CoreSite Reports Fourth-Quarter Funds from Operations Increased 17% Year over Year

  CoreSite Reports Fourth-Quarter Funds from Operations Increased 17% Year
  over Year

         2013 funds from operations increased 17% to $1.82 per share

Business Wire

DENVER -- February 13, 2014

CoreSite Realty Corporation (NYSE:COR), a provider of network-dense,
cloud-enabled, enterprise-class data center products and services, today
announced financial results for the fourth quarter ended December 31, 2013.

Quarterly and Subsequent Highlights

  *Reported fourth-quarter funds from operations (“FFO”) of $0.49 per diluted
    share and unit, representing a 16.7% increase year over year
  *Reported fourth-quarter operating revenue of $61.4 million, representing
    an 11.2% increase year over year
  *Executed new and expansion data center leases representing $3.5 million of
    annualized GAAP rent at a rate of $132 of annualized GAAP rent per square
    foot
  *Realized rent growth on signed renewals of 3.5% on a cash basis and 14.3%
    on a GAAP basis and rental churn of 1.9%
  *Increased quarterly dividend by 30% to $0.35 per share; annual rate of
    $1.40 per share
  *Entered into a new $100 million, five-year, senior unsecured term loan,
    and subsequently retired the approximately $58 million loan secured by its
    SV1 facility

Tom Ray, CoreSite’s Chief Executive Officer, commented, “In the fourth quarter
we continued to see the financial results driven by execution upon our plan to
sell an attractive product mix to customers benefitting from our strong
foundation in the network and cloud verticals,” Mr. Ray continued, “We also
delivered the first computer room of turn-key data center capacity at NY2 in
Secaucus, New Jersey, in December, and are pleased with sales activity
surrounding the investment. In addition, we delivered the build-to-suit at SV5
and look forward to completing construction on our VA2 development in Northern
Virginia toward the second half of the year. 2014 represents a year of strong
opportunity for CoreSite to leverage our network-dense, cloud-enabled data
centers with excellence in customer service. Our primary focus for the balance
of 2014 centers around increasing the productivity of our existing sales and
marketing resources to sell available and pipeline capacity and deliver
attractive returns on capital.”

Financial Results

CoreSite reported FFO attributable to shares and units of $23.1 million for
the three months ended December 31, 2013, a 17.2% increase year over year and
an increase of 5.6% quarter over quarter. On a per diluted share and unit
basis, FFO increased 16.7% to $0.49 for the three months ended December 31,
2013, as compared to $0.42 per diluted share and unit for the three months
ended December 31, 2012. Total operating revenue for the three months ended
December 31, 2013, was $61.4 million, an 11.2% increase year over year.
Revenue growth in the fourth quarter was diluted by 1.8% due to CoreSite’s
customer at SV3 decreasing its metered power draw as it transitions out of
that facility. CoreSite reported net income attributable to common shares of
$3.1 million, or $0.15 per diluted share.

Sales Activity

CoreSite executed 122 new and expansion data center leases, representing $3.5
million of annualized GAAP rent during the fourth quarter, comprised of 26,276
NRSF at a weighted average GAAP rate of $132 per NRSF.

CoreSite’s renewal leases signed in the fourth quarter totaled $6.8 million in
annualized GAAP rent, comprised of 50,513 NRSF at a weighted average GAAP rate
of $135 per NRSF. These results reflect a 3.5% increase in rent on a cash
basis and a 14.3% increase on a GAAP basis. The fourth-quarter rental churn
rate was 1.9%.

CoreSite’s fourth-quarter data center lease commencements totaled 116,052 NRSF
at a weighted average GAAP rental rate of $41 per NRSF, which represents $4.8
million of annualized GAAP rent. These results include a 101,721 NRSF
build-to-suit powered shell lease for a valued and strategic customer at the
Santa Clara Campus. Excluding this lease, commencements totaled 14,331 at a
weighted average GAAP rental rate of $116 per NRSF.

