EX-99.2 3 cor-20211028xex99d2.htm EX-99.2

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 September 30, 2021

Overview

Financial
Statements

Operating
Portfolio

Development

Capital
Structure

Components
of NAV

Guidance

Appendix

Table of Contents

CoreSite Reports Third Quarter 2021 Financial Results

– Delivered Strong Q3 Financial Results, Including 6.4% Revenue Growth Year Over Year –

DENVER, CO – October 28, 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 the quarter ended September 30, 2021.

Q3 2021 Quarterly Highlights

o	Key Financial Results –

o

Grew operating revenues to $163.9 million, an increase of 6.4% year over year and 1.1% sequentially

o

Delivered net income of $0.50 per common diluted share, consistent year over year and a decrease of $0.09 sequentially

o

Grew adjusted EBITDA to $85.7 million, an increase of 5.2% year over year and a decrease of 2.0% sequentially

o

Generated FFO of $1.39 per diluted share and unit, an increase of $0.06, or 4.5% year over year, and a decrease of $0.03, or 2.1% sequentially

o

Paid a dividend of $1.27 per share for the third quarter on October 15^th, consistent with the prior quarter

o	Lease Commencements –

o

Commenced 122 new and expansion leases for 29,308 net rentable square feet (“NRSF”), representing $7.1 million of annualized GAAP rent, for an average rate of $242 per NRSF

o

LA3 Phase 1 was 93% leased and moved into the stabilized data center portfolio less than 12 months after being placed into service

o	Leasing Activity –

o

Signed 122 new and expansion leases for $7.2 million of annualized GAAP rent during the third quarter, and signed a large scale lease for $1.7 million of annualized GAAP rent at SV7 on October 7^th, representing total leasing activity of $8.9 million of annualized GAAP rent

o

This $8.9 million of annualized GAAP rent reflects 62,098 NRSF for an average rate of $143 per NRSF and includes leases signed at SV7 for $2.9 million of annualized GAAP rent

o

Renewed 296 leases for 118,887 NRSF and $18.7 million of annualized GAAP rent, for an average rate of $157 per NRSF

o

Renewed leases reflected an increase of 2.0% in cash rent and 5.7% in GAAP rent, and we reported churn of 2.5%

“Demand trends continue to be positive for low-latency, high-performance, hybrid-cloud IT solutions across our markets,” said Paul Szurek, CoreSite’s President and Chief Executive Officer. “Our excellent team continues to build on and strengthen the diverse customer ecosystems in each of our eight markets and our connectivity products to facilitate digital transformation. Our purpose-built, power efficient and scalable data center campuses enable the interoperability required for multi and hybrid-cloud solutions the current and future needs of enterprises, networks and cloud providers.”

Quarter Ended September 30, 2021

Overview

Financial
Statements

Operating
Portfolio

Development

Capital
Structure

Components
of NAV

Guidance

Appendix

Table of Contents

Quarter Ended September 30, 2021

Sales Activity

CoreSite signed new and expansion leases of $7.2 million in annualized GAAP rent during the third quarter, and signed a large scale lease for $1.7 million of annualized GAAP rent at SV7 on October 7^th, representing total leasing activity of $8.9 million of annualized GAAP rent.

“We are encouraged by our continuing strong attraction of retail and small scale leases, which are fundamental to our go-to-market strategy,” said Steve Smith, CoreSite’s Chief Revenue Officer. “We are focused on continual generation of profitable organic growth, attracting high-quality new logos, and creating incremental value to our customers and shareholders through the lease-up of our available capacity within our portfolio.”

Including the $1.7 million of annualized GAAP rent for the scale lease signed on October 7^th, CoreSite had annualized GAAP backlog of $9.9 million, or $17.2 million on a cash basis, for leases signed but not yet commenced. The difference between GAAP and cash backlog is primarily driven by a handful of scale leases with power ramps during the early portion of their lease terms.

Other Financial Results

CoreSite’s $163.9 million of operating revenues for the third quarter, included $138.1 million of rental, power and related revenue, reflecting 6.0% year over year growth, $23.0 million of interconnection revenue, reflecting 8.7% year over year growth, and $2.8 million of office, light-industrial and other revenue. Net income was $24.1 million for the quarter, or $0.50 attributable to each common diluted share.

Development Activity

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

o

The LA3 Phase 2 development project, comprised of 54,000 NRSF and 6 megawatts (“MW”), was completed in October. As of September 30, 2021, LA3 Phase 2 was approximately 8% leased.

o

NY2 Phase 4A, comprised of 35,000 NRSF and 4 MWs, is under construction and is on track for its estimated completion in the first quarter of 2022.

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

o

the ability to increase its occupied footprint of purpose-built data centers, both owned and leased, by approximately 2.0 million NRSF, or about 84.0%, including space unoccupied, under construction, pre-construction design and permitting or held for development, and

o

owning (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 reflects a ratio of net principal debt to second quarter annualized adjusted EBITDA of 5.2 times, or 5.1 times including GAAP backlog. As of the end of the third quarter, CoreSite had approximately $235.4 million of current liquidity, including $3.4 million of cash and $231.9 million of available capacity on its revolving credit facility.

Updated 2021 Guidance

CoreSite updated its 2021 guidance related to total capital expenditures to its new guidance range of $140 million to $150 million from its previous range of $185 million to $225 million. CoreSite’s full 2021 guidance can be found in the Company’s third quarter 2021 Supplemental Earnings Information on page 21.

Quarter Ended September 30, 2021

Overview

Financial
Statements

Operating
Portfolio

Development

Capital
Structure

Components
of NAV

Guidance

Appendix

Table of Contents

Quarter Ended September 30, 2021

Conference Call Details

CoreSite will host its third quarter 2021 earnings call on Thursday, October 28, 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 November 4, 2021, and can be accessed dialing 1-844-512-2921 (domestic) or 1-412-317-6671 (international). The passcode for the replay is 13723625.

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 third quarter 2021 Supplemental Information on its website at CoreSite.com, under the “Investors” link.

Upcoming Conferences and Events

CoreSite’s management will participate in the Nareit REITworld Virtual Conference on November 9^th.

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 1,370 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 480+ 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
[email protected]

Quarter Ended September 30, 2021

Overview

Financial
Statements

Operating
Portfolio

Development

Capital
Structure

Components
of NAV

Guidance

Appendix

Table of Contents

Quarter Ended September 30, 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 September 30, 2021

Overview

Financial
Statements

Operating
Portfolio

Development

Capital
Structure

Components
of NAV

Guidance

Appendix

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.


