K preferred units are payable quarterly in arrears. The first distribution paid on the series K preferred units on June 28, 2019 was a pro rata distribution from and including the original issue date to and including June 30, 2019 in the amount of $0.43875 per unit. The series K preferred units do not have a stated maturity date and are not subject to any sinking fund or mandatory redemption provisions. The Operating Partnership is required to redeem the series K preferred units in the event that the General Partner redeems the series K preferred stock. The General Partner is not allowed to redeem the series K preferred stock prior to March 13, 2024 except in limited circumstances to preserve the General Partner’s status as a REIT. On or after March 13, 2024, the General Partner may, at its option, redeem the series K preferred stock, in whole or in part,

57

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

at any time or from time to time, for cash at a redemption price of $25.00 per share, plus all accrued and unpaid dividends on such series K preferred stock up to but excluding the redemption date. Upon liquidation, dissolution or winding up, the series K preferred units will rank senior to the Operating Partnership’s common units with respect to the payment of distributions and other amounts and rank on parity with the Operating Partnership’s series C cumulative redeemable perpetual preferred units, series G cumulative redeemable preferred units, series I cumulative redeemable preferred units, series J cumulative redeemable preferred units and series L cumulative redeemable preferred units. Except in connection with specified change of control transactions of the General Partner, the series K preferred units are not convertible into or exchangeable for any other property or securities of the Operating Partnership.

(b) 5.200% Series L Cumulative Redeemable Preferred Units

On October 10, 2019, the Operating Partnership issued in the aggregate a total of 13,800,000 of its 5.200% series L cumulative redeemable preferred units, or the series L preferred units, to Digital Realty Trust, Inc. (the General Partner) in conjunction with the General Partner’s issuance of an equivalent number of shares of its 5.200% series L cumulative redeemable preferred stock, or the series L preferred stock. Distributions are cumulative on the series L preferred units from the date of original issuance in the amount of $1.30000 per unit each year, which is equivalent to 5.200% of the $25.00 liquidation preference per unit. Distributions on the series L preferred units are payable quarterly in arrears. The first distribution payable on the series L preferred units on December 31, 2019 will be a pro rata distribution from and including the original issue date to and including December 31, 2019 in the amount of $0.29250 per unit. The series L preferred units do not have a stated maturity date and are not subject to any sinking fund or mandatory redemption provisions. The Operating Partnership is required to redeem the series L preferred units in the event that the General Partner redeems the series L preferred stock. The General Partner is not allowed to redeem the series L preferred stock prior to October 10, 2024 except in limited circumstances to preserve the General Partner’s status as a REIT. On or after October 10, 2024, the General Partner may, at its option, redeem the series L preferred stock, in whole or in part, at any time or from time to time, for cash at a redemption price of $25.00 per share, plus all accrued and unpaid dividends on such series L preferred stock up to but excluding the redemption date. Upon liquidation, dissolution or winding up, the series L preferred units will rank senior to the Operating Partnership’s common units with respect to the payment of distributions and other amounts and rank on parity with the Operating Partnership’s series C cumulative redeemable perpetual preferred units, series G cumulative redeemable preferred units, series I cumulative redeemable preferred units, series J cumulative redeemable preferred units and series K cumulative redeemable preferred units. Except in connection with specified change of control transactions of the General Partner, the series L preferred units are not convertible into or exchangeable for any other property or securities of the Operating Partnership.

(c) Allocations of Net Income and Net Losses to Partners

Except for special allocations to holders of profits interest units described below in Note 14(a) under the heading “Incentive Plan—Long-Term Incentive Units,” the Operating Partnership’s net income will generally be allocated to Digital Realty Trust, Inc. (the General Partner) to the extent of the accrued preferred return on its preferred units, and then to the General Partner and the Operating Partnership’s limited partners in accordance with the respective percentage interests in the common units issued by the Operating Partnership. Net loss will generally be allocated to the General Partner and the Operating Partnership’s limited partners in accordance with the respective common percentage interests in the Operating Partnership until the limited partner’s capital is reduced to zero and any remaining net loss would be allocated to the General Partner. However, in some cases, losses may be disproportionately allocated to partners who have guaranteed our debt. The allocations described above are subject to special allocations relating to depreciation deductions and to compliance with the provisions of Sections 704(b) and 704(c) of the Code, and the associated Treasury Regulations.

58

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

(d) Forward Equity Sale

On September 27, 2018, Digital Realty Trust, Inc. completed an underwritten public offering of 9,775,000 shares of its common stock (including 1,275,000 shares from the exercise in full of the underwriters' option to purchase additional shares), all of which were offered in connection with forward sale agreements it entered into with certain financial institutions acting as forward purchasers. The forward purchasers borrowed and sold an aggregate of 9,775,000 shares of Digital Realty Trust, Inc.’s common stock in the public offering. Digital Realty Trust, Inc. did not receive any proceeds from the sale of our common stock by the forward purchasers in the public offering. The Company expects to receive net proceeds of approximately $1.1 billion (net of fees and estimated expenses) upon full physical settlement of the forward sale agreements, which was anticipated to be no later than September 27, 2019. On September 17, 2019, Digital Realty Trust, Inc. amended the forward sale agreements to extend the maturity date of such forward sales agreements from September 27, 2019 to September 25, 2020. Upon physical settlement of the forward sale agreements, the Operating Partnership is expected to issue partnership units to Digital Realty Trust, Inc. in exchange for contribution of the net proceeds.

(e) Partnership Units

Limited partners have the right to require the Operating Partnership to redeem part or all of their common units for cash based on the fair market value of an equivalent number of shares of the General Partner’s common stock at the time of redemption. Alternatively, the General Partner may elect to acquire those common units in exchange for shares of the General Partner’s common stock on a one-for-one basis, subject to adjustment in the event of stock splits, stock dividends, issuance of stock rights, specified extraordinary distributions and similar events. Pursuant to authoritative accounting guidance, Digital Realty Trust, Inc. evaluated whether it controls the actions or events necessary to issue the maximum number of shares that could be required to be delivered under the share settlement of the noncontrolling Operating Partnership common and incentive units. Based on the results of this analysis, we concluded that the common units and incentive units of the Operating Partnership met the criteria to be classified within capital, except for certain common units issued to certain former DFT Operating Partnership unitholders in the DFT Merger, which are subject to certain restrictions and, accordingly, are not presented as permanent capital in the condensed consolidated balance sheet.

In connection with the initial public offering of DFT in 2007, DFT, the DFT Operating Partnership and certain DFT Operating Partnership unitholders entered into a tax protection agreement to assist such unitholders in deferring certain U.S. federal income tax liabilities that may have otherwise resulted from the contribution transactions undertaken in connection with the initial public offering and the ownership of interests in the DFT Operating Partnership and to set forth certain agreements with respect to other tax matters. In connection with the DFT Merger, certain DFT Operating Partnership unitholders entered into a new tax protection agreement with Digital Realty Trust, Inc. and the Operating Partnership that replaced and superseded the DFT tax protection agreement, effective as of the closing of the DFT Merger. Pursuant to the new tax protection agreement, such DFT Operating Partnership unitholders entered into a guarantee of certain debt of a subsidiary of the Operating Partnership. The Operating Partnership must offer such DFT Operating Partnership unitholders a new guarantee opportunity in the event any guaranteed debt is repaid prior to March 1, 2023. If the Operating Partnership fails to offer the guarantee opportunity or to allocate guaranteed debt to any such DFT Operating Partnership unitholder as required under the new tax protection agreement, the Operating Partnership generally would be required to indemnify each such DFT Operating Partnership unitholder for the tax liability resulting from such failure, as determined under the new tax protection agreement.

The redemption value of the limited partners’ common units and the vested incentive units was approximately $1,121.8 million and $1,076.9 million based on the closing market price of Digital Realty Trust, Inc.’s common stock on September 30, 2019 and December 31, 2018, respectively.

59

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

(f) Distributions

All distributions on the Operating Partnership’s units are at the discretion of Digital Realty Trust, Inc.’s board of directors. The Operating Partnership has declared and paid the following distributions on its common and preferred units for the nine months ended September 30, 2019 (in thousands, except for per unit data):

Date distribution declared	Distribution payment date	Series C Preferred Units		Series G Preferred Units		Series H Preferred Units			Series I Preferred Units		Series J Preferred Units		Series K Preferred Units			Common Units
February 21, 2019	March 29, 2019	$	3,333	$	3,672	$	6,730		$	3,969	$	2,625	$	—		$	235,256
May 13, 2019	June 28, 2019	3,333		3,672		—		(1)	3,969		2,625		3,686		(2)	235,142
August 13, 2019	September 30, 2019	3,333		3,672		—			3,969		2,625		3,071			235,164
		$	9,999	$	11,016	$	6,730		$	11,907	$	7,875	$	6,757		$	705,562
Annual rate of distribution per unit		$	1.65625	$	1.46875	$	1.84375		$	1.58750	$	1.31250	$	1.46250		$	4.32000

(1) Redeemed on April 1, 2019 for $25.00 per unit, or a redemption price of $25.00 per unit, plus accrued and unpaid distributions up to but not including the redemption date. In connection with the redemption, the previously incurred offering costs of approximately $11.8 million were recorded as a reduction to net income available to common unitholders.

(2) Represents a pro rata distribution from and including the original issue date to and including June 30, 2019.

(g) Accumulated Other Comprehensive Loss

The accumulated balances for each item within other comprehensive income are as follows (in thousands):

	Foreign currency translation adjustments			Cash flow hedge adjustments			Foreign currency net investment hedge adjustments		Accumulated other comprehensive loss
Balance as of December 31, 2018	$	(163,531	)	$	16,986		$	26,152	$	(120,393	)
Net current period change	44,824			(11,379		)	—		33,445
Reclassification of foreign currency translation adjustment due to deconsolidation of Ascenty	21,687			—			—		21,687
Reclassification to interest expense from interest rate swaps	—			(6,055		)	—		(6,055		)
Balance as of September 30, 2019	$	(97,020	)	$	(448	)	$	26,152	$	(71,316	)

 

60

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

14. Incentive Plan

On April 28, 2014, our stockholders approved the Digital Realty Trust, Inc., Digital Services, Inc., and Digital Realty Trust, L.P. 2014 Incentive Award Plan (as amended, the 2014 Incentive Award Plan). The 2014 Incentive Award Plan became effective and replaced the Amended and Restated 2004 Incentive Award Plan, as amended, as of the date of such stockholder approval. The material features of the 2014 Incentive Award Plan are described in our definitive Proxy Statement filed on March 19, 2014 in connection with the 2014 Annual Meeting, which description is incorporated herein by reference. Effective as of September 14, 2017, the 2014 Incentive Award Plan was amended to provide that shares which remained available for issuance under DFT’s Amended and Restated 2011 Equity Incentive Plan immediately prior to the closing of the DFT Merger (as adjusted and converted into shares of Digital Realty Trust, Inc.’s common stock) may be used for awards under the 2014 Incentive Award Plan and will not reduce the shares authorized for grant under the 2014 Incentive Award Plan, to the extent that using such shares is permitted without stockholder approval under applicable stock exchange rules. In connection with the amendment to the 2014 Incentive Award Plan, on September 22, 2017, Digital Realty Trust, Inc. registered an additional 3.7 million shares that may be issued pursuant to the 2014 Incentive Award Plan.

As of September 30, 2019, approximately 6.6 million shares of common stock, including awards convertible into or exchangeable for shares of common stock, remained available for future issuance under the 2014 Incentive Award Plan. Each long-term incentive unit and each Class D unit issued under the 2014 Incentive Award Plan counts as one share of common stock for purposes of calculating the limit on shares that may be issued under the 2014 Incentive Award Plan and the individual award limits set forth therein.

Below is a summary of our compensation expense for the three and nine months ended September 30, 2019 and 2018 and our unearned compensation as of September 30, 2019 and December 31, 2018 (in millions):

	Deferred Compensation								Unearned Compensation				Expected period to recognize unearned compensation (in years)
	Expensed				Capitalized				As of September 30, 2019		As of December 31, 2018
	Three Months Ended September 30,
Type of incentive award	2019		2018		2019		2018
Long-term incentive units	$	2.4	$	1.2	$	—	$	0.1	$	17.8	$	11.5	2.5
Market performance-based awards	3.1		3.1		0.2		0.3		32.8		24.8		2.7
Restricted stock	2.9		1.5		0.7		1.1		32.9		23.6		2.8
	Nine Months Ended September 30,
	2019		2018		2019		2018
Long-term incentive units	$	6.2	$	5.2	$	0.1	$	0.2
Market performance-based awards	9.7		10.0		0.6		0.7
Restricted stock	8.6		4.7		2.1		3.2

(a) Long-Term Incentive Units

Long-term incentive units, which are also referred to as profits interest units, may be issued to eligible participants for the performance of services to or for the benefit of the Operating Partnership. Long-term incentive units (other than Class D units), whether vested or not, will receive the same quarterly per unit distributions as Operating Partnership common units, which equal the per share distributions on Digital Realty Trust, Inc. common stock. Initially, long-term incentive units do not have full parity with common units with respect to liquidating distributions. If such parity is reached, vested long-term incentive units may be converted into an equal number of common units of the Operating Partnership at any time, and thereafter enjoy all the rights and privileges of common units of the Operating Partnership, including redemption rights. For a discussion of how long-term incentive units achieve parity with common units, see Note 14(a) to our consolidated financial statements for the fiscal year ended December 31, 2018, included in our Annual Report on 10-K for the year ended December 31, 2018.

61

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

Below is a summary of our long-term incentive unit activity for the nine months ended September 30, 2019.

Unvested Long-term Incentive Units	Units		Weighted-Average Grant Date Fair Value
Unvested, beginning of period	158,486		$	100.94
Granted	119,397		116.18
Vested	(44,496	)	97.46
Cancelled or expired	(20,061	)	93.28
Unvested, end of period	213,326		$	109.90

The grant date fair values, which equal the market price of Digital Realty Trust, Inc. common stock on the applicable grant date(s), are being expensed on a straight-line basis for service awards between two and four years, the current vesting period of the long-term incentive units.

(b) Market Performance-Based Awards

During the nine months ended September 30, 2019 and 2018, the Compensation Committee of the Board of Directors of Digital Realty Trust, Inc. approved the grant of market performance-based Class D units of the Operating Partnership and market performance-based restricted stock units, or RSUs, covering shares of Digital Realty Trust, Inc.’s common stock (collectively, the “awards”), under the 2014 Incentive Award Plan to officers and employees of the Company.

The awards, which were determined to contain a market condition, utilize total shareholder return, or TSR, over a three-year measurement period as the market performance metric. Awards will vest based on Digital Realty Trust, Inc.’s TSR relative to the MSCI US REIT Index, or RMS, over a three-year market performance period, or the Market Performance Period, commencing in January 2019 or January 2018, as applicable (or, if earlier, ending on the date on which a change in control of the Company occurs), subject to continued services. Vesting with respect to the market condition is measured based on the difference between Digital Realty Trust, Inc.’s TSR percentage and the TSR percentage of the RMS, or the RMS Relative Market Performance. In the event that the RMS Relative Market Performance during the Market Performance Period is achieved at the “threshold,” “target” or “high” level as set forth below, the awards will become vested as to the market condition with respect to the percentage of Class D units or RSUs, as applicable, set forth below:

Level	RMS Relative Market Performance	Market Performance Vesting Percentage
Below Threshold Level	≤ -300 basis points	0%
Threshold Level	-300 basis points	25%
Target Level	100 basis points	50%
High Level	> 500 basis points	100%

If the RMS Relative Market Performance falls between the levels specified above, the percentage of the award that will vest with respect to the market condition will be determined using straight-line linear interpolation between such levels.

In January 2019, following the completion of the applicable Market Performance Period, the Compensation Committee determined that the high level had been achieved for the 2016 awards and, accordingly, 339,317 class D units (including 31,009 distribution equivalent units that immediately vested on December 31, 2018 upon the high level being achieved) and 56,778 RSUs performance vested, subject to service-based vesting. On February 27, 2019, 50% of the 2016 awards vested and the remaining 50% will vest on February 27, 2020, subject to continued employment through the vesting date.

Following the completion of the applicable Market Performance Period, the 2017 awards that satisfy the market condition, if any, will vest 50% on February 27, 2020 and 50% on February 27, 2021, subject to continued employment through each applicable vesting date. Following the completion of the applicable Market Performance Period, the 2018 awards that satisfy the market condition, if any, will vest 50% on February 27, 2021 and 50% on February 27, 2022, subject to continued

62

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

employment through each applicable vesting date. Following the completion of the applicable Market Performance Period, the 2019 awards that satisfy the market condition, if any, will vest 50% on February 27, 2022 and 50% on February 27, 2023, subject to continued employment through each applicable vesting date.

In the event of a change in control, termination of employment by the Company without cause, or termination of employment by the award recipient for good reason, death, disability or retirement, service-based vesting will be accelerated, in full or on a pro rata basis in any case prior to the completion of the Market Performance Period. However, vesting with respect to the market condition will continue to be measured based on RMS Relative Market Performance during the three-year Market Performance Period (or, in the case of a change in control, shortened Market Performance Period).

The fair values of the 2019 awards and 2018 awards granted were measured using a Monte Carlo simulation to estimate the probability of the market vesting condition being satisfied. Digital Realty Trust, Inc.’s achievement of the market vesting condition is contingent on its TSR over a three-year market performance period, relative to the total shareholder return of the RMS. The Monte Carlo simulation is a probabilistic technique based on the underlying theory of the Black-Scholes formula, which was run for 100,000 trials to determine the fair value of the awards. For each trial, the payoff to an award is calculated at the settlement date and is then discounted to the grant date at a risk-free interest rate. The total expected value of the awards on the grant date was determined by multiplying the average value per award over all trials by the number of awards granted. Assumptions used in the valuations are summarized as follows:

Award Date	Expected Stock Price Volatility	Risk-Free Interest rate
January 1, 2018	22%	1.98%
March 1, 2018	22%	2.34%
March 9, 2018	22%	2.42%
January 1, 2019	23%	2.44%
February 21, 2019	23%	2.48%

These valuations were performed in a risk-neutral framework, so no assumption was made with respect to an equity risk premium.

The grant date fair value of the Class D and RSU awards was approximately $21.3 million and $16.8 million for the nine months ended September 30, 2019 and 2018, respectively. We will recognize compensation expense on a straight-line basis over the expected service period of approximately four years.

(c) Restricted Stock

Below is a summary of our restricted stock activity for the nine months ended September 30, 2019.

Unvested Restricted Stock	Shares		Weighted-Average Grant Date Fair Value
Unvested, beginning of period	295,501		$	97.49
Granted	221,336		114.95
Vested	(104,955	)	92.80
Cancelled or expired	(29,412	)	106.83
Unvested, end of period	382,470		$	108.14

The grant date fair values, which equal the market price of Digital Realty Trust, Inc. common stock on the grant date, are expensed on a straight-line basis for service awards over the vesting period of the restricted stock, which is generally four years.

63

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

15. Derivative Instruments

Currently, we use interest rate swaps to manage our interest rate risk. The valuation of these instruments is determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves. The fair values of interest rate swaps are determined using the market standard methodology of netting the discounted future fixed cash receipts (or payments) and the discounted expected variable cash payments (or receipts). The variable cash payments (or receipts) are based on an expectation of future interest rates (forward curves) derived from observable market interest rate curves.

To comply with the provisions of fair value accounting guidance, we incorporate credit valuation adjustments to appropriately reflect both our own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of our derivative contracts for the effect of nonperformance risk, we have considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts, and guarantees.

Although we have determined that the majority of the inputs used to value our derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with our derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by us and our counterparties. However, as of September 30, 2019, we have assessed the significance of the impact of the credit valuation adjustments on the overall valuation of our derivative positions and have determined that the credit valuation adjustments are not significant to the overall valuation of our derivatives. As a result, we have determined that our derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy. We do not have any fair value measurements on a recurring basis using significant unobservable inputs (Level 3) as of September 30, 2019 or December 31, 2018.

The Company presents its interest rate derivatives in its condensed consolidated balance sheets on a gross basis as interest rate swap assets (recorded in other assets) and interest rate swap liabilities (recorded in accounts payable and other accrued liabilities). As of September 30, 2019, there was no impact from netting arrangements as the Company did not have any derivatives in liability positions.

Cash Flow Hedges of Interest Rate Risk

Our objectives in using interest rate derivatives are to add stability to interest expense and to manage our exposure to interest rate movements related to certain floating rate debt obligations. To accomplish this objective, we primarily use interest rate swaps as part of our interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.

We record all our interest rate swaps on the condensed consolidated balance sheet at fair value. In determining the fair value of our interest rate swaps, we consider the credit risk of our counterparties. These counterparties are generally larger financial institutions engaged in providing a variety of financial services. These institutions generally face similar risks regarding adverse changes in market and economic conditions, including, but not limited to, fluctuations in interest rates, exchange rates, equity and commodity prices and credit spreads. The recent and pervasive disruptions in the financial markets have heightened the risks to these institutions.

64

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

As of September 30, 2019 and December 31, 2018, we had the following outstanding interest rate derivatives that were designated as effective cash flow hedges of interest rate risk (in thousands): 

Notional Amount										Fair Value at Significant Other Observable Inputs (Level 2)
As of September 30, 2019			As of December 31, 2018			Type of Derivative	Strike Rate	Effective Date	Expiration Date	As of September 30, 2019 (3)			As of December 31, 2018 (3)
Currently-paying contracts
$	206,000	(1)	$	206,000	(1)	Swap	1.611	Jun 15, 2017	Jan 15, 2020	$	178		$	1,976
54,905		(1)	54,905		(1)	Swap	1.605	Jun 6, 2017	Jan 6, 2020	46			517
75,000		(1)	75,000		(1)	Swap	1.016	Apr 6, 2016	Jan 6, 2021	547			2,169
75,000		(1)	75,000		(1)	Swap	1.164	Jan 15, 2016	Jan 15, 2021	410			1,970
300,000		(1)	300,000		(1)	Swap	1.435	Jan 15, 2016	Jan 15, 2023	(379		)	11,463
74,397		(2)	72,220		(2)	Swap	0.779	Jan 15, 2016	Jan 15, 2021	1,052			2,024
$	785,302		$	783,125						$	1,854		$	20,119

(1) Represents debt which bears interest based on one-month U.S. LIBOR.

(2) Represents debt which bears interest based on one-month CDOR. Translation to U.S. dollars is based on exchange rates of $0.76 to 1.00 CAD as of September 30, 2019 and $0.73 to 1.00 CAD as of December 31, 2018.

(3) Balance recorded in other assets in the consolidated balance sheets if positive and recorded in accounts payable and other accrued liabilities in the consolidated balance sheets if negative.

As of September 30, 2019, we estimate that an additional $1.9 million will be reclassified as a decrease to interest expense during the twelve months ended September 30, 2020, when the hedged forecasted transactions impact earnings.

Credit-risk-related Contingent Features

We have agreements with each of our derivative counterparties that contain a provision where we could be declared in default on our derivative obligations if repayment of the underlying indebtedness is accelerated by the lender due to our default on the indebtedness. As of September 30, 2019, we did not have any derivatives in a net liability position, and have not posted any collateral related to these agreements.

16. Fair Value of Financial Instruments

We disclose fair value information about all financial instruments, whether or not recognized in the condensed consolidated balance sheets, for which it is practicable to estimate fair value. Current accounting guidance requires the Company to disclose fair value information about all financial instruments, whether or not recognized in the balance sheets, for which it is practicable to estimate fair value.

The Company’s disclosures of estimated fair value of financial instruments at September 30, 2019 and December 31, 2018 were determined using available market information and appropriate valuation methods. Considerable judgment is necessary to interpret market data and develop estimated fair value. The use of different market assumptions or estimation methods may have a material effect on the estimated fair value amounts.

The carrying amounts for cash and cash equivalents, restricted cash, accounts and other receivables, accounts payable and other accrued liabilities, accrued dividends and distributions, security deposits and prepaid rents approximate fair value because of the short-term nature of these instruments. As described in Note 15 "Derivative Instruments", the interest rate swaps are recorded at fair value.

We calculate the fair value of our secured debt, unsecured term loan and unsecured senior notes based on currently available market rates assuming the loans are outstanding through maturity and considering the collateral and other loan terms. In determining the current market rate for fixed rate debt, a market spread is added to the quoted yields on federal government treasury securities with similar maturity dates to our debt. The carrying value of our global revolving credit facilities approximate fair value, due to the variability of interest rates.

65

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

As of September 30, 2019 and December 31, 2018, the aggregate estimated fair value and carrying value of our global revolving credit facilities, unsecured term loans, unsecured senior notes and mortgage loans were as follows (in thousands):

	Categorization under the fair value hierarchy	As of September 30, 2019				As of December 31, 2018
		Estimated Fair Value		Carrying Value		Estimated Fair Value		Carrying Value
Global revolving credit facilities (1)(5)	Level 2	$	1,846,026	$	1,846,026	$	1,663,156	$	1,663,156
Unsecured term loans (2)(6)	Level 2	799,533		799,533		1,183,121		1,183,121
Unsecured senior notes (3)(4)(7)	Level 2	8,923,041		8,237,864		7,684,368		7,629,679
Secured debt (3)(8)	Level 2	105,529		105,377		706,086		705,924
		$	11,674,129	$	10,988,800	$	11,236,731	$	11,181,880

(1) The carrying value of our global revolving credit facilities approximates estimated fair value, due to the variability of interest rates and the stability of our credit ratings.

(2) The carrying value of our unsecured term loans approximates estimated fair value, due to the variability of interest rates and the stability of our credit ratings.

(3) Valuations for our unsecured senior notes and secured debt are determined based on the expected future payments discounted at risk-adjusted rates. The 3.400% 2020 Notes, 2021 Notes, 3.950% 2022 Notes, 3.625% 2022 Notes, 4.750% 2023 Notes, 2.750% 2023 Notes, 2.625% 2024 Notes, 2.750% 2024 Notes, 4.750% 2025 Notes, 4.250% 2025 Notes, 2026 Notes, 2027 Notes, 2028 Notes, 3.600% 2029 Notes, 3.300% 2029 Notes and 2030 Notes are valued based on quoted market prices.

(4) The carrying value of the 3.400% 2020 Notes, 2021 Notes, 3.625% 2022 Notes, 3.950% 2022 Notes, 4.750% 2023 Notes, 2.750% 2023 Notes, 2.625% 2024 Notes, 2.750% 2024 Notes, 4.250% 2025 Notes, 2026 Notes, 2027 Notes, 2028 Notes, 3.600% 2029 Notes, 3.300% 2029 Notes and 2030 Notes are net of discount of $11.2 million and $19.9 million in the aggregate as of September 30, 2019 and December 31, 2018, respectively.

(5) The estimated fair value and carrying value are exclusive of deferred financing costs of $12.5 million and $15.4 million as of September 30, 2019 and December 31, 2018, respectively.

(6) The estimated fair value and carrying value are exclusive of deferred financing costs of $3.3 million and $4.2 million as of September 30, 2019 and December 31, 2018, respectively.

(7) The estimated fair value and carrying value are exclusive of deferred financing costs of $48.7 million and $40.6 million as of September 30, 2019 and December 31, 2018, respectively.

(8) The estimated fair value and carrying value are exclusive of deferred financing costs of $0.2 million and $20.2 million as of September 30, 2019 and December 31, 2018, respectively.

66

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

17. Commitments and Contingencies

(a) Construction Commitments

Our properties require periodic investments of capital for tenant-related capital expenditures and for general capital improvements including ground up construction. From time to time in the normal course of our business, we enter into various construction contracts with third parties that may obligate us to make payments. At September 30, 2019, we had open commitments, including amounts reimbursable of approximately $9.0 million, related to construction contracts of approximately $452.9 million.

(b) Legal Proceedings

The Company is involved in legal proceedings arising in the ordinary course of business from time to time.  As of September 30, 2019, the Company is not currently a party to any legal proceedings that it believes would have a material adverse effect on its financial position, results of operations or liquidity nor, to its knowledge, are any such legal proceedings threatened against it.

67

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

18. Subsequent Events

In addition to other subsequent events discussed elsewhere within the footnotes, the following subsequent event warranted disclosure:

On October 29, 2019, Digital Realty Trust, Inc., an indirect subsidiary of Digital Realty Trust, Inc. (the “Buyer”) and InterXion Holding N.V. (“InterXion”) entered into a purchase agreement, pursuant to which, subject to the terms and conditions of the purchase agreement, the Buyer will commence a tender offer to purchase all of the outstanding ordinary shares of InterXion in exchange for shares of common stock of Digital Realty Trust, Inc. The transaction is expected to close in 2020 and is subject to the approval of shareholders of Digital Realty Trust, Inc. and shareholders of InterXion and other customary closing conditions.

On November 1, 2019, we closed the joint venture with Mapletree on three existing Turn-Key Flex® data centers located in Ashburn, Virginia. The Company is retaining a 20% ownership interest in the joint venture, and Mapletree closed on the acquisition of the remaining 80% stake for approximately $0.8 billion. We will continue to operate and manage these facilities. The second tranche of the Mapletree transaction, the sale of 10 fully-leased Powered Base Building® properties for $557 million, is expected to close in early 2020.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with the condensed consolidated financial statements and notes thereto appearing elsewhere in this report. This report contains forward-looking statements within the meaning of the federal securities laws. In particular, statements pertaining to the expected physical settlement of the forward sale agreements and use of proceeds from any such settlement, our capital resources, expected use of borrowings under our credit facilities, litigation matters, portfolio performance, leverage policy, acquisition and capital expenditure plans, capital recycling program, returns on invested capital, supply and demand for data center space, capitalization rates, rents to be received in future periods and expected rental rates on new or renewed data center space, as well as our discussion of “Factors Which May Influence Future Results of Operations,” contain forward-looking statements. Likewise, all of our statements regarding anticipated market conditions, demographics and results of operations are forward-looking statements. You can identify forward-looking statements by the use of forward-looking terminology such as “believes,” “expects,” “may,” “will,” “should,” “seeks,” “approximately,” “intends,” “plans,” “pro forma,” “estimates” or “anticipates” or the negative of these words and phrases or similar words or phrases which are predictions of or indicate future events or trends and discussions which do not relate solely to historical matters. You can also identify forward-looking statements by discussions of strategy, plans or intentions. Forward-looking statements involve numerous risks and uncertainties and you should not rely on them as predictions of future events. Forward-looking statements depend on assumptions, data or methods that may be incorrect or imprecise and that we may not be able to realize. We do not guarantee that the transactions and events described will happen as described or that they will happen at all. The following factors, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements: reduced demand for data centers or decreases in information technology spending; decreased rental rates, increased operating costs or increased vacancy rates; increased competition or available supply of data center space; the suitability of our data centers and data center infrastructure, delays or disruptions in connectivity or availability of power, or failures or breaches of our physical and information security infrastructure or services; our dependence upon significant customers, bankruptcy or insolvency of a major customer or a significant number of smaller customers, or defaults on or non-renewal of leases by customers; breaches of our obligations or restrictions under our contracts with our customers; our inability to successfully develop and lease new properties and development space, and delays or unexpected costs in development of properties; the impact of current global and local economic, credit and market conditions; our inability to retain data center space that we lease or sublease from third parties; difficulty acquiring or operating properties in foreign jurisdictions; our failure to realize the intended benefits from, or disruptions to our plans and operations or unknown or contingent liabilities related to, our recent and future acquisitions; our entry into a definitive agreement to combine with InterXion; our inability to achieve expected revenue synergies or cost savings as a result of our combination with InterXion; each of our and InterXion’s ability to consummate the transactions contemplated by the purchase agreement, the timing of the closing of those transactions and unexpected costs or unexpected liabilities that may arise from the transactions, whether or not consummated; the outcome of any legal proceedings, regulatory proceedings or enforcement matters that may be instituted relating to the anticipated transactions contemplated by the purchase agreement; our failure to successfully integrate and operate acquired or developed properties or businesses; difficulties in identifying properties to acquire and completing

68

acquisitions; risks related to joint venture investments, including as a result of our lack of control of such investments; risks associated with using debt to fund our business activities, including re-financing and interest rate risks, our failure to repay debt when due, adverse changes in our credit ratings or our breach of covenants or other terms contained in our loan facilities and agreements; our failure to obtain necessary debt and equity financing, and our dependence on external sources of capital; financial market fluctuations and changes in foreign currency exchange rates; adverse economic or real estate developments in our industry or the industry sectors that we sell to, including risks relating to decreasing real estate valuations and impairment charges and goodwill and other intangible asset impairment charges; our inability to manage our growth effectively; losses in excess of our insurance coverage; environmental liabilities and risks related to natural disasters; our inability to comply with rules and regulations applicable to our company; Digital Realty Trust, Inc.'s failure to maintain its status as a REIT for federal income tax purposes; Digital Realty Trust, L.P.'s failure to qualify as a partnership for federal income tax purposes; restrictions on our ability to engage in certain business activities; and changes in local, state, federal and international laws and regulations, including related to taxation, real estate and zoning laws, and increases in real property tax rates.

While forward-looking statements reflect our good faith beliefs, they are not guarantees of future performance. We disclaim any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, new information, data or methods, future events or other changes.

The risks included here are not exhaustive, and additional factors could adversely affect our business and financial performance, including factors and risks included in our annual report on Form 10-K for the year ended December 31, 2018 and in other sections of this report, including under Part II, Item 1A, Risk Factors. 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 we 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. Given these risks and uncertainties, you should not place undue reliance on forward-looking statements as a prediction of actual results.

Occupancy percentages included in the following discussion, for some of our properties, are calculated based on factors in addition to contractually leased square feet, including available power, required support space and common area.

As used in this report: “Ascenty Acquisition” refers to the acquisition of Ascenty by the Operating Partnership and Stellar Participações Ltda., a Brazilian subsidiary of the Operating Partnership; “Ascenty joint venture” refers to the joint venture, which owns and operates Ascenty, formed with Brookfield Infrastructure; “Brookfield” refers to Brookfield Infrastructure, an affiliate of Brookfield Asset Management; “DFT” refers to DuPont Fabros Technology, Inc.; “DFT Merger” refers to the Company’s acquisition of DuPont Fabros Technology, Inc.; and “DFT Operating Partnership” refers to DuPont Fabros Technology, L.P.

69

Overview

Our company. Digital Realty Trust, Inc. completed its initial public offering of common stock, or our IPO, on November 3, 2004. We believe that we have operated in a manner that has enabled us to qualify, and have elected to be treated, as a REIT under Sections 856 through 860 of the Code. Our Company was formed on March 9, 2004. During the period from our formation until we commenced operations in connection with the completion of our IPO, we did not have any corporate activity other than the issuance of shares of Digital Realty Trust, Inc. common stock in connection with the initial capitalization of the Company. Our Operating Partnership was formed on July 21, 2004.

Business and strategy. Our primary business objectives are to maximize: (i) sustainable long-term growth in earnings and funds from operations per share and unit, (ii) cash flow and returns to our stockholders and our operating partnership’s unitholders through the payment of distributions and (iii) return on invested capital. We expect to accomplish our objectives by achieving superior risk-adjusted returns, prudently allocating capital, diversifying our product offerings, accelerating our global reach and scale and driving revenue growth and operating efficiencies. We plan to focus on our core business of investing in and developing and operating data centers. A significant component of our current and future internal growth is anticipated through the development of our existing space held for development, acquisition of land for future development and acquisition of new properties. We target high-quality, strategically located properties containing the physical and connectivity infrastructure that supports the applications and operations of data center and technology industry customers and properties that may be developed for such use. Most of our data center properties contain fully redundant electrical supply systems, multiple power feeds, above-standard cooling systems, raised floor areas, extensive in-building communications cabling and high-level security systems. We focus exclusively on owning, acquiring, developing and operating data centers because we believe that the growth in data center demand and the technology-related real estate industry generally will continue to outpace the overall economy.

As of September 30, 2019, our portfolio included 223 data centers, including 38 data centers held as investments in unconsolidated joint ventures, with approximately 36.0 million rentable square feet including approximately 3.6 million square feet of space under active development and approximately 2.3 million square feet of space held for development. The 38 data centers held as investments in unconsolidated joint ventures have an aggregate of approximately 5.0 million rentable square feet. The 26 parcels of developable land we own as of September 30, 2019 comprised approximately 953 acres. At September 30, 2019, excluding unconsolidated joint ventures, approximately 3.1 million square feet was under construction for Turn-Key Flex^® and Powered Base Building^® products, all of which are expected to be income producing on or after completion, in eight U.S. metropolitan areas, five European metropolitan areas, one Asian metropolitan area, one Australian metropolitan area and one Canadian metropolitan area, consisting of approximately 2.2 million square feet of base building construction and 1.0 million square feet of data center construction.

We have developed detailed, standardized procedures for evaluating new real estate investments to ensure that they meet our financial, technical and other criteria. We expect to continue to acquire additional assets as part of our growth strategy. We intend to aggressively manage and lease our assets to increase their cash flow. We may continue to build out our development portfolio when justified by anticipated demand and returns.

We may acquire properties subject to existing mortgage financing and other indebtedness or we may incur new indebtedness in connection with acquiring or refinancing these properties. Debt service on such indebtedness will have a priority over any cash dividends with respect to Digital Realty Trust, Inc.’s common stock and preferred stock. We are committed to maintaining a conservative capital structure. We target a debt-to-Adjusted EBITDA ratio at or less than 5.5x, fixed charge coverage of greater than three times, and floating rate debt at less than 20% of total outstanding debt. In addition, we strive to maintain a well-laddered debt maturity schedule, and we seek to maximize the menu of our available sources of capital, while minimizing the cost.

Revenue base. As of September 30, 2019, we operated 223 data centers through our Operating Partnership, including 38 data centers held as investments in unconsolidated joint ventures. These data centers are mainly located throughout North America, with 41 located in Europe, 19 in Latin America, eight in Asia and five in Australia.

The following table presents an overview of our portfolio of data centers, including the 38 data centers held as investments in unconsolidated joint ventures, and developable land, based on information as of September 30, 2019. 

70

Metropolitan Area	Data Center Buildings	Net Rentable Square Feet (1)	Space Under Active Development (2)	Space Held for Development (3)
North America
Northern Virginia	23	5,140,044	908,090	83,220
Chicago	10	3,040,208	382,892	152,362
New York	12	2,049,115	34,010	136,859
Silicon Valley	20	2,251,021	65,594	—
Dallas	20	3,354,328	18,719	213,516
Phoenix	3	914,035	—	108,926
San Francisco	4	787,083	61,210	—
Atlanta	4	525,414	—	313,581
Los Angeles	4	802,878	15,601	—
Toronto, Canada	2	232,980	38,719	544,310
Boston	4	467,519	—	50,649
Houston	6	392,816	—	13,969
Austin	1	85,688	—	—
Miami	2	226,314	—	—
Portland	2	48,574	552,862	—
Minneapolis/St. Paul	1	328,765	—	—
Charlotte	3	95,499	—	—
North America Total	121	20,742,281	2,077,697	1,617,392
Europe
London, United Kingdom	16	1,457,196	137,352	99,355
Amsterdam, Netherlands	10	563,197	112,569	68,185
Dublin, Ireland	5	330,180	26,646	—
Frankfurt, Germany	4	167,799	240,316	—
Paris, France	4	185,994	96,402	—
Geneva, Switzerland	1	59,190	—	—
Manchester, England	1	38,016	—	—
Europe Total	41	2,801,572	613,285	167,540
Asia Pacific
Singapore	3	540,638	344,826	—
Sydney	3	223,736	90,621	—
Melbourne	2	146,570	—	—
Asia Pacific Total	8	910,944	435,447	—
Held for Sale / Contribution	15	2,081,252	—	—
Non-Data Center Properties	—	278,068	—	—

71

Metropolitan Area	Data Center Buildings	Net Rentable Square Feet (1)	Space Under Active Development (2)	Space Held for Development (3)
Managed Unconsolidated Joint Ventures
Northern Virginia	4	546,572	—	—
Hong Kong	1	178,505	—	7,795
Silicon Valley	4	326,305	—	—
Dallas	3	319,876	—	—
New York	1	108,336	—	—
	13	1,479,594	—	7,795
Non-Managed Unconsolidated Joint Ventures
São Paulo	15	671,072	254,853	427,553
Seattle	2	451,369	—	—
Tokyo	2	430,277	—	—
Osaka	2	167,092	164,994	—
Fortaleza	1	94,205	—	—
Rio De Janeiro	2	72,442	—	26,781
Chile	1	—	46,474	20,865
	25	1,886,457	466,321	475,199
Total	223	30,180,168	3,592,750	2,267,926

(1) Current net rentable square feet as of September 30, 2019, which represents the current square feet under lease as specified in the applicable lease agreements plus management’s estimate of space available for lease based on engineering drawings. Includes customers’ proportional share of common areas but excludes space under active development and space held for development.

(2) Space under active development includes current base building and data center projects in progress, and excludes space held for development. For additional information on the current and future investment for space under active development, see “—Liquidity and Capital Resources of the Operating Partnership—Construction”.

(3) Space held for development includes space held for future data center development, and excludes space under active development. For additional information on the current investment for space held for development, see “—Liquidity and Capital Resources of the Operating Partnership—Construction”.

As of September 30, 2019, our portfolio, including the 38 data centers held as investments in unconsolidated joint ventures, was approximately 87.4% leased excluding approximately 3.6 million square feet of space under active development and approximately 2.3 million square feet of space held for development. Due to the capital-intensive and long-term nature of the operations we support, our lease terms are generally longer than standard commercial leases. As of September 30, 2019, our average remaining lease term is approximately five years. Our scheduled lease expirations through December 31, 2020 are 11.0% of rentable square feet excluding month-to-month leases, space under active development and space held for development as of September 30, 2019.

Factors Which May Influence Future Results of Operations

Global market and economic conditions. General economic conditions and the cost and availability of capital may be adversely affected in some or all of the metropolitan areas in which we own properties and conduct our operations. In June 2016, a majority of voters in the United Kingdom elected to withdraw from the European Union in a national referendum. The terms of any withdrawal are subject to ongoing negotiations. Nevertheless, the referendum has created significant uncertainty about the future relationship between the United Kingdom and the European Union, and has given rise to calls for the governments of other European Union member states to consider withdrawal. Instability in the U.S., European, Asia Pacific and other international financial markets and economies may adversely affect our ability, and the ability of our customers, to replace or renew maturing liabilities on a timely basis, access the capital markets to meet liquidity and capital expenditure requirements and may result in adverse effects on our, and our customers’, financial condition and results of operations.

72

In addition, our access to funds under our global revolving credit facilities depends on the ability of the lenders that are parties to such facilities to meet their funding commitments to us. We cannot assure you that long-term disruptions in the global economy and the return of tighter credit conditions among, and potential failures or nationalizations of, third party financial institutions as a result of such disruptions will not have an adverse effect on our lenders. If our lenders are not able to meet their funding commitments to us, our business, results of operations, cash flows and financial condition could be adversely affected.

If we do not have sufficient cash flow to continue operating our business and are unable to borrow additional funds, access our existing lines of credit or raise equity or debt capital, we may need to source alternative ways to increase our liquidity. Such alternatives may include, without limitation, curtailing development activity, disposing of one or more of our properties possibly on disadvantageous terms or entering into or renewing leases on less favorable terms than we otherwise would.

Foreign currency exchange risk. For the three and nine months ended September 30, 2019 and 2018, we had foreign operations in the United Kingdom, Ireland, France, the Netherlands, Germany, Switzerland, Canada, Singapore, Australia, Japan and Hong Kong as well as Brazil for the three months ended March 31, 2019, prior to the deconsolidation of Ascenty. As such, we are subject to risk from the effects of exchange rate movements of foreign currencies, which may affect future costs and cash flows. Our foreign operations are conducted in the British pound sterling, Euro, Canadian dollar, Singapore dollar, Australian dollar, Japanese Yen and the Hong Kong dollar. Our primary currency exposures are to the British pound sterling, the Euro and the Singapore dollar. The possible exit of the United Kingdom (or any other country) from the European Union, or prolonged periods of uncertainty relating to any of these possibilities, could result in increased foreign currency exchange volatility. As a result of the Ascenty joint venture and deconsolidation of Ascenty, our exposure to foreign exchange risk related to the Brazilian real is limited to the impact that currency has on our share of the Ascenty joint venture's operations and financial position. We attempt to mitigate a portion of the risk of currency fluctuation by financing our investments in the local currency denominations, although there can be no assurance that this will be effective. As a result, changes in the relation of any such foreign currency to U.S. dollars may affect our revenues, operating margins and distributions and may also affect the book value of our assets, the book value of our debt and the amount of stockholders’ equity.

Rental income. The amount of rental income generated by the data centers in our portfolio depends on several factors, including our ability to maintain or improve the occupancy rates of currently leased space and to lease currently available space and space available from lease terminations. Excluding approximately 3.6 million square feet of space under active development and approximately 2.3 million square feet of space held for development as of September 30, 2019, the occupancy rate of our portfolio, including the 38 data centers held as investments in unconsolidated joint ventures, was approximately 87.4% of our net rentable square feet.

As of September 30, 2019, we had more than 2,000 customers in our data center portfolio, including the 13 data centers held in our managed portfolio of unconsolidated joint ventures. As of September 30, 2019, approximately 89% of our leases (on a rentable square footage basis) contained base rent escalations that were either fixed (generally ranging from 2% to 4%) or indexed based on a consumer price index or other similar inflation-related index. We cannot assure you that these escalations will cover any increases in our costs or will otherwise keep rental rates at or above market rates.

The amount of rental income generated by us also depends on maintaining or increasing rental rates at our properties, which in turn depends on several factors, including supply and demand and market rates for data center space. Included in our approximately 26.1 million net rentable square feet, excluding space under active development and space held for development and 38 data centers held as investments in unconsolidated joint ventures, at September 30, 2019 is approximately 1.0 million square feet of data center space with extensive installed tenant improvements available for lease. Our Turn-Key Flex^® product is an effective solution for customers who prefer to utilize a partner with the expertise or capital budget to provide extensive data center infrastructure and security. Our expertise in data center construction and operations enables us to lease space to these customers at a premium over other uses. In addition, as of September 30, 2019, we had approximately 3.6 million square feet of space under active development and approximately 2.3 million square feet of space held for development, or approximately 16% of the total rentable space in our portfolio, including the 38 data centers held as investments in unconsolidated joint ventures. Our ability to grow earnings depends in part on our ability to develop space and lease development space at favorable rates, which we may not be able to obtain. Development space requires significant capital investment in order to develop data center facilities that are ready for use and, in addition, we may require additional time or encounter delays in securing tenants for development space. We may purchase additional vacant properties and properties with vacant development space in the future. We will require additional capital to finance our development activities, which may not be available or may not be available on terms acceptable to us, including as a result of the conditions described above under “Global market and economic conditions.”

73

In addition, the timing between when we sign a new lease with a customer and when that lease commences and we begin to generate rental income may be significant and may not be easily predictable. Certain leases may provide for staggered commencement dates for additional space, the timing of which may be delayed significantly.

Economic downturns, including as a result of the conditions described above under “Global market and economic conditions,” or regional downturns affecting our metropolitan areas or downturns in the data center industry that impair our ability to lease or renew or re-lease space, or otherwise reduce returns on our investments, or the ability of our customers to fulfill their lease commitments, as in the case of tenant bankruptcies, could adversely affect our ability to maintain or increase rental rates at our properties.

Scheduled lease expirations. Our ability to re-lease expiring space at rental rates equal to or in excess of current rental rates will impact our results of operations. In addition to approximately 3.5 million square feet of available space in our portfolio, which excludes approximately 3.6 million square feet of space under active development and approximately 2.3 million square feet of space held for development as of September 30, 2019 and the 25 data centers held as investments in our non-managed unconsolidated joint ventures, leases representing approximately 2.1% and 8.9% of the net rentable square footage of our portfolio are scheduled to expire during the six months ending December 31, 2019 and the year ending December 31, 2020, respectively.

During the nine months ended September 30, 2019, we signed renewal leases totaling approximately 4.2 million square feet of space and new leases totaling approximately 1.2 million square feet of space. The following table summarizes our leasing activity in the nine months ended September 30, 2019:

	Rentable Square Feet (1)	Expiring Rates (2)		New Rates (2)		Rental Rate Changes		TI’s/Lease Commissions Per Square Foot		Weighted  Average Lease Terms (years)
Leasing Activity (3)(4)
Renewals Signed
Turn-Key Flex ®	1,312,945	$	151.33	$	154.30	2.0	%	$	8.01	4.9
Powered Base Building ®	2,260,734	$	31.04	$	35.41	14.1	%	$	10.74	14.3
Colocation	352,059	$	291.36	$	297.81	2.2	%	$	0.03	1.3
Non-technical	270,256	$	17.15	$	19.94	16.3	%	$	4.37	5.7
New Leases Signed (5)
Turn-Key Flex ®	887,059	—		$	137.80	—		$	25.07	7.0
Powered Base Building ®	168,613	—		$	53.15	—		$	23.56	10.8
Colocation	72,640	—		$	311.00	—		$	30.40	2.6
Non-technical	101,652	—		$	11.52	—		$	3.69	3.8
Leasing Activity Summary
Turn-Key Flex ®	2,200,004			$	147.65
Powered Base Building ®	2,429,347			$	36.64
Colocation	424,699			$	300.07
Non-technical	371,908			$	17.64

(1) For some of our properties, we calculate square footage based on factors in addition to contractually leased square feet, including power, required support space and common area.

(2) Rental rates represent annual estimated cash rent per rentable square foot adjusted for straight-line rents in accordance with GAAP. GAAP rental rates are inclusive of tenant concessions, if any.

(3) Excludes short-term leases.

(4) Commencement dates for the leases signed range from 2019 to 2021.

(5) Includes leases signed for new and re-leased space.

Our ability to re-lease or renew expiring space at rental rates equal to or in excess of current rental rates will impact our results of operations. We continue to see strong demand in most of our key metropolitan areas for data center space and, subject to the supply of available data center space in these metropolitan areas, expect the rental rates we are likely to achieve on re-leased or renewed data center space leases for 2019 expirations on an average aggregate basis will generally be higher than the rates currently being paid for the same space on a GAAP basis and slightly down on a cash basis. For the nine months ended

74

September 30, 2019, rents on renewed space increased by an average of 2.0% on a GAAP basis on our Turn-Key Flex^® space compared to the expiring rents and increased by an average of 14.1% on a GAAP basis on our Powered Base Building^® space compared to the expiring rents. Our past performance may not be indicative of future results, and we cannot assure you that leases will be renewed or that our data centers will be re-leased at all or at rental rates equal to or above the current average rental rates. Further, re-leased/renewed rental rates in a particular metropolitan area may not be consistent with rental rates across our portfolio as a whole and may fluctuate from one period to another due to a number of factors, including local real estate conditions, local supply and demand for data center space, competition from other data center developers or operators, the condition of the property and whether the property, or space within the property, has been developed.

Geographic concentration. We depend on the market for data centers in specific geographic regions and significant changes in these regional metropolitan areas can impact our future results. As of September 30, 2019, our portfolio, including the 38 data centers held as investments in unconsolidated joint ventures, was geographically concentrated in the following metropolitan areas.

Metropolitan Area	Percentage of September 30, 2019 total annualized rent (1)
Northern Virginia	23.5	%
Chicago	11.4	%
Silicon Valley	8.2	%
New York	8.1	%
London, United Kingdom	7.9	%
Dallas	7.6	%
São Paulo, Brazil	4.2	%
Singapore	3.6	%
Phoenix	3.5	%
San Francisco	2.6	%
Seattle	2.2	%
Atlanta	2.1	%
Amsterdam, Netherlands	1.9	%
Other	13.2	%
Total	100.0	%

(1) Annualized rent is monthly contractual rent (defined as cash base rent before abatements) under existing leases as of September 30, 2019 multiplied by 12. The aggregate amount of abatements for the nine months ended September 30, 2019 was approximately $52.5 million.

Operating expenses. Our operating expenses generally consist of utilities, property and ad valorem taxes, property management fees, insurance and site maintenance costs, as well as rental expenses on our ground and building leases. In particular, our buildings require significant power to support the data center operations contained in them. Many of our leases contain provisions under which the tenants reimburse us for all or a portion of property operating expenses and real estate taxes incurred by us. However, in some cases we are not entitled to reimbursement of property operating expenses, other than utility expense, and real estate taxes under our leases for Turn-Key Flex® facilities. We also incur general and administrative expenses, including expenses relating to our asset management function, as well as significant legal, accounting and other expenses related to corporate governance, Securities Exchange Commission, or the SEC, reporting and compliance with the various provisions of the Sarbanes-Oxley Act. Increases or decreases in such operating expenses will impact our overall performance. We expect to incur additional operating expenses as we continue to expand.

Climate change legislation. In June 2009, the U.S. House of Representatives approved comprehensive clean energy and climate change legislation intended to cut greenhouse gas, or GHG, emissions, via a cap-and-trade program. The U.S. Senate did not subsequently pass similar legislation. Significant opposition to federal climate change legislation exists.

In the absence of comprehensive federal climate change legislation, regulatory agencies, including the U.S. Environmental Protection Agency, or EPA, and states have taken the lead in regulating GHG emissions in the U.S. Under the Obama administration, the EPA moved aggressively to regulate GHG emissions from automobiles and large stationary sources,

75

including electricity producers, using its own authority under the Clean Air Act. The Trump administration has moved to eliminate or modify certain of the EPA’s GHG emissions regulations and refocus the EPA’s mission away from such regulation.

The EPA made an endangerment finding in 2009 that allows it to create regulations imposing emissions reporting, permitting, control technology installation, and monitoring requirements applicable to certain emitters of GHGs, including facilities that provide electricity to our data centers, although the materiality of the impacts will not be fully known until all regulations are finalized and legal challenges are resolved. Under the Obama administration, the EPA finalized rules imposing

permitting and control technology requirements upon certain newly-constructed or modified facilities which emit GHGs under the Clean Air Act New Source Review Prevention of Significant Deterioration, or NSR PSD, and Title V permitting programs. As a result, newly-issued NSR PSD and Title V permits for new or modified electricity generating units (EGUs) and other facilities may need to address GHG emissions, including by requiring the installation of “Best Available Control Technology.” The EPA implemented in December 2015 the “Clean Power Plan” regulating carbon dioxide (CO2) emissions from new and existing coal-fired and natural gas EGUs. The Clean Power Plan subjected new, modified, and reconstructed EGUs to “New Source Performance Standards” that include both technological requirements and numeric emission limits. However, in March 2017, President Trump ordered the EPA to review and if appropriate revise or rescind the Clean Power Plan, and in June 2019 the EPA repealed the Clean Power Plan and issued the “Affordable Clean Energy Rule” to replace the Clean Power Plan. The Affordable Clean Energy Rule requires heat rate efficiency improvements at certain EGUs, but does not place numeric limits on EGU emissions. Separately, the EPA’s GHG “reporting rule” requires that certain emitters, including electricity generators, monitor and report GHG emissions.

As a result of Trump administration policies, states may drive near-term regulation to reduce GHG emissions in the United States. At the state level, California implemented a GHG cap-and-trade program that began imposing compliance obligations on industrial sectors, including electricity generators and importers, in January 2013. In September 2016, California adopted legislation calling for a further reduction in GHG emissions to 40% below 1990 levels by 2030, and in July 2017, California extended its cap-and-trade program through 2030. In September 2018, California adopted legislation that will require all of the state’s electricity to come from carbon-free sources by 2045. As another example of state action, a number of eastern states participate in the Regional Greenhouse Gas Initiative (RGGI), a market-based program aimed at reducing GHG emissions from power plants.

Outside the United States, the European Union, or EU (including the United Kingdom), has been operating since 2005 under a cap-and-trade program, which directly affects the largest emitters of GHGs, including electricity producers from whom we purchase power, and the EU has taken a number of other climate change-related initiatives, including a directive targeted at improving energy efficiency (which introduces energy efficiency auditing requirements). EU Commission President-elect Ursula von der Leyen announced her intent in July 2019 to extend the EU emissions-trading system to include mobile sources, strengthen the EU’s GHG reduction target from 40% below 1990 levels to 50% to 55% below 1990 levels, and institute a carbon import tax to encourage climate legislation in other countries. 

The Paris Agreement, which was adopted by the United States and 194 other countries and looks to prevent global average temperatures from increasing by more than 2 degrees Celsius above preindustrial levels officially went into force in November 2016. President Trump announced in June 2017 that he will initiate the process to withdraw the United States from the Paris Agreement; however, a number of states have formed groups supporting the Paris Agreement and pledging to fulfill its goals at the state level. National legislation may also be implemented independently by members of the EU.  For example, in the United Kingdom, the implementation of the CRC Energy Efficiency Scheme introduced a mandatory reporting and pricing scheme that is designed to incentivize energy efficiency and cut emissions by large energy users. It is not yet clear how Brexit, if effectuated, will impact the United Kingdom’s (or the EU’s) approach to climate change regulation. The Canadian Greenhouse Gas Pollution Pricing Act established a carbon-pricing regime that went into effect in January 2019 for provinces and territories in Canada where there is no provincial system in place already, or where the provincial system does not meet the federal benchmark. Climate change regulations are in various stages of implementation in other nations as well, including nations where we operate, such as Japan, Singapore, and Australia.

The cost of electric power comprises a significant component of our operating expenses. Any additional taxation or regulation of energy use, including as a result of (i) new legislation that Congress may pass, (ii) the regulations that the EPA has proposed or finalized, (iii) regulations under legislation that states have passed or may pass, or (iv) any further legislation or regulations in the EU or other regions where we operate could significantly increase our costs, and we may not be able to effectively pass all of these costs on to our customers. These matters could adversely impact our business, results of operations, or financial condition.

Interest rates. As of September 30, 2019, we had approximately $0.8 billion of variable rate debt subject to interest rate swap agreements, along with $1.5 billion and $425.1 million of variable rate debt that was outstanding on the global revolving

76

credit facilities and the unswapped portion of the unsecured term loans, respectively. The availability of debt and equity capital may decrease or be on unfavorable terms as a result of the circumstances described above under “Global market and economic conditions” or other factors. The effects on commercial real estate mortgages, if available, include, but may not be limited to: higher loan spreads, tightened loan covenants, reduced loan-to-value ratios resulting in lower borrower proceeds and higher principal payments. Potential future increases in interest rates and credit spreads may increase our interest expense and fixed charges and negatively affect our financial condition and results of operations, potentially impacting our future access to the debt and equity capital markets. Increased interest rates may also increase the risk that the counterparties to our swap agreements will default on their obligations, which could further increase our interest expense. If we cannot obtain capital from third party sources, we may not be able to acquire or develop properties when strategic opportunities exist, satisfy our debt service obligations or pay the cash dividends to Digital Realty Trust, Inc.’s stockholders necessary to maintain its qualification as a REIT.

Demand for data center space. Our portfolio consists primarily of data centers. A decrease in the demand for, or increase in supply of, data center space, Internet gateway facilities or other technology-related real estate would have a greater adverse effect on our business and financial condition than if we owned a portfolio with a more diversified customer base or less specialized use. We have invested in building out additional inventory primarily in what we anticipate will be our active major metropolitan areas prior to having executed leases with respect to this space. We believe that demand in key metropolitan areas such as Northern Virginia, Dallas, Singapore and London is largely in line with supply. We also continue to see strong demand in other key metropolitan areas across our portfolio. However, until this inventory is leased up, which will depend on a number of factors, including available data center space in these metropolitan areas, our return on invested capital is negatively impacted. Our development activities make us particularly susceptible to general economic slowdowns, including recessions and the other circumstances described above under “Global market and economic conditions,” as well as adverse developments in the corporate data center, Internet and data communications and broader technology industries. Any such slowdown or adverse development could lead to reduced corporate IT spending or reduced demand for data center space. Reduced demand could also result from business relocations, including to metropolitan areas that we do not currently serve. Changes in industry practice or in technology, such as virtualization technology, more efficient computing or networking devices, or devices that require higher power densities than today’s devices, could also reduce demand for the physical data center space we provide or make the tenant improvements in our facilities obsolete or in need of significant upgrades to remain viable. In addition, the development of new technologies, the adoption of new industry standards or other factors could render many of our customers’ current products and services obsolete or unmarketable and contribute to a downturn in their businesses, thereby increasing the likelihood that they default under their leases, become insolvent or file for bankruptcy. In addition, demand for data center space, or the rates at which we lease space, may be adversely impacted either across our portfolio or in specific metropolitan areas as a result of an increase in the number of competitors, or the amount of space being offered in our metropolitan areas and other metropolitan areas by our competitors.

Critical Accounting Policies

Our discussion and analysis of our financial condition and results of operations are based upon our condensed consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles, or GAAP. The preparation of these financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses in the reporting period. Our actual results may differ from these estimates. We have provided a summary of our significant accounting policies in Item 1, Note 2 “Summary of Significant Accounting Policies” in the Notes to Condensed Consolidated Financial Statements. We describe below those accounting policies that require material subjective or complex judgments and that have the most significant impact on our financial condition and consolidated results of operations. Our management evaluates these estimates on an ongoing basis, based upon information currently available and on various assumptions management believes are reasonable as of the date on the front cover of this report.

Investments in Real Estate

Acquisition of real estate. The price that we pay to acquire a property is impacted by many factors including the condition of the property and improvements, the occupancy of the building, the term and rate of in-place leases, the creditworthiness of the customers, favorable or unfavorable financing, above- or below-market ground leases and numerous other factors.

Accordingly, we are required to make subjective assessments to allocate the purchase price paid to acquire investments in real estate among the identifiable assets including intangibles and liabilities assumed based on our estimate of the fair value of such assets and liabilities. This includes determining the value of the property and improvements, land, ground leases, if any, and tenant improvements. Additionally, we evaluate the value of in-place leases on occupancy and market rent, the value of the tenant relationships, the value (or negative value) of above (or below) market leases, any debt or deferred taxes assumed from the seller or loans made by the seller to us and any building leases assumed from the seller. Each of these estimates requires a

77

great deal of judgment and some of the estimates involve complex calculations. These allocation assessments have a direct impact on our results of operations. For example, if we were to allocate more value to land, there would be no depreciation with respect to such amount. If we were to allocate more value to the property as opposed to allocating to the value of in-place tenant leases, this amount would be recognized as an expense over a much longer period of time. This potential effect occurs because the amounts allocated to property are depreciated over the estimated lives of the property whereas amounts allocated to in-place tenant leases are amortized over the estimated term (including renewal and extension assumptions) of the leases. Additionally, the amortization of the value (or negative value) assigned to above (or below) market rate leases is recorded as an adjustment to rental revenue as compared to amortization of the value of in-place tenant leases and tenant relationships, which is included in depreciation and amortization in our condensed consolidated income statements.

