DENVER--(BUSINESS WIRE)--Oct. 27, 2016-- CoreSite Realty Corporation (NYSE:COR), 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, 2016.

Quarterly and Subsequent Highlights

• Reported third-quarter total operating revenues of $101.3 million, representing a 17.2% increase year over year
• Reported third-quarter net income per diluted share of $0.36, representing 38.5% growth year over year
• Reported third-quarter funds from operations (“FFO”) of $0.90 per diluted share and unit, representing 21.6% growth year over year
• Executed 162 new and expansion data center leases comprising 59,991 net rentable square feet (NRSF), representing $11.2 million of annualized GAAP rent at an average rate of $187 per square foot
• Commenced 50,455 net rentable square feet of new and expansion leases representing $7.5 million of annualized GAAP rent at an average rate of $148 per square foot
• Realized rent growth on signed renewals of 4.0% on a cash basis and 6.8% on a GAAP basis and recorded rental churn of 2.2%
• On October 12, 2016, CoreSite announced the opening of SV7 on its Santa Clara campus, with 62% of the 230,000 NRSF of turn-key data center capacity leased

Paul Szurek, CoreSite’s Chief Executive Officer, commented, “We delivered another quarter of solid financial and operational performance in the third quarter, highlighted by strong earnings growth and leasing momentum. Our third quarter volume of new and expansion leasing for deployments of 5,000 net rentable square feet or less set a company record, as the demand for performance-sensitive retail colocation solutions remains robust.” Mr. Szurek continued, “Subsequent to the end of the third quarter, we opened SV7, our 230,000 net rentable square foot turn-key data center building in Santa Clara, which was 62% leased upon opening of the facility, another record for CoreSite. As an organization, we continue to successfully execute on our business plan in terms of leasing effectiveness, development, and increasing the value of our network dense, cloud-enabled platform of assets by enhancing and diversifying our customer base.”

Financial Results

CoreSite reported net income attributable to common shares of $12.2 million, or $0.36 per diluted share, for the three months ended September 30, 2016, compared to $6.9 million, or $0.26 per diluted share, for the three months ended September 30, 2015, an increase of 38.5% on a per share basis. On a sequential-quarter basis, net income attributable to common shares decreased 2.7%.

CoreSite reported FFO per diluted share and unit of $0.90 for the three months ended September 30, 2016, an increase of 21.6% compared to $0.74 per diluted share and unit for the three months ended September 30, 2015. On a sequential-quarter basis, FFO per diluted share and unit increased 1.1%.

Total operating revenues for the three months ended September 30, 2016, were $101.3 million, a 17.2% increase year over year and an increase of 5.4% on a sequential-quarter basis.

Sales Activity

CoreSite executed 162 new and expansion data center leases representing $11.2 million of annualized GAAP rent during the third quarter, comprised of 59,991 NRSF at a weighted-average GAAP rental rate of $187 per NRSF.

CoreSite’s third-quarter data center lease commencements totaled 50,455 NRSF at a weighted average GAAP rental rate of $148 per NRSF, which represents $7.5 million of annualized GAAP rent.

CoreSite’s renewal leases signed in the third quarter totaled $10.9 million in annualized GAAP rent, comprised of 76,735 NRSF at a weighted-average GAAP rental rate of $142 per NRSF, reflecting a 4.0% increase in rent on a cash basis and a 6.8% increase on a GAAP basis. The third-quarter rental churn rate was 2.2%, which included 160 basis points of churn related to a customer move-out at CoreSite’s VA1 data center.

Development Activity

Santa Clara – During the third quarter, CoreSite had 230,000 square feet of turn-key data center capacity under construction at SV7. As of September 30, 2016, CoreSite had incurred $208.2 million of the estimated $211.0 million required to complete this development. On October 12, 2016, CoreSite announced the opening of SV7, with 62% of the 230,000 net rentable square feet of turn-key data center capacity leased.

Denver– During the third quarter, CoreSite had 8,276 square feet of turn-key data center capacity under construction at DE1. As of September 30, 2016, CoreSite had incurred $2.0 million of the estimated $12.5 million required to complete this expansion and expects to substantially complete construction in the second quarter of 2017.

Los Angeles – During the third quarter, CoreSite had 4,726 square feet of turn-key data center capacity under construction at LA2, which is 100% pre-leased. As of September 30, 2016, CoreSite had incurred $0.4 million of the estimated $2.0 million required to complete this expansion and expects to substantially construction in the fourth quarter of 2016.

Balance Sheet and Liquidity

As of September 30, 2016, CoreSite had net principal debt of $588.5 million, correlating to 2.8 times third-quarter annualized adjusted EBITDA, and net principal debt and preferred stock outstanding of $703.5 million, correlating to 3.4 times third-quarter annualized adjusted EBITDA.

At quarter end, CoreSite had $6.3 million of cash available on its balance sheet and $250.8 million of borrowing capacity available under its revolving credit facility.

Dividend

On September 2, 2016, CoreSite announced a dividend of $0.53 per share of common stock and common stock equivalents for the third quarter of 2016. The dividend was paid on October 17, 2016, to shareholders of record on September 30, 2016.

CoreSite also announced on September 2, 2016, a dividend of $0.4531 per share of Series A preferred stock for the period July 15, 2016, to October 16, 2016. The preferred dividend was paid on October 17, 2016, to shareholders of record on September 30, 2016.

2016 Guidance

CoreSite is increasing its 2016 guidance for net income attributable to common shares to a range of $1.46 to $1.50 from the previous range of $1.41 to $1.49. In addition, CoreSite is increasing its 2016 guidance for FFO per diluted share and unit to a range of $3.61 to $3.65 from the previous range of $3.56 to $3.64, with the difference between FFO and net income being real estate depreciation and amortization.

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, beyond what has already been disclosed.

Upcoming Conferences and Events

CoreSite will participate in the RBC Technology, Internet, Media & Telecommunications Conference on November 9-10 at the Westin Times Square in New York City and NAREIT’s REITWorld conference on November 15-17 at the JW Marriott Phoenix Desert Ridge Resort & Spa in Phoenix, Arizona.

Conference Call Details

CoreSite will host a conference call on October 27, 2016, 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 844-512-2921 for domestic callers or 412-317-6671 for international callers. The passcode for the replay is 13646351. The replay will be available until November 10, 2016.

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” link. The on-line replay will be available for a limited time beginning immediately following the call.

About CoreSite

CoreSite Realty Corporation (NYSE:COR) delivers secure, reliable, high-performance data center and interconnection solutions to a growing customer ecosystem across eight key North American markets. More than 1,000 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 400+ 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.

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.

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