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 • 32,000+ interconnections • Multiple options for peering, cloud exchange, and network management including the CoreSite Open Cloud Exchange^TM, and the Any2 Exchange for Internet Peering, the second largest peering exchange in the U.S. • The CoreSite Interconnect Gateway^SMallows 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		480+ team dedicated to ensuring optimal data center performance and meeting the needs of our 1,370+ 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 • 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, and cross-connects, and to 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 September 30, 2021

Overview

Financial
Statements

Operating
Portfolio

Development

Capital
Structure

Components
of NAV

Guidance

Appendix

Table of Contents

Summary of Financial Data

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


	For the period of									Growth %		Growth %								Growth %
Summary of Results	Q3 2021			Q2 2021			Q3 2020			Q/Q		Y/Y		YTD 2021			YTD 2020			Y/Y
GAAP Financial Measures
Operating revenues	$	163,858		$	162,124		$	153,981		1.1	%	6.4	%	$	483,624		$	451,886		7.0	%
Net income		24,118			28,475			24,132		(15.3)		(0.1)			77,508			72,208		7.3
Net income attributable to common shares		21,779			25,249			21,132		(13.7)		3.1			68,896			59,651		15.5
Net income per share attributable to common shares - diluted	$	0.50		$	0.59		$	0.50		(15.3)		-		$	1.60		$	1.49		7.4

REIT Financial Measures⁽¹⁾
Funds from operations (FFO) to shares and units	$	67,467		$	72,111		$	64,268		(6.4)	%	5.0	%	$	207,382		$	191,921		8.1	%
Funds from operations (FFO) to shares and units, as adjusted⁽²⁾		67,467			69,013			64,268		(2.2)		5.0			204,284			191,921		6.4
Adjusted funds from operations (AFFO)		64,028			64,624			62,580		(0.9)		2.3			189,141			187,981		0.6
EBITDAre		81,089			85,828			77,285		(5.5)		4.9			248,592			229,936		8.1
Adjusted EBITDA		85,652			87,410			81,441		(2.0)		5.2			259,133			241,746		7.2
FFO per common share and OP unit - diluted	$	1.39		$	1.48		$	1.33		(6.1)		4.5		$	4.27		$	3.97		7.6
FFO per common share and OP unit - diluted, as adjusted⁽²⁾	$	1.39		$	1.42		$	1.33		(2.1)		4.5		$	4.20		$	3.97		5.8

Other Financial Ratios
EBITDAre Margin		49.5	%		52.9	%		50.2	%	(340)	bps	(70)	bps		51.4	%		50.9	%	50	bps
Adjusted EBITDA Margin		52.3	%		53.9	%		52.9	%	(160)	bps	(60)	bps		53.6	%		53.5	%	10	bps

(1)

See reconciliations of non-GAAP measures on page 11 and a discussion of the non-GAAP disclosures in the Appendix.

(2)

FFO available to shares and units, as adjusted, excludes a one-time benefit of $3.1 million, or $0.06 per share and unit, as a result of the release of a tax liability during the second quarter of 2021 that is no longer expected to be incurred.


	As of
	Q3 2021			Q2 2021			Q1 2021			Q4 2020			Q3 2020
Dividend Activity
Dividends declared per share and OP unit	$	1.27		$	1.27		$	1.23		$	1.23		$	1.22
TTM FFO payout ratio		89.7	%		89.8	%		91.1	%		92.7	%		93.1	%
TTM AFFO payout ratio		97.4	%		96.9	%		95.5	%		95.3	%		94.8	%

Operating Portfolio Statistics
Operating data center properties		25			25			25			25			24
Stabilized data center NRSF		2,673,639			2,623,263			2,502,591			2,502,591			2,516,411
Stabilized data center NRSF occupied		2,304,677			2,290,109			2,189,595			2,174,897			2,207,215
Stabilized data center % occupied		86.2	%		87.3	%		87.5	%		86.9	%		87.7	%

Turn-Key Data Center ("TKD") Same-Store Statistics
MRR per cabinet equivalent	$	1,548		$	1,526		$	1,508		$	1,478		$	1,474
TKD NRSF % occupied		82.5	%		83.9	%		82.5	%		81.8	%		82.4	%

Market Capitalization & Net Principal Debt
Total enterprise value	$	8,560,488		$	8,339,401		$	7,600,880		$	7,817,206		$	7,479,878
Total net principal debt outstanding	$	1,783,594		$	1,754,634		$	1,740,209		$	1,717,957		$	1,692,106

Net Principal Debt to:
Annualized adjusted EBITDA		5.2	x		5.0	x		5.1	x		5.2	x		5.2	x
Annualized adjusted EBITDA, including backlog⁽¹⁾		5.1	x		4.9	x		4.9	x		5.1	x		4.9	x
Enterprise value		20.8	%		21.0	%		22.9	%		22.0	%		22.6	%

(1)

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 September 30, 2021, was $9.9 million on a GAAP basis and $17.2 million on a cash basis, inclusive of a large scale lease signed at SV7 on October 7, 2021.

Quarter Ended September 30, 2021

Overview

Financial
Statements

Operating
Portfolio

Development

Capital
Structure

Components
of NAV

Guidance

Appendix

Table of Contents

Consolidated Balance Sheets

(in thousands, except per share data)


	September 30,		December 31,
	2021		2020
Assets:
Investments in real estate:
Land	$	109,400	$	104,734
Buildings and improvements		2,315,125		2,273,536
		2,424,525		2,378,270
Less: Accumulated depreciation and amortization		(986,095)		(867,975)
Net investment in operating properties		1,438,430		1,510,295
Construction in progress		375,168		319,411
Net investments in real estate		1,813,598		1,829,706
Operating lease right-of-use assets, net		172,439		173,928
Cash and cash equivalents		3,406		5,543
Accounts and other receivables, net		26,825		20,849
Lease intangibles, net		1,159		2,507
Goodwill		40,646		40,646
Other assets, net		108,922		103,094
Total assets	$	2,166,995	$	2,176,273

Liabilities and equity:
Liabilities
Debt, net	$	1,781,039	$	1,715,911
Operating lease liabilities		189,581		189,404
Accounts payable and accrued expenses		89,902		79,140
Accrued dividends and distributions		65,772		63,878
Acquired below-market lease contracts, net		2,164		2,313
Unearned revenue, prepaid rent and other liabilities		48,342		53,149
Total liabilities		2,176,800		2,103,795

Stockholders' equity (deficit)
Common stock, par value $0.01		436		422
Additional paid-in capital		570,746		555,595
Accumulated other comprehensive loss		(12,261)		(20,526)
Distributions in excess of net income		(567,771)		(471,910)
Total stockholders' equity (deficit)		(8,850)		63,581
Noncontrolling interests		(955)		8,897
Total equity (deficit)		(9,805)		72,478
Total liabilities and equity	$	2,166,995	$	2,176,273

Quarter Ended September 30, 2021

Overview

Financial
Statements

Operating
Portfolio

Development

Capital
Structure

Components
of NAV

Guidance

Appendix

Table of Contents

Consolidated Statements of Operations

(in thousands, except per share data)


	Three Months Ended						Nine Months Ended
	September 30,		June 30,		September 30,		September 30,		September 30,
	2021		2021		2020		2021		2020
Operating revenues:
Data center revenue:⁽¹⁾
Rental, power, and related revenue	$	138,095	$	136,793	$	130,300	$	407,864	$	381,913
Interconnection revenue		22,994		22,606		21,144		67,760		62,126
Total data center revenue		161,089		159,399		151,444		475,624		444,039
Office, light-industrial and other revenue		2,769		2,725		2,537		8,000		7,847
Total operating revenues		163,858		162,124		153,981		483,624		451,886