Development Activity

In the fourth quarter, CoreSite completed and delivered the build-to-suit
powered shell building at SV5 on its Santa Clara campus. Also during the
quarter, the company placed into service the first computer room at the new
NY2 data center in Secaucus, New Jersey, representing an incremental 18,103
NRSF of TKD capacity.

As of December 31, 2013, CoreSite had 118,300 NRSF of data center space under
construction at three locations. The projects under construction include a new
data center at VA2 (Northern Virginia), adjacent to VA1, and additional
inventory at NY2 (New York market) and LA2 (Los Angeles). As of December 31,
2013, CoreSite had incurred $117.9 million of the estimated $170.4 million
required to complete these projects.

Balance Sheet and Liquidity

As of December 31, 2013, CoreSite had $232.5 million of total long-term debt
equal to 2.1x annualized adjusted EBITDA and $347.5 million of long-term debt
and preferred stock equal to 3.1x annualized adjusted EBITDA.

As of December 31, 2013, CoreSite had $174.3 million drawn on the credit
facility and approximately $222.4 million of available capacity under the
facility.

At quarter end, CoreSite had $5.3 million of cash available on its balance
sheet. On January 31, 2014, CoreSite entered into a new $100 million,
five-year, senior unsecured term loan. The term loan has an accordion feature,
which would allow CoreSite to increase the total commitments by $100 million,
to $200 million, under specified circumstances. CoreSite used the capacity
under the term loan to retire the $58 million mortgage on its SV1 facility and
pay down a portion of the outstanding balance on its revolving credit
facility.

Dividend

On December 6, 2013, CoreSite announced a 30% increase in its quarterly
dividend to $0.35 per share of common stock and common stock equivalents for
the fourth quarter of 2013. The dividend was paid on January 15, 2014, to
shareholders of record on December 31, 2013.

CoreSite also announced on December 6, 2013, a dividend of $0.4531 per share
of Series A preferred stock for the period October 15, 2013, to January 14,
2014. The preferred dividend was paid on January 15, 2014, to shareholders of
record on December 31, 2013.

2014 Guidance

CoreSite is introducing its 2014 guidance of FFO per diluted share and unit in
the range of $2.00 to $2.10. More detail regarding the assumptions behind the
2014 annual guidance can be found on page 21 of the earnings supplemental.

In addition, the company’s estimate of the net income attributable to common
shares is $0.50 to $0.60 per diluted share, 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 Citi’s 2014 Global Property CEO Conference on
March 3, 2014, at The Westin Diplomat in Hollywood, Florida.

Conference Call Details

CoreSite will host a conference call on February 13, 2014, 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 13574365. The replay will be available until February 20,
2014.

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
immediately following the call.

About CoreSite

CoreSite Realty Corporation (NYSE:COR) delivers secure and reliable data
center solutions across eight key North American markets. CoreSite connects,
protects and delivers an optimal performance environment and continued
operation of mission-critical data and IT infrastructure for enterprises and
Internet, private networking, mobility, and cloud service providers.
CoreSite's scalable platform of over two and a half million square feet of
efficient, network-dense, cloud-enabled data center capacity enables customers
to accelerate business performance, reduce operating costs and increase
flexibility across their IT and communications systems. CoreSite's 350
professionals deliver best-in-class service by placing customer needs first in
supporting the planning, implementation and operating requirements
foundational to delivering reliable, secure and efficient IT operating
environments.

More than 750 of the world’s leading enterprises, carriers and mobile
operators, content and cloud providers and media and entertainment companies
choose CoreSite to connect, protect and optimize their performance-sensitive
data, applications and computing workloads. CoreSite provides valuable
gateways to global business opportunities with direct access to more than 275
carriers and ISPs, inter-site connectivity and CoreSite's Open Cloud Exchange,
which supports rapid, efficient and scalable Ethernet access to multiple key
public clouds, enabling simple, flexible, multiple-cloud capabilities.

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.

