Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | May 06, 2019 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 | |
Entity Registrant Name | QTS Realty Trust, Inc. | |
Entity Central Index Key | 0001577368 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Current Reporting Status | Yes | |
Current Fiscal Year End Date | --12-31 | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Class A Common Stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 55,261,739 | |
Class B Common Stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 128,408 | |
Qualitytech, LP | ||
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 | |
Entity Registrant Name | QualityTech, LP | |
Entity Central Index Key | 0001561164 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Current Reporting Status | Yes | |
Current Fiscal Year End Date | --12-31 | |
Entity Emerging Growth Company | false | |
Entity Small Business | false |
INTERIM CONSOLIDATED FINANCIAL
INTERIM CONSOLIDATED FINANCIAL STATEMENTS BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Real Estate Assets | ||
Land | $ 105,541 | $ 105,541 |
Buildings, improvements and equipment | 2,031,825 | 1,917,251 |
Less: Accumulated depreciation | (494,787) | (467,644) |
Total real estate assets | 1,642,579 | 1,555,148 |
Construction in progress | 803,888 | 790,064 |
Real Estate Assets, net | 2,446,467 | 2,345,212 |
Investments in unconsolidated entity | 44,191 | |
Operating lease right-of-use assets, net | 61,585 | |
Cash and cash equivalents | 18,678 | 11,759 |
Rents and other receivables, net | 56,898 | 55,093 |
Acquired intangibles, net | 92,053 | 95,451 |
Deferred costs, net | 45,674 | 45,096 |
Prepaid expenses | 9,585 | 6,822 |
Goodwill | 173,843 | 173,843 |
Assets held for sale | 71,800 | |
Other assets, net | 55,280 | 56,893 |
TOTAL ASSETS | 3,004,254 | 2,861,969 |
LIABILITIES | ||
Unsecured credit facility, net | 828,861 | 945,657 |
Senior notes, net of debt issuance costs | 394,944 | 394,786 |
Capital lease, lease financing obligations and mortgage notes payable | 4,674 | |
Finance leases and mortgage notes payable | 48,988 | |
Operating lease liabilities | 69,346 | |
Accounts payable and accrued liabilities | 120,501 | 99,166 |
Dividends and distributions payable | 33,244 | 29,633 |
Advance rents, security deposits and other liabilities | 34,515 | 32,679 |
Liabilities held for sale | 24,349 | |
Deferred income taxes | 1,208 | 1,097 |
Deferred income | 38,167 | 33,241 |
TOTAL LIABILITIES | 1,569,774 | 1,565,282 |
EQUITY | ||
Additional paid-in capital | 1,214,711 | 1,062,473 |
Accumulated other comprehensive income (loss) | (6,702) | 2,073 |
Accumulated dividends in excess of earnings | (292,219) | (278,548) |
Total stockholders’ equity | 1,323,779 | 1,193,986 |
Noncontrolling interests | 110,701 | 102,701 |
TOTAL EQUITY | 1,434,480 | 1,296,687 |
TOTAL LIABILITIES AND EQUITY | 3,004,254 | 2,861,969 |
Qualitytech, LP | ||
Real Estate Assets | ||
Land | 105,541 | 105,541 |
Buildings, improvements and equipment | 2,031,825 | 1,917,251 |
Less: Accumulated depreciation | (494,787) | (467,644) |
Total real estate assets | 1,642,579 | 1,555,148 |
Construction in progress | 803,888 | 790,064 |
Real Estate Assets, net | 2,446,467 | 2,345,212 |
Investments in unconsolidated entity | 44,191 | |
Operating lease right-of-use assets, net | 61,585 | |
Cash and cash equivalents | 18,678 | 11,759 |
Rents and other receivables, net | 56,898 | 55,093 |
Acquired intangibles, net | 92,053 | 95,451 |
Deferred costs, net | 45,674 | 45,096 |
Prepaid expenses | 9,585 | 6,822 |
Goodwill | 173,843 | 173,843 |
Assets held for sale | 71,800 | |
Other assets, net | 55,280 | 56,893 |
TOTAL ASSETS | 3,004,254 | 2,861,969 |
LIABILITIES | ||
Unsecured credit facility, net | 828,861 | 945,657 |
Senior notes, net of debt issuance costs | 394,944 | 394,786 |
Capital lease, lease financing obligations and mortgage notes payable | 4,674 | |
Finance leases and mortgage notes payable | 48,988 | |
Operating lease liabilities | 69,346 | |
Accounts payable and accrued liabilities | 120,501 | 99,166 |
Dividends and distributions payable | 33,244 | 29,633 |
Advance rents, security deposits and other liabilities | 34,515 | 32,679 |
Liabilities held for sale | 24,349 | |
Deferred income taxes | 1,208 | 1,097 |
Deferred income | 38,167 | 33,241 |
TOTAL LIABILITIES | 1,569,774 | 1,565,282 |
EQUITY | ||
Accumulated other comprehensive income (loss) | (7,509) | 2,344 |
TOTAL PARTNERS' CAPITAL | 1,434,480 | 1,296,687 |
TOTAL LIABILITIES AND EQUITY | 3,004,254 | 2,861,969 |
Series A Redeemable Perpetual Preferred | ||
EQUITY | ||
Cumulative redeemable perpetual preferred stock / units | 103,212 | 103,212 |
Series A Redeemable Perpetual Preferred | Qualitytech, LP | ||
EQUITY | ||
Cumulative redeemable perpetual preferred stock / units | 103,212 | 103,212 |
Series B Convertible Preferred Units | ||
EQUITY | ||
Cumulative redeemable perpetual preferred stock / units | 304,223 | 304,265 |
Series B Convertible Preferred Units | Qualitytech, LP | ||
EQUITY | ||
Cumulative redeemable perpetual preferred stock / units | 304,223 | 304,265 |
Common units: $0.01 par value, 450,133,000 units authorized, 62,027,587 and 57,799,035 units issued and outstanding as of March 31, 2019 and December 31, 2018, respectively | ||
EQUITY | ||
Common stock / units | 554 | 511 |
Common units: $0.01 par value, 450,133,000 units authorized, 62,027,587 and 57,799,035 units issued and outstanding as of March 31, 2019 and December 31, 2018, respectively | Qualitytech, LP | ||
EQUITY | ||
Common stock / units | $ 1,034,554 | $ 886,866 |
INTERIM CONSOLIDATED FINANCIA_2
INTERIM CONSOLIDATED FINANCIAL STATEMENTS BALANCE SHEETS (Parenthetical) - $ / shares | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Preferred stock, liquidation preference | $ 25 | |
Series A Redeemable Perpetual Preferred | ||
Dividend rate (as a percent) | 7.125% | 7.125% |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, liquidation preference | $ 25 | $ 25 |
Preferred stock, shares authorized | 4,600,000 | 4,600,000 |
Preferred stock, shares issued | 4,280,000 | 4,280,000 |
Preferred stock, shares outstanding | 4,280,000 | 4,280,000 |
Series A Redeemable Perpetual Preferred | Qualitytech, LP | ||
Dividend rate (as a percent) | 7.125% | 7.125% |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, liquidation preference | $ 25 | $ 25 |
Preferred stock, shares authorized | 4,600,000 | 4,600,000 |
Preferred stock, shares issued | 4,280,000 | 4,280,000 |
Preferred stock, shares outstanding | 4,280,000 | 4,280,000 |
Series B Convertible Preferred Units | ||
Dividend rate (as a percent) | 6.50% | 6.50% |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, liquidation preference | $ 100 | $ 100 |
Preferred stock, shares authorized | 3,162,500 | 3,162,500 |
Preferred stock, shares issued | 3,162,500 | 3,162,500 |
Preferred stock, shares outstanding | 3,162,500 | 3,162,500 |
Series B Convertible Preferred Units | Qualitytech, LP | ||
Dividend rate (as a percent) | 6.50% | 6.50% |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, liquidation preference | $ 100 | $ 100 |
Preferred stock, shares authorized | 3,162,500 | 3,162,500 |
Preferred stock, shares outstanding | 3,162,500 | 3,162,500 |
Common stock, shares issued | 3,162,500 | 3,162,500 |
Common units: $0.01 par value, 450,133,000 units authorized, 62,027,587 and 57,799,035 units issued and outstanding as of March 31, 2019 and December 31, 2018, respectively | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 450,133,000 | 450,133,000 |
Common stock, shares issued | 55,353,643 | 51,123,417 |
Common stock, shares outstanding | 55,353,643 | 51,123,417 |
Common units: $0.01 par value, 450,133,000 units authorized, 62,027,587 and 57,799,035 units issued and outstanding as of March 31, 2019 and December 31, 2018, respectively | Qualitytech, LP | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 450,133,000 | 450,133,000 |
Common stock, shares issued | 62,027,587 | 62,027,587 |
Common stock, shares outstanding | 57,799,035 | 57,799,035 |
INTERIM CONSOLIDATED FINANCIA_3
INTERIM CONSOLIDATED FINANCIAL STATEMENTS STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Revenues: | ||
Rental | $ 98,596 | $ 88,415 |
Variable lease revenue from recoveries | 10,793 | 11,513 |
Other | 3,300 | 13,769 |
Total revenues | 112,689 | 113,697 |
Operating Expenses: | ||
Property operating costs | 34,103 | 37,740 |
Real estate taxes and insurance | 3,367 | 2,905 |
Depreciation and amortization | 38,788 | 35,913 |
General and administrative | 19,891 | 22,234 |
Transaction, integration and impairment costs | 920 | |
Transaction and integration costs | 1,214 | |
Restructuring | 8,530 | |
Total operating expenses | 97,363 | 108,242 |
Gain on sale of real estate, net | 13,408 | |
Operating income (loss) | 28,734 | 5,455 |
Other income and expenses: | ||
Interest income | 45 | 1 |
Interest expense | (7,146) | (8,110) |
Equity in earnings (loss) of unconsolidated entity | (274) | |
Income (loss) before taxes | 21,359 | (2,654) |
Tax benefit (expense) of taxable REIT subsidiaries | (211) | 2,402 |
Net income (loss) | 21,148 | (252) |
Net (income) loss attributable to noncontrolling interests | (1,590) | 29 |
Net income (loss) attributable to QTS Realty Trust, Inc. | 19,558 | (223) |
Preferred stock dividends | (7,045) | (328) |
Net income (loss) attributable to common stockholders | $ 12,513 | $ (551) |
Net income (loss) per share attributable to common shares: | ||
Basic (in dollars per share) | $ 0.20 | $ (0.02) |
Diluted (in dollars per share) | $ 0.20 | $ (0.02) |
Qualitytech, LP | ||
Revenues: | ||
Rental | $ 98,596 | $ 88,415 |
Variable lease revenue from recoveries | 10,793 | 11,513 |
Other | 3,300 | 13,769 |
Total revenues | 112,689 | 113,697 |
Operating Expenses: | ||
Property operating costs | 34,103 | 37,740 |
Real estate taxes and insurance | 3,367 | 2,905 |
Depreciation and amortization | 38,788 | 35,913 |
General and administrative | 19,891 | 22,234 |
Transaction, integration and impairment costs | 920 | |
Transaction and integration costs | 1,214 | |
Restructuring | 8,530 | |
Total operating expenses | 97,363 | 108,242 |
Gain on sale of real estate, net | 13,408 | |
Operating income (loss) | 28,734 | 5,455 |
Other income and expenses: | ||
Interest income | 45 | 1 |
Interest expense | (7,146) | (8,110) |
Equity in earnings (loss) of unconsolidated entity | (274) | |
Income (loss) before taxes | 21,359 | (2,654) |
Tax benefit (expense) of taxable REIT subsidiaries | (211) | 2,402 |
Net income (loss) | 21,148 | (252) |
Preferred stock dividends | (7,045) | (328) |
Net income (loss) attributable to common stockholders | $ 14,103 | $ (580) |
INTERIM CONSOLIDATED FINANCIA_4
INTERIM CONSOLIDATED FINANCIAL STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Net income (loss) | $ 21,148 | $ (252) |
Other comprehensive income: | ||
Increase (decrease) in fair value of derivative contracts | (9,853) | 5,982 |
Reclassification of other comprehensive income to interest expense (income) | (494) | 402 |
Comprehensive income | 10,801 | 6,132 |
Comprehensive (income) attributable to noncontrolling interests | (1,217) | (702) |
Comprehensive income attributable to QTS Realty Trust, Inc. | 9,584 | 5,430 |
Qualitytech, LP | ||
Net income (loss) | 21,148 | (252) |
Other comprehensive income: | ||
Increase (decrease) in fair value of derivative contracts | (9,853) | 5,982 |
Reclassification of other comprehensive income to interest expense (income) | (494) | 402 |
Comprehensive income | $ 10,801 | $ 6,132 |
INTERIM CONSOLIDATED FINANCIA_5
INTERIM CONSOLIDATED FINANCIAL STATEMENTS CONSOLIDATED STATEMENT OF EQUITY - USD ($) shares in Thousands, $ in Thousands | Series A Preferred StockQualitytech, LPPreferred stockLimited Partner | Series A Preferred StockQualitytech, LPCommon stockLimited Partner | Series A Preferred StockQualitytech, LP | Series A Preferred StockPreferred stock | Series A Preferred StockAccumulated dividends in excess of earnings | Series A Preferred StockTotal stockholders' Equity | Series A Preferred Stock | Series B Preferred StockQualitytech, LPPreferred stockLimited Partner | Series B Preferred StockQualitytech, LPCommon stockLimited Partner | Series B Preferred StockQualitytech, LP | Series B Preferred StockPreferred stock | Series B Preferred StockAccumulated dividends in excess of earnings | Series B Preferred StockTotal stockholders' Equity | Series B Preferred Stock | Qualitytech, LPPreferred stockLimited Partner | Qualitytech, LPCommon stockLimited Partner | Qualitytech, LPCommon stockGeneral Partner | Qualitytech, LPAccumulated other comprehensive income | Qualitytech, LP | Preferred stock | Common stock | Additional paid-in capital | Accumulated other comprehensive income | Accumulated dividends in excess of earnings | Total stockholders' Equity | Noncontrolling interests | Total |
Beginning balance at Dec. 31, 2017 | $ 1,449 | $ 507 | $ 1,049,176 | $ 1,283 | $ (173,552) | $ 877,414 | $ 113,242 | $ 990,656 | |||||||||||||||||||
Beginning balance, shares at Dec. 31, 2017 | 50,702 | ||||||||||||||||||||||||||
Limited Partners' Capital, Beginning at Dec. 31, 2017 | $ 989,207 | ||||||||||||||||||||||||||
Limited Partners' Capital, Beginning balance, shares at Dec. 31, 2017 | 57,246 | ||||||||||||||||||||||||||
Beginning balance, shares at Dec. 31, 2017 | 1 | ||||||||||||||||||||||||||
Partners' Capital, Beginning Balance at Dec. 31, 2017 | $ 990,656 | ||||||||||||||||||||||||||
Net share activity through equity award plan | $ (238) | (238) | $ 4 | (1,311) | (1,307) | 1,069 | (238) | ||||||||||||||||||||
Net share activity through equity award plan, shares | 564 | 434 | |||||||||||||||||||||||||
Increase (decrease) in fair value of derivative contracts | 5,982 | 5,982 | 5,290 | 5,290 | 692 | 5,982 | |||||||||||||||||||||
Equity-based compensation expense | $ 4,898 | 4,898 | 4,337 | 4,337 | 561 | 4,898 | |||||||||||||||||||||
Net proceeds from stock offering | $ 103,184 | $ 103,184 | $ 103,184 | $ 103,184 | $ 103,184 | ||||||||||||||||||||||
Net proceeds from stock offering (in shares) | 4,280 | 4,280 | |||||||||||||||||||||||||
Dividends declared on Preferred Stock | (328) | (328) | (328) | (328) | |||||||||||||||||||||||
Dividends declared on Preferred Units | (328) | (328) | |||||||||||||||||||||||||
Dividends declared to common shareholders | (20,971) | (20,971) | (20,971) | (20,971) | (20,971) | ||||||||||||||||||||||
Dividends to noncontrolling interests | (2,736) | (2,736) | |||||||||||||||||||||||||
Partnership distributions | (2,736) | (2,736) | |||||||||||||||||||||||||
Net income (loss) | (252) | (252) | (223) | (223) | (29) | (252) | |||||||||||||||||||||
Ending balance at Mar. 31, 2018 | 7,431 | $ 103,184 | $ 511 | 1,052,202 | 6,573 | (195,074) | 967,396 | 112,799 | 1,080,195 | ||||||||||||||||||
Ending balance, shares at Mar. 31, 2018 | 4,280 | 51,136 | |||||||||||||||||||||||||
Limited Partners' Capital, Ending balance at Mar. 31, 2018 | $ 103,184 | $ 969,580 | |||||||||||||||||||||||||
Limited Partners' Capital Ending balance, shares at Mar. 31, 2018 | 4,280 | 57,810 | |||||||||||||||||||||||||
Ending balance, shares at Mar. 31, 2018 | 1 | ||||||||||||||||||||||||||
Partners' Capital, Ending Balance at Mar. 31, 2018 | 1,080,195 | ||||||||||||||||||||||||||
Beginning balance at Dec. 31, 2018 | 2,344 | $ 407,477 | $ 511 | 1,062,473 | 2,073 | (278,548) | 1,193,986 | 102,701 | 1,296,687 | ||||||||||||||||||
Beginning balance, shares at Dec. 31, 2018 | 7,443 | 51,123 | |||||||||||||||||||||||||
Limited Partners' Capital, Beginning at Dec. 31, 2018 | $ 407,477 | $ 886,866 | |||||||||||||||||||||||||
Limited Partners' Capital, Beginning balance, shares at Dec. 31, 2018 | 7,443 | 57,799 | |||||||||||||||||||||||||
Beginning balance, shares at Dec. 31, 2018 | 1 | ||||||||||||||||||||||||||
Partners' Capital, Beginning Balance at Dec. 31, 2018 | 1,296,687 | ||||||||||||||||||||||||||
Net share activity through equity award plan | $ 741 | 741 | $ 3 | 660 | 663 | 78 | 741 | ||||||||||||||||||||
Net share activity through equity award plan, shares | 229 | 231 | |||||||||||||||||||||||||
Increase (decrease) in fair value of derivative contracts | (9,853) | (9,853) | (8,775) | (8,775) | (1,078) | (9,853) | |||||||||||||||||||||
Equity-based compensation expense | $ 3,300 | 3,300 | 2,928 | 2,928 | 372 | 3,300 | |||||||||||||||||||||
Opening Equity Adjustment upon ASC 842 adoption | (1,813) | (1,813) | (1,813) | (1,813) | (1,813) | ||||||||||||||||||||||
Adjustment to expenses net from Series B Preferred stock offering | $ (42) | $ (42) | $ (42) | $ (42) | $ (42) | ||||||||||||||||||||||
Net proceeds from stock offering | $ 158,663 | 158,663 | $ 40 | 148,650 | 148,690 | 9,973 | 158,663 | ||||||||||||||||||||
Net proceeds from stock offering (in shares) | 4,000 | 4,000 | |||||||||||||||||||||||||
Dividends declared on Preferred Stock | $ (1,906) | $ (1,906) | $ (1,906) | $ (5,139) | $ (5,139) | $ (5,139) | (7,045) | (7,045) | |||||||||||||||||||
Dividends declared on Preferred Units | $ (1,906) | $ (1,906) | $ (5,139) | $ (5,139) | |||||||||||||||||||||||
Dividends declared to common shareholders | $ (24,371) | (24,371) | (24,371) | (24,371) | (24,371) | ||||||||||||||||||||||
Dividends to noncontrolling interests | (2,935) | (2,935) | |||||||||||||||||||||||||
Partnership distributions | (2,935) | (2,935) | |||||||||||||||||||||||||
Net income (loss) | 21,148 | 21,148 | 19,558 | 19,558 | 1,590 | 21,148 | |||||||||||||||||||||
