Operations and Leasing Activity The Company signed new and expansion data center leases representing $5.2 million of annualized GAAP rent during the quarter, comprised of 28,553 NRSF at a weighted average GAAP rate of $183 per NRSF and a weighted average lease term of 4.0 years. During the third quarter, data center lease commencements totaled 38,658 NRSF at a weighted average GAAP rental rate of $166 per NRSF. The leases that commenced during the quarter include 12,485 NRSF signed during the quarter and 26,173 NRSF signed in prior periods. As of September 30, 2011, the Company had executed and not yet commenced leases which upon full commencement would contribute an additional $7.6 million in annualized rent. Renewal leases totaling 21,353 NRSF commenced in the third quarter at a weighted average GAAP rate of $175 per NRSF, representing a retention rate of 88.4% and a 13.9% increase over expiring leases on a cash basis or a 21.5% increase on a GAAP basis. Development and Redevelopment Activity Including the space currently under construction or in preconstruction at September 30, 2011, and including currently operating space targeted for future redevelopment, we own land and buildings sufficient to develop or redevelop 964,037 feet of data center space, comprised of (1) 161,385 NRSF of data center space currently under construction, (2) 354,451 NRSF of office and industrial space currently available for redevelopment, (3) 102,951 NRSF of currently operating data center space targeted for future redevelopment, and (4) 345,250 NRSF of new data center space that can be developed on land that the Company currently owns at its Coronado-Stender campus. During the quarter, the Company completed the first computer room at 2972 Stender and closed the quarter 17% leased in completed space. The Company anticipates completing additional space at 2972 Stender in the fourth quarter of 2011 and the first quarter of 2012. Additionally, the Company remains on schedule to complete development of the 161,385 NRSF of data center space currently under construction, including 64,561 NRSF at 12100 Sunrise Valley. The total estimated cost to complete the 161,385 NRSF of data center space under construction at September 30, 2011 is $114.2 million. Approximately $69.1 million has been incurred through September 30, 2011, including investments of $37.0 million in its 2972 Stender project and $20.6 million in its 12100 Sunrise Valley project. Balance Sheet and Liquidity As of September 30, 2011, the Company had $110.5 million of total long-term debt equal to 12.8% of the undepreciated book value of total assets and equal to 1.5x annualized adjusted EBITDA for the quarter ended September 30, 2011. At quarter-end, the Company had $10.2 million of cash available on its balance sheet and $101.3 million of available capacity under its revolving credit facility. On September 28, 2011, the Company filed a universal shelf registration statement on Form S-3 with the Securities and Exchange Commission, and the shelf registration statement was declared effective on October 20, 2011. This provides the Company with further financial flexibility by providing an additional avenue to raise capital as needed. Overview Financial Statements Operating Portfolio Development and Capital Expenditures Capital Structure 2 Appendix |