0001490892false00014908922021-02-042021-02-04

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of The

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): April 29, 2021

CoreSite Realty Corporation

(Exact name of registrant as specified in its charter)

Maryland

001-34877

27-1925611

(State or other jurisdiction

(Commission

(IRS Employer

of incorporation)

File Number)

Identification No.)

1001 17th Street, Suite 500

Denver, CO

80202

(Address of principal executive offices)

(Zip Code)

Registrant's telephone number, including area code: (866) 777-2673

N/A

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

      Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

      Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

      Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

      Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class

Trading Symbol

Name of each exchange on which registered

Common Stock, $0.01 par value per share

COR

New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Section 2 — Financial Information

Item 2.02 Results of Operations and Financial Condition.

On April 29, 2021, CoreSite Realty Corporation ("CoreSite") issued a press release reporting financial results and operating information for the quarter ended March 31, 2021. In addition, CoreSite made available on its website supplemental operating and financial data for the same period. The text of the press release and the supplemental information package are furnished herewith as Exhibits 99.1 and 99.2, respectively.

The information in this report, including Exhibits 99.1 and 99.2 attached hereto, shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that section, and shall not be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.

Section 9 — Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits.

(d) The following exhibits are furnished with this Current Report on Form 8-K.

Exhibit No.

    

Description

99.1

Press Release, dated April 29, 2021.

99.2

Quarter Ended March 31, 2021, Earnings Release and Supplemental Information, dated April 29, 2021.

101.INS

XBRL Instance – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH

XBRL Taxonomy Extension Schema Document.

101.LAB

XBRL Taxonomy Extension Labels Linkbase Document.

101.PRE

XBRL Taxonomy Extension Presentation Linkbase Document.

104

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

2

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

CORESITE REALTY CORPORATION

Date: April 29, 2021

By:

/s/ Jeffrey S. Finnin

Name: Jeffrey S. Finnin

Title:   Chief Financial Officer

By:

/s/ Mark R. Jones

Name: Mark R. Jones

Title:   Chief Accounting Officer

3

Table of Contents

Graphic


Table of Contents

Table of Contents


Overview

Earnings Release

3

Company Profile

7

Summary of Financial Data

8

Financial Statements

Consolidated Balance Sheets

9

Consolidated Statements of Operations

10

Reconciliations of Net Income to FFO, AFFO, EBITDAre and Adjusted EBITDA

11

Operating Portfolio

Operating Portfolio & 10 Largest Customers

12

Leasing Statistics

13

Geographic and Vertical Diversification

15

Development

Capital Expenditures and Completed Pre-Stabilized Projects

16

Development Summary

17

Capital Structure

Market Capitalization and Debt Summary

18

Interest Summary, Debt Covenants and Liquidity

19

Components of Net Asset Value

20

2021 Guidance

21

Appendix

22

Quarter Ended March 31, 2021

Overview

Financial
Statements

Operating
Portfolio

Development

Capital
Structure

Components
of NAV

Guidance

Appendix

2


Table of Contents

CoreSite Reports First Quarter 2021 Financial Results


- Delivered Strong Q1 Financial Results, Including 7.0% Revenue Growth Year Over Year -

- Executed $7.0 Million of New and Expansions Sales, Driven by Retail Colocation and Small Scale -

DENVER, CO – April 29, 2021 – CoreSite Realty Corporation (NYSE:COR) (“the Company”), a premier provider of secure, reliable, high-uptime data center campuses with high-performance cloud access and interconnection solutions across the U.S., today announced financial results for quarter ended March 31, 2021.

Q1 2021 Quarterly Highlights

oKey Financial Results –
oGrew operating revenues to $157.6 million, an increase of 7.0% year over year and 1.7% sequentially
oDelivered net income of $0.51 per common diluted share, an increase of $0.03 year over year and $0.05 sequentially
oGrew adjusted EBITDA to $86.1 million, an increase of 9.4% year over year and 4.0% sequentially
oGenerated FFO of $1.40 per diluted share and unit, an increase of $0.11, or 8.5% year over year and $0.06, or 4.5% sequentially
oPaid a dividend of $1.23 per share for the first quarter on April 15th
oLease Commencements
oCommenced 130 new and expansion leases for 28,776 net rentable square feet (“NRSF”), representing $5.9 million of annualized GAAP rent, for an average rate of $206 per NRSF
oLeasing Activity
oSigned 134 new and expansion leases for 33,306 NRSF and $7.0 million of annualized GAAP rent, for an average rate of $209 per NRSF
oRenewed 276 leases for 91,605 NRSF and $15.9 million of annualized GAAP rent, for an average rate of $173 per NRSF
oRenewed leases reflected an increase of 2.3% in cash rent and 6.1% in GAAP rent, and we reported churn of 0.8%