Ending balance at Mar. 31, 2019 | $ (7,509) | $ 407,435 | $ 554 | $ 1,214,711 | $ (6,702) | $ (292,219) | $ 1,323,779 | $ 110,701 | $ 1,434,480 | ||||||||||||||||||
Ending balance, shares at Mar. 31, 2019 | 7,443 | 55,354 | |||||||||||||||||||||||||
Limited Partners' Capital, Ending balance at Mar. 31, 2019 | $ 407,435 | $ 1,034,554 | |||||||||||||||||||||||||
Limited Partners' Capital Ending balance, shares at Mar. 31, 2019 | 7,443 | 62,028 | |||||||||||||||||||||||||
Ending balance, shares at Mar. 31, 2019 | 1 | ||||||||||||||||||||||||||
Partners' Capital, Ending Balance at Mar. 31, 2019 | $ 1,434,480 |
INTERIM CONSOLIDATED FINANCIA_6
INTERIM CONSOLIDATED FINANCIAL STATEMENTS STATEMENTS OF CASH FLOW - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Cash flow from operating activities: | ||
Net income (loss) | $ 21,148 | $ (252) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation and amortization | 37,247 | 34,580 |
Amortization of above and below market leases | 64 | 139 |
Amortization of deferred loan costs | 978 | 962 |
Equity-based compensation expense | 3,300 | 3,481 |
Bad debt recoveries | (863) | |
Gain on sale of real estate, net | (13,408) | |
Deferred tax expense (benefit) | 111 | (2,402) |
Restructuring costs, net of cash paid | 8,020 | |
Changes in operating assets and liabilities | ||
Rents and other receivables, net | (1,804) | 2,753 |
Prepaid expenses | (2,762) | (4,165) |
Other assets | (419) | (3,339) |
Accounts payable and accrued liabilities | (6,866) | 9,619 |
Advance rents, security deposits and other liabilities | 1,653 | (354) |
Deferred income | 4,926 | 3,374 |
Net cash provided by operating activities | 44,168 | 51,553 |
Cash flow from investing activities: | ||
Proceeds from sale of property, net | 52,722 | |
Acquisitions, net of cash acquired | (24,626) | |
Additions to property and equipment | (101,234) | (103,936) |
Net cash used in investing activities | (48,512) | (128,562) |
Cash flow from financing activities: | ||
Credit facility proceeds | 93,000 | 102,000 |
Credit facility repayments | (210,000) | (95,000) |
Payment of deferred financing costs | (173) | (499) |
Payment of preferred stock dividends | (7,045) | |
Payment of common stock dividends | (20,961) | (19,670) |
Distribution to noncontrolling interests | (2,735) | (2,552) |
Proceeds from exercise of stock options | 2,687 | |
Payment of tax withholdings related to equity-based awards | (2,062) | (867) |
Principal payments on capital lease obligations | (2,324) | |
Principal payments on finance lease obligations | (799) | |
Mortgage principal debt repayments | (9) | (16) |
Preferred stock issuance proceeds, net of costs | 103,615 | |
Common stock issuance proceeds, net of costs | 159,360 | |
Net cash provided by financing activities | 11,263 | 84,687 |
Net increase in cash and cash equivalents | 6,919 | 7,678 |
Cash and cash equivalents, beginning of period | 11,759 | 8,243 |
Cash and cash equivalents, end of period | 18,678 | 15,921 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | ||
Cash paid for interest (excluding deferred financing costs and amounts capitalized) | 9,461 | 4,720 |
Noncash investing and financing activities: | ||
Accrued capital additions | 69,963 | 102,489 |
Net increase (decrease) in other assets/liabilities related to change in fair value of derivative contracts | (9,853) | 5,982 |
Equity received in unconsolidated entity in exchange for real estate assets | 25,280 | |
Increase in assets in exchange for finance lease obligation | 45,024 | |
Accrued equity issuance costs | 918 | 432 |
Accrued preferred stock dividend | 5,938 | 328 |
Qualitytech, LP | ||
Cash flow from operating activities: | ||
Net income (loss) | 21,148 | (252) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation and amortization | 37,247 | 34,580 |
Amortization of above and below market leases | 64 | 139 |
Amortization of deferred loan costs | 978 | 962 |
Equity-based compensation expense | 3,300 | 3,481 |
Bad debt recoveries | (863) | |
Gain on sale of real estate, net | (13,408) | |
Deferred tax expense (benefit) | 111 | (2,402) |
Restructuring costs, net of cash paid | 8,020 | |
Changes in operating assets and liabilities | ||
Rents and other receivables, net | (1,804) | 2,753 |
Prepaid expenses | (2,762) | (4,165) |
Other assets | (419) | (3,339) |
Accounts payable and accrued liabilities | (6,866) | 9,619 |
Advance rents, security deposits and other liabilities | 1,653 | (354) |
Deferred income | 4,926 | 3,374 |
Net cash provided by operating activities | 44,168 | 51,553 |
Cash flow from investing activities: | ||
Proceeds from sale of property, net | 52,722 | |
Acquisitions, net of cash acquired | (24,626) | |
Additions to property and equipment | (101,234) | (103,936) |
Net cash used in investing activities | (48,512) | (128,562) |
Cash flow from financing activities: | ||
Credit facility proceeds | 93,000 | 102,000 |
Credit facility repayments | (210,000) | (95,000) |
Payment of deferred financing costs | (173) | (499) |
Payment of preferred stock dividends | (7,045) | |
Payment of cash dividends | (20,961) | (19,670) |
Partnership distributions | (2,735) | (2,552) |
Proceeds from exercise of stock options | 2,687 | |
Payment of tax withholdings related to equity-based awards | (2,062) | (867) |
Principal payments on capital lease obligations | (2,324) | |
Principal payments on finance lease obligations | (799) | |
Mortgage principal debt repayments | (9) | (16) |
Preferred stock issuance proceeds, net of costs | 103,615 | |
Common stock issuance proceeds, net of costs | 159,360 | |
Net cash provided by financing activities | 11,263 | 84,687 |
Net increase in cash and cash equivalents | 6,919 | 7,678 |
Cash and cash equivalents, beginning of period | 11,759 | 8,243 |
Cash and cash equivalents, end of period | 18,678 | 15,921 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | ||
Cash paid for interest (excluding deferred financing costs and amounts capitalized) | 9,461 | 4,720 |
Noncash investing and financing activities: | ||
Accrued capital additions | 69,963 | 102,489 |
Net increase (decrease) in other assets/liabilities related to change in fair value of derivative contracts | (9,853) | 5,982 |
Equity received in unconsolidated entity in exchange for real estate assets | 25,280 | |
Increase in assets in exchange for finance lease obligation | 45,024 | |
Accrued equity issuance costs | 918 | 432 |
Accrued preferred stock dividend | $ 5,938 | $ 328 |
Description of Business
Description of Business | 3 Months Ended |
Mar. 31, 2019 | |
Description of Business [Abstract] | |
Description of Business | 1. Description of Business QTS Realty Trust, Inc., (“QTS”) through its controlling interest in QualityTech, LP (the “Operating Partnership” and collectively with QTS and their subsidiaries, the “Company”) and the subsidiaries of the Operating Partnership, is engaged in the business of owning, acquiring, constructing, redeveloping and managing multi-tenant data centers. As of March 31, 2019, the Company’s portfolio consisted of 24 owned and leased properties with data centers located throughout the United States, Canada, Europe and Asia. QTS elected to be taxed as a real estate investment trust (“REIT”) for U.S. federal income tax purposes, commencing with its taxable year ended December 31, 2013. As a REIT, QTS generally is not required to pay federal corporate income taxes on its taxable income to the extent it is currently distributed to its stockholders. The Operating Partnership is a Delaware limited partnership formed on August 5, 2009 and is QTS’ historical predecessor. As of March 31, 2019, QTS owned approximately 89.2% of the interests in the Operating Partnership. Substantially all of QTS’ assets are held by, and QTS’ operations are conducted through, the Operating Partnership. QTS’ interest in the Operating Partnership entitles QTS to share in cash distributions from, and in the profits and losses of, the Operating Partnership in proportion to QTS’ percentage ownership. As the sole general partner of the Operating Partnership, QTS generally has the exclusive power under the partnership agreement of the Operating Partnership to manage and conduct the Operating Partnership’s business and affairs, subject to certain limited approval and voting rights of the limited partners. QTS’ board of directors manages the Company’s business and affairs. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2019 | |
Summary of Significant Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Presentation – The accompanying financial statements have been prepared by management in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information and in compliance with the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). These unaudited consolidated financial statements and related notes should be read in conjunction with the audited consolidated financial statements and related notes and management’s discussion and analysis included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018, filed with the SEC on February 25, 2019. The consolidated balance sheet data included herein as of December 31, 2018 was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. The accompanying financial statements are presented for both QTS Realty Trust, Inc. and QualityTech, LP. References to “QTS” mean QTS Realty Trust, Inc. and its controlled subsidiaries and references to the “Operating Partnership” mean QualityTech, LP and its controlled subsidiaries. The Operating Partnership meets the definition and criteria of a variable interest entity (“VIE”) in accordance with ASC 810 Consolidation , and the Company is the primary beneficiary of the VIE. As discussed below, the Company’s only material asset is its ownership interest in the Operating Partnership, and consequently, all of its assets and liabilities represent those assets and liabilities of the Operating Partnership. The Company’s debt is an obligation of the Operating Partnership where the creditors may have recourse, under certain circumstances, against the credit of the Company. QTS is the sole general partner of the Operating Partnership, and its only material asset consists of its ownership interest in the Operating Partnership. Management operates QTS and the Operating Partnership as one business. The management of QTS consists of the same employees as the management of the Operating Partnership. QTS does not conduct business itself, other than acting as the sole general partner of the Operating Partnership and issuing public equity from time to time. QTS has not issued or guaranteed any indebtedness. Except for net proceeds from public equity issuances by QTS, which are contributed to the Operating Partnership in exchange for units of limited partnership interest of the Operating Partnership, the Operating Partnership generates all remaining capital required by the business through its operations, the direct or indirect incurrence of indebtedness, and the issuance of partnership units. Therefore, as general partner with control of the Operating Partnership, QTS consolidates the Operating Partnership for financial reporting purposes. The Company believes, therefore, that providing one set of notes for the financial statements of QTS and the Operating Partnership provides the following benefits: · enhances investors’ understanding of QTS and the Operating Partnership by enabling investors to view the business as a whole in the same manner as management views and operates the business; · eliminates duplicative disclosure and provides a more streamlined and readable presentation since a substantial portion of the disclosure applies to both QTS and the Operating Partnership; and · creates time and cost efficiencies through the preparation of one set of notes instead of two separate sets of notes. In addition, in light of these combined notes, the Company believes it is important for investors to understand the few differences between QTS and the Operating Partnership in the context of how QTS and the Operating Partnership operate as a consolidated company. With respect to balance sheets, the presentation of stockholders’ equity and partners’ capital are the main areas of difference between the consolidated balance sheets of QTS and those of the Operating Partnership. On the Operating Partnership’s consolidated balance sheets, partners’ capital includes preferred partnership units and common partnership units as well as accumulated other comprehensive income (loss) that are owned by QTS and other partners. On QTS’ consolidated balance sheets, stockholders’ equity includes preferred stock, common stock, additional paid in capital, accumulated other comprehensive income (loss) and accumulated dividends in excess of earnings. The remaining equity reflected on QTS’ consolidated balance sheet is the portion of net assets that are retained by partners other than QTS, referred to as noncontrolling interests. With respect to statements of operations, the primary difference in QTS' Statements of Operations and Statements of Comprehensive Income (Loss) is that for net income (loss), QTS retains its proportionate share of the net income (loss) based on its ownership of the Operating Partnership, with the remaining balance being retained by the Operating Partnership. These combined notes refer to actions or holdings as being actions or holdings of “the Company.” Although the Operating Partnership is generally the entity that enters into contracts, holds assets and issues debt, management believes that these general references to “the Company” in this context is appropriate because the business is one enterprise operated through the Operating Partnership. As discussed above, QTS owns no operating assets and has no operations independent of the Operating Partnership and its subsidiaries. Also, the Operating Partnership owns no operating assets and has no operations independent of its subsidiaries. Obligations under the 4.75% Senior Notes due 2025 and the unsecured credit facility, both discussed in Note 7, are fully, unconditionally, and jointly and severally guaranteed by the Operating Partnership’s existing subsidiaries (other than foreign subsidiaries and receivables entities) and future subsidiaries that guarantee any indebtedness of QTS Realty Trust, Inc., the Operating Partnership, QTS Finance Corporation (the co-issuer of the 4.75% Senior Notes due 2025) or any subsidiary guarantor. The indenture governing the 4.75% Senior Notes due 2025 restricts the ability of the Operating Partnership to make distributions to QTS, subject to certain exceptions, including distributions required in order for QTS to maintain its status as a real estate investment trust under the Internal Revenue Code of 1986, as amended (the “Code”). The interim consolidated financial statements of QTS Realty Trust, Inc. include the accounts of QTS Realty Trust, Inc. and its majority owned subsidiaries. This includes the operating results of the Operating Partnership for all periods presented. Use of Estimates – The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include the useful lives of fixed assets, allowances for doubtful accounts and deferred tax assets and the valuation of derivatives, real estate assets, acquired intangible assets and certain accruals. Principles of Consolidation – The consolidated financial statements of QTS Realty Trust, Inc. include the accounts of QTS Realty Trust, Inc. and its controlled subsidiaries. The consolidated financial statements of QualityTech, LP include the accounts of QualityTech, LP and its subsidiaries. All significant intercompany accounts and transactions have been eliminated in the financial statements. The Company evaluates its investments in unconsolidated entities to determine whether they should be recorded on a consolidated basis. The percentage of ownership interest in the entity, an evaluation of control and whether a VIE exists are all considered in the Company’s consolidation assessment. Investments in real estate entities which the Company has the ability to exercise significant influence, but does not have financial or operating control, are accounted for using the equity method of accounting. Accordingly, the Company’s share of the earnings or losses of these entities is included in consolidated net income (loss). Variable Interest Entities (VIEs) – The Company determines whether an entity is a VIE and, if so, whether it should be consolidated by utilizing judgments and estimates that are inherently subjective. The determination of whether an entity in which the Company holds a direct or indirect variable interest is a VIE is based on several factors, including whether the entity’s total equity investment at risk upon inception is sufficient to finance the entity’s activities without additional subordinated financial support. The Company makes judgments regarding the sufficiency of the equity at risk based first on a qualitative analysis, and then a quantitative analysis, if necessary. The Company analyzes any investments in VIEs to determine if the Company is the primary beneficiary. In evaluating whether it is the primary beneficiary, the Company evaluates its direct and indirect economic interests in the entity. A reporting entity is determined to be the primary beneficiary if it holds a controlling financial interest in the VIE. Determining which reporting entity, if any, has a controlling financial interest in a VIE is primarily a qualitative approach focused on identifying which reporting entity has both (1) the power to direct the activities of a VIE that most