From time to time, we will receive offers from third parties to purchase our properties, either solicited or unsolicited. For those offers that we accept, the prospective buyers will usually require a due diligence period before consummation of the transactions. It is not unusual for matters to arise that result in the withdrawal or rejection of the offer during this process. We classify real estate as “held for sale” when all criteria under the GAAP guidance have been met.

Asset impairment evaluation. We review each of our properties for indicators that its carrying amount may not be recoverable. Examples of such indicators may include a significant decrease in the market price of the property, a change in the expected holding period for the property, a significant adverse change in how the property is being used or expected to be used based on the underwriting at the time of acquisition, an accumulation of costs significantly in excess of the amount originally expected for the acquisition or development of the property, or a history of operating or cash flow losses of the property. When such impairment indicators exist, we review an estimate of the future undiscounted net cash flows (excluding interest charges) expected to result from the real estate investment’s use and eventual disposition and compare that estimate to the carrying value of the property. We consider factors such as future operating income, trends and prospects, as well as the effects of leasing demand, competition and other factors. If our future undiscounted net cash flow evaluation indicates that we are unable to recover the carrying value of a real estate investment, an impairment loss is recorded to the extent that the carrying value exceeds the estimated fair value of the property. These losses have a direct impact on our net income because recording an impairment loss results in an immediate negative adjustment to net income. The evaluation of anticipated cash flows is highly subjective and is based in part on assumptions regarding future occupancy, rental rates and capital requirements that could differ materially from actual results in future periods. Since cash flows on properties considered to be long-lived assets to be held and used are considered on an undiscounted basis to determine whether the carrying value of a property is recoverable, our strategy of holding properties over the long-term directly decreases the likelihood of their carrying values not being recoverable and therefore requiring the recording of an impairment loss. If our strategy changes or market conditions otherwise dictate an earlier sale date, an impairment loss may be recognized and such loss could be material. If we determine that the asset fails the recoverability test, the affected assets must be reduced to their fair value.

We generally estimate the fair value of rental properties utilizing a discounted cash flow analysis that includes projections of future revenues, expenses and capital improvement costs that a market participant would use based on the highest and best use of the asset, which is similar to the income approach that is commonly utilized by appraisers. In certain cases, we may supplement this analysis by obtaining outside broker opinions of value.

Goodwill impairment evaluation. We perform an annual impairment test for goodwill and between annual tests, we evaluate goodwill for impairment whenever events or changes in circumstances occur that would more likely than not reduce the fair value of a reporting unit below its carrying value.  In our impairment tests of goodwill, we first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value.  If, based on this assessment, we determine that the fair value of the reporting unit is not less than its carrying value, then performing the additional two-step impairment test is unnecessary. If our qualitative assessment indicates that goodwill impairment is more likely than not, we perform a two-step impairment test. We test goodwill for impairment under the two-step impairment test by first comparing the book value of net assets including goodwill to the fair value of the reporting unit. If the fair value is determined to be less than the book value of the net assets, including goodwill, a second step is performed to compute the amount of impairment as the difference between the implied fair value of goodwill and its carrying value. We estimate the fair value of the reporting units using discounted cash flows. If the carrying value of goodwill exceeds its implied fair value, an impairment charge is recognized. 

Revenue Recognition

The majority of our revenue is derived from lease arrangements, which we account for in accordance with Topic 842 commencing on January 1, 2019 and “Leases (Topic 840)” prior to 2019. We account for the non-lease components within our lease arrangements, as well as other sources of revenue, in accordance with “Revenue from Contracts with Customers (Topic 606)”. Revenue recognized as a result of applying Topic 842 and 840 was 99% and 97% and Topic 606 was less than 1% and 3% of total operating revenue for the three and nine months ended September 30, 2019 and 2018, respectively.

78

Our leases are classified as operating leases and minimum rents are recognized on a straight-line basis over the terms of the leases, which may span multiple years. The excess of rents recognized over amounts contractually due pursuant to the underlying leases is included in deferred rent in the accompanying condensed consolidated balance sheets and contractually due but unpaid rents are included in accounts and other receivables.

Tenant reimbursements for real estate taxes, common area maintenance, and other recoverable costs under our leases are recognized in the period that the expenses are incurred. Lease termination fees are recognized over the remaining term of the lease, effective as of the date the lease modification is finalized, assuming collection is not considered doubtful. As discussed above, we recognize amortization of the value of acquired above or below-market tenant leases as a reduction of rental revenue in the case of above-market leases or an increase to rental revenue in the case of below-market leases.

We must make subjective estimates as to when our revenue is earned and the collectability of our accounts receivable related to minimum rent, deferred rent, expense reimbursements, lease termination fees and other income. We specifically analyze accounts receivable and historical bad debts, customer concentrations, customer creditworthiness and current economic trends when evaluating the adequacy of the allowance for bad debts. These estimates have a direct impact on our net revenue because a higher bad debt allowance would result in lower net revenue, and recognizing rental revenue as earned in one period versus another would result in higher or lower net revenue for a particular period.

Recently Issued Accounting Pronouncements

Please refer to Item 1, Note 2(t) “New Accounting Pronouncements” in the notes to the condensed consolidated financial statements.

79

Results of Operations

The discussion below relates to our financial condition and results of operations for the three and nine months ended September 30, 2019 and 2018. A summary of our operating results for the three and nine months ended September 30, 2019 and 2018 is as follows (in thousands). 

	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
Income Statement Data:
Total operating revenues	$	806,466		$	768,924		$	2,421,778		$	2,268,211
Total operating expenses	(641,699		)	(629,859		)	(1,966,496		)	(1,841,271		)
Operating income	164,767			139,065			455,282			426,940
Other expenses, net	(97,193		)	(48,801		)	(205,387		)	(138,422		)
Net income	$	67,574		$	90,264		$	249,895		$	288,518

Our property portfolio has experienced consistent and significant growth since the first property acquisition in January 2002. As a result of this growth, our period-to-period comparison of our financial performance focuses on the impact on our revenues and expenses on a stabilized portfolio basis. Our stabilized portfolio includes properties owned as of December 31, 2017 with less than 5% of total rentable square feet under development and excludes properties that were undergoing, or were expected to undergo, development activities in 2018-2019 and properties sold or contributed to joint ventures. Our pre-stabilized pool includes the results of the newly acquired operating properties and newly delivered properties that were previously under development.

Comparison of the Three and Nine Months Ended September 30, 2019 to the Three and Nine Months Ended September 30, 2018

Portfolio

As of September 30, 2019, our portfolio consisted of 223 data centers, including 38 data centers held as investments in unconsolidated joint ventures, with an aggregate of 36.0 million rentable square feet including 3.6 million square feet of space under active development and 2.3 million square feet of space held for development compared to a portfolio consisting of 198 data centers, including 18 data centers held as investments in unconsolidated joint ventures, with an aggregate of 33.4 million rentable square feet including 3.6 million square feet of space under active development and 1.8 million square feet of space held for development as of September 30, 2018.

Revenues

Total operating revenues for the three and nine months ended September 30, 2019 and 2018 were as follows (in thousands):

	Three Months Ended September 30,							Nine Months Ended September 30,
	2019		2018		Change			2019		2018		Change
Rental and other services	$	802,472	$	603,833	$	198,639		$	2,413,888	$	1,792,457	$	621,431
Tenant reimbursements	—		163,104		(163,104		)	—		468,906		(468,906		)
Fee income and other	$	3,994	$	1,987	2,007			7,890		6,848		1,042
Total operating revenues	$	806,466	$	768,924	$	37,542		$	2,421,778	$	2,268,211	$	153,567

80

The following tables show rental and other services revenue and tenant reimbursement revenue for the three and nine months ended September 30, 2019 and 2018 for stabilized properties and pre-stabilized properties and other (all other properties) (in thousands). Revenue totals for pre-stabilized and other include results from properties that have not yet met the definition of stabilized and properties that are classified as held for sale or were sold during the period.

	Stabilized									Pre-Stabilized and Other
	Three Months Ended September 30,									Three Months Ended September 30,
	2019		2018		$ Change			% Change		2019		2018		Change
Rental and other services	$	623,631	$	495,158	$	128,473		25.9	%	$	178,841	$	108,675	$	70,166
Tenant reimbursements	—		137,757		(137,757		)	(100.0	)%	—		25,347		(25,347		)
Total	$	623,631	$	632,915	$	(9,284	)	(1.5	)%	$	178,841	$	134,022	$	44,819

	Stabilized									Pre-Stabilized and Other
	Nine Months Ended September 30,									Nine Months Ended September 30,
	2019		2018		$ Change			% Change		2019		2018		Change
Rental and other services	$	1,870,974	$	1,488,897	$	382,077		25.7	%	$	542,914	$	303,560	$	239,354
Tenant reimbursements	—		398,247		(398,247		)	(100.0	)%	—		70,659		(70,659		)
Total	$	1,870,974	$	1,887,144	$	(16,170	)	(0.9	)%	$	542,914	$	374,219	$	168,695

On January 1, 2019, we adopted Topic 842 and the practical expedient that resulted in combining the expenses reimbursed by our customers (“tenant reimbursements”) with contractual rental revenue if certain criteria were met. We assessed these criteria and concluded that the timing and pattern of transfer for rental revenue and the associated tenant reimbursements are the same and as our leases qualify as operating leases, we accounted for and presented rental and other services and tenant reimbursements as a single component under rental and other services in our condensed consolidated income statements for the three and nine months ended September 30, 2019. As a result, the prior periods are not directly comparable other than on an aggregate basis.

Stabilized revenue decreased $9.3 million and $16.2 million for the three and nine months ended September 30, 2019, respectively, compared to the same periods in 2018 due to unfavorable currency translation along with expiring leases at certain properties in the stabilized portfolio and higher bad debt expense.

Pre-stabilized and other revenues increased $44.8 million and $168.7 million for the three and nine months ended September 30, 2019, respectively, compared to the same periods in 2018 primarily as a result of new leasing activity and reimbursement from development properties and the Ascenty Acquisition (only for the three months ended March 31, 2019, prior to deconsolidation).

Operating Expenses and Interest Expense

Operating expenses and interest expense during the three and nine months ended September 30, 2019 and 2018 were as follows (in thousands): 

	Three Months Ended September 30,							Nine Months Ended September 30,
	2019		2018		Change			2019		2018		Change
Rental property operating and maintenance	$	259,431	$	245,971	$	13,460		$	766,417	$	701,933	$	64,484
Property taxes and insurance	41,358		37,524		3,834			126,587		106,408		20,179
Depreciation and amortization	286,718		293,957		(7,239		)	888,766		887,534		1,232
General and administrative	49,985		41,642		8,343			156,427		124,264		32,163
Transaction and integration expenses	4,115		9,626		(5,511		)	10,819		19,410		(8,591		)
Impairment of investments in real estate	—		—		—			5,351		—		5,351
Other	92		1,139		(1,047		)	12,129		1,722		10,407
Total operating expenses	$	641,699	$	629,859	$	11,840		$	1,966,496	$	1,841,271	$	125,225
Interest expense	$	84,574	$	80,851	$	3,723		$	272,177	$	236,646	$	35,531

81

The following tables show property level expenses for the three and nine months ended September 30, 2019 and 2018 for stabilized properties and pre-stabilized properties and other (all other properties) (in thousands). Expense totals for pre-stabilized and other include results from properties that have not yet met the definition of stabilized and properties that are classified as held for sale or were sold during the period. 

	Stabilized									Pre-Stabilized and Other
	Three Months Ended September 30,									Three Months Ended September 30,
	2019		2018		$ Change			% Change		2019		2018		Change
Rental property operating and maintenance	$	201,768	$	201,892	$	(124	)	(0.1	)%	$	57,663	$	44,080	$	13,583
Property taxes and insurance	30,725		29,471		1,254			4.3	%	10,633		8,053		2,580
	$	232,493	$	231,363	$	1,130		0.5	%	$	68,296	$	52,133	$	16,163

 

	Stabilized								Pre-Stabilized and Other
	Nine Months Ended September 30,								Nine Months Ended September 30,
	2019		2018		$ Change		% Change		2019		2018		Change
Rental property operating and maintenance	$	588,041	$	577,760	$	10,281	1.8	%	$	178,376	$	124,173	$	54,203
Property taxes and insurance	90,518		80,124		10,394		13.0	%	36,069		26,284		9,785
	$	678,559	$	657,884	$	20,675	3.1	%	$	214,445	$	150,457	$	63,988

Stabilized rental property operating and maintenance expenses decreased approximately $0.1 million and increased approximately $10.3 million in the three and nine months ended September 30, 2019, respectively, compared to the same periods in 2018, the increase for the nine-month period was primarily related to higher rent expense and internal labor costs across the portfolio.

Stabilized property taxes and insurance increased by approximately $1.3 million and $10.4 million in the three and nine months ended September 30, 2019, respectively, compared to the same periods in 2018, primarily due to a tax refund in 2018 at one of our properties in the stabilized portfolio along with higher assessments at certain properties in the stabilized portfolio.

Pre-stabilized and other rental property operating and maintenance expenses increased by approximately $13.6 million and $54.2 million in the three and nine months ended September 30, 2019, respectively, compared to the same periods in 2018, primarily due to higher expenses as a result of leasing activity during the twelve months ended September 30, 2019 and the Ascenty Acquisition that increased expenses during the first quarter of 2019.

Pre-stabilized and other property taxes and insurance increased approximately $2.6 million and $9.8 million in the three and nine months ended September 30, 2019, respectively, compared to the same periods in 2018, due to increased assessed values at our Chicago properties along with properties being placed in service.

Depreciation and Amortization

Depreciation and amortization expense decreased by approximately $7.2 million and increased by approximately $1.2 million in the three and nine months ended September 30, 2019, respectively, compared to the same periods in 2018. The decrease for the three-month period was principally due to certain intangibles related to the DFT Merger being fully amortized prior to the three months ended September 30, 2019. The increase for the nine-month period was primarily due to the Ascenty Acquisition.

General and Administrative

General and administrative expenses increased by approximately $8.3 million and $32.2 million in the three and nine months ended September 30, 2019, respectively, compared to the same periods in 2018, due to the adoption of ASC 842.

Transactions and Integration Expenses

Transactions and integration expense decreased by approximately $5.5 million and $8.6 million in the three and nine months ended September 30, 2019, respectively, compared to the same periods in 2018, principally due to higher integration costs in 2018 with the DFT Merger.

82

Interest Expense

Interest expense increased by approximately $3.7 million and $35.5 million in the three and nine months ended September 30, 2019, respectively, compared to the same periods in 2018, primarily due to the issuance of the 4.450% 2028 Notes in June 2018, the issuance of the 3.750% 2030 Notes in October of 2018, the issuance of the 2.500% 2026 Notes in February 2019, the issuance of the 3.600% 2029 Notes in June 2019 and the Ascenty loan offset by the early tender offer and subsequent redemption of the 5.875% 2020 Notes in January and February 2019 along with the 3.400% Notes due 2020 and 2021 Notes in June 2019 and July 2019.

Other Income (Expense)

Interest and other income (expense), net increased approximately $17.8 million and $52.9 million in the three and nine months ended September 30, 2019, respectively, compared to the same periods in 2018 primarily due to unrealized gains or losses from mark-to-market valuation changes on equity investments for the three- and nine-month periods and interest income and reimbursement of transaction expenses as a result of the closing of the Ascenty joint venture with Brookfield for the nine-month period.

Gain on Sale of Properties / Deconsolidation

During the nine months ended September 30, 2019, we recognized a gain on the deconsolidation of Ascenty of approximately $67.5 million as a result of the formation of a joint venture with Brookfield Infrastructure. During the nine months ended September 30, 2018, we recognized a gain on sale of properties of $80.4 million primarily related to the disposition of (i) 200 Quannapowitt Parkway, which sold for $15.0 million in January 2018, (ii) 34551 Ardenwood Boulevard, which sold for $73.3 million in February 2018, (iii) 3065 Gold Camp Drive, which sold for $14.2 million in March 2018, (iv) 11085 Sun Center Drive, which sold for $36.8 million in March 2018, (v) the Austin Portfolio, which sold for $47.6 million in April 2018, (vi) 2010 East Centennial Circle, which sold for $5.5 million in May 2018, (vii) 1125 Energy Park Drive, which sold for $7.0 million in May 2018 and (viii) 360 Spear Street, which sold for $92.3 million in September 2018.

Loss from Early Extinguishment of Debt

Loss from early extinguishment of debt increased approximately $5.4 million and $39.2 million in the three and nine months ended September 30, 2019 compared to the same periods in 2018, respectively, primarily due to the costs associated with the early tender offer and subsequent redemption of the 5.875% 2020 Notes in January and February 2019 along with the 3.400% Notes due 2020 and 2021 Notes in June 2019 and July 2019.

Liquidity and Capital Resources of the Parent Company

In this “Liquidity and Capital Resources of the Parent Company” section and in the “Liquidity and Capital Resources of the Operating Partnership” section below, the term our “Parent Company” refers to Digital Realty Trust, Inc. on an unconsolidated basis, excluding our Operating Partnership.

Analysis of Liquidity and Capital Resources

Our Parent Company’s business is operated primarily through our Operating Partnership, of which our Parent Company is the sole general partner and which it consolidates for financial reporting purposes. Because our Parent Company operates on a consolidated basis with our Operating Partnership, the section entitled “Liquidity and Capital Resources of the Operating Partnership” should be read in conjunction with this section to understand the liquidity and capital resources of our Parent Company on a consolidated basis and how our Company is operated as a whole.

Our Parent Company issues public equity from time to time, but generally does not otherwise generate any capital itself or conduct any business itself, other than incurring certain expenses in operating as a public company, which are fully reimbursed by the Operating Partnership. Our Parent Company itself does not hold any indebtedness other than guarantees of the indebtedness of our Operating Partnership and certain of its subsidiaries, and its only material asset is its ownership of partnership interests of our Operating Partnership. Therefore, the consolidated assets and liabilities and the consolidated revenues and expenses of our Parent Company and our Operating Partnership are the same on their respective financial statements, except for immaterial differences related to cash, other assets and accrued liabilities that arise from public company expenses paid by our Parent Company. All debt is held directly or indirectly at the Operating Partnership level. Our Parent Company’s principal funding requirement is the payment of dividends on its common and preferred stock. Our Parent Company’s principal source of funding for its dividend payments is distributions it receives from our Operating Partnership.

83

As the sole general partner of our Operating Partnership, our Parent Company has the full, exclusive and complete responsibility for our Operating Partnership’s day-to-day management and control. Our Parent Company causes our Operating Partnership to distribute such portion of its available cash as our Parent Company may in its discretion determine, in the manner provided in our Operating Partnership’s partnership agreement. Our Parent Company receives proceeds from its equity issuances from time to time, but is generally required by our Operating Partnership’s partnership agreement to contribute the proceeds from its equity issuances to our Operating Partnership in exchange for partnership units of our Operating Partnership.

Our Parent Company is a well-known seasoned issuer with an effective shelf registration statement filed on September 22, 2017, which allows our Parent Company to register an unspecified amount of various classes of equity securities. As circumstances warrant, our Parent Company may issue equity from time to time on an opportunistic basis, dependent upon market conditions and available pricing. Any proceeds from such equity issuances would generally be contributed to our Operating Partnership in exchange for additional equity interests in our Operating Partnership. Our Operating Partnership may use the proceeds to acquire additional properties, to fund development opportunities and for general working capital purposes, including potentially for the repurchase, redemption or retirement of outstanding debt or equity securities.

The liquidity of our Parent Company is dependent on our Operating Partnership’s ability to make sufficient distributions to our Parent Company. The primary cash requirement of our Parent Company is its payment of dividends to its stockholders. Our Parent Company also guarantees our Operating Partnership’s, as well as certain of its subsidiaries’ and affiliates’, unsecured debt. If our Operating Partnership or such subsidiaries fail to fulfill their debt requirements, which trigger Parent Company guarantee obligations, then our Parent Company will be required to fulfill its cash payment commitments under such guarantees. However, our Parent Company’s only material asset is its investment in our Operating Partnership.

We believe our Operating Partnership’s sources of working capital, specifically its cash flow from operations, and funds available under its global revolving credit facility are adequate for it to make its distribution payments to our Parent Company and, in turn, for our Parent Company to make its dividend payments to its stockholders. However, we cannot assure you that our Operating Partnership’s sources of capital will continue to be available at all or in amounts sufficient to meet its needs, including making distribution payments to our Parent Company. The lack of availability of capital could adversely affect our Operating Partnership’s ability to pay its distributions to our Parent Company, which would in turn, adversely affect our Parent Company’s ability to pay cash dividends to its stockholders.

On January 4, 2019, our Parent Company entered into equity distribution agreements, which we refer to as the 2019 Equity Distribution Agreements, under which it can issue and sell shares of its common stock having an aggregate offering price of up to $1.0 billion from time to time in “at the market” offerings as defined in Rule 415 of the Securities Act. To date, no sales have been made under the program. For additional information regarding the 2019 Equity Distribution Agreements, see Note 12 to our condensed consolidated financial statement contained herein.

On March 13, 2019 and March 15, 2019, our Parent Company completed an underwritten public offering of 8,400,000 shares in the aggregate of its 5.850% series K cumulative redeemable preferred stock for net proceeds of approximately $203.4 million after deducting the underwriting discount and other estimated expenses payable by our Parent Company.

On April 1, 2019, our Parent Company redeemed all 14,600,000 outstanding shares of its 7.375% series H cumulative redeemable preferred stock, or the series H preferred stock, for $25.00 per share. The redemption price was equal to the original issuance price of $25.00 per share, plus accrued and unpaid dividends up to but not including the redemption date. The excess of the redemption price over the carrying value of the series H preferred stock of approximately $11.8 million relates to the original issuance costs and was recorded as a reduction to net income available to common stockholders.

On June 14, 2019, the Operating Partnership issued $900.0 million in aggregate principal amount of notes, maturing on July 1, 2029 with an interest rate of 3.600% per annum, which we refer to as the 3.600% 2029 Notes. The purchase price paid by the initial purchasers was 99.823% of the principal amount. The 3.600% 2029 Notes are the Operating Partnership’s general unsecured senior obligations, rank equally in right of payment with all of its other senior unsecured indebtedness and are fully and unconditionally guaranteed by our Parent Company. Interest on the 3.600% 2029 Notes is payable on January 1 and July 1 of each year, beginning on January 1, 2020. The net proceeds from the offering after deducting the original issue discount of approximately $1.6 million and underwriting commissions and expenses of approximately $7.8 million was approximately $890.6 million. We used the net proceeds from this offering to finance the tender offer for, and redemption of, our 3.400% 2020 Notes and 2021 Notes, temporarily repay borrowings under our global revolving credit facility and for general corporate purposes.

84

On October 10, 2019, our Parent Company completed an underwritten public offering of 13,800,000 shares in the aggregate of its 5.200% series L cumulative redeemable preferred stock for net proceeds of approximately $334.6 million after deducting the underwriting discount and other estimated expenses payable by our Parent Company.

Future Uses of Cash

Our Parent Company may from time to time seek to retire, redeem or repurchase its equity or the debt securities of our Operating Partnership or its subsidiaries through cash purchases and/or exchanges for equity securities in open market purchases, privately negotiated transactions or otherwise. Such repurchases, redemptions or exchanges, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions or other factors. The amounts involved may be material.

We are also subject to the commitments discussed below under “Dividends and Distributions.”

Dividends and Distributions

Our Parent Company is required to distribute 90% of its taxable income (excluding capital gains) on an annual basis in order for it to continue to qualify as a REIT for federal income tax purposes. Accordingly, our Parent Company intends to make, but is not contractually bound to make, regular quarterly distributions to its common stockholders from cash flow from our Operating Partnership’s operating activities. While historically our Parent Company has satisfied this distribution requirement by making cash distributions to its stockholders, it may choose to satisfy this requirement by making distributions of cash or other property. All such distributions are at the discretion of our Parent Company’s board of directors. Our Parent Company considers market factors and our Operating Partnership’s performance in addition to REIT requirements in determining distribution levels. Our Parent Company has distributed at least 100% of its taxable income annually since inception to minimize corporate level federal income taxes. Amounts accumulated for distribution to stockholders are invested primarily in interest-bearing accounts and short-term interest-bearing securities, which are consistent with our intention to maintain our Parent Company’s status as a REIT.

As a result of this distribution requirement, our Operating Partnership cannot rely on retained earnings to fund its on-going operations to the same extent that other companies whose parent companies are not REITs can. Our Parent Company may need to continue to raise capital in the debt and equity markets to fund our Operating Partnership’s working capital needs, as well as potential developments at new or existing properties, acquisitions or investments in existing or newly created joint ventures. In addition, our Parent Company may be required to use borrowings under our global revolving credit facility, if necessary, to meet REIT distribution requirements and maintain our Parent Company’s REIT status.

Our Parent Company has declared and paid the following dividends on its common and preferred stock for the nine months ended September 30, 2019 (in thousands, except per share amounts):

Date dividend declared	Dividend payment date	Series C Preferred Stock		Series G Preferred Stock		Series H Preferred Stock			Series I Preferred Stock		Series J Preferred Stock		Series K Preferred Stock			Common Stock
February 21, 2019	March 29, 2019	$	3,333	$	3,672	$	6,730		$	3,969	$	2,625	$	—		$	224,802
May 13, 2019	June 28, 2019	3,333		3,672		—		(1)	3,969		2,625		3,686		(2)	224,895
August 13, 2019	September 30, 2019	3,333		3,672		—			3,969		2,625		3,071			225,188
		$	9,999	$	11,016	$	6,730		$	11,907	$	7,875	$	6,757		$	674,885
Annual rate of dividend per share		$	1.65625	$	1.46875	$	1.84375		$	1.58750	$	1.31250	$	1.46250		$	4.32000

(1) Redeemed on April 1, 2019 for $25.00 per share, or a redemption price of $25.00 per share, plus accrued and unpaid dividends up to but not including the redemption date. In connection with the redemption, the previously incurred offering costs of approximately $11.8 million were recorded as a reduction to net income available to common stockholders.

(2) Represents a pro rata dividend from and including the original issue date to and including June 30, 2019.

Distributions out of our Parent Company’s current or accumulated earnings and profits are generally classified as ordinary income whereas distributions in excess of our Parent Company’s current and accumulated earnings and profits, to the extent of a stockholder’s U.S. federal income tax basis in our Parent Company’s stock, are generally classified as a return of capital. Distributions in excess of a stockholder’s U.S. federal income tax basis in our Parent Company’s stock are generally

85

characterized as capital gain. Cash provided by operating activities has been generally sufficient to fund distributions on an annual basis, however, we may also need to utilize borrowings under the global revolving credit facilities to fund distributions.

Liquidity and Capital Resources of the Operating Partnership

In this “Liquidity and Capital Resources of the Operating Partnership” section, the terms “we”, “our” and “us” refer to our Operating Partnership together with its consolidated subsidiaries or our Operating Partnership and our Parent Company together with their consolidated subsidiaries, as the context requires.

Analysis of Liquidity and Capital Resources

Our Parent Company is our sole general partner and consolidates our results of operations for financial reporting purposes. Because we operate on a consolidated basis with our Parent Company, the section entitled “Liquidity and Capital Resources of the Parent Company” should be read in conjunction with this section to understand our liquidity and capital resources on a consolidated basis.

As of September 30, 2019, we had $7.2 million of cash and cash equivalents, excluding $8.2 million of restricted cash. Restricted cash primarily consists of contractual capital expenditures plus other deposits.

Our short-term liquidity requirements primarily consist of operating expenses, development costs and other expenditures associated with our properties, distributions to our Parent Company in order for it to make dividend payments on its preferred stock, distributions to our Parent Company in order for it to make dividend payments to its stockholders required to maintain its REIT status, distributions to the unitholders of common limited partnership interests in Digital Realty Trust, L.P., capital expenditures, debt service on our loans and senior notes, and, potentially, acquisitions. We expect to meet our short-term liquidity requirements through net cash provided by operations, restricted cash accounts established for certain future payments and by drawing upon our global revolving credit facilities.

For a discussion of the potential impact of current global economic and market conditions on our liquidity and capital resources, see “—Factors Which May Influence Future Results of Operations—Global market and economic conditions” above.

On January 4, 2019, our Parent Company entered into the 2019 Equity Distribution Agreements under which it can issue and sell shares of its common stock having an aggregate offering price of up to $1.0 billion from time to time in “at the market” offerings as defined in Rule 415 of the Securities Act. To date, no sales have been made under the program. For additional information regarding the 2019 Equity Distribution Agreements, see Note 12 to our condensed consolidated financial statement contained herein.

On June 14, 2019, we issued $900.0 million in aggregate principal amount of notes, maturing on July 1, 2029 with an interest rate of 3.600% per annum. The purchase price paid by the initial purchasers was 99.823% of the principal amount. The 3.600% 2029 Notes are our general unsecured senior obligation, rank equally in right of payment with all of our other senior unsecured indebtedness and are fully and unconditionally guaranteed by our Parent Company. Interest on the 3.600% 2029 Notes is payable on January 1 and July 1 of each year, beginning on January 1, 2020. The net proceeds from the offering after deducting the original issue discount of approximately $1.6 million and underwriting commissions and expenses of approximately $7.8 million was approximately $890.6 million. We used the net proceeds from this offering to finance the tender offer for, and redemption of, our 3.400% 2020 Notes and 2021 Notes, temporarily repay borrowings under our global revolving credit facility and for general corporate purposes.

On October 9, 2019, Digital Euro Finco, LLC, a wholly owned indirect finance subsidiary of the Operating Partnership, issued and sold €500.0 million (approximately $548.6 million based on the exchange rate on October 9, 2019) aggregate principal amount of 1.125% Guaranteed Notes due 2028, or the 2028 Notes. The 2028 Notes are senior unsecured obligations of Digital Euro Finco, LLC and are fully and unconditionally guaranteed by the Parent Company and the Operating Partnership. Net proceeds from the offering were approximately  €491.9 million (approximately $539.7 million based on the exchange rate on October 9, 2019) after deducting managers’ discounts and estimated offering expenses. We used the net proceeds from the offering to repay borrowings outstanding under the operating partnership’s global revolving credit facility and for other general corporate purposes.

The growing acceptance by private institutional investors of the data center asset class has generally pushed capitalization rates lower, as such private investors may often have lower return expectations than us. As a result, we anticipate near-term single asset acquisitions activity to comprise a smaller percentage of our growth while this market dynamic persists.

86

Construction

The table below summarizes our land held for future development and construction in progress and space held for development as of September 30, 2019 and December 31, 2018:  

Development Lifecycle	As of September 30, 2019							As of December 31, 2018
(dollars in thousands)	Net Rentable Square Feet (1)	Current Investment (2)		Future Investment (3)		Total Cost		Net Rentable Square Feet (1)	Current Investment (4)		Future Investment (3)		Total Cost
Land held for future development (5)	N/A	$	150,265	$	—	$	150,265	N/A	$	162,941	$	—	$	162,941
Construction in Progress and Space Held for Development
Land - Current Development (5)	N/A	$	511,017	$	—	$	511,017	N/A	$	385,892	$	—	$	385,892
Space Held for Development (6)	1,784,932	308,392		—		308,392		1,805,844	396,440		—		396,440
Base Building Construction	2,159,590	381,418		249,361		630,779		1,724,740	214,634		223,360		437,994
Data Center Construction	966,839	397,014		518,342		915,356		1,103,465	586,995		521,387		1,108,382
Equipment Pool & Other Inventory	N/A	37,800		—		37,800		N/A	14,558		—		14,558
Campus, Tenant Improvements & Other	N/A	11,489		16,387		27,876		N/A	23,409		16,228		39,637
Total Construction in Progress and Space Held for Development	4,911,361	$	1,647,130	$	784,090	$	2,431,220	4,634,049	$	1,621,928	$	760,975	$	2,382,903

(1) Square footage is based on current estimates and project plans, and may change upon completion of the project or due to remeasurement.

(2) Represents balances incurred through September 30, 2019.

(3) Represents estimated cost to complete specific scope of work pursuant to contract, budget or approved capital plan.

(4) Represents balances incurred through December 31, 2018.

(5) Represents approximately 948 acres as of September 30, 2019 and approximately 959 acres as of December 31, 2018.

(6) Excludes space held for development through unconsolidated joint ventures.

Land inventory and space held for development reflect cumulative cost spent pending future development. Base building construction consists of ongoing improvements to building infrastructure in preparation for future data center fit-out. Data center construction includes 3.1 million square feet of Turn Key Flex^® and Powered Base Building^® product. Generally, we expect to deliver the space within 12 months; however, lease commencement dates may significantly impact final delivery schedules. Equipment pool and other inventory represent the value of long-lead equipment and materials required for timely deployment and delivery of data center construction fit-out. Campus, tenant improvements and other costs include the value of development work which benefits space recently converted to our operating portfolio and is composed primarily of shared infrastructure projects and first-generation tenant improvements.

Future Uses of Cash

Our properties require periodic investments of capital for tenant-related capital expenditures and for general capital improvements. As of September 30, 2019, we had approximately 3.6 million square feet of space under active development and approximately 2.3 million square feet of space held for development. Turn-Key Flex^® space is move-in-ready space for the placement of computer and network equipment required to provide a data center environment. Depending on demand for additional Turn-Key Flex^® space, we expect to incur significant tenant improvement costs to build out and develop these types of spaces. At September 30, 2019, the approximate 3.6 million square feet of space under active development was under construction for Turn-Key Flex^® and Powered Base Building^® products, all of which are expected to be income producing on or after completion, in eight U.S. metropolitan areas, five European metropolitan areas, one Asian metropolitan area, one Australian metropolitan area and one Canadian metropolitan area, consisting of approximately 2.2 million square feet of base building construction and 1.0 million square feet of data center construction. At September 30, 2019, we had open commitments, related to construction contracts of approximately $452.9 million, including amounts reimbursable of approximately $9.0 million.

We currently expect to incur approximately $0.3 billion to $0.5 billion of capital expenditures for our development programs during the three months ending December 31, 2019, although this amount may increase or decrease, potentially materially, based on numerous factors, including changes in demand, leasing results and availability of debt or equity capital.

87

Historical Capital Expenditures (Cash Basis)

The table below summarizes our capital expenditure activity for the nine months ended September 30, 2019 and 2018 (in thousands):

	Nine Months Ended September 30,
	2019		2018
Development projects	$	932,370	$	771,262
Enhancement and improvements	2,459		10,585
Recurring capital expenditures	125,982		84,275
Total capital expenditures (excluding indirect costs)	$	1,060,811	$	866,122

For the nine months ended September 30, 2019, total capital expenditures increased $194.7 million to approximately $1,060.8 million from $866.1 million for the same period in 2018. Capital expenditures on our development projects plus our enhancement and improvements projects for the nine months ended September 30, 2019 were approximately $934.8 million, which reflects an increase of approximately 20% from the same period in 2018. This increase was primarily due to increased spending for ground-up development projects (including development projects acquired in the DFT Merger) and base building improvements. Our development capital expenditures are generally funded by our available cash and equity and debt capital.

Indirect costs, including capitalized interest, capitalized in the nine months ended September 30, 2019 and 2018 were $65.0 million and $80.0 million, respectively. Capitalized interest comprised approximately $30.3 million and $25.3 million, respectively, of the total indirect costs capitalized for the nine months ended September 30, 2019 and 2018, respectively. Capitalized interest in the nine months ended September 30, 2019 increased, compared to the same period in 2018, due to an increase in qualifying activities. See “—Future Uses of Cash” above for a discussion of the amount of capital expenditures we expect to incur during the year ending December 31, 2019.

We are also subject to the commitments discussed below under “Off-Balance Sheet Arrangements” and “Distributions.”

Consistent with our growth strategy, we actively pursue opportunities for potential acquisitions, with due diligence and negotiations often at different stages at different times. The dollar value of acquisitions for the year ending December 31, 2019 will be based on numerous factors, including tenant demand, leasing results, availability of debt or equity capital and acquisition opportunities.

We may from time to time seek to retire or repurchase our outstanding debt or the equity of our Parent Company through cash purchases and/or exchanges for equity securities of our Parent Company in open market purchases, privately negotiated transactions or otherwise. Such repurchases or exchanges, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions or other factors. The amounts involved may be material.

We expect to meet our short-term and long-term liquidity requirements, including to pay for scheduled debt maturities and to fund acquisitions and non-recurring capital improvements, with net cash from operations, future long-term secured and unsecured indebtedness and the issuance of equity and debt securities and the proceeds of equity issuances by our Parent Company. We also may fund future short-term and long-term liquidity requirements, including acquisitions and non-recurring capital improvements, using our global revolving credit facilities pending permanent financing. If we are not able to obtain additional financing on terms attractive to us, or at all, including as a result of the circumstances described above under “Factors Which May Influence Future Results of Operations—Global market and economic conditions”, we may be required to reduce our acquisition or capital expenditure plans, which could have a material adverse effect upon our business and results of operations.

88

Distributions

All distributions on our units are at the discretion of our Parent Company’s board of directors. During the nine months ended September 30, 2019, our Operating Partnership declared the following distributions (in thousands, except per unit amounts):

Date distribution declared	Distribution payment date	Series C Preferred Units		Series G Preferred Units		Series H Preferred Units			Series I Preferred Units		Series J Preferred Units		Series K Preferred Units			Common Units
February 21, 2019	March 29, 2019	$	3,333	$	3,672	$	6,730		$	3,969	$	2,625	$	—		$	235,256
May 13, 2019	June 28, 2019	3,333		3,672		—		(1)	3,969		2,625		3,686		(2)	235,142
August 13, 2019	September 30, 2019	3,333		3,672		—			3,969		2,625		3,071			235,164
		$	9,999	$	11,016	$	6,730		$	11,907	$	7,875	$	6,757		$	705,562
Annual rate of distribution per unit		$	1.65625	$	1.46875	$	1.84375		$	1.58750	$	1.31250	$	1.46250		$	4.32000

(1) Redeemed on April 1, 2019 for $25.00 per unit, or a redemption price of $25.00 per unit, plus accrued and unpaid distributions up to but not including the redemption date. In connection with the redemption, the previously incurred offering costs of approximately $11.8 million were recorded as a reduction to net income available to common unitholders.

(2) Represents a pro rata distribution from and including the original issue date to and including June 30, 2019.

Outstanding Consolidated Indebtedness

The table below summarizes our debt, as of September 30, 2019 (in millions):

Debt Summary:
Fixed rate	$	8,250.3
Variable rate debt subject to interest rate swaps	785.3
Total fixed rate debt (including interest rate swaps)	9,035.6
Variable rate—unhedged	1,964.3
Total	$	10,999.9
Percent of Total Debt:
Fixed rate (including swapped debt)	82.1		%
Variable rate	17.9		%
Total	100.0		%
Effective Interest Rate as of September 30, 2019
Fixed rate (including hedged variable rate debt)	3.44		%
Variable rate	2.10		%
Effective interest rate	3.20		%

 

As of September 30, 2019, we had approximately $11.0 billion of outstanding consolidated long-term debt as set forth in the table above, which excludes deferred financing costs. Our ratio of debt to total enterprise value was approximately 27% (based on the closing price of Digital Realty Trust, Inc.’s common stock on September 30, 2019 of $129.81). For this purpose, our total enterprise value is defined as the sum of the market value of Digital Realty Trust, Inc.’s outstanding common stock (which may decrease, thereby increasing our debt to total enterprise value ratio), plus the liquidation value of Digital Realty Trust, Inc.’s preferred stock, plus the aggregate value of our Operating Partnership’s units not held by Digital Realty Trust, Inc. (with the per unit value equal to the market value of one share of Digital Realty Trust, Inc.’s common stock and excluding long-term incentive units, Class C units and Class D units), plus the book value of our total consolidated indebtedness.

The variable rate debt shown above bears interest at interest rates based on various one-month LIBOR, EURIBOR, GBP LIBOR, SOR, BBR, HIBOR, JPY LIBOR and CDOR rates, depending on the respective agreement governing the debt, including our global revolving credit facilities and unsecured term loans. As of September 30, 2019, our debt had a weighted average term to initial maturity of approximately 6.0 years (or approximately 6.1 years assuming exercise of extension options).

89

Off-Balance Sheet Arrangements

As of September 30, 2019, we were party to interest rate swap agreements related to $0.8 billion of outstanding principal on our variable rate debt. See Item 3. “Quantitative and Qualitative Disclosures about Market Risk.”

As of September 30, 2019, our pro-rata share of secured debt of unconsolidated joint ventures was approximately $475.2 million, of which $10.2 million is subject to interest rate swap agreements.

90

Cash Flows

The following summary discussion of our cash flows is based on the condensed consolidated statements of cash flows and is not meant to be an all-inclusive discussion of the changes in our cash flows for the periods presented below.

Comparison of Nine Months Ended September 30, 2019 to Nine Months Ended September 30, 2018

The following table shows cash flows and ending cash and cash equivalent balances for the nine months ended September 30, 2019 and 2018 (in thousands).

	Nine Months Ended September 30,
	2019			2018			Change
Net cash provided by operating activities	$	1,111,944		$	1,033,849		$	78,095
Net cash used in investing activities	(708,056		)	(793,776		)	85,720
Net cash used in financing activities	(512,227		)	(208,535		)	(303,692		)
Net (decrease) increase in cash, cash equivalents and restricted cash	$	(108,339	)	$	31,538		$	(139,877	)

The increase in net cash provided by operating activities was primarily due to properties placed into service during the twelve months ended September 30, 2019. The increases in cash flow were partially offset by properties sold in 2018 and an increase in interest expense.

Net cash used in investing activities consisted of the following amounts (in thousands).

	Nine Months Ended September 30,
	2019			2018			Change
Improvements to investments in real estate	$	(1,125,772	)	$	(946,118	)	$	(179,654	)
Acquisitions of real estate	(74,973		)	(116,990		)	42,017
Proceeds from sale of properties, net of sales costs	—			286,204			(286,204		)
Proceeds from the Ascenty joint venture transaction	702,439			—			702,439
Deconsolidation of Ascenty cash	(97,081		)	—			(97,081		)
Other	(112,669		)	(16,872		)	(95,797		)
Net cash used in investing activities	$	(708,056	)	$	(793,776	)	$	85,720

Net cash used in financing activities for the Company consisted of the following amounts (in thousands).

	Nine Months Ended September 30,
	2019			2018			Change
Repayments of short-term borrowings, net of proceeds	$	(190,433	)	$	(11,950	)	$	(178,483	)
Net proceeds from issuance of common and preferred stock,    including equity plans	207,468			4,582			202,886
Redemption of preferred stock	(365,050		)	—			(365,050		)
Proceeds from unsecured senior notes	2,325,566			649,038			1,676,528
Repayment on unsecured notes	(1,539,613		)	—			(1,539,613		)
Dividend and distribution payments	(976,059		)	(910,558		)	(65,501		)
Other	25,894			60,353			(34,459		)
Net cash used in financing activities	$	(512,227	)	$	(208,535	)	$	(303,692	)

The increase in cash used in financing activities was due to repayments of borrowings, net of proceeds, increasing during the nine months ended September 30, 2019 as compared to the nine months ended September 30, 2018 and the repayment of the Floating rate notes due 2019, 5.875% 2020 Notes, 3.400% 2020 Notes and 2021 Notes along with the redemption of the series H preferred stock offset by higher proceeds in 2019 from the issuance of the series K preferred stock, 2026 Notes, 3.600% 2029 Notes and 2030 Notes. The increase in dividend and distribution payments for the nine months ended September 30, 2019 as compared to the same period in 2018 was a result of an increase in the number of shares outstanding and increased dividend amount per share of common stock in the nine months ended September 30, 2019 as compared to the same period in 2018.

91

Net cash used in financing activities for the Operating Partnership consisted of the following amounts (in thousands). 

	Nine Months Ended September 30,
	2019			2018			Change
Repayments of short-term borrowings, net of proceeds	$	(190,433	)	$	(11,950	)	$	(178,483	)
General partner distributions, net of contributions	(157,582		)	4,582			(162,164		)
Proceeds from unsecured senior notes	2,325,566			649,038			1,676,528
Repayment on unsecured notes	(1,539,613		)	—			(1,539,613		)
Distribution payments	(976,059		)	(910,558		)	(65,501		)
Other	25,894			60,353			(34,459		)
Net cash used in financing activities	$	(512,227	)	$	(208,535	)	$	(303,692	)

The increase in cash used in financing activities was due to repayments of borrowings, net of proceeds, increasing during the nine months ended September 30, 2019 as compared to the nine months ended September 30, 2018 and the repayment of the Floating rate notes due 2019, 5.875% 2020 Notes, 3.400% 2020 Notes and 2021 Notes along with the redemption of the series H preferred units offset by higher proceeds in 2019 from the issuance of the series K preferred units, 2026 Notes, 3.600% 2029 Notes and 2030 Notes. The increase in distribution payments for the nine months ended September 30, 2019 as compared to the same period in 2018 was a result of an increase in the number of units outstanding and increased distribution amount per common unit in the nine months ended September 30, 2019 as compared to the same period in 2018.

Noncontrolling Interests in Operating Partnership

Noncontrolling interests relate to the common units in our Operating Partnership that are not owned by Digital Realty Trust, Inc., which, as of September 30, 2019, amounted to 4.2% of our Operating Partnership common units. Historically, our Operating Partnership has issued common units to third party sellers in connection with our acquisition of real estate interests from such third parties.

Limited partners have the right to require our Operating Partnership to redeem part or all of their common units for cash based upon the fair market value of an equivalent number of shares of Digital Realty Trust, Inc. common stock at the time of the redemption. Alternatively, we may elect to acquire those common units in exchange for shares of Digital Realty Trust, Inc. common stock on a one-for-one basis, subject to adjustment in the event of stock splits, stock dividends, issuance of stock rights, specified extraordinary distributions and similar events. In connection with the DFT Merger, approximately 0.2 million common units of the Operating Partnership that were issued to certain former unitholders in the DFT Operating Partnership were outstanding as of September 30, 2019, which are subject to certain restrictions and, accordingly, are not presented as permanent capital in the condensed consolidated balance sheet.

Inflation

Many of our leases provide for separate real estate tax and operating expense escalations. In addition, many of the leases provide for fixed base rent increases. We believe that inflationary increases may be at least partially offset by the contractual rent increases and expense escalations described above.

Funds from Operations

We calculate funds from operations, or FFO, in accordance with the standards established by the National Association of Real Estate Investment Trusts (Nareit). FFO represents net income (loss) (computed in accordance with GAAP), excluding gains (or losses) from sales of property, a gain from a pre-existing relationship, impairment charges and 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 and after adjustments for unconsolidated partnerships and joint ventures, 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 capitalized leasing commissions necessary to maintain the operating performance of our properties, all of which have real economic effect and could materially impact our financial condition and 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

92

such other REITs’ FFO. FFO should be considered only as a supplement to net income computed in accordance with GAAP as a measure of our performance. 

Reconciliation of Net Income Available to Common Stockholders to Funds From Operations (FFO)

(unaudited, in thousands, except per share data)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
Net Income Available to Common Stockholders	$	49,827		$	67,268		$	177,434		$	218,700
Adjustments:
Non-controlling interests in operating partnership	2,300			2,700			8,000			8,880
Real estate related depreciation & amortization (1)	283,090			290,757			877,869			878,193
Unconsolidated JV real estate related depreciation & amortization	13,612			3,775			31,086			10,973
(Gain) on real estate transactions	—			(26,577		)	—			(80,042		)
Impairment of investments in real estate	—			—			5,351			—
FFO available to common stockholders and unitholders (2)	$	348,829		$	337,923		$	1,099,740		$	1,036,704
Basic FFO per share and unit	$	1.60		$	1.58		$	5.06		$	4.84
Diluted FFO per share and unit (2)	$	1.59		$	1.57		$	5.04		$	4.83
Weighted average common stock and units outstanding
Basic	217,375			214,289			217,255			214,199
Diluted (2)	218,756			214,937			218,280			214,824
(1)    Real estate related depreciation and amortization was computed as follows:
Depreciation and amortization per income statement	$	286,718		$	293,957		888,766			887,534
Non-real estate depreciation	(3,628		)	(3,200		)	(10,897		)	(9,341		)
	$	283,090		$	290,757		$	877,869		$	878,193

(2) For all periods presented, we have excluded the effect of dilutive series C, series G, series H, series I, series J and series K preferred stock, as applicable, that may be converted into common stock upon the occurrence of specified change in control transactions as described in the articles supplementary governing the series C, series G, series H, series I, series J and series K preferred stock, as applicable, which we consider highly improbable.

	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
FFO available to common stockholders and unitholders—diluted	$	348,829	$	337,923	$	1,099,740	$	1,036,704
Weighted average common stock and units outstanding	217,375		214,289		217,255		214,199
Add: Effect of dilutive securities	1,381		648		1,025		625
Weighted average common stock and units outstanding—diluted	218,756		214,937		218,280		214,824

93

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our future income, cash flows and fair values relevant to financial instruments depend upon prevalent market interest rates. Market risk refers to the risk of loss from adverse changes in market prices and interest rates. We do not use derivatives for trading or speculative purposes and only enter into contracts with major financial institutions based on their credit rating and other factors.

Analysis of Debt between Fixed and Variable Rate

We use interest rate swap agreements and fixed rate debt to reduce our exposure to interest rate movements. As of September 30, 2019, our consolidated debt was as follows (in millions):

	Carrying Value		Estimated Fair Value
Fixed rate debt	$	8,250.3	$	8,924.5
Variable rate debt subject to interest rate swaps	785.3		785.3
Total fixed rate debt (including interest rate swaps)	9,035.6		9,709.8
Variable rate debt	1,964.3		1,964.3
Total outstanding debt	$	10,999.9	$	11,674.1

Interest rate derivatives included in this table and their fair values as of September 30, 2019 and December 31, 2018 were as follows (in thousands):

Notional Amount										Fair Value at Significant Other Observable Inputs (Level 2)
As of September 30, 2019			As of December 31, 2018			Type of Derivative	Strike Rate	Effective Date	Expiration Date	As of September 30, 2019 (3)			As of December 31, 2018 (3)
Currently-paying contracts
$	206,000	(1)	$	206,000	(1)	Swap	1.611	Jun 15, 2017	Jan 15, 2020	$	178		$	1,976
54,905		(1)	54,905		(1)	Swap	1.605	Jun 6, 2017	Jan 6, 2020	46			517
75,000		(1)	75,000		(1)	Swap	1.016	Apr 6, 2016	Jan 6, 2021	547			2,169
75,000		(1)	75,000		(1)	Swap	1.164	Jan 15, 2016	Jan 15, 2021	410			1,970
300,000		(1)	300,000		(1)	Swap	1.435	Jan 15, 2016	Jan 15, 2023	(379		)	11,463
74,397		(2)	72,220		(2)	Swap	0.779	Jan 15, 2016	Jan 15, 2021	1,052			2,024
$	785,302		$	783,125						$	1,854		$	20,119

(1) Represents debt which bears interest based on one-month U.S. LIBOR.

(2) Represents debt which bears interest based on one-month CDOR. Translation to U.S. dollars is based on exchange rates of $0.76 to 1.00 CAD as of September 30, 2019 and $0.73 to 1.00 CAD as of December 31, 2018.

(3) Balance recorded in other assets in the consolidated balance sheets if positive and recorded in accounts payable and other accrued liabilities in the consolidated balance sheets if negative.

94

Sensitivity to Changes in Interest Rates

The following table shows the effect if assumed changes in interest rates occurred, based on fair values and interest expense as of September 30, 2019:

Assumed event	Change ($ millions)
Increase in fair value of interest rate swaps following an assumed 10% increase in interest rates	$	2.2
Decrease in fair value of interest rate swaps following an assumed 10% decrease in interest rates	(2.2		)
Increase in annual interest expense on our debt that is variable rate and not subject to swapped interest following a 10% increase in interest rates	3.3
Decrease in annual interest expense on our debt that is variable rate and not subject to swapped interest following a 10% decrease in interest rates	(3.3		)
Increase in fair value of fixed rate debt following a 10% decrease in interest rates	88.5
Decrease in fair value of fixed rate debt following a 10% increase in interest rates	(87.5		)

Interest risk amounts were determined by considering the impact of hypothetical interest rates on our financial instruments. These analyses do not consider the effect of any change in overall economic activity that could occur in that environment. Further, in the event of a change of that magnitude, we may take actions to further mitigate our exposure to the change. However, due to the uncertainty of the specific actions that would be taken and their possible effects, these analyses assume no changes in our financial structure.

Foreign Currency Exchange Risk

For the nine months ended September 30, 2019 and 2018, we had foreign operations in the United Kingdom, Ireland, France, Germany, the Netherlands, Switzerland, Canada, Singapore, Australia, Japan and Hong Kong as well as Brazil for the three months ended March 31, 2019, prior to the deconsolidation of Ascenty. As such, we are subject to risk from the effects of exchange rate movements of foreign currencies, which may affect future costs and cash flows. Our foreign operations are conducted in the British pound sterling, Euro, Australian dollar, Singapore dollar, Canadian dollar, Hong Kong dollar and the Japanese yen. Our primary currency exposures are to the British pound sterling, Euro and the Singapore dollar. As a result of the Ascenty joint venture and deconsolidation of Ascenty, our exposure to foreign exchange risk related to the Brazilian real is limited to the impact that currency has on our share of the Ascenty joint venture's operations and financial position. We attempt to mitigate a portion of the risk of currency fluctuation by financing our investments in the local currency denominations and we may also hedge well-defined transactional exposures with foreign currency forwards or options, although there can be no assurances that these will be effective. As a result, changes in the relation of any such foreign currency to U.S. dollars may affect our revenues, operating margins and distributions and may also affect the book value of our assets and the amount of stockholders’ equity. For the three months ended September 30, 2019 and 2018, operating revenues from properties outside the United States contributed $146.7 million and $139.7 million, respectively, which represented 18.2% and 18.2% of our total operating revenues, respectively. For the nine months ended September 30, 2019 and 2018, operating revenues from properties outside the United States contributed $475.9 million and $421.3 million, respectively, which represented 19.7% and 18.6% of our total operating revenues, respectively. Net investment in properties outside the United States was $3.4 billion and $3.8 billion as of September 30, 2019 and December 31, 2018, respectively. Net assets in foreign operations were approximately $(1.3) billion and $0.2 billion as of September 30, 2019 and December 31, 2018, respectively. The decrease was a result of the issuance of the 2026 Notes in January 2019 and March 2019, the proceeds of which were used to pay down the 5.875% Notes due 2020 and U.S. dollar borrowings on the global revolving credit facility.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures (Digital Realty Trust, Inc.)

The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in its reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the U.S. Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to its management, including its chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, the Company’s management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and its management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Also, the

95

Company has investments in certain unconsolidated entities, which are accounted for using the equity method of accounting. As the Company does not control or manage these entities, its disclosure controls and procedures with respect to such entities may be substantially more limited than those it maintains with respect to its consolidated subsidiaries.

As required by Rule 13a-15(b) or Rule 15d-15(b) of the Securities Exchange Act of 1934, as amended, management of the Company carried out an evaluation, under the supervision and with participation of its chief executive officer and chief financial officer, of the effectiveness of the design and operation of its disclosure controls and procedures that were in effect as of the end of the quarter covered by this report. Based on the foregoing, the Company’s chief executive officer and chief financial officer concluded that its disclosure controls and procedures were effective at the reasonable assurance level.

There have been no changes in the Company’s internal control over financial reporting during its most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, its internal control over financial reporting.

Evaluation of Disclosure Controls and Procedures (Digital Realty Trust, L.P.)

The Operating Partnership maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in its reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the U.S. Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to its management, including the chief executive officer and chief financial officer of its general partner, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, the Operating Partnership’s management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and its management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Also, the Operating Partnership has investments in certain unconsolidated entities, which are accounted for using the equity method of accounting. As the Operating Partnership does not control or manage these entities, its disclosure controls and procedures with respect to such entities may be substantially more limited than those it maintains with respect to its consolidated subsidiaries.

As required by Rule 13a-15(b) or Rule 15d-15(b) of the Securities Exchange Act of 1934, as amended, management of the Operating Partnership carried out an evaluation, under the supervision and with participation of the chief executive officer and chief financial officer of its general partner, of the effectiveness of the design and operation of its disclosure controls and procedures that were in effect as of the end of the quarter covered by this report. Based on the foregoing, the chief executive officer and chief financial officer of the Operating Partnership’s general partner concluded that its disclosure controls and procedures were effective at the reasonable assurance level.

There have been no changes in the Operating Partnership’s internal control over financial reporting during its most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, its internal control over financial reporting.

96

PART II—OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

The Company is involved in legal proceedings arising in the ordinary course of business from time to time.  As of September 30, 2019, the Company is not currently a party to any legal proceedings that it believes would have a material adverse effect on its financial position, results of operations or liquidity nor, to its knowledge, are any such legal proceedings threatened against it.

ITEM 1A. RISK FACTORS.

The risk factors discussed under the heading “Risk Factors” and elsewhere in the Company’s and the Operating Partnership’s Annual Report on Form 10-K for the year ended December 31, 2018 continue to apply to our business and should be supplemented with the following risk factors:

On October 29, 2019, the Company and its subsidiary DN 39J 7A B.V., a Dutch private limited liability company (besloten vennootschap met beperkte aansprakelijkheid) organized under the Laws of the Netherlands, entered into a Purchase Agreement (the “Purchase Agreement”) with InterXion Holding N.V., a Dutch public limited liability company (naamloze vennootschap) organized under the laws of the Netherlands (“InterXion”). Pursuant to the Purchase Agreement, and upon the terms and subject to the conditions thereof, Buyer will commence a tender offer (the “Offer”) to purchase all of the outstanding ordinary shares, nominal value €0.10 per share, of InterXion (the “InterXion Shares”) in exchange for 0.7067 shares of common stock of the Company per InterXion Share (the “Offer Consideration”). The Offer will initially remain open until 4:00 p.m. (New York City time) on the day that is the later of (a) twenty-one business days after the commencement of the Offer and (b) six business days after the date of InterXion’s extraordinary general meeting (as set forth in the Purchase Agreement), and may be extended in accordance with the terms of the Purchase Agreement (the “Expiration Time”).

There are a number of significant risks related to the transactions contemplated by the Purchase Agreement (collectively, the “transactions”), including the risk factors enumerated below.

Risks Related to the InterXion Tender Offer

The Offer Consideration will not be adjusted in the event of any change in the stock prices of either the Company or InterXion.

Upon the completion of the Offer, and subject to the satisfaction or waiver of the various closing conditions, each InterXion Share validly tendered and not properly withdrawn will be converted automatically into the right to receive 0.7067 shares of the Company’s common stock. The exchange ratio of 0.7067 will not be adjusted for changes in the market prices of either shares of Company common stock or the InterXion Shares. Changes in the market price of shares of Company common stock prior to the expiration of the Offer will affect the market value of the Offer Consideration. Stock price changes may result from a variety of factors (many of which are beyond the control of the Company and InterXion), including the following factors:

• market reaction to the announcement of the Offer and the prospects of the Company following the transactions;

• changes in the respective businesses, operations, assets, liabilities and prospects of the Company and InterXion;

• changes in market assessments of the business, operations, financial position and prospects of either company;

• market assessments of the likelihood that the transactions will be completed;

• interest rates, general market and economic conditions and other factors generally affecting the market prices of Company common stock and the InterXion Shares;

• federal, state and local legislation, governmental regulation and legal developments affecting the industries in which the Company and InterXion operate; and

• other factors beyond the control of the Company and InterXion, including those described or referred to elsewhere in this Quarterly Report.

The market price of shares of the Company’s common stock at the closing of the Offer may vary from its price on the date that was used to establish the exchange ratio, on the date the Purchase Agreement was executed, on the date of this Quarterly Report and at the Expiration Time. As a result, the market value of the Offer Consideration will also vary.

Therefore, while the number of shares of the Company’s common stock to be issued per InterXion ordinary share is fixed, (1) Company stockholders cannot be sure of the market value of the consideration that will be paid to InterXion

97

shareholders upon completion of the transactions and (2) InterXion shareholders cannot be sure of the market value of the consideration they will receive upon completion of the transactions.

Company stockholders and InterXion shareholders will be diluted by the transactions.

The transactions will dilute the ownership position of the Company’s stockholders and result in InterXion shareholders having an ownership stake in the Company that is smaller than their current stake in InterXion. Upon completion of the transactions, the Company estimates that continuing Company stockholders will own approximately 80% of the issued and outstanding common stock of the Company, and former InterXion shareholders will own approximately 20% of the issued and outstanding common stock of the Company. Consequently, Company stockholders and InterXion shareholders, as a general matter, will have less influence over the management and policies of the combined company after the completion of the transactions than each currently exercise over the management and policies of the Company and InterXion, as applicable.

Completion of the transactions is subject to many conditions and if these conditions are not satisfied or waived, the transactions will not be completed, which could result in the requirement that the Company or InterXion pay certain termination fees.

The Purchase Agreement includes customary representations, warranties and covenants of the Company, Buyer and InterXion. Until the earlier of the termination of the Purchase Agreement and the completion of the transactions, InterXion has agreed to operate its and its subsidiaries’ businesses in the ordinary course consistent with past practice and has agreed to certain other operating covenants, as set forth more fully in the Purchase Agreement. In addition, Buyer’s obligation to purchase the InterXion Shares validly tendered and not properly withdrawn pursuant to the Offer is subject to the satisfaction or waiver of various closing conditions, including that certain required regulatory approvals shall have been received and be in full force and effect or their relevant waiting periods (and any extension thereof) shall have expired or been terminated. The Company and InterXion have agreed to use their respective reasonable best efforts to obtain such required approvals.

