Digital Realty Trust, a large San Francisco-based data center developer and landlord, announced formation of a US$369m joint venture with an investment fund managed by Prudential Real Estate Investors (PREI), a division of Prudential Financial.

The PREI fund will own 80% of the venture, the rest belonging to Digital. The venture has arranged a $185m five-year bank loan.

The data center company seeded the new venture with nine powered-base data center buildings totaling 1.06m sq ft and valued at about $366m. The fully leased properties are expected to generate income of about $24.5m in 2013.

Digital CEO Michael Foust said, “We are delighted to be partnering with an institution of PREI's caliber, and we believe this transaction represents an important validation of the appeal of data centers as an asset class to a sophisticated, core real estate investor.”

Cathy Marcus, a PREI managing director and portfolio manager, said, “The long lease terms and contractual rental rate increases on these ... data centers provide a stable rental income stream that represents a good fit with our investment objectives.”