CoreSite Realty 10-Q 27 Jul 18 2018 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2018	Jul. 25, 2018
Document and Entity Information
Entity Registrant Name	CoreSite Realty Corp
Entity Central Index Key	1,490,892
Document Type	10-Q
Document Period End Date	Jun. 30, 2018
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		34,455,347
Document Fiscal Year Focus	2,018
Document Fiscal Period Focus	Q2

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Investments in real estate:
Land	$ 97,636	$ 97,258
Buildings and improvements	1,689,569	1,561,056
Total investments in real estate	1,787,205	1,658,314
Less: Accumulated depreciation and amortization	(530,528)	(473,141)
Net investment in operating properties	1,256,677	1,185,173
Construction in progress	146,236	162,903
Net investments in real estate	1,402,913	1,348,076
Operating lease right-of-use assets	181,195	92,984
Cash and cash equivalents	2,834	5,247
Accounts and other receivables, net of allowance for doubtful accounts of $946 and $1,094 as of June 30, 2018, and December 31, 2017, respectively	25,064	28,875
Lease intangibles, net of accumulated amortization of $9,234 and $8,585 as of June 30, 2018, and December 31, 2017, respectively	8,259	6,314
Goodwill	40,646	40,646
Other assets, net	106,187	103,501
Total assets	1,767,098	1,625,643
Liabilities:
Debt, net of unamortized deferred financing costs of $6,428 and $4,930 as of June 30, 2018, and December 31, 2017, respectively	1,030,536	939,570
Operating lease liabilities	191,494	102,912
Accounts payable and accrued expenses	71,404	77,170
Accrued dividends and distributions	51,760	48,976
Acquired below-market lease contracts, net of accumulated amortization of $5,984 and $5,608 as of June 30, 2018, and December 31, 2017, respectively	3,183	3,504
Unearned revenue, prepaid rent and other liabilities	34,121	34,867
Total liabilities	1,382,498	1,206,999
Stockholders' equity:
Common Stock, par value $0.01, 100,000,000 shares authorized and 34,459,728 and 34,240,815 shares issued and outstanding at June 30, 2018, and December 31, 2017, respectively	340	338
Additional paid-in capital	463,887	457,495
Accumulated other comprehensive income	1,291	753
Distributions in excess of net income	(207,048)	(177,566)
Total stockholders' equity	258,470	281,020
Noncontrolling interests	126,130	137,624
Total equity	384,600	418,644
Total liabilities and equity	$ 1,767,098	$ 1,625,643

CONSOLIDATED BALANCE SHEETS (Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
CONDENSED CONSOLIDATED BALANCE SHEETS
Allowance for doubtful accounts (in dollars)	$ 946	$ 1,094
Accumulated amortization, lease intangibles (in dollars)	9,234	8,585
Unamortized Debt Issuance Expense	6,428	4,930
Accumulated amortization of below-market lease	$ 5,984	$ 5,608
Common Stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized	100,000,000	100,000,000
Common Stock, shares issued	34,459,728	34,240,815
Common Stock, shares outstanding	34,459,728	34,240,815

CONSOLIDATED STATEMENTS OF OPER

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Data center revenue:
Rental revenue	$ 74,143	$ 64,853	$ 145,176	$ 129,104
Total operating revenues	136,447	117,886	266,066	232,807
Operating expenses:
Property operating and maintenance	37,861	31,781	71,709	61,007
Real estate taxes and insurance	4,693	3,824	9,630	8,328
Depreciation and amortization	35,558	32,207	69,334	64,545
Sales and marketing	5,369	4,414	10,449	8,917
General and administrative	10,297	9,508	19,482	17,632
Rent	6,547	5,931	12,947	11,893
Transaction Costs	19	139	75	139
Total operating expenses	100,344	87,804	193,626	172,461
Operating income	36,103	30,082	72,440	60,346
Interest expense	(8,907)	(5,958)	(16,645)	(11,065)
Income before income taxes	27,196	24,124	55,795	49,281
Income tax benefit (expense)	83	11	50	(86)
Net income	27,279	24,135	55,845	49,195
Net income attributable to noncontrolling interests	7,890	6,407	16,154	13,091
Net income attributable to CoreSite Realty Corporation	19,389	17,728	39,691	36,104
Preferred stock dividends		(2,085)		(4,169)
Net income attributable to common shares	$ 19,389	$ 15,643	$ 39,691	$ 31,935
Net income per share attributable to common shares:
Basic (in dollars per share)	$ 0.57	$ 0.46	$ 1.17	$ 0.95
Diluted (in dollars per share)	$ 0.57	$ 0.46	$ 1.16	$ 0.94
Weighted average common shares outstanding
Basic (in shares)	34,049,391	33,835,727	33,992,792	33,698,022
Diluted (in shares)	34,220,321	34,053,816	34,183,408	34,009,930
Power Revenue
Data center revenue:
Revenue	$ 38,986	$ 32,410	$ 75,389	$ 63,271
Interconnection Revenue
Data center revenue:
Revenue	17,422	15,325	33,982	29,837
Tenant Reimbursement And Other Revenue
Data center revenue:
Revenue	3,018	2,329	5,590	4,605
Office Light Industrial And Other Revenue
Data center revenue:
Revenue	$ 2,878	$ 2,969	$ 5,929	$ 5,990

CONSOLIDATED STATEMENTS OF COMP

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Net income	$ 27,279	$ 24,135	$ 55,845	$ 49,195
Other comprehensive income (loss):
Unrealized gain (loss) on derivative contracts	224	(323)	833	(10)
Reclassification of other comprehensive income (loss) to interest expense	(44)	170	(76)	467
Comprehensive income	27,459	23,982	56,602	49,652
Comprehensive income attributable to noncontrolling interests	7,942	6,363	16,373	13,224
Comprehensive income attributable to CoreSite Realty Corporation	$ 19,517	$ 17,619	$ 40,229	$ 36,428

CONSOLIDATED STATEMENTS OF EQUI

CONSOLIDATED STATEMENTS OF EQUITY - 6 months ended Jun. 30, 2018 - USD ($) $ in Thousands	Common Stock	Additional Paid-in Capital	Accumulated Other Comprehensive Income (Loss)	Distributions in Excess of Net Income	Total Stockholders' Equity	Noncontrolling Interests	Total
Balance at Dec. 31, 2017	$ 338	$ 457,495	$ 753	$ (177,566)	$ 281,020	$ 137,624	$ 418,644
Balance (in shares) at Dec. 31, 2017	34,240,815
Increase (Decrease) in Stockholders' Equity
Redemption of noncontrolling interests		70			70	(70)
Redemption of noncontrolling interests (in shares)	7,056
Issuance of stock awards, net of forfeitures (in shares)	198,976
Exercise of stock options		219			219		219
Exercise of stock options (in shares)	12,881
Share-based compensation	$ 2	6,103			6,105		6,105
Dividends and distributions				(69,173)	(69,173)	(27,797)	(96,970)
Net income				39,691	39,691	16,154	55,845
Other comprehensive income			538		538	219	757
Balance at Jun. 30, 2018	$ 340	$ 463,887	$ 1,291	$ (207,048)	$ 258,470	$ 126,130	$ 384,600
Balance (in shares) at Jun. 30, 2018	34,459,728

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$ 55,845	$ 49,195
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	69,334	64,545
Amortization of above/below market leases	(339)	(251)
Amortization of deferred financing costs	1,119	786
Share-based compensation	5,812	4,171
Bad debt expense	(88)	347
Changes in operating assets and liabilities:
Accounts receivable	4,183	3,220
Deferred rent receivable	(2,667)	(2,548)
Deferred leasing costs	(5,976)	(6,758)
Other assets	(2,211)	(8,751)
Accounts payable and accrued expenses	(341)	990
Unearned revenue, prepaid rent and other liabilities	(746)	(722)
Operating leases	442	1,711
Net cash provided by operating activities	124,367	105,935
CASH FLOWS FROM INVESTING ACTIVITIES
Tenant improvements	(2,667)	(4,809)
Real estate improvements	(107,093)	(85,333)
Acquisition of CH2 land	(4,383)
Acquisition of U.S. Colo, net of cash received	(6,298)
Net cash used in investing activities	(120,441)	(90,142)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from exercise of stock options	219	4,678
Proceeds from revolving credit facility	122,500	75,000
Payments on revolving credit facility	(180,036)	(269,000)
Proceeds from unsecured debt	150,000	275,000
Payments of loan fees and costs	(4,837)	(2,410)
Dividends and distributions	(94,185)	(81,156)
Net cash provided by (used in) financing activities	(6,339)	2,112
Net change in cash and cash equivalents	(2,413)	17,905
Cash and cash equivalents, beginning of period	5,247	4,429
Cash and cash equivalents, end of period	2,834	22,334
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for interest, net of capitalized amounts	15,419	9,271
Cash paid for operating lease liabilities	10,628	10,271
NON-CASH INVESTING AND FINANCING ACTIVITY
Construction costs payable capitalized to real estate	26,868	4,079
Accrual of dividends and distributions	51,760	46,180
NON-CASH OPERATING ACTIVITY
Lease liabilities arising from obtaining right-of-use assets	$ 96,790	$ 8,330

Organization and Description of

Organization and Description of Business	6 Months Ended
	Jun. 30, 2018
Organization and Description of Business
Organization and Description of Business	1. Organization and Description of Business CoreSite Realty Corporation (the “Company,” “we,” “us,” or “our”) was organized in the State of Maryland on February 17, 2010, and is a fully-integrated, self-administered, and self-managed real estate investment trust (“REIT”). Through our controlling interest in CoreSite, L.P. (our “Operating Partnership”), we are engaged in the business of owning, acquiring, constructing and operating data centers. As of June 30, 2018, the Company owns a 71.1% common interest in our Operating Partnership, and affiliates of The Carlyle Group and others own a 28.9% interest in our Operating Partnership. See additional discussion in Note 10, Noncontrolling Interests — Operating Partnership.