Operating expenses:
Property operating and maintenance		49,940		45,964		44,986		138,536		126,206
Real estate taxes and insurance		5,184		7,006		5,989		18,925		17,778
Depreciation and amortization		45,072		45,367		41,759		135,067		124,529
Sales and marketing		6,186		5,804		5,901		17,852		17,882
General and administrative		12,167		11,781		10,854		35,465		33,724
Rent		9,292		8,839		8,966		27,352		26,360
Total operating expenses		127,841		124,761		118,455		373,197		346,479
Operating income		36,017		37,363		35,526		110,427		105,407
Other income		—		3,098		—		3,098		—
Interest expense		(11,894)		(11,982)		(11,384)		(35,999)		(33,153)
Income before income taxes		24,123		28,479		24,142		77,526		72,254
Income tax expense		(5)		(4)		(10)		(18)		(46)
Net income		24,118		28,475		24,132		77,508		72,208
Net income attributable to noncontrolling interests		2,339		3,226		3,000		8,612		12,557
Net income attributable to common shares	$	21,779	$	25,249	$	21,132	$	68,896	$	59,651

Net income per share attributable to common shares:
Basic	$	0.50	$	0.59	$	0.50	$	1.60	$	1.50
Diluted	$	0.50	$	0.59	$	0.50	$	1.60	$	1.49

Weighted average common shares outstanding:
Basic		43,712		42,786		42,235		42,963		39,823
Diluted		43,907		42,939		42,404		43,166		39,996

(1)

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


	Three Months Ended						Nine Months Ended
	September 30,		June 30,		September 30,		September 30,		September 30,
	2021		2021		2020		2021		2020
Rental revenue	$	87,596	$	86,960	$	82,943	$	259,763	$	245,441
Power revenue		48,678		47,014		43,112		140,052		126,292
Tenant reimbursement and other		1,821		2,819		4,245		8,049		10,180
Rental, power, and related revenue	$	138,095	$	136,793	$	130,300	$	407,864	$	381,913

Quarter Ended September 30, 2021

Overview

Financial
Statements

Operating
Portfolio

Development

Capital
Structure

Components
of NAV

Guidance

Appendix

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						Nine Months Ended
	September 30,		June 30		September 30,		September 30,		September 30,
	2021		2021		2020		2021		2020
Net income	$	24,118	$	28,475	$	24,132	$	77,508	$	72,208
Real estate depreciation and amortization		43,349		43,636		40,136		129,874		119,713
FFO available to common shareholders and OP unit holders	$	67,467	$	72,111	$	64,268	$	207,382	$	191,921
Other income adjustment⁽¹⁾		—		(3,098)		—		(3,098)		—
FFO available to common shareholders and OP unit holders, as adjusted⁽¹⁾	$	67,467	$	69,013	$	64,268	$	204,284	$	191,921

Weighted average common shares outstanding - diluted		43,907		42,939		42,404		43,166		39,996
Weighted average OP units outstanding - diluted		4,740		5,664		6,030		5,444		8,392
Total weighted average shares and units outstanding - diluted		48,647		48,603		48,434		48,610		48,388

FFO per common share and OP unit - diluted	$	1.39	$	1.48	$	1.33	$	4.27	$	3.97

FFO per common share and OP unit - diluted, as adjusted⁽¹⁾	$	1.39	$	1.42	$	1.33	$	4.20	$	3.97

(1)	FFO available to shares and units, as adjusted, excludes a one-time benefit of $3.1 million, or $0.06 per share and unit, as a result of the release of a tax liability during the second quarter of 2021 that is no longer expected to be incurred.

Reconciliation of FFO to AFFO


	Three Months Ended						Nine Months Ended
	September 30,		June 30		September 30,		September 30,		September 30,
	2021		2021		2020		2021		2020
FFO available to common shareholders and unit holders	$	67,467	$	72,111	$	64,268	$	207,382	$	191,921

Adjustments:
Amortization of deferred financing costs and hedge amortization		960		960		1,028		2,907		3,100
Non-cash compensation		4,563		4,680		4,156		13,636		11,810
Non-real estate depreciation		1,723		1,731		1,623		5,193		4,816
Straight-line rent adjustment		176		(479)		(496)		(2,095)		(1,080)
Amortization of above and below market leases		(37)		(37)		(34)		(111)		(102)
Other income adjustment		—		(3,098)		—		(3,098)		—
Recurring capital expenditures - Data Center		(4,789)		(4,244)		(2,911)		(13,202)		(5,879)
Recurring capital expenditures - Office and Light-industrial		(57)		(1,296)		—		(3,574)		—
Tenant improvements		(2,504)		(1,963)		(1,275)		(7,237)		(4,413)
Capitalized leasing costs		(3,474)		(3,741)		(3,779)		(10,660)		(12,192)
AFFO available to common shareholders and OP unit holders	$	64,028	$	64,624	$	62,580	$	189,141	$	187,981

Reconciliation of Net Income to EBITDAre and Adjusted EBITDA


	Three Months Ended						Nine Months Ended
	September 30,		June 30		September 30,		September 30,		September 30,
	2021		2021		2020		2021		2020
Net income	$	24,118	$	28,475	$	24,132	$	77,508	$	72,208
Adjustments:
Interest expense		11,894		11,982		11,384		35,999		33,153
Income taxes		5		4		10		18		46
Depreciation and amortization		45,072		45,367		41,759		135,067		124,529
EBITDAre	$	81,089	$	85,828	$	77,285	$	248,592	$	229,936
Non-cash compensation		4,563		4,680		4,156		13,636		11,810
Transaction costs / litigation		—		—		—		3		—
Other income adjustment		—		(3,098)		—		(3,098)		—
Adjusted EBITDA	$	85,652	$	87,410	$	81,441	$	259,133	$	241,746

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

Quarter Ended September 30, 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	$	103,035	940,309	83.4	%	—	—	%	940,309	83.4	%	—	240,000	1,180,309
Los Angeles ⁽³⁾		96,168	631,557	90.7		—	—		631,557	90.7		54,388	64,740	750,685
Northern Virginia		63,003	567,269	85.6		—	—		567,269	85.6		—	809,742	1,377,011
New York		25,037	168,267	89.0		34,589	35.8		202,856	79.9		34,587	47,212	284,655
Chicago		17,396	178,407	83.9		54,798	3.9		233,205	65.1		—	112,368	345,573
Boston		15,288	122,730	85.8		19,961	9.3		142,691	75.1		—	110,985	253,676
Denver		6,519	34,924	86.7		—	—		34,924	86.7		—	—	34,924
Miami		1,870	30,176	86.3		—	—		30,176	86.3		—	13,154	43,330

Total Data Center Facilities	$	328,316	2,673,639	86.2	%	109,348	15.0	%	2,782,987	83.4	%	88,975	1,398,201	4,270,163

Office & Light-Industrial ⁽⁴⁾		9,154	418,110	83.0		—	—		418,110	83.0		—	(49,799)	368,311

Total Portfolio	$	337,470	3,091,749	85.7	%	109,348	15.0	%	3,201,097	83.3	%	88,975	1,348,402	4,638,474

(1)

On a gross basis, our total portfolio annualized rent was approximately $344.3 million as of September 30, 2021, which includes $6.8 million in operating expense reimbursements under modified gross and triple-net leases.