“We are pleased with our start to the year, and we are excited about the growth opportunities achievable as we lease up our vacant and available capacity,” said Paul Szurek, CoreSite’s President and Chief Executive Officer. “CoreSite’s network and cloud-dense customer communities continue to evidence a differentiated value proposition for customers who increasingly rely on digital operations to advance their business, and we believe our priorities and operating objectives will continue to drive long-term value creation.”

Quarter Ended March 31, 2021

Overview

Financial
Statements

Operating
Portfolio

Development

Capital
Structure

Components
of NAV

Guidance

Appendix

3


Table of Contents

Quarter Ended March 31, 2021


Sales Activity

CoreSite achieved new and expansion sales of $7.0 million of annualized GAAP rent for the quarter, which included annualized GAAP rent of $3.6 million, $2.6 million, and $0.8 million from retail colocation, small scale, and large scale leases, respectively.

“Our sales results were primarily driven by retail colocation and small scale leasing through strong organic growth from existing customers and demand from new enterprises during the first quarter,” said Steve Smith, CoreSite’s Chief Revenue Officer. “We continue to pursue large scale and hyperscale leases supplementing our retail and small scale leasing volume throughout the remainder of 2021. We have the available capacity to provide the flexibility and scalability required by customers to execute their hybrid and multi-cloud architectures.”

In addition, on April 1st, CoreSite achieved an 89% leased percentage at LA3 Phase 1 within six months of construction completion as a result of signing a large scale lease for approximately $0.8 million of annualized GAAP rent immediately subsequent to quarter end. LA3 Phase 1 will become stabilized upon the expected commencement of the large scale lease in Q3 2021.

CoreSite had annualized GAAP backlog of $9.6 million, or $19.3 million on a cash basis, which is inclusive of the large scale lease signed at LA3 subsequent to quarter end.

Other Financial Results

CoreSite’s $157.6 million of operating revenues for the first quarter included $133.0 million of rental, power and related revenue, reflecting 6.8% year over year growth, $22.2 million of interconnection revenue, reflecting 10.3% year over year growth, and $2.5 million of office, light-industrial and other revenue. Net income was $24.9 million for the quarter, or $0.51 attributable to each common diluted share.

Development Activity

CoreSite continues to invest and develop new capacity as needed to meet market demand.

oLA3 Phase 2 comprised of 54,000 NRSF and 6 MWs is under construction and continues to be on track for its estimated completion in the fourth quarter of 2021.

CoreSite’s ongoing data center development and operational position includes –

othe ability to increase its occupied footprint of Tier 1, purpose-built data centers, both owned or leased, by approximately 2.0 million NRSF, or about 85.8%, including space unoccupied, under construction, pre-construction or held for development, and
oowning (versus leasing) 93.1% of its current and developable 4.3 million data center NRSF, supporting operational control, expansion and long-term expense management.

Balance Sheet and Liquidity

The Company’s balance sheet remains strong, with a ratio of net principal debt to fourth quarter annualized adjusted EBITDA of 5.1 times, or 4.9 times including GAAP backlog. As of the end of the first quarter, CoreSite had approximately $278.7 million of current liquidity, including $3.8 million of cash and $274.9 million of available capacity on its revolving credit facility.

2021 Guidance

The Company’s 2021 guidance, including operating revenues, adjusted EBITDA, depreciation and amortization and capital expenditures, along with guidance drivers and other information, can be found on page 21 of CoreSite’s Supplemental Information.

Quarter Ended March 31, 2021

Overview

Financial
Statements

Operating
Portfolio

Development

Capital
Structure

Components
of NAV

Guidance

Appendix

4


Table of Contents

Quarter Ended March 31, 2021


Conference Call Details

CoreSite will host its first quarter 2021 earnings call on Thursday, April 29, 2021, at 12:00 p.m. (Eastern Time). The call will be accessible by dialing 1-877-407-3982 (domestic) or 1-201-493-6780 (international).

A replay will be available after the call until May 6, 2021, and can be accessed dialing 1-844-512-2921 (domestic) or 1-412-317-6671 (international). The passcode for the replay is 13717856.