significantly impact such entity’s economic performance and (2) the obligation to absorb losses or the right to receive benefits from such entity that could potentially be significant to such entity. Performance of that analysis requires the exercise of judgment. The Company considers a variety of factors in identifying the entity that holds the power to direct matters that most significantly impact the VIE’s economic performance including, but not limited to, the ability to direct financing, leasing, construction and other operating decisions and activities. In addition, the Company considers the rights of other investors to participate in those decisions, to replace the manager and to sell or liquidate the entity. The Company determines whether it is the primary beneficiary of a VIE at the time the Company becomes involved with a variable interest entity and reconsiders that conclusion continually. As of March 31, 2019, the Company had one unconsolidated entity that was considered a VIE for which the Company is not the primary beneficiary. The Company’s maximum exposure to losses associated with this VIE is limited to its aggregate investment, which was approximately $44 million as of March 31, 2019. Reclassifications – Revenue categories in the statement of operations for the three months ended March 31, 2018 have been reclassified to conform to 2019 presentation which consists of three categories instead of four categories presented historically. The statement of operations for the three months ended March 31, 2018 incorporates a reclassification of $2.7 million of straight line rent from the “Other” line item into the “Rental” line item, as well as the combination of $13.2 million of what was previously classified as “Cloud and managed services” revenue and $0.6 million of remaining “Other” revenue into a single “Other” line item. Real Estate Assets – Real estate assets are reported at cost. All capital improvements for the income-producing properties that extend their useful lives are capitalized to individual property improvements and depreciated over their estimated useful lives. Depreciation for real estate assets is generally provided on a straight-line basis over 40 years from the date the property was placed in service. Property improvements are depreciated on a straight-line basis over the life of the respective improvement ranging from 20 to 40 years from the date the components were placed in service. Leasehold improvements are depreciated over the lesser of 20 years or through the end of the respective life of the lease. Repairs and maintenance costs are expensed as incurred. For the three months ended March 31, 2019, depreciation expense related to real estate assets and non-real estate assets was $27.4 million and $2.9 million, respectively, for a total of $30.3 million. For the three months ended March 31, 2018, depreciation expense related to real estate assets and non-real estate assets was $23.7 million and $3.2 million, respectively, for a total of $26.9 million. The Company capitalizes certain development costs, including internal costs incurred in connection with development. The capitalization of costs during the construction period (including interest and related loan fees, property taxes and other direct and indirect costs) begins when development efforts commence and ends when the asset is ready for its intended use. Capitalization of such costs, excluding interest, aggregated to $4.5 million and $3.5 million for the three months ended March 31, 2019 and 2018, respectively. Interest is capitalized during the period of development by applying the Company’s weighted average effective borrowing rate to the actual development and other capitalized costs paid during the construction period. Interest is capitalized until the property is ready for its intended use. Interest costs capitalized totaled $7.8 million and $5.4 million for the three months ended March 31, 2019 and 2018, respectively. Acquisitions and Sales – Acquisitions of real estate and other entities are either accounted for as asset acquisitions or business combinations depending on facts and circumstances. When substantially all of the fair value of gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets, the transaction is accounted for as an asset acquisition. In an asset acquisition, the purchase price paid for assets acquired is allocated between identified tangible and intangible assets acquired based on relative fair value. Transaction costs associated with asset acquisitions are capitalized. When substantially all of the fair value of assets acquired is not concentrated in a group of similar identifiable assets, the set of assets will generally be considered a business. When accounting for business combinations purchase accounting is applied to the assets and liabilities related to all real estate investments acquired in accordance with the accounting requirements of ASC 805, Business Combinations , which requires the recording of net assets of acquired businesses at fair value. The fair value of the consideration transferred is assigned to the acquired tangible assets, consisting primarily of land, construction in progress, building and improvements, and identified intangible assets and liabilities, consisting of the value of above-market and below-market leases, value of in-place leases, value of customer relationships, trade names, software intangibles and finance leases. The excess of the fair value of liabilities assumed, common stock issued and cash paid over the fair value of identifiable assets acquired is allocated to goodwill, which is not amortized by the Company. Transaction costs associated with business combinations are expensed as incurred. In developing estimates of fair value of acquired assets and assumed liabilities, management analyzed a variety of factors including market data, estimated future cash flows of the acquired operations, industry growth rates, current replacement cost for fixed assets and market rate assumptions for contractual obligations. Such a valuation requires management to make significant estimates and assumptions, particularly with respect to the intangible assets. Acquired in-place leases are amortized as amortization expense on a straight-line basis over the remaining life of the underlying leases. This amortization expense is accounted for as real estate amortization expense. Acquired customer relationships are amortized as amortization expense on a straight-line basis over the expected life of the customer relationship. This amortization expense is accounted for as real estate amortization expense. Other acquired intangible assets, which includes platform, above or below market leases, and trade name intangibles, are amortized on a straight-line basis over their respective expected lives. Above or below market leases are amortized as a reduction to or increase in rental revenue when the Company is a lessor as well as a reduction to or increase in rent expense over the remaining lease terms in the case of the Company as lessee. The expense associated with trade name intangibles is accounted for as real estate amortization expense, whereas the expense associated with the amortization of platform intangibles is accounted for as non-real estate amortization expense. The Company accounts for the sale of assets to non-customers under Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) No. 2017-05, Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20), which provides for recognition or derecognition based on transfer of ownership. During the three months ended March 31, 2019, the Company sold its Manassas facility to an unconsolidated affiliate in exchange for cash consideration and noncash consideration in the form of an equity interest in the unconsolidated entity. After measuring the consideration received at fair value, the Company recognized a $13.4 million gain on sale of real estate, net of approximately $5.8 million of transaction costs, associated with the Company’s contribution of certain assets in its Manassas facility to the unconsolidated entity. Substantially all of the fair value of the assets contributed to the entity was concentrated in a group of similar identifiable assets and the sale of the assets were not to a customer, therefore the transaction was accounted for as an asset sale. The gain on sale of real estate is included within the “Gain on sale of real estate, net” line item of the consolidated statements of operations. Impairment of Long-Lived Assets, Intangible Assets and Goodwill – The Company reviews its long-lived assets and intangible assets for impairment when events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. Recoverability of assets to be held and used is measured by comparison of the carrying amount to the future net cash flows, undiscounted and without interest, expected to be generated by the asset group. If the net carrying value of the asset exceeds the value of the undiscounted cash flows, the fair value of the asset is assessed and may be considered impaired. An impairment loss is recognized based on the excess of the carrying amount of the impaired asset over its fair value. No impairment losses were recorded for the three months ended March 31, 2019. The Company recognized $4.0 million of impairment losses related to certain non-real estate product related assets during the three months ended March 31, 2018, which was included in the “Restructuring” line item of the consolidated statement of operations. The fair value of goodwill is the consideration transferred in a business combination which is not allocable to identifiable intangible and tangible assets. Goodwill is subject to at least an annual assessment for impairment. In connection with the goodwill impairment evaluation that the Company performed as of October 1, 2018, the Company determined qualitatively that it is not more likely than not that the fair value of the Company’s one reporting unit was less than the carrying amount, thus it did not perform a quantitative analysis. As the Company continues to operate and assess its goodwill at the consolidated level for its single reporting unit and its market capitalization significantly exceeds its net asset value, further analysis was not deemed necessary as of March 31, 2019. Assets Held for Sale – The Company completed the sale of the Manassas facility to an unconsolidated entity on February 22, 2019. As of December 31, 2018, prior to the Company’s sale of the assets to the entity, the completion of the sale was probable and the Company accordingly reclassified certain assets, as well as liabilities associated with those assets, as held for sale. As of December 31, 2018, the asset value of $71.8 million associated with the held for sale assets was included within the “Assets held for sale” line item of the consolidated statements of financial position and primarily consisted of construction in progress. As of December 31, 2018, the liability value of $24.3 million associated with the held for sale liabilities was included within the “Liabilities held for sale” line item of the consolidated statements of financial position and primarily consisted of accounts payable and accrued liabilities associated with construction in progress assets. See Note 6 for further discussion of the unconsolidated entity. Cash and Cash Equivalents – The Company considers all demand deposits and money market accounts purchased with a maturity date of three months or less at the date of purchase to be cash equivalents. The Company’s account balances at one or more institutions periodically exceed the Federal Deposit Insurance Corporation (“FDIC”) insurance coverage and, as a result, there is concentration of credit risk related to amounts on deposit in excess of FDIC coverage. The Company mitigates this risk by depositing a majority of its funds with several major financial institutions. The Company also has not experienced any losses and does not believe that the risk is significant. Deferred Costs – Deferred costs, net, on the Company’s balance sheets include both financing costs and leasing costs. Deferred financing costs represent fees and other costs incurred in connection with obtaining debt and are amortized over the term of the loan and are included in interest expense. Debt issuance costs related to revolving debt arrangements are deferred and presented as assets on the balance sheet; however, all other debt issuance costs are recorded as a direct offset to the associated liability. Amortization of debt issuance costs, including those costs presented as offsets to the associated liability in the consolidated balance sheet, was $1.0 million for both the three months ended March 31, 2019 and 2018, respectively. Deferred financing costs presented as assets on the balance sheet related to revolving debt arrangements, net of accumulated amortization, are as follows: March 31, December 31, (dollars in thousands) 2019 2018 (unaudited) Deferred financing costs $ 11,488 $ 11,530 Accumulated amortization (4,335) (3,859) Deferred financing costs, net $ 7,153 $ 7,671 Deferred financing costs presented as offsets to the associated liabilities on the balance sheet related to fixed debt arrangements, net of accumulated amortization, are as follows: March 31, December 31, (dollars in thousands) 2019 2018 (unaudited) Deferred financing costs $ 14,641 $ 14,501 Accumulated amortization (2,944) Deferred financing costs, net $ 11,195 $ 11,557 Initial direct costs, or deferred leasing 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 and are accounted for pursuant to ASC 842, Leases . These costs are incurred when the Company executes lease agreements and represent only incremental costs that would not have been incurred if the lease agreement had not been executed. To a lesser extent, the Company incurs the same incremental costs to obtain managed service contracts with customers that are accounted for pursuant to ASC 606, Revenue from Contracts with Customers. Because the framework of accounting for these costs and the underlying nature of the costs are the same for the Company’s revenue and lease contracts, the costs are presented on a combined basis within the Company’s financial statements and within the below table. Both revenue and leasing commissions are capitalized and generally amortized over the term of the related leases or the expected term of the contract 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 deferred leasing costs totaled $5.4 million and $4.9 million for the three months ended March 31, 2019 and 2018, respectively. Deferred leasing costs, net of accumulated amortization, are as follows: March 31, December 31, (dollars in thousands) 2019 2018 (unaudited) Deferred leasing costs $ 65,655 $ 63,018 Accumulated amortization (27,134) (25,593) Deferred leasing costs, net $ 38,521 $ 37,425 Revenue Recognition – The Company derives its revenues from leases with customers for data center space which include lease components and nonlease revenue components, such as power, tenant recoveries, cloud and managed services. The Company adopted Accounting Standards Codification (“ASC”) Topic 842, Leases , the new accounting standard for leases, effective January 1, 2019 using the modified retrospective approach. In addition, the Company adopted ASC Topic 606, Revenue from Contracts with Customers , the new accounting standard for revenue from contracts with customers, effective January 1, 2018 using the modified retrospective approach. The Company has elected the available practical expedient to combine its nonlease revenue components that have the same pattern of transfer as the related operating lease component into a single combined lease component under ASC 842. See the “Recently Adopted Accounting Standards” section below for further details. A description of each of the Company’s disaggregated revenue streams as presented on the face of the Consolidated Statements of Operations is as follows: Rental Revenue The Company’s leases with customers are classified as operating leases and rental revenue is recognized on a straight-line basis over the customer lease term. Occasionally, customer leases include options to extend or terminate the lease agreements. The Company does not include any of these extension or termination options in a customer’s lease term for lease classification purposes or recognizing rental revenue unless it is reasonably certain the customer will exercise these extension or termination options. Rental revenue also includes revenue from power delivery on fixed power arrangements, whereby customers are billed and pay a fixed monthly fee per committed available amount of connected power. These fixed power arrangements require the Company to provide a series of distinct services of standing ready to deliver the power over the contracted term which is co-terminus with the lease. Customer fixed power arrangements have the same pattern of transfer over the lease term as the lease component and are therefore combined with the lease component to form a single lease component that is recognized over the term of the lease on a straight line basis. In addition, rental revenue includes straight line rent. Straight line rent represents the difference in rents recognized during the period versus amounts contractually due pursuant to the underlying leases and is recorded as deferred rent receivable/payable in the consolidated balance sheets. For lease agreements that provide for scheduled rent