There can be no assurance that the conditions to closing of the transactions will be satisfied or waived or that the transactions will be completed. Failure to consummate the transactions may adversely affect the Company’s or InterXion’s results of operations and business prospects for the following reasons, among others: (i) each of the Company and InterXion will incur certain transaction costs, regardless of whether the transactions close, which could adversely affect each company’s respective financial condition, results of operations and ability to make distributions to its security holders; and (ii) the transactions, whether or not they close, will divert the attention of certain management and other key employees of the Company and InterXion from ongoing business activities, including the pursuit of other opportunities that could be beneficial to the Company or InterXion, respectively. In addition, the Company or InterXion may terminate the Purchase Agreement under certain circumstances, which may require the Company to pay InterXion a termination fee of $254.3 million, or may require InterXion to pay the Company a termination fee of $72.6 million. If the transactions are not consummated, the price of the Company’s common stock might decline.

The pendency of the transactions could adversely affect the business and operations of the Company and InterXion.

Prior to the completion of the transactions, some customers, prospective customers or vendors of each of the Company and InterXion may delay or defer decisions, which could negatively affect the revenues, earnings, cash flows and expenses of the Company and InterXion, regardless of whether the transactions are completed. Similarly, current and prospective employees of the Company and InterXion may experience uncertainty about their future roles with the Company following the transactions, which may adversely affect the ability of each of the Company and InterXion to attract and retain key personnel during the pendency of the transactions. In addition, during the pendency of the transactions, the Company has agreed not to: declare or pay any dividend, other than in the ordinary course of business; enter into a material new line of business unrelated to the current business lines; or knowingly take or fail to any action which would reasonably be expected to cause the Company to fail to qualify as a REIT, among other things. Similarly, during the pendency of the transactions, InterXion has agreed not to: pursue strategic transactions; undertake significant capital projects; undertake certain significant financing transactions; incur significant indebtedness; modify, amend, renew, or extend any material customer contract other than in the ordinary course of business; hire any new senior management employees; or otherwise pursue certain material actions, even if such actions would prove beneficial to InterXion.

The Purchase Agreement contains provisions that could discourage a potential competing acquirer of InterXion or could result in a competing proposal being at a lower price than it might otherwise be.

The Purchase Agreement contains provisions that, subject to limited exceptions necessary to comply with the duties of the InterXion Board, restrict the ability of InterXion to solicit or initiate discussions with any third party regarding Alternative

98

Acquisition Proposals (as defined in the Purchase Agreement) or participate in any discussions or negotiations with any third party regarding such proposals. Subject to certain exceptions, the InterXion Board is not permitted to (a) withhold, withdraw, qualify or modify its recommendation to its shareholders to accept the Offer and approve and adopt certain matters, including the transactions contemplated by the Purchase Agreement (the “InterXion Recommendation”), (b) recommend, adopt or approve any Alternative Acquisition Proposal, (c) publicly make any recommendation in connection with an Alternative Acquisition Proposal other than a recommendation against such proposal, (d) fail to publicly and without qualification recommend against any Alternative Acquisition Proposal or fail to reaffirm the InterXion Recommendation within certain specified time periods (any such action in this paragraph an “Adverse Recommendation Change”), (e) publicly propose to do any of the foregoing or (f) approve or recommend or allow InterXion or any affiliates to execute or enter into, any agreement relating to any Alternative Acquisition Proposal.

Solely in response to a Superior Proposal (as defined in the Purchase Agreement) received by the InterXion Board, which must be (i) more favorable to InterXion and its shareholders and (ii) include offer consideration with a value that exceeds the Offer Consideration by at least 7%, the InterXion Board may at any time prior to the Expiration Time make an Adverse Recommendation Change, or terminate the Purchase Agreement and enter into an Alternative Acquisition Agreement (as defined in the Purchase Agreement) with respect to a Superior Proposal if, (a) InterXion has provided to the Company and Buyer four business days’ prior written notice of the existence of and material terms and conditions of the Superior Proposal; (b) InterXion has engaged in good faith negotiations with the Company and Buyer to amend the Purchase Agreement to make the Purchase Agreement at least as favorable as the Alternative Acquisition Proposal; and (c) the InterXion Board has determined that, in light of such Superior Proposal and taking into account any revised terms proposed by the Company, that the failure to effect an Adverse Recommendation Change and/or terminate the Purchase Agreement would be inconsistent with the directors’ fiduciary duties under the laws of the Netherlands.

These provisions could discourage a potential competing acquirer that might have an interest in acquiring all or a significant part of InterXion from considering or proposing such an acquisition, even if the potential competing acquirer was prepared to pay consideration with a higher per share value than the value proposed to be received or realized in the transactions, or might result in a potential competing acquirer proposing to pay a lower per share value than it might otherwise have proposed to pay because of the added expense of the termination fee that may become payable in certain circumstances under the Purchase Agreement.

If the Offer is not consummated by the End Date, either the Company or InterXion may terminate the Purchase Agreement.

The Purchase Agreement contains certain termination rights, including, but not limited to, the right of either party to terminate the Purchase Agreement if the Offer is not consummated on or before 11:59 p.m. (New York City time) on October 29, 2020 (the “End Date”), provided, further, that if all of the Offer conditions shall have been satisfied (other than the condition that all Required Approvals (as defined in the Purchase Agreement) shall have been received), the End Date shall automatically extend until the date that is 90 days following the initial End Date.

The transactions will result in changes to the board of directors of the combined company.

The board of directors of the combined company will consist of nine board members designated by Digital Realty and one board member designated by InterXion. Laurence A. Chapman, the current Chairman of the Digital Realty Board of Directors, will serve as Chairman of the Board of Directors of the combined company. This new composition of the board of directors of the combined company may affect the future decisions of the combined company.

Risks Related to the Combined Company Following the Transactions

The combined company expects to incur substantial expenses related to the transactions.

The combined company expects to incur substantial expenses in connection with completing the transactions and integrating the business, operations, networks, systems, technologies, policies and procedures of InterXion with those of the Company. There are several systems that must be integrated, including accounting and finance and asset management. While the Company has assumed that a certain level of transaction and integration expenses would be incurred, there are a number of factors beyond its control that could affect the total amount or the timing of the combined company’s integration expenses. Many of the expenses that will be incurred, by their nature, are difficult to estimate accurately at the present time. As a result, the transaction and integration expenses associated with the transactions could, particularly in the near term, exceed the savings that the combined company expects to achieve from the elimination of duplicative expenses and the realization of economies of scale and cost savings related to the integration of the businesses following the completion of the transactions.

99

Following the transactions, the combined company may be unable to integrate the businesses of the Company and InterXion successfully and realize the anticipated synergies and other benefits of the transactions or do so within the anticipated timeframe.

The transactions involve the combination of two companies that currently operate as independent public companies. The combined company is expected to benefit from the elimination of duplicative costs associated with supporting a public company platform, technologies and systems. These savings are expected to be realized upon full integration following the closing of the transactions. However, the combined company will be required to devote significant management attention and resources to integrating the business practices and operations of the Company and InterXion. Potential difficulties the combined company may encounter in the integration process include the following:

• the inability to successfully combine the businesses of the Company and InterXion in a manner that permits the combined company to achieve the cost savings anticipated to result from the transactions, which would result in the anticipated benefits of the transactions not being realized in the timeframe currently anticipated or at all;

• the complexities associated with managing the combined businesses out of several different locations and integrating personnel from the two companies;

• the additional complexities of combining two companies with different histories, cultures, regulatory restrictions, markets and customer bases;

• potential unknown liabilities and unforeseen increased expenses, delays or regulatory conditions associated with the transactions; and

• performance shortfalls as a result of the diversion of management’s attention caused by completing the transactions and integrating the companies’ operations.

For all these reasons, it is possible that the integration process could result in the distraction of the combined company’s management, the disruption of the combined company’s ongoing business or inconsistencies in the combined company’s operations, services, standards, controls, procedures and policies, any of which could adversely affect the ability of the combined company to maintain relationships with customers, vendors and employees or to achieve the anticipated benefits of the transaction, or could otherwise adversely affect the business and financial results of the combined company.

Following the transactions, the combined company may be unable to retain key employees.

The success of the combined company after the transactions will depend in part upon its ability to retain key Company and InterXion employees. Key employees may depart either before or after the transactions because of issues relating to the uncertainty and difficulty of integration or a desire not to remain with the combined company following the transactions. Accordingly, no assurance can be given that the Company, InterXion or, following the transactions, the combined company will be able to retain key employees to the same extent as in the past.

The combined company’s anticipated level of indebtedness will increase upon completion of the transactions and may increase the related risks the Company now faces.

In connection with the transactions, the combined company will assume and/or refinance certain indebtedness of InterXion totaling approximately $1.4 billion and may be subject to increased risks associated with debt financing, including the risk that the combined company’s cash flow could be insufficient to meet required payments on its debt.

The combined company’s increased indebtedness could have important consequences to holders of its common stock and preferred stock, including InterXion shareholders who receive Company common stock in the transactions, including:

• increasing the combined company’s vulnerability to general adverse economic and industry conditions;

• limiting the combined company’s ability to obtain additional financing to fund future working capital, capital expenditures and other general corporate requirements;

• requiring the use of a substantial portion of the combined company’s cash flow from operations for the payment of principal and interest on its indebtedness, thereby reducing its ability to use its cash flow to fund working capital, acquisitions, capital expenditures and general corporate requirements;

• limiting the combined company’s flexibility in planning for, or reacting to, changes in its business and its industry; and

• putting the combined company at a disadvantage compared to its competitors with less indebtedness.

If the combined company defaults under a mortgage loan, it may automatically be in default under any other loan that has cross-default provisions, and it may lose the properties securing these loans. Although the combined company anticipates that it will pay off its mortgage payables if and when prepayment penalties and other costs and considerations make it economically feasible to do so, the combined company cannot anticipate when such payment will occur.

100

The future results of the combined company will suffer if the combined company does not effectively manage its expanded operations following the transactions.

Following the transactions, the combined company expects to continue to expand its operations through additional acquisitions and development, some of which may involve complex challenges. The future success of the combined company will depend, in part, upon the ability of the combined company to manage its development and expansion opportunities, which may pose substantial challenges for the combined company to complete development projects and integrate new operations into its existing business in an efficient and timely manner, and upon its ability to successfully monitor its operations, costs, regulatory compliance and service quality, and to maintain other necessary internal controls. There is no assurance that the combined company’s development, expansion or acquisition opportunities will be successful, or that the combined company will realize its expected operating efficiencies, cost savings, revenue enhancements, synergies or other benefits.

Counterparties to certain significant agreements with the Company or InterXion may exercise contractual rights under such agreements in connection with the transactions.

The Company and InterXion are each party to certain agreements that give the counterparty certain rights following a “change in control,” including in some cases the right to terminate the agreement. Under some such agreements, the closing of the Offer may constitute a change in control and therefore the counterparty may exercise certain rights under the agreement upon the closing of the transactions. Any such counterparty may request modifications of their respective agreements as a condition to granting a waiver or consent under their agreement. There can be no assurances that such counterparties will not exercise their rights under these agreements, including termination rights where available, or that the exercise of any such rights under, or modification of, these agreements will not adversely affect the business or operations of the combined company.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

Digital Realty Trust, Inc.

None.

Digital Realty Trust, L.P.

During the three months ended September 30, 2019, our Operating Partnership issued partnership units in private placements in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act, in the amounts and for the consideration set forth below:

During the three months ended September 30, 2019, Digital Realty Trust, Inc. issued an aggregate of 1,414 shares of its common stock in connection with restricted stock awards for no cash consideration. For each share of common stock issued by Digital Realty Trust, Inc. in connection with such an award, our Operating Partnership issued a restricted common unit to Digital Realty Trust, Inc. During the three months ended September 30, 2019, our Operating Partnership issued an aggregate of 1,414 common units to Digital Realty Trust, Inc., as required by our Operating Partnership’s partnership agreement.

For these issuances of common units to Digital Realty Trust, Inc., our Operating Partnership relied on Digital Realty Trust, Inc.’s status as a publicly traded NYSE-listed company with approximately $23.2 billion in total consolidated assets and as our Operating Partnership’s majority owner and general partner as the basis for the exemption under Section 4(a)(2) of the Securities Act.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. MINE SAFETY DISCLOSURES.

Not applicable.

101

ITEM 5. OTHER INFORMATION.

None.

102

ITEM 6. EXHIBITS.

Exhibit Number	Description
3.1	Articles of Amendment and Restatement of Digital Realty Trust, Inc., as amended (incorporated by reference to Exhibit 3.1 to the Combined Quarterly Report on Form 10-Q of Digital Realty Trust, Inc. and Digital Realty Trust, L.P. (File Nos. 001-32336 and 000-54023) filed on May 10, 2019).
3.2	Eighth Amended and Restated Bylaws of Digital Realty Trust, Inc. (incorporated by reference to the Combined Annual Report on Form 10-K of Digital Realty Trust, Inc. and Digital Realty Trust, L.P. (File Nos. 001-32336 and 000-54023) filed on February 25, 2019).
3.3	Certificate of Limited Partnership of Digital Realty Trust, L.P. (incorporated by reference to Exhibit 3.1 to Digital Realty Trust, L.P.’s General Form for Registration of Securities on Form 10 (File No. 000-54023) filed on June 25, 2010).
3.4	Nineteenth Amended and Restated Agreement of Limited Partnership of Digital Realty Trust, L.P. (incorporated by reference to Exhibit 3.1 to the Combined Current Report on Form 8-K of Digital Realty Trust, Inc. and Digital Realty Trust, L.P. (File Nos. 001-32336 and 000-54023) filed on October 10, 2019).
3.5	Articles Supplementary designating Digital Realty Trust, Inc.’s 5.200% Series L Cumulative Redeemable Preferred Stock (incorporated by reference to Exhibit 3.2 to the Registration Statement on Form 8-A of Digital Realty Trust, Inc. (File No. 001-32336) filed on October 9, 2019).
4.1	Indenture, dated as of October 9, 2019, among Digital Euro Finco, LLC, Digital Realty Trust, Inc., Digital Realty Trust, L.P., Deutsche Trustee Company Limited, as trustee, Deutsche Bank AG, London Branch, as paying agent and a transfer agent, and Deutsche Bank Luxembourg S.A., as registrar and a transfer agent, including the form of the 1.125% Guaranteed Notes due 2028 (incorporated by reference to Exhibit 4.1 to the Combined Current Report on Form 8-K of Digital Realty Trust, Inc. and Digital Realty Trust, L.P. (File Nos. 001-32336 and 000-54023) filed on October 9, 2019).
4.2	Specimen Certificate for Digital Realty Trust, Inc.’s 5.200% Series L Cumulative Redeemable Preferred Stock (incorporated by reference to Exhibit 4.1 to the Registration Statement on Form 8-A of Digital Realty Trust, Inc. (File No. 001-32336) filed on October 9, 2019).
31.1	Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer for Digital Realty Trust, Inc.
31.2	Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer for Digital Realty Trust, Inc.
31.3	Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer for Digital Realty Trust, L.P.
31.4	Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer for Digital Realty Trust, L.P.
32.1	18 U.S.C. § 1350 Certification of Chief Executive Officer for Digital Realty Trust, Inc.
32.2	18 U.S.C. § 1350 Certification of Chief Financial Officer for Digital Realty Trust, Inc.
32.3	18 U.S.C. § 1350 Certification of Chief Executive Officer for Digital Realty Trust, L.P.
32.4	18 U.S.C. § 1350 Certification of Chief Financial Officer for Digital Realty Trust, L.P.
101	The following financial statements from Digital Realty Trust, Inc.’s and Digital Realty Trust, L.P.’s Form 10-Q for the quarter ended September 30, 2019, formatted in XBRL interactive data files: (i) Condensed Consolidated Balance Sheets as of September 30, 2019 and December 31, 2018; (ii) Condensed Consolidated Income Statements for the three and nine months ended September 30, 2019 and 2018; (iii) Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2019 and 2018; (iv) Condensed Consolidated Statements of Equity/Capital for the three and nine months ended September 30, 2019 and 2018; (v) Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2019 and 2018; and (vi) Notes to Condensed Consolidated Financial Statements.
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

 

† Management contract or compensatory plan or arrangement.

103

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 thereunto duly authorized.

	DIGITAL REALTY TRUST, INC.
November 8, 2019	/S/    A. WILLIAM STEIN
	A. William Stein Chief Executive Officer (principal executive officer)
November 8, 2019	/S/    ANDREW P. POWER
	Andrew P. Power Chief Financial Officer (principal financial officer)
November 8, 2019	/S/    EDWARD F. SHAM
	Edward F. Sham Chief Accounting Officer (principal accounting officer)

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 thereunto duly authorized.

		DIGITAL REALTY TRUST, L.P.
	By: Digital Realty Trust, Inc.        Its general partner
	By:
November 8, 2019		/S/    A. WILLIAM STEIN
		A. William Stein Chief Executive Officer (principal executive officer)
November 8, 2019		/S/    ANDREW P. POWER
		Andrew P. Power Chief Financial Officer (principal financial officer)
November 8, 2019		/s/    EDWARD F. SHAM
		Edward F. Sham Chief Accounting Officer (principal accounting officer)

104

EX-31.1

Exhibit 31.1

Certification of Chief Executive Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, A. William Stein, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Digital Realty Trust, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated:	November 8, 2019
By:	/s/    A. WILLIAM STEIN
	A. William Stein
	Chief Executive Officer
	(Principal Executive Officer)

EX-31.2

Exhibit 31.2

Certification of Chief Financial Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Andrew P. Power, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Digital Realty Trust, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated:	November 8, 2019
By:	/s/    ANDREW P. POWER
	Andrew P. Power
	Chief Financial Officer
	(Principal Financial Officer)

EX-31.3

Exhibit 31.3

Certification of Chief Executive Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, A. William Stein, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Digital Realty Trust, L.P.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated:	November 8, 2019
By:	/s/    A. WILLIAM STEIN
	A. William Stein
	Chief Executive Officer
	(Principal Executive Officer)
	Digital Realty Trust, Inc., sole general partner of
	Digital Realty Trust, L.P.

EX-31.4

Exhibit 31.4

Certification of Chief Financial Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Andrew P. Power, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Digital Realty Trust, L.P.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated:	November 8, 2019
By:	/s/    ANDREW P. POWER
	Andrew P. Power
	Chief Financial Officer
	(Principal Financial Officer)
	Digital Realty Trust, Inc., sole general partner of
	Digital Realty Trust, L.P.

EX-32.1

Exhibit 32.1

Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as

Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Pursuant to 18 U.S.C. § 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of Digital Realty Trust, Inc. (the “Company”) hereby certifies, to such officer’s knowledge, that:

(i) the accompanying Quarterly Report on Form 10-Q of the Company for the quarterly period ended September 30, 2019 (the “Report”) fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended; and

(ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company at the dates and for the periods indicated.

Dated:	November 8, 2019
	/s/    A. WILLIAM STEIN
	A. William Stein
	Chief Executive Officer
	(Principal Executive Officer)

Pursuant to Securities and Exchange Commission Release 33-8238, dated June 5, 2003, this certification is being furnished and shall not be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or incorporated by reference in any registration statement of the Company filed under the Securities Act of 1933, as amended.

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as

Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Pursuant to 18 U.S.C. § 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of Digital Realty Trust, Inc. (the “Company”) hereby certifies, to such officer’s knowledge, that:

(i) the accompanying Quarterly Report on Form 10-Q of the Company for the quarterly period ended September 30, 2019 (the “Report”) fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended; and

(ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company at the dates and for the periods indicated.

Dated:	November 8, 2019
	/s/    ANDREW P. POWER
	Andrew P. Power
	Chief Financial Officer
	(Principal Financial Officer)

Pursuant to Securities and Exchange Commission Release 33-8238, dated June 5, 2003, this certification is being furnished and shall not be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or incorporated by reference in any registration statement of the Company filed under the Securities Act of 1933, as amended.

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.3

Exhibit 32.3

Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as

Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Pursuant to 18 U.S.C. § 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of Digital Realty Trust, Inc., in its capacity as the sole general partner of Digital Realty Trust, L.P. (the “Operating Partnership”), hereby certifies, to such officer’s knowledge, that:

(i) the accompanying Quarterly Report on Form 10-Q of the Operating Partnership for the quarterly period ended September 30, 2019 (the “Report”) fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended; and

(ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Operating Partnership at the dates and for the periods indicated.

Dated:	November 8, 2019
	/s/    A. WILLIAM STEIN
	A. William Stein
	Chief Executive Officer
	(Principal Executive Officer)
	Digital Realty Trust, Inc., sole general partner of
	Digital Realty Trust, L.P.

Pursuant to Securities and Exchange Commission Release 33-8238, dated June 5, 2003, this certification is being furnished and shall not be deemed filed by the Operating Partnership for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or incorporated by reference in any registration statement of the Operating Partnership filed under the Securities Act of 1933, as amended.

A signed original of this written statement required by Section 906 has been provided to the Operating Partnership and will be retained by the Operating Partnership and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.4

Exhibit 32.4

Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as

Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Pursuant to 18 U.S.C. § 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of Digital Realty Trust, Inc., in its capacity as the sole general partner of Digital Realty Trust, L.P. (the “Operating Partnership”), hereby certifies, to such officer’s knowledge, that:

(i) the accompanying Quarterly Report on Form 10-Q of the Operating Partnership for the quarterly period ended September 30, 2019 (the “Report”) fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended; and

(ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Operating Partnership at the dates and for the periods indicated.

Dated:	November 8, 2019
	/s/    ANDREW P. POWER
	Andrew P. Power
	Chief Financial Officer
	(Principal Financial Officer)
	Digital Realty Trust, Inc., sole general partner of
	Digital Realty Trust, L.P.

Pursuant to Securities and Exchange Commission Release 33-8238, dated June 5, 2003, this certification is being furnished and shall not be deemed filed by the Operating Partnership for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or incorporated by reference in any registration statement of the Operating Partnership filed under the Securities Act of 1933, as amended.

A signed original of this written statement required by Section 906 has been provided to the Operating Partnership and will be retained by the Operating Partnership and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Real Estate (Schedule of Real Estate Property Acquisitions) (Details) $ in Millions		9 Months Ended
	May 02, 2019 USD ($)	Sep. 30, 2019 USD ($) land_parcel
Business Acquisition [Line Items]
Payment to acquire real estate		$ 72.3
Various
Business Acquisition [Line Items]
Payment to acquire real estate		$ 44.3
Number of vacant land parcels | land_parcel		5
21780 Filigree Court
Business Acquisition [Line Items]
Payment to acquire real estate	$ 28.0

XML

Fair Value of Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2019

Fair Value Disclosures [Abstract]

Estimated Fair Value And Carrying Amounts

As of September 30, 2019 and December 31, 2018, the aggregate estimated fair value and carrying value of our global revolving credit facilities, unsecured term loans, unsecured senior notes and mortgage loans were as follows (in thousands):

	Categorization under the fair value hierarchy	As of September 30, 2019				As of December 31, 2018
		Estimated Fair Value		Carrying Value		Estimated Fair Value		Carrying Value
Global revolving credit facilities (1)(5)	Level 2	$	1,846,026	$	1,846,026	$	1,663,156	$	1,663,156
Unsecured term loans (2)(6)	Level 2	799,533		799,533		1,183,121		1,183,121
Unsecured senior notes (3)(4)(7)	Level 2	8,923,041		8,237,864		7,684,368		7,629,679
Secured debt (3)(8)	Level 2	105,529		105,377		706,086		705,924
		$	11,674,129	$	10,988,800	$	11,236,731	$	11,181,880

(1) The carrying value of our global revolving credit facilities approximates estimated fair value, due to the variability of interest rates and the stability of our credit ratings.

(2) The carrying value of our unsecured term loans approximates estimated fair value, due to the variability of interest rates and the stability of our credit ratings.

(3) Valuations for our unsecured senior notes and secured debt are determined based on the expected future payments discounted at risk-adjusted rates. The 3.400% 2020 Notes, 2021 Notes, 3.950% 2022 Notes, 3.625% 2022 Notes, 4.750% 2023 Notes, 2.750% 2023 Notes, 2.625% 2024 Notes, 2.750% 2024 Notes, 4.750% 2025 Notes, 4.250% 2025 Notes, 2026 Notes, 2027 Notes, 2028 Notes, 3.600% 2029 Notes, 3.300% 2029 Notes and 2030 Notes are valued based on quoted market prices.

(4) The carrying value of the 3.400% 2020 Notes, 2021 Notes, 3.625% 2022 Notes, 3.950% 2022 Notes, 4.750% 2023 Notes, 2.750% 2023 Notes, 2.625% 2024 Notes, 2.750% 2024 Notes, 4.250% 2025 Notes, 2026 Notes, 2027 Notes, 2028 Notes, 3.600% 2029 Notes, 3.300% 2029 Notes and 2030 Notes are net of discount of $11.2 million and $19.9 million in the aggregate as of September 30, 2019 and December 31, 2018, respectively.

(5) The estimated fair value and carrying value are exclusive of deferred financing costs of $12.5 million and $15.4 million as of September 30, 2019 and December 31, 2018, respectively.

(6) The estimated fair value and carrying value are exclusive of deferred financing costs of $3.3 million and $4.2 million as of September 30, 2019 and December 31, 2018, respectively.

(7) The estimated fair value and carrying value are exclusive of deferred financing costs of $48.7 million and $40.6 million as of September 30, 2019 and December 31, 2018, respectively.

(8)

The estimated fair value and carrying value are exclusive of deferred financing costs of $0.2 million and $20.2 million as of September 30, 2019 and December 31, 2018, respectively.

XML

Leases (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018
Lessor, Lease, Description [Line Items]
Weighted average remaining lease term, operating lease	12 years		12 years
Weighted average remaining lease term, finance lease	24 years		24 years
Incremental borrowing rate, operating lease	4.10%		4.10%
Incremental borrowing rate, finance lease	3.50%		3.50%
Lease revenue					$ 3,000,000
Revenues	$ 806,466	$ 768,924	$ 2,421,778	$ 2,268,211
Initial direct costs					37,000
Rental and other services
Lessor, Lease, Description [Line Items]
Revenues	802,472	603,833	2,413,888	1,792,457	2,100,000
Tenant reimbursements
Lessor, Lease, Description [Line Items]
Revenues	$ 0	$ 163,104	$ 0	$ 468,906	$ 600,000

XML

Subsequent Events (Details) $ in Thousands		9 Months Ended
	Sep. 16, 2019 USD ($) property	Sep. 30, 2019 USD ($) property	Sep. 30, 2018 USD ($)	Nov. 01, 2019 property	Dec. 31, 2018 property
Subsequent Event [Line Items]
Number of properties		223			214
Capital contributions from noncontrolling interests in consolidated joint ventures, net | $		$ 60,961	$ 63,745
Turn-Key Flex Data Centers | Held-For-Contribution Properties
Subsequent Event [Line Items]
Number of properties	3
Powered Base Building | Disposal Group, Held-for-sale, Not Discontinued Operations
Subsequent Event [Line Items]
Purchase consideration | $	$ 557,000
Powered Base Building | Held-For-Contribution Properties
Subsequent Event [Line Items]
Number of properties		3
Powered Base Building | Held-for-Sale Properties
Subsequent Event [Line Items]
Number of properties	10	10
Data Center Joint Venture | Mapletree
Subsequent Event [Line Items]
Ownership percentage in joint ventures	80.00%
Capital contributions from noncontrolling interests in consolidated joint ventures, net | $	$ 800,000
Data Center Joint Venture | Turn-Key Flex Data Centers
Subsequent Event [Line Items]
Ownership percentage in joint ventures	20.00%
Data Center Joint Venture | Subsequent Event | Mapletree
Subsequent Event [Line Items]
Ownership percentage in joint ventures				80.00%
Data Center Joint Venture | Subsequent Event | Turn-Key Flex Data Centers
Subsequent Event [Line Items]
Ownership percentage in joint ventures				20.00%
Data Center Joint Venture | Subsequent Event | Turn-Key Flex Data Centers | Held-For-Contribution Properties
Subsequent Event [Line Items]
Number of properties				3

XML

Debt of the Operating Partnership (Floating and Base Rate Borrowing) (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2019 USD ($) $ / $ $ / € $ / ¥ $ / £ $ / $ $ / $ $ / $	Dec. 31, 2018 USD ($) $ / $ $ / € $ / ¥ $ / £ $ / $ $ / $ $ / $
Canadian dollar (CAD) | Unsecured Term Loans
Debt Instrument [Line Items]
Exchange rate | $ / $	0.76	0.73
Digital Realty Trust, L.P.
Debt Instrument [Line Items]
Long-term debt, gross	$ 10,999,905
Digital Realty Trust, L.P. | Global revolving credit facilities
Debt Instrument [Line Items]
Long-term debt, gross	$ 1,846,026	$ 1,663,156
Interest rate basis spread	0.90%
Commitment fee percentage	0.20%
Letters of credit issued	$ 44,300
Digital Realty Trust, L.P. | Yen Revolving Credit Facility
Debt Instrument [Line Items]
Long-term debt, gross	$ 193,480	$ 134,564
Weighted-average interest rate	0.50%	0.50%
Commitment fee percentage	0.50%
Digital Realty Trust, L.P. | Unsecured Term Loans
Debt Instrument [Line Items]
Long-term debt, gross	$ 799,533
Digital Realty Trust, L.P. | Unsecured Term Loans | Interest Rate Swap
Debt Instrument [Line Items]
Weighted-average interest rate	2.38%	2.66%
Digital Realty Trust, L.P. | 2023 and 2024 Term Loan | Unsecured Term Loans
Debt Instrument [Line Items]
Long-term debt, gross	$ 799,533	$ 808,120
Weighted-average interest rate	2.72%	3.17%
Interest rate basis spread	1.00%
Digital Realty Trust, L.P. | Floating Rate | Global revolving credit facilities
Debt Instrument [Line Items]
Long-term debt, gross	$ 1,652,546	$ 1,528,592
Weighted-average interest rate	2.36%	2.57%
Interest rate basis spread	0.90%
Digital Realty Trust, L.P. | Floating Rate | Global revolving credit facilities | Interest Rate Swap
Debt Instrument [Line Items]
Weighted-average interest rate	2.05%	2.20%
Digital Realty Trust, L.P. | Floating Rate | Revolving Credit Facility
Debt Instrument [Line Items]
Long-term debt, gross	$ 1,846,026	$ 1,663,156
Weighted-average interest rate	2.16%	2.41%
Digital Realty Trust, L.P. | U.S. dollar ($) | Unsecured Term Loans | Interest Rate Swap
Debt Instrument [Line Items]
Weighted-average interest rate	2.44%	2.44%
Digital Realty Trust, L.P. | U.S. dollar ($) | 2023 and 2024 Term Loan | Unsecured Term Loans
Debt Instrument [Line Items]
Long-term debt, gross	$ 300,000	$ 300,000
Weighted-average interest rate	3.03%	3.46%
Digital Realty Trust, L.P. | U.S. dollar ($) | Floating Rate | Global revolving credit facilities
Debt Instrument [Line Items]
Long-term debt, gross	$ 960,000	$ 890,000
Weighted-average interest rate	3.00%	3.37%
Digital Realty Trust, L.P. | U.S. dollar ($) | Floating Rate | Global revolving credit facilities | Interest Rate Swap
Debt Instrument [Line Items]
Long-term debt, gross	$ 306,900	$ 306,900
Weighted-average interest rate	2.79%	2.99%
Digital Realty Trust, L.P. | British pound sterling (£) | Global revolving credit facilities
Debt Instrument [Line Items]
Exchange rate | $ / £	1.23	1.28
Digital Realty Trust, L.P. | British pound sterling (£) | Unsecured Term Loans
Debt Instrument [Line Items]
Exchange rate | $ / £	1.23	1.28
Digital Realty Trust, L.P. | British pound sterling (£) | Floating Rate | Global revolving credit facilities
Debt Instrument [Line Items]
Long-term debt, gross	$ 44,240	$ 8,290
Weighted-average interest rate	1.61%	1.61%
Digital Realty Trust, L.P. | Euro (€) | Global revolving credit facilities
Debt Instrument [Line Items]
Exchange rate | $ / €	1.09	1.15
Digital Realty Trust, L.P. | Euro (€) | Floating Rate | Global revolving credit facilities
Debt Instrument [Line Items]
Long-term debt, gross	$ 438,685	$ 451,800
Weighted-average interest rate	0.90%	0.90%
Digital Realty Trust, L.P. | Australian dollar (AUD) | Global revolving credit facilities
Debt Instrument [Line Items]
Exchange rate | $ / $	0.68	0.70
Digital Realty Trust, L.P. | Australian dollar (AUD) | Unsecured Term Loans
Debt Instrument [Line Items]
Exchange rate | $ / $	0.68	0.70
Digital Realty Trust, L.P. | Australian dollar (AUD) | 2023 and 2024 Term Loan | Unsecured Term Loans
Debt Instrument [Line Items]
Long-term debt, gross	$ 195,952	$ 204,632
Weighted-average interest rate	2.06%	2.94%
Digital Realty Trust, L.P. | Australian dollar (AUD) | Floating Rate | Global revolving credit facilities
Debt Instrument [Line Items]
Long-term debt, gross	$ 31,725	$ 27,632
Weighted-average interest rate	1.94%	2.82%
Digital Realty Trust, L.P. | Hong Kong dollar (HKD) | Global revolving credit facilities
Debt Instrument [Line Items]
Exchange rate | $ / $	0.13	0.13
Digital Realty Trust, L.P. | Hong Kong dollar (HKD) | Unsecured Term Loans
Debt Instrument [Line Items]
Exchange rate | $ / $	0.13	0.13
Digital Realty Trust, L.P. | Hong Kong dollar (HKD) | 2023 and 2024 Term Loan | Unsecured Term Loans
Debt Instrument [Line Items]
Long-term debt, gross	$ 85,115	$ 85,188
Weighted-average interest rate	2.99%	3.32%
Digital Realty Trust, L.P. | Hong Kong dollar (HKD) | Floating Rate | Global revolving credit facilities
Debt Instrument [Line Items]
Long-term debt, gross	$ 11,851	$ 8,797
Weighted-average interest rate	2.85%	3.14%
Digital Realty Trust, L.P. | Japanese yen (JPY) | Global revolving credit facilities
Debt Instrument [Line Items]
Exchange rate | $ / ¥	0.01	0.01
Digital Realty Trust, L.P. | Japanese yen (JPY) | Floating Rate | Global revolving credit facilities
Debt Instrument [Line Items]
Long-term debt, gross	$ 0	$ 4,105
Weighted-average interest rate	0.00%	0.90%
Digital Realty Trust, L.P. | Singapore dollar (SGD) | Global revolving credit facilities
Debt Instrument [Line Items]
Exchange rate | $ / $	0.72	0.73
Digital Realty Trust, L.P. | Singapore dollar (SGD) | Unsecured Term Loans
Debt Instrument [Line Items]
Exchange rate | $ / $	0.72	0.73
Digital Realty Trust, L.P. | Singapore dollar (SGD) | 2023 and 2024 Term Loan | Unsecured Term Loans
Debt Instrument [Line Items]
Long-term debt, gross	$ 144,069	$ 146,080
Weighted-average interest rate	2.68%	2.76%
Digital Realty Trust, L.P. | Singapore dollar (SGD) | Floating Rate | Global revolving credit facilities
Debt Instrument [Line Items]
Long-term debt, gross	$ 75,182	$ 77,112
Weighted-average interest rate	2.55%	2.79%
Digital Realty Trust, L.P. | Canadian dollar (CAD) | Global revolving credit facilities
Debt Instrument [Line Items]
Exchange rate | $ / $	0.76	0.73
Digital Realty Trust, L.P. | Canadian dollar (CAD) | Unsecured Term Loans
Debt Instrument [Line Items]
Exchange rate | $ / $	0.76	0.73
Digital Realty Trust, L.P. | Canadian dollar (CAD) | Unsecured Term Loans | Interest Rate Swap
Debt Instrument [Line Items]
Weighted-average interest rate	1.78%	1.78%
Digital Realty Trust, L.P. | Canadian dollar (CAD) | 2023 and 2024 Term Loan | Unsecured Term Loans
Debt Instrument [Line Items]
Long-term debt, gross	$ 74,397	$ 72,220
Weighted-average interest rate	2.95%	3.24%
Digital Realty Trust, L.P. | Canadian dollar (CAD) | Floating Rate | Global revolving credit facilities
Debt Instrument [Line Items]
Long-term debt, gross	$ 90,863	$ 60,856
Weighted-average interest rate	2.85%	3.16%

XML

Income per Share (Schedule of Antidilutive Securities Excluded from Computation of Earnings per Share) (Details) - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potentially dilutive securities (shares)	17,852,252	19,036,184	18,872,565	19,993,742
Weighted average of Operating Partnership common units not owned by Digital Realty Trust, Inc.
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potentially dilutive securities (shares)	8,953,826	8,170,912	9,080,816	8,268,382
Potentially dilutive Series C Cumulative Redeemable Perpetual Preferred Stock
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potentially dilutive securities (shares)	1,614,005	1,727,724	1,678,511	1,864,489
Potentially dilutive Series G Cumulative Redeemable Preferred Stock
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potentially dilutive securities (shares)	2,001,277	2,142,282	2,081,260	2,311,864
Potentially dilutive Series H Cumulative Redeemable Preferred Stock
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potentially dilutive securities (shares)	0	3,139,291	1,053,127	3,387,795
Potentially dilutive Series I Cumulative Redeemable Preferred Stock
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potentially dilutive securities (shares)	2,003,619	2,144,789	2,083,696	2,314,569
Potentially dilutive Series J Cumulative Redeemable Preferred Stock
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potentially dilutive securities (shares)	1,598,556	1,711,186	1,662,444	1,846,643
Potentially dilutive Series K Cumulative Redeemable Preferred Stock
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potentially dilutive securities (shares)	1,680,969	0	1,232,711	0

XML

Organization and Description of Business (Tables)

9 Months Ended

Sep. 30, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of Real Estate Properties

A summary of our data center portfolio as of September 30, 2019 and December 31, 2018 is as follows:

	Data Centers
	As of September 30, 2019				As of December 31, 2018
Region	Operating	Held for Sale and Contribution (1)	Unconsolidated Joint Ventures	Total	Operating	Unconsolidated Joint Ventures	Total
United States	119	14	14	147	131	14	145
Europe	41	—	—	41	38	—	38
Latin America	—	—	19	19	16	—	16
Asia	3	—	5	8	3	4	7
Australia	5	—	—	5	5	—	5
Canada	2	1	—	3	3	—	3
Total	170	15	38	223	196	18	214

(1)

Includes 10 Powered Base Building® properties, which comprise 12 data centers, that are held for sale to a third party and three data centers that are held for contribution to a joint venture as of September 30, 2019 (see Note 3).

XML

Equity and Accumulated Other Comprehensive Loss, Net

9 Months Ended

Sep. 30, 2019

Equity [Abstract]

Equity and Accumulated Other Comprehensive Loss, Net

Equity and Accumulated Other Comprehensive Loss, Net

(a) Equity Distribution Agreements

On January 4, 2019, Digital Realty Trust, Inc. and Digital Realty Trust, L.P. entered into equity distribution agreements, which we refer to as the 2019 Equity Distribution Agreements, with each of Merrill Lynch, Pierce, Fenner & Smith Incorporated, Barclays Capital Inc., BTIG, LLC, Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., J.P. Morgan Securities LLC, Mizuho Securities USA LLC, Morgan Stanley & Co. LLC, MUFG Securities Americas Inc., PNC Capital Markets LLC, Raymond James & Associates, Inc., RBC Capital Markets, LLC, Scotia Capital (USA) Inc., SMBC Nikko Securities America, Inc., SunTrust Robinson Humphrey, Inc., TD Securities (USA) LLC, and Wells Fargo Securities, LLC, or the Agents, under which it can issue and sell shares of its common stock having an aggregate offering price of up to $1.0 billion from time to time through, at its discretion, any of the Agents as its sales agents or as principals. Sales may also be made on a forward basis pursuant to separate forward sale agreements. The sales of common stock made under the 2019 Equity Distribution Agreements will be made in “at the market” offerings as defined in Rule 415 of the Securities Act. No sales were made under the program during the nine months ended September 30, 2019.

(b) Forward Equity Sale

On September 27, 2018, Digital Realty Trust, Inc. completed an underwritten public offering of 9,775,000 shares of its common stock (including 1,275,000 shares from the exercise in full of the underwriters' option to purchase additional shares), all of which were offered in connection with forward sale agreements it entered into with certain financial institutions acting as forward purchasers. The forward purchasers borrowed and sold an aggregate of 9,775,000 shares of Digital Realty Trust, Inc.’s common stock in the public offering. Digital Realty Trust, Inc. did not receive any proceeds from the sale of our common stock by the forward purchasers in the public offering. The Company expects to receive net proceeds of approximately $1.1 billion (net of fees and estimated expenses) upon full physical settlement of the forward sale agreements, which was anticipated to be no later than September 27, 2019. On September 17, 2019, the Company amended the forward sale agreements to extend the maturity date of such forward sales agreements from September 27, 2019 to September 25, 2020.

(c) 5.850% Series K Cumulative Redeemable Preferred Stock

On March 13, 2019, Digital Realty Trust, Inc. issued 8,000,000 shares of its 5.850% series K cumulative redeemable preferred stock, or the series K preferred stock, for net proceeds of approximately $193.7 million. In addition, on March 15, 2019, Digital Realty Trust, Inc. issued an additional 400,000 shares of series K preferred stock pursuant to a partial exercise of the underwriters’ over-allotment option for net proceeds of approximately $9.7 million. Dividends are cumulative on the series K preferred stock from the date of original issuance in the amount of $1.46250 per share each year, which is equivalent to 5.850% of the $25.00 liquidation preference per share. Dividends on the series K preferred stock are payable quarterly in arrears. The first dividend paid on the series K preferred stock on June 28, 2019 was a pro rata dividend from and including the original issue date to and including June 30, 2019 in the amount of $0.43875 per share. The series K preferred stock does not have a stated maturity date and is not subject to any sinking fund or mandatory redemption provisions. Upon liquidation, dissolution or winding up, the series K preferred stock will rank senior to Digital Realty Trust, Inc. common stock and rank on parity with Digital Realty Trust, Inc.’s series C cumulative redeemable perpetual preferred stock, series G cumulative redeemable preferred stock, series I cumulative redeemable preferred stock, series J cumulative redeemable preferred stock and series L cumulative redeemable preferred stock with respect to the payment of distributions and other amounts. Digital Realty Trust, Inc. is not allowed to redeem the series K preferred stock before March 13, 2024, except in limited circumstances to preserve its status as a REIT. On or after March 13, 2024, Digital Realty Trust, Inc. may, at its option, redeem the series K preferred stock, in whole or in part, at any time or from time to time, for cash at a redemption price of $25.00 per share, plus all accrued and unpaid dividends on such series K preferred stock up to but excluding the redemption date. Holders of the series K preferred stock generally have no voting rights except for limited voting rights if Digital Realty Trust, Inc. fails to pay dividends for six or more quarterly periods (whether or not consecutive) and in certain other circumstances. Upon the occurrence of specified changes of control, as a result of which neither Digital Realty Trust, Inc.’s common stock nor the common securities of the acquiring or surviving entity (or American Depositary

Receipts representing such securities) is listed on the New York Stock Exchange, the NYSE MKT, LLC or the NASDAQ Stock Market or listed or quoted on a successor exchange or quotation system, each holder of series K preferred stock will have the right (unless, prior to the change of control conversion date specified in the Articles Supplementary governing the series K preferred stock, Digital Realty Trust, Inc. has provided or provides notice of its election to redeem the series K preferred stock) to convert some or all of the series K preferred stock held by it into a number of shares of Digital Realty Trust, Inc.’s common stock per share of series K preferred stock to be converted equal to the lesser of:

• the quotient obtained by dividing (i) the sum of (x) the $25.00 liquidation preference plus (y) the amount of any accrued and unpaid dividends to, but not including, the change of control conversion date (unless the change of control conversion date is after a record date for a Series K Preferred Stock dividend payment and prior to the corresponding Series K Preferred Stock dividend payment date, in which case no additional amount for such accrued and unpaid dividend will be included in this sum) by (ii) the common stock price specified in the Articles Supplementary governing the series K preferred stock; and

• 0.43611 (i.e., the share cap), subject to certain adjustments;

subject, in each case, to provisions for the receipt of alternative consideration as described in the Articles Supplementary governing the series K preferred stock. Except in connection with specified change of control transactions, the series K preferred stock is not convertible into or exchangeable for any other property or securities of Digital Realty Trust, Inc.

(d) 5.200% Series L Cumulative Redeemable Preferred Stock

On October 10, 2019, Digital Realty Trust, Inc. issued 13,800,000 shares of its 5.200% series L cumulative redeemable preferred stock, or the series L preferred stock, for net proceeds of approximately $334.6 million. Dividends are cumulative on the series L preferred stock from the date of original issuance in the amount of $1.30000 per share each year, which is equivalent to 5.200% of the $25.00 liquidation preference per share. Dividends on the series L preferred stock are payable quarterly in arrears. The first dividend payable on the series L preferred stock on December 31, 2019 will be a pro rata dividend from and including the original issue date to and including December 31, 2019 in the amount of $0.29250 per share. The series L preferred stock does not have a stated maturity date and is not subject to any sinking fund or mandatory redemption provisions. Upon liquidation, dissolution or winding up, the series L preferred stock will rank senior to Digital Realty Trust, Inc. common stock and rank on parity with Digital Realty Trust, Inc.’s series C cumulative redeemable perpetual preferred stock, series G cumulative redeemable preferred stock, series I cumulative redeemable preferred stock, series J cumulative redeemable preferred stock and series K cumulative redeemable preferred stock with respect to the payment of distributions and other amounts. Digital Realty Trust, Inc. is not allowed to redeem the series L preferred stock before October 10, 2024, except in limited circumstances to preserve its status as a REIT. On or after October 10, 2024, Digital Realty Trust, Inc. may, at its option, redeem the series L preferred stock, in whole or in part, at any time or from time to time, for cash at a redemption price of $25.00 per share, plus all accrued and unpaid dividends on such series L preferred stock up to but excluding the redemption date. Holders of the series L preferred stock generally have no voting rights except for limited voting rights if Digital Realty Trust, Inc. fails to pay dividends for six or more quarterly periods (whether or not consecutive) and in certain other circumstances. Upon the occurrence of specified changes of control, as a result of which neither Digital Realty Trust, Inc.’s common stock nor the common securities of the acquiring or surviving entity (or American Depositary Receipts representing such securities) is listed on the New York Stock Exchange, the NYSE MKT, LLC or the NASDAQ Stock Market or listed or quoted on a successor exchange or quotation system, each holder of series L preferred stock will have the right (unless, prior to the change of control conversion date specified in the Articles Supplementary governing the series L preferred stock, Digital Realty Trust, Inc. has provided or provides notice of its election to redeem the series L preferred stock) to convert some or all of the series L preferred stock held by it into a number of shares of Digital Realty Trust, Inc.’s common stock per share of series L preferred stock to be converted equal to the lesser of:

• the quotient obtained by dividing (i) the sum of (x) the $25.00 liquidation preference plus (y) the amount of any accrued and unpaid dividends to, but not including, the change of control conversion date (unless the change of control conversion date is after a record date for a Series L Preferred Stock dividend payment and prior

to the corresponding Series L Preferred Stock dividend payment date, in which case no additional amount for such accrued and unpaid dividend will be included in this sum) by (ii) the common stock price specified in the Articles Supplementary governing the series L preferred stock; and

• 0.38518 (i.e., the share cap), subject to certain adjustments;

subject, in each case, to provisions for the receipt of alternative consideration as described in the Articles Supplementary governing the series L preferred stock. Except in connection with specified change of control transactions, the series L preferred stock is not convertible into or exchangeable for any other property or securities of Digital Realty Trust, Inc.

(e) Noncontrolling Interests in Operating Partnership

Noncontrolling interests in the Operating Partnership relate to the interests that are not owned by Digital Realty Trust, Inc. The following table shows the ownership interests in the Operating Partnership as of September 30, 2019 and December 31, 2018:

	September 30, 2019			December 31, 2018
	Number of units	Percentage of total		Number of units	Percentage of total
Digital Realty Trust, Inc.	208,583,244	95.8	%	206,425,656	95.1	%
Noncontrolling interests consist of:
Common units held by third parties	4,762,394	2.2	%	6,297,272	2.9	%
Issuance of units in connection with Ascenty Acquisition	2,338,874	1.1	%	2,338,874	1.1	%
Incentive units held by employees and directors (see Note 14)	2,042,713	0.9	%	1,944,738	0.9	%
	217,727,225	100.0	%	217,006,540	100.0	%

Limited partners have the right to require the Operating Partnership to redeem part or all of their common units for cash based on the fair market value of an equivalent number of shares of Digital Realty Trust, Inc. common stock at the time of redemption. Alternatively, Digital Realty Trust, Inc. may elect to acquire those common units in exchange for shares of Digital Realty Trust, Inc. common stock on a one-for-one basis, subject to adjustment in the event of stock splits, stock dividends, issuance of stock rights, specified extraordinary distributions and similar events. Pursuant to authoritative accounting guidance, Digital Realty Trust, Inc. evaluated whether it controls the actions or events necessary to issue the maximum number of shares that could be required to be delivered under the share settlement of the noncontrolling Operating Partnership common and incentive units. Based on the results of this analysis, we concluded that the common units and incentive units of the Operating Partnership met the criteria to be classified within equity, except for certain common units issued to certain former DFT Operating Partnership unitholders in the DFT Merger, which are subject to certain restrictions and, accordingly, are not presented as permanent equity in the condensed consolidated balance sheet.

In connection with the initial public offering of DFT in 2007, DFT, the DFT Operating Partnership and certain DFT Operating Partnership unitholders entered into a tax protection agreement to assist such unitholders in deferring certain U.S. federal income tax liabilities that may have otherwise resulted from the contribution transactions undertaken in connection with the initial public offering and the ownership of interests in the DFT Operating Partnership and to set forth certain agreements with respect to other tax matters. In connection with the DFT Merger, certain DFT Operating Partnership unitholders entered into a new tax protection agreement with Digital Realty Trust, Inc. and the Operating Partnership that replaced and superseded the DFT tax protection agreement, effective as of the closing of the DFT Merger. Pursuant to the new tax protection agreement, such DFT Operating Partnership unitholders entered into a guarantee of certain debt of a subsidiary of the Operating Partnership. The Operating

Partnership must offer such DFT Operating Partnership unitholders a new guarantee opportunity in the event any guaranteed debt is repaid prior to March 1, 2023. If the Operating Partnership fails to offer the guarantee opportunity or to allocate guaranteed debt to any such DFT Operating Partnership unitholder as required under the new tax

protection agreement, the Operating Partnership generally would be required to indemnify each such DFT Operating Partnership unitholder for the tax liability resulting from such failure, as determined under the new tax protection agreement.

The redemption value of the noncontrolling Operating Partnership common units and the vested incentive units was approximately $1,121.8 million and $1,076.9 million based on the closing market price of Digital Realty Trust, Inc. common stock on September 30, 2019 and December 31, 2018, respectively.

The following table shows activity for the noncontrolling interests in the Operating Partnership for the nine months ended September 30, 2019:

	Common Units		Incentive Units		Total
As of December 31, 2018	8,636,146		1,944,738		10,580,884
Redemption of common units for shares of Digital Realty Trust, Inc. common stock (1)	(1,534,878	)	—		(1,534,878	)
Conversion of incentive units held by employees and directors for shares of Digital Realty Trust, Inc. common stock (1)	—		(306,814	)	(306,814	)
Incentive units issued upon achievement of market performance condition	—		308,308		308,308
Grant of incentive units to employees and directors	—		119,397		119,397
Cancellation / forfeitures of incentive units held by employees and directors	—		(22,916	)	(22,916	)
As of September 30, 2019	7,101,268		2,042,713		9,143,981

(1) Redemption of common units / conversion of incentive units was recorded as a reduction to noncontrolling interests in the Operating Partnership and an increase to common stock and additional paid-in capital based on the book value per unit in the accompanying condensed consolidated balance sheet of Digital Realty Trust, Inc.

(f) Dividends

We have declared and paid the following dividends on our common and preferred stock for the nine months ended September 30, 2019 (in thousands, except per share data): 

Date dividend declared	Dividend payment date	Series C Preferred Stock		Series G Preferred Stock		Series H Preferred Stock			Series I Preferred Stock		Series J Preferred Stock		Series K Preferred Stock			Common Stock
February 21, 2019	March 29, 2019	$	3,333	$	3,672	$	6,730		$	3,969	$	2,625	$	—		$	224,802
May 13, 2019	June 28, 2019	3,333		3,672		—		(1)	3,969		2,625		3,686		(2)	224,895
August 13, 2019	September 30, 2019	3,333		3,672		—			3,969		2,625		3,071			225,188
		$	9,999	$	11,016	$	6,730		$	11,907	$	7,875	$	6,757		$	674,885
Annual rate of dividend per share		$	1.65625	$	1.46875	$	1.84375		$	1.58750	$	1.31250	$	1.46250		$	4.32000

(1) Redeemed on April 1, 2019 for $25.00 per share, or a redemption price of $25.00 per share, plus accrued and unpaid dividends up to but not including the redemption date. In connection with the redemption, the previously incurred offering costs of approximately $11.8 million were recorded as a reduction to net income available to common stockholders.

(2) Represents a pro rata dividend from and including the original issue date to and including June 30, 2019.

Distributions out of Digital Realty Trust, Inc.’s current or accumulated earnings and profits are generally classified as dividends whereas distributions in excess of its current and accumulated earnings and profits, to the extent of a stockholder’s U.S. federal income tax basis in Digital Realty Trust, Inc.’s stock, are generally classified as a return of capital. Distributions in excess of a stockholder’s U.S. federal income tax basis in Digital Realty Trust, Inc.’s stock are generally characterized as capital gain. Cash provided by operating activities has generally been sufficient to fund all distributions, however, in the future we may also need to utilize borrowings under the global revolving credit facility to fund all or a portion of distributions.

(g) Accumulated Other Comprehensive Loss, Net

The accumulated balances for each item within other comprehensive income (loss), net are as follows (in thousands):

	Foreign currency translation adjustments			Cash flow hedge adjustments			Foreign currency net investment hedge adjustments		Accumulated other comprehensive  income (loss), net
Balance as of December 31, 2018	$	(158,649	)	$	17,264		$	25,738	$	(115,647	)
Net current period change	42,038			(10,901		)	—		31,137
Reclassification of foreign currency translation adjustment due to deconsolidation of Ascenty	21,687			—			—		21,687
Reclassification to interest expense from interest rate swaps	—			(5,802		)	—		(5,802		)
Balance as of September 30, 2019	$	(94,924	)	$	561		$	25,738	$	(68,625	)

XML

Fair Value of Financial Instruments

9 Months Ended

Sep. 30, 2019

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

Fair Value of Financial Instruments

We disclose fair value information about all financial instruments, whether or not recognized in the condensed consolidated balance sheets, for which it is practicable to estimate fair value. Current accounting guidance requires the Company to disclose fair value information about all financial instruments, whether or not recognized in the balance sheets, for which it is practicable to estimate fair value.

The Company’s disclosures of estimated fair value of financial instruments at September 30, 2019 and December 31, 2018 were determined using available market information and appropriate valuation methods. Considerable judgment is necessary to interpret market data and develop estimated fair value. The use of different market assumptions or estimation methods may have a material effect on the estimated fair value amounts.

The carrying amounts for cash and cash equivalents, restricted cash, accounts and other receivables, accounts payable and other accrued liabilities, accrued dividends and distributions, security deposits and prepaid rents approximate fair value because of the short-term nature of these instruments. As described in Note 15 "Derivative Instruments", the interest rate swaps are recorded at fair value.

We calculate the fair value of our secured debt, unsecured term loan and unsecured senior notes based on currently available market rates assuming the loans are outstanding through maturity and considering the collateral and other loan terms. In determining the current market rate for fixed rate debt, a market spread is added to the quoted yields on federal government treasury securities with similar maturity dates to our debt. The carrying value of our global revolving credit facilities approximate fair value, due to the variability of interest rates.

As of September 30, 2019 and December 31, 2018, the aggregate estimated fair value and carrying value of our global revolving credit facilities, unsecured term loans, unsecured senior notes and mortgage loans were as follows (in thousands):

	Categorization under the fair value hierarchy	As of September 30, 2019				As of December 31, 2018
		Estimated Fair Value		Carrying Value		Estimated Fair Value		Carrying Value
Global revolving credit facilities (1)(5)	Level 2	$	1,846,026	$	1,846,026	$	1,663,156	$	1,663,156
Unsecured term loans (2)(6)	Level 2	799,533		799,533		1,183,121		1,183,121
Unsecured senior notes (3)(4)(7)	Level 2	8,923,041		8,237,864		7,684,368		7,629,679
Secured debt (3)(8)	Level 2	105,529		105,377		706,086		705,924
		$	11,674,129	$	10,988,800	$	11,236,731	$	11,181,880

(1) The carrying value of our global revolving credit facilities approximates estimated fair value, due to the variability of interest rates and the stability of our credit ratings.

(2) The carrying value of our unsecured term loans approximates estimated fair value, due to the variability of interest rates and the stability of our credit ratings.

(3) Valuations for our unsecured senior notes and secured debt are determined based on the expected future payments discounted at risk-adjusted rates. The 3.400% 2020 Notes, 2021 Notes, 3.950% 2022 Notes, 3.625% 2022 Notes, 4.750% 2023 Notes, 2.750% 2023 Notes, 2.625% 2024 Notes, 2.750% 2024 Notes, 4.750% 2025 Notes, 4.250% 2025 Notes, 2026 Notes, 2027 Notes, 2028 Notes, 3.600% 2029 Notes, 3.300% 2029 Notes and 2030 Notes are valued based on quoted market prices.

(4) The carrying value of the 3.400% 2020 Notes, 2021 Notes, 3.625% 2022 Notes, 3.950% 2022 Notes, 4.750% 2023 Notes, 2.750% 2023 Notes, 2.625% 2024 Notes, 2.750% 2024 Notes, 4.250% 2025 Notes, 2026 Notes, 2027 Notes, 2028 Notes, 3.600% 2029 Notes, 3.300% 2029 Notes and 2030 Notes are net of discount of $11.2 million and $19.9 million in the aggregate as of September 30, 2019 and December 31, 2018, respectively.

(5) The estimated fair value and carrying value are exclusive of deferred financing costs of $12.5 million and $15.4 million as of September 30, 2019 and December 31, 2018, respectively.

(6) The estimated fair value and carrying value are exclusive of deferred financing costs of $3.3 million and $4.2 million as of September 30, 2019 and December 31, 2018, respectively.

(7) The estimated fair value and carrying value are exclusive of deferred financing costs of $48.7 million and $40.6 million as of September 30, 2019 and December 31, 2018, respectively.

(8)

The estimated fair value and carrying value are exclusive of deferred financing costs of $0.2 million and $20.2 million as of September 30, 2019 and December 31, 2018, respectively.

XML

Leases

9 Months Ended

Sep. 30, 2019

Leases [Abstract]

Leases

Leases

We lease space at certain of our data centers from third parties, primarily data centers acquired as part of the Telx Acquisition and European Portfolio Acquisition, and certain equipment under noncancelable lease agreements. Leases for our data centers expire at various dates through 2074. As of September 30, 2019, certain of our data centers, primarily in Europe and Singapore, are subject to ground leases. The termination dates of these ground leases range from 2024 to 2982. In addition, our corporate headquarters along with several regional office locations are subject to leases with termination dates ranging from 2021 to 2027.

The leases may contain renewal and/or early termination options that are not reasonably certain of exercise as of September 30, 2019. Also, the leases generally require us to make fixed rental payments that increase at defined intervals during the term of the lease plus pay our share of common area, real estate and utility expenses as incurred. The leases neither contain residual value guarantees nor impose material restrictions or covenants on us. Further, the leases have been classified and accounted for as either operating or finance leases.

Supplemental balance sheet information related to leases as of September 30, 2019 was as follows (in thousands):

	Balance Sheet Classification	Balance as of September 30, 2019
Assets:
Operating lease assets	Operating lease right-of-use assets, net (1)	$	634,085
Finance lease assets	Buildings and improvements, net (2)	124,477
Total leased assets		$	758,562
Liabilities:
Operating lease liabilities	Operating lease liabilities	$	699,381
Finance lease liabilities	Accounts payable and other accrued liabilities	168,266
Total lease liabilities		$	867,647

(1) Net of accumulated depreciation and amortization of $37.7 million as of September 30, 2019.

(2) Net of accumulated depreciation and amortization of $3.4 million as of September 30, 2019.

The components of lease expense for the three and nine months ended September 30, 2019 were as follows (in thousands):

Lease cost	Income Statement Classification	Three Months Ended September 30, 2019		Nine Months Ended September 30, 2019
Finance lease cost:
Amortization of right-of-use    assets	Depreciation and amortization	$	1,264	$	3,771
Interest on lease liabilities	Interest expense	1,435		4,566
Operating lease cost	Rental property operating and maintenance / General and administrative	22,633		68,503
Total lease cost		$	25,332	$	76,840

As of September 30, 2019, the weighted average remaining lease term for our operating leases and finance leases was 12 years and 24 years, respectively. We do not include renewal options in the lease term for calculating the lease liability unless we are reasonably certain we will exercise the option or the lessor has the sole ability to exercise the option. The weighted average incremental borrowing rate was 4.1% for operating leases and 3.5% for finance leases at September 30, 2019. We assigned a collateralized interest rate to each lease based on the term of the lease and the currency in which the lease is denominated.