The quarterly conference call also will be offered as a simultaneous webcast, accessible by visiting CoreSite.com and clicking on the “Investors” link. An on-line replay will be available for a limited time immediately following the call.

Concurrently with issuing its financial results, the Company will post its first quarter 2021 Supplemental Information on its website at CoreSite.com, under the “Investors” link.

Upcoming Conferences and Events

CoreSite’s management will participate virtually in the RBC Capital Markets Data Center & Connectivity Conference on May 25th, Cowen’s 49th Annual Technology, Media & Telecom Conference on June 2nd, the Nareit REITweek 2021 Investor Conference on June 8-9th, and Credit Suisse’s 23rd Annual Communications Conference on June 15th.

About CoreSite

CoreSite Realty Corporation (NYSE:COR) delivers secure, reliable, high-uptime data center campuses with high-performance cloud access and interconnection solutions to a growing customer ecosystem across eight key North American markets. More than 1,375 of the world’s leading enterprises, network operators, cloud providers, and supporting service providers choose CoreSite to connect, protect and optimize their performance-sensitive data, applications and computing workloads. Our scalable, flexible solutions and 475+ dedicated employees consistently deliver unmatched data center options — all of which leads to a best-in-class customer experience and lasting relationships. For more information, visit www.CoreSite.com.

CoreSite Contact

Kate Ruppe

Investor Relations Manager

303-222-7369
InvestorRelations@CoreSite.com

Quarter Ended March 31, 2021

Overview

Financial
Statements

Operating
Portfolio

Development

Capital
Structure

Components
of NAV

Guidance

Appendix

5


Table of Contents

Quarter Ended March 31, 2021


Forward Looking Statements

This earnings release and accompanying supplemental information may contain forward-looking statements within the meaning of the federal securities laws. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. In some cases, you can identify forward-looking statements by the use of forward-looking terminology such as “believes,” “expects,” “may,” “will,” “should,” “seeks,” “approximately,” “intends,” “plans,” “pro forma,” “estimates” or “anticipates” or the negative of these words and phrases or similar words or phrases that are predictions of or indicate future events or trends and that do not relate solely to historical matters. Forward-looking statements involve known and unknown risks, uncertainties, assumptions and contingencies, many of which are beyond CoreSite’s control that may cause actual results to differ significantly from those expressed in any forward-looking statement. These risks include, without limitation: the geographic concentration of the Company’s data centers in certain markets and any adverse developments in local economic conditions or the level of supply of or demand for data center space in these markets; fluctuations in interest rates and increased operating costs; difficulties in identifying properties to acquire and completing acquisitions; significant industry competition, including indirect competition from cloud service providers; failure to obtain necessary outside financing; the ability to service existing debt; the failure to qualify or maintain its status as a REIT; financial market fluctuations; changes in real estate and zoning laws and increases in real property tax rates;  the effects on our business operations, demand for our services and general economic conditions resulting from the spread of the novel coronavirus (“COVID-19”) in our markets, as well as orders, directives and legislative action by local, state and federal governments in response to such spread of COVID-19; and other factors affecting the real estate industry generally. All forward-looking statements reflect the Company’s good faith beliefs, assumptions and expectations, but they are not guarantees of future performance. Furthermore, the Company disclaims any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, of new information, data or methods, future events or other changes. For a further discussion of these and other factors that could cause the Company’s future results to differ materially from any forward-looking statements, see the section entitled “Risk Factors” in its most recent annual report on Form 10-K, and other risks described in documents subsequently filed by the Company from time to time with the Securities and Exchange Commission.

Quarter Ended March 31, 2021

Overview

Financial
Statements

Operating
Portfolio

Development

Capital
Structure

Components
of NAV

Guidance

Appendix

6


Table of Contents

Company Profile


Low-latency, secure and reliable access to Amazon, Microsoft, Google, Alibaba Cloud, Oracle and IBM from eight key North American Markets.

Graphic

ONE DATA CENTER PROVIDER. EVERYTHING YOU NEED.

CONNECTIVITY TO NETWORKS AND CLOUDS

THE BEST CUSTOMER EXPERIENCE

Connecting to cloud and network providers within the same data center campus can save thousands of dollars a month in networking and data egress fees while reducing latency

•   Optionality to connect to 775+ cloud, IT and network service providers as business needs evolve

•   31,000+ interconnections

•   Multiple options for peering and cloud exchange, including the CoreSite Open Cloud ExchangeTM, and the Any2 Exchange for Internet Peering, the second largest peering exchange in the U.S.