Summary of Significant Accounti

Summary of Significant Accounting Policies	6 Months Ended
	Jun. 30, 2018
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies	2. Summary of Significant Accounting Policies Principles of Consolidation and Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared by our management in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and in compliance with the rules and regulations of the U.S. Securities and Exchange Commission. Accordingly, these unaudited condensed consolidated financial statements do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of our management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. The results of operations for the three and six months ended June 30, 2018, are not necessarily indicative of the expected results for the year ending December 31, 2018. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2017. Our Operating Partnership meets the definition and criteria of a variable interest entity (“VIE”) and we are the primary beneficiary of the VIE. Our sole significant asset is the investment in our Operating Partnership, and consequently, substantially all of our assets and liabilities represent those assets and liabilities of our Operating Partnership. Our debt is an obligation of our Operating Partnership where the creditors also have recourse against the credit of the Company. Intercompany balances and transactions have been eliminated upon consolidation. Recently Adopted Accounting Pronouncements Revenue from Contracts with Customers In May 2014, the Financial Accounting Standards Board (“FASB”) issued guidance codified in Accounting Standards Codification (“ASC”) Topic 606, Revenue Recognition — Revenue from Contracts with Customers , which amends the guidance in former ASC Topic 605, Revenue Recognition . The standard establishes a five-step model framework which recognizes revenue as an entity transfers control of goods or services to the customer and requires enhanced disclosures. The standard provides guidance for our nonlease revenue components, including power, interconnection, and tenant reimbursement revenue. We adopted this standard effective January 1, 2018, using the cumulative effect method. The adoption did not result in a cumulative catch-up adjustment to opening equity and does not change the recognition pattern of our operating revenues. Under the standard, disclosures are required to provide information on the nature, amount, timing, and uncertainty of revenue, certain costs, and cash flows arising from contracts with customers. See additional discussion below and in Note 6, Contracts with Customers. Leases In February 2016, the FASB issued guidance codified in ASC Topic 842, Leases , which amends the guidance in former ASC Topic 840, Leases . The new standard increases transparency and comparability by requiring the recognition by lessees of right-of-use (“ROU”) assets and lease liabilities on the balance sheet for those leases classified as operating leases. Under the standard, disclosures are required to meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. We elected to early adopt the lease standard effective January 1, 2018, concurrent with our adoption of the new revenue recognition standard. The lease standard requires a modified retrospective transition approach as of the January 1, 2016, transition date. We elected the package of practical expedients which permits us to not reassess (1) whether any expired or existing contracts are or contain leases, (2) the lease classification for any expired or existing leases, and (3) any initial direct costs for any existing leases as of the effective date. We did not elect the hindsight practical expedient which permits entities to use hindsight in determining the lease term and assessing impairment. The adoption of the lease standard did not change our previously reported condensed consolidated statements of operations and did not result in a cumulative catch-up adjustment to opening equity. Adoption of the lease standard had a material impact on our condensed consolidated balance sheets. As a lessee, we adjusted certain previously reported financial statements to include the recognition of ROU assets and lease liabilities for operating leases. See the table below for the impact of adoption of the lease standard on our condensed consolidated balance sheet as of December 31, 2017 (in thousands): As Previously New Lease Standard As Adjusted Operating lease right-of-use assets $ — $ 92,984 $ 92,984 Operating lease liabilities — 102,912 102,912 Deferred rent payable 9,928 (9,928) — As a lessor, our recognition of rental revenue remained mainly consistent with previous guidance, apart from the narrower definition of initial direct costs that can be capitalized. The new standard defines initial direct costs as only the incremental costs of signing a lease. Internal sales employees’ compensation, payroll-related fringe benefits and certain external legal fees related to the execution of successful lease agreements no longer meet the definition of initial direct costs under the new standard and will be accounted for as a sales and marketing expense or general and administrative expense in our condensed consolidated statements of operations. As a result of electing the package of practical expedients described above, existing leases, including the allocation of consideration between lease and nonlease components, and related initial direct costs have not been reassessed prior to the effective date and therefore adoption of the lease standard did not have an impact on our previously reported condensed consolidated statements of operations. Statement of Cash Flows In August 2016, the FASB issued guidance codified in Accounting Standards Update (“ASU”) 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. The standard provides guidance on eight specific cash flow classification issues including debt prepayment or debt extinguishment costs, contingent consideration payments made after a business combination, and separately identifiable cash flows and application of the predominance principle. We adopted this standard effective January 1, 2018, and the provisions of ASU 2016-15 did not have a material impact on our condensed consolidated financial statements. Derivatives and Hedging In August 2017, the FASB issued guidance codified in ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. ASU 2017-12 simplifies hedge accounting by eliminating the requirement to separately measure and report hedge ineffectiveness and presenting all items that affect earnings in the same income statement line item as the hedged item. The standard will be effective for interim and annual reporting periods beginning after December 15, 2018, with early adoption permitted. We elected to early adopt this standard effective April 1, 2018, with an initial application date of January 1, 2018, using a modified retrospective transition and the provisions of ASU 2017-12 did not have a material impact on our condensed consolidated financial statements. Recent Accounting Pronouncements Not Yet Adopted Intangibles – Goodwill and Other In January 2017, the FASB issued guidance codified in ASU 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. ASU 2017-04 simplifies the accounting for goodwill impairment by eliminating the process of measuring the implied value of goodwill, known as step two, from the goodwill impairment test. Instead, if the carrying amount of a reporting unit exceeds its fair value, an impairment loss is recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. The standard will be effective for interim and annual reporting periods beginning after December 15, 2019, with early adoption permitted. We do not expect the provisions of ASU 2017-04 to have a material impact on our condensed consolidated financial statements. Leases – Targeted Improvements In January 2018, the FASB proposed an ASU for targeted improvements to lease accounting. The proposed ASU provides a practical expedient which allows lessors to not separate nonlease components from the related lease components if both the timing and pattern of revenue recognition are the same for the nonlease component(s) and related lease component, and the combined single lease component would be classified as an operating lease. The FASB has deliberated on the comment letters received and approved additional clarifications to the proposed ASU, including allowing lessors to apply the practical expedient to all existing leases on a retrospective or prospective basis. We intend to elect the practical expedient and combine our lease and nonlease components that meet the defined criteria once the FASB issues the ASU. After election of this practical expedient, we plan to adjust our condensed consolidated statements of operations to present our revenues as follows: Currently Anticipated Adjustment Adjusted Condensed Consolidated Statement of Operations Three Months Ended June 30, 2018 Rental revenue $ 74,143 $ (74,143) $ — Power revenue 38,986 (38,986) — Tenant reimbursement and other 3,018 (3,018) — Rental, power, and related revenue — 116,147 116,147 Three Months Ended June 30, 2017 Rental revenue $ 64,853 $ (64,853) $ — Power revenue 32,410 (32,410) — Tenant reimbursement and other 2,329 (2,329) — Rental, power, and related revenue — 99,592 99,592 Six Months Ended June 30, 2018 Rental revenue $ 145,176 $ (145,176) $ — Power revenue 75,389 (75,389) — Tenant reimbursement and other 5,590 (5,590) — Rental, power, and related revenue — 226,155 226,155 Six Months Ended June 30, 2017 Rental revenue $ 129,104 $ (129,104) $ — Power revenue 63,271 (63,271) — Tenant reimbursement and other 4,605 (4,605) — Rental, power, and related revenue — 196,980 196,980 Use of Estimates The preparation of these unaudited condensed consolidated financial statements, in conformity with GAAP, requires our management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingencies at the date of the unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. We evaluate our estimates, including those related to assessing our standalone selling prices, performance-based equity compensation plans and the carrying values of our real estate properties, goodwill, and accrued liabilities. We base our estimates on historical experience, current market conditions, and various other assumptions that we believe to be reasonable under the circumstances. Actual results may vary from those estimates and those estimates could vary under different assumptions or conditions. Investments in Real Estate Real estate investments are carried at cost less accumulated depreciation and amortization. The cost of real estate includes the purchase price of property and leasehold improvements. Expenditures for maintenance and repairs are expensed as incurred. Significant renovations and betterments that extend the economic useful lives of assets are capitalized. During land development and construction periods, we capitalize construction costs, legal fees, financing costs, real estate taxes and insurance, rent expense and internal costs of personnel performing development, if such costs are incremental and identifiable to a specific development project. Capitalization of costs begins upon commencement of development efforts and ceases when the project is ready for its intended use and held available for occupancy. Interest is capitalized during the period of development based upon applying the weighted-average borrowing rate to the actual development costs expended. Capitalized interest costs were $1.1 million and $0.8 million for the three months ended June 30, 2018, and 2017, respectively. Capitalized interest costs were $2.2 million and $1.4 million for the six months ended June 30, 2018, and 2017, respectively. Depreciation and amortization are calculated using the straight-line method over the following useful lives of the assets: Buildings 27 to 40 years Building improvements 1 to 10 years Leasehold improvements The shorter of the lease term or useful life of the asset Depreciation expense was $30.8 million and $26.7 million for the three months ended June 30, 2018, and 2017, respectively. Depreciation expense was $59.9 million and $53.5 million for the six months ended June 30, 2018, and 2017, respectively. Acquisition of Investment in Real Estate When accounting for business combinations and asset acquisitions, the fair value of the real estate acquired is allocated to the acquired tangible assets, consisting primarily of land, building and building improvements, and identified intangible assets and liabilities, consisting of the value of above-market and below-market leases, value of in-place leases and the value of customer relationships. The fair value of the land and building of an acquired property is determined by valuing the property as if it were vacant, and the “as-if-vacant” fair value is then allocated to land and building based on management's determination of the fair values of these assets. Management determines the as-if-vacant fair value of a property using methods similar to those used by independent appraisers. Factors considered by management in performing these analyses include an estimate of carrying costs during the expected lease-up periods considering current market conditions and costs to execute similar leases. The fair value of intangibles related to in-place leases includes the value of lease intangibles for above-market and below-market leases, lease origination costs, and customer relationships, determined on a lease-by-lease basis. Above-market and below-market leases are valued based on the present value (using an interest rate which reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to the in-place leases and (ii) management's estimate of market lease rates for the corresponding in-place leases, measured over a period equal to the remaining noncancelable term of the lease and, for below-market leases, over a time period equal to the initial term plus any below-market fixed rate renewal periods. Lease origination costs include estimates of costs avoided associated with leasing the property, including tenant allowances and improvements and leasing commissions. Customer relationship intangibles relate to the additional revenue opportunities expected to be generated through interconnection services and utility services to be provided to the in-place lease tenants. The capitalized values for above and below-market lease intangibles, lease origination costs, and customer relationships are amortized over the term of the underlying leases or the expected customer relationship. Amortization related to above-market and below-market leases where the Company is the lessor is recorded as either a reduction of or an increase to rental revenue, amortization related to above-market and below-market leases where the Company is the lessee is recorded as either a reduction of or an increase to rent expense. If a lease is terminated prior to its stated expiration, all unamortized amounts relating to that lease are written off. The carrying value of intangible assets is reviewed for impairment in connection with its respective asset group whenever events or changes in circumstances indicate that the asset group may not be recoverable. An impairment loss is recognized if the carrying amount of the asset group is not recoverable and its carrying amount exceeds its estimated fair value. No impairment loss related to these intangible assets was recognized for the three or six months ended June 30, 2018, or 2017. The excess of the cost of an acquired business over the net of the amounts assigned to assets acquired (including identified intangible assets) and liabilities assumed is recorded as goodwill. As of June 30, 2018, and December 31, 2017, we had $40.6 million of goodwill at each date. The Company’s goodwill has an indeterminate life and is not amortized, but is tested for impairment on an annual basis, or more frequently if events or changes in circumstances indicate that the asset might be impaired. No impairment loss was recognized for the three or six months ended June 30, 2018, or 2017. Cash and Cash Equivalents Cash and cash equivalents include all non-restricted cash held in financial institutions and other non-restricted highly liquid short-term investments with original maturities at acquisition of three months or less. Initial Direct Costs Initial direct costs include commissions paid to third parties, including brokers, leasing and referral agents, and internal sales commissions paid to employees for successful execution of lease agreements. Initial direct costs are incremental costs that would not have been incurred if the lease agreement had not been executed. These commissions are capitalized and generally amortized over the term of the related leases using the straight-line method. If a customer lease terminates prior to the expiration of its initial term, any unamortized initial direct costs related to the lease are written off to amortization expense. Amortization of initial direct costs were $3.9 million and $4.0 million for the three months ended June 30, 2018, and 2017, respectively. Amortization of initial direct costs was $7.8 million and $8.1 million for the six months ended June 30, 2018, and 2017, respectively. Initial direct costs are included within other assets in the condensed consolidated balance sheets and consisted of the following, net of amortization, as of June 30, 2018, and December 31, 2017 (in thousands): June 30, December 31, 2018 2017 Internal sales commissions $ 16,118 $ 17,402 Third party commissions 10,502 11,802 Other 679 775 Total $ 27,299 $ 29,979 Deferred Financing Costs Deferred financing costs include costs incurred in connection with obtaining debt and extending existing debt. These financing costs are capitalized and amortized on a straight-line basis, which approximates the effective-interest method, over the term of the loan and the amortization is included as a component of interest expense. Depending on the type of debt instrument, deferred financing costs are reported either in other assets or as a direct deduction from the carrying amount of the related debt liabilities in our condensed consolidated balance sheets. Recoverability of Long-Lived Assets We review our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Impairment is recognized when estimated expected future cash flows (undiscounted and without interest charges) are less than the carrying amount of the assets. The estimation of expected future net cash flows is inherently uncertain and relies, to a considerable extent, on assumptions regarding current and future economics and market conditions and the availability of capital. If, in future periods, there are changes in the estimates or assumptions incorporated into the impairment review analysis, the changes could result in an adjustment to the carrying amount of the long-lived assets. To the extent that impairment has occurred, the excess of the carrying amount of long-lived assets over its estimated fair value would be recognized as an impairment loss charged to net income. For the three and six months ended June 30, 2018, and 2017, no impairment of long-lived assets was recognized in the condensed consolidated financial statements. Derivative Instruments and Hedging Activities We reflect all derivative instruments at fair value as either assets or liabilities on the condensed consolidated balance sheets. For those derivative instruments that are designated and qualify as hedging instruments, we record the gain or loss on the hedging instruments as a component of accumulated other comprehensive income or loss. For derivatives that do not meet the criteria for hedge accounting, changes in fair value are immediately recognized within net income. See additional discussion in Note 8, Derivatives and Hedging Activities. Internal-Use Software We recognize internal-use software development costs based on the development stage of the project and nature of the cost. Internal and external costs incurred during the preliminary project stage are expensed as they are incurred. Internal and external costs incurred to develop internal-use software during the application development stage are capitalized. Internal and external training costs and maintenance costs during the post-implementation-operation stage are expensed as incurred. Completed projects are placed into service and amortized over the estimated useful life of the software. No impairment was recognized related to internal-use software in the condensed consolidated statements of operations for the three and six months ended June 30, 2018, and 2017. Revenue Recognition We derive our revenues from leases with customers for data center and office and light-industrial space. Our data center leases include rental revenue lease components and nonlease revenue components, such as power. Data center lease rental revenue and power arrangements are included within a single contract, which requires that we allocate the transaction consideration to each lease and nonlease component on a relative standalone selling price basis. In instances where standalone selling prices are not directly observable, such as when we do not sell the product or service separately, we determine our standalone selling prices by maximizing our use of observable inputs as well as various market conditions. We typically have more than one standalone selling price for individual services due to the variability of the pricing of those services based on market, building, and customer specific conditions. We estimate standalone selling prices based on the contractual prices charged to customers and allocate discounts proportionately when necessary. Interconnection revenue and other data center services revenue are accounted for as separate contracts that are generally month-to-month or a point-in-time service and are not combined with lease and power arrangements. Lessor Rental Revenue Our leases with customers are classified as operating leases and rental revenue is recognized on a straight-line basis over the customer lease term. Occasionally, our customer leases include options to extend or terminate the lease agreements. We do not include any of these extension or termination options in a customer’s lease term for lease classification purposes or recognizing rental revenue unless we are reasonably certain the customer will exercise these extension or termination options. The excess of rents recognized over amounts contractually due pursuant to the underlying leases is recorded as deferred rent receivable within our condensed consolidated balance sheets. Power Revenue Customer power arrangements are coterminous with the customer’s underlying lease and have the same pattern of transfer over the lease term. In general, we provide two power products, including a fixed (breakered-amperage) and variable (sub-metered) model. Over the lease term, monthly power services are substantially the same and we account for the nonlease component as a series of distinct services. For our fixed power arrangements, a customer is billed and pays a fixed monthly fee per committed available amount of connected power. The customer simultaneously receives and consumes the power benefits we provide over the lease term and we recognize power revenue on a straight-line basis over the lease term. For our variable power arrangements, a customer pays us variable monthly fees for the specific amount of power utilized at the current utility rates. Customers have the flexibility to increase or decrease the amount of power consumed, and therefore “sub-metered power” revenue is constrained at contract inception. We recognize power revenue each month as the uncertainty related to the consideration is resolved, as power is provided to our customers, and our customers utilize the power. Interconnection Revenue Interconnection services are generally contracted on a month-to-month basis cancellable by the customer at any time. We recognize revenue each month as these services are delivered to and utilized by our customers. Tenant Reimbursement and Other Revenue Some of our leases contain provisions under which our customers reimburse us for common area maintenance and other executory costs. Such tenant reimbursements are recognized in the period that the expenses are recognized. We also provide other data center support services to our customers, which are generally provided to customers at a point in time. We recognize revenue each month as these service are delivered to and utilized by our customers. A provision for uncollectible accounts is recorded if a receivable balance relating to contractual rent, rent recorded on a straight-line basis, tenant reimbursements or other billed amounts is considered by management to be uncollectible. At June 30, 2018, and December 31, 2017, the allowance for doubtful accounts totaled $0.9 million and $1.1 million, respectively, on the condensed consolidated balance sheets. Lessee Accounting We determine if an arrangement is a lease at inception. Our operating lease agreements are primarily for real estate space and are included within operating lease ROU assets and operating lease liabilities on the condensed consolidated balance sheets. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. Variable lease payments are excluded from the ROU assets and lease liabilities and are recognized in the period in which the obligation for those payments is incurred. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. ROU assets also include any lease payments made and exclude lease incentives. Many of our lessee agreements include options to extend the lease, which we do not include in our minimum lease terms unless they are reasonably certain to be exercised. Rental expense for lease payments related to operating leases is recognized on a straight-line basis over the lease term. Share-Based Compensation We account for share-based compensation using the fair value method of accounting. The estimated fair value of the stock options granted by us is calculated based on the Black-Scholes option-pricing model. The fair value of restricted share-based and Operating Partnership unit compensation is based on the fair value of our common stock on the date of the grant. The fair value of performance share awards, which have a market condition, is based on a Monte Carlo simulation. The fair value for all share-based compensation is amortized on a straight-line basis over the vesting period. We have elected to account for forfeitures as they occur. Asset Retirement and Environmental Remediation Obligations We record accruals for estimated asset retirement and environmental remediation obligations. The obligations relate primarily to the removal of asbestos during development of properties as well as the estimated equipment removal costs upon termination of a certain lease where we are the lessee. At June 30, 2018, and December 31, 2017, the amount included in unearned revenue, prepaid rent and other liabilities on the condensed consolidated balance sheets was $1.5 million at each date. Income Taxes We elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended (the “Code”), commencing with our taxable year ended December 31, 2010. To qualify as a REIT, we are required to distribute at least 90% of our taxable income to our stockholders and meet various other requirements imposed by the Code relating to such matters as operating results, asset holdings, distribution levels and diversity of stock ownership. Provided we qualify for taxation as a REIT, we generally are not subject to corporate level federal income tax on the earnings distributed currently to our stockholders. If we fail to qualify as a REIT in any taxable year, and are unable to avail ourselves of certain savings provisions set forth in the Code, all of our taxable income would be subject to federal income tax at regular corporate rates, including any applicable alternative minimum tax. To maintain REIT status, we must distribute a minimum of 90% of our taxable income. However, it is our policy and intent, subject to change, to distribute 100% of our taxable income and therefore, no provision is required in the accompanying condensed consolidated financial statements for federal income taxes with regards to our activities and our subsidiary pass-through entities. The allocable share of taxable income is included in the income tax returns of our stockholders. We are subject to the statutory requirements of the locations in which we conduct business. State and local income taxes are accrued as deemed required in the best judgment of management based on analysis and interpretation of respective tax laws. We have elected to treat certain subsidiaries as taxable REIT subsidiaries (“TRS”). Certain activities that we undertake must be conducted by a TRS, such as services for our tenants that could be considered otherwise impermissible for us to perform and holding assets that we cannot hold directly. A TRS is subject to corporate level federal and state income taxes. Deferred income taxes are recognized in certain taxable entities. Deferred income tax generally is a function of the period's temporary differences (items that are treated differently for tax purposes than for financial reporting purposes), the utilization of tax net operating losses generated in prior years that previously had been recognized as deferred income tax assets and the reversal of any previously recorded deferred income tax liabilities. A valuation allowance for deferred income tax assets is provided if we believe all or some portion of the deferred income tax asset may more likely than not be realized. Any increase or decrease in the valuation allowance resulting from a change in circumstances that causes a change in the estimated realizability of the related deferred income tax asset is included in deferred tax expense. As of June 30, 2018, and December 31, 2017, the gross deferred income taxes were not material. We currently have no liabilities for uncertain income tax positions. The earliest tax year for which we are subject to examination is 2014. Concentration of Credit Risks Our cash and cash equivalents are maintained in various financial institutions, which, at times, may exceed federally insured limits. We have not experienced any losses in such accounts, and management believes that the Company is not exposed to any significant credit risk in this area. We have no off-balance sheet concentrations of credit risk, such as foreign exchange contracts, option contracts, or foreign currency hedging arrangements. Segment Information We manage our business as one reportable segment consisting of investments in data centers located in the United States. Although we provide services in several markets, these operations have been aggregated into one reportable segment based on the similar economic characteristics amongst all markets, including the nature of the services provided and the type of customers purchasing these services.

Investment in Real Estate

Investment in Real Estate	6 Months Ended
	Jun. 30, 2018
Investment in Real Estate
Investment in Real Estate	3. Investment in Real Estate The following is a summary of the properties owned or leased by market at June 30, 2018 (in thousands): Buildings and Construction in Market Land Improvements Progress Total Cost Boston $ 5,154 $ 106,981 $ 445 $ 112,580 Chicago (1) 5,493 113,068 5,258 123,819 Denver — 27,610 1,593 29,203 Los Angeles (2) 28,467 331,820 13,161 373,448 Miami 728 11,745 1,383 13,856 New York 2,729 148,833 35,431 186,993 Northern Virginia 23,679 325,068 70,555 419,302 San Francisco Bay 31,386 624,444 18,410 674,240 Total $ 97,636 $ 1,689,569 $ 146,236 $ 1,933,441 (1) On January 29, 2018, we acquired a two-acre land parcel located in downtown Chicago, Illinois, for a purchase price of $4.5 million. We expect to build a 175,000 square foot turn-key data center building on the acquired land parcel, which we refer to as CH2, upon the receipt of necessary permits and entitlements. (2) On April 20, 2018, we acquired U.S. Colo, a carrier-neutral, network-dense colocation provider, located in Los Angeles, California, for a purchase price of $6.3 million, net of previously accrued legal expense. In connection with the U.S. Colo acquisition, we assumed a leasehold interest of 6,723 square feet at our existing LA1 facility. We also assumed a leasehold interest of 21,850 square feet at a nearby colocation data center facility, which we refer to as LA4.