increases, rental income is recognized on a straight-line basis over the non-cancellable term of the leases, which commences when control of the space has been provided to the customer. The amount of the straight-line rent receivable on the balance sheets included in rents and other receivables, net was $31.4 million and $29.7 million as of March 31, 2019 and December 31, 2018, respectively. Rental revenue also includes amortization of set-up fees which are amortized over the term of the respective lease as discussed below. Variable Lease Revenue from Recoveries Certain customer leases contain provisions under which customers reimburse the Company for power and cooling-related charges as well as a portion of the property’s real estate taxes, insurance and other operating expenses. Recoveries of power and cooling-related expenses relate specifically to the Company’s variable power arrangements, whereby customers pay variable monthly fees for the specific amount of power utilized at the current utility rates. The Company’s performance obligation is to stand ready to deliver power over the life of the customer contract up to a contracted power capacity. Customers have the flexibility to increase or decrease the amount of power consumed, and therefore sub-metered power revenue is constrained at contract inception. The reimbursements are included in revenue as recoveries from customers and are recognized each month as the uncertainty related to the consideration is resolved (i.e. the Company provides power to its customers) and customers utilize the power. Reimbursement of real estate taxes, insurance, common area maintenance, or other operating expenses are accounted for as variable payments under lease guidance pursuant to the practical expedient and are recognized as revenue in the period that the expenses are recognized. Variable lease revenue from recoveries discussed above, including power, common area maintenance or other operating costs, have the same pattern of transfer over the lease term as the lease component and are therefore combined with the lease component to form a single lease component. Other Revenue Other revenue primarily consists of revenue from the Company’s cloud and managed service offerings. The Company, through its TRS, may provide both its cloud product and use of its managed services to its customers on an individual or combined basis. In both its cloud and managed services offerings the TRS’s performance obligation is to provide services (e.g. cloud hosting, data backup, data storage or data center personnel labor hours) to facilitate a fully integrated information technology (“IT”) outsourcing environment over a contracted term. Although underlying services may vary, over the contracted term monthly service offerings are substantially the same and the Company accounts for the services as a series of distinct services in accordance with ASC 606. Service fee revenue is recognized as the revenue is earned, which generally coincides with the services being provided. As the Company has the right to consideration from customers in an amount that corresponds directly with the value to the customer of the TRS’s performance of providing continuous services, the Company recognizes monthly revenue for the amount invoiced. With respect to the transaction price allocated to remaining performance obligations within the Company’s cloud and managed service contracts, the Company has elected to use the optional exemption provided by ASC 606 whereby the Company is not required to estimate the total transaction price allocated to remaining performance obligations as the Company applies the “right-to-invoice” practical expedient. As described above, the nature of our performance obligation in these contracts is to provide monthly services that are substantially the same and accounted for as a series of distinct services. These contracts generally have a remaining term ranging from month-to-month to three years. Management fees and other revenues are generally received from the Company’s unconsolidated affiliate properties as well as third parties. Management fee revenue is earned based on a contractual percentage of unconsolidated affiliate property revenue. Development fee revenue is earned on a contractual percentage of hard costs to develop a property. The Company recognizes revenue for these services provided when earned based on the performance criteria in ASC 606, with such revenue recorded in “Other” revenue on the consolidated statement of operations. The Company records a provision for uncollectible accounts if a receivable balance relating to contractual rent, rental revenue recorded on a straight-line basis, tenant recoveries or other billed amounts is considered by manag |
Acquired Intangibles Assets and
Acquired Intangibles Assets and Liabilities | 3 Months Ended |
Mar. 31, 2019 | |
Acquired Intangible Assets and Liabilities [Abstract] | |
Acquired Intangibles Assets and Liabilities | 3. Acquired Intangible Assets and Liabilities Summarized below are the carrying values for the major classes of intangible assets and liabilities (unaudited and in thousands): March 31, 2019 December 31, 2018 Gross Gross Carrying Accumulated Net Carrying Carrying Accumulated Net Carrying Useful Lives Value Amortization Value Value Amortization Value Customer Relationships 1 to 12 years $ 95,705 $ (30,449) $ 65,256 $ 95,705 $ (28,461) $ 67,244 In-Place Leases 0.5 to 10 years 32,066 (18,701) 13,365 32,066 (17,670) 14,396 Solar Power Agreement (1) 17 years 13,747 (3,841) 9,906 13,747 (3,639) 10,108 Platform Intangible 3 years — — — 9,600 (9,600) — Acquired Favorable Leases Acquired below market leases - as Lessee 46 years 2,301 (8) 2,293 2,301 — 2,301 Acquired above market leases - as Lessor 0.5 to 8 years 4,649 (3,416) 1,233 4,649 (3,247) 1,402 Tradenames 3 years — — — 3,100 (3,100) — Total Intangible Assets $ 148,468 $ (56,415) $ 92,053 $ 161,168 $ (65,717) $ 95,451 Solar Power Agreement (1) 17 years 13,747 (3,841) 9,906 13,747 (3,639) 10,108 Acquired Unfavorable Leases Acquired below market leases - as Lessor 3 to 4 years 809 (671) 138 809 (611) 198 Acquired above market leases - as Lessee 11 to 12 years 2,453 (821) 1,632 2,453 (767) 1,686 Total Intangible Liabilities (2) $ 17,009 $ (5,333) $ 11,676 $ 17,009 $ (5,017) $ 11,992 (1) Amortization related to the Solar Power Agreement asset and liability is recorded at the same rate and therefore has no net impact on the statement of operations. (2) Intangible liabilities are included within the “Advance rents, security deposits and other liabilities” line item of the consolidated balance sheets. Above or below market leases are amortized as a reduction to or increase in rental revenue in the case of the Company as lessor as well as a reduction to or increase in rent expense in the case of the Company as lessee over the remaining lease terms. The net effect of amortization of acquired above‑market and below‑market leases resulted in a net decrease in rental revenue of $0.1 million and $0.1 million for the three months ended March 31, 2019 and 2018, respectively. The estimated amortization of acquired favorable and unfavorable leases for each of the five succeeding fiscal years ending December 31 is as follows (unaudited and in thousands): Net Rental Revenue Net Rental Expense Decrease Increase/(Decrease) 2019 (April - December) $ 368 $ (121) 2020 647 (166) 2021 46 (166) 2022 17 (166) 2023 17 (166) Thereafter — 1,446 Total $ 1,095 $ 661 Net amortization of all other identified intangible assets and liabilities was $3.1 million and $4.0 million for the three months ended March 31, 2019 and 2018, respectively. The estimated net amortization of all other identified intangible assets and liabilities for each of the five succeeding fiscal years ending December 31 is as follows (unaudited and in thousands): 2019 (April - December) $ 8,946 2020 11,379 2021 10,137 2022 9,910 2023 9,910 Thereafter 28,339 Total $ 78,621 |
Real Estate Assets and Construc
Real Estate Assets and Construction in Progress | 3 Months Ended |
Mar. 31, 2019 | |
Real Estate Assets and Construction in Progress [Abstract] | |
Real Estate Assets and Construction in Progress | 4. Real Estate Assets and Construction in Progress The following is a summary of properties owned or leased by the Company as of March 31, 2019 and December 31, 2018 (in thousands): As of March 31, 2019 (unaudited): Buildings, Improvements Construction Property Location Land and Equipment in Progress Total Cost Atlanta, Georgia (Atlanta-Metro) $ 20,416 $ 497,111 $ 110,769 $ 628,296 Irving, Texas 8,606 346,276 104,988 459,870 Richmond, Virginia 2,180 253,593 68,059 323,832 Chicago, Illinois 9,400 152,704 120,999 283,103 Suwanee, Georgia (Atlanta-Suwanee) 3,521 167,173 2,977 173,671 Ashburn, Virginia (1) 17,326 95,585 166,484 279,395 Piscataway, New Jersey 7,466 98,501 34,141 140,108 Santa Clara, California (2) — 105,386 1,250 106,636 Dulles, Virginia 3,154 72,756 4,018 79,928 Sacramento, California 1,481 64,904 91 66,476 Leased Facilities (3) — 89,331 9,449 98,780 Fort Worth, Texas 9,078 18,619 50,869 78,566 Princeton, New Jersey 20,700 34,083 424 55,207 Phoenix, Arizona (1) — — 30,016 30,016 Hillsboro, Oregon (1) — — 44,942 44,942 Manassas, Virginia (1) — 8 54,245 54,253 Other (4) 2,213 35,795 167 38,175 $ 105,541 $ 2,031,825 $ 803,888 $ 2,941,254 (1) Represent land purchases. Land acquisition costs, as well as subsequent development costs, are included within construction in progress until development on the land has ended and the asset is ready for its intended use. (2) Owned facility subject to long-term ground sublease. (3) Includes 9 facilities. All facilities are leased, including those subject to finance leases. (4) Consists of Miami, FL; Lenexa, KS and Overland Park, KS facilities. As of December 31, 2018: Buildings, Improvements Construction Property Location Land and Equipment in Progress Total Cost Atlanta, Georgia (Atlanta-Metro) $ 20,416 $ 493,446 $ 88,253 $ 602,115 Irving, Texas 8,606 345,615 99,445 453,666 Richmond, Virginia 2,180 253,098 67,932 323,210 Chicago, Illinois 9,400 130,150 133,095 272,645 Ashburn, Virginia (1) 17,325 63,245 184,951 265,521 Suwanee, Georgia (Atlanta-Suwanee) 3,521 166,298 3,188 173,007 Piscataway, New Jersey 7,466 97,806 33,472 138,744 Manassas, Virginia (1) (2) — — 45,194 45,194 Santa Clara, California (3) — 98,548 7,600 106,148 Dulles, Virginia 3,154 72,435 3,852 79,441 Fort Worth, Texas 9,079 18,623 43,715 71,417 Sacramento, California 1,481 64,874 92 66,447 Princeton, New Jersey 20,700 34,046 431 55,177 Leased Facilities (4) — 43,347 9,334 52,681 Hillsboro, Oregon (1) — — 39,835 39,835 Phoenix, Arizona (1) — — 29,562 29,562 Other (5) 2,213 35,720 113 38,046 $ 105,541 $ 1,917,251 $ 790,064 $ 2,812,856 (1) Represent land purchases. Land acquisition costs, as well as subsequent development costs, are included within construction in progress until development on the land has ended and the asset is ready for its intended use. (2) Excludes $71.0 million of construction in progress included within the “Assets held for sale” line item of the consolidated balance sheets. (3) Owned facility subject to long-term ground sublease. (4) Includes 10 facilities. All facilities are leased, including those subject to finance leases. (5) Consists of Miami, FL; Lenexa, KS; Overland Park, KS; and Duluth, GA facilities. |
Leases
Leases | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Leases | 5. Leases Leases as Lessee The Company determines if an arrangement is a lease at inception. If the contract is considered a lease, the Company evaluates leased property to determine whether the lease should be classified as a finance or operating lease in accordance with U.S. GAAP. The Company periodically enters into finance leases for certain data center facilities, equipment, and fiber optic transmission cabling. In addition, the Company leases certain real estate (primarily land or real estate space) under operating lease agreements with such assets included within the “Operating lease right of use assets, net” line item of the consolidated balance sheets and the associated lease liabilities included within the “Operating lease liabilities” line item on the consolidated balance sheets. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. Variable lease payments consist of nonlease services related to the lease. 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 the Company’s leases as lessee typically do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The Company assessed multiple variables when determining the incremental borrowing rate, such as lease term, payment terms, collateral, economic conditions, and creditworthiness. ROU assets also include any lease payments made and exclude lease incentives. Many of the Company’s lease agreements include options to extend the lease, which the Company does not include in its expected 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. The Company uses leasing as a source of financing for certain data center facilities and related equipment. The Company currently operates one data center facility, along with various equipment and fiber optic transmission cabling, that are subject to finance leases. The remaining terms of our finance leases range from one to nineteen years. The Company’s finance lease associated with the data center includes multiple extension option periods, some of which were included in the lease term as the Company is reasonably certain to exercise those extension options. The Company’s other finance leases typically do not have options to extend the initial lease term. Finance lease assets are included within the “Buildings, improvements and equipment” line item of the consolidated balance sheets and finance lease liabilities are included within “Finance leases and mortgage notes payable” line item of the consolidated balance sheets. The Company currently leases seven other facilities under operating lease agreements for various data centers and office space. The Company’s leases have remaining lease terms ranging from one to eight years. The Company has options to extend the initial lease term on nearly all of these leases. Additionally, the Company has two ground leases that are considered operating leases, only one of which is material that is scheduled to expire in 2052. Components of lease expense were as follows (unaudited and in thousands): Three months ended March 31, 2019 Operating lease cost $ 3,543 Finance lease cost: Amortization of assets 386 Interest on lease liabilities 245 Sublease income (46) Total lease costs $ 4,128 Supplemental balance sheet information related to leases was as follows (unaudited and in thousands, except lease term and discount rate): March 31, 2019 Operating leases: Operating lease right-of-use assets $ 61,585 Operating lease liabilities 69,346 Finance leases: Property and equipment, at cost 48,233 Accumulated amortization (1,477) Property and equipment, net $ 46,756 Finance lease liabilities $ 47,196 Weighted average remaining lease term (in years): Operating leases 14.0 Finance leases 12.1 Weighted average discount rate: Operating leases Finance leases Supplemental cash flow and other information related to leases was as follows (unaudited and in thousands): Three months ended March 31, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 2,523 Operating cash flows from finance leases $ 196 Financing cash flows from finance leases $ 799 Maturities of lease liabilities were as follows (unaudited and in thousands): March 31, 2019 Operating Leases Finance Leases 2019 (April - December) $ 7,281 $ 3,561 2020 9,605 4,493 2021 9,834 4,514 2022 10,283 4,639 2023 10,409 4,776 Thereafter 57,889 39,908 Total Lease Payments $ 105,301 $ 61,891 Less: Imputed Interest 35,955 14,695 Total Lease Obligations $ 69,346 $ 47,196 Leases as lessor The Company’s lease revenue contains both minimum lease payments as well as variable lease payments. See Note 2 for further details of the Company’s disaggregated revenue streams and associated accounting treatment. The components of the Company’s lease revenue were as follows (in thousands): Three months ended March 31, 2019 2018 Lease revenue: Minimum lease revenue $ $ Variable lease revenue (recoveries from customers) Total lease revenue $ $ |
Investments in Unconsolidated E
Investments in Unconsolidated Entity | 3 Months Ended |
