Press Release

CoreSite Reports Third Quarter 2019 Financial Results

October 31, 2019 at 7:08 AM EDT
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-- Delivered $14.4 Million of New and Expansion Sales for the Quarter --

-- Placed in Service 54,000 square feet for Quarter, and 151,000 Year To Date --

-- Pre-leased 74% of Phase 1 Development at LA3 --

DENVER--(BUSINESS WIRE)--Oct. 31, 2019-- CoreSite Realty Corporation (NYSE:COR) (“the Company”), a premier provider of secure, reliable, high-performance data center and interconnection solutions across the U.S., today announced financial results for the third quarter ended September 30, 2019.

Q3 Quarterly Highlights

  • Key Financial Results –
  • Grew operating revenues to $144.9 million, an increase of 4.1% year over year and 1.4% sequentially
  • Delivered net income of $0.47 per common diluted share, a decrease of $0.05 year over year and $0.06 sequentially
  • Generated FFO of $1.28 per diluted share and unit, an increase of $0.03 year over year and $0.01 sequentially
  • Lease Commencements
  • Commenced 130 new and expansion leases for 78,244 net rentable square feet (“NRSF”), representing $15.7 million of annualized GAAP rent, for an average rate of $200 per square foot
  • Lease Sales Activity
  • Signed 122 new and expansion leases for 73,144 NRSF and $14.4 million of annualized GAAP rent, for an average rate of $197 per square foot
  • Renewed 299 leases for 123,445 NRSF and $20.4 million of annualized GAAP rent, for an average rate of $165 per square foot, reflecting a decrease of 2.2% in cash rent, an increase of 4.2% in GAAP rent, and 3.1% churn

Q3 2019 Notable Events

  • Delivered SV8 Phase 1 into service with 100% occupancy –
  • Placed into service SV8 Phase 1 for nearly 54,000 NRSF, and commenced the customer lease
  • Construction of SV8 Phase 2 remains on track to be completed in late Q4 2019
  • Executed a Pre-Lease at new Los Angeles Data Center –
  • In September 2019, the Company executed a pre-lease for 74% of LA3 Phase 1
  • Construction is on track to deliver LA3 Phase 1 late Q3 2020

“We continue to execute on our 2019 building blocks for sustainable growth,” said Paul Szurek, CoreSite’s President and Chief Executive Officer. “We’re on track to deliver significant new capacity in 2019 and 2020, while creating a pipeline of sustainable and agile capacity additions for future years, thereby increasing our sales opportunities and the ability to grow our customer communities. We believe our ongoing capacity growth, new connectivity products, and superior customer experience, position us well to benefit from the secular tailwinds for data center space and demand for high-performance hybrid-cloud solutions.”

Sales Activity

CoreSite achieved new and expansion sales of $14.4 million of annualized GAAP rent for the quarter. This included $4.5 million of core retail colocation sales and $9.9 million of scale leasing. CoreSite achieved strong new logo sales and ongoing expansion with strategic customers in the third quarter.

“We believe we are well positioned to continue to compete for retail colocation and new logos with our connected campuses, rich ecosystems, and ability to serve the network edge for new and future applications,” said Steve Smith, CoreSite’s Chief Revenue Officer. “Enterprises are looking for colocation solutions offering direct interconnection to cloud and solution providers for their hybrid and multi-cloud needs to create a seamless service that addresses increased data volumes and end user preferences for very low latency. We continue to focus on winning and growing with these customers as we help solve their dynamic requirements and provide optionality for future needs.”

“We also delivered strong scale leasing this quarter, including a major pre-lease at LA3, and expect to continue to use our increased capacity to compete for scale opportunities with those customers who value and enrich our ecosystem,” said Smith.

Other Financial Results

CoreSite’s $144.9 million of operating revenues for the third quarter included $122.6 million of rental, power and related revenue, $19.1 million of interconnection revenue and $3.2 million of office, light-industrial and other revenue. Net income was $22.6 million for the third quarter, or $0.47 attributable to each common diluted share.

Development Activity

CoreSite continues to execute on its property development pipeline. After entering 2019 with leasable capacity at a lower level than historical norms, the Company will exit 2019 with leasable capacity and quickly developable incremental capacity at the higher levels experienced in previous years.

  • CoreSite’s ongoing data center development and operational position includes
  • the ability to increase its occupied footprint of land and buildings, both owned or leased, by about 2.1 million NRSF, or about 99.0%, including space unoccupied, under construction, pre-construction or held for development, and
  • owning (versus leasing) 92.4% of its current and developable 4.3 million data center NRSF, supporting operational control, expansion and long-term expense management
  • Completed Construction

    During the third quarter, CoreSite completed construction of 54,000 NRSF of its development at SV8 Phase 1 and commenced the customer lease. For the year to date, the Company has completed and placed into service nearly 151,000 NRSF in 2019.
  • Construction in Progress

    The Company continued to advance construction on its data center expansions at BO1, NY2 and SV8, as well as its new developments at CH2 and LA3. CoreSite successfully pre-leased 74% of Phase 1 of its new data center at LA3, a year in advance of its expected completion.

As of September 30, 2019, CoreSite had a total of approximately 269,000 NRSF of turn-key data center capacity under construction, with $128.9 million incurred to date of the $395.0 million of total estimated costs, as detailed below.