Other Assets

Other Assets	6 Months Ended
	Jun. 30, 2018
Other Assets.
Other Assets	4. Other Assets Other assets consisted of the following, net of amortization and depreciation, if applicable for each line item, as of June 30, 2018, and December 31, 2017 (in thousands): June 30, December 31, 2018 2017 Deferred rent receivable $ 42,705 $ 40,038 Initial direct costs 27,299 29,979 Internal-use software 17,665 17,477 Prepaid expenses 6,745 6,770 Corporate furniture, fixtures and equipment 5,686 6,408 Deferred financing costs - revolving credit facility 3,311 957 Other 2,776 1,872 Total $ 106,187 $ 103,501

Leases

Leases	6 Months Ended
	Jun. 30, 2018
Leases
Leases	5. Leases As the lessee, we currently lease real estate space under noncancelable operating lease agreements for our turn-key data centers at NY1, LA1, LA4, DC1, DC2, DE1, and DE2, and our corporate headquarters located in Denver, Colorado. Our leases have remaining lease terms of one year to 11 years, some of which include options to extend the leases for up to an additional 20 years. We do not include any of our renewal options in our lease terms for calculating our lease liability as the renewal options allow us to maintain operational flexibility and we are not reasonably certain we will exercise these options at this time. The weighted-average remaining lease term for our operating leases was ten years and five years at June 30, 2018, and December 31, 2017, respectively. The weighted-average discount rate was 4.9% and 4.8% at June 30, 2018, and December 31, 2017. On June 30, 2018, we extended the term of approximately 160,000 NRSF of our existing LA1 space from July 2022 to July 2029. As a result of this modification, we re-measured the lease liability and adjusted the ROU asset by $91.4 million. We also expanded our LA1 facility by leasing an additional 17,238 square feet, which we plan to convert into turn-key data center space. We expect this lease to commence once we obtain control of the space and start construction activities in the second half of 2018 with a lease term through July 2029, concurrent with our existing space. In addition, we assumed a $5.3 million lease liability and ROU asset associated with the acquisition of U.S. Colo in April 2018. The components of lease expense were as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Lease expense: Operating lease expense $ 5,418 $ 5,089 $ 10,645 $ 10,178 Variable lease expense 1,129 842 2,302 1,715 Rent expense $ 6,547 $ 5,931 $ 12,947 $ 11,893 The future minimum lease payments to be paid under noncancelable leases in effect at June 30, 2018, are as follows (in thousands): Operating Period / Year Ending December 31, Leases 2018 $ 11,848 2019 24,282 2020 24,651 2021 24,406 2022 24,035 Thereafter 136,507 Total lease payments $ 245,729 Less imputed interest (54,235) Total $ 191,494

Contracts with customers

Contracts with customers	6 Months Ended
	Jun. 30, 2018
Contracts with customers
Contracts with customers	6. Contracts with Customers The future minimum lease payments to be received under noncancelable operating leases and the minimum payments to be received for our fixed contracted power services in effect at June 30, 2018, are as follows (in thousands): Period / Year Ending December 31, Rent Power 2018 $ 136,873 $ 37,124 2019 216,169 47,118 2020 149,240 24,945 2021 113,350 13,711 2022 86,292 7,755 Thereafter 170,391 4,561 Total $ 872,315 $ 135,214 In addition to our fixed minimum lease and power service payments, we receive monthly fees for variable power arrangements, interconnection services and tenant reimbursements.

Debt

Debt	6 Months Ended
	Jun. 30, 2018
Debt
Debt	7. Debt A summary of outstanding indebtedness as of June 30, 2018, and December 31, 2017, is as follows (in thousands): Maturity June 30, December 31, Interest Rate Date 2018 2017 Revolving credit facility 3.54% and 3.11% at June 30, 2018, and December 31, 2017, respectively April 19, 2022 $ 111,964 $ 169,500 2020 Senior unsecured term loan (1) 3.16% and 3.00% at June 30, 2018, and December 31, 2017, respectively June 24, 2020 150,000 150,000 2021 Senior unsecured term loan 3.49% and 3.06% at June 30, 2018, and December 31, 2017, respectively February 2, 2021 100,000 100,000 2022 Senior unsecured term loan (2) 3.34% and 3.04% at June 30, 2018, and December 31, 2017, respectively April 19, 2022 200,000 200,000 2023 Senior unsecured term loan (3) 3.80% at June 30, 2018 April 19, 2023 150,000 — 2023 Senior unsecured notes 4.19% at June 30, 2018, and December 31, 2017, respectively June 15, 2023 150,000 150,000 2024 Senior unsecured notes 3.91% at June 30, 2018, and December 31, 2017, respectively April 20, 2024 175,000 175,000 Total principal outstanding ` 1,036,964 944,500 Unamortized deferred financing costs (6,428) (4,930) Total debt $ 1,030,536 $ 939,570 (1) Our Operating Partnership has in place a swap agreement with respect to the 2020 Term Loan (as defined below) to swap the variable interest rate associated with $75 million, or 50% of the principal amount, of the 2020 Term Loan to a fixed rate of approximately 2.83% per annum at our current leverage ratio. The interest rate on the remaining $75 million of the 2020 Term Loan is based on LIBOR plus the applicable spread. The effective interest rate as of June 30, 2018, is 3.16%. See Note 8 – Derivatives and Hedging Activities. (2) Our Operating Partnership has in place a swap agreement with respect to the 2022 Term Loan (as defined below) to swap the variable interest rate associated with $50 million, or 25% of the principal amount of the 2022 Term Loan to a fixed rate of approximately 2.88% per annum at our current leverage ratio as of June 30, 2018. The interest rate on the remaining $150 million of the 2022 Term Loan is based on LIBOR plus the applicable spread. The effective interest rate as of June 30, 2018, is 3.34%. See Note 8 – Derivatives and Hedging Activities. (3) Our Operating Partnership has in place a swap agreement with respect to the 2023 Term Loan (as defined below) to swap the variable interest rate associated with $75 million, or 50% of the principal amount of the 2023 Term Loan, to a fixed rate of approximately 4.12% per annum at our current leverage ratio as of June 30, 2018. The interest rate on the remaining $75 million of the 2023 Term Loan is based on LIBOR plus the applicable spread. The effective interest rate as of June 30, 2018, is 3.80%. See Note 8 – Derivatives and Hedging Activities. Revolving Credit Facility On April 19, 2018, our Operating Partnership and certain subsidiary co-borrowers amended and restated our previous credit agreement, (as amended, the “Amended and Restated Credit Agreement”), in order to provide additional liquidity of $250 million, which was used to pay down a portion of the then-existing current revolving credit facility balance, fund continued development across our portfolio, and for general corporate purposes. The Amended and Restated Credit Agreement, among other things, increased the revolving credit facility from $350 million to $450 million and extended the maturity date from June 24, 2019, to April 19, 2022, with a one-time extension option, which, if exercised, would extend the maturity date to April 19, 2023. The exercise of the extension option is subject to the payment of an extension fee equal to 10 basis points of the total commitment under the Amended and Restated Credit Agreement at initial maturity and certain other customary conditions. The Amended and Restated Credit Agreement increased our total commitment from $600 million to $850 million, consisting of a $450 million revolving credit facility, a $150 million senior unsecured term loan scheduled to mature on June 24, 2020, a $100 million senior unsecured term loan scheduled to mature on February 2, 2021, and a new $150 million senior unsecured term loan scheduled to mature on April 19, 2023. See “2020 Senior Unsecured Term Loan,” “2021 Senior Unsecured Term Loan,” and “2023 Senior Unsecured Term Loan” below for a discussion of the $150 million, $100 million, and $150 million term loans, respectively. The Amended and Restated Credit Agreement also increased our accordion feature by $150 million to $350 million, which allows our Operating Partnership to increase the total commitment from $850 million to $1.2 billion, under specified circumstances, including securing capital from new or existing lenders. Borrowings under the revolving credit facility have been amended to bear interest at a variable rate per annum equal to either (i) LIBOR plus 145 basis points to 205 basis points, or (ii) a base rate plus 45 basis points to 105 basis points, each depending on our Operating Partnership’s leverage ratio. At June 30, 2018, our Operating Partnership’s leverage ratio was 24.3% and the interest rate was LIBOR plus 145 basis points. The total amount available for borrowing under the revolving credit facility, is equal to the lesser of $450.0 million or the availability calculated based on our unencumbered asset pool. As of June 30, 2018, the borrowing capacity was $450.0 million. As of June 30, 2018, $112.0 million was borrowed and outstanding, $4.9 million was outstanding under letters of credit, and therefore $333.1 million remained available for us to borrow under the revolving credit facility. Our ability to borrow under the Amended and Restated Credit Agreement is subject to ongoing compliance with a number of financial covenants and other customary restrictive covenants, including, among others: · a maximum leverage ratio (defined as total consolidated indebtedness to total gross asset value) of 60%, which, as of June 30, 2018, was 24.3% · a maximum secured debt ratio (defined as total consolidated secured debt to total gross asset value) of 40%, which, as of June 30, 2018, was 0.0% · a minimum fixed charge coverage ratio (defined as adjusted consolidated earnings before interest, taxes, depreciation and amortization to consolidated fixed charges) of 1.5 to 1.0, which, as of June 30, 2018, was 7.9 to 1.0. The Amended and Restated Credit Agreement ranks pari passu with the 2020 Term Loan, the 2021 Term Loan, the 2022 Term Loan, the 2023 Term Loan (each as defined herein), the 2023 Notes, and the 2024 Notes and contains the same financial covenants and other customary restrictive covenants as those debt instruments. In connection with the Amended and Restated Credit Agreement, the revolving credit facility and senior unsecured term loans were amended to remove or change certain financial covenants and other customary restrictive covenants, including removal of covenants limiting distributions (except upon an event of default), incurrence of unhedged variable rate debt, and increases or decreases, as applicable to a number of ratios and other figures in the Amended and Restated Credit Agreement resulting in increased flexibility for our Operating Partnership. As of June 30, 2018, we were in compliance with all of the financial covenants under the Amended and Restated Credit Agreement. 2020 Senior Unsecured Term Loan On June 24, 2015, in connection with, and pursuant to the terms of, the previous credit agreement, our Operating Partnership and certain subsidiaries entered into a $150 million senior unsecured term loan (the “2020 Term Loan”). The 2020 Term Loan has a five-year term maturing on June 24, 2020. The 2020 Term Loan ranks pari passu with the 2021 Term Loan, the 2022 Term Loan, the 2023 Term Loan, the 2023 Notes, the 2024 Notes and the Amended and Restated Credit Agreement and contains the same financial covenants and other customary restrictive covenants as those debt instruments. As of June 30, 2018, we were in compliance with all of the financial covenants under the 2020 Term Loan. As a result of the Amended and Restated Credit Agreement, the borrowings under the 2020 Term Loan bear interest at a variable rate per annum equal to either (i) LIBOR plus 140 basis points to 200 basis points, or (ii) a base rate plus 40 basis points to 100 basis points, each depending on our Operating Partnership's leverage ratio. At June 30, 2018, the Operating Partnership’s leverage ratio was 24.3% and the interest rate was LIBOR plus 140 basis points. 2021 Senior Unsecured Term Loan On February 2, 2016, pursuant to the terms of the previous credit agreement, we partially exercised the accordion feature and entered into a $100 million senior unsecured term loan (the “2021 Term Loan”). The 2021 Term Loan has a five-year term maturing on February 2, 2021. The 2021 Term Loan ranks pari passu with the 2020 Term Loan, the 2022 Term Loan, the 2023 Term Loan, the 2023 Notes, the 2024 Notes and the Amended and Restated Credit Agreement and contains the same financial covenants and other customary restrictive covenants as those debt instruments. As of June 30, 2018, we were in compliance with all of the financial covenants under the 2021 Term Loan. As a result of the Amended and Restated Credit Agreement, the borrowings under the 2021 Term Loan bear interest at a variable rate per annum equal to either (i) LIBOR plus 140 basis points to 200 basis points, or (ii) a base rate plus 40 basis points to 100 basis points, each depending on our Operating Partnership’s leverage ratio. At June 30, 2018, our Operating Partnership’s leverage ratio was 24.3% and the interest rate was LIBOR plus 140 basis points. 2022 Senior Unsecured Term Loan On April 19, 2017, our Operating Partnership and certain subsidiaries amended and restated the $100 million senior unsecured term loan, originally entered into on January 31, 2014, to (i) exercise the accordion feature to increase the total commitments to $200 million, (ii) extend the maturity of the term loan from January 31, 2019, to April 19, 2022, (iii) amend the accordion feature to allow an increase in total commitments from $200 million to $300 million, under specified circumstances, including securing capital from new or existing lenders, and (iv) explicitly permit the issuance of the 2024 Notes defined below (the “2022 Term Loan”). The 2022 Term Loan ranks pari passu with the 2020 Term Loan, the 2021 Term Loan, the 2023 Term Loan, the 2023 Notes, the 2024 Notes and the Amended and Restated Credit Agreement and contains the same financial covenants and other customary restrictive covenants as those debt instruments. As of June 30, 2018, we were in compliance with all of the financial covenants under the 2022 Term Loan. As a result of the Amended and Restated Credit Agreement, the borrowings under the 2022 Term Loan bear interest at a variable rate per annum equal to either (i) LIBOR plus 140 basis points to 200 basis points, or (ii) a base rate plus 40 basis points to 100 basis points, each depending on our Operating Partnership's leverage ratio. At June 30, 2018, our Operating Partnership’s leverage ratio was 24.3% and the interest rate was LIBOR plus 140 basis points. 2023 Senior Unsecured Term Loan On April 19, 2018, in connection with, and pursuant to the terms of, the Amended and Restated Credit Agreement, our Operating Partnership and certain subsidiaries entered into the 2023 Term Loan in principal amount of $150 million. The 2023 Term Loan has a five-year term maturing on April 19, 2023. The 2023 Term Loan ranks pari passu with the 2020 Term Loan, the 2021 Term Loan, the 2022 Term Loan, the 2023 Notes, the 2024 Notes and the Amended and Restated Credit Agreement and contains the same financial covenants and other customary restrictive covenants as those debt instruments. The borrowings under the 2023 Term Loan bear interest at a variable rate per annum equal to either (i) LIBOR plus 140 basis points to 200 basis points, or (ii) a base rate plus 40 basis points to 100 basis points, each depending on our Operating Partnership’s leverage ratio. At June 30, 2018, our Operating Partnership’s leverage ratio was 24.3% and the interest rate was LIBOR plus 140 basis points. 2023 Senior Unsecured Notes On June 15, 2016, our Operating Partnership issued an aggregate principal amount of $150 million, 4.19% senior unsecured notes due June 15, 2023 (the “2023 Notes”), in a private placement to certain accredited investors. The terms of the 2023 Notes are governed by a note purchase agreement, dated June 15, 2016 (the “2023 Note Purchase Agreement”), by and among our Operating Partnership, the Company and the purchasers of the 2023 Notes. Interest is payable semiannually, on the 15 th day of June and December of each year, commencing on December 15, 2016. The 2023 Notes are senior unsecured obligations of our Operating Partnership and are jointly and severally guaranteed by the Company and each of our Operating Partnership’s subsidiaries that guarantees indebtedness under our Operating Partnership’s Amended and Restated Credit Agreement (the “Subsidiary Guarantors”). Our Operating Partnership may prepay all or a portion of the 2023 Notes upon notice to the holders for 100% of the principal amount so prepaid plus a make-whole premium as set forth in the 2023 Note Purchase Agreement. Upon the occurrence of certain change of control events, holders of the 2023 Notes have the right to require our Operating Partnership to purchase 100% of such holders’ 2023 Notes in cash at a purchase price equal to 100% of the principal amount thereof plus accrued and unpaid interest, if any, to the date of repurchase. The 2023 Notes rank pari passu with the 2020 Term Loan, the 2021 Term Loan, the 2022 Term Loan, the 2023 Term Loan, the 2024 Notes and the Amended and Restated Credit Agreement. On June 12, 2018, the 2023 Note Purchase Agreement was amended to, among other things, conform to the same terms and financial covenants as the Amended and Restated Credit Agreement. In addition, certain additional financial covenants in the Amended and Restated Credit Agreement were automatically incorporated into the 2023 Note Purchase Agreement, and, subject to certain conditions, these additional financial covenants will be deleted, removed, amended or otherwise modified to be more or less restrictive if the analogous covenant in the Amended and Restated Credit Agreement is so deleted, removed, amended or otherwise modified. These covenants are subject to a number of exceptions and qualifications set forth in the 2023 Note Purchase Agreement. As of June 30, 2018, we were in compliance with all of the financial covenants under the 2023 Note Purchase Agreement. 2024 Senior Unsecured Notes On April 20, 2017, our Operating Partnership issued an aggregate principal amount of $175 million, 3.91% senior unsecured notes due April 20, 2024 (the “2024 Notes”), in a private placement to certain accredited investors. The terms of the 2024 Notes are governed by a note purchase agreement, dated April 20, 2017 (the “2024 Note Purchase Agreement”), by and among our Operating Partnership, the Company and the purchasers of the 2024 Notes. Interest is payable semiannually, on the 15 th day of June and December of each year, commencing on December 15, 2017. The 2024 Notes are senior unsecured obligations of our Operating Partnership and are jointly and severally guaranteed by the Company and each of the Subsidiary Guarantors. Our Operating Partnership may prepay all or a portion of the 2024 Notes upon notice to the holders for 100% of the principal amount so prepaid plus a make-whole premium as set forth in the 2024 Note Purchase Agreement. Upon the occurrence of certain change of control events, holders of the 2024 Notes will have the right to require our Operating Partnership to purchase 100% of such holders’ 2024 Notes in cash at a purchase price equal to 100% of the principal amount thereof plus accrued and unpaid interest, if any, to the date of repurchase. The 2024 Notes rank pari passu with the 2020 Term Loan, the 2021 Term Loan, the 2022 Term Loan, the 2023 Term Loan, the 2023 Notes and the Amended and Restated Credit Agreement. On June 12, 2018, the 2024 Note Purchase Agreement was amended to, among other things, conform to the same terms and financial covenants as the Amended and Restated Credit Agreement. In addition, certain additional financial covenants in the Amended and Restated Credit Agreement were automatically incorporated into the 2024 Note Purchase Agreement, and, subject to certain conditions, these additional financial covenants will be deleted, removed, amended or otherwise modified to be more or less restrictive if the analogous covenant in the Amended and Restated Credit Agreement is so deleted, removed, amended or otherwise modified. These covenants are subject to a number of exceptions and qualifications set forth in the 2024 Note Purchase Agreement. As of June 30, 2018, we were in compliance with all of the financial covenants under the 2024 Note Purchase Agreement. Debt Maturities The following table summarizes when our debt currently becomes due (in thousands): Year Ending December 31, 2018 $ — 2019 — 2020 150,000 2021 100,000 2022 311,964 Thereafter 475,000 Total principal outstanding 1,036,964 Unamortized deferred financing costs (6,428) Total debt, net $ 1,030,536

