Equity and Capital

9 Months Ended

Sep. 30, 2023

Equity and Capital

Equity and Capital

11. Equity and Capital

Equity Distribution Agreement

Digital Realty Trust, Inc. and Digital Realty Trust, L.P. were parties to an ATM Equity Offering^SM Sales Agreement dated April 1, 2022, as amended in 2023 (the “2022 Sales Agreement”). Pursuant to the 2022 Sales Agreement, Digital Realty Trust, Inc. could issue and sell common stock having an aggregate offering price of up to $1.5 billion through various named agents from time to time. For the nine months ended September 30, 2023, Digital Realty Trust, Inc. generated net proceeds of approximately $1.1 billion from the issuance of approximately 11.3 million common shares under the 2022 Sales Agreement at an average price of $96.35 per share after payment of approximately $7.5 million of commissions to the agents. The 2022 Sales Agreement was terminated on August 4, 2023, and Digital Realty Trust, Inc. and Digital Realty Trust, L.P. entered into a new ATM Equity Offering^SM Sales Agreement dated August 4, 2023 (the “2023 Sales Agreement”). At the time of the termination, $408.7 million remained unsold under the 2022 Sales Agreement. Pursuant to the 2023 Sales Agreement, Digital Realty Trust, Inc. can issue and sell common stock having an aggregate offering price of up to $1.5 billion through various named agents from time to time. As of September 30, 2023, $1.5 billion remained available for future sales under the 2023 Sales Agreement. For the nine months ended September 30, 2022, we had no sales under the 2022 Sales Agreement.

Noncontrolling Interests in Operating Partnership

Noncontrolling interests in the Operating Partnership relate to the proportion of entities consolidated by the Company that are owned by third parties. The following table shows the ownership interest in the Operating Partnership as of September 30, 2023 and December 31, 2022 (in thousands):

	September 30, 2023			December 31, 2022
	Number of	Percentage of		Number of	Percentage of
	units	total		units	total
Digital Realty Trust, Inc.	302,846	97.9	%	291,148	97.9	%
Noncontrolling interests consist of:
Common units held by third parties	4,343	1.4	%	4,375	1.5	%
Incentive units held by employees and directors (see Note 13. "Incentive Plan")	2,136	0.7	%	1,914	0.6	%
	309,325	100.0	%	297,437	100.0	%

Limited partners have the right to require the Operating Partnership to redeem all or a portion 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 its 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. The common units and incentive units of the Operating Partnership are classified within equity, except for certain common units issued to certain former DuPont Fabros Technology, L.P. unitholders in the Company’s acquisition of DuPont Fabros Technology, Inc., which are subject to certain restrictions and, accordingly, are not presented as permanent equity in the condensed balance sheet.

The redemption value of the noncontrolling Operating Partnership common units and the vested incentive units was approximately $750.9 million and $591.2 million based on the closing market price of Digital Realty Trust, Inc. common stock on September 30, 2023 and December 31, 2022, respectively.

The following table shows activity for noncontrolling interests in the Operating Partnership for the nine months ended September 30, 2023 (in thousands):

	Common Units	Incentive Units	Total
As of December 31, 2022	4,375	1,914	6,289
Conversion of incentive units held by employees and directors for shares of Digital Realty Trust, Inc. common stock (1)	(32)	(45)	(77)
Incentive units issued upon achievement of market performance condition	—	141	141
Grant of incentive units to employees and directors	—	166	166
Cancellation / forfeitures of incentive units held by employees and directors	—	(40)	(40)
As of September 30, 2023	4,343	2,136	6,479

(1) These redemptions and conversions were 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 consolidated balance sheet of Digital Realty Trust, Inc.

Dividends and Distributions

Digital Realty Trust, Inc. Dividends

We have declared and paid the following dividends on our common and preferred stock for the nine months ended September 30, 2023 (in thousands, except per share data):

		Series J		Series K		Series L
		Preferred		Preferred		Preferred		Common
Date dividend declared	Dividend payment date	Stock		Stock		Stock		Stock
February 22, 2023	March 31, 2023	$	2,625	$	3,071	$	4,485	$	356,214
May 24, 2023	June 30, 2023		2,625		3,071		4,485		365,937
August 9, 2023	September 29, 2023		2,625		3,071		4,485		370,278
		$	7,875	$	9,213	$	13,455	$	1,092,429
Annual rate of dividend per share		$	1.31250	$	1.46250	$	1.30000	$	4.88000

Digital Realty Trust, L.P. Distributions

All distributions on the Operating Partnership’s units are at the discretion of Digital Realty Trust, Inc.’s Board of Directors. The table below shows the distributions declared and paid by the Operating Partnership on its common and preferred units for the nine months ended September 30, 2023 (in thousands, except for per unit data):

		Series J		Series K		Series L
		Preferred		Preferred		Preferred		Common
Date distribution declared	Distribution payment date	Units		Units		Units		Units
February 22, 2023	March 31, 2023	$	2,625	$	3,071	$	4,485	$	364,204
May 24, 2023	June 30, 2023		2,625		3,071		4,485		373,833
August 9, 2023	September 29, 2023		2,625		3,071		4,485		378,352
		$	7,875	$	9,213	$	13,455	$	1,116,389
Annual rate of distribution per unit		$	1.31250	$	1.46250	$	1.30000	$	4.88000