The minimum commitment under operating leases, excluding fully prepaid ground leases, as of December 31, 2018 was as follows (in thousands):

2019	$	84,712
2020	87,396
2021	86,212
2022	81,976
2023	80,707
Thereafter	539,047
Total	$	960,050

Future minimum lease payments and their present value for property under capital lease obligations as of December 31, 2018, are as follows (in thousands):  

2019	$	11,657
2020	13,108
2021	13,207
2022	13,706
2023	14,219
Thereafter	285,774
	351,671
Less amount representing interest	(137,827		)
Present value	$	213,844

Maturities of lease liabilities as of September 30, 2019 were as follows (in thousands):

	Operating lease liabilities			Finance lease liabilities
Remainder of 2019	$	21,135		$	2,075
2020	85,013			8,343
2021	83,824			8,389
2022	79,522			8,829
2023	78,265			9,262
Thereafter	546,530			221,854
Total undiscounted future cash flows	894,289			258,752
Less: Imputed interest	(194,908		)	(90,486		)
Present value of undiscounted future cash flows	$	699,381		$	168,266

Lessor accounting

We recognized revenue from our lease agreements aggregating $3.0 billion for the year ended December 31, 2018. This revenue consisted primarily of rental revenues and tenant recoveries for the year ended December 31, 2018, aggregating $2.1 billion and $0.6 billion, respectively.

Prior to January 1, 2019, we recognized rental revenue from our operating leases on a straight-line basis over the respective lease terms. We commenced recognition of rental revenue at the date the property was ready for its intended use and the tenant took possession of, or controlled the physical use of, the property.

Prior to January 1, 2019, we considered tenant recoveries related to payments of real estate taxes, insurance, utilities, repairs and maintenance, common area expenses, and other operating expenses as lease components. We recognized these tenant recoveries as revenue when services were rendered in an amount equal to the related operating expenses incurred that were recoverable under the terms of the applicable lease and classified as tenant reimbursements revenue.

Effective January 1, 2019

Under the new lease ASUs, each lease agreement is evaluated to identify the lease and nonlease components at lease inception. The total consideration in the lease agreement is allocated to the lease and nonlease components based on their relative stand-alone selling prices. The new lease ASUs govern the recognition of revenue for lease components, and revenue related to nonlease components is subject to the revenue recognition ASU. Tenant recoveries for utilities, repairs and maintenance, and common area expenses are considered nonlease components. If a lessee makes payments for taxes and insurance directly to a third party on behalf of a lessor, lessors are required to exclude them from variable payments and from recognition in the lessors’ income statements. Otherwise, tenant recoveries for taxes and insurance are classified as additional lease revenue recognized by the lessor on a gross basis in their income statements.

On January 1, 2019, we adopted the practical expedient that allowed us to not separate expenses reimbursed by our customers (“rental recoveries”) from the associated rental revenue if certain criteria were met. We assessed these criteria and concluded that the timing and pattern of transfer for rental revenue and the associated rental recoveries are the same and as our leases qualify as operating leases, we accounted for and presented rental revenue and rental recoveries as a single component under rental and other services in our condensed consolidated income statements for the three and nine months ended September 30, 2019.

Costs to execute leases

The new lease ASUs require that lessors and lessees capitalize, as initial direct costs, only incremental costs of a lease that would not have been incurred if the lease had not been obtained. Effective January 1, 2019, costs that we incur to negotiate or arrange a lease regardless of its outcome, such as fixed employee compensation, tax, or legal advice to negotiate lease terms, and costs related to advertising or soliciting potential tenants will be expensed as incurred.

We estimate that approximately $37 million of initial direct costs that were capitalized in 2018 would have been expensed if the new lease ASUs that are effective on January 1, 2019 had been in effect during 2018. Future expenses as a result of the change in the accounting for initial direct costs will depend on the future events that are not yet known; therefore, the ultimate impact on initial direct leasing costs from the adoption of the lease ASUs might differ from our estimate.

Under the package of practical expedients that we elected on January 1, 2019, we were not required to reassess whether initial direct leasing costs capitalized prior to the adoption of the new lease ASUs in connection with the leases that commenced prior to January 1, 2019, qualify for capitalization under the new lease ASUs. Therefore, we continue to amortize these initial direct leasing costs.

We lease our operating properties to customers under agreements that are classified as operating leases. We recognize the total minimum lease payments provided for under the leases on a straight-line basis over the lease term if we determine that it is probable that substantially all of the lease payments will be collected over the lease term. Otherwise, rental revenue is recognized based on the amount contractually due. Generally, under the terms of our leases, the majority of our rental expenses, including common area maintenance, real estate taxes and insurance, are recovered from our customers. We record amounts reimbursed by customers in the period that the applicable expenses are incurred, which is generally ratably throughout the term of the lease. The reimbursements are recognized in rental and other services revenue in the condensed consolidated income statements as we are the primary obligor with respect to purchasing and selecting goods and services from third-party vendors and bearing the associated credit risk. The following table summarizes the minimum lease payments due from our customers on leases with lease periods greater than one year for space in our operating properties, prestabilized development properties and leases of land subject to ground leases at September 30, 2019 (in thousands):    

	Operating leases
Remainder of 2019	$	625,824
2020	2,220,209
2021	1,852,760
2022	1,527,560
2023	1,328,487
Thereafter	5,158,479
Total	$	12,713,319

These amounts do not reflect future rental revenues from the renewal or replacement of existing leases unless we are reasonably certain we will exercise the option or the lessor has the sole ability to exercise the option. We exclude reimbursements of operating expenses and rental increases that are not fixed.

Leases

Leases

We lease space at certain of our data centers from third parties, primarily data centers acquired as part of the Telx Acquisition and European Portfolio Acquisition, and certain equipment under noncancelable lease agreements. Leases for our data centers expire at various dates through 2074. As of September 30, 2019, certain of our data centers, primarily in Europe and Singapore, are subject to ground leases. The termination dates of these ground leases range from 2024 to 2982. In addition, our corporate headquarters along with several regional office locations are subject to leases with termination dates ranging from 2021 to 2027.

The leases may contain renewal and/or early termination options that are not reasonably certain of exercise as of September 30, 2019. Also, the leases generally require us to make fixed rental payments that increase at defined intervals during the term of the lease plus pay our share of common area, real estate and utility expenses as incurred. The leases neither contain residual value guarantees nor impose material restrictions or covenants on us. Further, the leases have been classified and accounted for as either operating or finance leases.

Supplemental balance sheet information related to leases as of September 30, 2019 was as follows (in thousands):

	Balance Sheet Classification	Balance as of September 30, 2019
Assets:
Operating lease assets	Operating lease right-of-use assets, net (1)	$	634,085
Finance lease assets	Buildings and improvements, net (2)	124,477
Total leased assets		$	758,562
Liabilities:
Operating lease liabilities	Operating lease liabilities	$	699,381
Finance lease liabilities	Accounts payable and other accrued liabilities	168,266
Total lease liabilities		$	867,647

(1) Net of accumulated depreciation and amortization of $37.7 million as of September 30, 2019.

(2) Net of accumulated depreciation and amortization of $3.4 million as of September 30, 2019.

The components of lease expense for the three and nine months ended September 30, 2019 were as follows (in thousands):

Lease cost	Income Statement Classification	Three Months Ended September 30, 2019		Nine Months Ended September 30, 2019
Finance lease cost:
Amortization of right-of-use    assets	Depreciation and amortization	$	1,264	$	3,771
Interest on lease liabilities	Interest expense	1,435		4,566
Operating lease cost	Rental property operating and maintenance / General and administrative	22,633		68,503
Total lease cost		$	25,332	$	76,840

As of September 30, 2019, the weighted average remaining lease term for our operating leases and finance leases was 12 years and 24 years, respectively. We do not include renewal options in the lease term for calculating the lease liability unless we are reasonably certain we will exercise the option or the lessor has the sole ability to exercise the option. The weighted average incremental borrowing rate was 4.1% for operating leases and 3.5% for finance leases at September 30, 2019. We assigned a collateralized interest rate to each lease based on the term of the lease and the currency in which the lease is denominated.

The minimum commitment under operating leases, excluding fully prepaid ground leases, as of December 31, 2018 was as follows (in thousands):

2019	$	84,712
2020	87,396
2021	86,212
2022	81,976
2023	80,707
Thereafter	539,047
Total	$	960,050

Future minimum lease payments and their present value for property under capital lease obligations as of December 31, 2018, are as follows (in thousands):  

2019	$	11,657
2020	13,108
2021	13,207
2022	13,706
2023	14,219
Thereafter	285,774
	351,671
Less amount representing interest	(137,827		)
Present value	$	213,844

Maturities of lease liabilities as of September 30, 2019 were as follows (in thousands):

	Operating lease liabilities			Finance lease liabilities
Remainder of 2019	$	21,135		$	2,075
2020	85,013			8,343
2021	83,824			8,389
2022	79,522			8,829
2023	78,265			9,262
Thereafter	546,530			221,854
Total undiscounted future cash flows	894,289			258,752
Less: Imputed interest	(194,908		)	(90,486		)
Present value of undiscounted future cash flows	$	699,381		$	168,266

Lessor accounting

We recognized revenue from our lease agreements aggregating $3.0 billion for the year ended December 31, 2018. This revenue consisted primarily of rental revenues and tenant recoveries for the year ended December 31, 2018, aggregating $2.1 billion and $0.6 billion, respectively.

Prior to January 1, 2019, we recognized rental revenue from our operating leases on a straight-line basis over the respective lease terms. We commenced recognition of rental revenue at the date the property was ready for its intended use and the tenant took possession of, or controlled the physical use of, the property.

Prior to January 1, 2019, we considered tenant recoveries related to payments of real estate taxes, insurance, utilities, repairs and maintenance, common area expenses, and other operating expenses as lease components. We recognized these tenant recoveries as revenue when services were rendered in an amount equal to the related operating expenses incurred that were recoverable under the terms of the applicable lease and classified as tenant reimbursements revenue.

Effective January 1, 2019

Under the new lease ASUs, each lease agreement is evaluated to identify the lease and nonlease components at lease inception. The total consideration in the lease agreement is allocated to the lease and nonlease components based on their relative stand-alone selling prices. The new lease ASUs govern the recognition of revenue for lease components, and revenue related to nonlease components is subject to the revenue recognition ASU. Tenant recoveries for utilities, repairs and maintenance, and common area expenses are considered nonlease components. If a lessee makes payments for taxes and insurance directly to a third party on behalf of a lessor, lessors are required to exclude them from variable payments and from recognition in the lessors’ income statements. Otherwise, tenant recoveries for taxes and insurance are classified as additional lease revenue recognized by the lessor on a gross basis in their income statements.

On January 1, 2019, we adopted the practical expedient that allowed us to not separate expenses reimbursed by our customers (“rental recoveries”) from the associated rental revenue if certain criteria were met. We assessed these criteria and concluded that the timing and pattern of transfer for rental revenue and the associated rental recoveries are the same and as our leases qualify as operating leases, we accounted for and presented rental revenue and rental recoveries as a single component under rental and other services in our condensed consolidated income statements for the three and nine months ended September 30, 2019.

Costs to execute leases

The new lease ASUs require that lessors and lessees capitalize, as initial direct costs, only incremental costs of a lease that would not have been incurred if the lease had not been obtained. Effective January 1, 2019, costs that we incur to negotiate or arrange a lease regardless of its outcome, such as fixed employee compensation, tax, or legal advice to negotiate lease terms, and costs related to advertising or soliciting potential tenants will be expensed as incurred.

We estimate that approximately $37 million of initial direct costs that were capitalized in 2018 would have been expensed if the new lease ASUs that are effective on January 1, 2019 had been in effect during 2018. Future expenses as a result of the change in the accounting for initial direct costs will depend on the future events that are not yet known; therefore, the ultimate impact on initial direct leasing costs from the adoption of the lease ASUs might differ from our estimate.

Under the package of practical expedients that we elected on January 1, 2019, we were not required to reassess whether initial direct leasing costs capitalized prior to the adoption of the new lease ASUs in connection with the leases that commenced prior to January 1, 2019, qualify for capitalization under the new lease ASUs. Therefore, we continue to amortize these initial direct leasing costs.

We lease our operating properties to customers under agreements that are classified as operating leases. We recognize the total minimum lease payments provided for under the leases on a straight-line basis over the lease term if we determine that it is probable that substantially all of the lease payments will be collected over the lease term. Otherwise, rental revenue is recognized based on the amount contractually due. Generally, under the terms of our leases, the majority of our rental expenses, including common area maintenance, real estate taxes and insurance, are recovered from our customers. We record amounts reimbursed by customers in the period that the applicable expenses are incurred, which is generally ratably throughout the term of the lease. The reimbursements are recognized in rental and other services revenue in the condensed consolidated income statements as we are the primary obligor with respect to purchasing and selecting goods and services from third-party vendors and bearing the associated credit risk. The following table summarizes the minimum lease payments due from our customers on leases with lease periods greater than one year for space in our operating properties, prestabilized development properties and leases of land subject to ground leases at September 30, 2019 (in thousands):    

	Operating leases
Remainder of 2019	$	625,824
2020	2,220,209
2021	1,852,760
2022	1,527,560
2023	1,328,487
Thereafter	5,158,479
Total	$	12,713,319

These amounts do not reflect future rental revenues from the renewal or replacement of existing leases unless we are reasonably certain we will exercise the option or the lessor has the sole ability to exercise the option. We exclude reimbursements of operating expenses and rental increases that are not fixed.

Leases

Leases

We lease space at certain of our data centers from third parties, primarily data centers acquired as part of the Telx Acquisition and European Portfolio Acquisition, and certain equipment under noncancelable lease agreements. Leases for our data centers expire at various dates through 2074. As of September 30, 2019, certain of our data centers, primarily in Europe and Singapore, are subject to ground leases. The termination dates of these ground leases range from 2024 to 2982. In addition, our corporate headquarters along with several regional office locations are subject to leases with termination dates ranging from 2021 to 2027.

The leases may contain renewal and/or early termination options that are not reasonably certain of exercise as of September 30, 2019. Also, the leases generally require us to make fixed rental payments that increase at defined intervals during the term of the lease plus pay our share of common area, real estate and utility expenses as incurred. The leases neither contain residual value guarantees nor impose material restrictions or covenants on us. Further, the leases have been classified and accounted for as either operating or finance leases.

Supplemental balance sheet information related to leases as of September 30, 2019 was as follows (in thousands):

	Balance Sheet Classification	Balance as of September 30, 2019
Assets:
Operating lease assets	Operating lease right-of-use assets, net (1)	$	634,085
Finance lease assets	Buildings and improvements, net (2)	124,477
Total leased assets		$	758,562
Liabilities:
Operating lease liabilities	Operating lease liabilities	$	699,381
Finance lease liabilities	Accounts payable and other accrued liabilities	168,266
Total lease liabilities		$	867,647

(1) Net of accumulated depreciation and amortization of $37.7 million as of September 30, 2019.

(2) Net of accumulated depreciation and amortization of $3.4 million as of September 30, 2019.

The components of lease expense for the three and nine months ended September 30, 2019 were as follows (in thousands):

Lease cost	Income Statement Classification	Three Months Ended September 30, 2019		Nine Months Ended September 30, 2019
Finance lease cost:
Amortization of right-of-use    assets	Depreciation and amortization	$	1,264	$	3,771
Interest on lease liabilities	Interest expense	1,435		4,566
Operating lease cost	Rental property operating and maintenance / General and administrative	22,633		68,503
Total lease cost		$	25,332	$	76,840

As of September 30, 2019, the weighted average remaining lease term for our operating leases and finance leases was 12 years and 24 years, respectively. We do not include renewal options in the lease term for calculating the lease liability unless we are reasonably certain we will exercise the option or the lessor has the sole ability to exercise the option. The weighted average incremental borrowing rate was 4.1% for operating leases and 3.5% for finance leases at September 30, 2019. We assigned a collateralized interest rate to each lease based on the term of the lease and the currency in which the lease is denominated.

The minimum commitment under operating leases, excluding fully prepaid ground leases, as of December 31, 2018 was as follows (in thousands):

2019	$	84,712
2020	87,396
2021	86,212
2022	81,976
2023	80,707
Thereafter	539,047
Total	$	960,050

Future minimum lease payments and their present value for property under capital lease obligations as of December 31, 2018, are as follows (in thousands):  

2019	$	11,657
2020	13,108
2021	13,207
2022	13,706
2023	14,219
Thereafter	285,774
	351,671
Less amount representing interest	(137,827		)
Present value	$	213,844

Maturities of lease liabilities as of September 30, 2019 were as follows (in thousands):

	Operating lease liabilities			Finance lease liabilities
Remainder of 2019	$	21,135		$	2,075
2020	85,013			8,343
2021	83,824			8,389
2022	79,522			8,829
2023	78,265			9,262
Thereafter	546,530			221,854
Total undiscounted future cash flows	894,289			258,752
Less: Imputed interest	(194,908		)	(90,486		)
Present value of undiscounted future cash flows	$	699,381		$	168,266

Lessor accounting

We recognized revenue from our lease agreements aggregating $3.0 billion for the year ended December 31, 2018. This revenue consisted primarily of rental revenues and tenant recoveries for the year ended December 31, 2018, aggregating $2.1 billion and $0.6 billion, respectively.

Prior to January 1, 2019, we recognized rental revenue from our operating leases on a straight-line basis over the respective lease terms. We commenced recognition of rental revenue at the date the property was ready for its intended use and the tenant took possession of, or controlled the physical use of, the property.

Prior to January 1, 2019, we considered tenant recoveries related to payments of real estate taxes, insurance, utilities, repairs and maintenance, common area expenses, and other operating expenses as lease components. We recognized these tenant recoveries as revenue when services were rendered in an amount equal to the related operating expenses incurred that were recoverable under the terms of the applicable lease and classified as tenant reimbursements revenue.

Effective January 1, 2019

Under the new lease ASUs, each lease agreement is evaluated to identify the lease and nonlease components at lease inception. The total consideration in the lease agreement is allocated to the lease and nonlease components based on their relative stand-alone selling prices. The new lease ASUs govern the recognition of revenue for lease components, and revenue related to nonlease components is subject to the revenue recognition ASU. Tenant recoveries for utilities, repairs and maintenance, and common area expenses are considered nonlease components. If a lessee makes payments for taxes and insurance directly to a third party on behalf of a lessor, lessors are required to exclude them from variable payments and from recognition in the lessors’ income statements. Otherwise, tenant recoveries for taxes and insurance are classified as additional lease revenue recognized by the lessor on a gross basis in their income statements.

On January 1, 2019, we adopted the practical expedient that allowed us to not separate expenses reimbursed by our customers (“rental recoveries”) from the associated rental revenue if certain criteria were met. We assessed these criteria and concluded that the timing and pattern of transfer for rental revenue and the associated rental recoveries are the same and as our leases qualify as operating leases, we accounted for and presented rental revenue and rental recoveries as a single component under rental and other services in our condensed consolidated income statements for the three and nine months ended September 30, 2019.

Costs to execute leases

The new lease ASUs require that lessors and lessees capitalize, as initial direct costs, only incremental costs of a lease that would not have been incurred if the lease had not been obtained. Effective January 1, 2019, costs that we incur to negotiate or arrange a lease regardless of its outcome, such as fixed employee compensation, tax, or legal advice to negotiate lease terms, and costs related to advertising or soliciting potential tenants will be expensed as incurred.

We estimate that approximately $37 million of initial direct costs that were capitalized in 2018 would have been expensed if the new lease ASUs that are effective on January 1, 2019 had been in effect during 2018. Future expenses as a result of the change in the accounting for initial direct costs will depend on the future events that are not yet known; therefore, the ultimate impact on initial direct leasing costs from the adoption of the lease ASUs might differ from our estimate.

Under the package of practical expedients that we elected on January 1, 2019, we were not required to reassess whether initial direct leasing costs capitalized prior to the adoption of the new lease ASUs in connection with the leases that commenced prior to January 1, 2019, qualify for capitalization under the new lease ASUs. Therefore, we continue to amortize these initial direct leasing costs.

We lease our operating properties to customers under agreements that are classified as operating leases. We recognize the total minimum lease payments provided for under the leases on a straight-line basis over the lease term if we determine that it is probable that substantially all of the lease payments will be collected over the lease term. Otherwise, rental revenue is recognized based on the amount contractually due. Generally, under the terms of our leases, the majority of our rental expenses, including common area maintenance, real estate taxes and insurance, are recovered from our customers. We record amounts reimbursed by customers in the period that the applicable expenses are incurred, which is generally ratably throughout the term of the lease. The reimbursements are recognized in rental and other services revenue in the condensed consolidated income statements as we are the primary obligor with respect to purchasing and selecting goods and services from third-party vendors and bearing the associated credit risk. The following table summarizes the minimum lease payments due from our customers on leases with lease periods greater than one year for space in our operating properties, prestabilized development properties and leases of land subject to ground leases at September 30, 2019 (in thousands):    

	Operating leases
Remainder of 2019	$	625,824
2020	2,220,209
2021	1,852,760
2022	1,527,560
2023	1,328,487
Thereafter	5,158,479
Total	$	12,713,319

These amounts do not reflect future rental revenues from the renewal or replacement of existing leases unless we are reasonably certain we will exercise the option or the lessor has the sole ability to exercise the option. We exclude reimbursements of operating expenses and rental increases that are not fixed.

XML

Debt of the Operating Partnership

9 Months Ended

Sep. 30, 2019

Digital Realty Trust, L.P.

Debt Instrument [Line Items]

Debt of the Operating Partnership

Debt of the Operating Partnership

A summary of outstanding indebtedness of the Operating Partnership as of September 30, 2019 and December 31, 2018 is as follows (in thousands):

Indebtedness	Interest Rate at September 30, 2019		Maturity Date		Principal Outstanding at September 30, 2019				Principal Outstanding at December 31, 2018
Global revolving credit facilities	Various	(1)(4)	Jan 24, 2023	(1)	$	1,846,026		(2)	$	1,663,156		(2)
Deferred financing costs, net					(12,514		)		(15,421		)
Global revolving credit facilities, net					1,833,512				1,647,735
Unsecured Term Loans
2019 Term Loan	Base Rate + 1.000%		Jan 19, 2019		—				375,000
2023 Term Loan	Various	(3)(4)	Jan 15, 2023		300,000			(5)	300,000			(5)
2024 Term Loan	Various	(3)(4)	Jan 24, 2023	(3)	499,533			(5)	508,120			(5)
Deferred financing costs, net					(3,301		)		(4,216		)
Unsecured term loans, net					796,232				1,178,904
Floating rate notes due 2019	EURIBOR + 0.500%		May 22, 2019		—			(11)	143,338			(6)
5.875% notes due 2020	5.875%		Feb 1, 2020		—			(8)	500,000
3.400% notes due 2020	3.400%		Oct 1, 2020		—			(12)	500,000
5.250% notes due 2021	5.250%		Mar 15, 2021		—			(12)	400,000
3.950% notes due 2022	3.950%		Jul 1, 2022		500,000				500,000
3.625% notes due 2022	3.625%		Oct 1, 2022		300,000				300,000
2.750% notes due 2023	2.750%		Feb 1, 2023		350,000				350,000
4.750% notes due 2023	4.750%		Oct 13, 2023		368,670			(7)	382,620			(7)
2.625% notes due 2024	2.625%		Apr 15, 2024		653,940			(6)	688,020			(6)
2.750% notes due 2024	2.750%		Jul 19, 2024		307,225			(7)	318,850			(7)
4.250% notes due 2025	4.250%		Jan 17, 2025		491,560			(7)	510,160			(7)
4.750% notes due 2025	4.750%		Oct 1, 2025		450,000				450,000
2.500% notes due 2026	2.500%		Jan 16, 2026		1,171,642			(6)	—
3.700% notes due 2027	3.700%		Aug 15, 2027		1,000,000				1,000,000
4.450% notes due 2028	4.450%		Jul 15, 2028		650,000				650,000
3.600% notes due 2029	3.600%		Jul 1, 2029		900,000				—
3.300% notes due 2029	3.300%		Jul 19, 2029		430,115			(7)	446,390			(7)
3.750% notes due 2030	3.750%		Oct 17, 2030		675,895			(7)(9)	510,160			(7)
Unamortized discounts, net of premiums					(11,183		)		(19,859		)
Total senior notes, net of discount					8,237,864				7,629,679
Deferred financing costs, net					(48,726		)		(40,553		)
Total unsecured senior notes, net of discount and deferred financing costs					8,189,138				7,589,126

Indebtedness	Interest Rate at September 30, 2019		Maturity Date	Principal Outstanding September 30, 2019				Principal Outstanding December 31, 2018
Secured Debt:
731 East Trade Street	8.22%		Jul 1, 2020	$	1,299			$	1,776
Secured note due March 2023	LIBOR + 1.000%	(4)	Mar 1, 2023	104,000				104,000
Secured note due December 2023	Base Rate + 4.250%		Dec 20, 2023	—			(10)	600,000
Unamortized net premiums				78				148
Total mortgage loans, including premiums				105,377				705,924
Deferred financing costs, net				(224		)		(20,210		)
Total secured debt, including premiums and net of deferred financing costs				105,153				685,714
Total indebtedness				$	10,924,035			$	11,101,479

_________________________________ 

(1) The interest rate for borrowings under the global revolving credit facility equals the applicable index plus a margin of 90 basis points, which is based on the current credit rating of our long-term debt. An annual facility fee of 20 basis points, which is based on the credit rating of our long-term debt, is due and payable quarterly on the total commitment amount of the facility. Two six months extensions are available, which we may exercise if certain conditions are met. The interest rate for borrowings under the Yen revolving credit facility equals the applicable index plus a margin of 50 basis points, which is based on the current credit rating of our long-term debt.

(2) Balances as of September 30, 2019 and December 31, 2018 are as follows (balances, in thousands):

Denomination of Draw	Balance as of September 30, 2019			Weighted-average interest rate			Balance as of December 31, 2018			Weighted-average interest rate
Floating Rate Borrowing (a)(e)
U.S. dollar ($)	$	960,000	(b)	3.00	%	(b)	$	890,000	(b)	3.37	%	(b)
British pound sterling (£)	44,240		(c)	1.61	%		8,290		(d)	1.61	%
Euro (€)	438,685		(c)	0.90	%		451,800		(d)	0.90	%
Australian dollar (AUD)	31,725		(c)	1.94	%		27,632		(d)	2.82	%
Hong Kong dollar (HKD)	11,851		(c)	2.85	%		8,797		(d)	3.14	%
Japanese yen (JPY)	—			—	%		4,105		(d)	0.90	%
Singapore dollar (SGD)	75,182		(c)	2.55	%		77,112		(d)	2.79	%
Canadian dollar (CAD)	90,863		(c)	2.85	%		60,856		(d)	3.16	%
Total	$	1,652,546		2.36	%		$	1,528,592		2.57	%
Yen Revolving Credit Facility (a)	$	193,480	(f)	0.50	%		$	134,564	(f)	0.50	%
Total borrowings	$	1,846,026		2.16	%	(b)	$	1,663,156		2.41	%	(b)

(a) The interest rates for floating rate borrowings under the global revolving credit facility currently equal the applicable index plus a margin of 90 basis points, which is based on the credit rating of our long-term debt. The interest rate for borrowings under the Yen revolving credit facility equals the applicable index plus a margin of 50 basis points, which is based on the current credit rating of our long-term debt.

(b) As of September 30, 2019 and December 31, 2018, approximately $306.9 million of the U.S. dollar tranche was subject to interest rate swaps. As of September 30, 2019, the weighted-average interest rate reflecting interest rate swaps was 2.79% (U.S. dollar) and 2.05% (Total borrowings). As of December 31, 2018, the weighted-average interest rate reflecting interest rate swaps was 2.99% (U.S. dollar) and 2.20% (Total borrowings).

(c) Based on exchange rates of $1.23 to £1.00, $1.09 to €1.00, $0.68 to 1.00 AUD, $0.13 to 1.00 HKD, $0.72 to 1.00 SGD and $0.76 to 1.00 CAD, respectively, as of September 30, 2019.

(d) Based on exchange rates of $1.28 to £1.00, $1.15 to €1.00, $0.70 to 1.00 AUD, $0.13 to 1.00 HKD, $0.01 to 1.00 JPY, $0.73 to 1.00 SGD and $0.73 to 1.00 CAD, respectively, as of December 31, 2018.

(e) As of September 30, 2019, approximately $44.3 million of letters of credit were issued.

(f) Based on exchange rates of $0.01 to 1.00 JPY for September 30, 2019 and December 31, 2018.

(3) Interest rates are based on our current senior unsecured debt ratings and are currently 100 basis points over the applicable index for floating rate advances for the 2023 Term Loan and the 2024 Term Loan. Two six months extensions are available for the 2024 Term Loan, which we may exercise if certain conditions are met.

(4) We have entered into interest rate swap agreements as a cash flow hedge for interest generated by a portion of U.S. dollar borrowings under the global revolving credit facility, a portion of U.S. dollar and Canadian dollar borrowings under the 2023 Term Loan and 2024 Term Loan, and the secured note due March 2023. See Note 15 "Derivative Instruments" for further information. 

(5) Balances as of September 30, 2019 and December 31, 2018 are as follows (balances, in thousands):

Denomination of Draw	Balance as of September 30, 2019			Weighted-average interest rate			Balance as of December 31, 2018			Weighted-average interest rate
U.S. dollar ($)	$	300,000		3.03	%	(b)	$	300,000		3.46	%	(d)
Singapore dollar (SGD)	144,069		(a)	2.68	%		146,080		(c)	2.76	%
Australian dollar (AUD)	195,952		(a)	2.06	%		204,632		(c)	2.94	%
Hong Kong dollar (HKD)	85,115		(a)	2.99	%		85,188		(c)	3.32	%
Canadian dollar (CAD)	74,397		(a)	2.95	%	(b)	72,220		(c)	3.24	%	(d)
Total	$	799,533		2.72	%	(b)	$	808,120		3.17	%	(d)

(a) Based on exchange rates of $0.72 to 1.00 SGD, $0.68 to 1.00 AUD, $0.13 to 1.00 HKD and $0.76 to 1.00 CAD, respectively, as of September 30, 2019.

(b) As of September 30, 2019, the weighted-average interest rate reflecting interest rate swaps was 2.44% (U.S. dollar), 1.78% (Canadian dollar) and 2.38% (Total). See Note 15 "Derivative Instruments" for further discussion on interest rate swaps.

(c) Based on exchange rates of $0.73 to 1.00 SGD, $0.70 to 1.00 AUD, $0.13 to 1.00 HKD and $0.73 to 1.00 CAD, respectively, as of December 31, 2018.

(d) As of December 31, 2018, the weighted-average interest rate reflecting interest rate swaps was 2.44% (U.S. dollar), 1.78% (Canadian dollar) and 2.66% (Total).

(6) Based on exchange rates of $1.09 to €1.00 as of September 30, 2019 and $1.15 to €1.00 as of December 31, 2018.

(7) Based on exchange rates of $1.23 to £1.00 as of September 30, 2019 and $1.28 to £1.00 as of December 31, 2018.

(8) The 5.875% 2020 Notes were paid in full in January 2019 (by tender offer) and February 2019 (by redemption of the remaining balance after the tender offer). The tender offer and redemption resulted in an early extinguishment charge of approximately $12.9 million during the three months ended March 31, 2019.

(9) On March 5, 2019, Digital Stout Holding, LLC, a wholly owned subsidiary of the Operating Partnership, issued and sold an additional £150.0 million aggregate principal amount of 2030 Notes. The terms of the 2030 Notes are governed by an indenture, dated as of October 17, 2018, among Digital Stout Holding, LLC, Digital Realty Trust, Inc., the Operating Partnership, Deutsche Trustee Company Limited, as trustee, Deutsche Bank AG, London Branch, as paying agent and a transfer agent, and Deutsche Bank Luxembourg S.A., as registrar and a transfer agent (the “GBP Notes Indenture”), pursuant to which Digital Stout Holding, LLC previously issued £400.0 million in aggregate principal amount of its 2030 Notes. The 2030 Notes are treated as a single series with the notes previously issued under the GBP Notes Indenture.

(10) The debt was deconsolidated as a result of the Ascenty joint venture formed with Brookfield.

(11) Paid in full at maturity in May 2019.

(12) The 3.400% 2020 Notes and 2021 Notes were paid in full in June 2019 (by tender offer) and July 2019 (by redemption of the remaining balances after the tender offer). The tender offer resulted in an early extinguishment charge of approximately $5.4 million and $26.3 million during the three and nine months ended September 30, 2019, respectively.

The indentures governing our debt contain certain covenants, including (1) a leverage ratio not to exceed 60%, (2) a secured debt leverage ratio not to exceed 40% and (3) an interest coverage ratio of greater than 1.50, and also requires us to maintain total unencumbered assets of not less than 150% of the aggregate principal amount of unsecured debt. At September 30, 2019, we were in compliance with each of these financial covenants.

2.500% Notes due 2026

On January 16, 2019, Digital Euro Finco, LLC, a wholly owned indirect finance subsidiary of the Operating Partnership, issued and sold €850 million aggregate principal amount of 2.500% Guaranteed Notes due 2026 denominated in Euros, which we refer to as the 2026 Notes. The 2026 Notes are senior unsecured obligations of Digital Euro Finco, LLC and are fully and unconditionally guaranteed by Digital Realty Trust, Inc. and the Operating Partnership. The terms of the 2026 Notes are governed by an indenture, dated as of January 16, 2019, among Digital Euro Finco, LLC, Digital Realty Trust, Inc., the Operating Partnership, Deutsche Trustee Company Limited, as trustee, Deutsche Bank AG, London Branch, as paying agent and a transfer agent, and Deutsche Bank Luxembourg S.A., as registrar and a transfer agent (the “2026 Notes Indenture”). Net proceeds from the offering were approximately €843.5 million (approximately $960.9 million based on the exchange rate on January 16, 2019) after deducting managers’ discounts and estimated offering expenses. We intend to allocate an amount equal to the net proceeds from the offering of the 2026 Notes to finance or refinance, in whole or in part, certain green building, energy and resource efficiency and renewable energy projects (collectively, “Eligible Green Projects”), including the development and redevelopment of such projects. Pending the allocation of an amount equal to the net proceeds of the 2026 Notes to Eligible Green Projects, all or a portion of an amount equal to the net proceeds were used for the payment of outstanding indebtedness or other capital management activities. Such indebtedness to be redeemed or repaid included the Operating Partnership’s 5.875% Senior Notes due 2020 pursuant to a previously announced tender offer for such notes.

On March 6, 2019, Digital Euro Finco, LLC issued and sold an additional €225.0 million aggregate principal amount of 2026 Notes. The terms of the additional 2026 Notes are governed by the 2026 Notes Indenture pursuant to which Digital Euro Finco, LLC previously issued €850.0 million in aggregate principal amount of its 2026 Notes. The 2026 Notes issued in March 2019 are treated as a single series with the notes previously issued under the 2026 Notes Indenture.

3.600% Notes due 2029

On June 14, 2019, the Operating Partnership issued $900.0 million in aggregate principal amount of notes, maturing on July 1, 2029 with an interest rate of 3.600% per annum, which we refer to as the 3.600% 2029 Notes. The purchase price paid by the initial purchasers was 99.823% of the principal amount. The 3.600% 2029 Notes are general unsecured senior obligations of the Operating Partnership, rank equally in right of payment with all other senior unsecured indebtedness of the Operating Partnership and are fully and unconditionally guaranteed by Digital Realty Trust, Inc. Interest on the 3.600% 2029 Notes is payable on January 1 and July 1 of each year, beginning on January 1, 2020. The net proceeds from the offering after deducting the original issue discount of approximately $1.6 million and underwriting commissions and expenses of approximately $7.8 million was approximately $890.6 million. We used the net proceeds from this offering to finance the tender offer for, and redemption of, our 3.400% 2020 Notes and 2021 Notes, temporarily repay borrowings under our global revolving credit facility and for general corporate purposes. The 3.600% 2029 Notes have been reflected net of discount and deferred financing costs in the condensed consolidated balance sheet.

1.125% Notes due 2028

On October 9, 2019, Digital Euro Finco, LLC, a wholly owned indirect finance subsidiary of the Operating Partnership, issued and sold €500.0 million aggregate principal amount of 1.125% Guaranteed Notes due 2028 denominated in Euros, which we refer to as the 2028 Notes. The 2028 Notes are senior unsecured obligations of Digital Euro Finco, LLC and are fully and unconditionally guaranteed by Digital Realty Trust, Inc. and the Operating Partnership. The terms of the 2028 Notes are governed by an indenture, dated as of October 9, 2019, among Digital Euro Finco, LLC, Digital Realty Trust, Inc., the Operating Partnership, Deutsche Trustee Company Limited, as trustee, Deutsche Bank AG, London Branch, as paying agent and a transfer agent, and Deutsche Bank Luxembourg S.A., as registrar and a transfer agent (the “2028 Notes Indenture”). Net

proceeds from the offering were approximately €491.9 million (approximately $539.7 million based on the exchange rate on October 9, 2019) after deducting managers’ discounts and estimated offering expenses. We used the net proceeds from the offering to repay borrowings outstanding under the operating partnership’s global revolving credit facility and for other general corporate purposes.

The table below summarizes our debt maturities and principal payments as of September 30, 2019 (in thousands): 

	Global Revolving Credit Facilities(1)		Unsecured Term Loans (1)		Senior Notes			Secured Debt		Total Debt
Remainder of 2019	$	—	$	—	$	—		$	166	$	166
2020	—		—		—			1,133		1,133
2021	—		—		—			—		—
2022	—		—		800,000			—		800,000
2023	1,652,546		799,533		718,670			104,000		3,274,749
Thereafter	193,480		—		6,730,377			—		6,923,857
Subtotal	$	1,846,026	$	799,533	$	8,249,047		$	105,299	$	10,999,905
Unamortized discount	—		—		(17,578		)	—		(17,578		)
Unamortized premium	—		—		6,395			78		6,473
Total	$	1,846,026	$	799,533	$	8,237,864		$	105,377	$	10,988,800

(1)

The global revolving credit facility and 2024 Term Loan are subject to two six-month extension options exercisable by us. The bank group is obligated to grant the extension options provided we give proper notice, we make certain representations and warranties and no default exists.

XML

Income per Share (Tables)

9 Months Ended

Sep. 30, 2019

Earnings Per Share [Abstract]

Summary of Basic and Diluted Earnings Per Share

The following is a summary of basic and diluted income per share (in thousands, except share and per share amounts): 

	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
Net income available to common stockholders	$	49,827	$	67,268	$	177,434	$	218,700
Weighted average shares outstanding—basic	208,421,470		206,118,472		208,173,995		205,931,031
Potentially dilutive common shares:
Unvested incentive units	181,064		169,100		142,670		160,117
Forward equity offering	1,013,970		37,884		705,720		1,847
Market performance-based awards	185,267		440,800		177,150		462,632
Weighted average shares outstanding—diluted	209,801,771		206,766,256		209,199,535		206,555,627
Income per share:
Basic	$	0.24	$	0.33	$	0.85	$	1.06
Diluted	$	0.24	$	0.33	$	0.85	$	1.06

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share

We have excluded the following potentially dilutive securities in the calculations above as they would be antidilutive or not dilutive: 

	Three Months Ended September 30,		Nine Months Ended September 30,
	2019	2018	2019	2018
Weighted average of Operating Partnership common units not owned by Digital Realty Trust, Inc.	8,953,826	8,170,912	9,080,816	8,268,382
Potentially dilutive Series C Cumulative Redeemable Perpetual Preferred Stock	1,614,005	1,727,724	1,678,511	1,864,489
Potentially dilutive Series G Cumulative Redeemable Preferred Stock	2,001,277	2,142,282	2,081,260	2,311,864
Potentially dilutive Series H Cumulative Redeemable Preferred Stock	—	3,139,291	1,053,127	3,387,795
Potentially dilutive Series I Cumulative Redeemable Preferred Stock	2,003,619	2,144,789	2,083,696	2,314,569
Potentially dilutive Series J Cumulative Redeemable Preferred Stock	1,598,556	1,711,186	1,662,444	1,846,643
Potentially dilutive Series K Cumulative Redeemable Preferred Stock	1,680,969	—	1,232,711	—
Total	17,852,252	19,036,184	18,872,565	19,993,742

XML

Leases (Tables)

9 Months Ended

Sep. 30, 2019

Leases [Abstract]

Supplemental Balance Sheet Information

Supplemental balance sheet information related to leases as of September 30, 2019 was as follows (in thousands):

	Balance Sheet Classification	Balance as of September 30, 2019
Assets:
Operating lease assets	Operating lease right-of-use assets, net (1)	$	634,085
Finance lease assets	Buildings and improvements, net (2)	124,477
Total leased assets		$	758,562
Liabilities:
Operating lease liabilities	Operating lease liabilities	$	699,381
Finance lease liabilities	Accounts payable and other accrued liabilities	168,266
Total lease liabilities		$	867,647

(1) Net of accumulated depreciation and amortization of $37.7 million as of September 30, 2019.

(2)

Net of accumulated depreciation and amortization of $3.4 million as of September 30, 2019.

Lease, Cost

The components of lease expense for the three and nine months ended September 30, 2019 were as follows (in thousands):

Lease cost	Income Statement Classification	Three Months Ended September 30, 2019		Nine Months Ended September 30, 2019
Finance lease cost:
Amortization of right-of-use    assets	Depreciation and amortization	$	1,264	$	3,771
Interest on lease liabilities	Interest expense	1,435		4,566
Operating lease cost	Rental property operating and maintenance / General and administrative	22,633		68,503
Total lease cost		$	25,332	$	76,840

Schedule of Future Minimum Rental Payments for Operating Leases

The minimum commitment under operating leases, excluding fully prepaid ground leases, as of December 31, 2018 was as follows (in thousands):

2019	$	84,712
2020	87,396
2021	86,212
2022	81,976
2023	80,707
Thereafter	539,047
Total	$	960,050

Schedule of Future Minimum Lease Payments for Capital Leases

Future minimum lease payments and their present value for property under capital lease obligations as of December 31, 2018, are as follows (in thousands):  

2019	$	11,657
2020	13,108
2021	13,207
2022	13,706
2023	14,219
Thereafter	285,774
	351,671
Less amount representing interest	(137,827		)
Present value	$	213,844

Finance Leases Maturity

Maturities of lease liabilities as of September 30, 2019 were as follows (in thousands):

	Operating lease liabilities			Finance lease liabilities
Remainder of 2019	$	21,135		$	2,075
2020	85,013			8,343
2021	83,824			8,389
2022	79,522			8,829
2023	78,265			9,262
Thereafter	546,530			221,854
Total undiscounted future cash flows	894,289			258,752
Less: Imputed interest	(194,908		)	(90,486		)
Present value of undiscounted future cash flows	$	699,381		$	168,266

Operating Lease Maturity

Maturities of lease liabilities as of September 30, 2019 were as follows (in thousands):

	Operating lease liabilities			Finance lease liabilities
Remainder of 2019	$	21,135		$	2,075
2020	85,013			8,343
2021	83,824			8,389
2022	79,522			8,829
2023	78,265			9,262
Thereafter	546,530			221,854
Total undiscounted future cash flows	894,289			258,752
Less: Imputed interest	(194,908		)	(90,486		)
Present value of undiscounted future cash flows	$	699,381		$	168,266

Lessor Operating Minimum Lease Payments

The following table summarizes the minimum lease payments due from our customers on leases with lease periods greater than one year for space in our operating properties, prestabilized development properties and leases of land subject to ground leases at September 30, 2019 (in thousands):    

	Operating leases
Remainder of 2019	$	625,824
2020	2,220,209
2021	1,852,760
2022	1,527,560
2023	1,328,487
Thereafter	5,158,479
Total	$	12,713,319

XML

Incentive Plan (Tables)

9 Months Ended

Sep. 30, 2019

Share-based Payment Arrangement [Abstract]

Schedule of Deferred Compensation

Below is a summary of our compensation expense for the three and nine months ended September 30, 2019 and 2018 and our unearned compensation as of September 30, 2019 and December 31, 2018 (in millions):

	Deferred Compensation								Unearned Compensation				Expected period to recognize unearned compensation (in years)
	Expensed				Capitalized				As of September 30, 2019		As of December 31, 2018
	Three Months Ended September 30,
Type of incentive award	2019		2018		2019		2018
Long-term incentive units	$	2.4	$	1.2	$	—	$	0.1	$	17.8	$	11.5	2.5
Market performance-based awards	3.1		3.1		0.2		0.3		32.8		24.8		2.7
Restricted stock	2.9		1.5		0.7		1.1		32.9		23.6		2.8
	Nine Months Ended September 30,
	2019		2018		2019		2018
Long-term incentive units	$	6.2	$	5.2	$	0.1	$	0.2
Market performance-based awards	9.7		10.0		0.6		0.7
Restricted stock	8.6		4.7		2.1		3.2

Summary of Long-Term Incentive Unit Activity

Below is a summary of our long-term incentive unit activity for the nine months ended September 30, 2019.

Unvested Long-term Incentive Units	Units		Weighted-Average Grant Date Fair Value
Unvested, beginning of period	158,486		$	100.94
Granted	119,397		116.18
Vested	(44,496	)	97.46
Cancelled or expired	(20,061	)	93.28
Unvested, end of period	213,326		$	109.90

Market Performance Based Awards

In the event that the RMS Relative Market Performance during the Market Performance Period is achieved at the “threshold,” “target” or “high” level as set forth below, the awards will become vested as to the market condition with respect to the percentage of Class D units or RSUs, as applicable, set forth below:

Level	RMS Relative Market Performance	Market Performance Vesting Percentage
Below Threshold Level	≤ -300 basis points	0%
Threshold Level	-300 basis points	25%
Target Level	100 basis points	50%
High Level	> 500 basis points	100%

Schedule Of Valuation Assumptions

Assumptions used in the valuations are summarized as follows:

Award Date	Expected Stock Price Volatility	Risk-Free Interest rate
January 1, 2018	22%	1.98%
March 1, 2018	22%	2.34%
March 9, 2018	22%	2.42%
January 1, 2019	23%	2.44%
February 21, 2019	23%	2.48%

Summary of Restricted Stock Activity

Below is a summary of our restricted stock activity for the nine months ended September 30, 2019.

Unvested Restricted Stock	Shares		Weighted-Average Grant Date Fair Value
Unvested, beginning of period	295,501		$	97.49
Granted	221,336		114.95
Vested	(104,955	)	92.80
Cancelled or expired	(29,412	)	106.83
Unvested, end of period	382,470		$	108.14

XML

CONDENSED CONSOLIDATED STATEMENT OF CAPITAL (unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Jan. 01, 2019	Jan. 01, 2018
Increase (Decrease) in Partners' Capital [Roll Forward]
Beginning balance (units)			206,425,656
Conversion of limited partner common units to general partner common units			$ 163,861	$ 49,696
Units issued in connection with employee stock purchase plan	$ 3,203	$ 3,365	5,462	5,874
Units repurchased and retired to satisfy tax withholding upon vesting		(234)		(4,952)
Issuance of series K preferred units, net of offering costs			203,264
Redemption of series H preferred units			(365,050)
Amortization of share-based compensation	9,913	7,755	28,774	25,213
Contributions from noncontrolling interests in consolidated joint ventures, net of distributions		63,683	60,961	63,745
Cumulative effect adjustment from adoption of new accounting standard					$ (6,318)	$ 5,915
Deconsolidation of consolidated joint venture	(110,086)		(110,086)
Net income (loss)	67,535	90,264	249,760	288,518
Other comprehensive income (loss)—foreign currency translation adjustments	24,668	2,368	66,511	(8,608)
Other comprehensive loss—fair value of interest rate swaps	(1,000)	2,925	(11,379)	16,336
Other comprehensive loss—reclassification of accumulated other comprehensive income to interest expense	$ (1,805)	(1,271)	$ (6,055)	(2,289)
Ending balance (units)	208,583,244		208,583,244
Digital Realty Trust, L.P.
Increase (Decrease) in Partners' Capital [Roll Forward]
Beginning balance	$ 10,473,720	10,796,928	$ 10,858,210	11,049,450
Payment of offering costs	(282)	(640)	(1,258)	(1,292)
Units issued in connection with employee stock purchase plan	3,203	3,365	5,462	5,874
Units repurchased and retired to satisfy tax withholding upon vesting		(234)		(4,952)
Issuance of series K preferred units, net of offering costs			203,264
Redemption of series H preferred units			(365,050)
Amortization of share-based compensation	9,913	7,755	28,774	25,213
Adjustment to redeemable partnership units	(1,876)	35,252	(3,630)	36,349
Distributions	(251,348)	(236,933)	(758,311)	(710,797)
Contributions from noncontrolling interests in consolidated joint ventures, net of distributions	(1,787)	63,683	60,961	63,745
Cumulative effect adjustment from adoption of new accounting standard					(6,318)	5,915
Deconsolidation of consolidated joint venture	(110,086)		(110,086)
Net income (loss)	67,535	90,264	249,760	288,518
Other comprehensive income (loss)—foreign currency translation adjustments	24,668	2,368	66,511	(8,608)
Other comprehensive loss—fair value of interest rate swaps	(1,000)	2,925	(11,379)	16,336
Other comprehensive loss—reclassification of accumulated other comprehensive income to interest expense	(1,805)	(1,271)	(6,055)	(2,289)
Ending balance	10,210,855	10,763,462	10,210,855	10,763,462
Redeemable Limited Partner Common Units | Digital Realty Trust, L.P.
Increase (Decrease) in Partners' Capital [Roll Forward]
Beginning balance	17,344	52,805	15,832	53,902
Adjustment to redeemable partnership units	1,876	(35,252)	3,630	(36,349)
Distributions	(169)	0	(507)
Net income (loss)	39	0	135
Ending balance	19,090	17,553	19,090	17,553
Accumulated Other Comprehensive Loss | Digital Realty Trust, L.P.
Increase (Decrease) in Partners' Capital [Roll Forward]
Beginning balance	(93,179)	(111,468)	(120,393)	(112,885)
Other comprehensive income (loss)—foreign currency translation adjustments	24,668	2,368	66,511	(8,608)
Other comprehensive loss—reclassification of accumulated other comprehensive income to interest expense	(1,805)	(1,271)	(6,055)	(2,289)
Ending balance	(71,316)	(107,446)	(71,316)	(107,446)
Total Partners' Capital | Digital Realty Trust, L.P.
Increase (Decrease) in Partners' Capital [Roll Forward]
Beginning balance	10,318,275	10,794,639	10,765,154	11,047,207
Payment of offering costs	(282)	(640)	(1,258)	(1,292)
Units issued in connection with employee stock purchase plan	3,203	3,365	5,462	5,874
Units repurchased and retired to satisfy tax withholding upon vesting		(234)		(4,952)
Issuance of series K preferred units, net of offering costs			203,264
Redemption of series H preferred units			(365,050)
Amortization of share-based compensation	9,913	7,755	28,774	25,213
Adjustment to redeemable partnership units	(1,876)	35,252	(3,630)	36,349
Distributions	(251,348)	(236,933)	(758,311)	(710,797)
Cumulative effect adjustment from adoption of new accounting standard					(6,318)	5,915
Net income (loss)	68,758	90,297	251,342	288,567
Other comprehensive income (loss)—foreign currency translation adjustments	24,668	2,368	66,511	(8,608)
Other comprehensive loss—reclassification of accumulated other comprehensive income to interest expense	(1,805)	(1,271)	(6,055)	(2,289)
Ending balance	10,168,506	10,697,523	10,168,506	10,697,523
Noncontrolling Interests in Consolidated Joint Ventures | Digital Realty Trust, L.P.
Increase (Decrease) in Partners' Capital [Roll Forward]
Beginning balance	155,445	2,289	93,056	2,243
Contributions from noncontrolling interests in consolidated joint ventures, net of distributions	(1,787)	63,683	60,961	63,745
Deconsolidation of consolidated joint venture	(110,086)		(110,086)
Net income (loss)	(1,223)	(33)	(1,582)	(49)
Other comprehensive income (loss)—foreign currency translation adjustments	0	0	0
Ending balance	42,349	65,939	42,349	65,939
General Partner | Preferred Units | Digital Realty Trust, L.P.
Increase (Decrease) in Partners' Capital [Roll Forward]
Beginning balance	$ 1,099,534	$ 1,249,560	$ 1,249,560	$ 1,249,560
Beginning balance (units)	44,450,000	50,650,000	50,650,000	50,650,000
Issuance of series K preferred units, net of offering costs (units)			8,400,000
Issuance of series K preferred units, net of offering costs			$ 203,264
Redemption of series H preferred units (in units)			(14,600,000)
Redemption of series H preferred units			$ (353,290)
Distributions	$ (16,670)	$ (20,329)	(54,283)	$ (60,987)
Net income (loss)	16,670	20,329	54,283	60,987
Ending balance	$ 1,099,534	$ 1,249,560	$ 1,099,534	$ 1,249,560
Ending balance (units)	44,450,000	50,650,000	44,450,000	50,650,000
General Partner | Common Units | Digital Realty Trust, L.P.
Increase (Decrease) in Partners' Capital [Roll Forward]
Beginning balance	$ 8,552,279	$ 8,997,888	$ 8,724,731	$ 9,207,953
Beginning balance (units)	208,324,538	206,055,117	206,425,656	205,470,300
Conversion of limited partner common units to general partner common units	$ 18,755	$ 13,869	$ 163,861	$ 49,696
Conversion of limited partner common units to general partner common units (units)	218,752	161,153	1,841,692	567,792
Issuance of unvested restricted common units (units)	1,414	13,146	252,122	206,264
Payment of offering costs	$ (282)	$ (640)	$ (1,258)	$ (1,292)
Units issued in connection with employee stock purchase plan	$ 3,203	$ 3,365	$ 5,462	$ 5,874
Units issued in connection with employee stock purchase plan (units)	38,540	37,639	63,774	69,532
Units repurchased and retired to satisfy tax withholding upon vesting		$ (234)		$ (4,952)
Units repurchased and retired to satisfy tax withholding upon vesting (units)		0		(46,833)
Redemption of series H preferred units			$ (11,760)
Amortization of share-based compensation	$ 9,913	$ 7,755	28,774	$ 25,213
Reclassification of vested share-based awards	(250)	(784)	(7,962)	(3,631)
Adjustment to redeemable partnership units	(1,876)	(426)	(3,630)	671
Distributions	(225,188)	(208,166)	(674,713)	(624,252)
Cumulative effect adjustment from adoption of new accounting standard					$ (6,318)	$ 5,915
Net income (loss)	49,827	67,268	189,194	218,700
Ending balance	$ 8,406,381	$ 8,879,895	$ 8,406,381	$ 8,879,895
Ending balance (units)	208,583,244	206,267,055	208,583,244	206,267,055
Limited Partners | Common Units | Digital Realty Trust, L.P.
Increase (Decrease) in Partners' Capital [Roll Forward]
Beginning balance	$ 759,641	$ 658,659	$ 911,256	$ 702,579
Beginning balance (units)	9,370,049	8,498,032	10,580,884	8,489,095
Conversion of limited partner common units to general partner common units	$ (18,755)	$ (13,869)	$ (163,861)	$ (49,696)
Conversion of limited partner common units to general partner common units (units)	(218,752)	(161,153)	(1,841,692)	(567,792)
Issuance of common units, net of forfeitures (units)	(7,316)	3,708	404,789	419,284
Reclassification of vested share-based awards	$ 250	$ 784	$ 7,962	$ 3,631
Adjustment to redeemable partnership units		35,678		35,678
Distributions	(9,490)	(8,438)	(29,315)	(25,558)
Net income (loss)	2,261	2,700	7,865	8,880
Ending balance	$ 733,907	$ 675,514	$ 733,907	$ 675,514
Ending balance (units)	9,143,981	8,340,587	9,143,981	8,340,587
Interest Rate Swap
Increase (Decrease) in Partners' Capital [Roll Forward]
Other comprehensive loss—fair value of interest rate swaps	$ (1,000)	$ 2,925	$ (11,379)	$ 16,336
Interest Rate Swap | Digital Realty Trust, L.P.
Increase (Decrease) in Partners' Capital [Roll Forward]
Other comprehensive loss—fair value of interest rate swaps	(1,000)	2,925	(11,379)	16,336
Interest Rate Swap | Accumulated Other Comprehensive Loss | Digital Realty Trust, L.P.
Increase (Decrease) in Partners' Capital [Roll Forward]
Other comprehensive loss—fair value of interest rate swaps	(1,000)	2,925	(11,379)	16,336
Interest Rate Swap | Total Partners' Capital | Digital Realty Trust, L.P.
Increase (Decrease) in Partners' Capital [Roll Forward]
Other comprehensive loss—fair value of interest rate swaps	$ (1,000)	$ 2,925	$ (11,379)	$ 16,336

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (Parenthetical) - $ / shares	Sep. 30, 2019	Dec. 31, 2018
Preferred stock, par value (in dollars per share/unit)	$ 0.01	$ 0.01
Preferred stock, authorized (shares)	110,000,000	110,000,000
Preferred stock, issued (shares)	44,450,000	50,650,000
Preferred stock, outstanding (shares)	44,450,000	50,650,000
Common stock, par value (in dollars per share/unit)	$ 0.01	$ 0.01
Common stock, authorized (shares)	315,000,000	315,000,000
Common stock, shares, issued (shares)	208,583,244	206,425,656
Common stock, shares, outstanding (shares)	208,583,244	206,425,656
Digital Realty Trust, L.P.
Preferred units, issued (units)	44,450,000	50,650,000
Preferred units, outstanding (units)	44,450,000	50,650,000
Common units, issued (units)	208,583,244	206,425,656
Common units, outstanding (units)	208,583,244	206,425,656
Limited Partners' units, issued (units)	9,143,981	10,580,884
Limited Partners' units outstanding (units)	9,143,981	10,580,884

XML

Acquired Intangible Assets and Liabilities (Schedule of Estimated Annual Amortization of Below Market Leases) (Details) - Below-Market Leases, Net of Above-Market Leases $ in Thousands	Sep. 30, 2019 USD ($)
Finite-Lived Intangible Assets [Line Items]
Remainder of 2019	$ (4,105)
2020	(10,693)
2021	(3,590)
2022	4,619
2023	9,384
Thereafter	73,492
Total	$ 69,107

XML

Leases (Minimum Commitment Under Operating Leases) (Details) $ in Thousands	Dec. 31, 2018 USD ($)
Leases [Abstract]
2019	$ 84,712
2020	87,396
2021	86,212
2022	81,976
2023	80,707
Thereafter	539,047
Total undiscounted future cash flows	$ 960,050

XML

Investments in Unconsolidated Joint Ventures (Summary Of Financial Information For Joint Ventures) (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Mar. 29, 2019	Dec. 31, 2018
Schedule of Equity Method Investments [Line Items]
Investments in unconsolidated joint ventures	$ 1,035,861		$ 175,108
Noncontrolling interests in consolidated joint ventures	$ 42,349		93,056
Ascenty Acquisition
Schedule of Equity Method Investments [Line Items]
% Ownership	51.00%	51.00%
Investments in unconsolidated joint ventures	$ 737,727		0
Ownership interest by noncontrolling interest	2.00%
Noncontrolling interests in consolidated joint ventures	$ 25,000
Digital MC
Schedule of Equity Method Investments [Line Items]
% Ownership	50.00%
Investments in unconsolidated joint ventures	$ 185,525		66,835
Chun Choi
Schedule of Equity Method Investments [Line Items]
% Ownership	50.00%
Investments in unconsolidated joint ventures	$ 98,706		96,094
Other
Schedule of Equity Method Investments [Line Items]
Investments in unconsolidated joint ventures	$ 13,903		$ 12,179

XML

Incentive Plan (Summary of Restricted Stock Activity) (Details)	9 Months Ended
	Sep. 30, 2019 $ / shares shares
Units
Granted (shares)	119,397
Restricted stock
Units
Unvested beginning of period (shares)	295,501
Granted (shares)	221,336
Vested (shares)	(104,955)
Cancelled or expired (shares)	(29,412)
Unvested end of period (shares)	382,470
Weighted-Average Grant Date Fair Value
Unvested, beginning of period (in dollars per share) | $ / shares	$ 97.49
Granted (in dollars per share) | $ / shares	114.95
Vested (in dollars per share) | $ / shares	92.80
Cancelled or expired (in dollars per share) | $ / shares	106.83
Unvested, end of period (in dollars per share) | $ / shares	$ 108.14
Restricted stock | Maximum
Weighted-Average Grant Date Fair Value
Award vesting period	4 years

XML

Capital and Accumulated Other Comprehensive Loss (5.850% Series K Cumulative Redeemable Preferred Units) (Details) - $ / shares	Dec. 31, 2019	Oct. 10, 2019	Jun. 29, 2019	Mar. 15, 2019	Sep. 30, 2019	Dec. 31, 2018
Class of Stock [Line Items]
Preferred stock, issued (shares)					44,450,000	50,650,000
Series K Preferred Units
Class of Stock [Line Items]
Dividend rate percentage				5.85%
Preferred stock, issued (shares)				8,400,000
Preferred stock dividend per share amount (in dollars per share)			$ 0.43875	$ 1.46250
Redemption price (in dollars per share)				$ 25.00
Series L Preferred Units | Subsequent Event
Class of Stock [Line Items]
Dividend rate percentage		5.20%
Preferred stock, issued (shares)		13,800,000
Preferred stock dividend per share amount (in dollars per share)		$ 1.30000
Redemption price (in dollars per share)		$ 25.00
Series L Preferred Units | Subsequent Event | Scenario, Forecast
Class of Stock [Line Items]
Preferred stock dividend per share amount (in dollars per share)	$ 0.29250

XML

Equity and Accumulated Other Comprehensive Loss, Net (Noncontrolling Interests in Operating Partnership) (Details) - USD ($) $ in Millions	Sep. 30, 2019	Dec. 31, 2018
Class of Stock [Line Items]
Number of units (units)	208,583,244	206,425,656
Percentage of total	95.80%	95.10%
Common stock conversion ratio	1
Digital Realty Trust, L.P.
Class of Stock [Line Items]
Common stock conversion ratio	1
Redeemable noncontrolling interests – operating partnership	$ 1,121.8	$ 1,076.9
Ascenty Acquisition
Class of Stock [Line Items]
Issuance of units in connection with Ascenty Acquisition (units)	2,338,874	2,338,874
Percentage of total	1.10%	1.10%
Common units held by third parties
Class of Stock [Line Items]
Common units held by third parties (units)	4,762,394	6,297,272
Percentage of total	2.20%	2.90%
Incentive units held by employees and directors (see Note 14)
Class of Stock [Line Items]
Incentive units held by employees and directors (units)	2,042,713	1,944,738
Percentage of total	0.90%	0.90%
Noncontrolling Interests in Operating Partnership
Class of Stock [Line Items]
Number of units (units)	217,727,225	217,006,540
Percentage of total	100.00%	100.00%

XML

Incentive Plan (Schedule of Deferred and Unearned Compensation) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018
Long-term incentive units
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Deferred compensation, expensed	$ 2.4	$ 1.2	$ 6.2	$ 5.2
Deferred compensation, capitalized	0.0	0.1	0.1	0.2
Unearned Compensation	17.8		$ 17.8		$ 11.5
Expected period to recognize unearned compensation (in years)			2 years 6 months
Market performance-based awards
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Deferred compensation, expensed	3.1	3.1	$ 9.7	10.0
Deferred compensation, capitalized	0.2	0.3	0.6	0.7
Unearned Compensation	32.8		$ 32.8		24.8
Expected period to recognize unearned compensation (in years)			2 years 8 months 12 days
Restricted stock
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Deferred compensation, expensed	2.9	1.5	$ 8.6	4.7
Deferred compensation, capitalized	0.7	$ 1.1	2.1	$ 3.2
Unearned Compensation	$ 32.9		$ 32.9		$ 23.6
Expected period to recognize unearned compensation (in years)			2 years 9 months 18 days

XML

Investments in Unconsolidated Joint Ventures

9 Months Ended

Sep. 30, 2019

Equity Method Investments and Joint Ventures [Abstract]

Investments in Unconsolidated Joint Ventures

Investments in Unconsolidated Joint Ventures

As of September 30, 2019 and December 31, 2018, our investments in unconsolidated joint ventures accounted for under the equity method of accounting presented in our condensed consolidated balance sheets consist of the following (in thousands):

Joint Venture	Metropolitan Area	% Ownership		Balance as of September 30, 2019		Balance as of December 31, 2018
Ascenty (1)	Brazil / Chile	51%	(2)	$	737,727	$	—
Digital MC	Osaka / Tokyo	50%		185,525		66,835
Chun Choi	Hong Kong	50%		98,706		96,094
Other				13,903		12,179
Total				$	1,035,861	$	175,108

(1) Our maximum exposure to loss related to this unconsolidated variable interest entity (VIE) is limited to our equity investment in this VIE.

