DENVER--(BUSINESS WIRE)--Oct. 31, 2013-- CoreSite Realty Corporation (NYSE:COR), a leading provider of network-dense, cloud-enabled data center solutions, today announced financial results for the third quarter ended September 30, 2013.
Tom Ray, CoreSite’s Chief Executive Officer, commented, “Our third-quarter results reflect continued execution and focus upon our business plan. We executed 106 new and expansion leases in the quarter including agreements with 21 new customers, 67% of which were in our network and cloud verticals, and we executed a record 44 leases signed with customers deploying in more than one location.” Mr. Ray continued, “Our development activities are progressing and we look forward to delivering our build-to-suit at SV5 as well as our first computer room at NY2 toward the end of the fourth quarter. Furthermore, we expect our additional development project at LA2 to deliver in the first quarter of 2014 and our VA2 project in Northern Virginia to deliver at the end of the second quarter in 2014. We remain focused upon and optimistic regarding executing upon our strategy of differentiating CoreSite as a leading provider of performance-sensitive colocation products and services, enhanced by a premium customer experience.”
CoreSite reported FFO attributable to shares and units of $21.9 million for the three months ended September 30, 2013, a 17.3% increase year-over-year and an increase of 3.6% quarter-over-quarter. On a per diluted share and unit basis, FFO increased 17.5% to $0.47 for the three months ended September 30, 2013, as compared to $0.40 per diluted share and unit for the three months ended September 30, 2012. Total operating revenue for the three months ended September 30, 2013, was $60.6 million, a 12.8% increase year over year. Revenue growth in the third quarter was diluted by 1.1% due to our customer at SV3 decreasing their metered power draw as they continue to transition certain applications out of that facility. CoreSite reported net income attributable to common shares of $2.9 million, or $0.14 per diluted share.
CoreSite executed 106 new and expansion data center leases representing $4.0 million of annualized GAAP rent during the third quarter, comprised of 23,294 NRSF at a weighted average GAAP rate of $170 per NRSF.
CoreSite’s renewal leases signed in the third quarter totaled $4.6 million in annualized GAAP rent, comprised of 29,567 NRSF at a weighted average GAAP rate of $155 per NRSF, reflecting a 6.6% increase in rent on a cash basis and a 10.7% increase on a GAAP basis. The third-quarter rental churn rate was 2.7%.
CoreSite’s third-quarter data center lease commencements totaled 37,243 NRSF at a weighted average GAAP rental rate of $180 per NRSF, which represents $6.7 million of annualized GAAP rent.
CoreSite had 249,961 NRSF of data center space under construction at four key locations as of September 30, 2013. The projects under construction include new data centers at SV5 (San Francisco Bay Area), VA2 (Northern Virginia), NY2 (New York market) and additional inventory at LA2 (Los Angeles). As of September 30, 2013, CoreSite had incurred $111.5 million of the estimated $199.6 million required to complete these projects.
Balance Sheet and Liquidity
As of September 30, 2013, CoreSite had $166.6 million of total long-term debt equal to 1.5x annualized adjusted EBITDA and $281.6 million of long-term debt and preferred stock equal to 2.6x annualized adjusted EBITDA.
At quarter end, CoreSite had $289.3 million of total liquidity, consisting primarily of available capacity under its credit facility.
On August 30, 2013, CoreSite announced a dividend of $0.27 per share of common stock and common stock equivalents for the third quarter of 2013. The dividend was paid on October 15, 2013, to shareholders of record on September 30, 2013.
CoreSite also announced on August 30, 2013, a dividend of $0.4531 per share of Series A preferred stock for the period July 15, 2013, to October 14, 2013. The preferred dividend was paid on October 15, 2013, to shareholders of record on September 30, 2013.
CoreSite is tightening its FFO per share and OP unit guidance and now expects FFO per share in the range of $1.80 to $1.84, compared to the previous range of $1.76 to $1.84.
This outlook is predicated on current economic conditions, internal assumptions about CoreSite’s customer base, and the supply and demand dynamics of the markets in which CoreSite operates. The guidance does not include the impact of any future financing, investment or disposition activities.
Upcoming Conferences and Events
CoreSite will participate in NAREIT’s REITWorld conference from November 13 through November 14 at the San Francisco Marriott Marquis in San Francisco, CA.
Conference Call Details
CoreSite will host a conference call on October 31, 2013, at 12:00 p.m., Eastern time (10:00 a.m., Mountain time), to discuss its financial results, current business trends and market conditions.
The call can be accessed live over the phone by dialing 877-407-3982 for domestic callers or 201-493-6780 for international callers. A replay will be available shortly after the call and can be accessed by dialing 877-870-5176 for domestic callers or 858-384-5517 for international callers. The passcode for the replay is 10000326. The replay will be available until November 7, 2013.
Interested parties may also listen to a simultaneous webcast of the conference call by logging on to CoreSite’s website at www.CoreSite.com and clicking on the “Investors” tab. The on-line replay will be available for a limited time beginning immediately following the call.
CoreSite Realty Corporation (NYSE:COR) propels customer growth and long-term competitive advantage by connecting Internet, private networking, mobility, and cloud communities within and across its fourteen high-performance data center campuses and through the CoreSite Mesh. More than 750 of the world's leading carriers and mobile operators, content and cloud providers, media and entertainment companies, and global enterprises choose CoreSite to run their performance-sensitive applications and to connect and do business with each other. With direct access to more than 275 carriers and ISPs, North America inter-site connectivity and the nation's first Open Cloud Exchange that provides access to the "most lit" buildings and cloud "on-ramps," CoreSite provides easy, efficient and valuable gateways to global business opportunities. For more information, visit www.CoreSite.com.
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 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; the company’s failure to obtain necessary outside financing; the company’s 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; 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 the company’s 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.