Derivatives and Hedging Activit

Derivatives and Hedging Activities	6 Months Ended
	Jun. 30, 2018
Derivatives and Hedging Activities
Derivatives and Hedging Activities	8. Derivatives and Hedging Activities On April 19, 2018, we entered into a $75 million forward starting five-year interest rate swap agreement, effective May 5, 2018, to protect against adverse fluctuation in interest rates. The swap reduces our exposure to variability in cash flows relating to interest payments on $75 million of one-month LIBOR variable rate debt and effectively fixes the interest rate at approximately 4.12% per annum. On April 21, 2017, we terminated $50 million of our previously existing $100 million five-year interest rate swap agreement that reduces our exposure to variability in cash flows relating to interest payments based on one-month LIBOR variable rate debt, resulting in a remaining $50 million interest rate swap effective through January 31, 2019, at approximately 2.88% and 2.98% per annum as of June 30, 2018, and December 31, 2017. On April 9, 2015, we entered into a $75 million forward starting five-year interest rate swap agreement, effective May 5, 2015, to protect against adverse fluctuation in interest rates. The swap reduces our exposure to variability in cash flows relating to interest payments on $75 million of one-month LIBOR variable rate debt and effectively fixes the interest rate at approximately 2.83% and 2.93% per annum as of June 30, 2018, and December 31, 2017. All interest rate swap agreements were designated for hedge accounting. Risk Management Objective of Using Derivatives We are exposed to certain risks arising from both our business operations and economic conditions. We principally manage our exposures to a wide variety of business and operational risks through management of our core business activities. We manage economic risks, including interest rate, liquidity, and credit risk primarily by managing the amount, sources, and duration of our debt funding and the use of derivative financial instruments. Specifically, we enter into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known or uncertain cash amounts, the value of which are determined by interest rates. Our derivative financial instruments are used to manage differences in the amount, timing, and duration of our known or expected cash receipts and our known or expected cash payments principally related to our investments and borrowings. Cash Flow Hedges of Interest Rate Risk Our objectives in using interest rate derivatives are to reduce variability in interest expense and to manage our exposure to adverse interest rate movements. To accomplish this objective, we primarily use interest rate swaps as part of our interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. The changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in accumulated other comprehensive income or loss on the condensed consolidated balance sheets and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. The amounts recorded in other comprehensive income or loss related to the unrealized gain or loss on derivative contracts were a gain of $0.2 million and a loss of $0.3 million for the three months ended June 30, 2018, and 2017, respectively, and were a gain of $0.8 million and a loss of less than $0.1 million for the six months ended June 30, 2018, and 2017, respectively. The amounts reclassified from other comprehensive income (loss) to interest expense on the condensed consolidated statements of operations were less than ($0.1) million and $0.2 million for the three months ended June 30, 2018, and 2017, respectively, and were ($0.1) million and $0.5 million for the six months ended June 30, 2018, and 2017, respectively. Total interest expense presented in the condensed consolidated statements of operations in which the effects of cash flow hedges are recorded was $8.9 million and $6.0 million for the three months ended June 30, 2018, and 2017, respectively, and $16.6 million and $11.1 million for the six months ended June 30, 2018, and 2017, respectively. Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest expense as interest payments are made on our variable-rate debt. During the subsequent twelve months, beginning July 1, 2018, we estimate that $0.7 million will be reclassified as an increase to interest expense. Derivatives are recorded at fair value in our condensed consolidated balance sheets in other assets or unearned revenue, prepaid rent and other liabilities, as applicable. We do not net our derivative position by counterparty for purposes of balance sheet presentation and disclosure. We had $1.9 million and $1.1 million in derivative assets recognized in other assets in our condensed consolidated balance sheets as of June 30, 2018, and December 31, 2017, respectively.

Stockholders' Equity

Stockholders' Equity	6 Months Ended
	Jun. 30, 2018
Stockholders' Equity
Stockholders' Equity	9. Stockholders’ Equity We announced the following dividends per share on our common stock during the six months ended June 30, 2018: Declaration Date Record Date Payment Date Common Stock March 9, 2018 March 29, 2018 April 16, 2018 $ 0.98 May 24, 2018 June 29, 2018 July 16, 2018 1.03 Total $ 2.01

Noncontrolling Interests - Oper

Noncontrolling Interests - Operating Partnership	6 Months Ended
	Jun. 30, 2018
Noncontrolling Interests - Operating Partnership
Noncontrolling Interests - Operating Partnership	10. Noncontrolling Interests — Operating Partnership Noncontrolling interests represent the limited partnership interests in our Operating Partnership held by individuals and entities other than CoreSite Realty Corporation. The current holders of common Operating Partnership units are eligible to have the common Operating Partnership units redeemed for cash or common stock on a one-for-one basis, at our option. The following table shows the common ownership interests in our Operating Partnership as of June 30, 2018, and December 31, 2017: June 30, 2018 December 31, 2017 Number of Units Percentage of Total Number of Units Percentage of Total CoreSite Realty Corporation 33,986,299 71.1 % 33,826,264 71.0 % Noncontrolling interests 13,829,280 28.9 13,836,336 29.0 Total 47,815,579 100.0 % 47,662,600 100.0 % For each share of common stock issued by us, our Operating Partnership issues to us an equivalent common Operating Partnership unit. During the six months ended June 30, 2018, we issued 160,035 shares of common stock related to employee compensation arrangements and therefore an equivalent number of common Operating Partnership units were issued to us by our Operating Partnership. Holders of common Operating Partnership units for the six months ended June 30, 2018, received distributions of $2.01 per unit, payable in correlation with declared dividends on common stock. The redemption value of the noncontrolling interests at June 30, 2018, was $1.5 billion based on the closing price of the Company’s common stock of $110.82 per share on the last trading day prior to that date.

Equity Incentive Award Plan

Equity Incentive Award Plan	6 Months Ended
	Jun. 30, 2018
Equity Incentive Award Plan
Equity Incentive Plan	11. Equity Incentive Plan Our Board of Directors adopted and, with the approval of our stockholders, amended the 2010 Equity Incentive Plan (as amended, the “2010 Plan”). The 2010 Plan is administered by the Compensation Committee of our Board of Directors. Awards issuable under the 2010 Plan include common stock, stock options, restricted stock, stock appreciation rights, dividend equivalents, Operating Partnership units and other incentive awards. We have reserved a total of 6,000,000 shares of our common stock for issuance pursuant to the 2010 Plan, which may be adjusted for changes in our capitalization and certain corporate transactions. To the extent that an award expires, terminates or lapses, or an award is settled in cash without the delivery of shares of common stock to the participant, then any unvested shares subject to the award will be available for future grant or sale under the 2010 Plan. Shares of restricted stock that are forfeited or repurchased by us pursuant to the 2010 Plan may again be awarded under the 2010 Plan. The payment of dividend equivalents in cash in conjunction with any outstanding awards will not be counted against the shares available for issuance under the 2010 Plan. As of June 30, 2018, 2,844,780 shares of our common stock were available for issuance pursuant to the 2010 Plan. Stock Options Stock option awards are granted with an exercise price equal to the closing market price of the Company’s common stock on the date of grant. The fair value of each option granted under the 2010 Plan is estimated on the date of grant using the Black-Scholes option-pricing model. The fair values are amortized on a straight-line basis over the vesting periods. Stock options have not been granted since the year ended December 31, 2013. The following table sets forth stock option activity under the 2010 Plan for the six months ended June 30, 2018: Number of Shares Weighted- Subject to Average Option Exercise Price Options outstanding, December 31, 2017 67,789 $ 19.12 Granted — — Exercised (12,881) 17.04 Forfeited — — Expired — — Options outstanding, June 30, 2018 54,908 $ 19.60 As of June 30, 2018, all stock option awards are fully vested. Restricted Stock Awards and Units Restricted stock awards and restricted stock units, or RSUs, are granted with a fair value equal to the closing market price of the Company’s common stock on the date of grant. The principal difference between restricted stock awards and RSUs is that RSUs are not shares of our common stock and do not have any of the rights or privileges thereof, including voting rights. On the applicable vesting date, the holder of an RSU becomes entitled to a share of common stock. The restricted stock awards and RSUs are amortized on a straight-line basis to expense over the vesting period. The following table sets forth the number of unvested restricted stock awards and RSUs and the weighted-average fair value of these awards at the date of grant: Restricted Weighted- Stock Average Fair Awards and Value at Grant Units Date Unvested balance, December 31, 2017 289,843 $ 70.71 Granted 150,727 97.15 Forfeited (21,669) 82.36 Vested (112,937) 63.52 Unvested balance, June 30, 2018 305,964 $ 85.56 As of June 30, 2018, total unearned compensation on restricted stock awards and RSUs was approximately $22.6 million, and the weighted-average vesting period was 2.7 years. Performance Stock Awards We grant long-term incentives to members of management in the form of performance-based restricted stock awards (“PSAs”) under the 2010 Plan. The number of PSAs earned is based on our achievement of relative total shareholder return (“TSR”) measured versus the MSCI US REIT Index over a three-year performance period and ranges between 25% and 175% of the target number of shares for PSAs granted in 2016, 2017, and 2018. The PSAs are granted at the maximum percentage of target and are retired annually to the extent we do not meet the maximum relative TSR performance threshold versus the MSCI US REIT Index. The PSAs are earned upon TSR achievement measured both annually and over the full three-year performance period. The PSAs have a service condition and will be released at the end of the three-year performance period, to the extent earned, provided that the holder continues to be employed by or otherwise in service of the Company at the end of the three-year performance period. The PSAs are amortized on a straight-line basis to expense over the vesting period. Holders of the PSAs are entitled to dividends on the PSAs, which are accrued and paid in cash at the end of the three-year performance period. The following table sets forth the number of unvested PSAs and the weighted-average fair value of these awards at the date of grant: Weighted- Average Fair Performance-Based Restricted Stock Awards Value at Grant Minimum Maximum Target Date Unvested balance, December 31, 2017 38,694 130,843 84,769 $ 84.63 Granted 10,667 74,670 42,669 100.93 Performance adjustment (1) 33,403 — 16,702 — Forfeited — — — — Vested (32,003) (32,003) (32,003) 61.22 Unvested balance, June 30, 2018 50,761 173,510 112,137 $ 96.54 (1) Includes the annual adjustment for the number of PSAs earned based on our achievement of relative TSR measured versus the MSCI US REIT Index for the applicable performance periods. As of June 30, 2018, total unearned compensation on PSAs was approximately $6.2 million, and the weighted-average vesting period was 2.3 years. The fair value of each PSA award is estimated on the date of grant using a Monte Carlo simulation. The simulation requires assumptions for expected volatility, risk-free rate of return, and dividend yield. The following table summarizes the assumptions used to value the PSAs granted during the six months ended June 30, 2018, and 2017. Six Months Ended June 30, 2018 2017 Expected term (in years) 2.82 2.81 Expected volatility 24.15 % 23.33 % Expected annual dividend (1) — — Risk-free rate 2.24 % 1.60 % (1) The fair value of the PSAs assumes reinvestment of dividends.

Earnings Per Share

Earnings Per Share	6 Months Ended
	Jun. 30, 2018
Earnings Per Share
Earnings Per Share	12. Earnings Per Share Basic net income per share is calculated by dividing the net income attributable to common shares by the weighted-average number of common shares outstanding during the period. Diluted net income per share adjusts basic net income per share for the effects of potentially dilutive common shares, if the effect is not antidilutive. Potentially dilutive common stock consists of shares issuable under the 2010 Plan. The following is a summary of basic and diluted net income per share (in thousands, except share and per share amounts): Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Net income attributable to common shares $ 19,389 $ 15,643 $ 39,691 $ 31,935 Weighted-average common shares outstanding - basic 34,049,391 33,835,727 33,992,792 33,698,022 Effect of potentially dilutive common shares: Stock options 48,720 76,968 51,267 117,550 Unvested awards 122,210 141,121 139,349 194,358 Weighted-average common shares outstanding - diluted 34,220,321 34,053,816 34,183,408 34,009,930 Net income per share attributable to common shares Basic $ 0.57 $ 0.46 $ 1.17 $ 0.95 Diluted $ 0.57 $ 0.46 $ 1.16 $ 0.94 In the calculations above, we have excluded weighted-average potentially dilutive securities of 908 and 562 for the three months ended June 30, 2018, and 2017, respectively, and 105,829 and 92,260 for the six months ended June 30, 2018, and 2017, respectively, as their effect would have been antidilutive.

Estimated Fair Value of Financi

Estimated Fair Value of Financial Instruments	6 Months Ended
	Jun. 30, 2018
Estimated Fair Value of Financial Instruments
Estimated Fair Value of Financial Instruments	13. Estimated Fair Value of Financial Instruments Authoritative guidance issued by FASB establishes a hierarchy of valuation techniques based on the observability of inputs utilized in measuring assets and liabilities at fair values. This hierarchy establishes market-based or observable inputs as the preferred source of values, followed by valuation models using management assumptions in the absence of market inputs. The three levels of the hierarchy under the authoritative guidance are as follows: Level 1 — Quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity can access at the assessment date. Level 2 — Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3 — Unobservable inputs for the asset or liability. Our financial instruments consist of cash and cash equivalents, accounts and other receivables, interest rate swaps, the revolving credit facility, the senior unsecured term loans, senior unsecured notes, interest payable and accounts payable. The carrying values of cash and cash equivalents, accounts and other receivables, interest payable and accounts payable approximate fair values due to the short-term nature of these financial instruments. The interest rate swaps are recorded at fair value. The valuation of our derivatives is determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative, which reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves. We have determined that the majority of the inputs used to value our derivatives fall within Level 2 of the fair value hierarchy; however, the credit valuation adjustments associated with our derivatives utilize Level 3 inputs, such as estimates of current credit spreads, to evaluate the likelihood of default by our Operating Partnership and its counterparties. As of June 30, 2018, we have assessed the significance of the impact of the credit valuation adjustments on the overall valuation of our derivative positions and have determined that the credit valuation adjustment is not significant to the overall valuation of our derivative portfolio. As a result we classify our derivative valuation in Level 2 of the fair value hierarchy. The total principal balance of our revolving credit facility, senior unsecured term loans, and senior unsecured notes was $1,037.0 million and $944.5 million as of June 30, 2018, and December 31, 2017, respectively, with a fair value of $1,039.0 million and $946.6 million, respectively, based on Level 3 inputs from the fair value hierarchy. Under the discounted cash flow method, the fair values of the revolving credit facility and the senior unsecured term loans are based on our assumptions of market interest rates and terms available incorporating our credit risk for similar loan maturities. Our lease liabilities are determined based on the estimated present value of our minimum lease payments under our lease agreements. The discount rate used to determine the lease liabilities is based on our estimated incremental borrowing rate, based on Level 3 inputs from the fair value hierarchy.

Commitments and Contingencies

Commitments and Contingencies	6 Months Ended
	Jun. 30, 2018
Commitments and Contingencies.
Commitments and Contingencies	14. Commitments and Contingencies Our properties require periodic investments of capital for general capital improvements and for tenant-related capital expenditures. We enter into various construction and equipment contracts with third parties for the development of our properties. At June 30, 2018, we had open commitments related to construction contracts of approximately $170.4 million. Additionally, we have commitments related to telecommunications capacity used to connect data centers located within the same market or geographical area, power usage, and company-wide improvements that are ancillary to revenue generation. At June 30, 2018, we had open commitments related to these contracts of approximately $99.6 million, of which $1.5 million is scheduled to be met during the remainder of the year ended December 31, 2018. In the ordinary course of business, we are subject to claims and administrative proceedings. We are not presently party to any proceeding, which we believe to be material or which we would expect to have, individually or in the aggregate, a material adverse effect on our business, financial condition, cash flows or results of operations.