(2) Includes an approximate 2% ownership interest held by a non-controlling interest in our entity that holds the investment in the Ascenty joint venture, which has a carrying value of approximately $25.0 million.

The debt of our unconsolidated joint ventures generally are non-recourse to us, except for customary exceptions pertaining to such matters as intentional misuse of funds, environmental conditions, and material misrepresentations.

Ascenty Joint Venture

We completed the acquisition of Ascenty on December 20, 2018 for total cash and equity consideration of approximately $2.0 billion, including approximately $116.0 million of assumed cash and cash equivalents. The transaction was initially funded with $600.0 million of proceeds from a non-recourse, five-year secured term loan; the issuance of approximately $254 million of Operating Partnership common units in exchange for the substantial majority of the Ascenty management's equity interests; and approximately $1.0 billion of unsecured corporate borrowings. On March 29, 2019, we formed a joint venture with Brookfield Infrastructure, an affiliate of Brookfield Asset Management. Brookfield invested approximately $702 million in exchange for approximately 49% of the total equity interests and a subsidiary of the Operating Partnership retained the remaining 51% equity interests (including an approximate 2% ownership interest held by a non-controlling interest in our entity that holds the investment in the Ascenty joint venture) in the joint venture which owns and operates Ascenty. The governing documents related to the Ascenty joint venture provide Brookfield and the Company shared power to direct the activities of the Ascenty joint venture that most significantly impact the Ascenty joint venture's economic performance. As a result of the formation of the joint venture, the Company determined that the joint venture is a variable interest entity (VIE) since the Ascenty joint venture's equity investment at risk is not sufficient to finance the Ascenty joint venture's ongoing data center development activities without additional subordinated financial support. The Company concluded that it is not the primary beneficiary because power is shared and it does not have substantive kick-out rights to obtain control and deconsolidated Ascenty. We recognized a gain of approximately $67.5 million (net of the accumulated foreign currency translation loss related to Ascenty) on the deconsolidation and subsequent recognition of our subsidiary's 51% equity investment in the Ascenty joint venture at its estimated fair value of $727 million on March 29, 2019. The fair value of the Company’s retained equity investment is based on Level 2 measurements within the fair value hierarchy based on the cash price paid by Brookfield for their 49% interest. The gain was calculated based on the: (i) the sum of the cash proceeds of $702 million received from Brookfield for its 49% interest and the estimated fair value of $727 million for our 51% retained interest less (ii) the carrying value of the Ascenty assets and liabilities deconsolidated as of March 29, 2019. The gain related to the remeasurement of the Company's retained equity interests to fair value was approximately $89.2 million. The reported gain of $67.5 million was net of a foreign currency translation loss of approximately $21.7 million previously included in accumulated other comprehensive loss, net, which accumulated during the period the Company consolidated Ascenty and translated the Brazilian Real, Ascenty's functional currency, into the Company's functional currency. The Company has no other subsidiaries or businesses with the Brazilian Real as its functional currency and, therefore, the deconsolidation of Ascenty resulted in the reclassification out of accumulated other comprehensive loss into a component of income from continuing operations in the condensed consolidated income statement. The Ascenty deconsolidation did not meet the criteria to be presented as a discontinued operation in accordance with ASC 205-20, Presentation of Financial Statements Discontinued Operations, because the deconsolidation of Ascenty does not represent a strategic shift in and does not have a major effect on the Company's operations, as defined by ASC 205-20.

XML

Income per Share

9 Months Ended

Sep. 30, 2019

Earnings Per Share [Abstract]

Income per Share

Income per Share

The following is a summary of basic and diluted income per share (in thousands, except share and per share amounts): 

	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
Net income available to common stockholders	$	49,827	$	67,268	$	177,434	$	218,700
Weighted average shares outstanding—basic	208,421,470		206,118,472		208,173,995		205,931,031
Potentially dilutive common shares:
Unvested incentive units	181,064		169,100		142,670		160,117
Forward equity offering	1,013,970		37,884		705,720		1,847
Market performance-based awards	185,267		440,800		177,150		462,632
Weighted average shares outstanding—diluted	209,801,771		206,766,256		209,199,535		206,555,627
Income per share:
Basic	$	0.24	$	0.33	$	0.85	$	1.06
Diluted	$	0.24	$	0.33	$	0.85	$	1.06

We have excluded the following potentially dilutive securities in the calculations above as they would be antidilutive or not dilutive: 

	Three Months Ended September 30,		Nine Months Ended September 30,
	2019	2018	2019	2018
Weighted average of Operating Partnership common units not owned by Digital Realty Trust, Inc.	8,953,826	8,170,912	9,080,816	8,268,382
Potentially dilutive Series C Cumulative Redeemable Perpetual Preferred Stock	1,614,005	1,727,724	1,678,511	1,864,489
Potentially dilutive Series G Cumulative Redeemable Preferred Stock	2,001,277	2,142,282	2,081,260	2,311,864
Potentially dilutive Series H Cumulative Redeemable Preferred Stock	—	3,139,291	1,053,127	3,387,795
Potentially dilutive Series I Cumulative Redeemable Preferred Stock	2,003,619	2,144,789	2,083,696	2,314,569
Potentially dilutive Series J Cumulative Redeemable Preferred Stock	1,598,556	1,711,186	1,662,444	1,846,643
Potentially dilutive Series K Cumulative Redeemable Preferred Stock	1,680,969	—	1,232,711	—
Total	17,852,252	19,036,184	18,872,565	19,993,742

XML

CONDENSED CONSOLIDATED STATEMENT OF EQUITY (unaudited) - USD ($) $ in Thousands	Total	Interest Rate Swap	Redeemable Noncontrolling Interests -- Operating Partnership	Preferred Stock	Common Stock	Additional Paid-in Capital	Accumulated Dividends in Excess of Earnings	Accumulated Other Comprehensive Loss, Net	Accumulated Other Comprehensive Loss, Net Interest Rate Swap	Total Stockholders’ Equity	Total Stockholders’ Equity Interest Rate Swap	Noncontrolling Interests in Operating Partnership	Noncontrolling Interests in Operating Partnership Interest Rate Swap	Noncontrolling Interests in Consolidated Joint Ventures	Total Noncontrolling Interests	Total Noncontrolling Interests Interest Rate Swap	Digital Realty Trust, L.P.	Digital Realty Trust, L.P. Interest Rate Swap	Total Partners' Capital Digital Realty Trust, L.P.	Total Partners' Capital Digital Realty Trust, L.P. Interest Rate Swap	Redeemable Limited Partner Common Units Digital Realty Trust, L.P.	Accumulated Other Comprehensive Loss, Net Digital Realty Trust, L.P.	Accumulated Other Comprehensive Loss, Net Digital Realty Trust, L.P. Interest Rate Swap	Noncontrolling Interests in Consolidated Joint Ventures Digital Realty Trust, L.P.	General Partner Preferred Units Digital Realty Trust, L.P.	General Partner Common Units Digital Realty Trust, L.P.	Limited Partners Common Units Digital Realty Trust, L.P.
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Number of units (units)																									50,650,000	205,470,300	8,489,095
Beginning balance at Dec. 31, 2017	$ 11,049,450		$ 53,902	$ 1,249,560	$ 2,044	$ 11,261,461	$ (2,055,552)	$ (108,432)		$ 10,349,081		$ 698,126		$ 2,243	$ 700,369
Beginning balance (shares) at Dec. 31, 2017					205,470,300
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Conversion of common units to common stock					$ 6	49,690				49,696		(49,696)			(49,696)
Conversion of common units to common stock (shares)					567,792
Issuance of unvested restricted stock, net of forfeitures (shares)					206,264
Shares issued under employee stock purchase plan	5,874					5,874				5,874							$ 5,874		$ 5,874							$ 5,874
Shares issued under employee stock purchase plan (shares)					69,532																					69,532
Shares repurchased and retired to satisfy tax withholding upon vesting	(4,952)				$ (1)	(4,951)				(4,952)							(4,952)		(4,952)							$ (4,952)
Shares repurchased and retired to satisfy tax withholding upon vesting (shares)					(46,833)																					(46,833)
Payment of offering costs	(1,292)					(1,292)				(1,292)
Amortization of share-based compensation	25,213					25,213				25,213							25,213		25,213							$ 25,213
Reclassification of vested share-based awards						(3,631)				(3,631)		3,631			3,631
Adjustment to redeemable noncontrolling interests—operating partnership	36,349		(36,349)			671				671		35,678			35,678
Dividends declared on preferred stock	(60,987)						(60,987)			(60,987)
Dividends and distributions on common stock and common and incentive units	(649,810)						(624,252)			(624,252)		(25,558)			(25,558)
Contributions from noncontrolling interests in consolidated joint ventures, net of distributions	63,745													63,745	63,745
Net income (loss)	288,518						279,687			279,687		8,880		(49)	8,831		288,518		288,567					$ (49)	$ 60,987	$ 218,700	$ 8,880
Other comprehensive income (loss)—foreign currency translation adjustments	(8,608)							(8,272)		(8,272)		(336)			(336)		(8,608)		(8,608)			$ (8,608)
Other comprehensive loss—fair value of interest rate swaps	16,336	$ 16,336							$ 15,705		$ 15,705		$ 631			$ 631	16,336	$ 16,336		$ 16,336			$ 16,336
Other comprehensive loss—reclassification of accumulated other comprehensive income to interest expense	(2,289)							(2,202)		(2,202)		(87)			(87)		(2,289)		(2,289)			(2,289)
Ending balance at Sep. 30, 2018	10,763,462		17,553	1,249,560	$ 2,049	11,333,035	(2,455,189)	(103,201)		10,026,254		671,269		65,939	737,208
Ending balance (shares) at Sep. 30, 2018					206,267,055
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Conversion of limited partner common units to general partner common units (units)																										567,792	(567,792)
Noncontrolling interests in operating partnership converted to shares of common stock	49,696																									$ 49,696	$ (49,696)
Issuance of unvested restricted common units (units)																										206,264
Payment of offering costs																	(1,292)		(1,292)							$ (1,292)
Issuance of common units, net of forfeitures (units)																											419,284
Reclassification of vested share-based awards																										(3,631)	$ 3,631
Adjustment to redeemable partnership units																	36,349		36,349		$ (36,349)					671	35,678
Partners' Capital Account, Distributions																	(710,797)		(710,797)						$ (60,987)	$ (624,252)	$ (25,558)
Distributions From Noncontrolling Interests In Consolidated Joint Ventures Subsidiary																	63,745							63,745
Number of units (units)																									50,650,000	206,055,117	8,498,032
Beginning balance at Jun. 30, 2018	10,796,928		52,805	1,249,560	$ 2,047	11,310,132	(2,314,291)	(107,070)		10,140,378		654,261		2,289	656,550
Beginning balance (shares) at Jun. 30, 2018					206,055,117
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Conversion of common units to common stock					$ 2	13,867				13,869		(13,869)			(13,869)
Conversion of common units to common stock (shares)					161,153
Issuance of unvested restricted stock, net of forfeitures (shares)					13,146
Shares issued under employee stock purchase plan	3,365					3,365				3,365							3,365		3,365							$ 3,365
Shares issued under employee stock purchase plan (shares)					37,639																					37,639
Shares repurchased and retired to satisfy tax withholding upon vesting	(234)					(234)				(234)							(234)		(234)							$ (234)
Shares repurchased and retired to satisfy tax withholding upon vesting (shares)																										0
Payment of offering costs	(640)					(640)				(640)
Amortization of share-based compensation	7,755					7,755				7,755							7,755		7,755							$ 7,755
Reclassification of vested share-based awards						(784)				(784)		784			784
Adjustment to redeemable noncontrolling interests—operating partnership	35,252		(35,252)			(426)				(426)		35,678			35,678
Dividends declared on preferred stock	(20,329)						(20,329)			(20,329)
Dividends and distributions on common stock and common and incentive units	(216,604)						(208,166)			(208,166)		(8,438)			(8,438)
Contributions from noncontrolling interests in consolidated joint ventures, net of distributions	63,683													63,683	63,683
Net income (loss)	90,264						87,597			87,597		2,700		(33)	2,667		90,264		90,297		0			(33)	$ 20,329	$ 67,268	$ 2,700
Other comprehensive income (loss)—foreign currency translation adjustments	2,368							2,278		2,278		90			90		2,368		2,368			2,368		0
Other comprehensive loss—fair value of interest rate swaps	2,925	2,925							2,814		2,814		111			111	2,925	2,925		2,925			2,925
Other comprehensive loss—reclassification of accumulated other comprehensive income to interest expense	(1,271)							(1,223)		(1,223)		(48)			(48)		(1,271)		(1,271)			(1,271)
Ending balance at Sep. 30, 2018	$ 10,763,462		17,553	1,249,560	$ 2,049	11,333,035	(2,455,189)	(103,201)		10,026,254		$ 671,269		65,939	737,208
Ending balance (shares) at Sep. 30, 2018					206,267,055
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Conversion of limited partner common units to general partner common units (units)																										161,153	(161,153)
Noncontrolling interests in operating partnership converted to shares of common stock																										$ 13,869	$ (13,869)
Issuance of unvested restricted common units (units)																										13,146
Payment of offering costs																	(640)		(640)							$ (640)
Issuance of common units, net of forfeitures (units)																											3,708
Reclassification of vested share-based awards																										(784)	$ 784
Adjustment to redeemable partnership units																	35,252		35,252		(35,252)					(426)	35,678
Partners' Capital Account, Distributions																	(236,933)		(236,933)		0				$ (20,329)	$ (208,166)	$ (8,438)
Distributions From Noncontrolling Interests In Consolidated Joint Ventures Subsidiary																	63,683							63,683
Number of units (units)																									50,650,000	206,267,055	8,340,587
Number of units (units)	206,425,656											217,006,540													50,650,000	206,425,656	10,580,884
Beginning balance at Dec. 31, 2018	$ 10,858,210		15,832	1,249,560	$ 2,051	11,355,751	(2,633,071)	(115,647)		9,858,644		$ 906,510		93,056	999,566
Beginning balance (shares) at Dec. 31, 2018					206,425,656
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Conversion of common units to common stock					$ 18	163,843				163,861		(163,861)			(163,861)
Conversion of common units to common stock (shares)					1,841,692
Issuance of unvested restricted stock, net of forfeitures (shares)					252,122
Shares issued under employee stock purchase plan	5,462					5,462				5,462							5,462		5,462							$ 5,462
Shares issued under employee stock purchase plan (shares)					63,774																					63,774
Payment of offering costs	(1,258)					(1,258)				(1,258)
Issuance of series K preferred stock, net of offering costs	203,264			203,264						203,264							203,264		203,264						$ 203,264
Redemption of series H preferred stock	(365,050)			(353,290)			(11,760)			(365,050)							(365,050)		(365,050)						(353,290)	$ (11,760)
Amortization of share-based compensation	28,774					28,774				28,774							28,774		28,774							28,774
Reclassification of vested share-based awards						(7,962)				(7,962)		7,962			7,962
Adjustment to redeemable noncontrolling interests—operating partnership	(3,630)		3,630			(3,630)				(3,630)
Dividends declared on preferred stock	(54,283)						(54,283)			(54,283)
Dividends and distributions on common stock and common and incentive units	(704,028)		(507)				(674,713)			(674,713)		(29,315)			(29,315)
Contributions from noncontrolling interests in consolidated joint ventures, net of distributions	60,961													60,961	60,961
Deconsolidation of consolidated joint venture	(110,086)													(110,086)	(110,086)		(110,086)							(110,086)
Net income (loss)	249,760		135				243,477			243,477		7,865		(1,582)	6,283		249,760		251,342		135			(1,582)	54,283	$ 189,194	$ 7,865
Other comprehensive income (loss)—foreign currency translation adjustments	66,511							63,725		63,725		2,786		0	2,786		66,511		66,511			66,511		0
Other comprehensive loss—fair value of interest rate swaps	(11,379)	(11,379)							(10,901)		(10,901)		(478)			(478)	(11,379)	(11,379)		(11,379)			(11,379)
Other comprehensive loss—reclassification of accumulated other comprehensive income to interest expense	(6,055)							(5,802)		(5,802)		(253)			(253)		(6,055)		(6,055)			(6,055)
Ending balance at Sep. 30, 2019	10,210,855		19,090	1,099,534	$ 2,069	11,540,980	(3,136,668)	(68,625)		9,437,290		731,216		42,349	773,565
Ending balance (shares) at Sep. 30, 2019					208,583,244
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Conversion of limited partner common units to general partner common units (units)																										1,841,692	(1,841,692)
Noncontrolling interests in operating partnership converted to shares of common stock	163,861																									$ 163,861	$ (163,861)
Issuance of unvested restricted common units (units)																										252,122
Payment of offering costs																	(1,258)		(1,258)							$ (1,258)
Issuance of common units, net of forfeitures (units)																											404,789
Reclassification of vested share-based awards																										(7,962)	$ 7,962
Adjustment to redeemable partnership units																	(3,630)		(3,630)		3,630					(3,630)
Partners' Capital Account, Distributions																	(758,311)		(758,311)		(507)				$ (54,283)	$ (674,713)	$ (29,315)
Distributions From Noncontrolling Interests In Consolidated Joint Ventures Subsidiary																	60,961							60,961
Number of units (units)																									44,450,000	208,324,538	9,370,049
Beginning balance at Jun. 30, 2019	10,473,720		17,344	1,099,534	$ 2,067	11,511,519	(2,961,307)	(89,588)		9,562,225		756,050		155,445	911,495
Beginning balance (shares) at Jun. 30, 2019					208,324,538
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Conversion of common units to common stock					$ 2	18,753				18,755		(18,755)			(18,755)
Conversion of common units to common stock (shares)					218,752
Issuance of unvested restricted stock, net of forfeitures (shares)					1,414
Shares issued under employee stock purchase plan	3,203					3,203				3,203							3,203		3,203							$ 3,203
Shares issued under employee stock purchase plan (shares)					38,540																					38,540
Payment of offering costs	(282)					(282)				(282)
Amortization of share-based compensation	9,913					9,913				9,913							9,913		9,913							$ 9,913
Reclassification of vested share-based awards						(250)				(250)		250			250
Adjustment to redeemable noncontrolling interests—operating partnership	(1,876)		1,876			(1,876)				(1,876)
Dividends declared on preferred stock	(16,670)						(16,670)			(16,670)
Dividends and distributions on common stock and common and incentive units	(234,678)		(169)				(225,188)			(225,188)		(9,490)			(9,490)
Distributions from noncontrolling interests in consolidated joint ventures, net of contributions	(1,787)													(1,787)	(1,787)
Deconsolidation of consolidated joint venture	(110,086)													(110,086)	(110,086)		(110,086)							(110,086)
Net income (loss)	67,535		39				66,497			66,497		2,261		(1,223)	1,038		67,535		68,758		39			(1,223)	$ 16,670	$ 49,827	$ 2,261
Other comprehensive income (loss)—foreign currency translation adjustments	24,668							23,652		23,652		1,016		0	1,016		24,668		24,668			24,668		0
Other comprehensive loss—fair value of interest rate swaps	(1,000)	$ (1,000)							$ (958)		$ (958)		$ (42)			$ (42)	(1,000)	$ (1,000)		$ (1,000)			$ (1,000)
Other comprehensive loss—reclassification of accumulated other comprehensive income to interest expense	(1,805)							(1,731)		(1,731)		(74)			(74)		(1,805)		(1,805)			$ (1,805)
Ending balance at Sep. 30, 2019	$ 10,210,855		$ 19,090	$ 1,099,534	$ 2,069	$ 11,540,980	$ (3,136,668)	$ (68,625)		$ 9,437,290		$ 731,216		$ 42,349	$ 773,565
Ending balance (shares) at Sep. 30, 2019					208,583,244
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Conversion of limited partner common units to general partner common units (units)																										218,752	(218,752)
Noncontrolling interests in operating partnership converted to shares of common stock																										$ 18,755	$ (18,755)
Issuance of unvested restricted common units (units)																										1,414
Payment of offering costs																	(282)		(282)							$ (282)
Issuance of common units, net of forfeitures (units)																											(7,316)
Reclassification of vested share-based awards																										(250)	$ 250
Adjustment to redeemable partnership units																	(1,876)		(1,876)		1,876					(1,876)
Partners' Capital Account, Distributions																	(251,348)		$ (251,348)		$ (169)				$ (16,670)	$ (225,188)	$ (9,490)
Distributions From Noncontrolling Interests In Consolidated Joint Ventures Subsidiary																	$ (1,787)							$ (1,787)
Number of units (units)	208,583,244											217,727,225													44,450,000	208,583,244	9,143,981

XML

Capital and Accumulated Other Comprehensive Loss (Tables)

9 Months Ended

Sep. 30, 2019

Class of Stock [Line Items]

Schedule of Distributions

We have declared and paid the following dividends on our common and preferred stock for the nine months ended September 30, 2019 (in thousands, except per share data): 

Date dividend declared	Dividend payment date	Series C Preferred Stock		Series G Preferred Stock		Series H Preferred Stock			Series I Preferred Stock		Series J Preferred Stock		Series K Preferred Stock			Common Stock
February 21, 2019	March 29, 2019	$	3,333	$	3,672	$	6,730		$	3,969	$	2,625	$	—		$	224,802
May 13, 2019	June 28, 2019	3,333		3,672		—		(1)	3,969		2,625		3,686		(2)	224,895
August 13, 2019	September 30, 2019	3,333		3,672		—			3,969		2,625		3,071			225,188
		$	9,999	$	11,016	$	6,730		$	11,907	$	7,875	$	6,757		$	674,885
Annual rate of dividend per share		$	1.65625	$	1.46875	$	1.84375		$	1.58750	$	1.31250	$	1.46250		$	4.32000

(1) Redeemed on April 1, 2019 for $25.00 per share, or a redemption price of $25.00 per share, plus accrued and unpaid dividends up to but not including the redemption date. In connection with the redemption, the previously incurred offering costs of approximately $11.8 million were recorded as a reduction to net income available to common stockholders.

(2)

Represents a pro rata dividend from and including the original issue date to and including June 30, 2019.

Schedule of Accumulated Other Comprehensive Income, Net

The accumulated balances for each item within other comprehensive income (loss), net are as follows (in thousands):

	Foreign currency translation adjustments			Cash flow hedge adjustments			Foreign currency net investment hedge adjustments		Accumulated other comprehensive  income (loss), net
Balance as of December 31, 2018	$	(158,649	)	$	17,264		$	25,738	$	(115,647	)
Net current period change	42,038			(10,901		)	—		31,137
Reclassification of foreign currency translation adjustment due to deconsolidation of Ascenty	21,687			—			—		21,687
Reclassification to interest expense from interest rate swaps	—			(5,802		)	—		(5,802		)
Balance as of September 30, 2019	$	(94,924	)	$	561		$	25,738	$	(68,625	)

Digital Realty Trust, L.P.

Class of Stock [Line Items]

Schedule of Distributions

The Operating Partnership has declared and paid the following distributions on its common and preferred units for the nine months ended September 30, 2019 (in thousands, except for per unit data):

Date distribution declared	Distribution payment date	Series C Preferred Units		Series G Preferred Units		Series H Preferred Units			Series I Preferred Units		Series J Preferred Units		Series K Preferred Units			Common Units
February 21, 2019	March 29, 2019	$	3,333	$	3,672	$	6,730		$	3,969	$	2,625	$	—		$	235,256
May 13, 2019	June 28, 2019	3,333		3,672		—		(1)	3,969		2,625		3,686		(2)	235,142
August 13, 2019	September 30, 2019	3,333		3,672		—			3,969		2,625		3,071			235,164
		$	9,999	$	11,016	$	6,730		$	11,907	$	7,875	$	6,757		$	705,562
Annual rate of distribution per unit		$	1.65625	$	1.46875	$	1.84375		$	1.58750	$	1.31250	$	1.46250		$	4.32000

(1) Redeemed on April 1, 2019 for $25.00 per unit, or a redemption price of $25.00 per unit, plus accrued and unpaid distributions up to but not including the redemption date. In connection with the redemption, the previously incurred offering costs of approximately $11.8 million were recorded as a reduction to net income available to common unitholders.

(2)

Represents a pro rata distribution from and including the original issue date to and including June 30, 2019.

Schedule of Accumulated Other Comprehensive Income, Net

The accumulated balances for each item within other comprehensive income are as follows (in thousands):

	Foreign currency translation adjustments			Cash flow hedge adjustments			Foreign currency net investment hedge adjustments		Accumulated other comprehensive loss
Balance as of December 31, 2018	$	(163,531	)	$	16,986		$	26,152	$	(120,393	)
Net current period change	44,824			(11,379		)	—		33,445
Reclassification of foreign currency translation adjustment due to deconsolidation of Ascenty	21,687			—			—		21,687
Reclassification to interest expense from interest rate swaps	—			(6,055		)	—		(6,055		)
Balance as of September 30, 2019	$	(97,020	)	$	(448	)	$	26,152	$	(71,316	)

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Properties:
Land	$ 790,821	$ 859,113
Acquired ground leases	10,133	10,575
Buildings and improvements	14,998,062	15,610,992
Tenant improvements	608,064	574,336
Total investments in operating properties	16,407,080	17,055,016
Accumulated depreciation and amortization	(4,298,629)	(3,935,267)
Net investments in operating properties	12,108,451	13,119,749
Construction in progress and space held for development	1,647,130	1,621,928
Land held for future development	150,265	162,941
Net investments in properties	13,905,846	14,904,618
Investments in unconsolidated joint ventures	1,035,861	175,108
Net investments in real estate	14,941,707	15,079,726
Operating lease right-of-use assets, net	634,085	0
Cash and cash equivalents	7,190	126,700
Accounts and other receivables, net	304,712	299,621
Deferred rent, net	471,516	463,248
Acquired above-market leases, net	84,315	119,759
Goodwill	3,338,168	4,348,007
Acquired in-place lease value, deferred leasing costs and intangibles, net	2,245,017	3,144,395
Assets held for sale and contribution	967,527	0
Other assets	178,528	185,239
Total assets	23,172,765	23,766,695
LIABILITIES AND EQUITY
Unsecured senior notes, net	8,189,138	7,589,126
Secured debt, including premiums	105,153	685,714
Operating lease liabilities	699,381	0
Accounts payable and other accrued liabilities	938,740	1,164,509
Accrued dividends and distributions	0	217,241
Acquired below-market leases, net	153,422	200,113
Security deposits and prepaid rents	203,708	209,311
Obligations associated with assets held for sale and contribution	23,534	0
Total liabilities	12,942,820	12,892,653
Redeemable noncontrolling interests – operating partnership	19,090	15,832
Commitments and contingencies
Stockholders’ Equity:
Preferred stock/units	1,099,534	1,249,560
Common Stock: $0.01 par value per share, 315,000,000 shares authorized, 208,583,244 and 206,425,656 shares issued and outstanding as of September 30, 2019 and December 31, 2018, respectively	2,069	2,051
Partners’ capital:
Additional paid-in capital	11,540,980	11,355,751
Accumulated dividends in excess of earnings	(3,136,668)	(2,633,071)
Accumulated other comprehensive loss, net	(68,625)	(115,647)
Total stockholders’ equity	9,437,290	9,858,644
Noncontrolling Interests:
Noncontrolling interests in operating partnership	731,216	906,510
Noncontrolling interests in consolidated joint ventures	42,349	93,056
Total noncontrolling interests	773,565	999,566
Total equity	10,210,855	10,858,210
Total liabilities and equity/capital	23,172,765	23,766,695
Digital Realty Trust, L.P.
Properties:
Land	790,821	859,113
Acquired ground leases	10,133	10,575
Buildings and improvements	14,998,062	15,610,992
Tenant improvements	608,064	574,336
Total investments in operating properties	16,407,080	17,055,016
Accumulated depreciation and amortization	(4,298,629)	(3,935,267)
Net investments in operating properties	12,108,451	13,119,749
Construction in progress and space held for development	1,647,130	1,621,928
Land held for future development	150,265	162,941
Net investments in properties	13,905,846	14,904,618
Investments in unconsolidated joint ventures	1,035,861	175,108
Net investments in real estate	14,941,707	15,079,726
Operating lease right-of-use assets, net	634,085	0
Cash and cash equivalents	7,190	126,700
Accounts and other receivables, net	304,712	299,621
Deferred rent, net	471,516	463,248
Acquired above-market leases, net	84,315	119,759
Goodwill	3,338,168	4,348,007
Acquired in-place lease value, deferred leasing costs and intangibles, net	2,245,017	3,144,395
Assets held for sale and contribution	967,527	0
Other assets	178,528	185,239
Total assets	23,172,765	23,766,695
LIABILITIES AND EQUITY
Unsecured senior notes, net	8,189,138	7,589,126
Secured debt, including premiums	105,153	685,714
Operating lease liabilities	699,381	0
Accounts payable and other accrued liabilities	938,740	1,164,509
Accrued dividends and distributions	0	217,241
Acquired below-market leases, net	153,422	200,113
Security deposits and prepaid rents	203,708	209,311
Obligations associated with assets held for sale and contribution	23,534	0
Total liabilities	12,942,820	12,892,653
Redeemable noncontrolling interests – operating partnership	19,090	15,832
Commitments and contingencies
Stockholders’ Equity:
Preferred stock/units	1,099,534	1,249,560
Partners’ capital:
Common units, 208,583,244 and 206,425,656 units issued and outstanding as of September 30, 2019 and December 31, 2018, respectively	8,406,381	8,724,731
Limited Partners, 9,143,981 and 10,580,884 units issued and outstanding as of September 30, 2019 and December 31, 2018, respectively	733,907	911,256
Accumulated other comprehensive loss, net	(71,316)	(120,393)
Total partners’ capital	10,168,506	10,765,154
Noncontrolling Interests:
Noncontrolling interests in consolidated joint ventures	42,349	93,056
Total capital	10,210,855	10,858,210
Total liabilities and equity/capital	23,172,765	23,766,695
Global revolving credit facilities, net
LIABILITIES AND EQUITY
Line of credit	1,833,512	1,647,735
Global revolving credit facilities, net | Digital Realty Trust, L.P.
LIABILITIES AND EQUITY
Line of credit	1,833,512	1,647,735
Unsecured term loans, net
LIABILITIES AND EQUITY
Line of credit	796,232	1,178,904
Unsecured term loans, net | Digital Realty Trust, L.P.
LIABILITIES AND EQUITY
Line of credit	$ 796,232	$ 1,178,904

XML

Debt of the Operating Partnership (Tables) - Digital Realty Trust, L.P.

9 Months Ended

Sep. 30, 2019

Debt Instrument [Line Items]

Summary of Outstanding Indebtedness of the Operating Partnership

A summary of outstanding indebtedness of the Operating Partnership as of September 30, 2019 and December 31, 2018 is as follows (in thousands):

Indebtedness	Interest Rate at September 30, 2019		Maturity Date		Principal Outstanding at September 30, 2019				Principal Outstanding at December 31, 2018
Global revolving credit facilities	Various	(1)(4)	Jan 24, 2023	(1)	$	1,846,026		(2)	$	1,663,156		(2)
Deferred financing costs, net					(12,514		)		(15,421		)
Global revolving credit facilities, net					1,833,512				1,647,735
Unsecured Term Loans
2019 Term Loan	Base Rate + 1.000%		Jan 19, 2019		—				375,000
2023 Term Loan	Various	(3)(4)	Jan 15, 2023		300,000			(5)	300,000			(5)
2024 Term Loan	Various	(3)(4)	Jan 24, 2023	(3)	499,533			(5)	508,120			(5)
Deferred financing costs, net					(3,301		)		(4,216		)
Unsecured term loans, net					796,232				1,178,904
Floating rate notes due 2019	EURIBOR + 0.500%		May 22, 2019		—			(11)	143,338			(6)
5.875% notes due 2020	5.875%		Feb 1, 2020		—			(8)	500,000
3.400% notes due 2020	3.400%		Oct 1, 2020		—			(12)	500,000
5.250% notes due 2021	5.250%		Mar 15, 2021		—			(12)	400,000
3.950% notes due 2022	3.950%		Jul 1, 2022		500,000				500,000
3.625% notes due 2022	3.625%		Oct 1, 2022		300,000				300,000
2.750% notes due 2023	2.750%		Feb 1, 2023		350,000				350,000
4.750% notes due 2023	4.750%		Oct 13, 2023		368,670			(7)	382,620			(7)
2.625% notes due 2024	2.625%		Apr 15, 2024		653,940			(6)	688,020			(6)
2.750% notes due 2024	2.750%		Jul 19, 2024		307,225			(7)	318,850			(7)
4.250% notes due 2025	4.250%		Jan 17, 2025		491,560			(7)	510,160			(7)
4.750% notes due 2025	4.750%		Oct 1, 2025		450,000				450,000
2.500% notes due 2026	2.500%		Jan 16, 2026		1,171,642			(6)	—
3.700% notes due 2027	3.700%		Aug 15, 2027		1,000,000				1,000,000
4.450% notes due 2028	4.450%		Jul 15, 2028		650,000				650,000
3.600% notes due 2029	3.600%		Jul 1, 2029		900,000				—
3.300% notes due 2029	3.300%		Jul 19, 2029		430,115			(7)	446,390			(7)
3.750% notes due 2030	3.750%		Oct 17, 2030		675,895			(7)(9)	510,160			(7)
Unamortized discounts, net of premiums					(11,183		)		(19,859		)
Total senior notes, net of discount					8,237,864				7,629,679
Deferred financing costs, net					(48,726		)		(40,553		)
Total unsecured senior notes, net of discount and deferred financing costs					8,189,138				7,589,126

Indebtedness	Interest Rate at September 30, 2019		Maturity Date	Principal Outstanding September 30, 2019				Principal Outstanding December 31, 2018
Secured Debt:
731 East Trade Street	8.22%		Jul 1, 2020	$	1,299			$	1,776
Secured note due March 2023	LIBOR + 1.000%	(4)	Mar 1, 2023	104,000				104,000
Secured note due December 2023	Base Rate + 4.250%		Dec 20, 2023	—			(10)	600,000
Unamortized net premiums				78				148
Total mortgage loans, including premiums				105,377				705,924
Deferred financing costs, net				(224		)		(20,210		)
Total secured debt, including premiums and net of deferred financing costs				105,153				685,714
Total indebtedness				$	10,924,035			$	11,101,479

_________________________________ 

(1) The interest rate for borrowings under the global revolving credit facility equals the applicable index plus a margin of 90 basis points, which is based on the current credit rating of our long-term debt. An annual facility fee of 20 basis points, which is based on the credit rating of our long-term debt, is due and payable quarterly on the total commitment amount of the facility. Two six months extensions are available, which we may exercise if certain conditions are met. The interest rate for borrowings under the Yen revolving credit facility equals the applicable index plus a margin of 50 basis points, which is based on the current credit rating of our long-term debt.

(2) Balances as of September 30, 2019 and December 31, 2018 are as follows (balances, in thousands):

Denomination of Draw	Balance as of September 30, 2019			Weighted-average interest rate			Balance as of December 31, 2018			Weighted-average interest rate
Floating Rate Borrowing (a)(e)
U.S. dollar ($)	$	960,000	(b)	3.00	%	(b)	$	890,000	(b)	3.37	%	(b)
British pound sterling (£)	44,240		(c)	1.61	%		8,290		(d)	1.61	%
Euro (€)	438,685		(c)	0.90	%		451,800		(d)	0.90	%
Australian dollar (AUD)	31,725		(c)	1.94	%		27,632		(d)	2.82	%
Hong Kong dollar (HKD)	11,851		(c)	2.85	%		8,797		(d)	3.14	%
Japanese yen (JPY)	—			—	%		4,105		(d)	0.90	%
Singapore dollar (SGD)	75,182		(c)	2.55	%		77,112		(d)	2.79	%
Canadian dollar (CAD)	90,863		(c)	2.85	%		60,856		(d)	3.16	%
Total	$	1,652,546		2.36	%		$	1,528,592		2.57	%
Yen Revolving Credit Facility (a)	$	193,480	(f)	0.50	%		$	134,564	(f)	0.50	%
Total borrowings	$	1,846,026		2.16	%	(b)	$	1,663,156		2.41	%	(b)

(a) The interest rates for floating rate borrowings under the global revolving credit facility currently equal the applicable index plus a margin of 90 basis points, which is based on the credit rating of our long-term debt. The interest rate for borrowings under the Yen revolving credit facility equals the applicable index plus a margin of 50 basis points, which is based on the current credit rating of our long-term debt.

(b) As of September 30, 2019 and December 31, 2018, approximately $306.9 million of the U.S. dollar tranche was subject to interest rate swaps. As of September 30, 2019, the weighted-average interest rate reflecting interest rate swaps was 2.79% (U.S. dollar) and 2.05% (Total borrowings). As of December 31, 2018, the weighted-average interest rate reflecting interest rate swaps was 2.99% (U.S. dollar) and 2.20% (Total borrowings).

(c) Based on exchange rates of $1.23 to £1.00, $1.09 to €1.00, $0.68 to 1.00 AUD, $0.13 to 1.00 HKD, $0.72 to 1.00 SGD and $0.76 to 1.00 CAD, respectively, as of September 30, 2019.

(d) Based on exchange rates of $1.28 to £1.00, $1.15 to €1.00, $0.70 to 1.00 AUD, $0.13 to 1.00 HKD, $0.01 to 1.00 JPY, $0.73 to 1.00 SGD and $0.73 to 1.00 CAD, respectively, as of December 31, 2018.

(e) As of September 30, 2019, approximately $44.3 million of letters of credit were issued.

(f) Based on exchange rates of $0.01 to 1.00 JPY for September 30, 2019 and December 31, 2018.

(3) Interest rates are based on our current senior unsecured debt ratings and are currently 100 basis points over the applicable index for floating rate advances for the 2023 Term Loan and the 2024 Term Loan. Two six months extensions are available for the 2024 Term Loan, which we may exercise if certain conditions are met.

(4) We have entered into interest rate swap agreements as a cash flow hedge for interest generated by a portion of U.S. dollar borrowings under the global revolving credit facility, a portion of U.S. dollar and Canadian dollar borrowings under the 2023 Term Loan and 2024 Term Loan, and the secured note due March 2023. See Note 15 "Derivative Instruments" for further information. 

(5) Balances as of September 30, 2019 and December 31, 2018 are as follows (balances, in thousands):

Denomination of Draw	Balance as of September 30, 2019			Weighted-average interest rate			Balance as of December 31, 2018			Weighted-average interest rate
U.S. dollar ($)	$	300,000		3.03	%	(b)	$	300,000		3.46	%	(d)
Singapore dollar (SGD)	144,069		(a)	2.68	%		146,080		(c)	2.76	%
Australian dollar (AUD)	195,952		(a)	2.06	%		204,632		(c)	2.94	%
Hong Kong dollar (HKD)	85,115		(a)	2.99	%		85,188		(c)	3.32	%
Canadian dollar (CAD)	74,397		(a)	2.95	%	(b)	72,220		(c)	3.24	%	(d)
Total	$	799,533		2.72	%	(b)	$	808,120		3.17	%	(d)

(a) Based on exchange rates of $0.72 to 1.00 SGD, $0.68 to 1.00 AUD, $0.13 to 1.00 HKD and $0.76 to 1.00 CAD, respectively, as of September 30, 2019.

(b) As of September 30, 2019, the weighted-average interest rate reflecting interest rate swaps was 2.44% (U.S. dollar), 1.78% (Canadian dollar) and 2.38% (Total). See Note 15 "Derivative Instruments" for further discussion on interest rate swaps.

(c) Based on exchange rates of $0.73 to 1.00 SGD, $0.70 to 1.00 AUD, $0.13 to 1.00 HKD and $0.73 to 1.00 CAD, respectively, as of December 31, 2018.

(d) As of December 31, 2018, the weighted-average interest rate reflecting interest rate swaps was 2.44% (U.S. dollar), 1.78% (Canadian dollar) and 2.66% (Total).

(6) Based on exchange rates of $1.09 to €1.00 as of September 30, 2019 and $1.15 to €1.00 as of December 31, 2018.

(7) Based on exchange rates of $1.23 to £1.00 as of September 30, 2019 and $1.28 to £1.00 as of December 31, 2018.

(8) The 5.875% 2020 Notes were paid in full in January 2019 (by tender offer) and February 2019 (by redemption of the remaining balance after the tender offer). The tender offer and redemption resulted in an early extinguishment charge of approximately $12.9 million during the three months ended March 31, 2019.

(9) On March 5, 2019, Digital Stout Holding, LLC, a wholly owned subsidiary of the Operating Partnership, issued and sold an additional £150.0 million aggregate principal amount of 2030 Notes. The terms of the 2030 Notes are governed by an indenture, dated as of October 17, 2018, among Digital Stout Holding, LLC, Digital Realty Trust, Inc., the Operating Partnership, Deutsche Trustee Company Limited, as trustee, Deutsche Bank AG, London Branch, as paying agent and a transfer agent, and Deutsche Bank Luxembourg S.A., as registrar and a transfer agent (the “GBP Notes Indenture”), pursuant to which Digital Stout Holding, LLC previously issued £400.0 million in aggregate principal amount of its 2030 Notes. The 2030 Notes are treated as a single series with the notes previously issued under the GBP Notes Indenture.

(10) The debt was deconsolidated as a result of the Ascenty joint venture formed with Brookfield.

(11) Paid in full at maturity in May 2019.

(12)

The 3.400% 2020 Notes and 2021 Notes were paid in full in June 2019 (by tender offer) and July 2019 (by redemption of the remaining balances after the tender offer). The tender offer resulted in an early extinguishment charge of approximately $5.4 million and $26.3 million during the three and nine months ended September 30, 2019, respectively.

Schedule of Debt Maturities and Principal Maturities

he table below summarizes our debt maturities and principal payments as of September 30, 2019 (in thousands): 

	Global Revolving Credit Facilities(1)		Unsecured Term Loans (1)		Senior Notes			Secured Debt		Total Debt
Remainder of 2019	$	—	$	—	$	—		$	166	$	166
2020	—		—		—			1,133		1,133
2021	—		—		—			—		—
2022	—		—		800,000			—		800,000
2023	1,652,546		799,533		718,670			104,000		3,274,749
Thereafter	193,480		—		6,730,377			—		6,923,857
Subtotal	$	1,846,026	$	799,533	$	8,249,047		$	105,299	$	10,999,905
Unamortized discount	—		—		(17,578		)	—		(17,578		)
Unamortized premium	—		—		6,395			78		6,473
Total	$	1,846,026	$	799,533	$	8,237,864		$	105,377	$	10,988,800

(1)

The global revolving credit facility and 2024 Term Loan are subject to two six-month extension options exercisable by us. The bank group is obligated to grant the extension options provided we give proper notice, we make certain representations and warranties and no default exists.

XML

Real Estate (Tables)

9 Months Ended

Sep. 30, 2019

Real Estate [Abstract]

Schedule of Properties Acquired

We acquired the following real estate during the nine months ended September 30, 2019:

Location	Market	Date Acquired	Amount (in millions)
Land parcels (1)	Various	Various	$	44.3
21780 Filigree Court	Northern Virginia	May 2, 2019	28.0
			$	72.3

(1)

Represents five currently vacant land parcels in total located in the United States, Europe and Asia which are not included in our operating property count. Purchase price in U.S. dollars and excludes capitalized closing costs.

XML

Leases (Future Minimum Lease Payments for Capital Lease Obligations) (Details) $ in Thousands	Dec. 31, 2018 USD ($)
Leases [Abstract]
2019	$ 11,657
2020	13,108
2021	13,207
2022	13,706
2023	14,219
Thereafter	285,774
Total	351,671
Less amount representing interest	(137,827)
Present value	$ 213,844

XML

Investments in Unconsolidated Joint Ventures (Narrative) (Details) - USD ($)			3 Months Ended		9 Months Ended
	Mar. 29, 2019	Dec. 20, 2018	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Mar. 31, 2019
Schedule of Equity Method Investments [Line Items]
Recognition of retained equity investment in unconsolidated Ascenty joint venture			$ 110,086,000		$ 110,086,000
Remeasurement of the retained equity interests to fair value			110,086,000		110,086,000
Reclassification of foreign currency translation adjustment due to deconsolidation of Ascenty			$ 0	$ 0	$ 21,687,000	$ 0
Ascenty Acquisition
Schedule of Equity Method Investments [Line Items]
Ownership percentage in joint ventures	51.00%		51.00%		51.00%
Ownership interest by noncontrolling interest			2.00%		2.00%
Deconsolidation gain recognized, net of taxes and foreign currency loss					$ 67,500,000
Recognition of retained equity investment in unconsolidated Ascenty joint venture			$ 727,439,000		$ 727,439,000
Ascenty Acquisition | Brookfield Infrastructure
Schedule of Equity Method Investments [Line Items]
Investment	$ 702,000,000						$ 702,000,000
Ownership percentage in joint ventures	49.00%						49.00%
Ascenty Acquisition
Schedule of Equity Method Investments [Line Items]
Total consideration of assets and liabilities acquired		$ 2,000,000,000.0
Cash assumed in merger		116,000,000.0
Recognition of retained equity investment in unconsolidated Ascenty joint venture	$ 727,000,000
Cash proceeds from divestiture	702,000,000
Remeasurement of the retained equity interests to fair value	$ 89,200,000
Reclassification of foreign currency translation adjustment due to deconsolidation of Ascenty			$ 21,700,000
Ascenty Acquisition | Digital Realty Operating Partnership Units
Schedule of Equity Method Investments [Line Items]
Equity interest in exchange for units		254,000,000
Ascenty Acquisition | Secured Term Loan | Secured Term Loan, 5 Year
Schedule of Equity Method Investments [Line Items]
Long-term debt		$ 600,000,000.0
Debt instrument term		5 years
Ascenty Acquisition | Secured Term Loan | Unsecured Debt
Schedule of Equity Method Investments [Line Items]
Long-term debt		$ 1,000,000,000.0

XML

Acquired Intangible Assets And Liabilities (Schedule of Estimated Annual Amortization of Intangible Assets) (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Acquired in-place lease value
Finite-Lived Intangible Assets [Line Items]
Remainder of 2019	$ 28,176
2020	98,331
2021	77,848
2022	58,210
2023	47,109
Thereafter	174,282
Net	483,956	$ 774,368
Tenant relationships
Finite-Lived Intangible Assets [Line Items]
Remainder of 2019	28,970
2020	115,879
2021	115,879
2022	115,879
2023	115,879
Thereafter	970,211
Net	$ 1,462,697

XML

Incentive Plan (Assumptions Used) (Details) - Market performance-based awards	Feb. 21, 2019	Jan. 01, 2019	Mar. 09, 2018	Mar. 01, 2018	Jan. 01, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected Stock Price Volatility	23.00%	23.00%	22.00%	22.00%	22.00%
Risk-Free Interest rate	2.48%	2.44%	2.42%	2.34%	1.98%

XML

Equity and Accumulated Other Comprehensive Loss, Net (Schedule of Accumulated Other Comprehensive Loss, Net) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Beginning balance	$ 10,473,720	$ 10,796,928	$ 10,858,210	$ 11,049,450
Net current period change			31,137
Reclassification of foreign currency translation adjustment due to deconsolidation of Ascenty	0	0	21,687	0
Reclassification to interest expense from interest rate swaps			(5,802)
Ending balance	10,210,855	10,763,462	10,210,855	10,763,462
Foreign currency translation adjustments
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Beginning balance			(158,649)
Net current period change			42,038
Reclassification of foreign currency translation adjustment due to deconsolidation of Ascenty			21,687
Reclassification to interest expense from interest rate swaps			0
Ending balance	(94,924)		(94,924)
Cash flow hedge adjustments
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Beginning balance			17,264
Net current period change			(10,901)
Reclassification of foreign currency translation adjustment due to deconsolidation of Ascenty			0
Reclassification to interest expense from interest rate swaps			(5,802)
Ending balance	561		561
Foreign currency net investment hedge adjustments
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Beginning balance			25,738
Net current period change			0
Reclassification of foreign currency translation adjustment due to deconsolidation of Ascenty			0
Reclassification to interest expense from interest rate swaps			0
Ending balance	25,738		25,738
Accumulated other comprehensive income (loss), net
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Beginning balance	(89,588)	(107,070)	(115,647)	(108,432)
Ending balance	$ (68,625)	$ (103,201)	$ (68,625)	$ (103,201)

XML

Equity and Accumulated Other Comprehensive Loss, Net (Series K and Series L Cumulative Redeemable Preferred Stock) (Details) - USD ($) $ / shares in Units, $ in Millions						9 Months Ended
	Dec. 31, 2019	Oct. 10, 2019	Jun. 28, 2019	Mar. 15, 2019	Mar. 13, 2019	Sep. 30, 2019	Dec. 31, 2018
Class of Stock [Line Items]
Preferred stock, issued (shares)						44,450,000	50,650,000
Series K Preferred Stock
Class of Stock [Line Items]
Dividend rate percentage					5.85%
Preferred stock, issued (shares)					8,000,000
Net proceeds from preferred stock					$ 193.7
Preferred stock dividend per share amount (in dollars per share)			$ 0.43875		$ 1.46250	$ 1.46250
Redemption price (in dollars per share)				$ 25.00		$ 25.00
Share cap (shares)						0.43611
Series K Preferred Stock | Over-Allotment Option
Class of Stock [Line Items]
Preferred stock, issued (shares)				400,000
Net proceeds from preferred stock				$ 9.7
Series L Preferred Stock | Subsequent Event
Class of Stock [Line Items]
Dividend rate percentage		5.20%
Preferred stock, issued (shares)		13,800,000
Net proceeds from preferred stock		$ 334.6
Preferred stock dividend per share amount (in dollars per share)		$ 1.30000
Redemption price (in dollars per share)		$ 25.00
Share cap (shares)		0.38518
Series L Preferred Stock | Subsequent Event | Scenario, Forecast
Class of Stock [Line Items]
Preferred stock dividend per share amount (in dollars per share)	$ 0.29250

XML

Incentive Plan (Narrative) (Details) shares in Millions		9 Months Ended
	Sep. 22, 2017 shares	Sep. 30, 2019 shares
2004 Incentive Award Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Additional shares registered for issuance, 2014 Incentive Award Plan (shares)	3.7
2014 Incentive Award Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares remaining for issuance under the Incentive Plan (shares)		6.6
Conversion of units to shares ratio		1

XML

Leases (Lease Expense) (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2019
Finance lease cost:
Amortization of right-of-use assets	$ 1,264	$ 3,771
Interest on lease liabilities	1,435	4,566
Operating lease cost	22,633	68,503
Total lease cost	$ 25,332	$ 76,840

XML

Summary of Significant Accounting Policies (Summary of Goodwill Activity) (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2019 USD ($)
Goodwill [Roll Forward]
Goodwill - Beginning Balance	$ 4,348,007
Deconsolidation	(982,667)
Goodwill Adjustments	(9,436)
Impact of Change in Foreign Exchange Rates	(17,736)
Goodwill - Ending Balance	3,338,168
Telx Acquisition
Goodwill [Roll Forward]
Goodwill - Beginning Balance	330,845
Deconsolidation	0
Goodwill Adjustments	0
Impact of Change in Foreign Exchange Rates	0
Goodwill - Ending Balance	330,845
European Portfolio Acquisition
Goodwill [Roll Forward]
Goodwill - Beginning Balance	442,349
Deconsolidation	0
Goodwill Adjustments	(9,436)
Impact of Change in Foreign Exchange Rates	(17,736)
Goodwill - Ending Balance	415,177
DFT Merger
Goodwill [Roll Forward]
Goodwill - Beginning Balance	2,592,146
Deconsolidation	0
Goodwill Adjustments	0
Impact of Change in Foreign Exchange Rates	0
Goodwill - Ending Balance	2,592,146
Ascenty Acquisition
Goodwill [Roll Forward]
Goodwill - Beginning Balance	982,667
Deconsolidation	(982,667)
Goodwill Adjustments	0
Impact of Change in Foreign Exchange Rates	0
Goodwill - Ending Balance	$ 0

XML

Derivative Instruments (Tables)

9 Months Ended

Sep. 30, 2019

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Outstanding Derivative Instruments

As of September 30, 2019 and December 31, 2018, we had the following outstanding interest rate derivatives that were designated as effective cash flow hedges of interest rate risk (in thousands): 

Notional Amount										Fair Value at Significant Other Observable Inputs (Level 2)
As of September 30, 2019			As of December 31, 2018			Type of Derivative	Strike Rate	Effective Date	Expiration Date	As of September 30, 2019 (3)			As of December 31, 2018 (3)
Currently-paying contracts
$	206,000	(1)	$	206,000	(1)	Swap	1.611	Jun 15, 2017	Jan 15, 2020	$	178		$	1,976
54,905		(1)	54,905		(1)	Swap	1.605	Jun 6, 2017	Jan 6, 2020	46			517
75,000		(1)	75,000		(1)	Swap	1.016	Apr 6, 2016	Jan 6, 2021	547			2,169
75,000		(1)	75,000		(1)	Swap	1.164	Jan 15, 2016	Jan 15, 2021	410			1,970
300,000		(1)	300,000		(1)	Swap	1.435	Jan 15, 2016	Jan 15, 2023	(379		)	11,463
74,397		(2)	72,220		(2)	Swap	0.779	Jan 15, 2016	Jan 15, 2021	1,052			2,024
$	785,302		$	783,125						$	1,854		$	20,119

(1) Represents debt which bears interest based on one-month U.S. LIBOR.

(2) Represents debt which bears interest based on one-month CDOR. Translation to U.S. dollars is based on exchange rates of $0.76 to 1.00 CAD as of September 30, 2019 and $0.73 to 1.00 CAD as of December 31, 2018.

(3)

Balance recorded in other assets in the consolidated balance sheets if positive and recorded in accounts payable and other accrued liabilities in the consolidated balance sheets if negative.

XML

Debt of the Operating Partnership (Narrative) (Details) $ in Millions						9 Months Ended
	Oct. 09, 2019 USD ($)	Oct. 09, 2019 EUR (€)	Jun. 14, 2019 EUR (€)	Jan. 16, 2019 USD ($)	Jan. 16, 2019 EUR (€)	Sep. 30, 2019	Mar. 06, 2019 EUR (€)
Debt Instrument [Line Items]
Leverage ratio						60.00%
Secured debt leverage ratio, maximum						40.00%
Interest coverage ratio						1.50
Total unencumbered assets						150.00%
3.600% notes due 2029
Debt Instrument [Line Items]
Stated interest rate						3.60%
Senior Notes | 2.500% notes due 2026
Debt Instrument [Line Items]
Stated interest rate						2.50%
Senior Notes | 2.500% notes due 2026 | Digital Realty Trust, L.P.
Debt Instrument [Line Items]
Stated interest rate					2.50%	2.50%
Aggregate principal amount					€ 850,000,000.0		€ 225,000,000.0
Net proceeds from offering				$ 960.9	€ 843,500,000
Senior Notes | 5.875% notes due 2020 | Digital Realty Trust, L.P.
Debt Instrument [Line Items]
Stated interest rate					5.875%	5.875%
Senior Notes | 3.600% notes due 2029
Debt Instrument [Line Items]
Stated interest rate						3.60%
Senior Notes | 3.600% notes due 2029 | Digital Realty Trust, L.P.
Debt Instrument [Line Items]
Stated interest rate			3.60%			3.60%
Aggregate principal amount			€ 900,000,000.0
Net proceeds from offering			€ 890,600,000
Purchase price paid, percentage of principal			99.823%
Original issue discount on offering			€ 1,600,000
Underwriting commissions and expenses			€ 7,800,000
Senior Notes | 3.400% notes due 2020 | Digital Realty Trust, L.P.
Debt Instrument [Line Items]
Stated interest rate			3.40%			3.40%
Senior Notes | 1.125% notes due 2028 | Digital Euro Finco, LLC | Subsequent Event
Debt Instrument [Line Items]
Stated interest rate		1.125%
Aggregate principal amount		€ 500,000,000.0
Net proceeds from offering	$ 539.7	€ 491,900,000

XML

Income per Unit (Summary of Basic and Diluted Earnings per Share) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Class of Stock [Line Items]
Net income available to common unitholders	$ 49,827	$ 67,268	$ 177,434	$ 218,700
Weighted average units outstanding-basic (units)	208,421,470	206,118,472	208,173,995	205,931,031
Potentially dilutive common units:
Unvested incentive units (units)	181,064	169,100	142,670	160,117
Forward equity offering (units)	1,013,970	37,884	705,720	1,847
Market performance-based awards (units)	185,267	440,800	177,150	462,632
Weighted average shares/units outstanding-diluted (shares/units)	209,801,771	206,766,256	209,199,535	206,555,627
Income per share:
Basic (in dollars per unit)	$ 0.24	$ 0.33	$ 0.85	$ 1.06
Diluted (in dollars per unit)	$ 0.24	$ 0.33	$ 0.85	$ 1.06
Digital Realty Trust, L.P.
Class of Stock [Line Items]
Net income available to common unitholders	$ 52,127	$ 69,968	$ 185,434	$ 227,580
Weighted average units outstanding-basic (units)	217,375,296	214,289,384	217,254,811	214,199,414
Potentially dilutive common units:
Unvested incentive units (units)	181,064	169,100	142,670	160,117
Forward equity offering (units)	1,013,970	37,884	705,720	1,847
Market performance-based awards (units)	185,267	440,800	177,150	462,632
Weighted average shares/units outstanding-diluted (shares/units)	218,755,597	214,937,168	218,280,351	214,824,010
Income per share:
Basic (in dollars per unit)	$ 0.24	$ 0.33	$ 0.85	$ 1.06
Diluted (in dollars per unit)	$ 0.24	$ 0.33	$ 0.85	$ 1.06

XML

Capital and Accumulated Other Comprehensive Loss

9 Months Ended

Sep. 30, 2019

Digital Realty Trust, L.P.

Class of Stock [Line Items]

Capital and Accumulated Other Comprehensive Loss

Capital and Accumulated Other Comprehensive Loss

(a) 5.850% Series K Cumulative Redeemable Preferred Units

On March 13, 2019 and March 15, 2019, the Operating Partnership issued in the aggregate a total of 8,400,000 of its 5.850% series K cumulative redeemable preferred units, or the series K preferred units, to Digital Realty Trust, Inc. (the General Partner) in conjunction with the General Partner’s issuance of an equivalent number of shares of its 5.850% series K cumulative redeemable preferred stock, or the series K preferred stock. Distributions are cumulative on the series K preferred units from the date of original issuance in the amount of $1.46250 per unit each year, which is equivalent to 5.850% of the $25.00 liquidation preference per unit. Distributions on the series K preferred units are payable quarterly in arrears. The first distribution paid on the series K preferred units on June 28, 2019 was a pro rata distribution from and including the original issue date to and including June 30, 2019 in the amount of $0.43875 per unit. The series K preferred units do not have a stated maturity date and are not subject to any sinking fund or mandatory redemption provisions. The Operating Partnership is required to redeem the series K preferred units in the event that the General Partner redeems the series K preferred stock. The General Partner is not allowed to redeem the series K preferred stock prior to March 13, 2024 except in limited circumstances to preserve the General Partner’s status as a REIT. On or after March 13, 2024, the General Partner may, at its option, redeem the series K preferred stock, in whole or in part,

at any time or from time to time, for cash at a redemption price of $25.00 per share, plus all accrued and unpaid dividends on such series K preferred stock up to but excluding the redemption date. Upon liquidation, dissolution or winding up, the series K preferred units will rank senior to the Operating Partnership’s common units with respect to the payment of distributions and other amounts and rank on parity with the Operating Partnership’s series C cumulative redeemable perpetual preferred units, series G cumulative redeemable preferred units, series I cumulative redeemable preferred units, series J cumulative redeemable preferred units and series L cumulative redeemable preferred units. Except in connection with specified change of control transactions of the General Partner, the series K preferred units are not convertible into or exchangeable for any other property or securities of the Operating Partnership.