•   The CoreSite Interconnect GatewaySM allows customers to rapidly optimize application performance with a 100% managed solution

•   CoreSite’s Inter-Site Connectivity allows SDN connectivity between its markets, enabling access to its national ecosystem

475+ team dedicated to ensuring optimal data center performance and meeting the needs of our 1,375+ customers at all times of day

•   Consistent customer satisfaction demonstrated by customer expansion and retention

•   Dedicated move-in and service representatives, and in-house 24/7 data center operations personnel

•   100% uptime Service Level Agreement with a minimum of six-nines portfolio uptime goal – achieved seven-nines of uptime for two consecutive years

•   Prepared to support and respond to our customers, employees, and communities during the COVID-19 pandemic

•   Direct access through our customer portal to provision new space, power, cross-connects, and monitor temperature, humidity, and power draw

HIGH GROWTH, HIGH-DENSITY SOLUTIONS

LOW LATENCY, EDGE MARKETS, GLOBAL REACH

Cloud connectivity is important, and so is the ability for a data center campus to grow as business evolves

•   The ability to cost-effectively scale from a single cabinet to a large-scale deployment

•   Data center campuses that connect our buildings via short-run dark fiber to a network/cloud dense campus ecosystem

•   Flexible and high-density solutions

The closer a business is to its end users, the easier it is to provide a high quality experience

•   25 operating data centers in eight major metros that provide access to 75% of US businesses within 5 milliseconds

•   National footprint with international cloud and data center partnerships for multi-market requirements

•   Access to subsea cables for international reach

Quarter Ended March 31, 2021

Overview

Financial
Statements

Operating
Portfolio

Development

Capital
Structure

Components
of NAV

Guidance

Appendix

7


Table of Contents

Summary of Financial Data


(in thousands, except per share, NRSF and MRR data)

For the period of

Growth %

Growth %

Summary of Results

Q1 2021

Q4 2020

Q1 2020

Q/Q

Y/Y

GAAP Financial Measures

Operating revenues

$

157,642

$

154,938

$

147,362

1.7

%

7.0

%

Net income

24,915

22,409

22,988

11.2

8.4

Net income attributable to common shares

21,868

19,658

17,848

11.2

22.5

Net income per share attributable to common shares - diluted

$

0.51

$

0.46

$

0.48

10.9

6.3

REIT Financial Measures(1)

Funds from operations (FFO) to shares and units

$

67,804

$

64,927

$

62,403

4.4

%

8.7

%

Adjusted funds from operations (AFFO)

60,489

61,694

60,110

(2.0)

0.6

EBITDAre

81,675

78,738

75,179

3.7

8.6

Adjusted EBITDA

86,071

82,771

78,661

4.0

9.4

FFO per common share and OP unit - diluted

$

1.40

$

1.34

$

1.29

4.5

8.5

Other Financial Ratios

EBITDAre Margin

51.8

%

50.8

%

51.0

%

100

bps

80

bps

Adjusted EBITDA Margin

54.6

%

53.4

%

53.4

%

120

bps

120

bps

As of

    

Q1 2021

    

Q4 2020

    

Q3 2020

    

Q2 2020

Q1 2020

    

Dividend Activity

Dividends declared per share and OP unit

$

1.23

$

1.23

$

1.22

$

1.22

$

1.22

TTM FFO payout ratio

91.1

%

92.7

93.1

93.9

95.2

TTM AFFO payout ratio

95.5

%

95.3

94.8

95.2

95.9

Operating Portfolio Statistics

Operating data center properties

25

25

24

24

23

Stabilized data center NRSF

2,502,591

2,502,591

2,516,411

2,516,411

2,482,660

Stabilized data center NRSF occupied

2,189,595

2,174,897

2,207,215

2,226,153

2,183,751

Stabilized data center % occupied

87.5

%

86.9

87.7

88.5

88.0

Turn-Key Data Center ("TKD") Same-Store Statistics

MRR per cabinet equivalent

$

1,508

$

1,478

$

1,474

$

1,465

$

1,468

TKD NRSF % occupied

84.7

%

83.9

83.0

83.0

81.6

Market Capitalization & Net Principal Debt

Total enterprise value

$

7,600,880

$

7,817,206

$

7,479,878

$

7,514,871

$

7,218,678

Total net principal debt outstanding

$

1,740,209

$

1,717,957

$

1,692,106

$

1,621,314

$

1,577,193

Net Principal Debt to:

Annualized adjusted EBITDA

5.1

x

5.2

x

5.2

x

5.0

x

5.0

x

Annualized adjusted EBITDA, including backlog(2)

4.9

x

5.1

x

4.9

x

4.8

x

4.7

x

Enterprise value

22.9

22.0

22.6

21.6

21.8

(1)See reconciliations of non-GAAP measures on page 11 and a discussion of the non-GAAP disclosures in the Appendix.
(2)Backlog is the annualized rent for data center leases that were signed, but have not yet commenced during the quarter. Backlog for the quarter ended March 31, 2021, was $9.6 million on a GAAP basis and $19.3 million on a cash basis, inclusive of a large scale lease signed at LA3 Phase 1 on April 1, 2021.

Quarter Ended March 31, 2021

Overview

Financial
Statements

Operating
Portfolio

Development

Capital
Structure

Components
of NAV

Guidance

Appendix

8


Table of Contents

Consolidated Balance Sheets


(in thousands, except per share data)

  

March 31,

  

December 31,

 

2021

2020

Assets:

Investments in real estate:

Land

$

109,400

$

104,734

Buildings and improvements

2,281,662

2,273,536

2,391,062

2,378,270

Less: Accumulated depreciation and amortization

(907,256)

(867,975)

Net investment in operating properties

1,483,806

1,510,295

Construction in progress

335,913

319,411

Net investments in real estate

1,819,719

1,829,706

Operating lease right-of-use assets, net

168,879

173,928

Cash and cash equivalents

3,791

5,543

Accounts and other receivables, net

22,102

20,849

Lease intangibles, net

2,061

2,507

Goodwill

40,646

40,646

Other assets, net

108,015

103,094

Total assets

$

2,165,213

$

2,176,273

Liabilities and equity:

Liabilities

Debt, net

$

1,736,972

$

1,715,911

Operating lease liabilities

184,775

189,404

Accounts payable and accrued expenses

79,185

79,140

Accrued dividends and distributions

62,861

63,878

Acquired below-market lease contracts, net

2,263

2,313

Unearned revenue, prepaid rent and other liabilities

50,340

53,149

Total liabilities

2,116,396

2,103,795

Stockholders' equity

Common stock, par value $0.01

424

422

Additional paid-in capital

559,777

555,595

Accumulated other comprehensive loss

(14,463)

(20,526)

Distributions in excess of net income

(502,894)

(471,910)

Total stockholders' equity

42,844

63,581

Noncontrolling interests

5,973

8,897

Total equity

48,817

72,478

Total liabilities and equity

$

2,165,213

$

2,176,273

Quarter Ended March 31, 2021

Overview

Financial
Statements

Operating
Portfolio

Development

Capital
Structure

Components
of NAV

Guidance

Appendix

9


Table of Contents

Consolidated Statements of Operations


(in thousands, except per share data)

Three Months Ended

March 31,

December 31,

March 31,

  

2021

2020

2020

  

Operating revenues:

 

  

Data center revenue:(1)

Rental, power, and related revenue

$

132,976

$

130,430

$

124,505

Interconnection revenue

22,160

21,947

20,085

Total data center revenue

155,136

152,377

144,590

Office, light-industrial and other revenue

2,506

2,561

2,772

Total operating revenues

157,642

154,938

147,362

Operating expenses:

Property operating and maintenance

42,632

43,649

40,183

Real estate taxes and insurance

6,735

6,218

6,190

Depreciation and amortization

44,628

44,386

40,991

Sales and marketing

5,862

5,844

6,144

General and administrative

11,517

10,302

11,267

Rent

9,221

10,187

8,399

Total operating expenses

120,595

120,586

113,174

Operating income

37,047

34,352

34,188

Interest expense

(12,123)

(11,933)

(11,183)

Income before income taxes

24,924

22,419

23,005

Income tax expense

(9)

(10)

(17)

Net income

24,915

22,409

22,988

Net income attributable to noncontrolling interests

3,047

2,751

5,140

Net income attributable to common shares

$

21,868

$

19,658

$

17,848

Net income per share attributable to common shares:

Basic

$

0.52

$

0.46

$

0.48

Diluted

$

0.51

$

0.46

$

0.48

Weighted average common shares outstanding:

Basic

42,378

42,330

37,336

Diluted

42,592

42,529

37,504

(1)Below is a breakout of our contractual data center rental, power, and tenant reimbursements and other revenue:

Three Months Ended

March 31,

December 31,

March 31,

2021

2020

2020

Rental revenue

$

85,207

$

83,891

$

80,886

Power revenue

44,360

43,374

41,278

Tenant reimbursement and other

3,409

3,165

2,341

Rental, power, and related revenue

$

132,976

$

130,430

$

124,505

Quarter Ended March 31, 2021

Overview

Financial
Statements

Operating
Portfolio

Development

Capital
Structure

Components
of NAV

Guidance

Appendix

10


Table of Contents

Reconciliations of Net Income to FFO, AFFO, EBITDAre and Adjusted EBITDA


(in thousands, except per share data)

Reconciliation of Net Income to FFO

Three Months Ended

  

March 31,

December 31,

March 31,

  

2021

2020

2020

Net income

$

24,915

$

22,409

$

22,988

Real estate depreciation and amortization

42,889

42,518

39,415

FFO available to common shareholders and OP unit holders

$

67,804

$

64,927

$

62,403

Weighted average common shares outstanding - diluted

42,592

42,529

37,504

Weighted average OP units outstanding - diluted

5,941

5,943

10,796

Total weighted average shares and units outstanding - diluted

48,533

48,472

48,300

FFO per common share and OP unit - diluted

$

1.40

$

1.34

$

1.29

Reconciliation of FFO to AFFO

Three Months Ended

  

March 31,

December 31,

March 31,

  

2021

2020

2020

FFO available to common shareholders and unit holders

$

67,804

$

64,927

$

62,403

Adjustments:

Amortization of deferred financing costs and hedge amortization

987

1,028

1,029

Non-cash compensation

4,393

4,033

3,482

Non-real estate depreciation

1,739

1,868

1,576

Straight-line rent adjustment

(1,792)

(1,243)

(419)

Amortization of above and below market leases

(37)

(37)

(34)

Recurring capital expenditures - Data Center

(4,169)

(2,457)

(1,418)

Recurring capital expenditures - Office and light-industrial

(2,221)

Tenant improvements

(2,770)

(1,506)

(966)

Capitalized leasing costs

(3,445)

(4,919)

(5,543)

AFFO available to common shareholders and OP unit holders

$

60,489

$

61,694

$

60,110

Reconciliation of Net Income to EBITDAre and Adjusted EBITDA

Three Months Ended

  

March 31,

December 31,

March 31,

  

2021

2020

2020

Net income

$

24,915

$

22,409

$

22,988

Adjustments:

Interest expense

12,123

11,933

11,183

Income taxes

9

10

17

Depreciation and amortization

44,628

44,386

40,991

EBITDAre

$

81,675

$

78,738

$

75,179

Non-cash compensation

4,393

4,033

3,482

Transaction costs / litigation

3

Adjusted EBITDA

$

86,071

$

82,771

$

78,661

For additional discussion of these non-GAAP measures, see the Appendix starting on page 22.

Quarter Ended March 31, 2021

Overview

Financial
Statements

Operating
Portfolio

Development

Capital
Structure

Components
of NAV

Guidance

Appendix

11


Table of Contents

Operating Portfolio & Top Customers


 

Data Center Operating Portfolio

 

Annualized

Stabilized

Pre-Stabilized

Total

Held for

 

Rent

Total

Percent

Total

Percent

Percent

NRSF Under

Development

Market

($000)(1)

  

NRSF

  

Occupied(2)

  

NRSF

  

Occupied(2)

  

NRSF

  

Occupied(2)

  

Construction

  

NRSF

  

Total NRSF

 

 

 

 

 

 

 

 

 

 

San Francisco Bay

$

107,079

888,108

86.7

52,201

76.2

940,309

86.2

240,000

1,180,309

Los Angeles (3)

92,128

563,943

91.1

67,614

69.1

631,557

88.7

54,388

64,740

750,685

Northern Virginia

58,803

516,036

87.6

51,233

27.7

567,269

82.2

809,742

1,377,011

New York

24,006

168,267

88.5

34,589

19.8

202,856

76.8

81,799

284,655

Chicago

17,180

178,407

87.7

54,798

0.8

233,205

67.3

112,368

345,573

Boston

14,953

122,730

77.2

19,961

9.3

142,691

67.7

110,985

253,676

Denver

5,754

34,924

81.0

34,924

81.0

34,924

Miami

1,775

30,176

81.7

30,176

81.7

13,154

43,330

Total Data Center Facilities

$

321,678

2,502,591

87.5

280,396

39.2

2,782,987

82.6

54,388

1,432,788

4,270,163

Office & Light-Industrial (4)