                                                                             
                                                                             
Consolidated Balance Sheet
(in thousands)                                             
                                                                             
                                              December 31,      December 31,

                                              2013              2012
Assets:
Investments in real estate:
Land                                          $ 78,983          $ 85,868
Building and building improvements              717,007           596,405
Leasehold improvements                         95,218          85,907   
                                                891,208           768,180
Less: Accumulated depreciation and             (155,704  )      (105,433 )
amortization
Net investment in operating properties          735,504           662,747
Construction in progress                       157,317         61,328   
Net investments in real estate                 892,821         724,075  
Cash and cash equivalents                       5,313             8,130
Accounts and other receivables, net             10,339            9,901
Lease intangibles, net                          11,028            19,453
Goodwill                                        41,191            41,191
Other assets                                   55,802          42,582   
                                                                             
Total assets                                  $ 1,016,494      $ 845,332  
                                                                             
Liabilities and equity:
Liabilities
Revolving credit facility                     $ 174,250         $ -
Mortgage loan payable                           58,250            59,750
Accounts payable and accrued expenses           67,782            50,624
Deferred rent payable                           9,646             4,329
Acquired below-market lease contracts,          6,681             8,539
net
Prepaid rent and other liabilities             11,578          11,317   
Total liabilities                              328,187         134,559  
                                                                             
Stockholders' equity
Series A cumulative preferred stock             115,000           115,000
Common stock, par value $0.01                   209               207
Additional paid-in capital                      267,465           259,009
Distributions in excess of net income          (50,264   )      (35,987  )
Total stockholders' equity                      332,410           338,229
Noncontrolling interests                       355,897         372,544  
Total equity                                   688,307         710,773  
                                                                             
Total liabilities and equity                  $ 1,016,494      $ 845,332  

                                                                                                         
                                                                                                         
Consolidated Statement of Operations
(in thousands, except share and per share data)
                                                                                  
                                                                                                         
                    Three Months Ended                                   Year Ended
                    December 31,     September 30,    December 31,       December 31,     December 31,

                    2013             2013             2012               2013             2012
Operating
revenues:
Data center
revenue:
Rental revenue      $ 33,988         $ 33,428         $ 30,251           $ 131,080        $ 116,146
Power revenue         15,669           15,979           14,129             59,663           53,672
Interconnection       7,866            7,441            6,369              28,932           21,637
revenue
Tenant
reimbursement        1,885          1,873          2,506            7,317          7,088      
and other
Total data            59,408           58,721           53,255             226,992          198,543
center revenue
Office, light
industrial and       2,032          1,914          1,997            7,841          8,391      
other revenue
Total operating       61,440           60,635           55,252             234,833          206,934
revenues
Operating
expenses:
Property
operating and         17,247           17,368           15,206             64,260           61,235
maintenance
Real estate
taxes and             1,708            2,226            2,461              8,458            8,765
insurance
Depreciation
and                   17,151           16,424           16,336             65,785           64,327
amortization
Sales and             3,474            3,206            3,389              14,405           10,330
marketing
General and           7,092            7,045            7,133              27,317           25,910
administrative
Rent                  5,028            5,082            4,754              19,659           18,711
Transaction          -              25             37               279            613        
costs
Total operating      51,700         51,376         49,316           200,163        189,891    
expenses
Operating             9,740            9,259            5,936              34,670           17,043
income
Interest income       14               14               1                  32               13
Interest             (759       )    (708       )    (1,314     )      (2,689     )    (5,236     )
expense
Income before         8,995            8,565            4,623              32,013           11,820
income taxes
Income tax
(expense)            34             (56        )    (45        )      (401       )    (1,104     )
benefit
Net income            9,029            8,509            4,578              31,612           10,716
Net income
attributable to      3,809          3,524          2,276            12,771         5,668      
noncontrolling
interests
Net income
attributable to       5,220            4,985            2,302              18,841           5,048
CoreSite Realty
Corporation
Preferred            (2,085     )    (2,084     )    (440       )      (8,338     )    (440       )
dividends
Net income
attributable to     $ 3,135         $ 2,901         $ 1,862           $ 10,503        $ 4,608      
common shares
Net income per
share
attributable to
common shares:
Basic               $ 0.15           $ 0.14           $ 0.09             $ 0.50           $ 0.22
Diluted             $ 0.15          $ 0.14          $ 0.09            $ 0.49          $ 0.22       
Weighted
average common
shares
outstanding:
Basic                 20,924,624       20,871,504       20,607,119         20,826,622       20,537,946
Diluted               21,492,301       21,479,971       21,036,794         21,503,212       20,992,290