(b) 5.200% Series L Cumulative Redeemable Preferred Units

On October 10, 2019, the Operating Partnership issued in the aggregate a total of 13,800,000 of its 5.200% series L cumulative redeemable preferred units, or the series L preferred units, to Digital Realty Trust, Inc. (the General Partner) in conjunction with the General Partner’s issuance of an equivalent number of shares of its 5.200% series L cumulative redeemable preferred stock, or the series L preferred stock. Distributions are cumulative on the series L preferred units from the date of original issuance in the amount of $1.30000 per unit each year, which is equivalent to 5.200% of the $25.00 liquidation preference per unit. Distributions on the series L preferred units are payable quarterly in arrears. The first distribution payable on the series L preferred units on December 31, 2019 will be a pro rata distribution from and including the original issue date to and including December 31, 2019 in the amount of $0.29250 per unit. The series L preferred units do not have a stated maturity date and are not subject to any sinking fund or mandatory redemption provisions. The Operating Partnership is required to redeem the series L preferred units in the event that the General Partner redeems the series L preferred stock. The General Partner is not allowed to redeem the series L preferred stock prior to October 10, 2024 except in limited circumstances to preserve the General Partner’s status as a REIT. On or after October 10, 2024, the General Partner may, at its option, redeem the series L preferred stock, in whole or in part, at any time or from time to time, for cash at a redemption price of $25.00 per share, plus all accrued and unpaid dividends on such series L preferred stock up to but excluding the redemption date. Upon liquidation, dissolution or winding up, the series L preferred units will rank senior to the Operating Partnership’s common units with respect to the payment of distributions and other amounts and rank on parity with the Operating Partnership’s series C cumulative redeemable perpetual preferred units, series G cumulative redeemable preferred units, series I cumulative redeemable preferred units, series J cumulative redeemable preferred units and series K cumulative redeemable preferred units. Except in connection with specified change of control transactions of the General Partner, the series L preferred units are not convertible into or exchangeable for any other property or securities of the Operating Partnership.

(c) Allocations of Net Income and Net Losses to Partners

Except for special allocations to holders of profits interest units described below in Note 14(a) under the heading “Incentive Plan—Long-Term Incentive Units,” the Operating Partnership’s net income will generally be allocated to Digital Realty Trust, Inc. (the General Partner) to the extent of the accrued preferred return on its preferred units, and then to the General Partner and the Operating Partnership’s limited partners in accordance with the respective percentage interests in the common units issued by the Operating Partnership. Net loss will generally be allocated to the General Partner and the Operating Partnership’s limited partners in accordance with the respective common percentage interests in the Operating Partnership until the limited partner’s capital is reduced to zero and any remaining net loss would be allocated to the General Partner. However, in some cases, losses may be disproportionately allocated to partners who have guaranteed our debt. The allocations described above are subject to special allocations relating to depreciation deductions and to compliance with the provisions of Sections 704(b) and 704(c) of the Code, and the associated Treasury Regulations.

(d) Forward Equity Sale

On September 27, 2018, Digital Realty Trust, Inc. completed an underwritten public offering of 9,775,000 shares of its common stock (including 1,275,000 shares from the exercise in full of the underwriters' option to purchase additional shares), all of which were offered in connection with forward sale agreements it entered into with certain financial institutions acting as forward purchasers. The forward purchasers borrowed and sold an aggregate of 9,775,000 shares of Digital Realty Trust, Inc.’s common stock in the public offering. Digital Realty Trust, Inc. did not receive any proceeds from the sale of our common stock by the forward purchasers in the public offering. The Company expects to receive net proceeds of approximately $1.1 billion (net of fees and estimated expenses) upon full physical settlement of the forward sale agreements, which was anticipated to be no later than September 27, 2019. On September 17, 2019, Digital Realty Trust, Inc. amended the forward sale agreements to extend the maturity date of such forward sales agreements from September 27, 2019 to September 25, 2020. Upon physical settlement of the forward sale agreements, the Operating Partnership is expected to issue partnership units to Digital Realty Trust, Inc. in exchange for contribution of the net proceeds.

(e) Partnership Units

Limited partners have the right to require the Operating Partnership to redeem part or all of their common units for cash based on the fair market value of an equivalent number of shares of the General Partner’s common stock at the time of redemption. Alternatively, the General Partner may elect to acquire those common units in exchange for shares of the General Partner’s common stock on a one-for-one basis, subject to adjustment in the event of stock splits, stock dividends, issuance of stock rights, specified extraordinary distributions and similar events. Pursuant to authoritative accounting guidance, Digital Realty Trust, Inc. evaluated whether it controls the actions or events necessary to issue the maximum number of shares that could be required to be delivered under the share settlement of the noncontrolling Operating Partnership common and incentive units. Based on the results of this analysis, we concluded that the common units and incentive units of the Operating Partnership met the criteria to be classified within capital, except for certain common units issued to certain former DFT Operating Partnership unitholders in the DFT Merger, which are subject to certain restrictions and, accordingly, are not presented as permanent capital in the condensed consolidated balance sheet.

In connection with the initial public offering of DFT in 2007, DFT, the DFT Operating Partnership and certain DFT Operating Partnership unitholders entered into a tax protection agreement to assist such unitholders in deferring certain U.S. federal income tax liabilities that may have otherwise resulted from the contribution transactions undertaken in connection with the initial public offering and the ownership of interests in the DFT Operating Partnership and to set forth certain agreements with respect to other tax matters. In connection with the DFT Merger, certain DFT Operating Partnership unitholders entered into a new tax protection agreement with Digital Realty Trust, Inc. and the Operating Partnership that replaced and superseded the DFT tax protection agreement, effective as of the closing of the DFT Merger. Pursuant to the new tax protection agreement, such DFT Operating Partnership unitholders entered into a guarantee of certain debt of a subsidiary of the Operating Partnership. The Operating Partnership must offer such DFT Operating Partnership unitholders a new guarantee opportunity in the event any guaranteed debt is repaid prior to March 1, 2023. If the Operating Partnership fails to offer the guarantee opportunity or to allocate guaranteed debt to any such DFT Operating Partnership unitholder as required under the new tax protection agreement, the Operating Partnership generally would be required to indemnify each such DFT Operating Partnership unitholder for the tax liability resulting from such failure, as determined under the new tax protection agreement.

The redemption value of the limited partners’ common units and the vested incentive units was approximately $1,121.8 million and $1,076.9 million based on the closing market price of Digital Realty Trust, Inc.’s common stock on September 30, 2019 and December 31, 2018, respectively.

(f) Distributions

All distributions on the Operating Partnership’s units are at the discretion of Digital Realty Trust, Inc.’s board of directors. The Operating Partnership has declared and paid the following distributions on its common and preferred units for the nine months ended September 30, 2019 (in thousands, except for per unit data):

Date distribution declared	Distribution payment date	Series C Preferred Units		Series G Preferred Units		Series H Preferred Units			Series I Preferred Units		Series J Preferred Units		Series K Preferred Units			Common Units
February 21, 2019	March 29, 2019	$	3,333	$	3,672	$	6,730		$	3,969	$	2,625	$	—		$	235,256
May 13, 2019	June 28, 2019	3,333		3,672		—		(1)	3,969		2,625		3,686		(2)	235,142
August 13, 2019	September 30, 2019	3,333		3,672		—			3,969		2,625		3,071			235,164
		$	9,999	$	11,016	$	6,730		$	11,907	$	7,875	$	6,757		$	705,562
Annual rate of distribution per unit		$	1.65625	$	1.46875	$	1.84375		$	1.58750	$	1.31250	$	1.46250		$	4.32000

(1) Redeemed on April 1, 2019 for $25.00 per unit, or a redemption price of $25.00 per unit, plus accrued and unpaid distributions up to but not including the redemption date. In connection with the redemption, the previously incurred offering costs of approximately $11.8 million were recorded as a reduction to net income available to common unitholders.

(2) Represents a pro rata distribution from and including the original issue date to and including June 30, 2019.

(g) Accumulated Other Comprehensive Loss

The accumulated balances for each item within other comprehensive income are as follows (in thousands):

	Foreign currency translation adjustments			Cash flow hedge adjustments			Foreign currency net investment hedge adjustments		Accumulated other comprehensive loss
Balance as of December 31, 2018	$	(163,531	)	$	16,986		$	26,152	$	(120,393	)
Net current period change	44,824			(11,379		)	—		33,445
Reclassification of foreign currency translation adjustment due to deconsolidation of Ascenty	21,687			—			—		21,687
Reclassification to interest expense from interest rate swaps	—			(6,055		)	—		(6,055		)
Balance as of September 30, 2019	$	(97,020	)	$	(448	)	$	26,152	$	(71,316	)

XML

Commitments and Contingencies

9 Months Ended

Sep. 30, 2019

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

(a) Construction Commitments

Our properties require periodic investments of capital for tenant-related capital expenditures and for general capital improvements including ground up construction. From time to time in the normal course of our business, we enter into various construction contracts with third parties that may obligate us to make payments. At September 30, 2019, we had open commitments, including amounts reimbursable of approximately $9.0 million, related to construction contracts of approximately $452.9 million.

(b) Legal Proceedings

The Company is involved in legal proceedings arising in the ordinary course of business from time to time.  As of September 30, 2019, the Company is not currently a party to any legal proceedings that it believes would have a material adverse effect on its financial position, results of operations or liquidity nor, to its knowledge, are any such legal proceedings threatened against it.

XML

Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2019

Accounting Policies [Abstract]

Schedule of Goodwill

The following is a summary of goodwill activity for the nine months ended September 30, 2019 (in thousands):

	Balance as of December 31, 2018		Deconsolidation			Goodwill Adjustments (1)			Impact of Change in Foreign Exchange Rates			Balance as of September 30, 2019
Merger / Portfolio Acquisition
Telx Acquisition	$	330,845	$	—		$	—		$	—		$	330,845
European Portfolio Acquisition	442,349		—			(9,436		)	(17,736		)	415,177
DFT Merger	2,592,146		—			—			—			2,592,146
Ascenty Acquisition	982,667		(982,667		)	—			—			—
Total	$	4,348,007	$	(982,667	)	$	(9,436	)	$	(17,736	)	$	3,338,168

(1) As a result of a subsequent change to an acquired deferred tax liability that would not have impacted consideration paid, goodwill was adjusted.

XML

CONDENSED CONSOLIDATED INCOME STATEMENTS (unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Operating Revenues:
Total operating revenues	$ 806,466	$ 768,924	$ 2,421,778	$ 2,268,211
Operating Expenses:
Rental property operating and maintenance	259,431	245,971	766,417	701,933
Property taxes and insurance	41,358	37,524	126,587	106,408
Depreciation and amortization	286,718	293,957	888,766	887,534
General and administrative	49,985	41,642	156,427	124,264
Transactions and integration	4,115	9,626	10,819	19,410
Impairment of investments in real estate	0	0	5,351	0
Other	92	1,139	12,129	1,722
Total operating expenses	641,699	629,859	1,966,496	1,841,271
Operating income	164,767	139,065	455,282	426,940
Other Income (Expenses):
Equity in (losses) earnings of unconsolidated joint ventures	(19,269)	8,886	(3,090)	23,734
Gain on deconsolidation / sale of properties, net	0	26,577	67,497	80,042
Interest and other income, net	16,842	(981)	55,266	2,375
Interest expense	(84,574)	(80,851)	(272,177)	(236,646)
Tax expense	(4,826)	(2,432)	(13,726)	(7,927)
Loss from early extinguishment of debt	(5,366)	0	(39,157)	0
Net income	67,574	90,264	249,895	288,518
Net income attributable to noncontrolling interests	(1,077)	(2,667)	(6,418)	(8,831)
Net income attributable to Digital Realty Trust, Inc./Digital Realty Trust, L.P.	66,497	87,597	243,477	279,687
Preferred stock dividends, including undeclared dividends	(16,670)	(20,329)	(54,283)	(60,987)
Issuance costs associated with redeemed preferred stock	0	0	(11,760)	0
Net income available to common stock/unitholders	$ 49,827	$ 67,268	$ 177,434	$ 218,700
Net income per share/unit available to common stockholders/unitholders:
Basic (in dollars per share/unit)	$ 0.24	$ 0.33	$ 0.85	$ 1.06
Diluted (in dollars per share/unit)	$ 0.24	$ 0.33	$ 0.85	$ 1.06
Weighted average common shares/units outstanding:
Basic (shares/units)	208,421,470	206,118,472	208,173,995	205,931,031
Diluted (shares/units)	209,801,771	206,766,256	209,199,535	206,555,627
Digital Realty Trust, L.P.
Operating Revenues:
Total operating revenues	$ 806,466	$ 768,924	$ 2,421,778	$ 2,268,211
Operating Expenses:
Rental property operating and maintenance	259,431	245,971	766,417	701,933
Property taxes and insurance	41,358	37,524	126,587	106,408
Depreciation and amortization	286,718	293,957	888,766	887,534
General and administrative	49,985	41,642	156,427	124,264
Transactions and integration	4,115	9,626	10,819	19,410
Impairment of investments in real estate	0	0	5,351	0
Other	92	1,139	12,129	1,722
Total operating expenses	641,699	629,859	1,966,496	1,841,271
Operating income	164,767	139,065	455,282	426,940
Other Income (Expenses):
Equity in (losses) earnings of unconsolidated joint ventures	(19,269)	8,886	(3,090)	23,734
Gain on deconsolidation / sale of properties, net	0	26,577	67,497	80,042
Interest and other income, net	16,842	(981)	55,266	2,375
Interest expense	(84,574)	(80,851)	(272,177)	(236,646)
Tax expense	(4,826)	(2,432)	(13,726)	(7,927)
Loss from early extinguishment of debt	(5,366)	0	(39,157)	0
Net income	67,574	90,264	249,895	288,518
Net income attributable to noncontrolling interests	1,223	33	1,582	49
Net income attributable to Digital Realty Trust, Inc./Digital Realty Trust, L.P.	68,797	90,297	251,477	288,567
Preferred stock dividends, including undeclared dividends	(16,670)	(20,329)	(54,283)	(60,987)
Issuance costs associated with redeemed preferred stock	0	0	(11,760)	0
Net income available to common stock/unitholders	$ 52,127	$ 69,968	$ 185,434	$ 227,580
Net income per share/unit available to common stockholders/unitholders:
Basic (in dollars per share/unit)	$ 0.24	$ 0.33	$ 0.85	$ 1.06
Diluted (in dollars per share/unit)	$ 0.24	$ 0.33	$ 0.85	$ 1.06
Weighted average common shares/units outstanding:
Basic (shares/units)	217,375,296	214,289,384	217,254,811	214,199,414
Diluted (shares/units)	218,755,597	214,937,168	218,280,351	214,824,010
Rental and other services
Operating Revenues:
Total operating revenues	$ 802,472	$ 603,833	$ 2,413,888	$ 1,792,457
Rental and other services | Digital Realty Trust, L.P.
Operating Revenues:
Total operating revenues	802,472	603,833	2,413,888	1,792,457
Tenant reimbursements
Operating Revenues:
Total operating revenues	0	163,104	0	468,906
Tenant reimbursements | Digital Realty Trust, L.P.
Operating Revenues:
Total operating revenues	0	163,104	0	468,906
Fee income and other
Operating Revenues:
Total operating revenues	3,994	1,987	7,890	6,848
Fee income and other | Digital Realty Trust, L.P.
Operating Revenues:
Total operating revenues	$ 3,994	$ 1,987	$ 7,890	$ 6,848

XML

Income per Unit (Tables)

9 Months Ended

Sep. 30, 2019

Class of Stock [Line Items]

Summary of Basic and Diluted Earnings Per Share

The following is a summary of basic and diluted income per share (in thousands, except share and per share amounts): 

	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
Net income available to common stockholders	$	49,827	$	67,268	$	177,434	$	218,700
Weighted average shares outstanding—basic	208,421,470		206,118,472		208,173,995		205,931,031
Potentially dilutive common shares:
Unvested incentive units	181,064		169,100		142,670		160,117
Forward equity offering	1,013,970		37,884		705,720		1,847
Market performance-based awards	185,267		440,800		177,150		462,632
Weighted average shares outstanding—diluted	209,801,771		206,766,256		209,199,535		206,555,627
Income per share:
Basic	$	0.24	$	0.33	$	0.85	$	1.06
Diluted	$	0.24	$	0.33	$	0.85	$	1.06

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share

We have excluded the following potentially dilutive securities in the calculations above as they would be antidilutive or not dilutive: 

	Three Months Ended September 30,		Nine Months Ended September 30,
	2019	2018	2019	2018
Weighted average of Operating Partnership common units not owned by Digital Realty Trust, Inc.	8,953,826	8,170,912	9,080,816	8,268,382
Potentially dilutive Series C Cumulative Redeemable Perpetual Preferred Stock	1,614,005	1,727,724	1,678,511	1,864,489
Potentially dilutive Series G Cumulative Redeemable Preferred Stock	2,001,277	2,142,282	2,081,260	2,311,864
Potentially dilutive Series H Cumulative Redeemable Preferred Stock	—	3,139,291	1,053,127	3,387,795
Potentially dilutive Series I Cumulative Redeemable Preferred Stock	2,003,619	2,144,789	2,083,696	2,314,569
Potentially dilutive Series J Cumulative Redeemable Preferred Stock	1,598,556	1,711,186	1,662,444	1,846,643
Potentially dilutive Series K Cumulative Redeemable Preferred Stock	1,680,969	—	1,232,711	—
Total	17,852,252	19,036,184	18,872,565	19,993,742

Digital Realty Trust, L.P.

Class of Stock [Line Items]

Summary of Basic and Diluted Earnings Per Share

The following is a summary of basic and diluted income per unit (in thousands, except unit and per unit amounts):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
Net income available to common unitholders	$	52,127	$	69,968	$	185,434	$	227,580
Weighted average units outstanding—basic	217,375,296		214,289,384		217,254,811		214,199,414
Potentially dilutive common units:
Unvested incentive units	181,064		169,100		142,670		160,117
Forward equity offering	1,013,970		37,884		705,720		1,847
Market performance-based awards	185,267		440,800		177,150		462,632
Weighted average units outstanding—diluted	218,755,597		214,937,168		218,280,351		214,824,010
Income per unit:
Basic	$	0.24	$	0.33	$	0.85	$	1.06
Diluted	$	0.24	$	0.33	$	0.85	$	1.06

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share

We have excluded the following potentially dilutive securities in the calculations above as they would be antidilutive or not dilutive: 

	Three Months Ended September 30,		Nine Months Ended September 30,
	2019	2018	2019	2018
Potentially dilutive Series C Cumulative Redeemable Perpetual Preferred Units	1,614,005	1,727,724	1,678,511	1,864,489
Potentially dilutive Series G Cumulative Redeemable Preferred Units	2,001,277	2,142,282	2,081,260	2,311,864
Potentially dilutive Series H Cumulative Redeemable Preferred Units	—	3,139,291	1,053,127	3,387,795
Potentially dilutive Series I Cumulative Redeemable Preferred Units	2,003,619	2,144,789	2,083,696	2,314,569
Potentially dilutive Series J Cumulative Redeemable Preferred Units	1,598,556	1,711,186	1,662,444	1,846,643
Potentially dilutive Series K Cumulative Redeemable Preferred Units	1,680,969	—	1,232,711	—
Total	8,898,426	10,865,272	9,791,749	11,725,360

XML

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2019	Sep. 30, 2018
Cash flows from operating activities:
Net income	$ 67,574	$ 249,895	$ 288,518
Adjustments to reconcile net income to net cash provided by operating activities:
Gain on deconsolidation / sale of properties, net	0	(67,497)	(80,042)
Unrealized gain on equity investment		(34,931)	(2,005)
Impairment of investments in real estate	0	5,351	0
Equity in losses (earnings) of unconsolidated joint ventures	19,269	3,090	(23,734)
Distributions from unconsolidated joint ventures		26,739	15,487
Write-off due to early lease terminations		9,633	1,723
Depreciation and amortization of buildings and improvements, tenant improvements and acquired ground leases		612,678	570,179
Amortization of acquired in-place lease value and deferred leasing costs		276,088	317,355
Amortization of share-based compensation		25,966	21,177
Non-cash amortization of terminated swaps		785	858
Allowance for doubtful accounts		1,871	2,594
Amortization of deferred financing costs		10,299	8,926
Loss from early extinguishment of debt		4,090	0
Amortization of debt discount/premium		1,671	2,590
Amortization of acquired above-market leases and acquired below-market leases, net		12,988	20,008
Changes in assets and liabilities:
Accounts and other receivables		(37,510)	(37,498)
Deferred rent		(40,356)	(29,474)
Deferred leasing costs		(20,960)	(18,986)
Other assets		(25,397)	(20,794)
Accounts payable, operating lease liabilities and other accrued liabilities		100,495	3,671
Security deposits and prepaid rents		(3,044)	(6,704)
Net cash provided by operating activities		1,111,944	1,033,849
Cash flows from investing activities:
Improvements to investments in real estate		(1,125,772)	(946,118)
Acquisitions of real estate		(74,973)	(116,990)
Proceeds from sale of properties, net of sales costs		0	286,204
Proceeds from the Ascenty joint venture transaction		702,439	0
Deconsolidation of Ascenty cash		(97,081)	0
Contributions to unconsolidated joint ventures		(81,423)	(463)
Prepaid construction costs and other investments		(2,598)	(13,514)
Deposits paid for acquisitions of real estate		(12,474)	0
Improvement advances to tenants		(37,785)	(35,223)
Collection of improvement advances to tenants		21,611	32,328
Net cash used in investing activities		(708,056)	(793,776)
Cash flows from financing activities:
Borrowings on global revolving credit facilities		2,876,819	1,079,673
Repayments on global revolving credit facilities		(2,674,931)	(1,045,816)
Repayments on unsecured term loans		(375,000)	(39,095)
Borrowings on unsecured senior notes		2,325,566	649,038
Repayments on unsecured senior notes		(1,539,613)	0
Principal payments on mortgage loans		(478)	(440)
Payment of loan fees and costs		(16,843)	(6,272)
Premium paid for early extinguishment of debt		(35,067)	0
Capital contributions from noncontrolling interests in consolidated joint ventures, net		60,961	63,745
Taxes paid related to net settlement of stock-based compensation awards		0	(4,952)
Proceeds from common and preferred stock offerings, net		202,006	(1,292)
Redemption of preferred stock		(365,050)	0
Proceeds from equity plans		5,462	5,874
Proceeds from forward swap contract		0	1,560
Payment of dividends/distributions to preferred stockholders/unitholders		(54,283)	(60,987)
Payment of dividends/distributions to common stockholders/unitholders and distributions to noncontrolling interests in operating partnership		(921,776)	(849,571)
Net cash used in financing activities		(512,227)	(208,535)
Net (decrease) increase in cash, cash equivalents and restricted cash		(108,339)	31,538
Effect of exchange rate changes on cash, cash equivalents and restricted cash		(11,479)	9,591
Cash, cash equivalents and restricted cash at beginning of period		135,222	13,181
Cash, cash equivalents and restricted cash at end of period	15,404	15,404	54,310
Supplemental disclosure of cash flow information:
Cash paid for interest, net of amounts capitalized		262,532	247,652
Cash paid for income taxes		13,187	7,861
Operating cash paid used in the measurement of operating lease liabilities		67,162
Supplementary disclosure of noncash operating activities:
Right-of-use assets obtained in exchange for new operating lease liabilities		671,822
Supplementary disclosure of noncash investing and financing activities:
Change in net assets related to foreign currency translation adjustments		66,511	(8,608)
(Decrease) increase in other assets related to change in fair value of interest rate swaps		(11,379)	16,336
Decrease to goodwill and deferred tax liability (classified within accounts payable and other accrued liabilities)		(9,436)	0
Noncontrolling interests in operating partnership converted to shares of common stock		163,861	49,696
Accrual for additions to investments in real estate and tenant improvement advances included in accounts payable and accrued expenses		171,670	193,615
Addition to leasehold improvements pursuant to capital lease obligation		0	73,873
Deconsolidation of Ascenty and consolidated joint venture:
Investment in real estate	(14,941,707)	(14,941,707)
Account receivables	(304,712)	(304,712)
Acquired in-place lease value, deferred leasing costs and intangibles	(2,245,017)	(2,245,017)
Goodwill	(3,338,168)	(3,338,168)
Other assets	(178,528)	(178,528)
Secured debt	105,153	105,153
Accounts payable and other accrued liabilities	938,740	938,740
Accumulated other comprehensive loss, net	(68,625)	(68,625)
Deconsolidation of Ascenty cash		(97,081)	0
Non-controlling interest in consolidated joint venture	1,035,861	1,035,861
Deconsolidation of cash and cash equivalents	(7,190)	(7,190)
Recognition of retained equity investment in unconsolidated Ascenty joint venture	110,086	110,086
Corporate Joint Venture
Deconsolidation of Ascenty and consolidated joint venture:
Investment in real estate	(199,063)	(199,063)
Account receivables	(14,545)	(14,545)
Acquired in-place lease value, deferred leasing costs and intangibles	(23)	(23)
Other assets	(13)	(13)
Accounts payable and other accrued liabilities	1,316	1,316
Non-controlling interest in consolidated joint venture	110,086	110,086
Deconsolidation of cash and cash equivalents	(7,844)	(7,844)
Net carrying value of Ascenty assets and liabilities deconsolidated		(110,086)
Digital Realty Trust, L.P.
Cash flows from operating activities:
Net income	67,574	249,895	288,518
Adjustments to reconcile net income to net cash provided by operating activities:
Gain on deconsolidation / sale of properties, net	0	(67,497)	(80,042)
Unrealized gain on equity investment		(34,931)	(2,005)
Impairment of investments in real estate	0	5,351	0
Equity in losses (earnings) of unconsolidated joint ventures	19,269	3,090	(23,734)
Distributions from unconsolidated joint ventures		26,739	15,487
Write-off due to early lease terminations		9,633	1,723
Depreciation and amortization of buildings and improvements, tenant improvements and acquired ground leases		612,678	570,179
Amortization of acquired in-place lease value and deferred leasing costs		276,088	317,355
Amortization of share-based compensation		25,966	21,177
Non-cash amortization of terminated swaps		785	858
Allowance for doubtful accounts		1,871	2,594
Amortization of deferred financing costs		10,299	8,926
Loss from early extinguishment of debt		4,090	0
Amortization of debt discount/premium		1,671	2,590
Amortization of acquired above-market leases and acquired below-market leases, net		12,988	20,008
Changes in assets and liabilities:
Accounts and other receivables		(37,510)	(37,498)
Deferred rent		(40,356)	(29,474)
Deferred leasing costs		(20,960)	(18,986)
Other assets		(25,397)	(20,794)
Accounts payable, operating lease liabilities and other accrued liabilities		100,495	3,671
Security deposits and prepaid rents		(3,044)	(6,704)
Net cash provided by operating activities		1,111,944	1,033,849
Cash flows from investing activities:
Improvements to investments in real estate		(1,125,772)	(946,118)
Acquisitions of real estate		(74,973)	(116,990)
Proceeds from sale of properties, net of sales costs		0	286,204
Proceeds from the Ascenty joint venture transaction		702,439	0
Deconsolidation of Ascenty cash		(97,081)	0
Contributions to unconsolidated joint ventures		(81,423)	(463)
Prepaid construction costs and other investments		(2,598)	(13,514)
Deposits paid for acquisitions of real estate		(12,474)	0
Improvement advances to tenants		(37,785)	(35,223)
Collection of improvement advances to tenants		21,611	32,328
Net cash used in investing activities		(708,056)	(793,776)
Cash flows from financing activities:
Borrowings on global revolving credit facilities		2,876,819	1,079,673
Repayments on global revolving credit facilities		(2,674,931)	(1,045,816)
Repayments on unsecured term loans		(375,000)	(39,095)
Borrowings on unsecured senior notes		2,325,566	649,038
Repayments on unsecured senior notes		(1,539,613)	0
Principal payments on mortgage loans		(478)	(440)
Payment of loan fees and costs		(16,843)	(6,272)
Premium paid for early extinguishment of debt		(35,067)	0
Capital contributions from noncontrolling interests in consolidated joint ventures, net		60,961	63,745
Taxes paid related to net settlement of stock-based compensation awards		0	(4,952)
General partner contributions		207,468	4,582
General partner distributions		(365,050)	0
Proceeds from forward swap contract		0	1,560
Payment of dividends/distributions to preferred stockholders/unitholders		(54,283)	(60,987)
Payment of dividends/distributions to common stockholders/unitholders and distributions to noncontrolling interests in operating partnership		(921,776)	(849,571)
Net cash used in financing activities		(512,227)	(208,535)
Net (decrease) increase in cash, cash equivalents and restricted cash		(108,339)	31,538
Effect of exchange rate changes on cash, cash equivalents and restricted cash		(11,479)	9,591
Cash, cash equivalents and restricted cash at beginning of period		135,222	13,181
Cash, cash equivalents and restricted cash at end of period	15,404	15,404	54,310
Supplemental disclosure of cash flow information:
Cash paid for interest, net of amounts capitalized		262,532	247,652
Cash paid for income taxes		13,187	7,861
Operating cash paid used in the measurement of operating lease liabilities		67,162	0
Supplementary disclosure of noncash operating activities:
Right-of-use assets obtained in exchange for new operating lease liabilities		671,822	0
Supplementary disclosure of noncash investing and financing activities:
Change in net assets related to foreign currency translation adjustments		66,511	(8,608)
(Decrease) increase in other assets related to change in fair value of interest rate swaps		(11,379)	16,336
Decrease to goodwill and deferred tax liability (classified within accounts payable and other accrued liabilities)		(9,436)	0
Limited Partner common units converted to General Partner common units		163,861	49,696
Accrual for additions to investments in real estate and tenant improvement advances included in accounts payable and accrued expenses		171,670	193,615
Addition to leasehold improvements pursuant to capital lease obligation		0	73,873
Deconsolidation of Ascenty and consolidated joint venture:
Investment in real estate	(14,941,707)	(14,941,707)
Account receivables	(304,712)	(304,712)
Acquired in-place lease value, deferred leasing costs and intangibles	(2,245,017)	(2,245,017)
Goodwill	(3,338,168)	(3,338,168)
Other assets	(178,528)	(178,528)
Secured debt	105,153	105,153
Accounts payable and other accrued liabilities	938,740	938,740
Accumulated other comprehensive loss, net	(71,316)	(71,316)
Deconsolidation of Ascenty cash		(97,081)	$ 0
Non-controlling interest in consolidated joint venture	1,035,861	1,035,861
Deconsolidation of cash and cash equivalents	(7,190)	(7,190)
Digital Realty Trust, L.P. | Corporate Joint Venture
Deconsolidation of Ascenty and consolidated joint venture:
Investment in real estate	(199,063)	(199,063)
Account receivables	(14,545)	(14,545)
Acquired in-place lease value, deferred leasing costs and intangibles	(23)	(23)
Other assets	(13)	(13)
Accounts payable and other accrued liabilities	1,316	1,316
Non-controlling interest in consolidated joint venture	110,086	110,086
Deconsolidation of cash and cash equivalents	(7,844)	(7,844)
Net carrying value of Ascenty assets and liabilities deconsolidated		(110,086)
Recognition of retained equity investment in unconsolidated Ascenty joint venture	110,086	110,086
Ascenty Acquisition
Cash flows from investing activities:
Deconsolidation of Ascenty cash		(97,081)
Deconsolidation of Ascenty and consolidated joint venture:
Investment in real estate	(362,951)	(362,951)
Account receivables	(24,977)	(24,977)
Acquired in-place lease value, deferred leasing costs and intangibles	(480,128)	(480,128)
Goodwill	(967,189)	(967,189)
Other assets	(31,099)	(31,099)
Secured debt	571,873	571,873
Accounts payable and other accrued liabilities	72,449	72,449
Accumulated other comprehensive loss, net	(21,687)	(21,687)
Deconsolidation of Ascenty cash		(97,081)
Net carrying value of Ascenty assets and liabilities deconsolidated		(1,340,790)
Recognition of retained equity investment in unconsolidated Ascenty joint venture	727,439	727,439
Ascenty Acquisition | Digital Realty Trust, L.P.
Cash flows from investing activities:
Deconsolidation of Ascenty cash		(97,081)
Deconsolidation of Ascenty and consolidated joint venture:
Investment in real estate	(362,951)	(362,951)
Account receivables	(24,977)	(24,977)
Acquired in-place lease value, deferred leasing costs and intangibles	(480,128)	(480,128)
Goodwill	(967,189)	(967,189)
Other assets	(31,099)	(31,099)
Secured debt	571,873	571,873
Accounts payable and other accrued liabilities	72,449	72,449
Accumulated other comprehensive loss, net	(21,687)	(21,687)
Deconsolidation of Ascenty cash		(97,081)
Net carrying value of Ascenty assets and liabilities deconsolidated		(1,340,790)
Recognition of retained equity investment in unconsolidated Ascenty joint venture	$ 727,439	$ 727,439

XML

Investments in Unconsolidated Joint Ventures (Tables)

9 Months Ended

Sep. 30, 2019

Equity Method Investments and Joint Ventures [Abstract]

Summary of Financial Information for Joint Ventures

As of September 30, 2019 and December 31, 2018, our investments in unconsolidated joint ventures accounted for under the equity method of accounting presented in our condensed consolidated balance sheets consist of the following (in thousands):

Joint Venture	Metropolitan Area	% Ownership		Balance as of September 30, 2019		Balance as of December 31, 2018
Ascenty (1)	Brazil / Chile	51%	(2)	$	737,727	$	—
Digital MC	Osaka / Tokyo	50%		185,525		66,835
Chun Choi	Hong Kong	50%		98,706		96,094
Other				13,903		12,179
Total				$	1,035,861	$	175,108

(1) Our maximum exposure to loss related to this unconsolidated variable interest entity (VIE) is limited to our equity investment in this VIE.

(2)

Includes an approximate 2% ownership interest held by a non-controlling interest in our entity that holds the investment in the Ascenty joint venture, which has a carrying value of approximately $25.0 million.

XML

Income Taxes

9 Months Ended

Sep. 30, 2019

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

Digital Realty Trust, Inc. has elected to be treated and believes that it has been organized and has operated in a manner that has enabled it to qualify as a REIT for federal income tax purposes. As a REIT, Digital Realty Trust, Inc. is generally not subject to corporate level federal income taxes on taxable income distributed currently to its stockholders. Since inception, Digital Realty Trust, Inc. has distributed at least 100% of its taxable income annually. As such, no provision for federal income taxes has been included in the Company's accompanying condensed consolidated financial statements for the nine months ended September 30, 2019 and 2018.

The Operating Partnership is a partnership and is not required to pay federal income tax. Instead, taxable income is allocated to its partners, who include such amounts on their federal income tax returns. As such, no provision for federal income taxes has been included in the Operating Partnership’s accompanying condensed consolidated financial statements.

We have elected taxable REIT subsidiary (“TRS”) status for some of our consolidated subsidiaries. In general, a TRS may provide services that would otherwise be considered impermissible for REITs to provide and may hold assets that REITs cannot hold directly. Income taxes for TRS entities were accrued, as necessary, for the nine months ended September 30, 2019 and 2018.

For our TRS entities and foreign subsidiaries that are subject to U.S. federal, state, local and foreign income taxes, deferred tax assets and liabilities are established for temporary differences between the financial reporting basis and the tax basis of assets and liabilities at the enacted tax rates expected to be in effect when the temporary differences reverse. A valuation allowance for deferred tax assets is provided if we believe it is more likely than not that the deferred tax asset may not be realized, based on available evidence at the time the determination is made. An increase or decrease in the valuation allowance that results from the change in circumstances that causes a change in our judgment about the realizability of the related deferred tax asset is included in the income statement. Deferred tax assets (net of valuation allowance) and liabilities for our TRS entities and foreign subsidiaries were accrued, as necessary, for the nine months ended September 30, 2019 and 2018. As of September 30, 2019 and December 31, 2018, we had deferred tax liabilities net of deferred tax assets of approximately $140.6 million and $146.6 million, respectively, primarily related to our foreign properties, classified in accounts payable and other accrued expenses in the consolidated balance sheet. The majority of our net deferred tax liability relates to differences between tax basis and book basis of the assets acquired in the Sentrum portfolio acquisition during 2012 and the European Portfolio Acquisition in July 2016. The valuation allowance against the deferred tax assets at September 30, 2019 and December 31, 2018 relate primarily to net operating loss carryforwards that we do not expect to utilize attributable to certain foreign jurisdictions and from the Telx Acquisition.

The federal tax legislation enacted in December 2017, commonly known as the Tax Cuts and Jobs Act (the “TCJA”), reduced the corporate federal tax rate in the U.S. to 21%, generally effective on January 1, 2018. As such, deferred tax assets and liabilities were remeasured using the lower corporate federal tax rate at December 31, 2017. While we do not expect other material impacts, the new tax rules are complex and, in some respects, lack developed administrative guidance. We continue to work with our tax advisors to analyze and determine the full impact that the TCJA as a whole will have on us.

XML

Label	Element	Value
Parent [Member]
Cumulative Effect of New Accounting Principle in Period of Adoption	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	$ 5,915,000
Cumulative Effect of New Accounting Principle in Period of Adoption	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	(6,318,000)
Retained Earnings [Member]
Cumulative Effect of New Accounting Principle in Period of Adoption	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	(6,318,000)
Cumulative Effect of New Accounting Principle in Period of Adoption	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	$ 5,915,000

XML

Real Estate

9 Months Ended

Sep. 30, 2019

Real Estate [Abstract]

Real Estate

Real Estate

Acquisitions

We acquired the following real estate during the nine months ended September 30, 2019:

Location	Market	Date Acquired	Amount (in millions)
Land parcels (1)	Various	Various	$	44.3
21780 Filigree Court	Northern Virginia	May 2, 2019	28.0
			$	72.3

(1) Represents five currently vacant land parcels in total located in the United States, Europe and Asia which are not included in our operating property count. Purchase price in U.S. dollars and excludes capitalized closing costs.

Assets Held For Sale / Contribution

On September 16, 2019, we announced the proposed sale of 10 Powered Base Building® properties, which comprise 12 data centers, in North America to Mapletree Investments Pte Ltd (“Mapletree Investments”) and Mapletree Industrial Trust (“MIT” and together with Mapletree Investments, “Mapletree”), at a purchase consideration of approximately $557.0 million. As of September 30, 2019, these 12 data centers had an aggregate carrying value of $224.2 million within total assets and $2.5 million within total liabilities and are shown as assets held for sale and contribution and obligations associated with assets held for sale and contribution on the condensed consolidated balance sheet. The 12 data centers are not representative of a significant component of our portfolio, nor does the potential sales represent a significant shift in our strategy.

On September 16, 2019, we also announced a contribution of three Turn-Key Flex® data centers, valued at approximately $1.0 billion, to a new joint venture with Mapletree in exchange for a 20% interest in the joint venture and approximately $0.8 billion of cash, net of closing costs. An entity jointly owned by Mapletree Investments and MIT will contribute such cash to the joint venture in exchange for an 80% interest in the joint venture. The carrying value of the three data centers is classified as assets held for sale and contribution on our condensed consolidated balance sheet as of September 30, 2019. The disposition of a portion of our interest in the three data centers met the criteria under ASC 360 for the assets to qualify as held for sale and contribution. However, the operations are not classified as discontinued operations as a result of our continuing interest in the venture. As of September 30, 2019, these three data centers had an aggregate carrying value of $743.3 million within total assets and $21.0 million within total liabilities and are shown as assets held for sale and contribution and obligations associated with assets held for sale and contribution on the condensed consolidated balance sheet.

XML

Debt of the Company

9 Months Ended

Sep. 30, 2019

Debt Disclosure [Abstract]

Debt of the Company

Debt of the Company

In this Note 7, the “Company” refers only to Digital Realty Trust, Inc. and not to any of its subsidiaries.

The Company itself does not currently have any indebtedness. All debt is currently held directly or indirectly by the Operating Partnership.

Guarantee of Debt

The Company guarantees the Operating Partnership’s obligations with respect to its 3.950% notes due 2022 (3.950% 2022 Notes), 3.625% notes due 2022 (3.625% 2022 Notes), 2.750% notes due 2023 (2.750% 2023 Notes), 4.750% notes due 2025 (4.750% 2025 Notes), 3.700% notes due 2027 (2027 Notes), 4.450% notes due 2028 (2028 Notes) and 3.600% notes due 2029 (3.600% 2029 Notes). The Company and the Operating Partnership guarantee the obligations of Digital Stout Holding, LLC, a wholly owned subsidiary of the Operating Partnership, with respect to its 4.750% notes due 2023 (4.750% 2023 Notes), 2.750% notes due 2024 (2.750% 2024 Notes), 4.250% notes due 2025 (4.250% 2025 Notes), 3.300% notes due 2029 (3.300% 2029 Notes) and 3.750% notes due 2030 (2030 Notes) and the obligations of Digital Euro Finco, LLC, an indirect wholly owned subsidiary of the Operating Partnership, with respect to its 2.625% notes due 2024 (2.625% 2024 Notes) and 2.500% notes due 2026 (2026 Notes). The Company is also the guarantor of the Operating Partnership’s and its subsidiary borrowers’ obligations under the global revolving credit facilities and unsecured term loans.

XML

Incentive Plan (Summary of Long-Term Incentive Units) (Details)	9 Months Ended
	Sep. 30, 2019 $ / shares shares
Units
Granted (shares)	119,397
Long-term incentive units
Units
Unvested beginning of period (shares)	158,486
Granted (shares)	119,397
Vested (shares)	(44,496)
Cancelled or expired (shares)	(20,061)
Unvested end of period (shares)	213,326
Weighted-Average Grant Date Fair Value
Unvested, beginning of period (in dollars per share) | $ / shares	$ 100.94
Granted (in dollars per share) | $ / shares	116.18
Vested (in dollars per share) | $ / shares	97.46
Cancelled or expired (in dollars per share) | $ / shares	93.28
Unvested, end of period (in dollars per share) | $ / shares	$ 109.90
Long-term incentive units | Minimum
Weighted-Average Grant Date Fair Value
Award vesting period	2 years
Long-term incentive units | Maximum
Weighted-Average Grant Date Fair Value
Award vesting period	4 years

XML

Equity and Accumulated Other Comprehensive Loss, Net (Summary of Activity For Noncontrolling Interests in The Operating Partnership) (Details)	9 Months Ended
	Sep. 30, 2019 shares
Common and Incentive Unit Activity [Roll Forward]
Beginning balance (units)	10,580,884
Redemption of common units for shares of Digital Realty Trust, Inc. common stock (units)	(1,534,878)
Conversion of incentive units held by employees and directors for shares of Digital Realty Trust, Inc. common stock (units)	(306,814)
Incentive units issued upon achievement of market performance condition (units)	308,308
Grant of incentive units to employees and directors (units)	119,397
Cancellation / forfeitures of incentive units held by employees and directors (units)	(22,916)
Ending balance (units)	9,143,981
Common Units
Common and Incentive Unit Activity [Roll Forward]
Beginning balance (units)	8,636,146
Redemption of common units for shares of Digital Realty Trust, Inc. common stock (units)	(1,534,878)
Conversion of incentive units held by employees and directors for shares of Digital Realty Trust, Inc. common stock (units)	0
Incentive units issued upon achievement of market performance condition (units)	0
Grant of incentive units to employees and directors (units)	0
Cancellation / forfeitures of incentive units held by employees and directors (units)	0
Ending balance (units)	7,101,268
Incentive Units
Common and Incentive Unit Activity [Roll Forward]
Beginning balance (units)	1,944,738
Redemption of common units for shares of Digital Realty Trust, Inc. common stock (units)	0
Conversion of incentive units held by employees and directors for shares of Digital Realty Trust, Inc. common stock (units)	(306,814)
Incentive units issued upon achievement of market performance condition (units)	308,308
Grant of incentive units to employees and directors (units)	119,397
Cancellation / forfeitures of incentive units held by employees and directors (units)	(22,916)
Ending balance (units)	2,042,713

XML

Equity and Accumulated Other Comprehensive Loss, Net (Equity Distribution Agreements) (Details)	Jan. 04, 2019 USD ($)
2019 Equity Distribution Agreements
Class of Stock [Line Items]
Aggregate offering price of the distribution agreement maximum	$ 1,000,000,000.0

XML

Capital and Accumulated Other Comprehensive Loss (Schedule of Distributions) (Details) - USD ($) $ / shares in Units, $ in Thousands			9 Months Ended
	Jun. 29, 2019	Mar. 15, 2019	Sep. 30, 2019	Apr. 01, 2019
Series H Preferred Units
Dividends Payable [Line Items]
Redemption price (in dollars per share)				$ 25.00
Offering costs				$ 11,800
Series K Preferred Units
Dividends Payable [Line Items]
Preferred stock dividend per share amount (in dollars per share/unit)	$ 0.43875	$ 1.46250
Redemption price (in dollars per share)		$ 25.00
Digital Realty Trust, L.P. | Series C Preferred Units
Dividends Payable [Line Items]
Dividends/Distributions, preferred units			$ 9,999
Preferred stock dividend per share amount (in dollars per share/unit)			$ 1.65625
Digital Realty Trust, L.P. | Series G Preferred Units
Dividends Payable [Line Items]
Dividends/Distributions, preferred units			$ 11,016
Preferred stock dividend per share amount (in dollars per share/unit)			$ 1.46875
Digital Realty Trust, L.P. | Series H Preferred Units
Dividends Payable [Line Items]
Dividends/Distributions, preferred units			$ 6,730
Preferred stock dividend per share amount (in dollars per share/unit)			$ 1.84375
Digital Realty Trust, L.P. | Series I Preferred Units
Dividends Payable [Line Items]
Dividends/Distributions, preferred units			$ 11,907
Preferred stock dividend per share amount (in dollars per share/unit)			$ 1.58750
Digital Realty Trust, L.P. | Series J Preferred Units
Dividends Payable [Line Items]
Dividends/Distributions, preferred units			$ 7,875
Preferred stock dividend per share amount (in dollars per share/unit)			$ 1.31250
Digital Realty Trust, L.P. | Series K Preferred Units
Dividends Payable [Line Items]
Dividends/Distributions, preferred units			$ 6,757
Preferred stock dividend per share amount (in dollars per share/unit)			$ 1.46250
Digital Realty Trust, L.P. | Common Units
Dividends Payable [Line Items]
Dividends/Distributions, common stock/units			$ 705,562
Common stock dividend per share amount (in dollars per share/unit)			$ 4.32000
Digital Realty Trust, L.P. | March 29, 2019 | Series C Preferred Units
Dividends Payable [Line Items]
Dividends/Distributions, preferred units			$ 3,333
Digital Realty Trust, L.P. | March 29, 2019 | Series G Preferred Units
Dividends Payable [Line Items]
Dividends/Distributions, preferred units			3,672
Digital Realty Trust, L.P. | March 29, 2019 | Series H Preferred Units
Dividends Payable [Line Items]
Dividends/Distributions, preferred units			6,730
Digital Realty Trust, L.P. | March 29, 2019 | Series I Preferred Units
Dividends Payable [Line Items]
Dividends/Distributions, preferred units			3,969
Digital Realty Trust, L.P. | March 29, 2019 | Series J Preferred Units
Dividends Payable [Line Items]
Dividends/Distributions, preferred units			2,625
Digital Realty Trust, L.P. | March 29, 2019 | Series K Preferred Units
Dividends Payable [Line Items]
Dividends/Distributions, preferred units			0
Digital Realty Trust, L.P. | March 29, 2019 | Common Units
Dividends Payable [Line Items]
Dividends/Distributions, common stock/units			235,256
Digital Realty Trust, L.P. | June 28, 2019 | Series C Preferred Units
Dividends Payable [Line Items]
Dividends/Distributions, preferred units			3,333
Digital Realty Trust, L.P. | June 28, 2019 | Series G Preferred Units
Dividends Payable [Line Items]
Dividends/Distributions, preferred units			3,672
Digital Realty Trust, L.P. | June 28, 2019 | Series H Preferred Units
Dividends Payable [Line Items]
Dividends/Distributions, preferred units			0
Digital Realty Trust, L.P. | June 28, 2019 | Series I Preferred Units
Dividends Payable [Line Items]
Dividends/Distributions, preferred units			3,969
Digital Realty Trust, L.P. | June 28, 2019 | Series J Preferred Units
Dividends Payable [Line Items]
Dividends/Distributions, preferred units			2,625
Digital Realty Trust, L.P. | June 28, 2019 | Series K Preferred Units
Dividends Payable [Line Items]
Dividends/Distributions, preferred units			3,686
Digital Realty Trust, L.P. | June 28, 2019 | Common Units
Dividends Payable [Line Items]
Dividends/Distributions, common stock/units			235,142
Digital Realty Trust, L.P. | September 30, 2019 | Series C Preferred Units
Dividends Payable [Line Items]
Dividends/Distributions, preferred units			3,333
Digital Realty Trust, L.P. | September 30, 2019 | Series G Preferred Units
Dividends Payable [Line Items]
Dividends/Distributions, preferred units			3,672
Digital Realty Trust, L.P. | September 30, 2019 | Series H Preferred Units
Dividends Payable [Line Items]
Dividends/Distributions, preferred units			0
Digital Realty Trust, L.P. | September 30, 2019 | Series I Preferred Units
Dividends Payable [Line Items]
Dividends/Distributions, preferred units			3,969
Digital Realty Trust, L.P. | September 30, 2019 | Series J Preferred Units
Dividends Payable [Line Items]
Dividends/Distributions, preferred units			2,625
Digital Realty Trust, L.P. | September 30, 2019 | Series K Preferred Units
Dividends Payable [Line Items]
Dividends/Distributions, preferred units			3,071
Digital Realty Trust, L.P. | September 30, 2019 | Common Units
Dividends Payable [Line Items]
Dividends/Distributions, common stock/units			$ 235,164

XML

Capital and Accumulated Other Comprehensive Loss (Forward Equity Sale) (Details) - Digital Realty Trust, L.P. - USD ($) $ in Billions	Sep. 27, 2019	Sep. 27, 2018
Forward Sale Agreement
Class of Stock [Line Items]
Common stock issued in public offering (shares)		9,775,000
Net proceeds on public offering	$ 1.1
Over-Allotment Option
Class of Stock [Line Items]
Common stock issued in public offering (shares)		1,275,000

XML

Derivative Instruments (Outstanding Interest Rate Derivatives) (Details) $ in Thousands	Sep. 30, 2019 USD ($) $ / $	Dec. 31, 2018 USD ($) $ / $
Unsecured Term Loans | Canadian dollar (CAD)
Currently-paying contracts
Exchange rate | $ / $	0.76	0.73
Interest Rate Swap, 1.611
Currently-paying contracts
Notional Amount	$ 206,000	$ 206,000
Strike Rate	1.611%
Interest Rate Swap, 1.611 | Level 2
Currently-paying contracts
Fair value of derivatives	$ 178	1,976
Interest Rate Swap, 1.605
Currently-paying contracts
Notional Amount	$ 54,905	54,905
Strike Rate	1.605%
Interest Rate Swap, 1.605 | Level 2
Currently-paying contracts
Fair value of derivatives	$ 46	517
Interest Rate Swap 1.016
Currently-paying contracts
Notional Amount	$ 75,000	75,000
Strike Rate	1.016%
Interest Rate Swap 1.016 | Level 2
Currently-paying contracts
Fair value of derivatives	$ 547	2,169
Interest Rate Swap, 1.164
Currently-paying contracts
Notional Amount	$ 75,000	75,000
Strike Rate	1.164%
Interest Rate Swap, 1.164 | Level 2
Currently-paying contracts
Fair value of derivatives	$ 410	1,970
Interest Rate Swap, 1.435
Currently-paying contracts
Notional Amount	$ 300,000	300,000
Strike Rate	1.435%
Interest Rate Swap, 1.435 | Level 2
Currently-paying contracts
Fair value of derivatives	$ (379)	11,463
Interest Rate Swap, 0.779
Currently-paying contracts
Notional Amount	$ 74,397	72,220
Strike Rate	0.779%
Interest Rate Swap, 0.779 | Level 2
Currently-paying contracts
Fair value of derivatives	$ 1,052	2,024
Interest Rate Swap
Currently-paying contracts
Notional Amount	785,302	783,125
Interest Rate Swap | Level 2
Currently-paying contracts
Fair value of derivatives	$ 1,854	$ 20,119

XML

Leases (Minimum Lease Payments From Customers) (Details) $ in Thousands	Sep. 30, 2019 USD ($)
Leases [Abstract]
Remainder of 2019	$ 625,824
2020	2,220,209
2021	1,852,760
2022	1,527,560
2023	1,328,487
Thereafter	5,158,479
Total	$ 12,713,319

XML

Acquired Intangible Assets and Liabilities (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Finite-Lived Intangible Assets [Line Items]
Increase (decrease) in rental revenues	$ (2,800)	$ (6,800)	$ (13,000)	$ (20,600)
Expected average remaining lives of acquired below market leases (in years)			8 years 1 month 6 days
Amortization of acquired in-place lease value and deferred leasing costs			$ 276,088	317,355
Acquired above-market leases
Finite-Lived Intangible Assets [Line Items]
Expected average remaining lives (in years)			2 years 7 months 6 days
Acquired in-place lease value
Finite-Lived Intangible Assets [Line Items]
Expected average remaining lives (in years)			5 years 10 months 24 days
Amortization of acquired in-place lease value and deferred leasing costs	32,400	50,200	$ 114,700	162,300
Weighted average remaining contractual life for acquired leases excluding renewals or extensions (in years)			5 years 7 months 6 days
Tenant relationship value
Finite-Lived Intangible Assets [Line Items]
Amortization of acquired in-place lease value and deferred leasing costs	$ 30,700	$ 30,800	$ 99,300	$ 92,800
Weighted average remaining contractual life for acquired leases excluding renewals or extensions (in years)			13 years 3 months 18 days

XML

Income Taxes (Narrative) (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2019	Dec. 31, 2018
Income Tax Disclosure [Abstract]
Percentage of income distributed (at least)	100.00%
Net deferred tax liability	$ 140.6	$ 146.6

XML

Commitments and Contingencies (Details) $ in Millions	Sep. 30, 2019 USD ($)
Commitments and Contingencies Disclosure [Abstract]
Reimbursable amount of commitments related to construction contracts	$ 9.0
Commitments related to construction contracts	$ 452.9

XML

Debt of the Operating Partnership (Summary of Outstanding Indebtedness) (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019 USD ($)	Mar. 31, 2019 USD ($)	Sep. 30, 2019 USD ($) extension	Jun. 14, 2019 EUR (€)	Mar. 06, 2019 EUR (€)	Mar. 05, 2019 GBP (£)	Jan. 16, 2019 EUR (€)	Dec. 31, 2018 USD ($)	Oct. 17, 2018 GBP (£)
3.950% notes due 2022
Debt Instrument [Line Items]
Stated interest rate	3.95%		3.95%
3.625% notes due 2022
Debt Instrument [Line Items]
Stated interest rate	3.625%		3.625%
2.625% notes due 2024
Debt Instrument [Line Items]
Stated interest rate	2.625%		2.625%
2.750% notes due 2024
Debt Instrument [Line Items]
Stated interest rate	2.75%		2.75%
4.750% notes due 2025
Debt Instrument [Line Items]
Stated interest rate	4.75%		4.75%
3.600% notes due 2029
Debt Instrument [Line Items]
Stated interest rate	3.60%		3.60%
3.300% notes due 2029
Debt Instrument [Line Items]
Stated interest rate	3.30%		3.30%
Global revolving credit facilities
Debt Instrument [Line Items]
Deferred financing costs	$ (12,500)		$ (12,500)					$ (15,400)
Unsecured Term Loans
Debt Instrument [Line Items]
Deferred financing costs	(3,300)		(3,300)					(4,200)
Senior Notes
Debt Instrument [Line Items]
Deferred financing costs	$ (48,700)		$ (48,700)					(40,600)
Senior Notes | 3.950% notes due 2022
Debt Instrument [Line Items]
Stated interest rate	3.95%		3.95%
Senior Notes | 3.625% notes due 2022
Debt Instrument [Line Items]
Stated interest rate	3.625%		3.625%
Senior Notes | 2.750% notes due 2023
Debt Instrument [Line Items]
Stated interest rate	2.75%		2.75%
Senior Notes | 4.750% notes due 2023
Debt Instrument [Line Items]
Stated interest rate	4.75%		4.75%
Senior Notes | 2.625% notes due 2024
Debt Instrument [Line Items]
Stated interest rate	2.625%		2.625%
Senior Notes | 2.750% notes due 2024
Debt Instrument [Line Items]
Stated interest rate	2.75%		2.75%
Senior Notes | 4.250% notes due 2025
Debt Instrument [Line Items]
Stated interest rate	4.25%		4.25%
Senior Notes | 4.750% notes due 2025
Debt Instrument [Line Items]
Stated interest rate	4.75%		4.75%
Senior Notes | 2.500% notes due 2026
Debt Instrument [Line Items]
Stated interest rate	2.50%		2.50%
Senior Notes | 3.700% notes due 2027
Debt Instrument [Line Items]
Stated interest rate	3.70%		3.70%
Senior Notes | 4.450% notes due 2028
Debt Instrument [Line Items]
Stated interest rate	4.45%		4.45%
Senior Notes | 3.600% notes due 2029
Debt Instrument [Line Items]
Stated interest rate	3.60%		3.60%
Senior Notes | 3.300% notes due 2029
Debt Instrument [Line Items]
Stated interest rate	3.30%		3.30%
Senior Notes | 3.750% notes due 2030
Debt Instrument [Line Items]
Stated interest rate	3.75%		3.75%
Secured Debt
Debt Instrument [Line Items]
Deferred financing costs	$ (200)		$ (200)					(20,200)
Digital Realty Trust, L.P.
Debt Instrument [Line Items]
Long-term debt, gross	10,999,905		10,999,905
Total indebtedness	10,924,035		10,924,035					11,101,479
Unamortized net premiums	6,473		6,473
Long-term debt, net of discount (premium)	10,988,800		10,988,800
Digital Realty Trust, L.P. | Global revolving credit facilities
Debt Instrument [Line Items]
Long-term debt, gross	1,846,026		1,846,026					1,663,156
Deferred financing costs	(12,514)		(12,514)					(15,421)
Total indebtedness	1,833,512		1,833,512					1,647,735
Unamortized net premiums	0		0
Long-term debt, net of discount (premium)	1,846,026		$ 1,846,026
Interest rate basis spread			0.90%
Commitment fee percentage			0.20%
Number of extension options | extension			2
Debt instrument, extension term			6 months
Digital Realty Trust, L.P. | Unsecured Term Loans
Debt Instrument [Line Items]
Long-term debt, gross	799,533		$ 799,533
Deferred financing costs	(3,301)		(3,301)					(4,216)
Total indebtedness	796,232		796,232					1,178,904
Unamortized net premiums	0		0
Long-term debt, net of discount (premium)	799,533		799,533
Early extinguishment charge	5,400	$ 12,900	26,300
Digital Realty Trust, L.P. | Unsecured Term Loans | 2019 Term Loan
Debt Instrument [Line Items]
Long-term debt, gross	0		$ 0					375,000
Digital Realty Trust, L.P. | Unsecured Term Loans | 2019 Term Loan | Base Rate
Debt Instrument [Line Items]
Interest rate basis spread			1.00%
Digital Realty Trust, L.P. | Unsecured Term Loans | 2023 Term Loan
Debt Instrument [Line Items]
Long-term debt, gross	300,000		$ 300,000					300,000
Digital Realty Trust, L.P. | Unsecured Term Loans | 2024 Term Loan
Debt Instrument [Line Items]
Long-term debt, gross	499,533		499,533					508,120
Digital Realty Trust, L.P. | Senior Notes
Debt Instrument [Line Items]
Long-term debt, gross	8,249,047		8,249,047
Deferred financing costs	(48,726)		(48,726)					(40,553)
Total indebtedness	8,189,138		8,189,138					7,589,126
Unamortized discounts, net of premiums	(11,183)		(11,183)					(19,859)
Unamortized net premiums	6,395		6,395
Long-term debt, net of discount (premium)	8,237,864		8,237,864					7,629,679
Digital Realty Trust, L.P. | Senior Notes | Floating rate notes due 2019
Debt Instrument [Line Items]
Long-term debt, gross	0		$ 0					143,338
Digital Realty Trust, L.P. | Senior Notes | Floating rate notes due 2019 | EURIBOR
Debt Instrument [Line Items]
Interest rate basis spread			0.50%
Digital Realty Trust, L.P. | Senior Notes | 5.875% notes due 2020
Debt Instrument [Line Items]
Long-term debt, gross	$ 0		$ 0					500,000
Stated interest rate	5.875%		5.875%				5.875%
Digital Realty Trust, L.P. | Senior Notes | 3.400% notes due 2020
Debt Instrument [Line Items]
Long-term debt, gross	$ 0		$ 0					500,000
Stated interest rate	3.40%		3.40%	3.40%
Digital Realty Trust, L.P. | Senior Notes | 5.250% notes due 2021
Debt Instrument [Line Items]
Long-term debt, gross	$ 0		$ 0					400,000
Stated interest rate	5.25%		5.25%
Digital Realty Trust, L.P. | Senior Notes | 3.950% notes due 2022
Debt Instrument [Line Items]
Long-term debt, gross	$ 500,000		$ 500,000					500,000
Stated interest rate	3.95%		3.95%
Digital Realty Trust, L.P. | Senior Notes | 3.625% notes due 2022
Debt Instrument [Line Items]
Long-term debt, gross	$ 300,000		$ 300,000					300,000
Stated interest rate	3.625%		3.625%
Digital Realty Trust, L.P. | Senior Notes | 2.750% notes due 2023
Debt Instrument [Line Items]
Long-term debt, gross	$ 350,000		$ 350,000					350,000
Stated interest rate	2.75%		2.75%
Digital Realty Trust, L.P. | Senior Notes | 4.750% notes due 2023
Debt Instrument [Line Items]
Long-term debt, gross	$ 368,670		$ 368,670					382,620
Stated interest rate	4.75%		4.75%
Digital Realty Trust, L.P. | Senior Notes | 2.625% notes due 2024
Debt Instrument [Line Items]
Long-term debt, gross	$ 653,940		$ 653,940					688,020
Stated interest rate	2.625%		2.625%
Digital Realty Trust, L.P. | Senior Notes | 2.750% notes due 2024
Debt Instrument [Line Items]
Long-term debt, gross	$ 307,225		$ 307,225					318,850
Stated interest rate	2.75%		2.75%
Digital Realty Trust, L.P. | Senior Notes | 4.250% notes due 2025
Debt Instrument [Line Items]
Long-term debt, gross	$ 491,560		$ 491,560					510,160
Stated interest rate	4.25%		4.25%
Digital Realty Trust, L.P. | Senior Notes | 4.750% notes due 2025
Debt Instrument [Line Items]
Long-term debt, gross	$ 450,000		$ 450,000					450,000
Stated interest rate	4.75%		4.75%
Digital Realty Trust, L.P. | Senior Notes | 2.500% notes due 2026
Debt Instrument [Line Items]
Long-term debt, gross	$ 1,171,642		$ 1,171,642					0
Stated interest rate	2.50%		2.50%				2.50%
Aggregate principal amount | €					€ 225,000,000.0		€ 850,000,000.0
Digital Realty Trust, L.P. | Senior Notes | 3.700% notes due 2027
Debt Instrument [Line Items]
Long-term debt, gross	$ 1,000,000		$ 1,000,000					1,000,000
Stated interest rate	3.70%		3.70%
Digital Realty Trust, L.P. | Senior Notes | 4.450% notes due 2028
Debt Instrument [Line Items]
Long-term debt, gross	$ 650,000		$ 650,000					650,000
Stated interest rate	4.45%		4.45%
Digital Realty Trust, L.P. | Senior Notes | 3.600% notes due 2029
Debt Instrument [Line Items]
Long-term debt, gross	$ 900,000		$ 900,000					0
Stated interest rate	3.60%		3.60%	3.60%
Aggregate principal amount | €				€ 900,000,000.0
Digital Realty Trust, L.P. | Senior Notes | 3.300% notes due 2029
Debt Instrument [Line Items]
Long-term debt, gross	$ 430,115		$ 430,115					446,390
Stated interest rate	3.30%		3.30%
Digital Realty Trust, L.P. | Senior Notes | 3.750% notes due 2030
Debt Instrument [Line Items]
Long-term debt, gross	$ 675,895		$ 675,895					510,160
Stated interest rate	3.75%		3.75%
Aggregate principal amount | £						£ 150,000,000.0			£ 400,000,000.0
Digital Realty Trust, L.P. | Senior Notes | Secured note due March 2023 | LIBOR
Debt Instrument [Line Items]
Interest rate basis spread			1.00%
Digital Realty Trust, L.P. | Senior Notes | Secured note due December 2023 | Base Rate
Debt Instrument [Line Items]
Interest rate basis spread			4.25%
Digital Realty Trust, L.P. | Secured Debt
Debt Instrument [Line Items]
Long-term debt, gross	$ 105,299		$ 105,299
Deferred financing costs	(224)		(224)					(20,210)
Total indebtedness	105,153		105,153					685,714
Unamortized net premiums	78		78					148
Long-term debt, net of discount (premium)	105,377		105,377					705,924
Digital Realty Trust, L.P. | Secured Debt | 731 East Trade Street
Debt Instrument [Line Items]
Long-term debt, gross	$ 1,299		$ 1,299					1,776
Effective interest rate (as a percent)	8.22%		8.22%
Digital Realty Trust, L.P. | Secured Debt | Secured note due March 2023
Debt Instrument [Line Items]
Long-term debt, gross	$ 104,000		$ 104,000					104,000
Digital Realty Trust, L.P. | Secured Debt | Secured note due December 2023
Debt Instrument [Line Items]
Long-term debt, gross	$ 0		$ 0					$ 600,000

