Matt Mercier
Chief Financial Officer at Digital Realty Trust
Thank you, Andy. Let me jump right into our third quarter results. We signed a total of $152 million of new leases in the third quarter with broad-based strength across each of our two primary product groups and geographic strength in the Americas and APAC. We leased a record $54 million in the 0-1 megawatt plus interconnection category, accounting for 35% of total bookings. This product segment remains a consistent and steady source of growth as we continue to execute on our global meeting place strategy.
Interconnection bookings were strong once again at over $12 million as we added another 2,000 cross connects in the quarter, finishing with 218,000 total cross-connects. Greater than a megawatt bookings totaled $97 million in the quarter with outsized contributions from Portland and Hong Kong. This was our highest greater than a megawatt signings quarter since we discussed sharpening the lens with regard to capital allocation decisions one year ago. Our greater focus and increased threshold have resulted in higher average returns in the greater than a megawatt category as implied by the growing expected stabilized returns in the Americas that we present on the development life cycle schedule in our supplemental. Pricing continues to improve across most markets globally with outsized pricing power experienced within the greater than a megawatt segment, which saw pricing on signed leases at the highest level since the first half of 2016.
Turning to our backlog slide. The current backlog of signed but not yet commenced leases increased to a new record of $482 million at quarter end. As commencements of $110 million were more than offset by elevated new leasing volume in the quarter. We expect nearly 15% of the backlog to commence in the fourth quarter with a little over 50% commencing throughout 2024. The lag between signings and commencements in the quarter ticked up to 12 months, driven by new development and build-outs to support larger scale leases.
During the third quarter, we signed $156 million of renewal leases with pricing increases of 7.4% on a cash basis, the strongest re-leasing spreads achieved since 2015. While renewal pricing was strong across product segments and across our three regions, the overall result was upwardly skewed by a single transaction within our other category. Excluding this outlier, renewal, re-leasing spreads in the quarter would have been up 4.5% on a cash basis and 6.4% on a GAAP basis.
We feel that this is a more representative picture of the renewal spreads that we are seeing throughout the portfolio, which is consistent with the broad-based improvement we've seen throughout this year. With renewal rates trending higher over the first 9 months of the year, we are raising our full year guidance for renewal spreads to reflect the success year-to-date and today's improved fundamental environment.
Renewal spreads in the 0-1 megawatt category continued their steady climb with 4.4% growth on a cash basis in the third quarter on $125 million of volume. Greater than a megawatt renewals continued to post strong results, with cash renewals higher by 5.6%, albeit on lighter volume of $19 million in the third quarter.
In terms of earnings growth, we reported third quarter core FFO of $1.62 per share, broadly consistent with consensus expectations, but down $0.06 per share versus the second quarter, primarily reflecting the impact of the asset sales and the equity raised in the quarter and the redeployment of capital into accelerated and increased development. On a constant currency basis, core FFO was $1.60 per share relative to the $1.67 we reported in the third quarter of 2022.
Total revenue was up 18% year-over-year and 3% sequentially despite the impact of the more than $2 billion of asset sales completed early in the quarter as the benefits of improved pricing are starting to take hold. Importantly, year-over-year revenue growth also continues to be impacted by the significant volatility in utility costs and reimbursements, particularly in Europe. Most of these energy costs are directly passed through to customers. Excluding the impact of utility and other reimbursements, total revenue was up 13% year-over-year.
Interconnection revenue of $107 million marked another quarterly record and was 12% higher than the year ago period. Excluding Teraco, interconnection revenue was up 11% year-over-year, the highest interconnection growth since 2018 and reflects the ongoing organic strength in our core footprint. Quarter-over-quarter interconnection revenue was up almost 3% and as 2,000 new cross connects were added, increasing the total global installed base to 218,000.
Moving over to the expense side, utilities were seasonally high given the warmer summer months and off an already elevated 2023 base. Rental property operating expenses remained essentially flat for the second consecutive quarter, partly reflecting the benefit of the removal of expenses related to the dispositions and joint ventures.
However, on the noncontrollable expense front, property taxes spiked higher quarter-over-quarter to $72 million, driven by an elevated reassessment on some of our properties in Chicago. While these expenses will be largely passed on to our underlying customers, it will also be disputed over the coming years.
Net of this movement, adjusted EBITDA increased 10% year-over-year. One nonrecurring item worth noting in the quarter was the $113 million noncash impairment charge related to the lower value of our holdings in digital core REIT stock. The Singapore REIT IPO-ed in December 2021 at $0.88 per share, but was valued at $0.53 per share at the end of September, driving the noncash adjustment in our carrying value of the investment.