Mar. 31, 2019 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investments in Unconsolidated Entity | 6. Investments in Unconsolidated Entity During the three months ended March 31, 2019, QTS formed an unconsolidated entity with Alinda Capital Partners (“Alinda”), a premier infrastructure investment firm. QTS contributed a 118,000 square foot hyperscale data center under development in Manassas, Virginia to the entity. The facility, and the previously executed operating lease to a global cloud-based software company pursuant to a 10-year lease agreement, was contributed in exchange for cash and noncash consideration in the form of equity interest in the entity that was measured at fair value pursuant to Topic 820. The equity interest received and any amounts due from the unconsolidated entity are recorded within the Company’s consolidated balance sheet and totaled $44.2 million as of March 31, 2019. QTS and Alinda each own a 50% interest in the entity. As the Company is not the primary beneficiary of the arrangement but has the ability to exercise significant influence, the Company concluded that the investment should be accounted for as an unconsolidated entity using equity method investment accounting. As of March 31, 2019 the total assets of the entity were $130.7 million and the total debt outstanding was $52.4 million. Under the equity method, the Company’s cost of investment is adjusted for additional contributions to and distributions from the unconsolidated entity, as well as its share of equity in the earnings and losses of the unconsolidated entity. Generally, distributions of cash flows from operations and capital events are made to members of the unconsolidated entity in accordance with each member’s ownership percentages and the terms of the agreement, but also provides the Company with rights to preferential cash distributions as certain phases are completed and leased to the underlying tenant. Any differences between the cost of the Company’s investment in an unconsolidated affiliate and its underlying equity as reflected in the unconsolidated affiliate’s financial statements generally result from costs of the Company’s investment that are not reflected on the unconsolidated affiliate’s financial statements. Under the unconsolidated entity agreement, the Company will serve as the entity’s operating member, subject to authority and oversight of a board appointed by the Company and Alinda, and separately the Company will serve as manager and developer of the facility in exchange for management and development fees. The entity agreement includes various transfer restrictions and rights of first offer that will allow the Company to repurchase Alinda’s interest should Alinda wish to exit in the future. |
Debt
Debt | 3 Months Ended |
Mar. 31, 2019 | |
Debt [Abstract] | |
Debt | 7. Debt Below is a listing of the Company’s outstanding debt, including finance leases, as of March 31, 2019 and December 31, 2018 (in thousands): Weighted Average Coupon Interest Rate at March 31, December 31, March 31, 2019 (1) Maturities 2019 2018 (unaudited) (unaudited) Unsecured Credit Facility Revolving Credit Facility 3.83% December 17, 2022 $ 135,000 $ 252,000 Term Loan I 3.50% December 17, 2023 350,000 350,000 Term Loan II 3.53% April 27, 2024 350,000 350,000 Senior Notes 4.75% November 15, 2025 400,000 400,000 Lenexa Mortgage 4.10% May 1, 2022 1,791 1,801 Finance Leases 4.33% 2019 - 2038 47,197 2,873 3.96% 1,283,988 1,356,674 Less net debt issuance costs (11,195) (11,557) Total outstanding debt, net $ 1,272,793 $ 1,345,117 (1) The coupon interest rates associated with Term Loan I and Term Loan II incorporate the effects of the Company’s interest rate swaps in effect as of March 31, 2019. Credit Facilities, Senior Notes and Mortgage Notes Payable (a) Unsecured Credit Facility – In November 2018, the Company executed an amendment to its amended and restated unsecured credit facility (the “unsecured credit facility”), which among other things included extending the term, modifying or eliminating certain covenants and reduced pricing by 20 basis points. The unsecured credit facility includes a $350 million term loan which matures on December 17, 2023, a $350 million term loan which matures on April 27, 2024, and an $820 million revolving credit facility which matures on December 17, 2022, with a one year extension option. Amounts outstanding under the amended unsecured credit facility bear interest at a variable rate equal to, at the Company’s election, LIBOR or a base rate, plus a spread that will vary depending upon the Company’s leverage ratio. For revolving credit loans, the spread ranges from 1.35% to 1.95% for LIBOR loans and 0.35% to 0.95% for base rate loans. For term loans, the spread ranges from 1.30% to 1.90% for LIBOR loans and 0.30% to 0.90% for base rate loans. The unsecured credit facility also provides for borrowing capacity of up to $200 million in various foreign currencies, and a $500 million accordion feature, subject to obtaining additional loan commitments. Under the unsecured credit facility, the capacity may be increased from the current capacity of $1.52 billion to $2.02 billion subject to certain conditions set forth in the credit agreement, including the consent of the administrative agent and obtaining necessary commitments. The Company is also required to pay a commitment fee to the lenders assessed on the unused portion of the unsecured revolving credit facility. At the Company’s election, it can prepay amounts outstanding under the unsecured credit facility, in whole or in part, without penalty or premium. The Company’s ability to borrow under the amended unsecured credit facility is subject to ongoing compliance with a number of customary affirmative and negative covenants. As of March 31, 2019, the Company was in compliance with all of its covenants. As of March 31, 2019, the Company had outstanding $835 million of indebtedness under the unsecured credit facility, consisting of $135.0 million of outstanding borrowings under the unsecured revolving credit facility and $700.0 million outstanding under the term loans, exclusive of net debt issuance costs of $6.1 million. In connection with the unsecured credit facility, as of March 31, 2019, the Company had additional letters of credit outstanding aggregating to $4.1 million. As of March 31, 2019, the weighted average interest rate for amounts outstanding under the unsecured credit facility, including the effects of interest rate swaps, was 3.57%. The Company has also entered into certain interest rate swap agreements. See Note 8 – ‘Derivative Instruments’ for additional details. (b) Senior Notes – On July 23, 2014, the Operating Partnership and QTS Finance Corporation, a subsidiary of the Operating Partnership formed solely for the purpose of facilitating the offering of the 5.875% Senior Notes due 2022 (collectively, the “Issuers”), the Company and certain of its other subsidiaries entered into a purchase agreement pursuant to which the Issuers issued $400 million aggregate principal amount of 4.75% Senior Notes due November 15, 2025 (the “Senior Notes”) in a private offering. The Senior Notes have an interest rate of 4.750% per annum and were issued at a price equal to 100% of their face value. The net proceeds from the offering were used to fund the redemption of, and satisfy and discharge the indenture pursuant to which the Issuers issued, all of their outstanding 5.875% Senior Notes and to repay a portion of the amount outstanding under the Company’s unsecured revolving credit facility. As of March 31, 2019, the outstanding net debt issuance costs associated with the Senior Notes were $5.2 million. The Senior Notes are unconditionally guaranteed, jointly and severally, on a senior unsecured basis by all of the Operating Partnership’s existing subsidiaries (other than foreign subsidiaries and receivables entities) and future subsidiaries that guarantee any indebtedness of QTS Realty Trust, Inc., the Issuers or any other subsidiary guarantor, other than QTS Finance Corporation, the co-issuer of the Senior Notes. QTS Realty Trust, Inc. does not guarantee the Senior Notes and will not be required to guarantee the Senior Notes except under certain circumstances. The offering was conducted pursuant to Rule 144A of the Securities Act of 1933, as amended, and the Senior Notes were issued pursuant to an indenture, dated as of November 8, 2017, among QTS, the Issuers, the guarantors named therein, and Deutsche Bank Trust Company Americas, as trustee. The annual remaining principal payment requirements as of March 31, 2019 per the contractual maturities, excluding extension options and excluding finance leases, are as follows (unaudited and in thousands): 2019 $ 52 2020 71 2021 74 2022 136,594 2023 350,000 Thereafter 750,000 Total $ 1,236,791 As of March 31, 2019, the Company was in compliance with all of its covenants. |
Derivative Instruments
Derivative Instruments | 3 Months Ended |
Mar. 31, 2019 | |
Derivative Instruments [Abstract] | |
Derivative Instruments | 8. Derivative Instruments From time to time, the Company enters into derivative financial instruments to manage certain cash flow risks. Derivatives designated and qualifying as a hedge of the exposure to variability in the cash flows of a specific asset or liability that is attributable to a particular risk, such as interest rate risk, are considered cash flow hedges. Interest Rate Swaps The Company’s objectives in using interest rate swaps are to reduce variability in interest expense and to manage exposure to adverse interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps as part of its 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. On April 5, 2017, the Company entered into forward interest rate swap agreements with an aggregate notional amount of $400 million. The forward swap agreements effectively fix the interest rate on $400 million of term loan borrowings, $200 million of swaps allocated to each term loan, from January 2, 2018 through December 17, 2021 and April 27, 2022, respectively, at approximately 3.3% assuming the current LIBOR spread of 1.3%. On December 20, 2018, the Company entered into additional forward interest rate swap agreements with an aggregate notional amount of $400 million. The forward swap agreements effectively fix the interest rate on $400 million of term loan borrowings, $200 million of swaps allocated to each term loan, from December 17, 2021 and April 27, 2022 through the current maturity dates of the respective term loans which are December 17, 2023 and April 27, 2024, respectively. The weighted average effective fixed interest rate on the $400 million notional amount of term loan financing following the execution of these swap agreements will approximate 3.9%, commencing on December 17, 2021 and April 27, 2022, assuming the current LIBOR spread of 1.3%. Additionally, the Company entered into forward interest rate swap agreements with an aggregate notional amount of $200 million. The forward swap agreements effectively fix the interest rate on $200 million of additional term loan borrowings, $100 million of swaps allocated to each term loan, from January 2, 2020 through the current maturity dates of December 17, 2023 and April 27, 2024, respectively. The weighted average effective fixed interest rate on the $200 million notional amount of term loan financing, following the execution of these swap agreements, will approximate 3.9%, commencing on January 2, 2020, assuming the current LIBOR spread of 1.3%. The Company reflects its interest rate swap agreements, which are designated as cash flow hedges, at fair value as either assets or liabilities on the consolidated balance sheets within the “Other assets, net” or “Advance rents, security deposits and other liabilities” line items, as applicable. As of March 31, 2019, the fair value of interest rate swaps included an asset of $1.9 million as well as a liability of $7.7 million. As of December 31, 2018, the fair value of interest rate swaps included an asset of $5.3 million as well as a liability of $3.0 million. The forward interest rate swap agreements are derivatives that currently qualify for hedge accounting whereby the Company records the effective portion of changes in fair value of the interest rate swaps in accumulated other comprehensive income or loss on the consolidated balance sheets and statements of comprehensive income which is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. Any ineffective portion of a derivative's change in fair value is immediately recognized within net income. The amount reclassified from other comprehensive income to interest income on the consolidated statements of operations was $0.5 million for the three months ended March 31, 2019. The amount reclassified from other comprehensive income to interest expense on the consolidated statements of operations was $0.4 million for the three months ended March 31, 2018. There was no ineffectiveness recognized for the three months ended March 31, 2019, and 2018. During the subsequent twelve months, beginning April 1, 2019, we estimate that $1.3 million will be reclassified from other comprehensive income as a reduction to interest expense. Interest rate derivatives and their fair values as of March 31, 2019 and December 31, 2018 were as follows (unaudited and in thousands): Fixed One Month Notional Amount LIBOR rate per Fair Value March 31, 2019 December 31, 2018 annum Effective Date Expiration Date March 31, 2019 December 31, 2018 $ 25,000 $ 25,000 January 2, 2018 December 17, 2021 $ 131 $ 331 100,000 100,000 January 2, 2018 December 17, 2021 523 1,318 75,000 75,000 January 2, 2018 December 17, 2021 392 990 50,000 50,000 January 2, 2018 April 27, 2022 213 667 100,000 100,000 January 2, 2018 April 27, 2022 436 1,341 50,000 50,000 January 2, 2018 April 27, 2022 212 666 100,000 100,000 January 2, 2020 December 17, 2023 (1,935) (782) 100,000 100,000 January 2, 2020 April 27, 2024 (2,071) (818) 200,000 200,000 December 17, 2021 December 17, 2023 (1,911) (722) 200,000 200,000 April 27, 2022 April 27, 2024 (1,809) (648) $ 1,000,000 $ 1,000,000 $ (5,819) $ 2,343 Power Purchase Agreements In March 2019, QTS entered into two 10 year agreements to purchase renewable energy equal to the expected electricity needs of the Company’s datacenters in Chicago, Illinois and Piscataway, New Jersey. These arrangements currently qualify for hedge accounting whereby the Company records the changes in fair value of the instruments in “Accumulated other comprehensive income” or loss on the consolidated balance sheets and statements of comprehensive income which is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. The Company currently reflects these agreements, which are designated as cash flow hedges, at fair value as liabilities on the consolidated balance sheets within the “Advance rents, security deposits and other liabilities” line items. Power purchase agreement derivatives and their fair values as of March 31, 2019 and December 31, 2018 were as follows (unaudited and in thousands): Fair Value Counterparty Facility Effective Date Expiration Date March 31, 2019 December 31, 2018 Calpine Energy Solutions, LLC Piscataway 3/8/2019 2/28/2029 $ (636) $ — Calpine Energy Solutions, LLC Chicago 3/8/2019 2/28/2029 (1,055) — $ (1,691) $ — |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2019 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | 9. Commitments and Contingencies The Company is subject to various routine legal proceedings and other matters in the ordinary course of business. The Company currently does not have any litigation that would have material adverse impact on the Company’s financial statements. |
Partners' Capital, Equity and I
Partners' Capital, Equity and Incentive Compensation Plans | 3 Months Ended |
Mar. 31, 2019 | |
Partners' Capital, Equity and Incentive Compensation Plans [Abstract] | |
Partners' Capital, Equity and Incentive Compensation Plans | 10. Partners’ Capital, Equity and Incentive Compensation Plans QualityTech, LP QTS has the full power and authority to do all the things necessary to conduct the business of the Operating Partnership. As of March 31, 2019, the Operating Partnership had four classes of limited partnership units outstanding: Series A Preferred Stock Units, Series B Convertible Preferred Stock Units, Class A units of limited partnership interest (“Class A units”) and Class O LTIP units of limited partnership units (“Class O units”). The Class A units are now redeemable on a one-for-one exchange rate at any time for cash or shares of Class A common stock of QTS. The Company may in its sole discretion elect to assume and satisfy the redemption amount with cash or its shares. Class O units were issued upon grants made under the QualityTech, LP 2010 Equity Incentive Plan (the “2010 Equity Incentive Plan”). Class O units are pari passu with Class A units. Each Class O unit is convertible into Class A units by the Operating Partnership at any time or by the holder at any time following full vesting (if such unit is subject to vesting) based on formulas contained in the partnership agreement. QTS Realty Trust, Inc. In connection with its IPO, QTS issued Class A common stock and Class B common stock. Class B common stock entitles the holder to 50 votes per share and was issued to enable the Company’s Chief Executive Officer to exchange 2% of his Operating Partnership units so he may have a vote proportionate to his economic interest in the Company. Also in connection with its IPO, QTS adopted the QTS Realty Trust, Inc. 2013 Equity Incentive Plan (the “2013 Equity Incentive Plan”), which authorized 1.75 million shares of Class A common stock to be issued under the 2013 Equity Incentive Plan, including options to purchase Class A common stock if exercised. On May 9, 2019, following approval by the Company’s stockholders at the Company’s 2019 Annual Meeting, the total number of shares available for issuance under the 2013 Equity Incentive Plan was increased by an additional 1,110,000. In March 2019, the Compensation Committee completed a redesign of the long-term incentive program for executive officers with the following changes: · Issued Performance-Based FFO Unit Awards — performance-based restricted share unit awards, which may be earned based on Operating Funds From Operations ("OFFO") per diluted share measured over a two-year performance period ending December 31, 2020 (Performance-Based FFO Units or “FFO Units”), with two-thirds of the earned shares of Class A common stock vesting at the end of the performance period when results have been certified and the