XML

Income per Share (Summary of Basic and Diluted Earnings per Share) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Earnings Per Share [Abstract]
Net income available to common stockholders	$ 49,827	$ 67,268	$ 177,434	$ 218,700
Weighted average shares outstanding-basic (shares)	208,421,470	206,118,472	208,173,995	205,931,031
Potentially dilutive common shares:
Unvested incentive units (shares)	181,064	169,100	142,670	160,117
Forward equity offering (shares)	1,013,970	37,884	705,720	1,847
Market performance-based awards (shares)	185,267	440,800	177,150	462,632
Weighted average shares/units outstanding-diluted (shares/units)	209,801,771	206,766,256	209,199,535	206,555,627
Income per share:
Basic (in dollars per share)	$ 0.24	$ 0.33	$ 0.85	$ 1.06
Diluted (in dollars per share)	$ 0.24	$ 0.33	$ 0.85	$ 1.06

XML

Real Estate (Narrative) (Details) $ in Thousands		9 Months Ended
	Sep. 16, 2019 USD ($) property	Sep. 30, 2019 USD ($) property	Sep. 30, 2018 USD ($)	Dec. 31, 2018 USD ($) property
Business Acquisition [Line Items]
Number of properties | property		223		214
Assets		$ 23,172,765		$ 23,766,695
Liabilities		12,942,820		12,892,653
Contribution of property		1,035,861		$ 175,108
Capital contributions from noncontrolling interests in consolidated joint ventures, net		60,961	$ 63,745
Powered Base Building | Disposal Group, Held-for-sale, Not Discontinued Operations
Business Acquisition [Line Items]
Purchase consideration	$ 557,000
Assets		224,200
Liabilities		$ 2,500
Powered Base Building | Held-for-Sale Properties
Business Acquisition [Line Items]
Number of properties | property	10	10
Powered Base Building | Held-For-Sale Properties To Third Party
Business Acquisition [Line Items]
Number of properties | property		12
Powered Base Building | Held-For-Contribution Properties
Business Acquisition [Line Items]
Number of properties | property		3
Turn-Key Flex Data Centers | Held-For-Contribution Properties
Business Acquisition [Line Items]
Number of properties | property	3
Assets		$ 743,300
Liabilities		$ 21,000
Data Center Joint Venture | Mapletree
Business Acquisition [Line Items]
Ownership percentage in joint ventures	80.00%
Capital contributions from noncontrolling interests in consolidated joint ventures, net	$ 800,000
Data Center Joint Venture | Turn-Key Flex Data Centers
Business Acquisition [Line Items]
Contribution of property	$ 1,000,000
Ownership percentage in joint ventures	20.00%

XML

Organization and Description of Business (Details) $ in Millions	Dec. 20, 2018 USD ($)	Sep. 30, 2019 property	Sep. 16, 2019 property	Mar. 31, 2019 USD ($)	Mar. 29, 2019 USD ($)	Dec. 31, 2018 property
Organization and Description of Business [Line Items]
Number of properties		223				214
Common Interest
Organization and Description of Business [Line Items]
Ownership percentage in joint ventures		95.80%				95.10%
Preferred Interest
Organization and Description of Business [Line Items]
Ownership percentage in joint ventures		100.00%				100.00%
Ascenty Acquisition
Organization and Description of Business [Line Items]
Ownership percentage in joint ventures		51.00%			51.00%
Brookfield Infrastructure | Ascenty Acquisition
Organization and Description of Business [Line Items]
Investment | $				$ 702	$ 702
Ownership percentage in joint ventures				49.00%	49.00%
Ascenty Acquisition
Organization and Description of Business [Line Items]
Payment for acquisition | $	$ 2,000
DFT Merger
Organization and Description of Business [Line Items]
Number of properties		8
Operating
Organization and Description of Business [Line Items]
Number of properties		170				196
Held for Sale and Contribution
Organization and Description of Business [Line Items]
Number of properties		15
Unconsolidated Joint Ventures
Organization and Description of Business [Line Items]
Number of properties		38				18
Held-for-Sale Properties | Powered Base Building
Organization and Description of Business [Line Items]
Number of properties		10	10
Held-For-Sale Properties To Third Party | Powered Base Building
Organization and Description of Business [Line Items]
Number of properties		12
Held-For-Contribution Properties | Powered Base Building
Organization and Description of Business [Line Items]
Number of properties		3
United States
Organization and Description of Business [Line Items]
Number of properties		147				145
United States | Operating
Organization and Description of Business [Line Items]
Number of properties		119				131
United States | Held for Sale and Contribution
Organization and Description of Business [Line Items]
Number of properties		14
United States | Unconsolidated Joint Ventures
Organization and Description of Business [Line Items]
Number of properties		14				14
Europe
Organization and Description of Business [Line Items]
Number of properties		41				38
Europe | Operating
Organization and Description of Business [Line Items]
Number of properties		41				38
Europe | Held for Sale and Contribution
Organization and Description of Business [Line Items]
Number of properties		0
Europe | Unconsolidated Joint Ventures
Organization and Description of Business [Line Items]
Number of properties		0				0
Latin America
Organization and Description of Business [Line Items]
Number of properties		19				16
Latin America | Operating
Organization and Description of Business [Line Items]
Number of properties		0				16
Latin America | Held for Sale and Contribution
Organization and Description of Business [Line Items]
Number of properties		0
Latin America | Unconsolidated Joint Ventures
Organization and Description of Business [Line Items]
Number of properties		19				0
Asia
Organization and Description of Business [Line Items]
Number of properties		8				7
Asia | Operating
Organization and Description of Business [Line Items]
Number of properties		3				3
Asia | Held for Sale and Contribution
Organization and Description of Business [Line Items]
Number of properties		0
Asia | Unconsolidated Joint Ventures
Organization and Description of Business [Line Items]
Number of properties		5				4
Australia
Organization and Description of Business [Line Items]
Number of properties		5				5
Australia | Operating
Organization and Description of Business [Line Items]
Number of properties		5				5
Australia | Held for Sale and Contribution
Organization and Description of Business [Line Items]
Number of properties		0
Australia | Unconsolidated Joint Ventures
Organization and Description of Business [Line Items]
Number of properties		0				0
Canada
Organization and Description of Business [Line Items]
Number of properties		3				3
Canada | Operating
Organization and Description of Business [Line Items]
Number of properties		2				3
Canada | Held for Sale and Contribution
Organization and Description of Business [Line Items]
Number of properties		1
Canada | Unconsolidated Joint Ventures
Organization and Description of Business [Line Items]
Number of properties		0				0

XML

Derivative Instruments

9 Months Ended

Sep. 30, 2019

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments

Derivative Instruments

Currently, we use interest rate swaps to manage our interest rate risk. The valuation of these instruments is determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves. The fair values of interest rate swaps are determined using the market standard methodology of netting the discounted future fixed cash receipts (or payments) and the discounted expected variable cash payments (or receipts). The variable cash payments (or receipts) are based on an expectation of future interest rates (forward curves) derived from observable market interest rate curves.

To comply with the provisions of fair value accounting guidance, we incorporate credit valuation adjustments to appropriately reflect both our own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of our derivative contracts for the effect of nonperformance risk, we have considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts, and guarantees.

Although we have determined that the majority of the inputs used to value our derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with our derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by us and our counterparties. However, as of September 30, 2019, we have assessed the significance of the impact of the credit valuation adjustments on the overall valuation of our derivative positions and have determined that the credit valuation adjustments are not significant to the overall valuation of our derivatives. As a result, we have determined that our derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy. We do not have any fair value measurements on a recurring basis using significant unobservable inputs (Level 3) as of September 30, 2019 or December 31, 2018.

The Company presents its interest rate derivatives in its condensed consolidated balance sheets on a gross basis as interest rate swap assets (recorded in other assets) and interest rate swap liabilities (recorded in accounts payable and other accrued liabilities). As of September 30, 2019, there was no impact from netting arrangements as the Company did not have any derivatives in liability positions.

Cash Flow Hedges of Interest Rate Risk

Our objectives in using interest rate derivatives are to add stability to interest expense and to manage our exposure to interest rate movements related to certain floating rate debt obligations. To accomplish this objective, we primarily use interest rate swaps as part of our interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.

We record all our interest rate swaps on the condensed consolidated balance sheet at fair value. In determining the fair value of our interest rate swaps, we consider the credit risk of our counterparties. These counterparties are generally larger financial institutions engaged in providing a variety of financial services. These institutions generally face similar risks regarding adverse changes in market and economic conditions, including, but not limited to, fluctuations in interest rates, exchange rates, equity and commodity prices and credit spreads. The recent and pervasive disruptions in the financial markets have heightened the risks to these institutions.

As of September 30, 2019 and December 31, 2018, we had the following outstanding interest rate derivatives that were designated as effective cash flow hedges of interest rate risk (in thousands): 

Notional Amount										Fair Value at Significant Other Observable Inputs (Level 2)
As of September 30, 2019			As of December 31, 2018			Type of Derivative	Strike Rate	Effective Date	Expiration Date	As of September 30, 2019 (3)			As of December 31, 2018 (3)
Currently-paying contracts
$	206,000	(1)	$	206,000	(1)	Swap	1.611	Jun 15, 2017	Jan 15, 2020	$	178		$	1,976
54,905		(1)	54,905		(1)	Swap	1.605	Jun 6, 2017	Jan 6, 2020	46			517
75,000		(1)	75,000		(1)	Swap	1.016	Apr 6, 2016	Jan 6, 2021	547			2,169
75,000		(1)	75,000		(1)	Swap	1.164	Jan 15, 2016	Jan 15, 2021	410			1,970
300,000		(1)	300,000		(1)	Swap	1.435	Jan 15, 2016	Jan 15, 2023	(379		)	11,463
74,397		(2)	72,220		(2)	Swap	0.779	Jan 15, 2016	Jan 15, 2021	1,052			2,024
$	785,302		$	783,125						$	1,854		$	20,119

(1) Represents debt which bears interest based on one-month U.S. LIBOR.

(2) Represents debt which bears interest based on one-month CDOR. Translation to U.S. dollars is based on exchange rates of $0.76 to 1.00 CAD as of September 30, 2019 and $0.73 to 1.00 CAD as of December 31, 2018.

(3) Balance recorded in other assets in the consolidated balance sheets if positive and recorded in accounts payable and other accrued liabilities in the consolidated balance sheets if negative.

As of September 30, 2019, we estimate that an additional $1.9 million will be reclassified as a decrease to interest expense during the twelve months ended September 30, 2020, when the hedged forecasted transactions impact earnings.

Credit-risk-related Contingent Features

We have agreements with each of our derivative counterparties that contain a provision where we could be declared in default on our derivative obligations if repayment of the underlying indebtedness is accelerated by the lender due to our default on the indebtedness. As of September 30, 2019, we did not have any derivatives in a net liability position, and have not posted any collateral related to these agreements.

XML

Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2019

Accounting Policies [Abstract]

Principles of Consolidation and Basis of Presentation

Principles of Consolidation and Basis of Presentation

The accompanying interim condensed consolidated financial statements include all of the accounts of Digital Realty Trust, Inc., the Operating Partnership and their subsidiaries. Intercompany balances and transactions have been eliminated.

The accompanying interim condensed consolidated financial statements are unaudited, but have been prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP) for interim financial information and in compliance with the rules and regulations of the U.S. Securities and Exchange Commission. Accordingly, they do not include all of the disclosures required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments necessary for a fair presentation have been included. All such adjustments are considered to be of a normal recurring nature, except as otherwise indicated. The results of operations for the interim periods are not necessarily indicative of the results to be obtained for the full fiscal year. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in our annual report on Form 10-K for the year ended December 31, 2018.

The notes to the condensed consolidated financial statements of Digital Realty Trust, Inc. and the Operating Partnership have been combined to provide the following benefits:

• enhancing investors’ understanding of the Company and the Operating Partnership by enabling investors to view the business as a whole in the same manner as management views and operates the business;

• eliminating duplicative disclosure and providing a more streamlined and readable presentation since a substantial portion of the disclosure applies to both the Company and the Operating Partnership; and

• creating time and cost efficiencies through the preparation of one set of notes instead of two separate sets of notes.

There are few differences between the Company and the Operating Partnership, which are reflected in these condensed consolidated financial statements. We believe it is important to understand the differences between the Company and the Operating Partnership in the context of how we operate as an interrelated consolidated company. Digital Realty Trust, Inc.’s only material asset is its ownership of partnership interests of the Operating Partnership. As a result, Digital Realty Trust, Inc. generally does not conduct business itself, other than acting as the sole general partner of the Operating Partnership, issuing public securities from time to time and guaranteeing certain unsecured debt of the Operating Partnership and certain of its subsidiaries and affiliates. Digital Realty Trust, Inc. itself has not issued any indebtedness but guarantees the unsecured debt of the Operating Partnership and certain of its subsidiaries and affiliates, as disclosed in these notes.

The Operating Partnership holds substantially all the assets of the Company and holds the ownership interests in the Company’s joint ventures. The Operating Partnership conducts the operations of the business and is structured as a partnership with no publicly traded equity. Except for net proceeds from public equity issuances by Digital Realty Trust, Inc., which are generally contributed to the Operating Partnership in exchange for partnership units, the Operating Partnership generally generates the capital required by the Company’s business primarily through the Operating Partnership’s operations, by the Operating Partnership’s or its affiliates’ direct or indirect incurrence of indebtedness or through the issuance of partnership units.

The presentation of noncontrolling interests in operating partnership, stockholders’ equity and partners’ capital are the main areas of difference between the condensed consolidated financial statements of Digital Realty Trust, Inc. and those of the Operating Partnership. The common limited partnership interests held by the limited partners in the Operating Partnership are presented as limited partners’ capital within partners’ capital in the Operating Partnership’s condensed consolidated financial statements and as noncontrolling interests in operating partnership within equity in Digital Realty Trust, Inc.’s condensed consolidated financial statements. The common and preferred partnership interests held by Digital Realty Trust, Inc. in the Operating Partnership are presented as general partner’s capital within partners’ capital in the Operating Partnership’s condensed consolidated financial statements and as preferred stock, common stock, additional paid-in capital and accumulated dividends in excess of earnings within stockholders’ equity in Digital Realty Trust, Inc.’s condensed consolidated financial

statements. The differences in the presentations between stockholders’ equity and partners’ capital result from the differences in the equity issued at the Digital Realty Trust, Inc. and the Operating Partnership levels.

To help investors understand the significant differences between the Company and the Operating Partnership, these consolidated financial statements present the following separate sections for each of the Company and the Operating Partnership:

• condensed consolidated face financial statements; and

• the following notes to the condensed consolidated financial statements:

• "Debt of the Company" and "Debt of the Operating Partnership";

• "Income per Share" and "Income per Unit"; and

• "Equity and Accumulated Other Comprehensive Loss, Net of the Company" and "Capital and Accumulated Other Comprehensive Loss of the Operating Partnership".

In the sections that combine disclosure of Digital Realty Trust, Inc. and the Operating Partnership, these notes refer to actions or holdings as being actions or holdings of the Company. Although the Operating Partnership is generally the entity that enters into contracts and joint ventures and holds assets and debt, reference to the Company is appropriate because the business is one enterprise and the Company generally operates the business through the Operating Partnership.

Cash Equivalents

Cash Equivalents

For the purpose of the condensed consolidated statements of cash flows, we consider short-term investments with original maturities of 90 days or less to be cash equivalents. As of September 30, 2019, cash equivalents consist of investments in money market instruments.

Investment in Unconsolidated Joint Ventures

Investments in Unconsolidated Joint Ventures

The Company’s investments in unconsolidated joint ventures are accounted for using the equity method, whereby our investment is increased for capital contributed and our share of the joint venture's net income and decreased by distributions we receive and our share of any losses of the joint ventures. We do not record losses of the joint ventures in excess of our investment balances unless we are liable for the obligations of the joint venture or are otherwise committed to provide financial support to the joint venture. Likewise, and as long as we have no explicit or implicit obligations to the joint venture, we will suspend equity method accounting to the extent that cash distributions exceed our investment balances until those unrecorded earnings exceed the excess distributions previously recognized in income. In this case, we will apply cost accounting concepts which tie income recognition to the receipt of cash.  Cost basis accounting concepts will apply until earnings exceed the excess distributions previously recognized in income.

We amortize the difference between the cost of our investments in the joint ventures and the book value of the underlying equity into income on a straight-line basis consistent with the lives of the underlying assets. The amortization of this difference was immaterial for the three and nine months ended September 30, 2019 and 2018, respectively.

Impairment of Long-Lived and Finite-Lived Intangible Assets

Impairment of Long-Lived and Finite-Lived Intangible Assets

We review each of our properties for indicators that its carrying amount may not be recoverable. Examples of such indicators may include a significant decrease in the market price of the property, a change in the expected holding period for the property, a significant adverse change in how the property is being used or expected to be used based on the underwriting at the time of acquisition, an accumulation of costs significantly in excess of the amount originally expected for the acquisition or development of the property, or a history of operating or cash flow losses of the property. When such impairment indicators exist, we review an estimate of the future undiscounted net cash flows (excluding interest charges) expected to result from the real estate investment’s use and eventual disposition and compare that estimate to the carrying value of the property. We consider factors such as future operating income, trends and prospects, as well as the effects of leasing demand, competition and other factors. If our future undiscounted net cash flow evaluation indicates that we are unable to recover the carrying value of a real estate investment, an impairment loss is recorded to the extent that the carrying value exceeds the estimated fair value of the property. These losses have a direct impact on our net income because recording an impairment loss results in an immediate negative adjustment to net income. The evaluation of anticipated cash flows is highly subjective and is based in part on assumptions regarding future occupancy, rental rates and capital requirements that could differ materially from actual results

in future periods. Since cash flows on properties considered to be long-lived assets to be held and used are considered on an undiscounted basis to determine whether the carrying value of a property is recoverable, our strategy of holding properties over the long-term directly decreases the likelihood of their carrying values not being recoverable and therefore requiring the recording of an impairment loss. If our strategy changes or market conditions otherwise dictate an earlier sale date, an impairment loss may be recognized and such loss could be material. If we determine that the asset fails the recoverability test, the affected assets must be reduced to their fair value.

We generally estimate the fair value of rental properties utilizing a discounted cash flow analysis that includes projections of future revenues, expenses and capital improvement costs that a market participant would use based on the highest and best use of the asset, which is similar to the income approach that is commonly utilized by appraisers. In certain cases, we may supplement this analysis by obtaining outside broker opinions of value.

In considering whether to classify a property as held for sale or contribution, the Company considers whether: (i) management has committed to a plan to sell or contribute the property; (ii) the property is available for immediate sale or contribution in its present condition; (iii) the Company has initiated a program to locate a buyer or joint venture partner; (iv) the Company believes that the sale or contribution of the property is probable; (v) the Company is actively marketing the property for sale or contribution at a price that is reasonable in relation to its current value; and (vi) actions required for the Company to complete the plan indicate that it is unlikely that any significant changes will be made to the plan.

If all the above criteria are met, the Company classifies the property as held for sale or contribution. Assets classified as held for sale are expected to be sold to a third party and assets classified as held for contribution are expected to be contributed to an unconsolidated joint venture or to a third party within twelve months. At such time, the respective assets and liabilities are presented separately in the condensed consolidated balance sheets and depreciation is no longer recognized. Assets held for sale or contribution are reported at the lower of their carrying amount or their estimated fair value less the costs to sell or contribute. Only those assets held for sale or contribution that constitute a strategic shift that has or will have a major effect on our operations are classified as discontinued operations.  To date we have had no property dispositions or assets classified as held for sale or contribution that would meet the definition of discontinued operations.

If impairment indicators arise with respect to intangible assets with finite useful lives, we evaluate impairment by comparing the carrying amount of the asset to the estimated future undiscounted net cash flows expected to be generated by the asset. If estimated future undiscounted net cash flows are less than the carrying amount of the asset, then we estimate the fair value of the asset and compare the estimated fair value to the intangible asset’s carrying value. We recognize any shortfall from carrying value as an impairment loss in the current period.

Capitalization of Costs

Capitalization of Costs

Direct and indirect project costs that are clearly associated with the development of properties are capitalized as incurred. Project costs include all costs directly associated with the development of a property, including construction costs, interest, property taxes, insurance, legal fees and costs of personnel working on the project. Indirect costs that do not clearly relate to the projects under development are not capitalized and are charged to expense as incurred.

Capitalization of costs begins when the activities necessary to get the development project ready for its intended use begins, which include costs incurred before the beginning of construction. Capitalization of costs ceases when the development project is substantially complete and ready for its intended use. Determining when a development project commences and when it is substantially complete and ready for its intended use involves a degree of judgment. We generally consider a development project to be substantially complete and ready for its intended use upon receipt of a certificate of occupancy. If and when development of a property is suspended pursuant to a formal change in the planned use of the property, we will evaluate whether the accumulated costs exceed the estimated value of the project and write off the amount of any such excess accumulated costs. For a development project that is suspended for reasons other than a formal change in the planned use of such property, the accumulated project costs are evaluated for impairment consistent with our impairment policies for long-lived assets. During the development period, all costs including the associated land are classified to construction in progress and space held for development. Upon completion of the development period for a project, accumulated construction in progress costs including the land related to a project are allocated to the specific components of a project that are benefited.

Construction in progress and space held for development includes the cost of land, the cost of construction of buildings, improvements and fixed equipment, and costs for design and engineering. Other costs, such as interest, legal, property taxes and corporate project supervision, which can be directly associated with the project during construction, are also included in construction in progress and space held for development. Land held for development includes parcels of land owned by the Company, upon which the Company intends to develop and own data centers, but has yet to commence development. 

Goodwill

Goodwill

Goodwill represents the excess of the purchase price over the fair value of net tangible and intangible assets acquired and tangible and intangible liabilities assumed in a business combination. Goodwill is not amortized.  We perform an annual impairment test for goodwill and between annual tests, we evaluate goodwill for impairment whenever events or changes in circumstances occur that would more likely than not reduce the fair value of a reporting unit below its carrying value.  In our impairment tests of goodwill, we first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value.  If based on this assessment, we determine that the fair value of the reporting unit is not less than its carrying value, then performing the additional two-step impairment test is unnecessary. If our qualitative assessment indicates that goodwill impairment is more likely than not, we perform a two-step impairment test. We test goodwill for impairment under the two-step impairment test by first comparing the book value of net assets including goodwill to the fair value of the reporting unit. If the fair value is determined to be less than the book value of the net assets, including goodwill, a second step is performed to compute the amount of impairment as the difference between the implied fair value of goodwill and its carrying value. We estimate the fair value of the reporting unit using discounted cash flows. If the carrying value of goodwill exceeds its implied fair value, an impairment charge is recognized. We have not recognized any goodwill impairments since our inception. Since some of the goodwill is denominated in foreign currencies, changes to the goodwill balance occur over time due to changes in foreign exchange rates.

Leases

Leases

We lease real estate, including corporate and regional offices, data center space, and land, along with IT equipment. When we receive substantially all economic benefits from and direct use of specified property, plant and equipment, we account for those transactions as leases under ASU No. 2016-02 Leases (Topic 842). See Note 2(t) for further discussion regarding the adoption of Topic 842 on January 1, 2019.

We have elected the practical expedient within Topic 842 to not separate lease and non-lease components within lease transactions for all asset classes within our existing lease portfolio and, therefore, account for non-lease components combined with related lease components under Topic 842. For transactions involving leases of buildings and land, we have also elected to not separate land components from leases of specified property, plant, and equipment, as it was determined to have no effect on lease classification for any lease component, and the amounts recognized for land lease components would not have been material.

Additionally, we have elected the short-term lease exception for all classes of assets, and do not apply the recognition and measurement requirements for leases of 12 months or less, and recognize lease payments for short-term leases as expense either straight-line over the lease term or as incurred depending on whether the lease payments are fixed or variable. These elections are applied consistently for all leases.

When discount rates implicit in leases cannot be readily determined, we use the applicable incremental borrowing rate at lease commencement to perform lease classification tests on lease components and to measure lease liabilities and right-of-use assets. We assigned a collateralized interest rate to each lease based on the term and the currency in which each lease is denominated. To the extent there are leases in foreign countries, rates were adjusted based on local yields in those particular markets. Further, we apply the “bright-line” thresholds within Topic 840 for lease classification for all classes of assets.

Share-Based Compensation

Share-Based Compensation

The Company measures all share-based compensation awards at fair value on the date they are granted to employees and directors, and recognizes compensation cost, net of forfeitures, over the requisite service period for awards with only a service condition. The estimated fair value of the long-term incentive units and Class D units (discussed in Note 14) granted by us is being amortized on a straight-line basis over the expected service period.

The fair value of share-based compensation awards that contain a market condition is measured using a Monte Carlo simulation method and not adjusted based on actual achievement of the market condition.

Assets and Liabilities Measured at Fair Value

Assets and Liabilities Measured at Fair Value

Fair value under U.S. GAAP is a market-based measurement, not an entity-specific measurement. Therefore, our fair value measurements are determined based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair-value measurements, we use a fair-value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy).

Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access. Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability (other than quoted prices), such as interest rates, foreign exchange rates, and yield curves that are observable at commonly quoted intervals. Level 3 inputs are unobservable inputs for the asset or


liability which are typically based on an entity’s own assumptions, as there is little, if any, related market activity. In instances where the determination of the fair-value measurement is based on inputs from different levels of the fair-value hierarchy, the lowest level input that is significant would be used to determine the fair-value measurement in its entirety. Our assessment of the significance of a particular input to the fair-value measurement in its entirety requires judgment, and considers factors specific to the asset or liability.

Derivative Instruments

Derivative Instruments

Derivative financial instruments are employed to manage risks, including foreign currency and interest rate exposures and are not used for trading or speculative purposes. As part of the Company’s risk management program, a variety of financial instruments, such as interest rate swaps and foreign exchange contracts, may be used to mitigate interest rate exposure and foreign currency exposure. The Company recognizes all derivative instruments in the balance sheet at fair value.

Changes in the fair value of derivatives are recognized periodically either in earnings or in stockholders’ equity as a component of accumulated other comprehensive income (loss), depending on whether the derivative financial instrument is undesignated or qualifies for hedge accounting, and if so, whether it represents a fair value, cash flow, or net investment hedge. Gains and losses on derivatives designated as cash flow hedges, to the extent they are included in the assessment of effectiveness, are recorded in other comprehensive income (loss) and subsequently reclassified to earnings to offset the impact of the hedged items when they occur. In the event it becomes probable the forecasted transaction to which a cash flow hedge relates will not occur, the derivative would be terminated and the amount in other comprehensive income (loss) would be recognized in earnings. Changes in the fair value of derivatives that are designated and qualify as a hedge of the net investment in foreign operations, to the extent they are included in the assessment of effectiveness, are reported in other comprehensive income (loss) and are deferred until disposal of the underlying assets. Gains and losses representing components excluded from the assessment of effectiveness for cash flow and fair value hedges are recognized in earnings on a straight-line basis in the same caption as the hedged item over the term of the hedge. Gains and losses representing components excluded from the assessment of effectiveness for net investment hedges are recognized in earnings on a straight-line basis over the term of the hedge.

The net interest paid or received on interest rate swaps is recognized as interest expense. Gains and losses resulting from the early termination of interest rate swap agreements are deferred and amortized as adjustments to interest expense over the remaining period of the debt originally covered by the terminated swap.

Income Taxes

Income Taxes

Digital Realty Trust, Inc. has elected to be treated as a real estate investment trust (a “REIT”) for federal income tax purposes. As a REIT, Digital Realty Trust, Inc. generally is not required to pay federal corporate income tax to the extent taxable income is currently distributed to its stockholders. If Digital Realty Trust, Inc. fails to qualify as a REIT in any taxable year, it will be subject to federal corporate income tax (including any applicable alternative minimum tax for taxable years prior to 2018) on its taxable income.

The Company is subject to foreign, state and local income taxes in the jurisdictions in which it conducts business. The Company’s taxable REIT subsidiaries are subject to federal, state, local and foreign income taxes to the extent there is taxable income. Accordingly, the Company recognizes current and deferred income taxes for its taxable REIT subsidiaries, including for federal, state, local and foreign jurisdictions, as appropriate.

We assess our significant tax positions in accordance with U.S. GAAP for all open tax years and determine whether we have any material unrecognized liabilities from uncertain tax benefits. If a tax position is not considered “more-likely-than-not” to be sustained solely on its technical merits, no benefits of the tax position are to be recognized (for financial statement purposes).

Presentation of Transactional-Based Taxes

Presentation of Transactional-based Taxes

We account for transactional-based taxes, such as value added tax, or VAT, for our international properties on a net basis.

Redeemable Noncontrolling Interests

Redeemable Noncontrolling Interests

Redeemable noncontrolling interests include amounts related to partnership units issued by consolidated subsidiaries of the Company in which redemption for equity is outside the control of the Company.  Partnership units which are determined to be contingently redeemable for cash under the Financial Accounting Standards Board’s "Distinguishing Liabilities from Equity" guidance are classified as redeemable noncontrolling interests and presented in the mezzanine section between total liabilities and stockholder’s equity on the Company’s condensed consolidated balance sheets. The amounts of consolidated net income

attributable to the Company and to the noncontrolling interests are presented on the Company’s condensed consolidated income statements.

Revenue Recognition

Revenue Recognition

The majority of our revenue is derived from lease arrangements, which we account for in accordance with Topic 842 commencing on January 1, 2019 and “Leases (Topic 840)” prior to 2019. We account for the non-lease components within our lease arrangements, as well as other sources of revenue, in accordance with “Revenue from Contracts with Customers (Topic 606)”. Revenue recognized as a result of applying Topics 842 and 840, as applicable, was 99% and 97% and Topic 606 was less than 1% and 3% of total operating revenue for the three and nine months ended September 30, 2019 and 2018, respectively.

Our leases are classified as operating leases and minimum rents are recognized on a straight-line basis over the terms of the leases, which may span multiple years. The excess of rents recognized over amounts contractually due pursuant to the underlying leases is included in deferred rent in the accompanying condensed consolidated balance sheets and contractually due but unpaid rents are included in accounts and other receivables.

Tenant reimbursements for real estate taxes, common area maintenance, and other recoverable costs under our leases are recognized in the period that the expenses are incurred. Lease termination fees are recognized over the remaining term of the lease, effective as of the date the lease modification is finalized, assuming collection is not considered doubtful. As discussed above, we recognize amortization of the value of acquired above or below-market tenant leases as a reduction of rental revenue in the case of above-market leases or an increase to rental revenue in the case of below-market leases.

Interconnection services are included in rental and other services on the condensed consolidated income statements and are generally provided on a month-to-month, one-year or multi-year term. Interconnection services include port and cross-connect services. Port services are typically sold on a one-year or multi-year term and revenue is recognized on a recurring monthly basis (straight-line). The Company bills customers on a monthly basis and recognizes the revenue over the period the service is provided. Revenue for cross-connect installations is generally recognized in the period the cross-connect is installed. Interconnection services that are not specific to a particular space are accounted for under Topic 606 and have terms that are generally one year or less.

Occasionally, customers engage the Company for certain services. The nature of these services historically involves property management and construction management. The proper revenue recognition of these services can be different, depending on whether the arrangements are service revenue or contractor type revenue.

Service revenues are typically recognized on an equal monthly basis based on the minimum fee to be earned. The monthly amounts could be adjusted depending on if certain performance milestones are met.

Fee income arises primarily from contractual management agreements with entities in which we have a noncontrolling interest. The management fees are recognized as earned under the respective agreements. Management and other fee income related to partially owned noncontrolled entities are recognized to the extent attributable to the unaffiliated interest.

We make subjective estimates as to when our revenue is earned and the collectability of our accounts receivable related to minimum rent, deferred rent, expense reimbursements, lease termination fees and other income. We specifically analyze accounts receivable and historical bad debts, customer concentrations, customer creditworthiness and current economic trends when evaluating the adequacy of the allowance for bad debts. These estimates have a direct impact on our net revenue because a higher bad debt allowance would result in lower net revenue, and recognizing rental revenue as earned in one period versus another would result in higher or lower net revenue for a particular period.

Transaction and Integration Expense

Transaction and Integration ExpenseTransaction and integration expense includes business combination expenses, other business development expenses and other expenses to integrate newly acquired investments, which are expensed as incurred. Transaction expenses include closing costs, broker commissions and other professional fees, including legal and accounting fees related to business combinations or acquisitions that were not consummated. Integration costs include transition costs associated with organizational restructuring (such as severance and retention payments and recruiting expenses), third-party consulting expenses directly related to the integration of acquired companies (in areas such as cost savings and synergy realization, technology and systems work), and internal costs such as training, travel and labor, reflecting time spent by Company personnel on integration activities and projects. Recurring costs are recorded in general and administrative expense.

Gain on Sale of Properties

Gain on Sale of PropertiesWe account for the sale of real estate properties under Financial Accounting Standards Board, or FASB, Accounting Standards Update, or ASU, No. 2017-05, Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20), which provides for revenue recognition based on transfer of ownership.

Gain On Deconsolidation

Gain on DeconsolidationWe deconsolidate our subsidiaries in accordance with ASC 810, Consolidation, as of the date we cease to have a controlling financial interest in our subsidiaries. We account for the deconsolidation of our subsidiaries by recognizing a gain or loss in accordance with ASC 810. This gain or loss is measured at the date our subsidiaries are deconsolidated as the difference between (a) the aggregate of the fair value of any consideration received, the fair value of any retained non-controlling interest in our subsidiaries being deconsolidated, and the carrying amount of any non-controlling interest in our subsidiaries being deconsolidated, including any accumulated other comprehensive income/loss attributable to the non-controlling interest, and (b) the carrying amount of the assets and liabilities of our subsidiaries being deconsolidated.

Management's Estimates

Management’s Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates made. On an on-going basis, we evaluate our estimates, including those related to the valuation of our real estate properties, tenant relationship value, goodwill, contingent consideration, accounts receivable and deferred rent receivable, performance-based equity compensation plans and the completeness of accrued liabilities. We base our estimates on historical experience, current market conditions, and various other assumptions that are believed to be reasonable under the circumstances. Actual results may vary from those estimates and those estimates could vary under different assumptions or conditions.

Segment and Geographic Information

Segment and Geographic Information

The Company is managed on a consolidated premise, based on customer demand considerations.  Deployment of capital is geared to satisfy this demand.  In this regard, the sale and delivery of our products is consistent throughout the portfolio.  Services are provided to customers typical of the data center industry.  Rent and the cost of services are billed and collected.  The Company has one operating segment and therefore one reporting segment.

New Accounting Pronouncements

New Accounting Pronouncements

New Accounting Standards Adopted

In February 2016, the FASB issued ASU No. 2016-02 Leases (Topic 842). The standard introduces new requirements to increase transparency and comparability among organizations for leasing transactions for both lessees and lessors. Topic 842 requires a lessee to record a right-of-use asset and a lease liability for all leases with terms longer than 12 months. These leases will be either finance or operating, with classification affecting the pattern of expense recognition.

We adopted Topic 842, on January 1, 2019 and elected to apply the modified retrospective transition method prospectively from the effective date of adoption.

As part of applying the transition method, we elected to apply the package of transition practical expedients within the new guidance. As required by the new standard, these expedients have been elected as a package, and consistently applied across our lease portfolio. Accordingly, we need not reassess the following:

◦Whether any expired or existing contracts are or contain leases

◦The lease classification for any expired or existing leases

◦Treatment of initial direct costs relating to any existing leases

We have decided not to elect the transition practical expedient to use hindsight in determining lease term and in assessing impairment of right-of-use assets.

In applying the modified retrospective transition method to operating leases, we measured lease liabilities at the present value of the sum of remaining minimum rental payments (as defined under Topic 840) as the leases contained no residual value guarantees. These lease liabilities have been measured using our incremental borrowing rates as of the date of adoption. Additionally, right-of-use assets for these operating leases have been measured as the initial measurement of applicable lease liabilities adjusted for other related lease balances at transition.

In applying the modified retrospective transition method to capital leases, at the effective date, we measured lease liabilities and right of use assets at the carrying amount of capital lease obligations and capital lease assets under Topic 840, respectively.

In addition, we applied the modified retrospective transition method to build-to-suit leases for which assets and liabilities have been recognized solely as a result of the transactions’ build-to-suit designation in accordance with Topic 840. Therefore, we derecognized those assets and liabilities at the effective date of adoption for build-to-suit leases where construction had completed, with the difference of approximately $6.3 million recorded as an increase to accumulated dividends in excess of earnings at the adoption date. We accounted for the leases therefrom, following lessee transition guidance.

New Accounting Standards Issued but not yet Adopted

In August 2018, the FASB issued ASU No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement.” This ASU amends existing fair value measurement disclosure requirements by adding, changing, or removing certain disclosures. ASU No. 2018-13 will be effective for us as of January 1, 2020, and earlier adoption is permitted. We are currently reviewing the impact this ASU will have on our financial statements.

We determined that all other recently issued accounting pronouncements will not have a material impact on our consolidated financial statements or do not apply to our operations.

XML

Fair Value of Financial Instruments (Estimated Fair Value And Carrying Amounts) (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
3.400% notes due 2020
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Stated interest rate	3.40%
3.950% notes due 2022
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Stated interest rate	3.95%
3.625% notes due 2022
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Stated interest rate	3.625%
4.750% notes due 2023
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Stated interest rate	4.75%
2.750% notes due 2023
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Stated interest rate	2.75%
2.625% notes due 2024
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Stated interest rate	2.625%
2.750% notes due 2024
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Stated interest rate	2.75%
4.750% notes due 2025
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Stated interest rate	4.75%
4.250% notes due 2025
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Stated interest rate	4.25%
3.600% notes due 2029
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Stated interest rate	3.60%
3.300% notes due 2029
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Stated interest rate	3.30%
Estimated Fair Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair value of long-term debt	$ 11,674,129	$ 11,236,731
Carrying Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair value of long-term debt	10,988,800	11,181,880
Global revolving credit facilities, net
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Deferred financing costs	12,500	15,400
Unsecured Term Loans
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Deferred financing costs	3,300	4,200
Senior Notes
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair value of long-term debt	11,200	19,900
Deferred financing costs	$ 48,700	40,600
Senior Notes | 3.950% notes due 2022
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Stated interest rate	3.95%
Senior Notes | 3.625% notes due 2022
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Stated interest rate	3.625%
Senior Notes | 2.625% notes due 2024
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Stated interest rate	2.625%
Senior Notes | 2.750% notes due 2024
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Stated interest rate	2.75%
Senior Notes | 4.750% notes due 2025
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Stated interest rate	4.75%
Senior Notes | 3.600% notes due 2029
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Stated interest rate	3.60%
Senior Notes | 3.300% notes due 2029
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Stated interest rate	3.30%
Secured Debt
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Deferred financing costs	$ 200	20,200
Level 2 | Global revolving credit facilities, net | Estimated Fair Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Lines of credit	1,846,026	1,663,156
Level 2 | Global revolving credit facilities, net | Carrying Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Lines of credit	1,846,026	1,663,156
Level 2 | Unsecured Term Loans | Estimated Fair Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Lines of credit	799,533	1,183,121
Level 2 | Unsecured Term Loans | Carrying Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Lines of credit	799,533	1,183,121
Level 2 | Senior Notes | Estimated Fair Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Unsecured senior notes	8,923,041	7,684,368
Level 2 | Senior Notes | Carrying Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Unsecured senior notes	8,237,864	7,629,679
Level 2 | Secured Debt | Estimated Fair Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Mortgage loans	105,529	706,086
Level 2 | Secured Debt | Carrying Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Mortgage loans	$ 105,377	$ 705,924

XML

Debt of the Company (Narrative) (Details)	Sep. 30, 2019
3.950% notes due 2022
Debt Instrument [Line Items]
Stated interest rate	3.95%
3.625% notes due 2022
Debt Instrument [Line Items]
Stated interest rate	3.625%
4.750% notes due 2025
Debt Instrument [Line Items]
Stated interest rate	4.75%
3.600% notes due 2029
Debt Instrument [Line Items]
Stated interest rate	3.60%
2.750% notes due 2024
Debt Instrument [Line Items]
Stated interest rate	2.75%
3.300% notes due 2029
Debt Instrument [Line Items]
Stated interest rate	3.30%
2.625% notes due 2024
Debt Instrument [Line Items]
Stated interest rate	2.625%
Senior Notes | 3.950% notes due 2022
Debt Instrument [Line Items]
Stated interest rate	3.95%
Senior Notes | 3.625% notes due 2022
Debt Instrument [Line Items]
Stated interest rate	3.625%
Senior Notes | 2.750% notes due 2023
Debt Instrument [Line Items]
Stated interest rate	2.75%
Senior Notes | 4.750% notes due 2025
Debt Instrument [Line Items]
Stated interest rate	4.75%
Senior Notes | 3.700% notes due 2027
Debt Instrument [Line Items]
Stated interest rate	3.70%
Senior Notes | 4.450% notes due 2028
Debt Instrument [Line Items]
Stated interest rate	4.45%
Senior Notes | 3.600% notes due 2029
Debt Instrument [Line Items]
Stated interest rate	3.60%
Senior Notes | 4.750% notes due 2023
Debt Instrument [Line Items]
Stated interest rate	4.75%
Senior Notes | 2.750% notes due 2024
Debt Instrument [Line Items]
Stated interest rate	2.75%
Senior Notes | 4.250% notes due 2025
Debt Instrument [Line Items]
Stated interest rate	4.25%
Senior Notes | 3.300% notes due 2029
Debt Instrument [Line Items]
Stated interest rate	3.30%
Senior Notes | 3.750% notes due 2030
Debt Instrument [Line Items]
Stated interest rate	3.75%
Senior Notes | 2.625% notes due 2024
Debt Instrument [Line Items]
Stated interest rate	2.625%
Senior Notes | 2.500% notes due 2026
Debt Instrument [Line Items]
Stated interest rate	2.50%

XML

Debt of the Operating Partnership (Schedule of Debt Maturities And Principal Maturities) (Details) - Digital Realty Trust, L.P. $ in Thousands	9 Months Ended
	Sep. 30, 2019 USD ($) extension	Dec. 31, 2018 USD ($)
Debt Instrument [Line Items]
Remainder of 2019	$ 166
2020	1,133
2021	0
2022	800,000
2023	3,274,749
Thereafter	6,923,857
Subtotal	10,999,905
Unamortized discounts, net of premiums	(17,578)
Unamortized premium	6,473
Long-term debt, net of discount (premium)	10,988,800
Global revolving credit facilities, net
Debt Instrument [Line Items]
Remainder of 2019	0
2020	0
2021	0
2022	0
2023	1,652,546
Thereafter	193,480
Subtotal	1,846,026	$ 1,663,156
Unamortized discounts, net of premiums	0
Unamortized premium	0
Long-term debt, net of discount (premium)	$ 1,846,026
Number of extension options | extension	2
Revolving credit facility commitments extension	6 months
Unsecured Term Loans
Debt Instrument [Line Items]
Remainder of 2019	$ 0
2020	0
2021	0
2022	0
2023	799,533
Thereafter	0
Subtotal	799,533
Unamortized discounts, net of premiums	0
Unamortized premium	0
Long-term debt, net of discount (premium)	799,533
Senior Notes
Debt Instrument [Line Items]
Remainder of 2019	0
2020	0
2021	0
2022	800,000
2023	718,670
Thereafter	6,730,377
Subtotal	8,249,047
Unamortized discounts, net of premiums	(17,578)
Unamortized premium	6,395
Long-term debt, net of discount (premium)	8,237,864	7,629,679
Secured Debt
Debt Instrument [Line Items]
Remainder of 2019	166
2020	1,133
2021	0
2022	0
2023	104,000
Thereafter	0
Subtotal	105,299
Unamortized discounts, net of premiums	0
Unamortized premium	78	148
Long-term debt, net of discount (premium)	$ 105,377	$ 705,924

XML

Income per Unit (Schedule of Antidilutive Securities Excluded from Computation of Earnings per Share) (Details) - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potentially dilutive securities (units)	17,852,252	19,036,184	18,872,565	19,993,742
Digital Realty Trust, L.P.
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potentially dilutive securities (units)	8,898,426	10,865,272	9,791,749	11,725,360
Digital Realty Trust, L.P. | Potentially dilutive Series C Cumulative Redeemable Perpetual Preferred Units
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potentially dilutive securities (units)	1,614,005	1,727,724	1,678,511	1,864,489
Digital Realty Trust, L.P. | Potentially dilutive Series G Cumulative Redeemable Preferred Units
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potentially dilutive securities (units)	2,001,277	2,142,282	2,081,260	2,311,864
Digital Realty Trust, L.P. | Potentially dilutive Series H Cumulative Redeemable Preferred Units
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potentially dilutive securities (units)	0	3,139,291	1,053,127	3,387,795
Digital Realty Trust, L.P. | Potentially dilutive Series I Cumulative Redeemable Preferred Units
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potentially dilutive securities (units)	2,003,619	2,144,789	2,083,696	2,314,569
Digital Realty Trust, L.P. | Potentially dilutive Series J Cumulative Redeemable Preferred Units
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potentially dilutive securities (units)	1,598,556	1,711,186	1,662,444	1,846,643
Digital Realty Trust, L.P. | Potentially dilutive Series K Cumulative Redeemable Preferred Units
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potentially dilutive securities (units)	1,680,969	0	1,232,711	0

XML

Leases (Supplemental Balance Sheet Information) (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Assets:
Operating lease assets	$ 634,085	$ 0
Finance lease assets	124,477
Total leased assets	758,562
Liabilities:
Operating lease liabilities	699,381	$ 0
Finance lease liabilities	168,266
Total lease liabilities	867,647
Operating lease assets, accumulated depreciation and amortization	37,700
Finance lease assets, accumulated depreciation and amortization	$ 3,400

XML

Summary of Significant Accounting Policies (Narrative) (Details)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2019 USD ($)	Sep. 30, 2018 USD ($)	Sep. 30, 2019 USD ($) segment	Sep. 30, 2018 USD ($)	Dec. 31, 2018 USD ($)
Summary Of Significant Accounting Policies [Line Items]
Period in which short-term investment become cash equivalents			90 days
Interest capitalized	$ 9,900,000	$ 9,700,000	$ 30,300,000	$ 25,300,000
Compensation costs, leasing and construction activities	12,900,000	10,800,000	37,400,000	31,100,000
Unrecognized tax benefits	0		0		$ 0
Income tax penalties and interest expense	0	0	0	0
Allowance for doubtful accounts	13,200,000		13,200,000		11,600,000
Gross proceeds			$ 0	291,700,000
Gain on sale of property				80,400,000
Number of operating segments | segment			1
Number of reportable segments | segment			1
Total operating revenues	806,466,000	$ 768,924,000	$ 2,421,778,000	$ 2,268,211,000
Net investments in real estate	$ 14,941,707,000		$ 14,941,707,000		$ 15,079,726,000
Total long-lived assets
Summary Of Significant Accounting Policies [Line Items]
Concentration risk					10.90%
ASU 2016-02
Summary Of Significant Accounting Policies [Line Items]
Revenue recognized from applying Topic 840	99.00%	97.00%	99.00%	97.00%
Accumulated dividends in excess of earnings	$ 6,300,000		$ 6,300,000
ASU 2014-09
Summary Of Significant Accounting Policies [Line Items]
Revenue recognized from applying Topic 840	1.00%	3.00%	1.00%	3.00%
Geographic Concentration Risk | Sales
Summary Of Significant Accounting Policies [Line Items]
Concentration risk	8.50%	9.40%	8.90%	9.80%
Geographic Concentration Risk | Total long-lived assets
Summary Of Significant Accounting Policies [Line Items]
Concentration risk			11.40%
Outside the United States
Summary Of Significant Accounting Policies [Line Items]
Total operating revenues	$ 146,700,000	$ 139,700,000	$ 475,900,000	$ 421,300,000
Net investments in real estate	3,400,000,000		3,400,000,000		$ 3,800,000,000
United States
Summary Of Significant Accounting Policies [Line Items]
Total operating revenues	659,800,000	629,300,000	1,900,000,000	1,800,000,000
Net investments in real estate	10,500,000,000		10,500,000,000		11,100,000,000
United Kingdom
Summary Of Significant Accounting Policies [Line Items]
Total operating revenues	68,900,000	$ 72,600,000	215,800,000	$ 221,900,000
Net investments in real estate	1,600,000,000		1,600,000,000		$ 1,600,000,000
Ascenty Acquisition
Summary Of Significant Accounting Policies [Line Items]
Deconsolidation gain recognized, net of taxes and foreign currency loss			67,500,000
Net investments in real estate	$ 362,951,000		$ 362,951,000

XML

Incentive Plan

9 Months Ended

Sep. 30, 2019

Share-based Payment Arrangement [Abstract]

Incentive Plan

Incentive Plan

On April 28, 2014, our stockholders approved the Digital Realty Trust, Inc., Digital Services, Inc., and Digital Realty Trust, L.P. 2014 Incentive Award Plan (as amended, the 2014 Incentive Award Plan). The 2014 Incentive Award Plan became effective and replaced the Amended and Restated 2004 Incentive Award Plan, as amended, as of the date of such stockholder approval. The material features of the 2014 Incentive Award Plan are described in our definitive Proxy Statement filed on March 19, 2014 in connection with the 2014 Annual Meeting, which description is incorporated herein by reference. Effective as of September 14, 2017, the 2014 Incentive Award Plan was amended to provide that shares which remained available for issuance under DFT’s Amended and Restated 2011 Equity Incentive Plan immediately prior to the closing of the DFT Merger (as adjusted and converted into shares of Digital Realty Trust, Inc.’s common stock) may be used for awards under the 2014 Incentive Award Plan and will not reduce the shares authorized for grant under the 2014 Incentive Award Plan, to the extent that using such shares is permitted without stockholder approval under applicable stock exchange rules. In connection with the amendment to the 2014 Incentive Award Plan, on September 22, 2017, Digital Realty Trust, Inc. registered an additional 3.7 million shares that may be issued pursuant to the 2014 Incentive Award Plan.

As of September 30, 2019, approximately 6.6 million shares of common stock, including awards convertible into or exchangeable for shares of common stock, remained available for future issuance under the 2014 Incentive Award Plan. Each long-term incentive unit and each Class D unit issued under the 2014 Incentive Award Plan counts as one share of common stock for purposes of calculating the limit on shares that may be issued under the 2014 Incentive Award Plan and the individual award limits set forth therein.

Below is a summary of our compensation expense for the three and nine months ended September 30, 2019 and 2018 and our unearned compensation as of September 30, 2019 and December 31, 2018 (in millions):

	Deferred Compensation								Unearned Compensation				Expected period to recognize unearned compensation (in years)
	Expensed				Capitalized				As of September 30, 2019		As of December 31, 2018
	Three Months Ended September 30,
Type of incentive award	2019		2018		2019		2018
Long-term incentive units	$	2.4	$	1.2	$	—	$	0.1	$	17.8	$	11.5	2.5
Market performance-based awards	3.1		3.1		0.2		0.3		32.8		24.8		2.7
Restricted stock	2.9		1.5		0.7		1.1		32.9		23.6		2.8
	Nine Months Ended September 30,
	2019		2018		2019		2018
Long-term incentive units	$	6.2	$	5.2	$	0.1	$	0.2
Market performance-based awards	9.7		10.0		0.6		0.7
Restricted stock	8.6		4.7		2.1		3.2

(a) Long-Term Incentive Units

Long-term incentive units, which are also referred to as profits interest units, may be issued to eligible participants for the performance of services to or for the benefit of the Operating Partnership. Long-term incentive units (other than Class D units), whether vested or not, will receive the same quarterly per unit distributions as Operating Partnership common units, which equal the per share distributions on Digital Realty Trust, Inc. common stock. Initially, long-term incentive units do not have full parity with common units with respect to liquidating distributions. If such parity is reached, vested long-term incentive units may be converted into an equal number of common units of the Operating Partnership at any time, and thereafter enjoy all the rights and privileges of common units of the Operating Partnership, including redemption rights. For a discussion of how long-term incentive units achieve parity with common units, see Note 14(a) to our consolidated financial statements for the fiscal year ended December 31, 2018, included in our Annual Report on 10-K for the year ended December 31, 2018.

Below is a summary of our long-term incentive unit activity for the nine months ended September 30, 2019.

Unvested Long-term Incentive Units	Units		Weighted-Average Grant Date Fair Value
Unvested, beginning of period	158,486		$	100.94
Granted	119,397		116.18
Vested	(44,496	)	97.46
Cancelled or expired	(20,061	)	93.28
Unvested, end of period	213,326		$	109.90

The grant date fair values, which equal the market price of Digital Realty Trust, Inc. common stock on the applicable grant date(s), are being expensed on a straight-line basis for service awards between two and four years, the current vesting period of the long-term incentive units.

(b) Market Performance-Based Awards

During the nine months ended September 30, 2019 and 2018, the Compensation Committee of the Board of Directors of Digital Realty Trust, Inc. approved the grant of market performance-based Class D units of the Operating Partnership and market performance-based restricted stock units, or RSUs, covering shares of Digital Realty Trust, Inc.’s common stock (collectively, the “awards”), under the 2014 Incentive Award Plan to officers and employees of the Company.

The awards, which were determined to contain a market condition, utilize total shareholder return, or TSR, over a three-year measurement period as the market performance metric. Awards will vest based on Digital Realty Trust, Inc.’s TSR relative to the MSCI US REIT Index, or RMS, over a three-year market performance period, or the Market Performance Period, commencing in January 2019 or January 2018, as applicable (or, if earlier, ending on the date on which a change in control of the Company occurs), subject to continued services. Vesting with respect to the market condition is measured based on the difference between Digital Realty Trust, Inc.’s TSR percentage and the TSR percentage of the RMS, or the RMS Relative Market Performance. In the event that the RMS Relative Market Performance during the Market Performance Period is achieved at the “threshold,” “target” or “high” level as set forth below, the awards will become vested as to the market condition with respect to the percentage of Class D units or RSUs, as applicable, set forth below:

Level	RMS Relative Market Performance	Market Performance Vesting Percentage
Below Threshold Level	≤ -300 basis points	0%
Threshold Level	-300 basis points	25%
Target Level	100 basis points	50%
High Level	> 500 basis points	100%

If the RMS Relative Market Performance falls between the levels specified above, the percentage of the award that will vest with respect to the market condition will be determined using straight-line linear interpolation between such levels.

In January 2019, following the completion of the applicable Market Performance Period, the Compensation Committee determined that the high level had been achieved for the 2016 awards and, accordingly, 339,317 class D units (including 31,009 distribution equivalent units that immediately vested on December 31, 2018 upon the high level being achieved) and 56,778 RSUs performance vested, subject to service-based vesting. On February 27, 2019, 50% of the 2016 awards vested and the remaining 50% will vest on February 27, 2020, subject to continued employment through the vesting date.

Following the completion of the applicable Market Performance Period, the 2017 awards that satisfy the market condition, if any, will vest 50% on February 27, 2020 and 50% on February 27, 2021, subject to continued employment through each applicable vesting date. Following the completion of the applicable Market Performance Period, the 2018 awards that satisfy the market condition, if any, will vest 50% on February 27, 2021 and 50% on February 27, 2022, subject to continued

employment through each applicable vesting date. Following the completion of the applicable Market Performance Period, the 2019 awards that satisfy the market condition, if any, will vest 50% on February 27, 2022 and 50% on February 27, 2023, subject to continued employment through each applicable vesting date.

In the event of a change in control, termination of employment by the Company without cause, or termination of employment by the award recipient for good reason, death, disability or retirement, service-based vesting will be accelerated, in full or on a pro rata basis in any case prior to the completion of the Market Performance Period. However, vesting with respect to the market condition will continue to be measured based on RMS Relative Market Performance during the three-year Market Performance Period (or, in the case of a change in control, shortened Market Performance Period).

The fair values of the 2019 awards and 2018 awards granted were measured using a Monte Carlo simulation to estimate the probability of the market vesting condition being satisfied. Digital Realty Trust, Inc.’s achievement of the market vesting condition is contingent on its TSR over a three-year market performance period, relative to the total shareholder return of the RMS. The Monte Carlo simulation is a probabilistic technique based on the underlying theory of the Black-Scholes formula, which was run for 100,000 trials to determine the fair value of the awards. For each trial, the payoff to an award is calculated at the settlement date and is then discounted to the grant date at a risk-free interest rate. The total expected value of the awards on the grant date was determined by multiplying the average value per award over all trials by the number of awards granted. Assumptions used in the valuations are summarized as follows:

Award Date	Expected Stock Price Volatility	Risk-Free Interest rate
January 1, 2018	22%	1.98%
March 1, 2018	22%	2.34%
March 9, 2018	22%	2.42%
January 1, 2019	23%	2.44%
February 21, 2019	23%	2.48%

These valuations were performed in a risk-neutral framework, so no assumption was made with respect to an equity risk premium.

The grant date fair value of the Class D and RSU awards was approximately $21.3 million and $16.8 million for the nine months ended September 30, 2019 and 2018, respectively. We will recognize compensation expense on a straight-line basis over the expected service period of approximately four years.

(c) Restricted Stock

Below is a summary of our restricted stock activity for the nine months ended September 30, 2019.

Unvested Restricted Stock	Shares		Weighted-Average Grant Date Fair Value
Unvested, beginning of period	295,501		$	97.49
Granted	221,336		114.95
Vested	(104,955	)	92.80
Cancelled or expired	(29,412	)	106.83
Unvested, end of period	382,470		$	108.14

The grant date fair values, which equal the market price of Digital Realty Trust, Inc. common stock on the grant date, are expensed on a straight-line basis for service awards over the vesting period of the restricted stock, which is generally four years.

XML

Subsequent Events

9 Months Ended

Sep. 30, 2019

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

In addition to other subsequent events discussed elsewhere within the footnotes, the following subsequent event warranted disclosure:

On October 29, 2019, Digital Realty Trust, Inc., an indirect subsidiary of Digital Realty Trust, Inc. (the “Buyer”) and InterXion Holding N.V. (“InterXion”) entered into a purchase agreement, pursuant to which, subject to the terms and conditions of the purchase agreement, the Buyer will commence a tender offer to purchase all of the outstanding ordinary shares of InterXion in exchange for shares of common stock of Digital Realty Trust, Inc. The transaction is expected to close in 2020 and is subject to the approval of shareholders of Digital Realty Trust, Inc. and shareholders of InterXion and other customary closing conditions.