Summary of Significant Accoun22

Summary of Significant Accounting Policies (Policies)	6 Months Ended
	Jun. 30, 2018
Summary of Significant Accounting Policies
Principles of Consolidation and Basis of Presentation	Principles of Consolidation and Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared by our management in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and in compliance with the rules and regulations of the U.S. Securities and Exchange Commission. Accordingly, these unaudited condensed consolidated financial statements do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of our management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. The results of operations for the three and six months ended June 30, 2018, are not necessarily indicative of the expected results for the year ending December 31, 2018. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2017. Our Operating Partnership meets the definition and criteria of a variable interest entity (“VIE”) and we are the primary beneficiary of the VIE. Our sole significant asset is the investment in our Operating Partnership, and consequently, substantially all of our assets and liabilities represent those assets and liabilities of our Operating Partnership. Our debt is an obligation of our Operating Partnership where the creditors also have recourse against the credit of the Company. Intercompany balances and transactions have been eliminated upon consolidation.
Recent Accounting Pronouncements	Recently Adopted Accounting Pronouncements Revenue from Contracts with Customers In May 2014, the Financial Accounting Standards Board (“FASB”) issued guidance codified in Accounting Standards Codification (“ASC”) Topic 606, Revenue Recognition — Revenue from Contracts with Customers , which amends the guidance in former ASC Topic 605, Revenue Recognition . The standard establishes a five-step model framework which recognizes revenue as an entity transfers control of goods or services to the customer and requires enhanced disclosures. The standard provides guidance for our nonlease revenue components, including power, interconnection, and tenant reimbursement revenue. We adopted this standard effective January 1, 2018, using the cumulative effect method. The adoption did not result in a cumulative catch-up adjustment to opening equity and does not change the recognition pattern of our operating revenues. Under the standard, disclosures are required to provide information on the nature, amount, timing, and uncertainty of revenue, certain costs, and cash flows arising from contracts with customers. See additional discussion below and in Note 6, Contracts with Customers. Leases In February 2016, the FASB issued guidance codified in ASC Topic 842, Leases , which amends the guidance in former ASC Topic 840, Leases . The new standard increases transparency and comparability by requiring the recognition by lessees of right-of-use (“ROU”) assets and lease liabilities on the balance sheet for those leases classified as operating leases. Under the standard, disclosures are required to meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. We elected to early adopt the lease standard effective January 1, 2018, concurrent with our adoption of the new revenue recognition standard. The lease standard requires a modified retrospective transition approach as of the January 1, 2016, transition date. We elected the package of practical expedients which permits us to not reassess (1) whether any expired or existing contracts are or contain leases, (2) the lease classification for any expired or existing leases, and (3) any initial direct costs for any existing leases as of the effective date. We did not elect the hindsight practical expedient which permits entities to use hindsight in determining the lease term and assessing impairment. The adoption of the lease standard did not change our previously reported condensed consolidated statements of operations and did not result in a cumulative catch-up adjustment to opening equity. Adoption of the lease standard had a material impact on our condensed consolidated balance sheets. As a lessee, we adjusted certain previously reported financial statements to include the recognition of ROU assets and lease liabilities for operating leases. See the table below for the impact of adoption of the lease standard on our condensed consolidated balance sheet as of December 31, 2017 (in thousands): As Previously New Lease Standard As Adjusted Operating lease right-of-use assets $ — $ 92,984 $ 92,984 Operating lease liabilities — 102,912 102,912 Deferred rent payable 9,928 (9,928) — As a lessor, our recognition of rental revenue remained mainly consistent with previous guidance, apart from the narrower definition of initial direct costs that can be capitalized. The new standard defines initial direct costs as only the incremental costs of signing a lease. Internal sales employees’ compensation, payroll-related fringe benefits and certain external legal fees related to the execution of successful lease agreements no longer meet the definition of initial direct costs under the new standard and will be accounted for as a sales and marketing expense or general and administrative expense in our condensed consolidated statements of operations. As a result of electing the package of practical expedients described above, existing leases, including the allocation of consideration between lease and nonlease components, and related initial direct costs have not been reassessed prior to the effective date and therefore adoption of the lease standard did not have an impact on our previously reported condensed consolidated statements of operations. Statement of Cash Flows In August 2016, the FASB issued guidance codified in Accounting Standards Update (“ASU”) 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. The standard provides guidance on eight specific cash flow classification issues including debt prepayment or debt extinguishment costs, contingent consideration payments made after a business combination, and separately identifiable cash flows and application of the predominance principle. We adopted this standard effective January 1, 2018, and the provisions of ASU 2016-15 did not have a material impact on our condensed consolidated financial statements. Derivatives and Hedging In August 2017, the FASB issued guidance codified in ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. ASU 2017-12 simplifies hedge accounting by eliminating the requirement to separately measure and report hedge ineffectiveness and presenting all items that affect earnings in the same income statement line item as the hedged item. The standard will be effective for interim and annual reporting periods beginning after December 15, 2018, with early adoption permitted. We elected to early adopt this standard effective April 1, 2018, with an initial application date of January 1, 2018, using a modified retrospective transition and the provisions of ASU 2017-12 did not have a material impact on our condensed consolidated financial statements. Recent Accounting Pronouncements Not Yet Adopted Intangibles – Goodwill and Other In January 2017, the FASB issued guidance codified in ASU 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. ASU 2017-04 simplifies the accounting for goodwill impairment by eliminating the process of measuring the implied value of goodwill, known as step two, from the goodwill impairment test. Instead, if the carrying amount of a reporting unit exceeds its fair value, an impairment loss is recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. The standard will be effective for interim and annual reporting periods beginning after December 15, 2019, with early adoption permitted. We do not expect the provisions of ASU 2017-04 to have a material impact on our condensed consolidated financial statements. Leases – Targeted Improvements In January 2018, the FASB proposed an ASU for targeted improvements to lease accounting. The proposed ASU provides a practical expedient which allows lessors to not separate nonlease components from the related lease components if both the timing and pattern of revenue recognition are the same for the nonlease component(s) and related lease component, and the combined single lease component would be classified as an operating lease. The FASB has deliberated on the comment letters received and approved additional clarifications to the proposed ASU, including allowing lessors to apply the practical expedient to all existing leases on a retrospective or prospective basis. We intend to elect the practical expedient and combine our lease and nonlease components that meet the defined criteria once the FASB issues the ASU. After election of this practical expedient, we plan to adjust our condensed consolidated statements of operations to present our revenues as follows: Currently Anticipated Adjustment Adjusted Condensed Consolidated Statement of Operations Three Months Ended June 30, 2018 Rental revenue $ 74,143 $ (74,143) $ — Power revenue 38,986 (38,986) — Tenant reimbursement and other 3,018 (3,018) — Rental, power, and related revenue — 116,147 116,147 Three Months Ended June 30, 2017 Rental revenue $ 64,853 $ (64,853) $ — Power revenue 32,410 (32,410) — Tenant reimbursement and other 2,329 (2,329) — Rental, power, and related revenue — 99,592 99,592 Six Months Ended June 30, 2018 Rental revenue $ 145,176 $ (145,176) $ — Power revenue 75,389 (75,389) — Tenant reimbursement and other 5,590 (5,590) — Rental, power, and related revenue — 226,155 226,155 Six Months Ended June 30, 2017 Rental revenue $ 129,104 $ (129,104) $ — Power revenue 63,271 (63,271) — Tenant reimbursement and other 4,605 (4,605) — Rental, power, and related revenue — 196,980 196,980
Use of Estimates	Use of Estimates The preparation of these unaudited condensed consolidated financial statements, in conformity with GAAP, requires our management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingencies at the date of the unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. We evaluate our estimates, including those related to assessing our standalone selling prices, performance-based equity compensation plans and the carrying values of our real estate properties, goodwill, and accrued liabilities. We base our estimates on historical experience, current market conditions, and various other assumptions that we believe to be reasonable under the circumstances. Actual results may vary from those estimates and those estimates could vary under different assumptions or conditions.
Investments in Real Estate	Investments in Real Estate Real estate investments are carried at cost less accumulated depreciation and amortization. The cost of real estate includes the purchase price of property and leasehold improvements. Expenditures for maintenance and repairs are expensed as incurred. Significant renovations and betterments that extend the economic useful lives of assets are capitalized. During land development and construction periods, we capitalize construction costs, legal fees, financing costs, real estate taxes and insurance, rent expense and internal costs of personnel performing development, if such costs are incremental and identifiable to a specific development project. Capitalization of costs begins upon commencement of development efforts and ceases when the project is ready for its intended use and held available for occupancy. Interest is capitalized during the period of development based upon applying the weighted-average borrowing rate to the actual development costs expended. Capitalized interest costs were $1.1 million and $0.8 million for the three months ended June 30, 2018, and 2017, respectively. Capitalized interest costs were $2.2 million and $1.4 million for the six months ended June 30, 2018, and 2017, respectively. Depreciation and amortization are calculated using the straight-line method over the following useful lives of the assets: Buildings 27 to 40 years Building improvements 1 to 10 years Leasehold improvements The shorter of the lease term or useful life of the asset Depreciation expense was $30.8 million and $26.7 million for the three months ended June 30, 2018, and 2017, respectively. Depreciation expense was $59.9 million and $53.5 million for the six months ended June 30, 2018, and 2017, respectively.
Acquisition of Investment in Real Estate	Acquisition of Investment in Real Estate When accounting for business combinations and asset acquisitions, the fair value of the real estate acquired is allocated to the acquired tangible assets, consisting primarily of land, building and building improvements, and identified intangible assets and liabilities, consisting of the value of above-market and below-market leases, value of in-place leases and the value of customer relationships. The fair value of the land and building of an acquired property is determined by valuing the property as if it were vacant, and the “as-if-vacant” fair value is then allocated to land and building based on management's determination of the fair values of these assets. Management determines the as-if-vacant fair value of a property using methods similar to those used by independent appraisers. Factors considered by management in performing these analyses include an estimate of carrying costs during the expected lease-up periods considering current market conditions and costs to execute similar leases. The fair value of intangibles related to in-place leases includes the value of lease intangibles for above-market and below-market leases, lease origination costs, and customer relationships, determined on a lease-by-lease basis. Above-market and below-market leases are valued based on the present value (using an interest rate which reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to the in-place leases and (ii) management's estimate of market lease rates for the corresponding in-place leases, measured over a period equal to the remaining noncancelable term of the lease and, for below-market leases, over a time period equal to the initial term plus any below-market fixed rate renewal periods. Lease origination costs include estimates of costs avoided associated with leasing the property, including tenant allowances and improvements and leasing commissions. Customer relationship intangibles relate to the additional revenue opportunities expected to be generated through interconnection services and utility services to be provided to the in-place lease tenants. The capitalized values for above and below-market lease intangibles, lease origination costs, and customer relationships are amortized over the term of the underlying leases or the expected customer relationship. Amortization related to above-market and below-market leases where the Company is the lessor is recorded as either a reduction of or an increase to rental revenue, amortization related to above-market and below-market leases where the Company is the lessee is recorded as either a reduction of or an increase to rent expense. If a lease is terminated prior to its stated expiration, all unamortized amounts relating to that lease are written off. The carrying value of intangible assets is reviewed for impairment in connection with its respective asset group whenever events or changes in circumstances indicate that the asset group may not be recoverable. An impairment loss is recognized if the carrying amount of the asset group is not recoverable and its carrying amount exceeds its estimated fair value. No impairment loss related to these intangible assets was recognized for the three or six months ended June 30, 2018, or 2017. The excess of the cost of an acquired business over the net of the amounts assigned to assets acquired (including identified intangible assets) and liabilities assumed is recorded as goodwill. As of June 30, 2018, and December 31, 2017, we had $40.6 million of goodwill at each date. The Company’s goodwill has an indeterminate life and is not amortized, but is tested for impairment on an annual basis, or more frequently if events or changes in circumstances indicate that the asset might be impaired. No impairment loss was recognized for the three or six months ended June 30, 2018, or 2017.
Cash and Cash Equivalents	Cash and Cash Equivalents Cash and cash equivalents include all non-restricted cash held in financial institutions and other non-restricted highly liquid short-term investments with original maturities at acquisition of three months or less.
Initial Direct Costs	Initial Direct Costs Initial direct costs include commissions paid to third parties, including brokers, leasing and referral agents, and internal sales commissions paid to employees for successful execution of lease agreements. Initial direct costs are incremental costs that would not have been incurred if the lease agreement had not been executed. These commissions are capitalized and generally amortized over the term of the related leases using the straight-line method. If a customer lease terminates prior to the expiration of its initial term, any unamortized initial direct costs related to the lease are written off to amortization expense. Amortization of initial direct costs were $3.9 million and $4.0 million for the three months ended June 30, 2018, and 2017, respectively. Amortization of initial direct costs was $7.8 million and $8.1 million for the six months ended June 30, 2018, and 2017, respectively. Initial direct costs are included within other assets in the condensed consolidated balance sheets and consisted of the following, net of amortization, as of June 30, 2018, and December 31, 2017 (in thousands): June 30, December 31, 2018 2017 Internal sales commissions $ 16,118 $ 17,402 Third party commissions 10,502 11,802 Other 679 775 Total $ 27,299 $ 29,979
Deferred Financing Costs	Deferred Financing Costs Deferred financing costs include costs incurred in connection with obtaining debt and extending existing debt. These financing costs are capitalized and amortized on a straight-line basis, which approximates the effective-interest method, over the term of the loan and the amortization is included as a component of interest expense. Depending on the type of debt instrument, deferred financing costs are reported either in other assets or as a direct deduction from the carrying amount of the related debt liabilities in our condensed consolidated balance sheets.
Recoverability of Long-Lived Assets	Recoverability of Long-Lived Assets We review our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Impairment is recognized when estimated expected future cash flows (undiscounted and without interest charges) are less than the carrying amount of the assets. The estimation of expected future net cash flows is inherently uncertain and relies, to a considerable extent, on assumptions regarding current and future economics and market conditions and the availability of capital. If, in future periods, there are changes in the estimates or assumptions incorporated into the impairment review analysis, the changes could result in an adjustment to the carrying amount of the long-lived assets. To the extent that impairment has occurred, the excess of the carrying amount of long-lived assets over its estimated fair value would be recognized as an impairment loss charged to net income. For the three and six months ended June 30, 2018, and 2017, no impairment of long-lived assets was recognized in the condensed consolidated financial statements.
Derivative Instruments and Hedging Activities	Derivative Instruments and Hedging Activities We reflect all derivative instruments at fair value as either assets or liabilities on the condensed consolidated balance sheets. For those derivative instruments that are designated and qualify as hedging instruments, we record the gain or loss on the hedging instruments as a component of accumulated other comprehensive income or loss. For derivatives that do not meet the criteria for hedge accounting, changes in fair value are immediately recognized within net income. See additional discussion in Note 8, Derivatives and Hedging Activities.
Internal-Use Software	Internal-Use Software We recognize internal-use software development costs based on the development stage of the project and nature of the cost. Internal and external costs incurred during the preliminary project stage are expensed as they are incurred. Internal and external costs incurred to develop internal-use software during the application development stage are capitalized. Internal and external training costs and maintenance costs during the post-implementation-operation stage are expensed as incurred. Completed projects are placed into service and amortized over the estimated useful life of the software. No impairment was recognized related to internal-use software in the condensed consolidated statements of operations for the three and six months ended June 30, 2018, and 2017.
Revenue Recognition	Revenue Recognition We derive our revenues from leases with customers for data center and office and light-industrial space. Our data center leases include rental revenue lease components and nonlease revenue components, such as power. Data center lease rental revenue and power arrangements are included within a single contract, which requires that we allocate the transaction consideration to each lease and nonlease component on a relative standalone selling price basis. In instances where standalone selling prices are not directly observable, such as when we do not sell the product or service separately, we determine our standalone selling prices by maximizing our use of observable inputs as well as various market conditions. We typically have more than one standalone selling price for individual services due to the variability of the pricing of those services based on market, building, and customer specific conditions. We estimate standalone selling prices based on the contractual prices charged to customers and allocate discounts proportionately when necessary. Interconnection revenue and other data center services revenue are accounted for as separate contracts that are generally month-to-month or a point-in-time service and are not combined with lease and power arrangements. Lessor Rental Revenue Our leases with customers are classified as operating leases and rental revenue is recognized on a straight-line basis over the customer lease term. Occasionally, our customer leases include options to extend or terminate the lease agreements. We do not include any of these extension or termination options in a customer’s lease term for lease classification purposes or recognizing rental revenue unless we are reasonably certain the customer will exercise these extension or termination options. The excess of rents recognized over amounts contractually due pursuant to the underlying leases is recorded as deferred rent receivable within our condensed consolidated balance sheets. Power Revenue Customer power arrangements are coterminous with the customer’s underlying lease and have the same pattern of transfer over the lease term. In general, we provide two power products, including a fixed (breakered-amperage) and variable (sub-metered) model. Over the lease term, monthly power services are substantially the same and we account for the nonlease component as a series of distinct services. For our fixed power arrangements, a customer is billed and pays a fixed monthly fee per committed available amount of connected power. The customer simultaneously receives and consumes the power benefits we provide over the lease term and we recognize power revenue on a straight-line basis over the lease term. For our variable power arrangements, a customer pays us variable monthly fees for the specific amount of power utilized at the current utility rates. Customers have the flexibility to increase or decrease the amount of power consumed, and therefore “sub-metered power” revenue is constrained at contract inception. We recognize power revenue each month as the uncertainty related to the consideration is resolved, as power is provided to our customers, and our customers utilize the power. Interconnection Revenue Interconnection services are generally contracted on a month-to-month basis cancellable by the customer at any time. We recognize revenue each month as these services are delivered to and utilized by our customers. Tenant Reimbursement and Other Revenue Some of our leases contain provisions under which our customers reimburse us for common area maintenance and other executory costs. Such tenant reimbursements are recognized in the period that the expenses are recognized. We also provide other data center support services to our customers, which are generally provided to customers at a point in time. We recognize revenue each month as these service are delivered to and utilized by our customers. A provision for uncollectible accounts is recorded if a receivable balance relating to contractual rent, rent recorded on a straight-line basis, tenant reimbursements or other billed amounts is considered by management to be uncollectible. At June 30, 2018, and December 31, 2017, the allowance for doubtful accounts totaled $0.9 million and $1.1 million, respectively, on the condensed consolidated balance sheets.
Lessee Accounting	Lessee Accounting We determine if an arrangement is a lease at inception. Our operating lease agreements are primarily for real estate space and are included within operating lease ROU assets and operating lease liabilities on the condensed consolidated balance sheets. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. Variable lease payments are excluded from the ROU assets and lease liabilities and are recognized in the period in which the obligation for those payments is incurred. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. ROU assets also include any lease payments made and exclude lease incentives. Many of our lessee agreements include options to extend the lease, which we do not include in our minimum lease terms unless they are reasonably certain to be exercised. Rental expense for lease payments related to operating leases is recognized on a straight-line basis over the lease term.
Share-Based Compensation	Share-Based Compensation We account for share-based compensation using the fair value method of accounting. The estimated fair value of the stock options granted by us is calculated based on the Black-Scholes option-pricing model. The fair value of restricted share-based and Operating Partnership unit compensation is based on the fair value of our common stock on the date of the grant. The fair value of performance share awards, which have a market condition, is based on a Monte Carlo simulation. The fair value for all share-based compensation is amortized on a straight-line basis over the vesting period. We have elected to account for forfeitures as they occur.
Asset Retirement and Environmental Remediation Obligations	Asset Retirement and Environmental Remediation Obligations We record accruals for estimated asset retirement and environmental remediation obligations. The obligations relate primarily to the removal of asbestos during development of properties as well as the estimated equipment removal costs upon termination of a certain lease where we are the lessee. At June 30, 2018, and December 31, 2017, the amount included in unearned revenue, prepaid rent and other liabilities on the condensed consolidated balance sheets was $1.5 million at each date.
Income Taxes	Income Taxes We elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended (the “Code”), commencing with our taxable year ended December 31, 2010. To qualify as a REIT, we are required to distribute at least 90% of our taxable income to our stockholders and meet various other requirements imposed by the Code relating to such matters as operating results, asset holdings, distribution levels and diversity of stock ownership. Provided we qualify for taxation as a REIT, we generally are not subject to corporate level federal income tax on the earnings distributed currently to our stockholders. If we fail to qualify as a REIT in any taxable year, and are unable to avail ourselves of certain savings provisions set forth in the Code, all of our taxable income would be subject to federal income tax at regular corporate rates, including any applicable alternative minimum tax. To maintain REIT status, we must distribute a minimum of 90% of our taxable income. However, it is our policy and intent, subject to change, to distribute 100% of our taxable income and therefore, no provision is required in the accompanying condensed consolidated financial statements for federal income taxes with regards to our activities and our subsidiary pass-through entities. The allocable share of taxable income is included in the income tax returns of our stockholders. We are subject to the statutory requirements of the locations in which we conduct business. State and local income taxes are accrued as deemed required in the best judgment of management based on analysis and interpretation of respective tax laws. We have elected to treat certain subsidiaries as taxable REIT subsidiaries (“TRS”). Certain activities that we undertake must be conducted by a TRS, such as services for our tenants that could be considered otherwise impermissible for us to perform and holding assets that we cannot hold directly. A TRS is subject to corporate level federal and state income taxes. Deferred income taxes are recognized in certain taxable entities. Deferred income tax generally is a function of the period's temporary differences (items that are treated differently for tax purposes than for financial reporting purposes), the utilization of tax net operating losses generated in prior years that previously had been recognized as deferred income tax assets and the reversal of any previously recorded deferred income tax liabilities. A valuation allowance for deferred income tax assets is provided if we believe all or some portion of the deferred income tax asset may more likely than not be realized. Any increase or decrease in the valuation allowance resulting from a change in circumstances that causes a change in the estimated realizability of the related deferred income tax asset is included in deferred tax expense. As of June 30, 2018, and December 31, 2017, the gross deferred income taxes were not material. We currently have no liabilities for uncertain income tax positions. The earliest tax year for which we are subject to examination is 2014.
Concentration of Credit Risks	Concentration of Credit Risks Our cash and cash equivalents are maintained in various financial institutions, which, at times, may exceed federally insured limits. We have not experienced any losses in such accounts, and management believes that the Company is not exposed to any significant credit risk in this area. We have no off-balance sheet concentrations of credit risk, such as foreign exchange contracts, option contracts, or foreign currency hedging arrangements.
Segment Information	Segment Information We manage our business as one reportable segment consisting of investments in data centers located in the United States. Although we provide services in several markets, these operations have been aggregated into one reportable segment based on the similar economic characteristics amongst all markets, including the nature of the services provided and the type of customers purchasing these services.