8,427

418,110

79.6

418,110

79.6

(49,799)

368,311

Total Portfolio

$

330,105

2,920,701

86.3

280,396

39.2

3,201,097

82.2

54,388

1,382,989

4,638,474

(1)On a gross basis, our total portfolio annualized rent was approximately $336.8 million as of March 31, 2021, which includes $6.7 million in operating expense reimbursements under modified gross and triple-net leases.

(2)Includes customer leases that have commenced as of March 31, 2021. If all leases signed during the current and prior periods had commenced, the percent occupied would have been as follows:

Percent Leased

    

Stabilized

    

Pre-Stabilized*

    

Total*

Total Data Center Facilities

 

89.3

%  

46.1

%  

84.9

%

Total Portfolio

 

88.7

%  

46.1

%  

84.9

%

* Inclusive of a large scale lease signed at LA3 Phase 1 on April 1, 2021

(3)Due to our decision to exit and vacate our leased data center space at LA4 and two computer rooms at LA1 by the end of 2021, we have excluded these leased spaces and the associated annualized rent from the reported Los Angeles market operating property portfolio.

(4)Included within our Reston Campus Expansion held for development space is 49,799 NRSF which is currently operating as office and light-industrial space.

10 Largest Customers (total portfolio, including data center and office and light-industrial “OLI”)

Weighted

Percentage

Percentage

Average

Number

Total

of Total

Annualized

of Total

Remaining

of

Occupied

Operating

Rent

Annualized

Lease Term in

CoreSite Vertical

Customer Industry

    

Locations

    

NRSF

    

NRSF(1)

    

($000)

    

Rent(2)

    

Months(3)

 

1

Cloud

Public Cloud

10

210,404

6.6

%

$

41,662

12.6

%

80

2

Enterprise

Digital Content

8

157,560

4.9

22,786

6.9

33

3

Cloud

Public Cloud

11

329,742

10.3

19,857

6.0

35

4

Cloud

Public Cloud

3

118,684

3.7

13,792

4.2

32

5

Network

Global Service Provider

9

44,147

1.4

9,388

2.8

17

6

Enterprise(4)

Travel / Hospitality

2

32,828

1.0

6,953

2.1

6

7

Cloud

Software as a Service

1

30,032

0.9

5,363

1.6

56

8

Network

US National Service Provider

14

39,784

1.2

5,067

1.5

29

9

Network

Cable Service Provider

16

22,327

0.7

4,614

1.4

38

10

Enterprise

SI & MSP

1

35,402

1.1

4,288

1.3

21

Total / Weighted Average

  

1,020,909

31.9

$

133,768

40.5

46

(1)Represents the customer’s total occupied square feet divided by the total operating NRSF in the portfolio as of March 31, 2021.
(2)Represents the customer’s total annualized rent divided by the total annualized rent in the portfolio as of March 31, 2021.
(3)Weighted average based on percentage of total annualized rent expiring calculated as of March 31, 2021.
(4)This customer has $5.1 million of annualized rent expiring at the end of Q3 2021 and $1.7 million of annualized rent expiring at the beginning of Q4 2021, which will not be renewed.

See the Appendix starting on page 22 for definitions

Quarter Ended March 31, 2021

Overview

Financial
Statements

Operating
Portfolio

Development

Capital
Structure

Components
of NAV

Guidance

Appendix

12


Table of Contents

Leasing Statistics


Data Center Leasing Activity

GAAP

GAAP

Cash

Leasing

Number

Annualized

Total

Annualized

Rental

Cash

GAAP

Activity

of

Rent

Leased

Rent per

Churn

Rent

Rent

  

Period

  

Leases(1)

  

($000)

  

NRSF

  

Leased NRSF

  

Rate

  

Growth

  

Growth

 

New / expansion leases commenced

Q1 2021

130

$

5,926

28,776

$

206

Q4 2020

147

20,397

109,154

187

Q3 2020

130

7,188

33,233

216

Q2 2020

121

7,925

45,271

175

Q1 2020

112

9,678

45,322

214