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Digital Realty (DLR) Ties Up to Offer Bare Metal Service

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Digital Realty Trust DLR along with Vapor IO and Hivelocity have recently come together to offer a multi-tier edge deployment that will enable developers to deploy core-to-edge workloads on Hivelocity's bare metal edge cloud. This deployment is first being offered in Atlanta, and will be available in other cities shortly.

Earlier in late June, Digital Realty’s data center platform, PlatformDIGITAL, and Vapor IO's networking infrastructure, Kinetic Edge, were integrated, driving convenient delivery of low-latency edge applications by their customers. This integration provided a seamless platform, which enabled Hivelocity to rapidly extend its bare metal cloud capabilities to Vapor IO's Kinetic Edge locations.

Per management at Digital Realty "Hivelocity's ability to tap into this service and create a clear path to highly interconnected true core-to-edge infrastructure for their customers is precisely the simplicity we hope to provide."  

Notably, PlatformDIGITAL is Digital Realty’s global data-center platform through which the company aims to help customers scale their digital business. Moreover, there has been a spike in demand for digital infrastructuresamid pandemic-led remote working environment and acceleration in digital transformations. This, in turn, is increasing demand for data center space.

Capitalizing on such factors and backed by a healthy balance sheet, the company is expanding its portfolio on accretive acquisition and development efforts. In fact, during the third quarter, it acquired Altus IT, a carrier-neutral data center provider in Croatia, for about €11 million, or approximately $13 million.

Additionally, Digital Realty has enhanced its presence in Europe, Australia and Asia in recent years through the development of high-quality facilities. Such expansion efforts will drive the company’s growth momentum.

However, the competitive data-center landscape remains a hurdle. Markedly, the company competes with several data-center developers, owners and operators, many of whom enjoy ownership of similar assets in locations same as Digital Realty.

Also, there are a number of local developers in the United States, and several regional operators in Europe, Asia and Australia. Given the solid growth potential of the data center real estate market, competition is anticipated to increase in the upcoming period from existing players, and with the entry of new ones. The scenario is likely to intensify pricing pressure in the data-center market.

Shares of this Zacks Rank #3 (Hold) have gained 20.8% over the past year against the industry’s decline of 3%.

Stocks to Consider

Alpine Income Property Trust, Inc.’s PINE funds from operations (FFO) per share estimates for 2020 have been revised upward by 1.7% to $1.21 over the past month. The company carries a Zacks Rank of 2 (Buy), currently. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Extra Space Storage Inc’s EXR Zacks Consensus Estimate for 2020 FFO per share has moved upmarginally to $4.98 over the past month. The company currently carries a Zacks Rank of 2.

Rexford Industrial Realty, Inc.’s REXR Zacks Consensus Estimate for 2020 FFO per share has improved 1.5% to $1.30 in a month’s time. The company has a Zacks Rank of 2, at present.

Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.

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Digital Realty Trust, Inc. (DLR) : Free Stock Analysis Report
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