Summary of Significant Accoun23

Summary of Significant Accounting Policies (Tables)	6 Months Ended
	Jun. 30, 2018
Schedule of useful lives of real estate investment assets	Buildings 27 to 40 years Building improvements 1 to 10 years Leasehold improvements The shorter of the lease term or useful life of the asset
Schedule of deferred leasing costs, net of amortization	Amortization of initial direct costs was $7.8 million and $8.1 million for the six months ended June 30, 2018, and 2017, respectively. Initial direct costs are included within other assets in the condensed consolidated balance sheets and consisted of the following, net of amortization, as of June 30, 2018, and December 31, 2017 (in thousands): June 30, December 31, 2018 2017 Internal sales commissions $ 16,118 $ 17,402 Third party commissions 10,502 11,802 Other 679 775 Total $ 27,299 $ 29,979
ASU 2016-02
Schedule of financial statement impact of new accounting pronouncements	As Previously New Lease Standard As Adjusted Operating lease right-of-use assets $ — $ 92,984 $ 92,984 Operating lease liabilities — 102,912 102,912 Deferred rent payable 9,928 (9,928) —
Proposed ASU
Schedule of financial statement impact of new accounting pronouncements	Currently Anticipated Adjustment Adjusted Condensed Consolidated Statement of Operations Three Months Ended June 30, 2018 Rental revenue $ 74,143 $ (74,143) $ — Power revenue 38,986 (38,986) — Tenant reimbursement and other 3,018 (3,018) — Rental, power, and related revenue — 116,147 116,147 Three Months Ended June 30, 2017 Rental revenue $ 64,853 $ (64,853) $ — Power revenue 32,410 (32,410) — Tenant reimbursement and other 2,329 (2,329) — Rental, power, and related revenue — 99,592 99,592 Six Months Ended June 30, 2018 Rental revenue $ 145,176 $ (145,176) $ — Power revenue 75,389 (75,389) — Tenant reimbursement and other 5,590 (5,590) — Rental, power, and related revenue — 226,155 226,155 Six Months Ended June 30, 2017 Rental revenue $ 129,104 $ (129,104) $ — Power revenue 63,271 (63,271) — Tenant reimbursement and other 4,605 (4,605) — Rental, power, and related revenue — 196,980 196,980

Investment in Real Estate (Tabl

Investment in Real Estate (Tables)	6 Months Ended
	Jun. 30, 2018
Investment in Real Estate
Summary of properties owned or leased	The following is a summary of the properties owned or leased by market at June 30, 2018 (in thousands): Buildings and Construction in Market Land Improvements Progress Total Cost Boston $ 5,154 $ 106,981 $ 445 $ 112,580 Chicago (1) 5,493 113,068 5,258 123,819 Denver — 27,610 1,593 29,203 Los Angeles (2) 28,467 331,820 13,161 373,448 Miami 728 11,745 1,383 13,856 New York 2,729 148,833 35,431 186,993 Northern Virginia 23,679 325,068 70,555 419,302 San Francisco Bay 31,386 624,444 18,410 674,240 Total $ 97,636 $ 1,689,569 $ 146,236 $ 1,933,441 (1) On January 29, 2018, we acquired a two-acre land parcel located in downtown Chicago, Illinois, for a purchase price of $4.5 million. We expect to build a 175,000 square foot turn-key data center building on the acquired land parcel, which we refer to as CH2, upon the receipt of necessary permits and entitlements. (2) On April 20, 2018, we acquired U.S. Colo, a carrier-neutral, network-dense colocation provider, located in Los Angeles, California, for a purchase price of $6.3 million, net of previously accrued legal expense. In connection with the U.S. Colo acquisition, we assumed a leasehold interest of 6,723 square feet at our existing LA1 facility. We also assumed a leasehold interest of 21,850 square feet at a nearby colocation data center facility, which we refer to as LA4.

Other Assets (Tables)

Other Assets (Tables)	6 Months Ended
	Jun. 30, 2018
Other Assets.
Schedule of other assets	Other assets consisted of the following, net of amortization and depreciation, if applicable for each line item, as of June 30, 2018, and December 31, 2017 (in thousands): June 30, December 31, 2018 2017 Deferred rent receivable $ 42,705 $ 40,038 Initial direct costs 27,299 29,979 Internal-use software 17,665 17,477 Prepaid expenses 6,745 6,770 Corporate furniture, fixtures and equipment 5,686 6,408 Deferred financing costs - revolving credit facility 3,311 957 Other 2,776 1,872 Total $ 106,187 $ 103,501

Leases (Tables)

Leases (Tables)	6 Months Ended
	Jun. 30, 2018
Leases
Schedule of components of lease expense	Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Lease expense: Operating lease expense $ 5,418 $ 5,089 $ 10,645 $ 10,178 Variable lease expense 1,129 842 2,302 1,715 Rent expense $ 6,547 $ 5,931 $ 12,947 $ 11,893
Schedule of future minimum lease payments to be paid under noncancelable leases	The future minimum lease payments to be paid under noncancelable leases in effect at June 30, 2018, are as follows (in thousands): Operating Period / Year Ending December 31, Leases 2018 $ 11,848 2019 24,282 2020 24,651 2021 24,406 2022 24,035 Thereafter 136,507 Total lease payments $ 245,729 Less imputed interest (54,235) Total $ 191,494

Contracts with customers (Table

Contracts with customers (Tables)	6 Months Ended
	Jun. 30, 2018
Contracts with customers
Schedule of future minimum lease payments to be received under noncancelable operating leases	The future minimum lease payments to be received under noncancelable operating leases and the minimum payments to be received for our fixed contracted power services in effect at June 30, 2018, are as follows (in thousands): Period / Year Ending December 31, Rent Power 2018 $ 136,873 $ 37,124 2019 216,169 47,118 2020 149,240 24,945 2021 113,350 13,711 2022 86,292 7,755 Thereafter 170,391 4,561 Total $ 872,315 $ 135,214

Debt (Tables)

Debt (Tables)	6 Months Ended
	Jun. 30, 2018
Debt
Summary of outstanding indebtedness	A summary of outstanding indebtedness as of June 30, 2018, and December 31, 2017, is as follows (in thousands): Maturity June 30, December 31, Interest Rate Date 2018 2017 Revolving credit facility 3.54% and 3.11% at June 30, 2018, and December 31, 2017, respectively April 19, 2022 $ 111,964 $ 169,500 2020 Senior unsecured term loan (1) 3.16% and 3.00% at June 30, 2018, and December 31, 2017, respectively June 24, 2020 150,000 150,000 2021 Senior unsecured term loan 3.49% and 3.06% at June 30, 2018, and December 31, 2017, respectively February 2, 2021 100,000 100,000 2022 Senior unsecured term loan (2) 3.34% and 3.04% at June 30, 2018, and December 31, 2017, respectively April 19, 2022 200,000 200,000 2023 Senior unsecured term loan (3) 3.80% at June 30, 2018 April 19, 2023 150,000 — 2023 Senior unsecured notes 4.19% at June 30, 2018, and December 31, 2017, respectively June 15, 2023 150,000 150,000 2024 Senior unsecured notes 3.91% at June 30, 2018, and December 31, 2017, respectively April 20, 2024 175,000 175,000 Total principal outstanding ` 1,036,964 944,500 Unamortized deferred financing costs (6,428) (4,930) Total debt $ 1,030,536 $ 939,570 (1) Our Operating Partnership has in place a swap agreement with respect to the 2020 Term Loan (as defined below) to swap the variable interest rate associated with $75 million, or 50% of the principal amount, of the 2020 Term Loan to a fixed rate of approximately 2.83% per annum at our current leverage ratio. The interest rate on the remaining $75 million of the 2020 Term Loan is based on LIBOR plus the applicable spread. The effective interest rate as of June 30, 2018, is 3.16%. See Note 8 – Derivatives and Hedging Activities. (2) Our Operating Partnership has in place a swap agreement with respect to the 2022 Term Loan (as defined below) to swap the variable interest rate associated with $50 million, or 25% of the principal amount of the 2022 Term Loan to a fixed rate of approximately 2.88% per annum at our current leverage ratio as of June 30, 2018. The interest rate on the remaining $150 million of the 2022 Term Loan is based on LIBOR plus the applicable spread. The effective interest rate as of June 30, 2018, is 3.34%. See Note 8 – Derivatives and Hedging Activities. (3) Our Operating Partnership has in place a swap agreement with respect to the 2023 Term Loan (as defined below) to swap the variable interest rate associated with $75 million, or 50% of the principal amount of the 2023 Term Loan, to a fixed rate of approximately 4.12% per annum at our current leverage ratio as of June 30, 2018. The interest rate on the remaining $75 million of the 2023 Term Loan is based on LIBOR plus the applicable spread. The effective interest rate as of June 30, 2018, is 3.80%. See Note 8 – Derivatives and Hedging Activities.
Summary of amount of the entity's outstanding debt when such debt currently become due	Year Ending December 31, 2018 $ — 2019 — 2020 150,000 2021 100,000 2022 311,964 Thereafter 475,000 Total principal outstanding 1,036,964 Unamortized deferred financing costs (6,428) Total debt, net $ 1,030,536

Stockholders' Equity (Tables)

Stockholders' Equity (Tables)	6 Months Ended
	Jun. 30, 2018
Stockholders' Equity
Schedule of dividends paid per share on Series A Cumulative Preferred Stock and common shares	Declaration Date Record Date Payment Date Common Stock March 9, 2018 March 29, 2018 April 16, 2018 $ 0.98 May 24, 2018 June 29, 2018 July 16, 2018 1.03 Total $ 2.01

Noncontrolling Interests - Op30

Noncontrolling Interests - Operating Partnership (Tables)	6 Months Ended
	Jun. 30, 2018
Noncontrolling Interests - Operating Partnership
Schedule of ownership interests in our Operating Partnership	June 30, 2018 December 31, 2017 Number of Units Percentage of Total Number of Units Percentage of Total CoreSite Realty Corporation 33,986,299 71.1 % 33,826,264 71.0 % Noncontrolling interests 13,829,280 28.9 13,836,336 29.0 Total 47,815,579 100.0 % 47,662,600 100.0 %

Equity Incentive Award Plan (Ta

Equity Incentive Award Plan (Tables)	6 Months Ended
	Jun. 30, 2018
Equity Incentive Award Plan
Schedule of stock option activity	Number of Shares Weighted- Subject to Average Option Exercise Price Options outstanding, December 31, 2017 67,789 $ 19.12 Granted — — Exercised (12,881) 17.04 Forfeited — — Expired — — Options outstanding, June 30, 2018 54,908 $ 19.60
Schedule of restricted awards and RSUs	Restricted Weighted- Stock Average Fair Awards and Value at Grant Units Date Unvested balance, December 31, 2017 289,843 $ 70.71 Granted 150,727 97.15 Forfeited (21,669) 82.36 Vested (112,937) 63.52 Unvested balance, June 30, 2018 305,964 $ 85.56
Schedule of unvested PSAs and their weighted-average fair value at the date of grant	Weighted- Average Fair Performance-Based Restricted Stock Awards Value at Grant Minimum Maximum Target Date Unvested balance, December 31, 2017 38,694 130,843 84,769 $ 84.63 Granted 10,667 74,670 42,669 100.93 Performance adjustment (1) 33,403 — 16,702 — Forfeited — — — — Vested (32,003) (32,003) (32,003) 61.22 Unvested balance, June 30, 2018 50,761 173,510 112,137 $ 96.54 (1) Includes the annual adjustment for the number of PSAs earned based on our achievement of relative TSR measured versus the MSCI US REIT Index for the applicable performance periods.
Summary of assumptions used to value stock option awards	Six Months Ended June 30, 2018 2017 Expected term (in years) 2.82 2.81 Expected volatility 24.15 % 23.33 % Expected annual dividend (1) — — Risk-free rate 2.24 % 1.60 % (1) The fair value of the PSAs assumes reinvestment of dividends.