-- Delivered $14.4 Million of New and Expansion Sales for the Quarter --

-- Placed in Service 54,000 square feet for Quarter, and 151,000 Year To Date --

-- Pre-leased 74% of Phase 1 Development at LA3 --

DENVER--(BUSINESS WIRE)--Oct. 31, 2019-- CoreSite Realty Corporation (NYSE:COR) (“the Company”), a premier provider of secure, reliable, high-performance data center and interconnection solutions across the U.S., today announced financial results for the third quarter ended September 30, 2019.

Q3 Quarterly Highlights

  • Key Financial Results –
  • Grew operating revenues to $144.9 million, an increase of 4.1% year over year and 1.4% sequentially
  • Delivered net income of $0.47 per common diluted share, a decrease of $0.05 year over year and $0.06 sequentially
  • Generated FFO of $1.28 per diluted share and unit, an increase of $0.03 year over year and $0.01 sequentially
  • Lease Commencements
  • Commenced 130 new and expansion leases for 78,244 net rentable square feet (“NRSF”), representing $15.7 million of annualized GAAP rent, for an average rate of $200 per square foot
  • Lease Sales Activity
  • Signed 122 new and expansion leases for 73,144 NRSF and $14.4 million of annualized GAAP rent, for an average rate of $197 per square foot
  • Renewed 299 leases for 123,445 NRSF and $20.4 million of annualized GAAP rent, for an average rate of $165 per square foot, reflecting a decrease of 2.2% in cash rent, an increase of 4.2% in GAAP rent, and 3.1% churn

Q3 2019 Notable Events

  • Delivered SV8 Phase 1 into service with 100% occupancy –
  • Placed into service SV8 Phase 1 for nearly 54,000 NRSF, and commenced the customer lease
  • Construction of SV8 Phase 2 remains on track to be completed in late Q4 2019
  • Executed a Pre-Lease at new Los Angeles Data Center –
  • In September 2019, the Company executed a pre-lease for 74% of LA3 Phase 1
  • Construction is on track to deliver LA3 Phase 1 late Q3 2020

“We continue to execute on our 2019 building blocks for sustainable growth,” said Paul Szurek, CoreSite’s President and Chief Executive Officer. “We’re on track to deliver significant new capacity in 2019 and 2020, while creating a pipeline of sustainable and agile capacity additions for future years, thereby increasing our sales opportunities and the ability to grow our customer communities. We believe our ongoing capacity growth, new connectivity products, and superior customer experience, position us well to benefit from the secular tailwinds for data center space and demand for high-performance hybrid-cloud solutions.”

Sales Activity

CoreSite achieved new and expansion sales of $14.4 million of annualized GAAP rent for the quarter. This included $4.5 million of core retail colocation sales and $9.9 million of scale leasing. CoreSite achieved strong new logo sales and ongoing expansion with strategic customers in the third quarter.

“We believe we are well positioned to continue to compete for retail colocation and new logos with our connected campuses, rich ecosystems, and ability to serve the network edge for new and future applications,” said Steve Smith, CoreSite’s Chief Revenue Officer. “Enterprises are looking for colocation solutions offering direct interconnection to cloud and solution providers for their hybrid and multi-cloud needs to create a seamless service that addresses increased data volumes and end user preferences for very low latency. We continue to focus on winning and growing with these customers as we help solve their dynamic requirements and provide optionality for future needs.”

“We also delivered strong scale leasing this quarter, including a major pre-lease at LA3, and expect to continue to use our increased capacity to compete for scale opportunities with those customers who value and enrich our ecosystem,” said Smith.

Other Financial Results

CoreSite’s $144.9 million of operating revenues for the third quarter included $122.6 million of rental, power and related revenue, $19.1 million of interconnection revenue and $3.2 million of office, light-industrial and other revenue. Net income was $22.6 million for the third quarter, or $0.47 attributable to each common diluted share.

Development Activity

CoreSite continues to execute on its property development pipeline. After entering 2019 with leasable capacity at a lower level than historical norms, the Company will exit 2019 with leasable capacity and quickly developable incremental capacity at the higher levels experienced in previous years.

  • CoreSite’s ongoing data center development and operational position includes
  • the ability to increase its occupied footprint of land and buildings, both owned or leased, by about 2.1 million NRSF, or about 99.0%, including space unoccupied, under construction, pre-construction or held for development, and
  • owning (versus leasing) 92.4% of its current and developable 4.3 million data center NRSF, supporting operational control, expansion and long-term expense management
  • Completed Construction

    During the third quarter, CoreSite completed construction of 54,000 NRSF of its development at SV8 Phase 1 and commenced the customer lease. For the year to date, the Company has completed and placed into service nearly 151,000 NRSF in 2019.
  • Construction in Progress

    The Company continued to advance construction on its data center expansions at BO1, NY2 and SV8, as well as its new developments at CH2 and LA3. CoreSite successfully pre-leased 74% of Phase 1 of its new data center at LA3, a year in advance of its expected completion.

As of September 30, 2019, CoreSite had a total of approximately 269,000 NRSF of turn-key data center capacity under construction, with $128.9 million incurred to date of the $395.0 million of total estimated costs, as detailed below.

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