(2)

Includes customer leases that have commenced as of September 30, 2021. If all leases signed during the current and prior periods had commenced, inclusive of a large scale lease signed at SV7 on October 7, 2021, the percent occupied would have been as follows:


Percent Leased	Stabilized		Pre-Stabilized		Total
Total Data Center Facilities	88.4	%	15.9	%	85.6	%
Total Portfolio	87.4	%	15.9	%	85.3	%

(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 Northern Virginia market held for development space is our Reston Campus Expansion project comprised of 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	210,031	6.6	%	$	42,135	12.5	%	73
2	Enterprise	Digital Content	9	157,547	4.9			24,995	7.4		31
3	Cloud	Public Cloud	11	330,298	10.3			20,473	6.1		32
4	Cloud	Public Cloud	3	118,684	3.7			14,015	4.1		26
5	Network	Global Service Provider	9	45,297	1.4			9,880	2.9		13
6	Cloud	Software as a Service	1	36,304	1.1			6,479	1.9		50
7	Network	US National Service Provider	14	39,778	1.3			5,142	1.5		25
8	Network	Cable Service Provider	16	22,503	0.7			4,659	1.4		35
9	Network	Network Service Provider	6	46,306	1.5			4,591	1.4		13
10	Enterprise	SI & MSP	1	35,402	1.1			4,416	1.3		15
	Total / Weighted Average			1,042,150	32.6	%	$	136,785	40.5	%	42

(1)

Represents the customer’s total occupied square feet divided by the total operating NRSF in the portfolio as of September 30, 2021.

(2)

Represents the customer’s total annualized rent divided by the total annualized rent in the portfolio as of September 30, 2021.

(3)

Weighted average based on percentage of total annualized rent expiring calculated as of September 30, 2021.

See the Appendix starting on page 22 for definitions

Quarter Ended September 30, 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
		YTD 2021	385	$	21,415	117,258	$	183
		Q3 2021	122		7,094	29,308		242
		Q2 2021	133		8,395	59,174		142
		Q1 2021	130		5,926	28,776		206
		Q4 2020	147		20,397	109,154		187
		Q3 2020	130		7,188	33,233		216

New / expansion leases signed
		YTD 2021	368	$	21,998	116,782	$	188
		Q3 2021	122		7,225	50,341		144
		Q2 2021	112		7,798	33,135		235
		Q1 2021	134		6,975	33,306		209
		Q4 2020	151		9,685	53,953		180
		Q3 2020	129		12,485	72,207		173

	Inclusive of the subsequent lease at SV7⁽²⁾
		YTD 2021 + Oct 7 lease	369	$	23,675	128,539	$	184
		Q3 2021 + Oct 7 lease	123		8,902	62,098		143

Renewal leases signed
		YTD 2021	902	$	54,927	347,056	$	158	4.6	%	2.9	%	6.3	%
		Q3 2021	296		18,660	118,887		157	2.5		2.0		5.7
		Q2 2021	330		20,397	136,564		149	1.3		4.2		7.1
		Q1 2021	276		15,870	91,605		173	0.8		2.3		6.1
		Q4 2020	260		15,844	121,420		130	5.4		1.0		4.4
		Q3 2020	309		20,662	135,959		152	1.9		2.9		5.1

(1)	Number of leases represents each agreement with a customer. A lease agreement could include multiple spaces and a customer could have multiple leases.

(2)	The new and expansion leases signed activity presented herein is inclusive of a large scale lease signed at SV7 for $1.7 million annualized GAAP rent on October 7, 2021.

New / Expansion Leases Signed by Deployment Size by Period⁽¹⁾


	Q3 2021		Q2 2021		Q1 2021		Q4 2020		Q3 2020
GAAP Annualized Rent ($000)
Retail Colocation (< 130 CkW)	$	2,896	$	3,355	$	3,558	$	4,448	$	3,589
Small Scale (130 - 500 CkW)		3,480		3,598		2,639		3,721		1,634
Large Scale & Hyperscale (> 500 CkW)		849		845		778		1,516		7,262
Total GAAP Annualized Rent	$	7,225	$	7,798	$	6,975	$	9,685	$	12,485

(1)	Our new and expansion leases signed are presented based on the critical kilowatt (“CkW”) size, which represents the maximum amount of power that customers can draw per their contractual lease agreement.


MRR per Cabinet Equivalent Billed (TKD Occupied Same-Store)

Quarter Ended September 30, 2021


Overview	Financial Statements	Operating Portfolio	Development	Capital Structure	Components of NAV	Guidance	Appendix	13

Table of Contents

Leasing Statistics

Lease Distribution (total portfolio, including total data center and office and light-industrial “OLI”)


				Total	Percentage				Percentage
	Number	Percentage		Operating	of Total		Annualized		of Total
	of	of All		NRSF of	Operating		Rent		Annualized
Lease Distribution	Leases	Leases		Leases	NRSF		($000)		Rent
Unoccupied data center
Leased but not commenced	—	—	%	49,194	1.5	%	$	—	—	%
Available capacity	—	—		414,017	12.9			—	—
Unoccupied OLI
Leased but not commenced	—	—		1,124	0.1			—	—
Available capacity	—	—		69,905	2.2			—	—
Data center deployment by CkW:
Retail Colocation (< 130 CkW)	2,195	85.9		538,316	16.8			82,998	24.6
Small Scale (130 - 500 CkW)	154	6.0		435,024	13.6			70,192	20.8
Large Scale (501 - 2,000 CkW)	50	2.0		433,770	13.6			70,236	20.8
Hyperscale (> 2,000 CkW)	11	0.4		489,815	15.3			87,754	26.0
Powered shell	18	0.7		422,851	13.2			17,136	5.1
OLI	129	5.0		347,081	10.8			9,154	2.7
Portfolio Total	2,557	100.0	%	3,201,097	100.0	%	$	337,470	100.0	%

Lease Expirations (total portfolio, including total data center and office and light-industrial “OLI”)


		Total											Annualized
	Number	Operating	Percentage				Percentage		Annualized		Annualized		Rent Per
	of	NRSF of	of Total		Annualized		of Total		Rent Per		Rent at		Leased
	Leases	Expiring	Operating		Rent		Annualized		Leased		Expiration		NRSF at
Year of Lease Expiration	Expiring⁽¹⁾	Leases	NRSF		($000)		Rent		NRSF		($000)⁽²⁾		Expiration
Unoccupied data center	—	463,211	14.4	%	$	—	—	%	$	—	$	—	$	—
Unoccupied OLI	—	71,029	2.3			—	—			—		—		—
2021	279	228,751	7.2			30,839	9.2			135		30,938		135
2022	1,236	567,727	17.8			88,143	26.1			155		89,242		157
2023	432	406,365	12.7			61,360	18.2			151		64,321		158
2024	318	257,363	8.0			42,867	12.7			167		47,321		184
2025	96	237,740	7.4			35,528	10.5			149		41,877		176
2026-Thereafter	67	621,830	19.4			69,579	20.6			112		80,960		130
OLI ⁽³⁾	129	347,081	10.8			9,154	2.7			26		10,899		31
Portfolio Total / Weighted Average	2,557	3,201,097	100.0	%	$	337,470	100.0	%	$	127	$	365,558	$	137

(1)	Includes leases that upon expiration will automatically be renewed, primarily on a year-to-year basis. Number of leases represents each agreement with a customer; a lease agreement could include multiple spaces and a customer could have multiple leases.