remaining one-third of the shares vesting at the end of three years from the award grant date. The number of shares of Class A common stock subject to the awards will be earned from 0% to 200% of the target award based on actual performance over the performance period, with the number of shares to be determined based on a linear interpolation basis between threshold and target and target and maximum performance. · Introduced Performance-Based Relative TSR Unit Awards — performance-based restricted share unit awards, which may be earned based on total stockholder return ("TSR") as compared to the MSCI U.S. REIT Index (the "Index") over a three-year performance period ending December 31, 2021 (the Performance-Based Relative TSR Units or “TSR Units”). The number of shares of Class A common stock subject to the awards will be earned from 0% to 200% of the target award based on TSR compared to an index. In addition, award payouts will be determined on a linear interpolation basis between threshold and target and target and maximum performance; and capped at the target performance level if our TSR is negative. The following is a summary of award activity under the 2010 Equity Incentive Plan and 2013 Equity Incentive Plan and related information for the three months ended March 31, 2019 (unaudited) : 2010 Equity Incentive Plan 2013 Equity Incentive Plan Weighted Weighted Restricted Weighted average Weighted average Stock / Weighted Weighted Weighted Number of average fair average fair Deferred average average average Class O units exercise price value Options exercise price value Stock grant price TSR Units grant price FFO Units grant price Outstanding at December 31, 2018 102,279 $ 24.05 $ 5.67 2,037,163 $ $ 420,309 $ 37.83 — $ — — $ — Granted — — — 124,955 265,231 86,089 86,089 Exercised/Vested (1) — — — (96,589) — — — — Cancelled/Expired — — — (60,285) (2) — — — — Outstanding at March 31, 2019 102,279 $ 24.05 $ 2,005,244 $ $ 7.12 $ $ $ (1) This represents the Class A common stock that has been released from restriction and which was not surrendered by the holder to satisfy their statutory minimum federal and state tax obligations associated with the vesting of restricted common stock. This also represents Class O units which were converted to Class A units and options to purchase Class A common stock which were exercised for their respective columns. (2) Includes restricted Class A common stock surrendered by certain employees to satisfy their statutory minimum federal and state tax obligations associated with the vesting of restricted common stock. The assumptions and fair values for restricted stock and options to purchase shares of Class A common stock granted for the three months ended March 31, 2019 are included in the following table on a per unit basis (unaudited). Options to purchase shares of Class A common stock were valued using the Black-Scholes model and TSR Units were valued using a Monte-Carlo simulation that leveraged similar assumptions to those used to value the Class A common stock and FFO Units. Three Months Ended Fair value of FFO units and restricted stock granted $ Fair value of TSR units granted $ Fair value of options granted $ Expected term (years) Expected volatility Expected dividend yield Expected risk-free interest rates The following tables summarize information about awards outstanding as of March 31, 2019 (unaudited). Operating Partnership Awards Outstanding Weighted average Awards remaining Exercise prices outstanding vesting period (years) Class O Units $ 20.00 - 25.00 102,279 — Total Operating Partnership awards outstanding 102,279 QTS Realty Trust, Inc. Awards Outstanding Weighted average Awards remaining Exercise prices outstanding vesting period (years) Restricted stock $ — 2.0 TSR units — 2.8 FFO units — 2.8 Options to purchase Class A common stock $ 21.00 - 50.66 0.8 Total QTS Realty Trust, Inc. awards outstanding Any remaining nonvested awards are valued as of the grant date and generally vest ratably over a defined service period. As of March 31, 2019 there were approximately 0.6 million nonvested restricted Class A common stock and options to purchase Class A common stock outstanding, respectively. As of March 31, 2019 the Company had $30.6 million of unrecognized equity-based compensation expense which will be recognized over a remaining weighted-average vesting period of 1.1 years. The total intrinsic value of Class O units and options to purchase Class A common stock outstanding at March 31, 2019 was $20.5 million. Dividends and Distributions The following tables present quarterly cash dividends and distributions paid to QTS’ common and preferred stockholders and the Operating Partnership’s unit holders for the three months ended March 31, 2019 and 2018 (unaudited): Three Months Ended March 31, 2019 Aggregate Per Share and Dividend/Distribution Record Date Payment Date Per Unit Rate Amount (in millions) Common Stock December 21, 2018 January 8, 2019 $ 0.41 $ 23.7 $ 23.7 Series A Preferred Stock December 31, 2018 January 15, 2019 $ 0.45 $ 1.9 $ 1.9 Series B Preferred Stock December 31, 2018 January 15, 2019 $ 1.63 $ 5.1 $ 5.1 Three Months Ended March 31, 2018 Aggregate Per Common Share and Dividend/Distribution Record Date Payment Date Per Unit Rate Amount (in millions) Common Stock December 5, 2017 January 5, 2018 $ 0.39 $ 22.2 $ 22.2 Additionally, subsequent to March 31, 2019, the Company paid the following dividends: · On April 4, 2019, the Company paid its regular quarterly cash dividend of $0.44 per common share and per unit in the Operating Partnership to stockholders and unit holders of record as of the close of business on March 20, 2019. · On April 15, 2019, the Company paid a quarterly cash dividend of approximately $0.45 per share on its Series A Preferred Stock to holders of Series A Preferred Stock of record as of the close of business on March 31, 2019. · On April 15, 2019, the Company paid a quarterly cash dividend of approximately $1.63 per share on its Series B Preferred Stock to holders of Series B Preferred Stock of record as of the close of business on March 31, 2019. Equity Issuances In March 2017, the Company established an “at-the-market” equity offering program (the “ATM Program”) pursuant to which the Company may issue, from time to time, up to $300 million of its Class A common stock. The Company issued no shares under the ATM Program during the three months ended March 31, 2019. The Company’s ATM program expired in March 2019. On March 15, 2018, QTS issued 4,280,000 shares of 7.125% Series A Cumulative Redeemable Perpetual Preferred Stock (“Series A Preferred Stock”) with a liquidation preference of $25.00 per share, which included 280,000 shares of the underwriters’ partial exercise of their option to purchase additional shares. The Company used the net proceeds of approximately $103.2 million to repay amounts outstanding under its unsecured revolving credit facility. In connection with the issuance of the Series A Preferred Stock, on March 15, 2018 the Operating Partnership issued to the Company 4,280,000 Series A Preferred Units, which have economic terms that are substantially similar to the Company’s Series A Preferred Stock. The Series A Preferred Units were issued in exchange for the Company’s contribution of the net offering proceeds of the offering of the Series A Preferred Stock to the Operating Partnership. Dividends on the Series A Preferred Stock are payable quarterly in arrears on or about the 15th day of each January, April, July and October. The first dividend on the Series A Preferred Stock was paid on April 16, 2018, in the amount of $0.14844 per share for the period March 15, 2018 through April 14, 2018. The Series A Preferred Stock does not have a stated maturity date and is not subject to any sinking fund or mandatory redemption provisions. Upon liquidation, dissolution or winding up, the Series A Preferred Stock will rank senior to common stock and pari passu with the Series B Preferred Stock with respect to the payment of distributions and other amounts. Except in instances relating to preservation of QTS’s qualification as a REIT or pursuant to the Company’s special optional redemption right, the Series A Preferred Stock is not redeemable prior to March 15, 2023. On and after March 15, 2023, the Company may, at its option, redeem the Series A Preferred Stock, in whole, at any time, or in part, from time to time, for cash at a redemption price of $25.00 per share, plus any accrued and unpaid dividends (whether or not declared) to, but not including, the date of redemption. Upon the occurrence of a change of control, the Company has a special optional redemption right that enables it to redeem the Series A Preferred Stock, in whole, at any time, or in part, from time to time, within 120 days after the first date on which a change of control has occurred resulting in neither QTS nor the surviving entity having a class of common shares listed on the NYSE, NYSE Amex, or NASDAQ or the acquisition of beneficial ownership of its stock entitling a person to exercise more than 50% of the total voting power of all our stock entitled to vote generally in election of directors. The special optional redemption price is $25.00 per share, plus any accrued and unpaid dividends (whether or not declared) to, but not including, the date of redemption. Upon the occurrence of a change of control, holders will have the right (unless the Company has elected to exercise its special optional redemption right to redeem their Series A Preferred Stock) to convert some or all of such holder’s Series A Preferred Stock into a number of shares of Class A common stock, par value $0.01 per share, equal to the lesser of: · the quotient obtained by dividing (i) the sum of the $25.00 liquidation preference plus the amount of any accrued and unpaid dividends (whether or not declared) to, but not including, the change of control conversion date (unless the change of control conversion date is after a record date for a Series A Preferred Stock dividend payment and prior to the corresponding Series A Preferred Stock dividend payment date, in which case no additional amount for such accrued and unpaid dividend will be included in this sum) by (ii) the Common Stock Price; and · 1.46929 (i.e., the Share Cap); subject, in each case, to certain adjustments and provisions for the receipt of alternative consideration of equivalent value as described in the prospectus supplement for the Series A Preferred Stock. On June 25, 2018, QTS issued 3,162,500 shares of 6.50% Series B Cumulative Convertible Perpetual Preferred Stock (“Series B Preferred Stock”) with a liquidation preference of $100.00 per share, which included 412,500 shares the underwriters purchased pursuant to the exercise of their overallotment option in full. The Company used the net proceeds of approximately $304 million to repay amounts outstanding under its unsecured revolving credit facility. In connection with the issuance of the Series B Preferred Stock, on June 25, 2018 the Operating Partnership issued to the Company 3,162,500 Series B Preferred Units, which have economic terms that are substantially similar to the Company’s Series B Preferred Stock. The Series B Preferred Units were issued in exchange for the Company’s contribution of the net offering proceeds of the offering of the Series B Preferred Stock to the Operating Partnership. Dividends on the Series B Preferred Stock are payable quarterly in arrears on or about the 15th day of each January, April, July and October. The first dividend on the Series B Preferred Stock was paid on October 15, 2018, in the amount of $1.9861111 per share for the period June 25, 2018 through October 14, 2018. The Series B Preferred Stock is convertible by holders into shares of Class A common stock at any time at the then-prevailing conversion rate. The conversion rate as of March 31, 2019 is 2.1278 shares of the Company’s Class A common stock per share of Series B Preferred Stock. The Series B Preferred Stock does not have a stated maturity date. Upon liquidation, dissolution or winding up, the Series B Preferred Stock will rank senior to common stock and pari passu with the Series A Preferred Stock with respect to the payment of distributions and other amounts. The Series B Preferred Stock will not be redeemable by the Company. At any time on or after July 20, 2023, the Company may at its option cause all (but not less than all) outstanding shares of the Series B Preferred Stock to be automatically converted into the Company’s Class A common stock at the then-prevailing conversion rate if the closing sale price of the Company’s Class A common stock is equal to or exceeds 150% of the then-prevailing conversion price for at least 20 trading days in a period of 30 consecutive trading days, including the last trading day of such 30-day period, ending on the trading day prior to the issuance of a press release announcing the mandatory conversion. If a holder converts its shares of Series B Preferred Stock at any time beginning at the opening of business on the trading day immediately following the effective date of a fundamental change (as described in the prospectus supplement) and ending at the close of business on the 30th trading day immediately following such effective date, the holder will automatically receive a number of shares of the Company’s Class A common stock equal to the greater of: · the sum of (i) a number of shares of the Company’s Class A common stock, as may be adjusted, as described in the Articles Supplementary for the 6.50% Series B Cumulative Convertible Perpetual Preferred Stock filed with the State Department of Assessments and Taxation of Maryland on June 22, 2018 (the “Articles Supplementary”) and (ii) the make-whole premium described in the Articles Supplementary; and · a number of shares of the Company’s Class A common stock equal to the lesser of (i) the liquidation preference divided by the average of the daily volume weighted average prices of the Company’s Class A common stock for ten days preceding the effective date of a fundamental change and (ii) 5.1020 (subject to adjustment). In February 2019, QTS conducted an underwritten offering of 7,762,500 shares of its Class A common stock, consisting of 4,000,000 shares issued by the Company during the first quarter of 2019 and 3,762,500 shares which will be issued on a forward basis, in each case at a price of $41.50 per share. The Company received net proceeds of approximately $159 million from the issuance of 4,000,000 shares during the first quarter, which it used to repay amounts outstanding under its unsecured revolving credit facility. The Company expects to physically settle the forward sale (by the delivery of shares of common stock) and receive proceeds of approximately $148 million from the sale of the 3,762,500 shares of common stock by March 1, 2020, although the Company has the right to elect settlement prior to that time. As of March 31, 2019 the Company had not settled any shares from the forward sale. QTS has concluded that the forward sale agreements meet the derivative scope exception for certain contracts involving an entity’s own equity. QTS has not yet received any proceeds from the forward contract and no amounts have been or will be recorded in equity on the Company’s balance sheet until the forward sale agreements settle. The initial forward sale price is subject to daily adjustment based on a floating interest rate factor, and will decrease by other fixed amounts specified in the forward sale agreement. Until settlement of the forward sale agreements, QTS’s EPS dilution resulting from the agreements, if any, is determined using the two-class method. QTS Realty Trust, Inc. Employee Stock Purchase Plan In June 2015, the Company established the QTS Realty Trust, Inc. Employee Stock Purchase Plan (the “2015 Plan”) to give eligible employees the opportunity to purchase, through payroll deductions, shares of the Company’s Class A common stock in the open market by an independent broker with the Company paying brokerage commissions and fees associated with such share purchases. The 2015 Plan became effective July 1, 2015. The Company reserved 250,000 shares of its Class A common stock for purchase under the 2015 Plan, which were registered pursuant to a registration statement on Form S-8 filed on June 17, 2015. On May 4, 2017, the stockholders of the Company approved an amendment and restatement of the Plan (the “2017 Plan”). The 2017 Plan became effective July 1, 2017 and is administered by the compensation committee (the “Compensation Committee”) of the board of directors (or by a committee of one or more persons appointed by it or the board of directors). The 2017 Plan permits participants to purchase the Company’s Class A common stock at a discount of up to 10% (as determined by the Compensation Committee). Employees of the Company and its majority-owned subsidiaries who have been employed for at least thirty days and who perform at least thirty hours of service per week for the Company are eligible to participate in the 2017 Plan, excluding any employee who, at any time during which the payroll deductions are made on behalf of the participating employees to purchase stocks, owns shares representing five percent or more of the total combined voting power or value of all classes of shares of the Company, or who is a Section 16 officer. Under the 2017 Plan, there are four purchase periods per year, and participants may deduct a minimum of $20 per paycheck and a maximum of $1,000 per paycheck towards the purchase of shares. Shares purchased under the 2017 Plan are subject to a one-year holding period following the purchase date, during which they may not be sold or transferred. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 11. Related Party Transactions The Company periodically executes transactions with entities affiliated with its Chairman and Chief Executive Officer. Such transactions include automobile, furniture and equipment purchases as well as building operating lease payments and receipts, and reimbursement for the use of a private aircraft service by the Company’s officers and directors. The transactions which occurred during the three months ended March 31, 2019 and 2018 are outlined below (unaudited and in thousands): Three Months Ended March 31, 2019 2018 Tax, utility, insurance and other reimbursement $ 261 $ 261 Rent expense 254 254 Capital assets acquired 54 158 Total $ 569 $ 673 |