Improvement in our stabilized same capital operating performance continued in the third quarter, with year-over-year cash NOI up a strong 9.4% but moderating by 1.5% sequentially due to the expected increase in utility bleed during the seasonally warmer months. Even on a constant currency basis, year-over-year cash NOI growth was strong at 6.6%. These results demonstrate the strongest period of organic growth in our same capital pool since 2014, and extends the turning fundamentals that we have been highlighting throughout this year.
Turning to the balance sheet. We meaningfully strengthened our balance sheet during the third quarter, driven by the success that we've had on our funding plan. This progress continues today, and as a result, we have raised our full year capital raising target for the second consecutive quarter. In the third quarter, we generated over $2.6 billion proceeds from JV closings, noncore asset sales and settlement of the equity forward. Roughly $1 billion was redeployed into our development program and a little over $500 million was used to repay higher cost USD borrowings on our credit facility. The remaining amount was kept in cash, earning interest at a rate in excess of the remaining borrowings under our credit facility.
As a result, at quarter end, we had over $1 billion of cash on our balance sheet and our leverage fell to 6.3x net debt to EBITDA, down from 6.8x at the end of the second quarter and we are now within spitting distance of our near 6x leverage goal that we set out to achieve by year-end. Since the end of the quarter, we paid off CHF100 million notes that matured in October and are confident in our ability to execute on additional asset sales and development joint ventures that are left in our upwardly revised funding plan.
Moving to our debt profile. Our weighted average debt maturity is over 4.5 years, and our weighted average interest rate is 2.9%. Approximately 84% of our debt is non-U.S. dollar denominated, reflecting the growth of our global platform and our FX hedging strategy. Approximately 86% of our net debt is fixed rate and 97% of our debt is unsecured, providing ample flexibility for capital recycling. Finally, we have less than $1 billion of debt maturing in 2024 and beyond that our maturities remain well laddered through 2032.
Lastly, let's turn to our guidance. We are tightening our core FFO per share guidance range for the full year 2023 by $0.03 at the high and low ends to a new range of $6.58 to $6.62 per share, maintaining the midpoint of $6.60 per share. We are also tightening the range for full year adjusted EBITDA, affirming our full year guidance midpoint of $2.7 billion. Our full year revenue guidance range is being adjusted down by about 1% at the midpoint to a new range of $5.475 billion to $5.525 billion to reflect the impact of lower pass-through oriented tenant utility reimbursements given the moderation in electricity pricing in EMEA.
Importantly, you'll recall that last quarter's core FFO per share guidance reflected a $0.05 to $0.07 per share impact from a bankrupt customer, including $0.02 that was realized in the second quarter. In the third quarter, we received all of the rent due from this customer across our portfolio, but we did incur a $0.01 write-off related to unpaid utility expenses and we expect that we could see up to another $0.02 of dilution related to this customer in the fourth quarter. In addition, we could see up to $0.01 of drag related to the carryforward of increased Chicago property tax assessment and $0.01 of drag related to the acceleration and increase of development spend as we capitalize on the opportunities we are seeing in front of us.
With the continued improvement in our fundamentals during the quarter, we are also updating the organic operating metrics supporting our full year guidance, including cash and GAAP re-leasing spreads of over 5%, up from 4%. Same capital cash NOI growth of 6% to 7%, representing a 200 basis points increase versus prior guidance and a reduction in year-end portfolio occupancy to between 83% and 84%, reflecting the delayed timing of the sale of a vacant non-data center asset in our portfolio.
Given the successful leasing executed in the third quarter and the increased level of demand embedded within our pipeline, we are increasing our full year development spend guidance to $2.7 billion to $2.9 billion for 2023, representing the $400 million increase at the midpoint. Similarly, reflecting the continued execution on our funding plan to date, we have also updated our guidance for dispositions and JV capital to $2.7 million to $3.2 billion, representing a $350 million increase at the midpoint, which is in line with the increase in our expected development spend for this year.
While development has been an important driver of our growth for the last decade, in the short term, we are experiencing the headwinds from the sharp regime change in interest rates. This year, we've sold assets at 6 caps, and new borrowings on our liner at similar levels, whereas GAAP requires us to capitalize interest at our weighted average borrowing cost of less than 3%. In other words, increasing our development spend today, to capitalize on the growing opportunities we are seeing is dilutive to near-term earnings. These projects underway are completed at incrementally higher yields and the relatively low rate of capitalized interest burns off, we expect development completions will become increasingly accretive to core FFO per share. The good news is that fundamentals are helping to mitigate a portion of this dilution.
This concludes our prepared remarks, and now we'll be pleased to take your questions. Operator, please begin the Q&A session.