(2)

Represents the final monthly contractual rent under existing customer leases as of September 30, 2021, multiplied by 12. This amount reflects total annualized base rent before any one-time or non-recurring rent abatements and excludes power revenue, interconnection revenue and operating expense reimbursement. Leases expiring during 2021 include annualized rent of $8.3 million associated with lease terms currently on a month-to-month basis.

(3)	The office and light-industrial leases are scheduled to expire as follows:


	NRSF of	Annualized
	Expiring	Rent
Year	Leases	($000)
2021	12,342	$	287
2022	77,440		1,896
2023	143,283		3,166
2024	13,711		455
2025	25,796		870
Thereafter	74,509		2,480
Total OLI	347,081	$	9,154

Quarter Ended September 30, 2021


Overview	Financial Statements	Operating Portfolio	Development	Capital Structure	Components of NAV	Guidance	Appendix	14

Table of Contents

Geographic and Vertical Diversification

Geographical Diversification




	Percentage of Total Data Center
	Annualized Rent
Metropolitan Market	September 30, 2021		December 31, 2020
San Francisco Bay	31.4	%	32.7	%
Los Angeles	29.3		29.2
Northern Virginia	19.2		18.5
New York	7.6		7.2
Chicago	5.3		5.3
Boston	4.7		4.8
Denver	2.0		1.8
Miami	0.5		0.5
Total	100.0	%	100.0	%

Vertical Diversification



	Percentage of Total Data Center
	Annualized Rent
Vertical	September 30, 2021		December 31, 2020
Enterprise	41.1	%	42.2	%
Cloud	34.9		33.8
Network	24.0		24.0
Total	100.0	%	100.0	%

Quarter Ended September 30, 2021


Overview	Financial Statements	Operating Portfolio	Development	Capital Structure	Components of NAV	Guidance	Appendix	15

Table of Contents

Capital Expenditures and Completed

Pre-Stabilized Projects

(in thousands, except NRSF, cost per NRSF, MW, and cost per MW data)

Capital Expenditures and Repairs and Maintenance


	Three Months Ended
	September 30,		June 30,		March 31,		December 31,
	2021		2021		2021		2020
Data center expansion⁽¹⁾	$	28,741	$	28,707	$	19,951	$	29,110
Non-recurring investments⁽²⁾		568		744		551		1,078
Tenant improvements		2,504		1,963		2,770		1,506
Recurring capital expenditures - Data Center⁽³⁾		4,789		4,244		4,169		2,457
Recurring capital expenditures - Office and Light-industrial⁽³⁾		57		1,296		2,221		—
Total capital expenditures	$	36,659	$	36,954	$	29,662	$	34,151

Repairs and maintenance expense⁽⁴⁾	$	4,387	$	3,936	$	3,688	$	4,214

(1)	Data center expansion capital expenditures include new data center construction, development projects adding capacity to existing data centers and other revenue generating investments. Data center expansion also includes investment of Deferred Expansion Capital.

(2)	Non-recurring investments include upgrades to existing data center or office space and company-wide improvements that are ancillary to revenue generation, such as internal system development for on-premises IT infrastructure and system-wide security upgrades, which have a future economic benefit.

(3)

Recurring capital expenditures within our data center space include required equipment upgrades with future economic benefit within our operating portfolio. Recurring capital incurred within our office and light-industrial space includes upgrades to convert vacant unrefined space into useable office space in preparation for a specific customer deployment.

(4)	Repairs and maintenance expense is classified within property operating and maintenance expense in the consolidated statements of operations. These expenditures represent recurring maintenance contracts and repairs to operating equipment necessary to maintain current operations.

Completed Pre-Stabilized Projects


	Metropolitan			Power			Cost Per		Cost Per		Percent		Percent
Projects / Facilities	Market	Completion	NRSF	(MW)	Cost⁽¹⁾		NRSF		MW		Leased⁽²⁾		Occupied
BO1	Boston	Q4 2019	19,961	1.5	$	7,124	$	357	$	4,749	9.3	%	9.3	%
NY2 Phase 3	New York	Q1 2020	34,589	4.0		50,144		1,450		12,536	35.8		35.8
CH2 Phase 1	Chicago	Q2 2020	54,798	6.0		62,988		1,149		10,498	5.7		3.9
Total completed pre-stabilized			109,348	11.5	$	120,256	$	1,100	$	10,457	15.9	%	15.0	%

(1)

“Cost” includes capital expenditures related to the specific project / phase and, for CH2 Phase 1, and NY2 Phase 3, also includes allocations of capital expenditures related to land, building shell, and infrastructure that were incurred at the beginning or during the first phase of the overall project.

(2)	“Percent Leased” includes customer leases that have been signed as of September 30, 2021, regardless of the date of commencement. The percent leased is determined based on leased NRSF as a proportion of total pre-stabilized NRSF.

Quarter Ended September 30, 2021

Overview

Financial
Statements

Operating
Portfolio

Development

Capital
Structure

Components
of NAV

Guidance

Appendix

Table of Contents

Development Summary

Data Center Leasing Capacity

The following chart sets forth the total data center power capacity in megawatts (“MW”), net of backlog, available in our portfolio as of the end of each reporting period presented:

(1)	The available capacity represents total MW’s within unoccupied operating data center space, net of backlog.

(2)	The MWs under construction represents sellable capacity that will be available for lease according to the estimated timeline disclosed in the development table below.

(3)	The developable MW’s represents the sellable capacity that is currently held for development within existing core and shell buildings.

Development Detail

(in thousands, except NRSF and power data)


	Under Construction									Held for Development				Total
			Costs							Estimated				Estimated
	Estimated		Incurred		Estimated		Percent		Power				Power
Projects/Facilities	Completion	NRSF	To- Date		Total		Leased		(MW)	NRSF	Total Cost		(MW)	NRSF		Cost

Data center expansion
BO1	—	—	$	—	$	—	—	%	—	110,985	$	71,200	9.0	110,985	$	71,200
CH2
Phase 2	—	—		—		—	—		—	56,184		40,000	6.0	56,184		40,000
Phase 3	—	—		—		—	—		—	56,184		40,000	6.0	56,184		40,000
LA1	—	—		—		—	—		—	10,352		1,250	0.5	10,352		1,250
LA3
Phase 2	Q4 2021	54,388		24,136		30,100	7.6		6.0	—		—	—	54,388		30,100
Phase 3	—	—		—		—	—		—	54,388		36,000	6.0	54,388		36,000
MI1	—	—		—		—	—		—	13,154		7,500	1.0	13,154		7,500
NY2
Phase 4A	Q1 2022	34,587		4,593		19,400	—		4.0	—		—	—	34,587		19,400
Phase 4B	—	—		—		—	—		—	12,112		3,000	1.0	12,112		3,000
Phase 5	—	—		—		—	—		—	35,100		40,000	4.5	35,100		40,000
VA3
Phase 1C	—	—		—		—	—		—	49,316		35,000	6.0	49,316		35,000
Phase 1D	—	—		—		—	—		—	34,143		22,000	3.0	34,143		22,000
Phase 1E	—	—		—		—	—		—	23,365		22,000	3.0	23,365		22,000
Total data center expansion		88,975	$	28,729	$	49,500	4.6	%	10.0	455,283	$	317,950	46.0	544,258	$	367,450