Noncontrolling Interest
Noncontrolling Interest | 3 Months Ended |
Mar. 31, 2019 | |
Noncontrolling Interest [Abstract] | |
Noncontrolling Interest | 12. Noncontrolling Interest Concurrently with the completion of the IPO, QTS consummated a series of transactions pursuant to which QTS became the sole general partner and majority owner of QualityTech, LP, which then became its operating partnership. The previous owners of QualityTech, LP retained 21.2% ownership of the Operating Partnership as of the date of the IPO. Commencing at any time beginning November 1, 2014, at the election of the holders of the noncontrolling interest, the Class A units of the Operating Partnership are redeemable for cash or, at the election of the Company, Class A common stock of the Company on a one-for-one basis. As of March 31, 2019, the noncontrolling ownership interest percentage of QualityTech, LP was 10.8%. |
Earnings per share of QTS Realt
Earnings per share of QTS Realty Trust, Inc. | 3 Months Ended |
Mar. 31, 2019 | |
Earnings per Share [Abstract] | |
Earnings per Share | 13. Earnings per share of QTS Realty Trust, Inc. Basic 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 income per share adjusts basic income per share for the effects of potentially dilutive common shares. Unvested restricted stock awards and the Company’s forward sale contract described in Note 10 contain non-forfeitable rights to dividends and thus are participating securities and are included in the computation of basic earnings per share pursuant to the two-class method for all periods presented. The two-class method is an earnings allocation formula that treats a participating security as having rights to undistributed earnings that would otherwise have been available to common stockholders. Accordingly, service-based restricted stock awards and the forward sale contract were included in the calculation of basic earnings per share using the two-class method for all periods presented to the extent outstanding during the period. The computation of basic and diluted net income per share is as follows (in thousands, except per share data, and unaudited): Three Months Ended March 31, 2019 2018 Numerator: Net income (loss) $ 21,148 $ (252) Loss (income) attributable to noncontrolling interests (1,590) 29 Preferred stock dividends (7,045) (328) Earnings attributable to participating securities (1,935) (258) Net income (loss) available to common stockholders after allocation of participating securities $ 10,578 $ (809) Denominator: Weighted average shares outstanding - basic 51,948 50,279 Effect of Class O units, TSR units and options to purchase Class A common stock on an "as if" converted basis 347 — Weighted average shares outstanding - diluted 52,295 50,279 Basic net income (loss) per share $ 0.20 $ Diluted net income (loss) per share $ 0.20 $ * Note: The table above does not include Class A partnership units of 6.7 million and 6.6 million for the three months ended March 31, 2019, and 2018, respectively, as their inclusion would have been antidilutive. Also does not include 0.5 million reflecting the effects of Class O units and options to purchase common stock on an "as if" converted basis for the three months ended March 31, 2018, and 6.7 million reflecting the effects of Series B Convertible preferred stock on an “as if” converted basis for the three months ended March 31, 2019, as their respective inclusion would have also been antidilutive. |
Contracts with Customers
Contracts with Customers | 3 Months Ended |
Mar. 31, 2019 | |
Contracts with Customers [Abstract] | |
Contracts with Customers | 14. Contracts with Customers Future minimum payments to be received under non-cancelable customer contracts including both lease rental revenue components and nonlease revenue components (inclusive of payments for contracts which have not yet commenced, and exclusive of recoveries of operating costs from customers) are as follows for the years ending December 31 (unaudited and in thousands): 2019 (April - December) $ 277,683 2020 308,650 2021 250,263 2022 163,494 2023 88,227 Thereafter 107,386 Total $ 1,195,703 |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 3 Months Ended |
Mar. 31, 2019 | |
Fair Value of Financial Instruments [Abstract] | |
Fair Value of Financial Instruments | 15. Fair Value of Financial Instruments ASC Topic 825, Financial Instruments, requires disclosure of fair value information about financial instruments, whether or not recognized in the consolidated balance sheets, for which it is practicable to estimate that value. In cases where quoted market prices are not available, fair values are based upon the application of discount rates to estimated future cash flows based upon market yields or by using other valuation methodologies. Considerable judgment is necessary to interpret market data and develop estimated fair value. Accordingly, fair values are not necessarily indicative of the amounts the Company could realize on disposition of the financial instruments. The use of different market assumptions and/or estimation methodologies may have a material effect on estimated fair value amounts. Short-term instruments: The carrying amounts of cash and cash equivalents and restricted cash approximate fair value. Derivative Contracts: Interest rate swaps Currently, the Company uses interest rate swaps to manage its interest rate risk. The valuation of these instruments is determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves. The fair values of interest rate swaps are determined using the market standard methodology of netting the discounted future fixed cash receipts (or payments) and the discounted expected variable cash payments (or receipts). The variable cash payments (or receipts) are based on an expectation of future interest rates (forward curves) derived from observable market interest rate curves. To comply with the provisions of fair value accounting guidance, the Company incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of its derivative contracts for the effect of nonperformance risk, the Company has considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts, and guarantees. Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by the Company and its counterparties. However, as of March 31, 2018, the Company assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments are not significant to the overall valuation of its derivatives. As a result, the Company has determined that its derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy. The Company does not have any fair value measurements on a recurring basis using significant unobservable inputs (Level 3) as of March 31, 2018 or December 31, 2017. Power Purchase Agreements In March 2019, Company began using energy hedges to manage risk related to energy prices. The valuation of these instruments is determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each contract. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including futures curves. The fair values of the energy hedges are determined using the market standard methodology of netting the discounted future fixed cash receipts (or payments) and the discounted expected variable cash payments (or receipts). The variable cash payments (or receipts) are based on an expectation of future energy rates (forward curves) derived from observable market futures curves. To comply with the provisions of fair value accounting guidance, the Company incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of its derivative contracts for the effect of nonperformance risk, the Company has considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts, and guarantees. Nonrecurring sale of assets: For the three months ended March 31, 2019, the company recognized a gain on the sale of real estate assets that is discussed in detail in Note 6. In order to determine fair value of the noncash equity consideration received for the sale of the assets, the Company utilized estimation models to derive the fair value of the equity interest received in the transaction. These estimation models consisted of a discounted cash flow analysis that included Level 3 inputs including market rents, discount rates, expected occupancy and estimates of additional capital expenditures, and capitalization rates derived from market data. Credit facility and Senior Notes: The Company’s unsecured credit facility did not have interest rates which were materially different than current market conditions and therefore, the fair value approximated the carrying value. The fair value of the Company’s Senior Notes was estimated using Level 2 “significant other observable inputs,” primarily based on quoted market prices for the same or similar issuances. At March 31, 2019, the fair value of the Senior Notes was approximately $387.0 million. Other debt instruments: The fair value of the Company’s other debt instruments (including finance leases and mortgage notes payable) were estimated in the same manner as the unsecured credit facility above. Similarly, each of these instruments did not have interest rates which were materially different than current market conditions and therefore, the fair value of each instrument approximated the respective carrying values. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | 16. Subsequent Events In April 2019, the Company paid its regular quarterly cash dividends on its common stock, Series A Preferred Stock and Series B Preferred Stock. See the ‘Dividends and Distributions’ section of Note 10 for additional details. In April 2019, QTS completed the acquisition of two data centers in the Netherlands for approximately $44 million in cash, including closing costs. The two facilities, in Groningen and Eemshaven, currently have approximately 160,000 square feet of raised floor capacity and 30 megawatts of combined gross power capacity built out and fully available. The acquisition is expected to be accounted for as an asset acquisition. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Summary of Significant Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation – The accompanying financial statements have been prepared by management in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information and in compliance with the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). These unaudited consolidated financial statements and related notes should be read in conjunction with the audited consolidated financial statements and related notes and management’s discussion and analysis included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018, filed with the SEC on February 25, 2019. The consolidated balance sheet data included herein as of December 31, 2018 was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. The accompanying financial statements are presented for both QTS Realty Trust, Inc. and QualityTech, LP. References to “QTS” mean QTS Realty Trust, Inc. and its controlled subsidiaries and references to the “Operating Partnership” mean QualityTech, LP and its controlled subsidiaries. The Operating Partnership meets the definition and criteria of a variable interest entity (“VIE”) in accordance with ASC 810 Consolidation , and the Company is the primary beneficiary of the VIE. As discussed below, the Company’s only material asset is its ownership interest in the Operating Partnership, and consequently, all of its assets and liabilities represent those assets and liabilities of the Operating Partnership. The Company’s debt is an obligation of the Operating Partnership where the creditors may have recourse, under certain circumstances, against the credit of the Company. QTS is the sole general partner of the Operating Partnership, and its only material asset consists of its ownership interest in the Operating Partnership. Management operates QTS and the Operating Partnership as one business. The management of QTS consists of the same employees as the management of the Operating Partnership. QTS does not conduct business itself, other than acting as the sole general partner of the Operating Partnership and issuing public equity from time to time. QTS has not issued or guaranteed any indebtedness. Except for net proceeds from public equity issuances by QTS, which are contributed to the Operating Partnership in exchange for units of limited partnership interest of the Operating Partnership, the Operating Partnership generates all remaining capital required by the business through its operations, the direct or indirect incurrence of indebtedness, and the issuance of partnership units. Therefore, as general partner with control of the Operating Partnership, QTS consolidates the Operating Partnership for financial reporting purposes. The Company believes, therefore, that providing one set of notes for the financial statements of QTS and the Operating Partnership provides the following benefits: · enhances investors’ understanding of QTS and the Operating Partnership by enabling investors to view the business as a whole in the same manner as management views and operates the business; · eliminates duplicative disclosure and provides a more streamlined and readable presentation since a substantial portion of the disclosure applies to both QTS and the Operating Partnership; and · creates time and cost efficiencies through the preparation of one set of notes instead of two separate sets of notes. In addition, in light of these combined notes, the Company believes it is important for investors to understand the few differences between QTS and the Operating Partnership in the context of how QTS and the Operating Partnership operate as a consolidated company. With respect to balance sheets, the presentation of stockholders’ equity and partners’ capital are the main areas of difference between the consolidated balance sheets of QTS and those of the Operating Partnership. On the Operating Partnership’s consolidated balance sheets, partners’ capital includes preferred partnership units and common partnership units as well as accumulated other comprehensive income (loss) that are owned by QTS and other partners. On QTS’ consolidated balance sheets, stockholders’ equity includes preferred stock, common stock, additional paid in capital, accumulated other comprehensive income (loss) and accumulated dividends in excess of earnings. The remaining equity reflected on QTS’ consolidated balance sheet is the portion of net assets that are retained by partners other than QTS, referred to as noncontrolling interests. With respect to statements of operations, the primary difference in QTS' Statements of Operations and Statements of Comprehensive Income (Loss) is that for net income (loss), QTS retains its proportionate share of the net income (loss) based on its ownership of the Operating Partnership, with the remaining balance being retained by the Operating Partnership. These combined notes refer to actions or holdings as being actions or holdings of “the Company.” Although the Operating Partnership is generally the entity that enters into contracts, holds assets and issues debt, management believes that these general references to “the Company” in this context is appropriate because the business is one enterprise operated through the Operating Partnership. As discussed above, QTS owns no operating assets and has no operations independent of the Operating Partnership and its subsidiaries. Also, the Operating Partnership owns no operating assets and has no operations independent of its subsidiaries. Obligations under the 4.75% Senior Notes due 2025 and the unsecured credit facility, both discussed in Note 7, are fully, unconditionally, and jointly and severally guaranteed by the Operating Partnership’s existing subsidiaries (other than foreign subsidiaries and receivables entities) and future subsidiaries that guarantee any indebtedness of QTS Realty Trust, Inc., the Operating Partnership, QTS Finance Corporation (the co-issuer of the 4.75% Senior Notes due 2025) or any subsidiary guarantor. The indenture governing the 4.75% Senior Notes due 2025 restricts the ability of the Operating Partnership to make distributions to QTS, subject to certain exceptions, including distributions required in order for QTS to maintain its status as a real estate investment trust under the Internal Revenue Code of 1986, as amended (the “Code”). The interim consolidated financial statements of QTS Realty Trust, Inc. include the accounts of QTS Realty Trust, Inc. and its majority owned subsidiaries. This includes the operating results of the Operating Partnership for all periods presented. |