On November 1, 2019, we closed the joint venture with Mapletree on three existing Turn-Key Flex® data centers located in Ashburn, Virginia. The Company is retaining a 20% ownership interest in the joint venture, and Mapletree closed on the acquisition of the remaining 80% stake for approximately $0.8 billion. We will continue to operate and manage these facilities. The second tranche of the Mapletree transaction, the sale of 10 fully-leased Powered Base Building® properties for $557 million, is expected to close in early 2020.

XML

Organization and Description of Business

9 Months Ended

Sep. 30, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization and Description of Business

Organization and Description of Business

Digital Realty Trust, Inc. through its controlling interest in Digital Realty Trust, L.P. (the Operating Partnership) and the subsidiaries of the Operating Partnership (collectively, we, our, us or the Company) is a leading global provider of data center, colocation and interconnection solutions for customers across a variety of industry verticals ranging from cloud and information technology services, communications and social networking to financial services, manufacturing, energy, healthcare, and consumer products. The Operating Partnership, a Maryland limited partnership, is the entity through which Digital Realty Trust, Inc., a Maryland corporation, conducts its business of owning, acquiring, developing and operating data centers.  Digital Realty Trust, Inc. operates as a REIT for federal income tax purposes. A summary of our data center portfolio as of September 30, 2019 and December 31, 2018 is as follows:

	Data Centers
	As of September 30, 2019				As of December 31, 2018
Region	Operating	Held for Sale and Contribution (1)	Unconsolidated Joint Ventures	Total	Operating	Unconsolidated Joint Ventures	Total
United States	119	14	14	147	131	14	145
Europe	41	—	—	41	38	—	38
Latin America	—	—	19	19	16	—	16
Asia	3	—	5	8	3	4	7
Australia	5	—	—	5	5	—	5
Canada	2	1	—	3	3	—	3
Total	170	15	38	223	196	18	214

(1) Includes 10 Powered Base Building® properties, which comprise 12 data centers, that are held for sale to a third party and three data centers that are held for contribution to a joint venture as of September 30, 2019 (see Note 3).

On December 20, 2018, the Operating Partnership and Stellar Participações Ltda., a Brazilian subsidiary of the Operating Partnership, completed the acquisition of Ascenty, a leading data center provider in Brazil, for cash and equity consideration of approximately $2.0 billion, including cash purchased. We refer to this transaction as the Ascenty Acquisition. In March 2019, we formed a joint venture with Brookfield Infrastructure, an affiliate of Brookfield Asset Management, one of the largest owners and operators of infrastructure assets globally. Brookfield invested approximately $702 million in exchange for approximately 49% of the total equity interests in the joint venture which owns and operates Ascenty. A subsidiary of the Operating Partnership retained the remaining equity interest in the Ascenty joint venture. The power to control the Ascenty joint venture is shared equally between the Operating Partnership and Brookfield and as a result of losing control, the Operating Partnership deconsolidated Ascenty on March 29, 2019. See Note 5 for additional information.

We are diversified in major metropolitan areas where data center and technology customers are concentrated, including the Atlanta, Boston, Chicago, Dallas, Los Angeles, New York, Northern Virginia, Phoenix, San Francisco, Seattle, Silicon Valley and Toronto metropolitan areas in North America, the Amsterdam, Dublin, Frankfurt, London and Paris metropolitan areas in Europe, the Fortaleza, Rio de Janeiro, Santiago and São Paulo metropolitan areas in Latin America, and the Hong Kong, Melbourne, Osaka, Seoul, Singapore, Sydney, and Tokyo metropolitan areas in the Asia Pacific region. The portfolio consists of data centers, Internet gateway facilities and office and other non-data center space.

The Operating Partnership was formed on July 21, 2004 in anticipation of Digital Realty Trust, Inc.’s initial public offering (IPO) on November 3, 2004 and commenced operations on that date. As of September 30, 2019, Digital Realty Trust, Inc. owned a 95.8% common interest and a 100.0% preferred interest in the Operating Partnership. As of December 31, 2018, Digital Realty Trust, Inc. owned a 95.1% common interest and a 100.0% preferred interest in the Operating Partnership. As sole general partner of the Operating Partnership, Digital Realty Trust, Inc. has the full, exclusive and complete responsibility for the Operating Partnership’s day-to-day management and control. The limited partners of the Operating Partnership do not have

rights to replace Digital Realty Trust, Inc. as the general partner nor do they have participating rights, although they do have certain protective rights.

As used in these Notes: “DFT” refers to DuPont Fabros Technology, Inc.; “DFT Merger” refers to the Company’s acquisition of DuPont Fabros Technology, Inc.; “DFT Operating Partnership” refers to DuPont Fabros Technology, L.P.; “European Portfolio Acquisition” refers to the Company’s acquisition of a portfolio of eight data centers in Europe; and “Telx Acquisition” refers to the Company’s acquisition of Telx Holdings, Inc.

XML

Equity and Accumulated Other Comprehensive Loss, Net (Tables)

9 Months Ended

Sep. 30, 2019

Equity [Abstract]

Ownership Interest In The Operating Partnership

The following table shows the ownership interests in the Operating Partnership as of September 30, 2019 and December 31, 2018:

	September 30, 2019			December 31, 2018
	Number of units	Percentage of total		Number of units	Percentage of total
Digital Realty Trust, Inc.	208,583,244	95.8	%	206,425,656	95.1	%
Noncontrolling interests consist of:
Common units held by third parties	4,762,394	2.2	%	6,297,272	2.9	%
Issuance of units in connection with Ascenty Acquisition	2,338,874	1.1	%	2,338,874	1.1	%
Incentive units held by employees and directors (see Note 14)	2,042,713	0.9	%	1,944,738	0.9	%
	217,727,225	100.0	%	217,006,540	100.0	%

Summary of Activity for Noncontrolling Interests in the Operating Partnership

The following table shows activity for the noncontrolling interests in the Operating Partnership for the nine months ended September 30, 2019:

	Common Units		Incentive Units		Total
As of December 31, 2018	8,636,146		1,944,738		10,580,884
Redemption of common units for shares of Digital Realty Trust, Inc. common stock (1)	(1,534,878	)	—		(1,534,878	)
Conversion of incentive units held by employees and directors for shares of Digital Realty Trust, Inc. common stock (1)	—		(306,814	)	(306,814	)
Incentive units issued upon achievement of market performance condition	—		308,308		308,308
Grant of incentive units to employees and directors	—		119,397		119,397
Cancellation / forfeitures of incentive units held by employees and directors	—		(22,916	)	(22,916	)
As of September 30, 2019	7,101,268		2,042,713		9,143,981

(1)

Redemption of common units / conversion of incentive units was recorded as a reduction to noncontrolling interests in the Operating Partnership and an increase to common stock and additional paid-in capital based on the book value per unit in the accompanying condensed consolidated balance sheet of Digital Realty Trust, Inc.

Schedule of Dividends

We have declared and paid the following dividends on our common and preferred stock for the nine months ended September 30, 2019 (in thousands, except per share data): 

Date dividend declared	Dividend payment date	Series C Preferred Stock		Series G Preferred Stock		Series H Preferred Stock			Series I Preferred Stock		Series J Preferred Stock		Series K Preferred Stock			Common Stock
February 21, 2019	March 29, 2019	$	3,333	$	3,672	$	6,730		$	3,969	$	2,625	$	—		$	224,802
May 13, 2019	June 28, 2019	3,333		3,672		—		(1)	3,969		2,625		3,686		(2)	224,895
August 13, 2019	September 30, 2019	3,333		3,672		—			3,969		2,625		3,071			225,188
		$	9,999	$	11,016	$	6,730		$	11,907	$	7,875	$	6,757		$	674,885
Annual rate of dividend per share		$	1.65625	$	1.46875	$	1.84375		$	1.58750	$	1.31250	$	1.46250		$	4.32000

(1) Redeemed on April 1, 2019 for $25.00 per share, or a redemption price of $25.00 per share, plus accrued and unpaid dividends up to but not including the redemption date. In connection with the redemption, the previously incurred offering costs of approximately $11.8 million were recorded as a reduction to net income available to common stockholders.

(2)

Represents a pro rata dividend from and including the original issue date to and including June 30, 2019.

Schedule of Accumulated Other Comprehensive Income, Net

The accumulated balances for each item within other comprehensive income (loss), net are as follows (in thousands):

	Foreign currency translation adjustments			Cash flow hedge adjustments			Foreign currency net investment hedge adjustments		Accumulated other comprehensive  income (loss), net
Balance as of December 31, 2018	$	(158,649	)	$	17,264		$	25,738	$	(115,647	)
Net current period change	42,038			(10,901		)	—		31,137
Reclassification of foreign currency translation adjustment due to deconsolidation of Ascenty	21,687			—			—		21,687
Reclassification to interest expense from interest rate swaps	—			(5,802		)	—		(5,802		)
Balance as of September 30, 2019	$	(94,924	)	$	561		$	25,738	$	(68,625	)

XML

Acquired Intangible Assets and Liabilities (Tables)

9 Months Ended

Sep. 30, 2019

Acquired Intangible Assets And Liabilities [Abstract]

Summary of Acquired Intangible Assets

The following summarizes our acquired intangible assets (real estate intangibles, comprised of acquired in-place lease value and tenant relationship value along with acquired above-market lease value) and intangible liabilities (acquired below-market lease value) as of September 30, 2019 and December 31, 2018.

	Balance as of
(Amounts in thousands)	September 30, 2019			December 31, 2018
Real Estate Intangibles:
Acquired in-place lease value:
Gross amount (1)(2)	$	1,348,534		$	1,569,401
Accumulated amortization	(864,578		)	(795,033		)
Net	$	483,956		$	774,368
Tenant relationship value:
Gross amount (1)(2)	$	1,831,554		$	2,339,606
Accumulated amortization	(368,857		)	(291,818		)
Net	$	1,462,697		$	2,047,788
Acquired above-market leases:
Gross amount	$	276,309		$	277,796
Accumulated amortization	(191,994		)	(158,037		)
Net	$	84,315		$	119,759
Acquired below-market leases:
Gross amount (2)	$	393,546		$	442,535
Accumulated amortization	(240,124		)	(242,422		)
Net	$	153,422		$	200,113

(1) In connection with the deconsolidation of Ascenty, $120.0 million of acquired in-place lease value and $375.0 million of tenant relationship value were written off during the nine months ended September 30, 2019.

(2)

In connection with the transactions with Mapletree (see Note 3), $93.0 million of acquired in-place lease value and $122.7 million of tenant relationship value were reclassified to assets held for sale and contribution, and $22.7 million of acquired below-market leases was reclassified to obligations associated with assets held for sale and contribution during the three months ended September 30, 2019.

Schedule of Estimated Annual Amortization of Below Market Leases

Estimated annual amortization of acquired below-market leases, net of acquired above-market leases, for each of the five succeeding years and thereafter, commencing October 1, 2019 is as follows:

(Amounts in thousands)
Remainder of 2019	$	(4,105	)
2020	(10,693		)
2021	(3,590		)
2022	4,619
2023	9,384
Thereafter	73,492
Total	$	69,107

Schedule of Estimated Annual Amortization of Acquired of Intangible Assets

Estimated annual amortization of acquired in-place lease value for each of the five succeeding years and thereafter, commencing October 1, 2019 is as follows:

(Amounts in thousands)
Remainder of 2019	$	28,176
2020	98,331
2021	77,848
2022	58,210
2023	47,109
Thereafter	174,282
Total	$	483,956

Estimated annual amortization of tenant relationship value for each of the five succeeding years and thereafter, commencing October 1, 2019 is as follows:

(Amounts in thousands)
Remainder of 2019	$	28,970
2020	115,879
2021	115,879
2022	115,879
2023	115,879
Thereafter	970,211
Total	$	1,462,697

XML

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Net income	$ 67,574	$ 90,264	$ 249,895	$ 288,518
Other comprehensive income (loss):
Foreign currency translation adjustments	24,668	2,368	44,824	(8,608)
Reclassification of foreign currency translation adjustment due to deconsolidation of Ascenty	0	0	21,687	0
(Decrease) increase in fair value of interest rate swaps and foreign currency hedges	(1,000)	2,925	(11,379)	16,336
Reclassification to interest expense from interest rate swaps	(1,805)	(1,271)	(6,055)	(2,289)
Comprehensive income	89,437	94,286	298,972	293,957
Comprehensive income attributable to noncontrolling interests	(1,953)	(2,820)	(8,426)	(9,039)
Comprehensive income attributable to Digital Realty Trust, Inc./Digital Realty Trust, L.P.	87,484	91,466	290,546	284,918
Digital Realty Trust, L.P.
Net income	67,574	90,264	249,895	288,518
Other comprehensive income (loss):
Foreign currency translation adjustments	24,668	2,368	44,824	(8,608)
Reclassification of foreign currency translation adjustment due to deconsolidation of Ascenty	0	0	21,687	0
(Decrease) increase in fair value of interest rate swaps and foreign currency hedges	(1,000)	2,925	(11,379)	16,336
Reclassification to interest expense from interest rate swaps	(1,805)	(1,271)	(6,055)	(2,289)
Comprehensive income	89,437	94,286	298,972	293,957
Comprehensive income attributable to noncontrolling interests	1,223	33	1,582	49
Comprehensive income attributable to Digital Realty Trust, Inc./Digital Realty Trust, L.P.	$ 90,660	$ 94,319	$ 300,554	$ 294,006

XML

Cover Page - shares	9 Months Ended
	Sep. 30, 2019	Nov. 04, 2019
Entity Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2019
Document Transition Report	false
Entity File Number	001-32336
Entity Registrant Name	DIGITAL REALTY TRUST, INC.
Entity Incorporation, State or Country Code	MD
Entity Tax Identification Number	26-0081711
Entity Address, Address Line One	Four Embarcadero Center, Suite 3200
Entity Address, City or Town	San Francisco
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	94111
City Area Code	415
Local Phone Number	738-6500
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		208,720,408
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q3
Amendment Flag	false
Entity Central Index Key	0001297996
Current Fiscal Year End Date	--12-31
Digital Realty Trust, L.P.
Entity Information [Line Items]
Document Type	10-Q
Document Period End Date	Sep. 30, 2019
Entity File Number	000-54023
Entity Registrant Name	DIGITAL REALTY TRUST, L.P.
Entity Incorporation, State or Country Code	MD
Entity Tax Identification Number	20-2402955
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	false
Entity Emerging Growth	false
Entity Shell Company	false
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q3
Amendment Flag	false
Entity Central Index Key	0001494877
Common Stock
Entity Information [Line Items]
Title of 12(b) Security	Common Stock
Trading Symbol	DLR
Security Exchange Name	NYSE
Series C Preferred Stock
Entity Information [Line Items]
Title of 12(b) Security	Series C Cumulative Redeemable Perpetual Preferred Stock
Trading Symbol	DLR Pr C
Security Exchange Name	NYSE
Series G Preferred Stock
Entity Information [Line Items]
Title of 12(b) Security	Series G Cumulative Redeemable Preferred Stock
Trading Symbol	DLR Pr G
Security Exchange Name	NYSE
Series I Preferred Stock
Entity Information [Line Items]
Title of 12(b) Security	Series I Cumulative Redeemable Preferred Stock
Trading Symbol	DLR Pr I
Security Exchange Name	NYSE
Series J Preferred Stock
Entity Information [Line Items]
Title of 12(b) Security	Series J Cumulative Redeemable Preferred Stock
Trading Symbol	DLR Pr J
Security Exchange Name	NYSE
Series K Preferred Stock
Entity Information [Line Items]
Title of 12(b) Security	Series K Cumulative Redeemable Preferred Stock
Trading Symbol	DLR Pr K
Security Exchange Name	NYSE
Series L Preferred Stock
Entity Information [Line Items]
Title of 12(b) Security	Series L Cumulative Redeemable Preferred Stock
Trading Symbol	DLR Pr L
Security Exchange Name	NYSE

XML

Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2019

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

(a) Principles of Consolidation and Basis of Presentation

The accompanying interim condensed consolidated financial statements include all of the accounts of Digital Realty Trust, Inc., the Operating Partnership and their subsidiaries. Intercompany balances and transactions have been eliminated.

The accompanying interim condensed consolidated financial statements are unaudited, but have been prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP) for interim financial information and in compliance with the rules and regulations of the U.S. Securities and Exchange Commission. Accordingly, they do not include all of the disclosures required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments necessary for a fair presentation have been included. All such adjustments are considered to be of a normal recurring nature, except as otherwise indicated. The results of operations for the interim periods are not necessarily indicative of the results to be obtained for the full fiscal year. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in our annual report on Form 10-K for the year ended December 31, 2018.

The notes to the condensed consolidated financial statements of Digital Realty Trust, Inc. and the Operating Partnership have been combined to provide the following benefits:

• enhancing investors’ understanding of the Company and the Operating Partnership by enabling investors to view the business as a whole in the same manner as management views and operates the business;

• eliminating duplicative disclosure and providing a more streamlined and readable presentation since a substantial portion of the disclosure applies to both the Company and the Operating Partnership; and

• creating time and cost efficiencies through the preparation of one set of notes instead of two separate sets of notes.

There are few differences between the Company and the Operating Partnership, which are reflected in these condensed consolidated financial statements. We believe it is important to understand the differences between the Company and the Operating Partnership in the context of how we operate as an interrelated consolidated company. Digital Realty Trust, Inc.’s only material asset is its ownership of partnership interests of the Operating Partnership. As a result, Digital Realty Trust, Inc. generally does not conduct business itself, other than acting as the sole general partner of the Operating Partnership, issuing public securities from time to time and guaranteeing certain unsecured debt of the Operating Partnership and certain of its subsidiaries and affiliates. Digital Realty Trust, Inc. itself has not issued any indebtedness but guarantees the unsecured debt of the Operating Partnership and certain of its subsidiaries and affiliates, as disclosed in these notes.

The Operating Partnership holds substantially all the assets of the Company and holds the ownership interests in the Company’s joint ventures. The Operating Partnership conducts the operations of the business and is structured as a partnership with no publicly traded equity. Except for net proceeds from public equity issuances by Digital Realty Trust, Inc., which are generally contributed to the Operating Partnership in exchange for partnership units, the Operating Partnership generally generates the capital required by the Company’s business primarily through the Operating Partnership’s operations, by the Operating Partnership’s or its affiliates’ direct or indirect incurrence of indebtedness or through the issuance of partnership units.

The presentation of noncontrolling interests in operating partnership, stockholders’ equity and partners’ capital are the main areas of difference between the condensed consolidated financial statements of Digital Realty Trust, Inc. and those of the Operating Partnership. The common limited partnership interests held by the limited partners in the Operating Partnership are presented as limited partners’ capital within partners’ capital in the Operating Partnership’s condensed consolidated financial statements and as noncontrolling interests in operating partnership within equity in Digital Realty Trust, Inc.’s condensed consolidated financial statements. The common and preferred partnership interests held by Digital Realty Trust, Inc. in the Operating Partnership are presented as general partner’s capital within partners’ capital in the Operating Partnership’s condensed consolidated financial statements and as preferred stock, common stock, additional paid-in capital and accumulated dividends in excess of earnings within stockholders’ equity in Digital Realty Trust, Inc.’s condensed consolidated financial

statements. The differences in the presentations between stockholders’ equity and partners’ capital result from the differences in the equity issued at the Digital Realty Trust, Inc. and the Operating Partnership levels.

To help investors understand the significant differences between the Company and the Operating Partnership, these consolidated financial statements present the following separate sections for each of the Company and the Operating Partnership:

• condensed consolidated face financial statements; and

• the following notes to the condensed consolidated financial statements:

• "Debt of the Company" and "Debt of the Operating Partnership";

• "Income per Share" and "Income per Unit"; and

• "Equity and Accumulated Other Comprehensive Loss, Net of the Company" and "Capital and Accumulated Other Comprehensive Loss of the Operating Partnership".

In the sections that combine disclosure of Digital Realty Trust, Inc. and the Operating Partnership, these notes refer to actions or holdings as being actions or holdings of the Company. Although the Operating Partnership is generally the entity that enters into contracts and joint ventures and holds assets and debt, reference to the Company is appropriate because the business is one enterprise and the Company generally operates the business through the Operating Partnership.

(b) Cash Equivalents

For the purpose of the condensed consolidated statements of cash flows, we consider short-term investments with original maturities of 90 days or less to be cash equivalents. As of September 30, 2019, cash equivalents consist of investments in money market instruments.

(c) Investments in Unconsolidated Joint Ventures

The Company’s investments in unconsolidated joint ventures are accounted for using the equity method, whereby our investment is increased for capital contributed and our share of the joint venture's net income and decreased by distributions we receive and our share of any losses of the joint ventures. We do not record losses of the joint ventures in excess of our investment balances unless we are liable for the obligations of the joint venture or are otherwise committed to provide financial support to the joint venture. Likewise, and as long as we have no explicit or implicit obligations to the joint venture, we will suspend equity method accounting to the extent that cash distributions exceed our investment balances until those unrecorded earnings exceed the excess distributions previously recognized in income. In this case, we will apply cost accounting concepts which tie income recognition to the receipt of cash.  Cost basis accounting concepts will apply until earnings exceed the excess distributions previously recognized in income.

We amortize the difference between the cost of our investments in the joint ventures and the book value of the underlying equity into income on a straight-line basis consistent with the lives of the underlying assets. The amortization of this difference was immaterial for the three and nine months ended September 30, 2019 and 2018, respectively.

(d) Impairment of Long-Lived and Finite-Lived Intangible Assets

We review each of our properties for indicators that its carrying amount may not be recoverable. Examples of such indicators may include a significant decrease in the market price of the property, a change in the expected holding period for the property, a significant adverse change in how the property is being used or expected to be used based on the underwriting at the time of acquisition, an accumulation of costs significantly in excess of the amount originally expected for the acquisition or development of the property, or a history of operating or cash flow losses of the property. When such impairment indicators exist, we review an estimate of the future undiscounted net cash flows (excluding interest charges) expected to result from the real estate investment’s use and eventual disposition and compare that estimate to the carrying value of the property. We consider factors such as future operating income, trends and prospects, as well as the effects of leasing demand, competition and other factors. If our future undiscounted net cash flow evaluation indicates that we are unable to recover the carrying value of a real estate investment, an impairment loss is recorded to the extent that the carrying value exceeds the estimated fair value of the property. These losses have a direct impact on our net income because recording an impairment loss results in an immediate negative adjustment to net income. The evaluation of anticipated cash flows is highly subjective and is based in part on assumptions regarding future occupancy, rental rates and capital requirements that could differ materially from actual results

in future periods. Since cash flows on properties considered to be long-lived assets to be held and used are considered on an undiscounted basis to determine whether the carrying value of a property is recoverable, our strategy of holding properties over the long-term directly decreases the likelihood of their carrying values not being recoverable and therefore requiring the recording of an impairment loss. If our strategy changes or market conditions otherwise dictate an earlier sale date, an impairment loss may be recognized and such loss could be material. If we determine that the asset fails the recoverability test, the affected assets must be reduced to their fair value.

We generally estimate the fair value of rental properties utilizing a discounted cash flow analysis that includes projections of future revenues, expenses and capital improvement costs that a market participant would use based on the highest and best use of the asset, which is similar to the income approach that is commonly utilized by appraisers. In certain cases, we may supplement this analysis by obtaining outside broker opinions of value.

In considering whether to classify a property as held for sale or contribution, the Company considers whether: (i) management has committed to a plan to sell or contribute the property; (ii) the property is available for immediate sale or contribution in its present condition; (iii) the Company has initiated a program to locate a buyer or joint venture partner; (iv) the Company believes that the sale or contribution of the property is probable; (v) the Company is actively marketing the property for sale or contribution at a price that is reasonable in relation to its current value; and (vi) actions required for the Company to complete the plan indicate that it is unlikely that any significant changes will be made to the plan.

If all the above criteria are met, the Company classifies the property as held for sale or contribution. Assets classified as held for sale are expected to be sold to a third party and assets classified as held for contribution are expected to be contributed to an unconsolidated joint venture or to a third party within twelve months. At such time, the respective assets and liabilities are presented separately in the condensed consolidated balance sheets and depreciation is no longer recognized. Assets held for sale or contribution are reported at the lower of their carrying amount or their estimated fair value less the costs to sell or contribute. Only those assets held for sale or contribution that constitute a strategic shift that has or will have a major effect on our operations are classified as discontinued operations.  To date we have had no property dispositions or assets classified as held for sale or contribution that would meet the definition of discontinued operations.

If impairment indicators arise with respect to intangible assets with finite useful lives, we evaluate impairment by comparing the carrying amount of the asset to the estimated future undiscounted net cash flows expected to be generated by the asset. If estimated future undiscounted net cash flows are less than the carrying amount of the asset, then we estimate the fair value of the asset and compare the estimated fair value to the intangible asset’s carrying value. We recognize any shortfall from carrying value as an impairment loss in the current period.

(e) Capitalization of Costs

Direct and indirect project costs that are clearly associated with the development of properties are capitalized as incurred. Project costs include all costs directly associated with the development of a property, including construction costs, interest, property taxes, insurance, legal fees and costs of personnel working on the project. Indirect costs that do not clearly relate to the projects under development are not capitalized and are charged to expense as incurred.

Capitalization of costs begins when the activities necessary to get the development project ready for its intended use begins, which include costs incurred before the beginning of construction. Capitalization of costs ceases when the development project is substantially complete and ready for its intended use. Determining when a development project commences and when it is substantially complete and ready for its intended use involves a degree of judgment. We generally consider a development project to be substantially complete and ready for its intended use upon receipt of a certificate of occupancy. If and when development of a property is suspended pursuant to a formal change in the planned use of the property, we will evaluate whether the accumulated costs exceed the estimated value of the project and write off the amount of any such excess accumulated costs. For a development project that is suspended for reasons other than a formal change in the planned use of such property, the accumulated project costs are evaluated for impairment consistent with our impairment policies for long-lived assets. During the development period, all costs including the associated land are classified to construction in progress and space held for development. Upon completion of the development period for a project, accumulated construction in progress costs including the land related to a project are allocated to the specific components of a project that are benefited.

Construction in progress and space held for development includes the cost of land, the cost of construction of buildings, improvements and fixed equipment, and costs for design and engineering. Other costs, such as interest, legal, property taxes and corporate project supervision, which can be directly associated with the project during construction, are also included in construction in progress and space held for development. Land held for development includes parcels of land owned by the Company, upon which the Company intends to develop and own data centers, but has yet to commence development. 

During the three months ended September 30, 2019 and 2018, we capitalized interest of approximately $9.9 million and $9.7 million, respectively, and approximately $30.3 million and $25.3 million during the nine months ended September 30, 2019 and 2018, respectively. We capitalized amounts relating to compensation and other overhead expense of employees direct and incremental to construction activities of approximately $12.9 million and $10.8 million during the three months ended September 30, 2019 and 2018, respectively, and approximately $37.4 million and $31.1 million during the nine months ended September 30, 2019 and 2018, respectively.

(f) Goodwill

Goodwill represents the excess of the purchase price over the fair value of net tangible and intangible assets acquired and tangible and intangible liabilities assumed in a business combination. Goodwill is not amortized.  We perform an annual impairment test for goodwill and between annual tests, we evaluate goodwill for impairment whenever events or changes in circumstances occur that would more likely than not reduce the fair value of a reporting unit below its carrying value.  In our impairment tests of goodwill, we first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value.  If based on this assessment, we determine that the fair value of the reporting unit is not less than its carrying value, then performing the additional two-step impairment test is unnecessary. If our qualitative assessment indicates that goodwill impairment is more likely than not, we perform a two-step impairment test. We test goodwill for impairment under the two-step impairment test by first comparing the book value of net assets including goodwill to the fair value of the reporting unit. If the fair value is determined to be less than the book value of the net assets, including goodwill, a second step is performed to compute the amount of impairment as the difference between the implied fair value of goodwill and its carrying value. We estimate the fair value of the reporting unit using discounted cash flows. If the carrying value of goodwill exceeds its implied fair value, an impairment charge is recognized. We have not recognized any goodwill impairments since our inception. Since some of the goodwill is denominated in foreign currencies, changes to the goodwill balance occur over time due to changes in foreign exchange rates.

The following is a summary of goodwill activity for the nine months ended September 30, 2019 (in thousands):

	Balance as of December 31, 2018		Deconsolidation			Goodwill Adjustments (1)			Impact of Change in Foreign Exchange Rates			Balance as of September 30, 2019
Merger / Portfolio Acquisition
Telx Acquisition	$	330,845	$	—		$	—		$	—		$	330,845
European Portfolio Acquisition	442,349		—			(9,436		)	(17,736		)	415,177
DFT Merger	2,592,146		—			—			—			2,592,146
Ascenty Acquisition	982,667		(982,667		)	—			—			—
Total	$	4,348,007	$	(982,667	)	$	(9,436	)	$	(17,736	)	$	3,338,168

(1) As a result of a subsequent change to an acquired deferred tax liability that would not have impacted consideration paid, goodwill was adjusted.

(g) Leases

We lease real estate, including corporate and regional offices, data center space, and land, along with IT equipment. When we receive substantially all economic benefits from and direct use of specified property, plant and equipment, we account for those transactions as leases under ASU No. 2016-02 Leases (Topic 842). See Note 2(t) for further discussion regarding the adoption of Topic 842 on January 1, 2019.

We have elected the practical expedient within Topic 842 to not separate lease and non-lease components within lease transactions for all asset classes within our existing lease portfolio and, therefore, account for non-lease components combined with related lease components under Topic 842. For transactions involving leases of buildings and land, we have also elected to not separate land components from leases of specified property, plant, and equipment, as it was determined to have no effect on lease classification for any lease component, and the amounts recognized for land lease components would not have been material.

Additionally, we have elected the short-term lease exception for all classes of assets, and do not apply the recognition and measurement requirements for leases of 12 months or less, and recognize lease payments for short-term leases as expense either straight-line over the lease term or as incurred depending on whether the lease payments are fixed or variable. These elections are applied consistently for all leases.

When discount rates implicit in leases cannot be readily determined, we use the applicable incremental borrowing rate at lease commencement to perform lease classification tests on lease components and to measure lease liabilities and right-of-use assets. We assigned a collateralized interest rate to each lease based on the term and the currency in which each lease is denominated. To the extent there are leases in foreign countries, rates were adjusted based on local yields in those particular markets. Further, we apply the “bright-line” thresholds within Topic 840 for lease classification for all classes of assets.

(h) Share-Based Compensation

The Company measures all share-based compensation awards at fair value on the date they are granted to employees and directors, and recognizes compensation cost, net of forfeitures, over the requisite service period for awards with only a service condition. The estimated fair value of the long-term incentive units and Class D units (discussed in Note 14) granted by us is being amortized on a straight-line basis over the expected service period.

The fair value of share-based compensation awards that contain a market condition is measured using a Monte Carlo simulation method and not adjusted based on actual achievement of the market condition.

(i) Assets and Liabilities Measured at Fair Value

Fair value under U.S. GAAP is a market-based measurement, not an entity-specific measurement. Therefore, our fair value measurements are determined based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair-value measurements, we use a fair-value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy).

Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access. Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability (other than quoted prices), such as interest rates, foreign exchange rates, and yield curves that are observable at commonly quoted intervals. Level 3 inputs are unobservable inputs for the asset or


liability which are typically based on an entity’s own assumptions, as there is little, if any, related market activity. In instances where the determination of the fair-value measurement is based on inputs from different levels of the fair-value hierarchy, the lowest level input that is significant would be used to determine the fair-value measurement in its entirety. Our assessment of the significance of a particular input to the fair-value measurement in its entirety requires judgment, and considers factors specific to the asset or liability.

(j) Derivative Instruments

Derivative financial instruments are employed to manage risks, including foreign currency and interest rate exposures and are not used for trading or speculative purposes. As part of the Company’s risk management program, a variety of financial instruments, such as interest rate swaps and foreign exchange contracts, may be used to mitigate interest rate exposure and foreign currency exposure. The Company recognizes all derivative instruments in the balance sheet at fair value.

Changes in the fair value of derivatives are recognized periodically either in earnings or in stockholders’ equity as a component of accumulated other comprehensive income (loss), depending on whether the derivative financial instrument is undesignated or qualifies for hedge accounting, and if so, whether it represents a fair value, cash flow, or net investment hedge. Gains and losses on derivatives designated as cash flow hedges, to the extent they are included in the assessment of effectiveness, are recorded in other comprehensive income (loss) and subsequently reclassified to earnings to offset the impact of the hedged items when they occur. In the event it becomes probable the forecasted transaction to which a cash flow hedge relates will not occur, the derivative would be terminated and the amount in other comprehensive income (loss) would be recognized in earnings. Changes in the fair value of derivatives that are designated and qualify as a hedge of the net investment in foreign operations, to the extent they are included in the assessment of effectiveness, are reported in other comprehensive income (loss) and are deferred until disposal of the underlying assets. Gains and losses representing components excluded from the assessment of effectiveness for cash flow and fair value hedges are recognized in earnings on a straight-line basis in the same caption as the hedged item over the term of the hedge. Gains and losses representing components excluded from the assessment of effectiveness for net investment hedges are recognized in earnings on a straight-line basis over the term of the hedge.

The net interest paid or received on interest rate swaps is recognized as interest expense. Gains and losses resulting from the early termination of interest rate swap agreements are deferred and amortized as adjustments to interest expense over the remaining period of the debt originally covered by the terminated swap.

See Note 15 for further discussion on derivative instruments.

(k) Income Taxes

Digital Realty Trust, Inc. has elected to be treated as a real estate investment trust (a “REIT”) for federal income tax purposes. As a REIT, Digital Realty Trust, Inc. generally is not required to pay federal corporate income tax to the extent taxable income is currently distributed to its stockholders. If Digital Realty Trust, Inc. fails to qualify as a REIT in any taxable year, it will be subject to federal corporate income tax (including any applicable alternative minimum tax for taxable years prior to 2018) on its taxable income.

The Company is subject to foreign, state and local income taxes in the jurisdictions in which it conducts business. The Company’s taxable REIT subsidiaries are subject to federal, state, local and foreign income taxes to the extent there is taxable income. Accordingly, the Company recognizes current and deferred income taxes for its taxable REIT subsidiaries, including for federal, state, local and foreign jurisdictions, as appropriate.

We assess our significant tax positions in accordance with U.S. GAAP for all open tax years and determine whether we have any material unrecognized liabilities from uncertain tax benefits. If a tax position is not considered “more-likely-than-not” to be sustained solely on its technical merits, no benefits of the tax position are to be recognized (for financial statement purposes). As of September 30, 2019 and December 31, 2018, we had no assets or liabilities for uncertain tax positions. We classify interest and penalties from significant uncertain tax positions as interest expense and operating expense, respectively, in our condensed consolidated income statements. For the three and nine months ended September 30, 2019 and 2018, we had no such interest or penalties. The tax year 2016 and thereafter remain open to examination by the major taxing jurisdictions with which the Company files tax returns.

See Note 11 for further discussion on income taxes.

(l) Presentation of Transactional-based Taxes

We account for transactional-based taxes, such as value added tax, or VAT, for our international properties on a net basis.

(m) Redeemable Noncontrolling Interests

Redeemable noncontrolling interests include amounts related to partnership units issued by consolidated subsidiaries of the Company in which redemption for equity is outside the control of the Company.  Partnership units which are determined to be contingently redeemable for cash under the Financial Accounting Standards Board’s "Distinguishing Liabilities from Equity" guidance are classified as redeemable noncontrolling interests and presented in the mezzanine section between total liabilities and stockholder’s equity on the Company’s condensed consolidated balance sheets. The amounts of consolidated net income

attributable to the Company and to the noncontrolling interests are presented on the Company’s condensed consolidated income statements.

(n) Revenue Recognition

The majority of our revenue is derived from lease arrangements, which we account for in accordance with Topic 842 commencing on January 1, 2019 and “Leases (Topic 840)” prior to 2019. We account for the non-lease components within our lease arrangements, as well as other sources of revenue, in accordance with “Revenue from Contracts with Customers (Topic 606)”. Revenue recognized as a result of applying Topics 842 and 840, as applicable, was 99% and 97% and Topic 606 was less than 1% and 3% of total operating revenue for the three and nine months ended September 30, 2019 and 2018, respectively.

Our leases are classified as operating leases and minimum rents are recognized on a straight-line basis over the terms of the leases, which may span multiple years. The excess of rents recognized over amounts contractually due pursuant to the underlying leases is included in deferred rent in the accompanying condensed consolidated balance sheets and contractually due but unpaid rents are included in accounts and other receivables.

Tenant reimbursements for real estate taxes, common area maintenance, and other recoverable costs under our leases are recognized in the period that the expenses are incurred. Lease termination fees are recognized over the remaining term of the lease, effective as of the date the lease modification is finalized, assuming collection is not considered doubtful. As discussed above, we recognize amortization of the value of acquired above or below-market tenant leases as a reduction of rental revenue in the case of above-market leases or an increase to rental revenue in the case of below-market leases.

Interconnection services are included in rental and other services on the condensed consolidated income statements and are generally provided on a month-to-month, one-year or multi-year term. Interconnection services include port and cross-connect services. Port services are typically sold on a one-year or multi-year term and revenue is recognized on a recurring monthly basis (straight-line). The Company bills customers on a monthly basis and recognizes the revenue over the period the service is provided. Revenue for cross-connect installations is generally recognized in the period the cross-connect is installed. Interconnection services that are not specific to a particular space are accounted for under Topic 606 and have terms that are generally one year or less.

Occasionally, customers engage the Company for certain services. The nature of these services historically involves property management and construction management. The proper revenue recognition of these services can be different, depending on whether the arrangements are service revenue or contractor type revenue.

Service revenues are typically recognized on an equal monthly basis based on the minimum fee to be earned. The monthly amounts could be adjusted depending on if certain performance milestones are met.

Fee income arises primarily from contractual management agreements with entities in which we have a noncontrolling interest. The management fees are recognized as earned under the respective agreements. Management and other fee income related to partially owned noncontrolled entities are recognized to the extent attributable to the unaffiliated interest.

We make subjective estimates as to when our revenue is earned and the collectability of our accounts receivable related to minimum rent, deferred rent, expense reimbursements, lease termination fees and other income. We specifically analyze accounts receivable and historical bad debts, customer concentrations, customer creditworthiness and current economic trends when evaluating the adequacy of the allowance for bad debts. These estimates have a direct impact on our net revenue because a higher bad debt allowance would result in lower net revenue, and recognizing rental revenue as earned in one period versus another would result in higher or lower net revenue for a particular period. The allowance for doubtful accounts as of September 30, 2019 and December 31, 2018 was approximately $13.2 million and $11.6 million, respectively.

(o) Transaction and Integration Expense

Transaction and integration expense includes business combination expenses, other business development expenses and other expenses to integrate newly acquired investments, which are expensed as incurred. Transaction expenses include closing costs, broker commissions and other professional fees, including legal and accounting fees related to business combinations or acquisitions that were not consummated. Integration costs include transition costs associated with organizational restructuring (such as severance and retention payments and recruiting expenses), third-party consulting expenses directly related to the integration of acquired companies (in areas such as cost savings and synergy realization, technology and systems work), and internal costs such as training, travel and labor, reflecting time spent by Company personnel on integration activities and projects. Recurring costs are recorded in general and administrative expense. 

(p) Gain on Sale of Properties

We account for the sale of real estate properties under Financial Accounting Standards Board, or FASB, Accounting Standards Update, or ASU, No. 2017-05, Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20), which provides for revenue recognition based on transfer of ownership. During the nine months ended September 30, 2018, the Company sold real estate properties for gross proceeds of $291.7 million, and recorded a net gain of $80.4 million. The Company did not sell any real estate properties during the nine months ended September 30, 2019.

(q) Gain on Deconsolidation

We deconsolidate our subsidiaries in accordance with ASC 810, Consolidation, as of the date we cease to have a controlling financial interest in our subsidiaries. We account for the deconsolidation of our subsidiaries by recognizing a gain or loss in accordance with ASC 810. This gain or loss is measured at the date our subsidiaries are deconsolidated as the difference between (a) the aggregate of the fair value of any consideration received, the fair value of any retained non-controlling interest in our subsidiaries being deconsolidated, and the carrying amount of any non-controlling interest in our subsidiaries being deconsolidated, including any accumulated other comprehensive income/loss attributable to the non-controlling interest, and (b) the carrying amount of the assets and liabilities of our subsidiaries being deconsolidated. During the nine months ended September 30, 2019, the Company deconsolidated Ascenty (see Note 5) and recorded a gain of $67.5 million.

(r) Management’s Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates made. On an on-going basis, we evaluate our estimates, including those related to the valuation of our real estate properties, tenant relationship value, goodwill, contingent consideration, accounts receivable and deferred rent receivable, performance-based equity compensation plans and the completeness of accrued liabilities. We base our estimates on historical experience, current market conditions, and various other assumptions that are believed to be reasonable under the circumstances. Actual results may vary from those estimates and those estimates could vary under different assumptions or conditions.

(s) Segment and Geographic Information

The Company is managed on a consolidated premise, based on customer demand considerations.  Deployment of capital is geared to satisfy this demand.  In this regard, the sale and delivery of our products is consistent throughout the portfolio.  Services are provided to customers typical of the data center industry.  Rent and the cost of services are billed and collected.  The Company has one operating segment and therefore one reporting segment.

Operating revenues from properties in the United States were $659.8 million and $629.3 million and outside the United States were $146.7 million and $139.7 million for the three months ended September 30, 2019 and 2018, respectively. Operating revenues from properties in the United States were $1.9 billion and $1.8 billion and outside the United States were $475.9 million and $421.3 million for the nine months ended September 30, 2019 and 2018, respectively. We had investments in real estate located in the United States of $10.5 billion and $11.1 billion, and outside the United States of $3.4 billion and $3.8 billion, as of September 30, 2019 and December 31, 2018, respectively.

Operating revenues from properties located in the United Kingdom were $68.9 million and $72.6 million, or 8.5% and 9.4% of total operating revenues, for the three months ended September 30, 2019 and 2018, respectively. Operating revenues from properties located in the United Kingdom were $215.8 million and $221.9 million, or 8.9% and 9.8% of total operating revenues, for the nine months ended September 30, 2019 and 2018, respectively. No other foreign country comprised more than 10% of total operating revenues for each of these periods. We had investments in real estate located in the United Kingdom of $1.6 billion and $1.6 billion, or 11.4% and 10.9% of total long-lived assets, as of September 30, 2019 and December 31, 2018, respectively. No other foreign country comprised more than 10% of total long-lived assets as of September 30, 2019 and December 31, 2018.

(t) New Accounting Pronouncements

New Accounting Standards Adopted

In February 2016, the FASB issued ASU No. 2016-02 Leases (Topic 842). The standard introduces new requirements to increase transparency and comparability among organizations for leasing transactions for both lessees and lessors. Topic 842 requires a lessee to record a right-of-use asset and a lease liability for all leases with terms longer than 12 months. These leases will be either finance or operating, with classification affecting the pattern of expense recognition.

We adopted Topic 842, on January 1, 2019 and elected to apply the modified retrospective transition method prospectively from the effective date of adoption.

As part of applying the transition method, we elected to apply the package of transition practical expedients within the new guidance. As required by the new standard, these expedients have been elected as a package, and consistently applied across our lease portfolio. Accordingly, we need not reassess the following:

◦Whether any expired or existing contracts are or contain leases

◦The lease classification for any expired or existing leases

◦Treatment of initial direct costs relating to any existing leases

We have decided not to elect the transition practical expedient to use hindsight in determining lease term and in assessing impairment of right-of-use assets.

In applying the modified retrospective transition method to operating leases, we measured lease liabilities at the present value of the sum of remaining minimum rental payments (as defined under Topic 840) as the leases contained no residual value guarantees. These lease liabilities have been measured using our incremental borrowing rates as of the date of adoption. Additionally, right-of-use assets for these operating leases have been measured as the initial measurement of applicable lease liabilities adjusted for other related lease balances at transition.

In applying the modified retrospective transition method to capital leases, at the effective date, we measured lease liabilities and right of use assets at the carrying amount of capital lease obligations and capital lease assets under Topic 840, respectively.

In addition, we applied the modified retrospective transition method to build-to-suit leases for which assets and liabilities have been recognized solely as a result of the transactions’ build-to-suit designation in accordance with Topic 840. Therefore, we derecognized those assets and liabilities at the effective date of adoption for build-to-suit leases where construction had completed, with the difference of approximately $6.3 million recorded as an increase to accumulated dividends in excess of earnings at the adoption date. We accounted for the leases therefrom, following lessee transition guidance.

New Accounting Standards Issued but not yet Adopted

In August 2018, the FASB issued ASU No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement.” This ASU amends existing fair value measurement disclosure requirements by adding, changing, or removing certain disclosures. ASU No. 2018-13 will be effective for us as of January 1, 2020, and earlier adoption is permitted. We are currently reviewing the impact this ASU will have on our financial statements.

We determined that all other recently issued accounting pronouncements will not have a material impact on our consolidated financial statements or do not apply to our operations.

XML

Acquired Intangible Assets and Liabilities

9 Months Ended

Sep. 30, 2019

Acquired Intangible Assets And Liabilities [Abstract]

Acquired Intangible Assets and Liabilities

Acquired Intangible Assets and Liabilities

The following summarizes our acquired intangible assets (real estate intangibles, comprised of acquired in-place lease value and tenant relationship value along with acquired above-market lease value) and intangible liabilities (acquired below-market lease value) as of September 30, 2019 and December 31, 2018.

	Balance as of
(Amounts in thousands)	September 30, 2019			December 31, 2018
Real Estate Intangibles:
Acquired in-place lease value:
Gross amount (1)(2)	$	1,348,534		$	1,569,401
Accumulated amortization	(864,578		)	(795,033		)
Net	$	483,956		$	774,368
Tenant relationship value:
Gross amount (1)(2)	$	1,831,554		$	2,339,606
Accumulated amortization	(368,857		)	(291,818		)
Net	$	1,462,697		$	2,047,788
Acquired above-market leases:
Gross amount	$	276,309		$	277,796
Accumulated amortization	(191,994		)	(158,037		)
Net	$	84,315		$	119,759
Acquired below-market leases:
Gross amount (2)	$	393,546		$	442,535
Accumulated amortization	(240,124		)	(242,422		)
Net	$	153,422		$	200,113

(1) In connection with the deconsolidation of Ascenty, $120.0 million of acquired in-place lease value and $375.0 million of tenant relationship value were written off during the nine months ended September 30, 2019.

(2) In connection with the transactions with Mapletree (see Note 3), $93.0 million of acquired in-place lease value and $122.7 million of tenant relationship value were reclassified to assets held for sale and contribution, and $22.7 million of acquired below-market leases was reclassified to obligations associated with assets held for sale and contribution during the three months ended September 30, 2019.

Amortization of acquired above-market leases, net of acquired below-market leases, resulted in a decrease in rental revenues of $2.8 million and $6.8 million for the three months ended September 30, 2019 and 2018, respectively. Amortization of acquired above-market leases, net of acquired below-market leases, resulted in a decrease in rental revenues of $13.0 million and $20.6 million for the nine months ended September 30, 2019 and 2018, respectively. The expected average remaining lives for acquired below-market leases and acquired above-market leases is 8.1 years and 2.6 years, respectively, as of September 30, 2019. Estimated annual amortization of acquired below-market leases, net of acquired above-market leases, for each of the five succeeding years and thereafter, commencing October 1, 2019 is as follows:

(Amounts in thousands)
Remainder of 2019	$	(4,105	)
2020	(10,693		)
2021	(3,590		)
2022	4,619
2023	9,384
Thereafter	73,492
Total	$	69,107

Amortization of acquired in-place lease value (a component of depreciation and amortization expense) was approximately $32.4 million and $50.2 million for the three months ended September 30, 2019 and 2018, respectively, and approximately $114.7 million and $162.3 million for the nine months ended September 30, 2019 and 2018, respectively. The expected average amortization period for acquired in-place lease value is 5.9 years as of September 30, 2019. The weighted average remaining contractual life for acquired leases excluding renewals or extensions is 5.6 years as of September 30, 2019. Estimated annual amortization of acquired in-place lease value for each of the five succeeding years and thereafter, commencing October 1, 2019 is as follows:

(Amounts in thousands)
Remainder of 2019	$	28,176
2020	98,331
2021	77,848
2022	58,210
2023	47,109
Thereafter	174,282
Total	$	483,956

Amortization of tenant relationship value (a component of depreciation and amortization expense) was approximately $30.7 million and $30.8 million for the three months ended September 30, 2019 and 2018, respectively, and approximately $99.3 million and $92.8 million for the nine months ended September 30, 2019 and 2018, respectively. As of September 30, 2019, the weighted average remaining contractual life for tenant relationship value was 13.3 years. Estimated annual amortization of tenant relationship value for each of the five succeeding years and thereafter, commencing October 1, 2019 is as follows:

(Amounts in thousands)
Remainder of 2019	$	28,970
2020	115,879
2021	115,879
2022	115,879
2023	115,879
Thereafter	970,211
Total	$	1,462,697

XML

Income per Unit

9 Months Ended

Sep. 30, 2019

Digital Realty Trust, L.P.

Class of Stock [Line Items]

Income per Unit

Income per Unit

The following is a summary of basic and diluted income per unit (in thousands, except unit and per unit amounts):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
Net income available to common unitholders	$	52,127	$	69,968	$	185,434	$	227,580
Weighted average units outstanding—basic	217,375,296		214,289,384		217,254,811		214,199,414
Potentially dilutive common units:
Unvested incentive units	181,064		169,100		142,670		160,117
Forward equity offering	1,013,970		37,884		705,720		1,847
Market performance-based awards	185,267		440,800		177,150		462,632
Weighted average units outstanding—diluted	218,755,597		214,937,168		218,280,351		214,824,010
Income per unit:
Basic	$	0.24	$	0.33	$	0.85	$	1.06
Diluted	$	0.24	$	0.33	$	0.85	$	1.06

We have excluded the following potentially dilutive securities in the calculations above as they would be antidilutive or not dilutive: 

	Three Months Ended September 30,		Nine Months Ended September 30,
	2019	2018	2019	2018
Potentially dilutive Series C Cumulative Redeemable Perpetual Preferred Units	1,614,005	1,727,724	1,678,511	1,864,489
Potentially dilutive Series G Cumulative Redeemable Preferred Units	2,001,277	2,142,282	2,081,260	2,311,864
Potentially dilutive Series H Cumulative Redeemable Preferred Units	—	3,139,291	1,053,127	3,387,795
Potentially dilutive Series I Cumulative Redeemable Preferred Units	2,003,619	2,144,789	2,083,696	2,314,569
Potentially dilutive Series J Cumulative Redeemable Preferred Units	1,598,556	1,711,186	1,662,444	1,846,643
Potentially dilutive Series K Cumulative Redeemable Preferred Units	1,680,969	—	1,232,711	—
Total	8,898,426	10,865,272	9,791,749	11,725,360

XML

Capital and Accumulated Other Comprehensive Loss (Partnership Units Narrative) (Details) $ in Millions	Sep. 30, 2019 USD ($)	Dec. 31, 2018 USD ($)
Class of Stock [Line Items]
Common stock conversion ratio	1
Digital Realty Trust, L.P.
Class of Stock [Line Items]
Common stock conversion ratio	1
Redeemable noncontrolling interests – operating partnership	$ 1,121.8	$ 1,076.9

XML

Derivative Instruments (Narrative) (Details) $ in Millions	9 Months Ended
	Sep. 30, 2019 USD ($)
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Gain (loss) to be reclassified within twelve months	$ 1.9

XML

Incentive Plan (Market Performance Based Awards) (Details) $ in Millions	1 Months Ended	9 Months Ended
	Jan. 31, 2019 shares	Sep. 30, 2019 USD ($) simulation	Sep. 30, 2018 USD ($)
Market performance-based awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Performance period		3 years
Number of trials | simulation		100,000
Fair value of awards | $		$ 21.3	$ 16.8
Award requisite service period		4 years
Market performance-based awards | 2016 Performance Grant
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Performance period		3 years
Vesting percentage		50.00%
Market performance-based awards | 2017 Performance Grant
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Performance period		3 years
Market performance-based awards | Below Threshold Level
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage		0.00%
Performance Threshold		(3.00%)
Market performance-based awards | Threshold Level
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage		25.00%
Performance Threshold		(3.00%)
Market performance-based awards | Target Level
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage		50.00%
Performance Threshold		1.00%
Market performance-based awards | High Level
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage		100.00%
Performance Threshold		5.00%
Market performance-based awards | First Vesting Period in February | 2016 Performance Grant
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage		50.00%
Market performance-based awards | First Vesting Period in February | 2017 Performance Grant
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage		50.00%
Market performance-based awards | First Vesting Period in February | 2019 Performance Grant
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage		50.00%
Market performance-based awards | Second Vesting Period in February | 2017 Performance Grant
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage		50.00%
Market performance-based awards | Second Vesting Period in February | 2019 Performance Grant
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage		50.00%
Class D Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vested (shares)	339,317
Distribution Equivalent Unit
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vested (shares)	31,009
Restricted Stock Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vested (shares)	56,778

XML

Equity and Accumulated Other Comprehensive Loss, Net (Schedule of Dividends) (Details) - USD ($) $ / shares in Units, $ in Thousands			9 Months Ended
	Jun. 28, 2019	Mar. 13, 2019	Sep. 30, 2019	Apr. 01, 2019	Mar. 15, 2019
Series C Preferred Stock
Dividends Payable [Line Items]
Dividends, preferred stock			$ 9,999
Preferred stock dividend per share amount (in dollars per share)			$ 1.65625
Series C Preferred Stock | March 29, 2019
Dividends Payable [Line Items]
Dividends, preferred stock			$ 3,333
Series C Preferred Stock | June 28, 2019
Dividends Payable [Line Items]
Dividends, preferred stock			3,333
Series C Preferred Stock | September 30, 2019
Dividends Payable [Line Items]
Dividends, preferred stock			3,333
Series G Preferred Stock
Dividends Payable [Line Items]
Dividends, preferred stock			$ 11,016
Preferred stock dividend per share amount (in dollars per share)			$ 1.46875
Series G Preferred Stock | March 29, 2019
Dividends Payable [Line Items]
Dividends, preferred stock			$ 3,672
Series G Preferred Stock | June 28, 2019
Dividends Payable [Line Items]
Dividends, preferred stock			3,672
Series G Preferred Stock | September 30, 2019
Dividends Payable [Line Items]
Dividends, preferred stock			3,672
Series H Preferred Stock
Dividends Payable [Line Items]
Dividends, preferred stock			$ 6,730
Preferred stock dividend per share amount (in dollars per share)			$ 1.84375
Redemption price (in dollars per share)				$ 25.00
Offering costs				$ 11,800
Series H Preferred Stock | March 29, 2019
Dividends Payable [Line Items]
Dividends, preferred stock			$ 6,730
Series H Preferred Stock | June 28, 2019
Dividends Payable [Line Items]
Dividends, preferred stock			0
Series H Preferred Stock | September 30, 2019
Dividends Payable [Line Items]
Dividends, preferred stock			0
Series I Preferred Stock
Dividends Payable [Line Items]
Dividends, preferred stock			$ 11,907
Preferred stock dividend per share amount (in dollars per share)			$ 1.58750
Series I Preferred Stock | March 29, 2019
Dividends Payable [Line Items]
Dividends, preferred stock			$ 3,969
Series I Preferred Stock | June 28, 2019
Dividends Payable [Line Items]
Dividends, preferred stock			3,969
Series I Preferred Stock | September 30, 2019
Dividends Payable [Line Items]
Dividends, preferred stock			3,969
Series J Preferred Stock
Dividends Payable [Line Items]
Dividends, preferred stock			$ 7,875
Preferred stock dividend per share amount (in dollars per share)			$ 1.31250
Series J Preferred Stock | March 29, 2019
Dividends Payable [Line Items]
Dividends, preferred stock			$ 2,625
Series J Preferred Stock | June 28, 2019
Dividends Payable [Line Items]
Dividends, preferred stock			2,625
Series J Preferred Stock | September 30, 2019
Dividends Payable [Line Items]
Dividends, preferred stock			2,625
Series K Preferred Stock
Dividends Payable [Line Items]
Dividends, preferred stock			$ 6,757
Preferred stock dividend per share amount (in dollars per share)	$ 0.43875	$ 1.46250	$ 1.46250
Redemption price (in dollars per share)			$ 25.00		$ 25.00
Series K Preferred Stock | March 29, 2019
Dividends Payable [Line Items]
Dividends, preferred stock			$ 0
Series K Preferred Stock | June 28, 2019
Dividends Payable [Line Items]
Dividends, preferred stock			3,686
Series K Preferred Stock | September 30, 2019
Dividends Payable [Line Items]
Dividends, preferred stock			3,071
Common Stock
Dividends Payable [Line Items]
Dividends, common stock			$ 674,885
Common stock dividend per share amount (in dollars per share)			$ 4.32000
Common Stock | March 29, 2019
Dividends Payable [Line Items]
Dividends, common stock			$ 224,802
Common Stock | June 28, 2019
Dividends Payable [Line Items]
Dividends, common stock			224,895
Common Stock | September 30, 2019
Dividends Payable [Line Items]
Dividends, common stock			$ 225,188

XML

Equity and Accumulated Other Comprehensive Loss, Net (Forward Equity Sale) (Details) - Digital Realty Trust, L.P. - USD ($) $ in Billions	Sep. 27, 2019	Sep. 27, 2018
Forward Sale Agreement
Class of Stock [Line Items]
Common stock issued in public offering (shares)		9,775,000
Net proceeds on public offering	$ 1.1
Over-Allotment Option
Class of Stock [Line Items]
Common stock issued in public offering (shares)		1,275,000

XML

Capital and Accumulated Other Comprehensive Loss (Schedule of Accumulated Other Comprehensive Loss) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Net current period change			$ 31,137
Reclassification of foreign currency translation adjustment due to deconsolidation of Ascenty	$ 0	$ 0	21,687	$ 0
Reclassification to interest expense from interest rate swaps			(5,802)
Foreign currency translation adjustments
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Net current period change			42,038
Reclassification of foreign currency translation adjustment due to deconsolidation of Ascenty			21,687
Reclassification to interest expense from interest rate swaps			0
Cash flow hedge adjustments
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Net current period change			(10,901)
Reclassification of foreign currency translation adjustment due to deconsolidation of Ascenty			0
Reclassification to interest expense from interest rate swaps			(5,802)
Foreign currency net investment hedge adjustments
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Net current period change			0
Reclassification of foreign currency translation adjustment due to deconsolidation of Ascenty			0
Reclassification to interest expense from interest rate swaps			0
Digital Realty Trust, L.P.
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Beginning balance	10,473,720	10,796,928	10,858,210	11,049,450
Net current period change			33,445
Reclassification of foreign currency translation adjustment due to deconsolidation of Ascenty	0	0	21,687	0
Reclassification to interest expense from interest rate swaps			(6,055)
Ending balance	10,210,855	$ 10,763,462	10,210,855	$ 10,763,462
Digital Realty Trust, L.P. | Foreign currency translation adjustments
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Beginning balance			(163,531)
Net current period change			44,824
Reclassification of foreign currency translation adjustment due to deconsolidation of Ascenty			21,687
Reclassification to interest expense from interest rate swaps			0
Ending balance	(97,020)		(97,020)
Digital Realty Trust, L.P. | Cash flow hedge adjustments
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Beginning balance			16,986
Net current period change			(11,379)
Reclassification of foreign currency translation adjustment due to deconsolidation of Ascenty			0
Reclassification to interest expense from interest rate swaps			(6,055)
Ending balance	(448)		(448)
Digital Realty Trust, L.P. | Foreign currency net investment hedge adjustments
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Beginning balance			26,152
Net current period change			0
Reclassification of foreign currency translation adjustment due to deconsolidation of Ascenty			0
Reclassification to interest expense from interest rate swaps			0
Ending balance	26,152		26,152
Digital Realty Trust, L.P. | Accumulated other comprehensive income (loss), net
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Beginning balance			(120,393)
Ending balance	$ (71,316)		$ (71,316)

XML

Leases (Maturities of Lease Liabilities) (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Operating lease liabilities
Remainder of 2019	$ 21,135
2020	85,013
2021	83,824
2022	79,522
2023	78,265
Thereafter	546,530
Total undiscounted future cash flows	894,289
Less: Imputed interest	(194,908)
Present value of undiscounted future cash flows	699,381	$ 0
Finance lease liabilities
Remainder of 2019	2,075
2020	8,343
2021	8,389
2022	8,829
2023	9,262
Thereafter	221,854
Total undiscounted future cash flows	258,752
Less: Imputed interest	(90,486)
Present value of undiscounted future cash flows	$ 168,266

XML

Acquired Intangible Assets and Liabilities (Summary of Acquired Intangible Assets) (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2019	Dec. 31, 2018
Finite-Lived Intangible Assets [Line Items]
Below-market lease, gross amount	$ 393,546	$ 442,535
Below-market lease, accumulated amortization	(240,124)	(242,422)
Total	153,422	200,113
Acquired in-place lease value
Finite-Lived Intangible Assets [Line Items]
Gross amount	1,348,534	1,569,401
Accumulated amortization	(864,578)	(795,033)
Net	483,956	774,368
Intangible assets written off due to deconsolidation	120,000
Acquired in-place lease value | Mapletree
Finite-Lived Intangible Assets [Line Items]
Net	93,000
Tenant relationship value
Finite-Lived Intangible Assets [Line Items]
Gross amount	1,831,554	2,339,606
Accumulated amortization	(368,857)	(291,818)
Net	1,462,697	2,047,788
Intangible assets written off due to deconsolidation	375,000
Tenant relationship value | Mapletree
Finite-Lived Intangible Assets [Line Items]
Net	122,700
Acquired above-market leases
Finite-Lived Intangible Assets [Line Items]
Gross amount	276,309	277,796
Accumulated amortization	(191,994)	(158,037)
Net	84,315	$ 119,759
Acquired above-market leases | Mapletree
Finite-Lived Intangible Assets [Line Items]
Net	$ 22,700