New development
Ground-up construction
VA3
Phase 2	—	—		—		—	—		—	289,173		200,000	27.0	289,173		200,000
Reston Campus Expansion
Future Phases	—	—		—		—	—		—	413,745		550,000	54.0	413,745		550,000
Pre-construction
SV9	—	—		—		—	—		—	240,000		325,000	30.0	240,000		325,000
Total new development		—	$	—	$	—	—	%	—	942,918	$	1,075,000	111.0	942,918	$	1,075,000

Total development⁽¹⁾⁽²⁾		88,975	$	28,729	$	49,500	4.6	%	10.0	1,398,201	$	1,392,950	157.0	1,487,176	$	1,442,450

(1)

In addition to new development and incremental capacity in existing core and shell buildings, we have land adjacent to our NY2 facility, in the form of an existing parking lot. By utilizing this land, we believe we can build approximately 100,000 NRSF of data center capacity in Secaucus, New Jersey, upon receipt of necessary entitlements.

(2)

We have an estimated $11.1 million in deferred expansion capital under construction at multiple properties as of September 30, 2021, of which $4.0 million has been incurred to-date. We estimate approximately $51 million of additional deferred expansion capital may be required in the future to support existing or anticipated future customer utilization.

Quarter Ended September 30, 2021

Overview

Financial
Statements

Operating
Portfolio

Development

Capital
Structure

Components
of NAV

Guidance

Appendix

Table of Contents

Market Capitalization and Debt Summary

(in thousands, except per share data)

Market Capitalization


	Shares or
	Equivalents	Market Price as of		Market Value
	Outstanding	September 30, 2021		Equivalents
Common shares	44,201	$	138.54	$	6,123,611
Operating partnership units	4,715		138.54		653,283
Total equity					6,776,894
Total net principal debt outstanding⁽¹⁾					1,783,594
Total enterprise value				$	8,560,488

Net principal debt to enterprise value					20.8	%

(1)	Net principal debt outstanding includes total principal debt outstanding net of $3.4 million of cash and cash equivalents.

Debt Summary⁽¹⁾


	Weighted		Outstanding as of:
	Average		September 30,		December 31,
Instrument	Rate⁽²⁾		2021		2020
Revolving credit facility	1.33	%	$	212,000	$	148,500
Senior unsecured term loans	2.27			700,000		700,000
Senior unsecured notes	4.16			875,000		875,000
Total principal debt outstanding				1,787,000		1,723,500
Unamortized deferred financing costs				(5,961)		(7,589)
Total debt			$	1,781,039	$	1,715,911
Weighted average interest rate	3.09	%

Floating rate vs. fixed rate debt				12% / 88%		9% / 91%

(1)	See the filed Form 10-K and 10-Q for information on specific debt instruments.

(2)	The interest rates above reflect the impacts of interest rate swap agreements.

Debt Maturities

(1)	The revolving credit facility contains a one-time extension option, which, if exercised, would extend the maturity date to November 2024.

Quarter Ended September 30, 2021


Overview	Financial Statements	Operating Portfolio	Development	Capital Structure	Components of NAV	Guidance	Appendix	18

Table of Contents

Interest Summary, Debt Covenants and Liquidity

(in thousands)

Interest Expense Components


	Three Months Ended									Nine Months Ended
	September 30,			June 30,			September 30,			September 30,			September 30,
	2021			2021			2020			2021			2020
Interest expense and fees	$	13,852		$	13,761		$	13,555		$	41,313		$	39,985
Amortization of deferred financing costs and hedge amortization		960			960			1,028			2,907			3,100
Capitalized interest		(2,918)			(2,739)			(3,199)			(8,221)			(9,932)
Total interest expense	$	11,894		$	11,982		$	11,384		$	35,999		$	33,153

Percent capitalized		19.7	%		18.6	%		21.9	%		18.6	%		23.1	%

Debt Covenants and Liquidity


	Revolving Credit Facility and Senior Unsecured Term Loans and Notes
		September 30,			June 30,			March 31,			December 31,			September 30,
	Required Compliance	2021			2021			2021			2020			2020

Fixed charge coverage ratio	Greater than 1.50x		6.2	x		6.4	x		6.2	x		6.0	x		6.1	x
Total indebtedness to gross asset value	Less than 60%		34.0	%		33.0	%		33.8	%		33.6	%		32.3	%
Secured debt to gross asset value	Less than 40%		—	%		—	%		—	%		—	%		—	%

Revolving credit facility availability		$	450,000		$	450,000		$	450,000		$	450,000		$	450,000
Borrowings outstanding			(212,000)			(182,500)			(169,000)			(148,500)			(120,000)
Outstanding letters of credit			(6,053)			(6,053)			(6,053)			(6,053)			(6,053)
Current availability		$	231,947		$	261,447		$	274,947		$	295,447		$	323,947

Cash			3,406			2,866			3,791			5,543			2,894
Current liquidity		$	235,353		$	264,313		$	278,738		$	300,990		$	326,841

Quarter Ended September 30, 2021


Overview	Financial Statements	Operating Portfolio	Development	Capital Structure	Components of NAV	Guidance	Appendix	19

Table of Contents

Components of Net Asset Value (NAV)

(in thousands)

Cash Net Operating Income


Reconciliation of Net Operating Income (NOI)	Q3 2021		Annualized
Operating Income	$	36,017	$	144,068
Adjustments:
Depreciation and amortization		45,072		180,288
General and administrative		12,167		48,668
Net Operating Income	$	93,256	$	373,024

Cash Net Operating Income (Cash NOI)
Net Operating Income	$	93,256	$	373,024
Adjustments:
Straight-line rent		176		704
Amortization of above and below-market leases		(37)		(148)
Cash NOI	$	93,395	$	373,580

Cash NOI with backlog (85.3% leased)⁽¹⁾	$	97,008	$	388,032
Cash stabilized NOI (93% leased)	$	105,765	$	423,060

(1)	Cash NOI with backlog includes cash backlog as of September 30, 2021, less any leasing of currently occupied NRSF and data center projects under development, inclusive of a large scale lease signed at SV7 on October 7, 2021.

Development Projects


Data Center Projects Under Construction	Q3 2021
TKD construction in progress⁽¹⁾	$	28,729
Remaining spend⁽¹⁾		20,771
Total	$	49,500

Targeted stabilized annual yields		12 - 16	%
Annualized pro forma NOI range	$	5,900 - 8,000

(1)	Does not include spend associated with leasing commissions. See page 17 for further breakdown of data center projects under construction.

