Deutsche Bank Markets Research Rating Buy North America United States Financial REITs Corn pig ly Digital Realty Trust DLR.N DLR US ENaiengo NYS DLR Nice rebound in bookings; no change in positive data center thesis the filosi inteiesting thing about Dt.i1 s 31) tenor C. . ...may be the stock's reaction to what we thought was a nice rebound in bookings from a disappointing 2Q. We think the activity is notable given the lack of a head of sales in the Q and the breadth of leasing, including good activity in London post-Brexit. Sentiment on the group has gone negative on concerns that hyperscale cloud demand has slowed with Data Center REITs down 8% since QTS kicked off earnings 2 days ago despite the fact that only 1 of 4 DC's that have reported saw a q/q decline in bookings, while low penetration rates support elevated growth for years to come. We would add to positions on the sell-off. Reiterate Buy Brx)longs rebound in 3o. DLR signed $55MM of annualized bookings, including S9MM of interconnection bookings, which was a nice rebound from 2Q's $23MM level and highlights the lumpy nature of leasing. The average volume in 2Q and 3O of $39MM was roughly in-line with TTM averages. DLR's backlog rose to $84MM from $70MM last Q. Pricing commentary suggested a stable environment with overall cash spreads in the O up 2.5% though TKF spreads fell 9% as a heavily flagged above-market lease rolled over in the Q. Cash rent spread guidance was unchanged at "slightly positive." US TKF pricing fell to $140/sf (S120/KW) vs $202/sf ($187/KW) last Q, with the decline attributed to geographic mix. US cob pricing was $304/sf and $295/KW versus $229/sf and $260/KW last Q. Cash SC NOI was up only 0.9% (+2.1% ex FX) vs. 3.3% last Q, although guidance implies acceleration in 4Q. 1;2177502e% 1,h111,,, 0 We have updated our model to reflect 3O results, updated guidance, and our revised outlook. Our 2016 core FFO/sh estimate moves to $5.72 from $5.73,