                                                                                                      
                                                                                                      
Reconciliations of Net Income to FFO
(in thousands, except share and per share data)
                                                                               
                 Three Months Ended                                   Year Ended
                 December 31,     September 30,    December 31,       December 31,     December 31,

                 2013             2013             2012               2013             2012
Net income       $ 9,029          $ 8,509          $ 4,578            $ 31,612         $ 10,716
Real estate
depreciation      16,146         15,443         15,566           62,040         61,700     
and
amortization
FFO              $ 25,175         $ 23,952         $ 20,144           $ 93,652         $ 72,416
Preferred
stock           (2,085     )   (2,084     )   (440       )    (8,338     )   (440       )
dividends
FFO
available to
common         $ 23,090       $ 21,868       $ 19,704        $ 85,314       $ 71,976     
shareholders
and OP unit
holders
Weighted
average
common             21,492,301       21,479,971       21,036,794         21,503,212       20,992,290
shares
outstanding
- diluted
Weighted
average OP
units             25,360,848     25,353,942     25,353,709       25,355,567     25,347,936 
outstanding
- diluted
Total
weighted
average
shares and         46,853,149       46,833,913       46,390,503         46,858,779       46,340,226
units
outstanding
- diluted
FFO per
common share     $ 0.49          $ 0.47          $ 0.42            $ 1.82          $ 1.55       
and OP unit
- diluted
                                                                                                      

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
and liquidity. We calculate FFO in accordance with the standards established
by the National Association of Real Estate Investment Trusts (“NAREIT”). FFO
represents net income (loss) (computed in accordance with GAAP), excluding
gains (or losses) from sales of property 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. FFO
attributable to common shares and units represents FFO less preferred stock
dividends declared during the period.

Our management uses FFO as a supplemental performance measure because, in
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 FFO will be used by investors
as a basis to compare our operating performance with that of other REITs.
However, 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, the utility of FFO as a
measure of our performance is limited. 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.

                                                                             
                                                                             
Reconciliation of Net Income to EBITDA and Adjusted EBITDA:
(in                                                         
thousands)
                  Three Months Ended                   Year Ended
                  December     September   December     December    December
                  31,          30,         31,          31,         31,

                  2013         2013        2012         2013        2012
Net income        $ 9,029      $  8,509    $ 4,578      $ 31,612    $ 10,716
Adjustments:
Interest
expense, net        745           694        1,313        2,657       5,223
of interest
income
Income taxes        (34    )      56         45           401         1,104
Depreciation
and                17,151      16,424    16,336      65,785     64,327
amortization
EBITDA            $ 26,891     $  25,683   $ 22,272     $ 100,455   $ 81,370
Non-cash            1,433         1,759      1,568        6,770       5,650
compensation
Transaction
costs /          -          25       328       529       2,354
litigation
Adjusted        $ 28,324   $  27,467  $ 24,168   $ 107,754  $ 89,374
EBITDA
                                                                             

EBITDA is defined as earnings before interest, taxes, depreciation and
amortization. We calculate adjusted EBITDA by adding our non-cash compensation
expense, transaction costs and litigation expense to EBITDA as well as
adjusting for the impact of gains or losses on early extinguishment of debt.
Management uses EBITDA and adjusted EBITDA as indicators of our ability to
incur and service debt. In addition, we consider EBITDA 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 non-cash depreciation or the cost of debt.
However, because EBITDA 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.

Contact:

CoreSite Investor Relations Contact
Greer Aviv | CoreSite Investor Relations Director
+1 303.405.1012 | +1 303.222.7276
Greer.Aviv@CoreSite.com
 
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