Other Assets and Liabilities


Other Assets	Q3 2021
Remaining construction in progress⁽¹⁾	$	346,439
Cash and cash equivalents		3,406
Accounts and other receivables		26,825
Other tangible assets		32,034
Total other assets	$	408,704

Liabilities
Principal debt	$	1,787,000
Accounts payable, accrued expenses and other liabilities		138,244
Accrued dividends and distributions		65,772
Total liabilities	$	1,991,016

Weighted average common shares and units - diluted		48,647

(1)	Represents the book value of in-progress capital projects, including land and shell building, of future data center expansion, non-recurring investments, tenant improvements and recurring capital expenditures.

Quarter Ended September 30, 2021

Overview

Financial
Statements

Operating
Portfolio

Development

Capital
Structure

Components
of NAV

Guidance

Appendix

Table of Contents

2021 Guidance

(in thousands, except per share data)

The annual guidance provided below represents forward-looking projections, which are based on current economic conditions, internal assumptions about our existing customer base and the supply and demand dynamics of the markets in which we operate. Please refer to the press release for additional information on forward-looking statements.


				2021									Implied
	Low			High			Mid			2020			Growth⁽¹⁾
Net income attributable to common diluted shares	$	1.99		$	2.07		$	2.03		$	1.95		4.1	%
Real estate depreciation and amortization		3.59			3.59			3.59			3.36
Other income adjustment⁽²⁾		(0.06)			(0.06)			(0.06)			—
FFO per common share and OP unit - diluted, as adjusted	$	5.52		$	5.60		$	5.56		$	5.31		4.7	%

Projected operating results:
Total operating revenues	$	645,000		$	653,000		$	649,000		$	606,824		7.0	%
Interconnection revenues		88,500			93,500			91,000			84,073		8.2
General and administrative expenses		46,500			50,500			48,500			44,026		10.2
Property taxes and insurance		27,500			29,500			28,500			23,996		18.8

Net Income	$	97,000		$	101,000		$	99,000		$	94,617		4.6	%
Depreciation and amortization		181,500			181,500			181,500			168,915		7.5
Other adjustments⁽³⁾		61,500			65,500			63,500			60,985		4.1
Adjusted EBITDA	$	340,000		$	348,000		$	344,000		$	324,517		6.0	%

Guidance drivers:
Annual rental churn rate		6.5	%		8.5	%		7.5	%		11.6	%
Cash rent growth on data center renewals		2.0	%		4.0	%		3.0	%		0.8	%
Capitalized interest		16.0	%		20.0	%		18.0	%		22.1	%
Sales and marketing expense as a percentage of revenue		3.7	%		3.9	%		3.8	%		3.9	%

Capital expenditures⁽⁴⁾:
Data center expansion	$	111,000		$	117,000		$	114,000		$	202,992
Non-recurring investments		2,500			4,500			3,500			3,963
Tenant improvements		8,500			9,500			9,000			5,919
Recurring capital expenditures - Data Center		14,500			15,500			15,000			8,336
Recurring capital expenditures - Office & Light-industrial⁽⁵⁾		3,500			3,500			3,500			—
Total capital expenditures	$	140,000		$	150,000		$	145,000		$	221,210

(1)	Implied growth is based on the midpoint of 2021 guidance.

(2)	FFO available to shares and units, as adjusted, excludes a one-time benefit of $3.1 million, or $0.06 per share and unit, as a result of the release of a tax liability during the second quarter of 2021 that is no longer expected to be incurred

(3)	Refer to the appendix for the adjustments made to net income to calculate adjusted EBITDA.

(4)	Guidance for 2021 capital expenditures has been updated since Q2 2021 as a result of our anticipated timing of the SV9 development.

(5)	Included in our recurring capital expenditures is an estimated $3.5 million of expenditures related to an office lease that commenced in Q2 2021.

Quarter Ended September 30, 2021

Overview

Financial
Statements

Operating
Portfolio

Development

Capital
Structure

Components
of NAV

Guidance

Appendix

Table of Contents

Appendix

Definitions

This document includes certain non-GAAP financial measures that management believes are helpful in understanding our business, as further described below. Our definition and calculation of non-GAAP financial measures may differ from those of other Real Estate Investment Trusts (“REITs”) and therefore may not be comparable. The non-GAAP measures should not be considered an alternative to net income as an indicator of our performance and should be considered only a supplement to net income, cash flows from operating, investing or financing activities as measures of profitability and/or liquidity, computed in accordance with GAAP.

Adjusted Funds From Operations “AFFO” is a non-GAAP measure that is used as a supplemental
operating measure specifically for comparing year over year ability to fund dividend distribution from operating activities. We use AFFO as a basis to address our ability to fund our dividend payments. AFFO is calculated by adding to or subtracting from FFO:

Plus: Amortization of deferred financing costs and hedge amortization

Plus: Non-cash compensation

Plus: Non-real estate depreciation

Plus: Impairment charges

Plus: Below market debt amortization

Plus / Less: Net straight line rent adjustments (lessor revenue and lessee expense)

Plus / Less: Net amortization of above and below market leases

Less: Recurring capital expenditures

Less: Tenant improvements

10.

Less: Capitalized leasing costs

Capitalized leasing costs consist of commissions payable to third parties, including brokers, leasing agents, referral agents, and internal sales commissions payable to employees. Capitalized leasing costs are accrued and deducted from AFFO generally in the period the lease is executed. Leasing costs are generally paid a) to third party brokers and internal sales employees 50% at customer lease signing and 50% at lease commencement and b) to referral and leasing agents monthly over the lease term as and to the extent we receive payment from the end customer.

We excluded from AFFO a one-time, non-cash benefit of $3.1 million as a result of the release of a tax liability during the second quarter of 2021 that is no longer expected to be incurred.

AFFO is not intended to represent cash flow from operations for the period, and is only intended to provide an additional measure of performance by adjusting for the effect of certain items noted above included in FFO. Other REITs widely report AFFO, however, other REITs may use different methodologies for calculating AFFO and, accordingly, our AFFO may not be comparable to other REITs.

Annualized Rent

Monthly contractual rent under existing commenced customer leases as of quarter-end, multiplied by 12. This amount reflects total annualized base rent before any one-time or non-recurring rent abatements and excludes power revenue, interconnection revenue and operating expense reimbursement.

Quarter Ended September 30, 2021

Overview

Financial
Statements

Operating
Portfolio

Development

Capital
Structure

Components
of NAV

Guidance

Appendix

Table of Contents

Appendix

Data Center Leasing Metrics

●

Cash Rental Churn Rate – represents data center leases which are not renewed, fully terminated, or partially terminated during the period. Rental churn is calculated based on the annualized cash rent of data center expired leases terminated in the period, compared with total data center annualized rent at the beginning of the period.

●

Cash and GAAP Rent Growth – represents the change in rental rates on renewed data center leases signed during the period, as compared with the previous rental rates for the same space. Cash and GAAP rent growth are calculated based on annualized rent from the renewed data center lease compared to annualized rent from the expired data center lease.

Data Center Net Rentable Square Feet (“NRSF”)

Both occupied and available data center NRSF includes a factor based on management’s estimate of space to account for a customer’s proportionate share of the required data center support space (such as the mechanical, telecommunications and utility rooms) and building common areas, which may be updated on a periodic basis to reflect the most current build-out of our properties.

