Operations and Leasing Activity The Company increased its operating data center portfolio by 20,995 net rentable square feet ("NRSF") during the quarter and finished the year ended December 31, 2010, with its operating data center portfolio 80.5% leased reflecting 220,185 NRSF readily available for lease. The Company's total operating portfolio increased by 43,144 NRSF during the quarter and finished the year ended December 31, 2010 79.7% leased. During the quarter, the Company signed new and expansion leases totaling 41,501 NRSF, which includes 33,135 NRSF of data center leases at a weighted-average GAAP rate of $119 per NRSF. The total of 33,135 NRSF of data center space leased in the quarter was comprised of 17,107 NRSF of space constructed with lower power density at a weighted-average GAAP rental rate of $86 per NRSF correlating to a yield on cost exceeding 12%, plus 16,028 NRSF of space at a GAAP rental rate of $153 per NRSF. Over the same period, data center lease commencements totaled 17,203 NRSF at a GAAP rate of $137 per NRSF, of which 5,694 NRSF were signed in the quarter and 11,509 NRSF were signed in prior periods. As of December 31, 2010, the company had executed 39,266 NRSF of leases that had not yet commenced, representing $4.5 million of annual rent at stabilization. In addition to our new and expansion leasing activity, during the fourth quarter the Company renewed 27,725 NRSF of data center leases, achieving a rent retention ratio of 89.0%. Data center leases renewed during the quarter reflected an average rental increase of 18.6% on a GAAP basis.Development and Redevelopment ActivityDuring the quarter ended December 31, 2010, the Company completed three redevelopment projects totaling 43,144 NRSF, comprised of 20,955 NRSF of data center space and 22,189 NRSF of ancillary office space. The total cost of the data center redevelopments was $6.1 million, or $291 per NRSF. In the first quarter of 2011, the Company received approval from the City of Santa Clara to develop up to 496,250 NRSF of data center space at the Coronado-Stender Business Park, which includes the 50,000 NRSF of data center space completed and leased at 2901 Coronado and 101,000 NRSF of space under construction at 2972 Stender. In February 2011, the Company topped out steel at 2972 Stender, the Company's second building in the Park, comprised of 50,400 NRSF of data center space and 50,600 NRSF of unconditioned core and shell space. The Company anticipates that it will substantially complete 2972 Stender in the third quarter of 2011 at a total estimated cost of $67.0 million. In addition to 2972 Stender, during the fourth quarter the Company commenced construction on 52,286 NRSF of data center space at its 12100 Sunrise Valley Drive facility in Northern Virginia. The Company estimates that this redevelopment project will cost approximately $30.5 million and expects to complete the space in phases during the second and third quarters of 2011. Overview Financial Statements Operating Portfolio Development and Capital Expenditures Capital Structure 2011 Guidance 2 Appendix |