Equity and Capital

9 Months Ended

Sep. 30, 2024

Equity and Capital

Equity and Capital

10. 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 August 4, 2023 (the “2023 Sales Agreement”). Pursuant to the 2023 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. From January 1, 2024 through February 23, 2024, Digital Realty Trust, Inc. generated net proceeds of approximately $99 million from the issuance of approximately 0.6 million common shares under the 2023 Sales Agreement at an average price of $133.43 per share after payment of approximately $0.6 million of commissions to the agents.

The 2023 Sales Agreement was amended on February 23, 2024 (the “2024 Sales Agreement Amendment”). At the time of the amendment, $258.3 million remained unsold under the 2023 Sales Agreement. Pursuant to the 2024 Sales Agreement Amendment, Digital Realty Trust, Inc. can issue and sell common stock having an aggregate offering price of up to $2.0 billion through various named agents from time to time. During the nine months ended September 30, 2024, Digital Realty Trust, Inc. generated net proceeds of approximately $983 million from the issuance of approximately 6.4 million common shares under the 2024 Sales Agreement Amendment at an average price of $154.84 per share before payment of approximately $9.9 million of commissions to the agents. Subsequent to September 30, 2024, Digital Realty Trust, Inc. generated net proceeds of approximately $62 million from the issuance of approximately 0.4 million common shares under the 2024 Sales Agreement Amendment at an average price of $160.81 per share after payment of approximately $0.6 million of commissions to the agents. As of October 30, 2024, approximately $0.9 billion remains available for future sales under the 2024 Sales Agreement Amendment.

Equity Offering

On May 7, 2024, Digital Realty Trust, Inc. and Digital Realty Trust, L.P. entered into an underwriting agreement with BofA Securities, Inc., Citigroup Global Markets Inc. and J.P. Morgan Securities LLC, as representatives of the several underwriters relating to the sale of up to approximately 12.1 million shares of common stock (including approximately 1.6 million shares that the underwriters had the option to purchase, and which option was exercised in full on May 8, 2024), at a purchase price to the underwriters of $136.66 per share. The offering closed on May 10, 2024, and we received net proceeds of approximately $1.7 billion.

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, 2024 and December 31, 2023 (in thousands):

	September 30, 2024			December 31, 2023
	Number of	Percentage of		Number of	Percentage of
(Units in thousands)	units	total		units	total
Digital Realty Trust, Inc.	331,347	98.1	%	311,608	98.0	%
Noncontrolling interests consist of:
Common units held by third parties	4,254	1.3	%	4,343	1.3	%
Incentive units held by employees and directors (see Note 12. ''Incentive Plans'')	2,143	0.6	%	2,106	0.7	%
	337,744	100.0	%	318,057	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 $1,004.4 million and $834.1 million based on the closing market price of Digital Realty Trust, Inc. common stock on September 30, 2024 and December 31, 2023, respectively.

The following table shows activity for noncontrolling interests in the Operating Partnership for the nine months ended September 30, 2024 (in thousands):

(Units in thousands)	Common Units	Incentive Units	Total
As of December 31, 2023	4,343	2,106	6,449
Conversion of incentive units held by employees and directors for shares of Digital Realty Trust, Inc. common stock (1)	(89)	(201)	(290)
Incentive units issued upon achievement of market performance condition	—	88	88
Grant of incentive units to employees and directors	—	154	154
Cancellation / forfeitures of incentive units held by employees and directors	—	(4)	(4)
As of September 30, 2024	4,254	2,143	6,397

(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, 2024 (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 28, 2024	March 28, 2024	$	2,625	$	3,071	$	4,485	$	382,208
May 8, 2024	June 28, 2024		2,625		3,071		4,485		397,429
August 7, 2024	September 30, 2024		2,625		3,071		4,485		400,659
		$	7,875	$	9,213	$	13,455	$	1,180,296
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, 2024 (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 28, 2024	March 28, 2024	$	2,625	$	3,071	$	4,485	$	390,356
May 8, 2024	June 28, 2024		2,625		3,071		4,485		405,421
August 7, 2024	September 30, 2024		2,625		3,071		4,485		408,577
		$	7,875	$	9,213	$	13,455	$	1,204,354
Annual rate of distribution per unit		$	1.31250	$	1.46250	$	1.30000	$	4.88000