Deferred Expansion Capital

As we construct data center capacity, we work to optimize both the amount of the capital we deploy on power and cooling infrastructure and the timing of that capital deployment; as such, we generally construct our power and cooling infrastructure supporting our data center NRSF based on our estimate of customer utilization. This practice can result in our investment at a later time in Deferred Expansion Capital. We define Deferred Expansion Capital as our estimate of the incremental capital we may invest in the future to add power or cooling infrastructure to support existing or anticipated future customer utilization of NRSF within our operating data centers. From time to time, we may revise our estimate of Deferred Expansion Capital as well as the potential time period during which we may invest it. See the Development Summary for more detail.

Earnings before Interest, Taxes, Depreciation and Amortization for Real Estate (EBITDAre) and Adjusted EBITDA

EBITDAre is calculated in accordance with the standards established by the National Association of Real Estate Investment Trusts (“Nareit”). EBITDAre is defined as earnings before interest, taxes, depreciation and amortization, gains or losses from the sale of depreciated property, and impairment of depreciated property. We calculate adjusted EBITDA by adding our non-cash compensation expense, transaction costs from unsuccessful deals and business combinations and litigation expense to EBITDAre as well as adjusting for the impact of other impairment charges, gains or losses from sales of undepreciated land and gains or losses on early extinguishment of debt. We excluded from adjusted EBITDA a one-time, non-cash benefit of $3.1 million as a result of the release of a tax liability during the second quarter of 2021 that is no longer expected to be incurred.

Management uses EBITDAre and adjusted EBITDA as indicators of our ability to incur and service debt. In addition, we consider EBITDAre and adjusted EBITDA to be appropriate supplemental measures of our performance because they eliminate depreciation and interest, which permits investors to view income from operations without the impact of

Quarter Ended September 30, 2021

Overview

Financial
Statements

Operating
Portfolio

Development

Capital
Structure

Components
of NAV

Guidance

Appendix

Table of Contents

non-cash depreciation or the cost of debt. However, because EBITDAre and adjusted EBITDA are calculated before recurring cash charges including interest expense and taxes, and are not adjusted for capital expenditures or other recurring cash requirements of our business, their utilization as a cash flow measurement is limited.

Funds From Operations (“FFO”) is a supplemental measure of our performance which should be considered
along with, but not as an alternative to, net income and cash provided by operating activities as a measure of operating performance. We calculate FFO in accordance with the standards established by Nareit. FFO represents net income (loss) (computed in accordance with GAAP), excluding gains (or losses) from sales of property and undepreciated land and impairment write-downs of depreciable real estate, plus real estate related depreciation and amortization (excluding amortization of deferred financing costs) and after adjustments for unconsolidated partnerships and joint ventures.

Our management uses FFO as a supplemental performance measure because, by excluding real estate related depreciation and amortization and gains and losses from property dispositions, it provides a performance measure that, when compared year over year, captures trends in occupancy rates, rental rates and operating costs.

We offer this measure because we recognize that investors use FFO as a basis to compare our operating performance with that of other REITs. However, the utility of FFO as a measure of our performance is limited because FFO excludes depreciation and amortization and captures neither the changes in the value of our properties that result from use or market conditions, nor the level of capital expenditures and capitalized leasing commissions necessary to maintain the operating performance of our properties, all of which have real economic effect and could materially impact our financial condition and results from operations. FFO is a non-GAAP measure and should not be considered a measure of liquidity, an alternative to net income, cash provided by operating activities or any other performance measure determined in accordance with GAAP, nor is it indicative of funds available to fund our cash needs, including our ability to pay dividends or make distributions. In addition, our calculations of FFO are not necessarily comparable to FFO as calculated by other REITs that do not use the same definition or implementation guidelines or interpret the standards differently from us. Investors in our securities should not rely on these measures as a substitute for any GAAP measure, including net income.

GAAP Annualized Rent

Represents the monthly average contractual rent as stated on customer contracts, multiplied by 12. This amount is inclusive of any one-time or non-recurring rent abatements and excludes power revenue, interconnection revenue and operating expense reimbursement.

Monthly Recurring Revenue per Cabinet Equivalent Billed

Represents the turn-key monthly recurring colocation revenue (“MRR”) per cabinet equivalent billed. We define MRR as recurring contractual revenue, including rental, power, and interconnection revenue and operating expense reimbursement, under existing commenced customer leases. MRR per cabinet equivalent is calculated as (current quarter MRR/3) divided by ((quarter-end cabinet equivalents billed plus prior quarter-end cabinet equivalents billed)/2). Cabinet equivalents are calculated as cage-usable square feet (turn-key leased NRSF/NRSF factor) divided by 25.

Quarter Ended September 30, 2021

Overview

Financial
Statements

Operating
Portfolio

Development

Capital
Structure

Components
of NAV

Guidance

Appendix

Table of Contents

Appendix

Net Operating Income (“NOI”) and Cash NOI – NOI, and cash NOI are supplemental measures for the operating performance of the Company’s portfolio. NOI is operating revenues less operating expenses adjusted for items such as depreciation and amortization, general and administrative expenses, transaction costs from unsuccessful deals and business combinations and litigation expenses. Cash NOI is NOI less straight-line rents and above and below market rent amortization.

NRSF Held for Development

Represents incremental data center capacity that may be constructed in existing facilities that requires significant capital investment in order to develop new data center facilities. The estimates are based on current construction plans and expectations regarding entitlements, and they are subject to change based on current economic conditions, final zoning approvals, and the supply and demand of the market. The estimated NRSF for new development projects is based on the entire building size. NRSF placed into service may change depending on the final construction and utilization of the built space.

NRSF Under Construction

Represents NRSF for which substantial activities are ongoing to prepare the property for its intended use following development. The NRSF reflects management’s estimate of engineering drawings and required support space and is subject to change based on final demising of space. TKD estimated development costs include two components: 1) general construction to ready the NRSF ass data center space and 2) power, cooling and other infrastructure to provide the designed amount of power capacity for the project. Following development completion, incremental capital, referred to as Deferred Expansion Capital, may be invested to support existing or anticipated future customer utilization of NRSF within our operating data centers.

NRSF Pre-Construction

Represents NRSF for which the projects are in the design and permitting stage. Construction will commence upon receipt of the applicable permits. The estimated completion dates are subject to change based on the timing of final design and permitting approvals.

Turn-Key Same-Store

Includes turn-key data center space that was leased or available to be leased to our colocation customers as of December 31, 2019, at each of our properties, and excludes powered shell data center space, office and light-industrial space and space for which development was completed and became available to be leased after December 31, 2019. The turn-key same-store space as of December 31, 2019, is 2,168,173 NRSF. We track same-store on a computer room basis within each data center facility.

Stabilized and Pre-Stabilized NRSF

Data center projects and facilities that recently have been developed and are in the initial lease-up phase are classified as pre-stabilized NRSF until they reach 85% occupancy or have been in service for 24 months. Pre-stabilized projects and facilities become stabilized operating properties at the earlier of achievement of 85% occupancy or 24 months after development completion and are included in the stabilized operating NRSF.

Quarter Ended September 30, 2021

Overview

Financial
Statements

Operating
Portfolio

Development

Capital
Structure

Components
of NAV

Guidance

Appendix