Earnings Per Share (Tables)

Earnings Per Share (Tables)	6 Months Ended
	Jun. 30, 2018
Earnings Per Share
Summary of basic and diluted income per share	The following is a summary of basic and diluted net income per share (in thousands, except share and per share amounts): Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Net income attributable to common shares $ 19,389 $ 15,643 $ 39,691 $ 31,935 Weighted-average common shares outstanding - basic 34,049,391 33,835,727 33,992,792 33,698,022 Effect of potentially dilutive common shares: Stock options 48,720 76,968 51,267 117,550 Unvested awards 122,210 141,121 139,349 194,358 Weighted-average common shares outstanding - diluted 34,220,321 34,053,816 34,183,408 34,009,930 Net income per share attributable to common shares Basic $ 0.57 $ 0.46 $ 1.17 $ 0.95 Diluted $ 0.57 $ 0.46 $ 1.16 $ 0.94

Organization and Description 33

Organization and Description of Business (Details) - Operating partnership	Jun. 30, 2018
Organization
Percentage of ownership interests held by the entity	71.10%
Percentage of ownership interests held by others	28.90%

Summary of Significant Accoun34

Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Balance sheet impact
Operating lease right-of-use assets	$ 181,195		$ 181,195		$ 92,984
Operating lease liabilities	191,494		191,494		102,912
Income statement impact
Rental revenue	74,143	$ 64,853	145,176	$ 129,104
ASU 2016-02
Balance sheet impact
Operating lease right-of-use assets					92,984
Operating lease liabilities					102,912
As Previously Reported | ASU 2016-02
Balance sheet impact
Deferred rent payable					9,928
Adjustment | ASU 2016-02
Balance sheet impact
Operating lease right-of-use assets					92,984
Operating lease liabilities					102,912
Deferred rent payable					$ (9,928)
Adjustment | Proposed ASU
Income statement impact
Rental revenue	(74,143)	(64,853)	(145,176)	(129,104)
Currently Reported | Proposed ASU
Income statement impact
Rental revenue	74,143	64,853	145,176	129,104
Power Revenue
Income statement impact
Revenue	38,986	32,410	75,389	63,271
Power Revenue | Adjustment | Proposed ASU
Income statement impact
Revenue	(38,986)	(32,410)	(75,389)	(63,271)
Power Revenue | Currently Reported | Proposed ASU
Income statement impact
Revenue	38,986	32,410	75,389	63,271
Tenant Reimbursement And Other Revenue
Income statement impact
Revenue	3,018	2,329	5,590	4,605
Tenant Reimbursement And Other Revenue | Adjustment | Proposed ASU
Income statement impact
Revenue	(3,018)	(2,329)	(5,590)	(4,605)
Tenant Reimbursement And Other Revenue | Currently Reported | Proposed ASU
Income statement impact
Revenue	3,018	2,329	5,590	4,605
Rental Power And Related Revenue | Adjustment | Proposed ASU
Income statement impact
Revenue	116,147	99,592	226,155	196,980
Rental Power And Related Revenue | Pro Forma | Proposed ASU
Income statement impact
Revenue	$ 116,147	$ 99,592	$ 226,155	$ 196,980

Summary of Significant Accoun35

Summary of Significant Accounting Policies - Real Estate (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Investments in Real Estate
Capitalized interest costs	$ 1.1	$ 0.8	$ 2.2	$ 1.4
Depreciation expense	$ 30.8	$ 26.7	$ 59.9	$ 53.5
Building | Minimum
Investments in Real Estate
Useful lives			27 years
Building | Maximum
Investments in Real Estate
Useful lives			40 years
Building Improvements | Minimum
Investments in Real Estate
Useful lives			1 year
Building Improvements | Maximum
Investments in Real Estate
Useful lives			10 years

Summary of Significant Accoun36

Summary of Significant Accounting Policies - Deferred Costs & Impairment (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Summary of Significant Accounting Policies
Impairment loss related to intangible assets	$ 0	$ 0	$ 0	$ 0
Goodwill	40,646		40,646		$ 40,646
Impairment loss related to goodwill	0	0	0	0
Deferred Costs
Amortization of initial direct costs	3,900	4,000	7,800	8,100
Internal sales commissions	16,118		16,118		17,402
Third party commissions	10,502		10,502		11,802
Other	679		679		775
Total	27,299		27,299		$ 29,979
Recoverability of Long-Lived Assets
Impairment of real estate	$ 0	$ 0	$ 0	$ 0

Summary of Significant Accoun37

Summary of Significant Accounting Policies - Internal Use Software, RR & IT (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Internal-Use Software
Recognized impairment of internal use software	$ 0	$ 0	$ 0	$ 0
Revenue Recognition
Allowance for doubtful accounts (in dollars)	946		946		$ 1,094
Asset Retirement and Environmental Remediation Obligations
Asset retirement and environmental remediation obligations	1,500		$ 1,500		$ 1,500
Income taxes
Minimum percentage of distribution of taxable income to qualify as REIT			90.00%
Percentage of distribution of taxable income as per company policy			100.00%
Provision for federal income taxes			$ 0
Liabilities for uncertain positions	$ 0		$ 0

Summary of Significant Accoun38

Summary of Significant Accounting Policies - Concentration of Credit Risks & Segment Information (Details)	6 Months Ended
	Jun. 30, 2018segmentitem
Summary of Significant Accounting Policies
Number of off-balance-sheet concentrations of credit risk | item	0
Segment information
Number of reportable segments | segment	1

Investment in Real Estate (Deta

Investment in Real Estate (Details) $ in Thousands	Apr. 20, 2018USD ($)ft²	Jan. 28, 2018USD ($)aft²	Jun. 30, 2018USD ($)	Dec. 31, 2017USD ($)
Investment in Real Estate
Land			$ 97,636	$ 97,258
Buildings and Improvements			1,689,569	1,561,056
Construction in progress			146,236	$ 162,903
Total investments in real estate			1,933,441
Purchase price			4,383
Boston
Investment in Real Estate
Land			5,154
Buildings and Improvements			106,981
Construction in progress			445
Total investments in real estate			112,580
Chicago
Investment in Real Estate
Land			5,493
Buildings and Improvements			113,068
Construction in progress			5,258
Total investments in real estate			123,819
Denver
Investment in Real Estate
Buildings and Improvements			27,610
Construction in progress			1,593
Total investments in real estate			29,203
Los Angeles
Investment in Real Estate
Land			28,467
Buildings and Improvements			331,820
Construction in progress			13,161
Total investments in real estate			373,448
Miami
Investment in Real Estate
Land			728
Buildings and Improvements			11,745
Construction in progress			1,383
Total investments in real estate			13,856
New York
Investment in Real Estate
Land			2,729
Buildings and Improvements			148,833
Construction in progress			35,431
Total investments in real estate			186,993
Northern Virginia
Investment in Real Estate
Land			23,679
Buildings and Improvements			325,068
Construction in progress			70,555
Total investments in real estate			419,302
San Francisco Bay
Investment in Real Estate
Land			31,386
Buildings and Improvements			624,444
Construction in progress			18,410
Total investments in real estate			$ 674,240
CH2 Chicago IL
Investment in Real Estate
Area of land | a		2
Purchase price		$ 4,500
Net Rentable Area | ft²		175,000
US Colo Los Angeles California
Investment in Real Estate
Net leased space | ft²	21,850
Purchase price	$ 6,300
Net Rentable Area | ft²	6,723

Other Assets (Details)

Other Assets (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Other Assets.
Deferred rent receivable	$ 42,705	$ 40,038
Initial direct costs	27,299	29,979
Internal-use software	17,665	17,477
Prepaid expense	6,745	6,770
Corporate furniture, fixtures and equipment	5,686	6,408
Deferred financing costs - revolving credit facility	3,311	957
Other	2,776	1,872
Total	$ 106,187	$ 103,501

Leases - (Detail)

Leases - (Detail) $ in Thousands	1 Months Ended	3 Months Ended		6 Months Ended
	Jun. 30, 2018USD ($)ft²	Jun. 30, 2018USD ($)ft²	Jun. 30, 2017USD ($)	Jun. 30, 2018USD ($)ft²	Jun. 30, 2017USD ($)	Apr. 20, 2018ft²	Dec. 31, 2017
Lease terms
Option to extend				P20Y
Weighted-average remaining lease term	10 years	10 years		10 years			5 years
Weighted-average discount rate	4.90%	4.90%		4.90%			4.80%
Increase in Right-of-Use Asset				$ 96,790	$ 8,330
Lease expense
Operating lease expense		$ 5,418	$ 5,089	10,645	10,178
Variable lease expense		1,129	842	2,302	1,715
Rent expense		$ 6,547	$ 5,931	$ 12,947	$ 11,893
Weighted-average remaining lease term	10 years	10 years		10 years			5 years
Minimum
Lease terms
Remaining lease terms	1 year	1 year		1 year
Maximum
Lease terms
Remaining lease terms	11 years	11 years		11 years
LA1
Lease terms
Increase in Right-of-Use Asset	$ 91,400
Net rentable space | ft²	160,000	160,000		160,000
Area of Real Estate Property | ft²	17,238	17,238		17,238
US Colo Los Angeles California
Lease terms
Increase in Right-of-Use Asset	$ 5,300
Net rentable space | ft²						6,723

Leases - Future minimum payment

Leases - Future minimum payments (Detail) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Operating leases
2,018	$ 11,848
2,019	24,282
2,020	24,651
2,021	24,406
2,022	24,035
Thereafter	136,507
Total lease payments	245,729
Less imputed interest	(54,235)
Total	191,494	$ 102,912
Operating lease right-of-use assets	$ 181,195	$ 92,984
Minimum
Operating leases
Remaining lease terms	1 year
Maximum
Operating leases
Remaining lease terms	11 years

Contracts with customers (Detai

Contracts with customers (Details) $ in Thousands	Jun. 30, 2018USD ($)
Rental Revenue
Future minimum lease payments to be received under noncancelable leases
2,018	$ 136,873
2,019	216,169
2,020	149,240
2,021	113,350
2,022	86,292
Thereafter	170,391
Total	872,315
Power Revenue | ASU 2014-09
Future minimum lease payments to be received under noncancelable leases
2,018	37,124
2,019	47,118
2,020	24,945
2,021	13,711
2,022	7,755
Thereafter	4,561
Total	$ 135,214

Debt - Summary of Debt (Details

Debt - Summary of Debt (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Debt
Total principal outstanding	$ 1,036,964	$ 944,500
Unamortized deferred financing costs	(6,428)	(4,930)
Total debt	$ 1,030,536	$ 939,570
Revolving Credit Facility
Debt
Interest rate as of reporting date (as a percent)	3.54%	3.11%
Total principal outstanding	$ 111,964	$ 169,500
2020 Senior Unsecured Term Loan | Senior Unsecured Term Loan
Debt
Interest rate as of reporting date (as a percent)	3.16%	3.00%
Total principal outstanding	$ 150,000	$ 150,000
2021 Senior Unsecured Term Loan | Senior Unsecured Term Loan
Debt
Interest rate as of reporting date (as a percent)	3.49%	3.06%
Total principal outstanding	$ 100,000	$ 100,000
2022 Senior Unsecured Term Loan | Senior Unsecured Term Loan
Debt
Interest rate as of reporting date (as a percent)	3.34%	3.04%
Total principal outstanding	$ 200,000	$ 200,000
2023 Senior Unsecured Term Loan | Senior Unsecured Term Loan
Debt
Interest rate as of reporting date (as a percent)	3.80%
Total principal outstanding	$ 150,000
Amount of debt hedged	$ 75,000
Percentage of debt hedged	50.00%
Amount of debt not hedged	$ 75,000
Derivative, Fixed Interest Rate	4.12%
2023 Senior Unsecured Term Loan | Senior Unsecured Notes
Debt
Interest rate as of reporting date (as a percent)	4.19%	4.19%
Total principal outstanding	$ 150,000	$ 150,000
2024 Senior Unsecured Term Loan
Debt
Interest rate as of reporting date (as a percent)	3.91%	3.91%
2024 Senior Unsecured Term Loan | Senior Unsecured Term Loan
Debt
Total principal outstanding	$ 175,000	$ 175,000
Operating partnership | 2020 Senior Unsecured Term Loan
Debt
Amount of debt not hedged	75,000
Operating partnership | 2020 Senior Unsecured Term Loan | Interest Rate Swap
Debt
Amount of debt hedged	$ 75,000
Percentage of debt hedged	50.00%
Derivative, Fixed Interest Rate	2.83%
Operating partnership | 2022 Senior Unsecured Term Loan
Debt
Amount of debt not hedged	$ 150,000
Operating partnership | 2022 Senior Unsecured Term Loan | Interest Rate Swap
Debt
Amount of debt hedged	$ 50,000
Percentage of debt hedged	25.00%
Derivative, Fixed Interest Rate	2.88%

Debt - Revolving Credit Facilit

Debt - Revolving Credit Facility (Details) $ in Thousands	Apr. 19, 2018USD ($)item	Feb. 02, 2016USD ($)	Jun. 24, 2015USD ($)	Jun. 30, 2018USD ($)	Apr. 18, 2018USD ($)	Dec. 31, 2017USD ($)	Apr. 19, 2017USD ($)
Debt
Total principal outstanding				$ 1,036,964		$ 944,500
Revolving Credit Facility
Debt
Total principal outstanding				$ 111,964		169,500
Credit Agreement
Debt
Leverage ratio (as a percent)				24.30%
Secured debt ratio (as a percent)				0.00%
Fixed charge coverage ratio				7.9
Credit Agreement | Minimum
Debt
Fixed charge coverage ratio				1.50
Credit Agreement | Maximum
Debt
Leverage ratio (as a percent)				0.60%
Secured debt ratio (as a percent)				0.40%
2023 Senior Unsecured Term Loan
Debt
Term of loan facility	5 years
Unsecured term loan	$ 150,000
2023 Senior Unsecured Term Loan | LIBOR | Minimum
Debt
Interest rate margin (as a percent)	1.40%
2023 Senior Unsecured Term Loan | LIBOR | Maximum
Debt
Interest rate margin (as a percent)	2.00%
2023 Senior Unsecured Term Loan | Base Rate | Minimum
Debt
Interest rate margin (as a percent)	0.40%
2023 Senior Unsecured Term Loan | Base Rate | Maximum
Debt
Interest rate margin (as a percent)	1.00%
2023 Senior Unsecured Term Loan | Senior Unsecured Term Loan
Debt
Total principal outstanding				$ 150,000
2020 Senior Unsecured Term Loan | Senior Unsecured Term Loan
Debt
Total principal outstanding				150,000		150,000
2021 Senior Unsecured Term Loan | Senior Unsecured Term Loan
Debt
Total principal outstanding				100,000		100,000
2022 Senior Unsecured Term Loan | Senior Unsecured Term Loan
Debt
Total principal outstanding				$ 200,000		$ 200,000
Operating partnership | LIBOR
Debt
Interest rate margin (as a percent)				1.45%
Operating partnership | Credit Agreement
Debt
Number of options available for extensions | item	1
Extension fee (as a percent)	0.10%
Total increase in commitment under accordion feature	$ 250,000
Maximum borrowing capacity	850,000				$ 600,000
Maximum borrowing capacity including accordion feature	1,200,000
Borrowing capacity at end of period				$ 450,000
Letters of credit outstanding				4,900
Amount available for borrowing under the facility				$ 333,100
Operating partnership | Credit Agreement | Revolving Credit Facility
Debt
Maximum borrowing capacity	450,000				$ 350,000
Operating partnership | Credit Agreement | Revolving Credit Facility | LIBOR | Minimum
Debt
Interest rate margin (as a percent)				1.45%
Operating partnership | Credit Agreement | Revolving Credit Facility | LIBOR | Maximum
Debt
Interest rate margin (as a percent)				2.05%
Operating partnership | Credit Agreement | Revolving Credit Facility | Base Rate | Minimum
Debt
Interest rate margin (as a percent)				0.45%
Operating partnership | Credit Agreement | Revolving Credit Facility | Base Rate | Maximum
Debt
Interest rate margin (as a percent)				1.05%
Operating partnership | 2020 Senior Unsecured Term Loan | LIBOR
Debt
Interest rate margin (as a percent)				1.40%
Operating partnership | 2020 Senior Unsecured Term Loan | LIBOR | Minimum
Debt
Interest rate margin (as a percent)				1.40%
Operating partnership | 2020 Senior Unsecured Term Loan | LIBOR | Maximum
Debt
Interest rate margin (as a percent)				2.00%
Operating partnership | 2020 Senior Unsecured Term Loan | Base Rate | Minimum
Debt
Interest rate margin (as a percent)				0.40%
Operating partnership | 2020 Senior Unsecured Term Loan | Base Rate | Maximum
Debt
Interest rate margin (as a percent)				1.00%
Operating partnership | 2020 Senior Unsecured Term Loan | Senior Unsecured Term Loan
Debt
Term of loan facility			5 years
Unsecured term loan	$ 150,000		$ 150,000
Operating partnership | 2021 Senior Unsecured Term Loan | LIBOR
Debt
Interest rate margin (as a percent)				1.40%
Operating partnership | 2021 Senior Unsecured Term Loan | LIBOR | Minimum
Debt
Interest rate margin (as a percent)				1.40%
Operating partnership | 2021 Senior Unsecured Term Loan | LIBOR | Maximum
Debt
Interest rate margin (as a percent)				2.00%
Operating partnership | 2021 Senior Unsecured Term Loan | Base Rate | Minimum
Debt
Interest rate margin (as a percent)				0.40%
Operating partnership | 2021 Senior Unsecured Term Loan | Base Rate | Maximum
Debt
Interest rate margin (as a percent)				1.00%
Operating partnership | 2021 Senior Unsecured Term Loan | Senior Unsecured Term Loan
Debt
Term of loan facility		5 years
Unsecured term loan		$ 100,000
Operating partnership | 2022 Senior Unsecured Term Loan | LIBOR
Debt
Interest rate margin (as a percent)				1.40%
Operating partnership | 2022 Senior Unsecured Term Loan | LIBOR | Minimum
Debt
Interest rate margin (as a percent)				1.40%
Operating partnership | 2022 Senior Unsecured Term Loan | LIBOR | Maximum
Debt
Interest rate margin (as a percent)				2.00%
Operating partnership | 2022 Senior Unsecured Term Loan | Base Rate | Minimum
Debt
Interest rate margin (as a percent)				0.40%
Operating partnership | 2022 Senior Unsecured Term Loan | Base Rate | Maximum
Debt
Interest rate margin (as a percent)				1.00%
Operating partnership | 2022 Senior Unsecured Term Loan | Senior Unsecured Term Loan
Debt
Increase in accordion feature borrowing capacity							$ 300,000

Debt - Unsecured Debt (Details)

Debt - Unsecured Debt (Details) - USD ($) $ in Thousands	Apr. 19, 2018	Feb. 02, 2016	Jun. 24, 2015	Jun. 30, 2018	Dec. 31, 2017	Apr. 20, 2017	Apr. 19, 2017	Jun. 15, 2016
Debt
Total principal outstanding				$ 1,036,964	$ 944,500
2020 Senior Unsecured Term Loan | Senior Unsecured Term Loan
Debt
Total principal outstanding				$ 150,000	$ 150,000
Debt Instrument, Interest Rate at Period End				3.16%	3.00%
2021 Senior Unsecured Term Loan | Senior Unsecured Term Loan
Debt
Total principal outstanding				$ 100,000	$ 100,000
Debt Instrument, Interest Rate at Period End				3.49%	3.06%
2022 Senior Unsecured Term Loan | Senior Unsecured Term Loan
Debt
Total principal outstanding				$ 200,000	$ 200,000
Debt Instrument, Interest Rate at Period End				3.34%	3.04%
2023 Senior Unsecured Term Loan
Debt
Unsecured term loan	$ 150,000
Term of loan facility	5 years
2023 Senior Unsecured Term Loan | LIBOR | Minimum
Debt
Interest rate margin (as a percent)	1.40%
2023 Senior Unsecured Term Loan | LIBOR | Maximum
Debt
Interest rate margin (as a percent)	2.00%
2023 Senior Unsecured Term Loan | Base Rate | Minimum
Debt
Interest rate margin (as a percent)	0.40%
2023 Senior Unsecured Term Loan | Base Rate | Maximum
Debt
Interest rate margin (as a percent)	1.00%
2023 Senior Unsecured Term Loan | Senior Unsecured Term Loan
Debt
Total principal outstanding				$ 150,000
Debt Instrument, Interest Rate at Period End				3.80%
2023 Senior Unsecured Term Loan | Senior Unsecured Notes
Debt
Total principal outstanding				$ 150,000	$ 150,000
Debt Instrument, Interest Rate at Period End				4.19%	4.19%
2024 Senior Unsecured Term Loan
Debt
Debt Instrument, Interest Rate at Period End				3.91%	3.91%
2024 Senior Unsecured Term Loan | Senior Unsecured Term Loan
Debt
Total principal outstanding				$ 175,000	$ 175,000
Operating partnership | LIBOR
Debt
Interest rate margin (as a percent)				1.45%
Operating partnership | 2020 Senior Unsecured Term Loan | LIBOR
Debt
Interest rate margin (as a percent)				1.40%
Operating partnership | 2020 Senior Unsecured Term Loan | LIBOR | Minimum
Debt
Interest rate margin (as a percent)				1.40%
Operating partnership | 2020 Senior Unsecured Term Loan | LIBOR | Maximum
Debt
Interest rate margin (as a percent)				2.00%
Operating partnership | 2020 Senior Unsecured Term Loan | Base Rate | Minimum
Debt
Interest rate margin (as a percent)				0.40%
Operating partnership | 2020 Senior Unsecured Term Loan | Base Rate | Maximum
Debt
Interest rate margin (as a percent)				1.00%
Operating partnership | 2020 Senior Unsecured Term Loan | Senior Unsecured Term Loan
Debt
Unsecured term loan	$ 150,000		$ 150,000
Term of loan facility			5 years
Operating partnership | 2021 Senior Unsecured Term Loan | LIBOR
Debt
Interest rate margin (as a percent)				1.40%
Operating partnership | 2021 Senior Unsecured Term Loan | LIBOR | Minimum
Debt
Interest rate margin (as a percent)				1.40%
Operating partnership | 2021 Senior Unsecured Term Loan | LIBOR | Maximum
Debt
Interest rate margin (as a percent)				2.00%
Operating partnership | 2021 Senior Unsecured Term Loan | Base Rate | Minimum
Debt
Interest rate margin (as a percent)				0.40%
Operating partnership | 2021 Senior Unsecured Term Loan | Base Rate | Maximum
Debt
Interest rate margin (as a percent)				1.00%
Operating partnership | 2021 Senior Unsecured Term Loan | Senior Unsecured Term Loan
Debt
Unsecured term loan		$ 100,000
Term of loan facility		5 years
Operating partnership | 2022 Senior Unsecured Term Loan | LIBOR
Debt
Interest rate margin (as a percent)				1.40%
Operating partnership | 2022 Senior Unsecured Term Loan | LIBOR | Minimum
Debt
Interest rate margin (as a percent)				1.40%
Operating partnership | 2022 Senior Unsecured Term Loan | LIBOR | Maximum
Debt
Interest rate margin (as a percent)				2.00%
Operating partnership | 2022 Senior Unsecured Term Loan | Base Rate | Minimum
Debt
Interest rate margin (as a percent)				0.40%
Operating partnership | 2022 Senior Unsecured Term Loan | Base Rate | Maximum
Debt
Interest rate margin (as a percent)				1.00%
Operating partnership | 2022 Senior Unsecured Term Loan | Senior Unsecured Term Loan
Debt
Increase in accordion feature borrowing capacity							$ 300,000
Aggregate principal amount							$ 200,000
Operating partnership | 2023 Senior Unsecured Term Loan | Senior Unsecured Notes | Private Placement
Debt
Aggregate principal amount								$ 150,000
Stated interest rate								4.19%
Percentage of term notes that may be prepaid								100.00%
Percentage of term notes that holders have right to purchase in cash								100.00%
Percentage of term notes that holders may redeem for cash								100.00%
Operating partnership | 2024 Senior Unsecured Term Loan | Senior Unsecured Term Loan
Debt
Unsecured term loan						$ 175,000
Stated interest rate						3.91%
Percentage of term notes that may be prepaid						100.00%
Percentage of term notes that holders have right to purchase in cash						100.00%
Percentage of term notes that holders may redeem for cash						100.00%

Debt - Maturities (Details)

Debt - Maturities (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Debt maturities
2,020	$ 150,000
2,021	100,000
2,022	311,964
Thereafter	475,000
Total principal outstanding	1,036,964	$ 944,500
Unamortized deferred financing costs	(6,428)	(4,930)
Total debt	$ 1,030,536	$ 939,570

Derivatives and Hedging Activ48

Derivatives and Hedging Activities (Details) - USD ($) $ in Thousands	Apr. 19, 2018	Apr. 21, 2017	Apr. 09, 2015	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2019	Mar. 31, 2018	Dec. 31, 2017
Derivative instruments and hedging activities disclosures
Amount of gain (loss) recorded in accumulated other comprehensive income				$ 224	$ (323)	$ 833	$ (10)
Interest expense				$ 8,907	5,958	$ 16,645	11,065
Interest Rate Swap | Designated as Hedging Instrument | Cash Flow Hedging
Derivative instruments and hedging activities disclosures
Amount of swap agreement	$ 75,000	$ 100,000	$ 75,000						$ 50,000	$ 50,000
Term of loan facility	5 years	5 years	5 years
Derivative, Fixed Interest Rate	4.12%			2.88%		2.88%				2.98%
Interest rate swap terminated		$ 50,000
Amount of gain (loss) recorded in accumulated other comprehensive income				$ (200)	300	$ 800
Amount reclassified to interest expense				(100)	200		500
Interest expense				8,900	$ 6,000	16,600	11,100
Derivative asset recognized in other assets				$ 1,900		1,900				$ 1,100
Interest Rate Swap | Designated as Hedging Instrument | Cash Flow Hedging | Forecast
Derivative instruments and hedging activities disclosures
Amount estimated to be reclassified as an increase to interest expense								$ 700
Interest Rate Swap | Designated as Hedging Instrument | Cash Flow Hedging | Maximum
Derivative instruments and hedging activities disclosures
Amount of gain (loss) recorded in accumulated other comprehensive income							$ (100)
Amount reclassified to interest expense						$ (100)
LIBOR | Interest Rate Swap | Designated as Hedging Instrument | Cash Flow Hedging
Derivative instruments and hedging activities disclosures
Reference rate	one-month LIBOR		one-month LIBOR
Derivative, Fixed Interest Rate				2.83%		2.83%				2.93%

Stockholders' Equity (Details)

Stockholders' Equity (Details) - Common Stock - $ / shares	May 24, 2018	Mar. 09, 2018	Jun. 30, 2018
Stockholders' Equity
Dividends Payable, Date of Record	Jun. 29, 2018	Mar. 29, 2018
Common Stock dividend declared (per share)	$ 1.03	$ 0.98	$ 2.01

Noncontrolling Interests - Op50

Noncontrolling Interests - Operating Partnership (Details) $ / shares in Units, $ in Thousands	6 Months Ended
	Jun. 30, 2018USD ($)$ / sharesshares	Dec. 31, 2017shares
Noncontrolling Interests - Operating Partnership
Closing price of the Company's stock (in dollars per share) | $ / shares	$ 110.82
Noncontrolling Interests
Noncontrolling Interests - Operating Partnership
Reduction to noncontrolling interests in the Operating Partnership and an increase to common stock and additional paid in capital | $	$ 70
Operating partnership
Noncontrolling Interests - Operating Partnership
Conversion ratio for common operating partnership units	1
Number of Operating Partnership Units (in shares)	47,815,579	47,662,600
Percentage of Total	71.10%
Percentage of Total	28.90%
Percentage of Total	100.00%	100.00%
Shares of common stock issued related to employee compensation arrangements	160,035
Quarterly distributions will receive by holders of operating partnership units (in dollars per unit) | $ / shares	$ 2.01
Operating partnership | Coresite Realty Corporation
Noncontrolling Interests - Operating Partnership
Number of Operating Partnership Units (in shares)	33,986,299	33,826,264
Percentage of Total	71.10%	71.00%
Operating partnership | Noncontrolling Interests
Noncontrolling Interests - Operating Partnership
Number of Operating Partnership Units (in shares)	13,829,280	13,836,336
Percentage of Total	28.90%	29.00%
Redemption value of the noncontrolling interests | $	$ 1,500,000

Equity Incentive Award Plan (De

Equity Incentive Award Plan (Details) - 2010 Plan - USD ($) $ / shares in Units, $ in Millions	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Equity Incentive Plan
Shares of common stock reserved for issuance	6,000,000
Shares of common stock that were available for issuance	2,844,780
Stock Options
Number of Shares Subject to Option
Options outstanding at the beginning of the period (in shares)	67,789
Exercised (in shares)	(12,881)
Options outstanding at the end of the period (in shares)	54,908
Weighted Average Exercise Price
Options outstanding at the beginning of the period (in dollars per share)	$ 19.12
Exercised (in dollars per share)	17.04
Options outstanding at the end of the period (in dollars per share)	$ 19.60
Restricted Awards
Restricted Awards and PSA's
Unvested balance at the beginning of the period (in shares)	289,843
Granted (in shares)	150,727
Forfeited (in shares)	(21,669)
Vested (in shares)	(112,937)
Unvested balance at the end of the period (in shares)	305,964
Weighted Average Fair Value at Grant
Unvested balance at the beginning of the period (in dollars per share)	$ 70.71
Granted (in dollars per share)	97.15
Forfeited (in dollars per share)	82.36
Vested (in dollars per share)	63.52
Unvested balance at the end of the period (in dollars per share)	$ 85.56
Compensation cost not yet recognized
Unearned compensation	$ 22.6
Restricted Awards | Weighted Average
Compensation cost not yet recognized
Vesting period	2 years 8 months 12 days
PSAs
Compensation cost not yet recognized
Unearned compensation	$ 6.2
Assumptions used to value the stock options granted
Expected term	2 years 9 months 26 days	2 years 9 months 22 days
Expected volatility (as a percent)	24.15%	23.33%
Risk-free rate (as a percent)	2.24%	1.60%
PSAs | Weighted Average
Weighted Average Fair Value at Grant
Unvested balance at the beginning of the period (in dollars per share)	$ 84.63
Granted (in dollars per share)	100.93
Vested (in dollars per share)	61.22
Unvested balance at the end of the period (in dollars per share)	$ 96.54
Compensation cost not yet recognized
Vesting period	2 years 3 months 18 days
PSAs | Minimum
Restricted Awards and PSA's
Unvested balance at the beginning of the period (in shares)	38,694
Granted (in shares)	10,667
Performance adjustment	33,403
Vested (in shares)	(32,003)
Unvested balance at the end of the period (in shares)	50,761
Compensation cost not yet recognized
Percentage of target number of shares for PSAs granted in years 2015, 2016 and 2017	25.00%
Assumptions used to value the stock options granted
Performance period	1 year
PSAs | Maximum
Restricted Awards and PSA's
Unvested balance at the beginning of the period (in shares)	130,843
Granted (in shares)	74,670
Vested (in shares)	(32,003)
Unvested balance at the end of the period (in shares)	173,510
Compensation cost not yet recognized
Percentage of target number of shares for PSAs granted in years 2015, 2016 and 2017	175.00%
Assumptions used to value the stock options granted
Performance period	3 years
PSAs | Target
Restricted Awards and PSA's
Unvested balance at the beginning of the period (in shares)	84,769
Granted (in shares)	42,669
Performance adjustment	16,702
Vested (in shares)	(32,003)
Unvested balance at the end of the period (in shares)	112,137

Earnings Per Share (Details)

Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Earnings Per Share
Net income attributable to common shares	$ 19,389	$ 15,643	$ 39,691	$ 31,935
Weighted-average common shares outstanding - basic	34,049,391	33,835,727	33,992,792	33,698,022
Effect of potentially dilutive common shares:
Stock options	48,720	76,968	51,267	117,550
Unvested awards	122,210	141,121	139,349	194,358
Weighted-average common shares outstanding - diluted	34,220,321	34,053,816	34,183,408	34,009,930
Net income per share attributable to common shares
Basic (in dollars per share)	$ 0.57	$ 0.46	$ 1.17	$ 0.95
Diluted (in dollars per share)	$ 0.57	$ 0.46	$ 1.16	$ 0.94
Weighted-average potentially dilutive securities excluded in calculation of basic and diluted income (loss) per share	908	562	105,829	92,260

Estimated Fair Value of Finan53

Estimated Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Estimated Fair Value of Financial Instruments
Total principal outstanding	$ 1,036,964	$ 944,500
Significant Unobservable Inputs (Level 3)
Estimated Fair Value of Financial Instruments
Fair value of debt	$ 1,039,000	$ 946,600

Commitments and Contingencies (

Commitments and Contingencies (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2018	Jun. 30, 2018
Telecommunications Capacity
Commitments and Contingencies
Open commitments		$ 99.6
Telecommunications Capacity | Forecast
Commitments and Contingencies
Open commitments met	$ 1.5
Construction Contracts
Commitments and Contingencies
Open commitments		$ 170.4