Use of Estimates | Use of Estimates – The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include the useful lives of fixed assets, allowances for doubtful accounts and deferred tax assets and the valuation of derivatives, real estate assets, acquired intangible assets and certain accruals. |
Principles of Consolidation | Principles of Consolidation – The consolidated financial statements of QTS Realty Trust, Inc. include the accounts of QTS Realty Trust, Inc. and its controlled subsidiaries. The consolidated financial statements of QualityTech, LP include the accounts of QualityTech, LP and its subsidiaries. All significant intercompany accounts and transactions have been eliminated in the financial statements. The Company evaluates its investments in unconsolidated entities to determine whether they should be recorded on a consolidated basis. The percentage of ownership interest in the entity, an evaluation of control and whether a VIE exists are all considered in the Company’s consolidation assessment. Investments in real estate entities which the Company has the ability to exercise significant influence, but does not have financial or operating control, are accounted for using the equity method of accounting. Accordingly, the Company’s share of the earnings or losses of these entities is included in consolidated net income (loss). Variable Interest Entities (VIEs) – The Company determines whether an entity is a VIE and, if so, whether it should be consolidated by utilizing judgments and estimates that are inherently subjective. The determination of whether an entity in which the Company holds a direct or indirect variable interest is a VIE is based on several factors, including whether the entity’s total equity investment at risk upon inception is sufficient to finance the entity’s activities without additional subordinated financial support. The Company makes judgments regarding the sufficiency of the equity at risk based first on a qualitative analysis, and then a quantitative analysis, if necessary. The Company analyzes any investments in VIEs to determine if the Company is the primary beneficiary. In evaluating whether it is the primary beneficiary, the Company evaluates its direct and indirect economic interests in the entity. A reporting entity is determined to be the primary beneficiary if it holds a controlling financial interest in the VIE. Determining which reporting entity, if any, has a controlling financial interest in a VIE is primarily a qualitative approach focused on identifying which reporting entity has both (1) the power to direct the activities of a VIE that most significantly impact such entity’s economic performance and (2) the obligation to absorb losses or the right to receive benefits from such entity that could potentially be significant to such entity. Performance of that analysis requires the exercise of judgment. The Company considers a variety of factors in identifying the entity that holds the power to direct matters that most significantly impact the VIE’s economic performance including, but not limited to, the ability to direct financing, leasing, construction and other operating decisions and activities. In addition, the Company considers the rights of other investors to participate in those decisions, to replace the manager and to sell or liquidate the entity. The Company determines whether it is the primary beneficiary of a VIE at the time the Company becomes involved with a variable interest entity and reconsiders that conclusion continually. As of March 31, 2019, the Company had one unconsolidated entity that was considered a VIE for which the Company is not the primary beneficiary. The Company’s maximum exposure to losses associated with this VIE is limited to its aggregate investment, which was approximately $44 million as of March 31, 2019. |
Reclassifications | Reclassifications – Revenue categories in the statement of operations for the three months ended March 31, 2018 have been reclassified to conform to 2019 presentation which consists of three categories instead of four categories presented historically. The statement of operations for the three months ended March 31, 2018 incorporates a reclassification of $2.7 million of straight line rent from the “Other” line item into the “Rental” line item, as well as the combination of $13.2 million of what was previously classified as “Cloud and managed services” revenue and $0.6 million of remaining “Other” revenue into a single “Other” line item. |
Real Estate Assets | Real Estate Assets – Real estate assets are reported at cost. All capital improvements for the income-producing properties that extend their useful lives are capitalized to individual property improvements and depreciated over their estimated useful lives. Depreciation for real estate assets is generally provided on a straight-line basis over 40 years from the date the property was placed in service. Property improvements are depreciated on a straight-line basis over the life of the respective improvement ranging from 20 to 40 years from the date the components were placed in service. Leasehold improvements are depreciated over the lesser of 20 years or through the end of the respective life of the lease. Repairs and maintenance costs are expensed as incurred. For the three months ended March 31, 2019, depreciation expense related to real estate assets and non-real estate assets was $27.4 million and $2.9 million, respectively, for a total of $30.3 million. For the three months ended March 31, 2018, depreciation expense related to real estate assets and non-real estate assets was $23.7 million and $3.2 million, respectively, for a total of $26.9 million. The Company capitalizes certain development costs, including internal costs incurred in connection with development. The capitalization of costs during the construction period (including interest and related loan fees, property taxes and other direct and indirect costs) begins when development efforts commence and ends when the asset is ready for its intended use. Capitalization of such costs, excluding interest, aggregated to $4.5 million and $3.5 million for the three months ended March 31, 2019 and 2018, respectively. Interest is capitalized during the period of development by applying the Company’s weighted average effective borrowing rate to the actual development and other capitalized costs paid during the construction period. Interest is capitalized until the property is ready for its intended use. Interest costs capitalized totaled $7.8 million and $5.4 million for the three months ended March 31, 2019 and 2018, respectively. |
Acquisitions and Sales | Acquisitions and Sales – Acquisitions of real estate and other entities are either accounted for as asset acquisitions or business combinations depending on facts and circumstances. When substantially all of the fair value of gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets, the transaction is accounted for as an asset acquisition. In an asset acquisition, the purchase price paid for assets acquired is allocated between identified tangible and intangible assets acquired based on relative fair value. Transaction costs associated with asset acquisitions are capitalized. When substantially all of the fair value of assets acquired is not concentrated in a group of similar identifiable assets, the set of assets will generally be considered a business. When accounting for business combinations purchase accounting is applied to the assets and liabilities related to all real estate investments acquired in accordance with the accounting requirements of ASC 805, Business Combinations , which requires the recording of net assets of acquired businesses at fair value. The fair value of the consideration transferred is assigned to the acquired tangible assets, consisting primarily of land, construction in progress, building and improvements, and identified intangible assets and liabilities, consisting of the value of above-market and below-market leases, value of in-place leases, value of customer relationships, trade names, software intangibles and finance leases. The excess of the fair value of liabilities assumed, common stock issued and cash paid over the fair value of identifiable assets acquired is allocated to goodwill, which is not amortized by the Company. Transaction costs associated with business combinations are expensed as incurred. In developing estimates of fair value of acquired assets and assumed liabilities, management analyzed a variety of factors including market data, estimated future cash flows of the acquired operations, industry growth rates, current replacement cost for fixed assets and market rate assumptions for contractual obligations. Such a valuation requires management to make significant estimates and assumptions, particularly with respect to the intangible assets. Acquired in-place leases are amortized as amortization expense on a straight-line basis over the remaining life of the underlying leases. This amortization expense is accounted for as real estate amortization expense. Acquired customer relationships are amortized as amortization expense on a straight-line basis over the expected life of the customer relationship. This amortization expense is accounted for as real estate amortization expense. Other acquired intangible assets, which includes platform, above or below market leases, and trade name intangibles, are amortized on a straight-line basis over their respective expected lives. Above or below market leases are amortized as a reduction to or increase in rental revenue when the Company is a lessor as well as a reduction to or increase in rent expense over the remaining lease terms in the case of the Company as lessee. The expense associated with trade name intangibles is accounted for as real estate amortization expense, whereas the expense associated with the amortization of platform intangibles is accounted for as non-real estate amortization expense. The Company accounts for the sale of assets to non-customers under Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) No. 2017-05, Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20), which provides for recognition or derecognition based on transfer of ownership. During the three months ended March 31, 2019, the Company sold its Manassas facility to an unconsolidated affiliate in exchange for cash consideration and noncash consideration in the form of an equity interest in the unconsolidated entity. After measuring the consideration received at fair value, the Company recognized a $13.4 million gain on sale of real estate, net of approximately $5.8 million of transaction costs, associated with the Company’s contribution of certain assets in its Manassas facility to the unconsolidated entity. Substantially all of the fair value of the assets contributed to the entity was concentrated in a group of similar identifiable assets and the sale of the assets were not to a customer, therefore the transaction was accounted for as an asset sale. The gain on sale of real estate is included within the “Gain on sale of real estate, net” line item of the consolidated statements of operations. |
Impairment of Long-Lived Assets, Intangible Assets and Goodwill – | Impairment of Long-Lived Assets, Intangible Assets and Goodwill – The Company reviews its long-lived assets and intangible assets for impairment when events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. Recoverability of assets to be held and used is measured by comparison of the carrying amount to the future net cash flows, undiscounted and without interest, expected to be generated by the asset group. If the net carrying value of the asset exceeds the value of the undiscounted cash flows, the fair value of the asset is assessed and may be considered impaired. An impairment loss is recognized based on the excess of the carrying amount of the impaired asset over its fair value. No impairment losses were recorded for the three months ended March 31, 2019. The Company recognized $4.0 million of impairment losses related to certain non-real estate product related assets during the three months ended March 31, 2018, which was included in the “Restructuring” line item of the consolidated statement of operations. The fair value of goodwill is the consideration transferred in a business combination which is not allocable to identifiable intangible and tangible assets. Goodwill is subject to at least an annual assessment for impairment. In connection with the goodwill impairment evaluation that the Company performed as of October 1, 2018, the Company determined qualitatively that it is not more likely than not that the fair value of the Company’s one reporting unit was less than the carrying amount, thus it did not perform a quantitative analysis. As the Company continues to operate and assess its goodwill at the consolidated level for its single reporting unit and its market capitalization significantly exceeds its net asset value, further analysis was not deemed necessary as of March 31, 2019. |
Assets Held for Sale | Assets Held for Sale – The Company completed the sale of the Manassas facility to an unconsolidated entity on February 22, 2019. As of December 31, 2018, prior to the Company’s sale of the assets to the entity, the completion of the sale was probable and the Company accordingly reclassified certain assets, as well as liabilities associated with those assets, as held for sale. As of December 31, 2018, the asset value of $71.8 million associated with the held for sale assets was included within the “Assets held for sale” line item of the consolidated statements of financial position and primarily consisted of construction in progress. As of December 31, 2018, the liability value of $24.3 million associated with the held for sale liabilities was included within the “Liabilities held for sale” line item of the consolidated statements of financial position and primarily consisted of accounts payable and accrued liabilities associated with construction in progress assets. See Note 6 for further discussion of the unconsolidated entity. |
Cash and Cash Equivalents | Cash and Cash Equivalents – The Company considers all demand deposits and money market accounts purchased with a maturity date of three months or less at the date of purchase to be cash equivalents. The Company’s account balances at one or more institutions periodically exceed the Federal Deposit Insurance Corporation (“FDIC”) insurance coverage and, as a result, there is concentration of credit risk related to amounts on deposit in excess of FDIC coverage. The Company mitigates this risk by depositing a majority of its funds with several major financial institutions. The Company also has not experienced any losses and does not believe that the risk is significant. |
Deferred Costs | Deferred Costs – Deferred costs, net, on the Company’s balance sheets include both financing costs and leasing costs. Deferred financing costs represent fees and other costs incurred in connection with obtaining debt and are amortized over the term of the loan and are included in interest expense. Debt issuance costs related to revolving debt arrangements are deferred and presented as assets on the balance sheet; however, all other debt issuance costs are recorded as a direct offset to the associated liability. Amortization of debt issuance costs, including those costs presented as offsets to the associated liability in the consolidated balance sheet, was $1.0 million for both the three months ended March 31, 2019 and 2018, respectively. Deferred financing costs presented as assets on the balance sheet related to revolving debt arrangements, net of accumulated amortization, are as follows: March 31, December 31, (dollars in thousands) 2019 2018 (unaudited) Deferred financing costs $ 11,488 $ 11,530 Accumulated amortization (4,335) (3,859) Deferred financing costs, net $ 7,153 $ 7,671 Deferred financing costs presented as offsets to the associated liabilities on the balance sheet related to fixed debt arrangements, net of accumulated amortization, are as follows: March 31, December 31, (dollars in thousands) 2019 2018 (unaudited) Deferred financing costs $ 14,641 $ 14,501 Accumulated amortization (2,944) Deferred financing costs, net $ 11,195 $ 11,557 Initial direct costs, or deferred leasing 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 and are accounted for pursuant to ASC 842, Leases . These costs are incurred when the Company executes lease agreements and represent only incremental costs that would not have been incurred if the lease agreement had not been executed. To a lesser extent, the Company incurs the same incremental costs to obtain managed service contracts with customers that are accounted for pursuant to ASC 606, Revenue from Contracts with Customers. Because the framework of accounting for these costs and the underlying nature of the costs are the same for the Company’s revenue and lease contracts, the costs are presented on a combined basis within the Company’s financial statements and within the below table. Both revenue and leasing commissions are capitalized and generally amortized over the term of the related leases or the expected term of the contract 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 deferred leasing costs totaled $5.4 million and $4.9 million for the three months ended March 31, 2019 and 2018, respectively. Deferred leasing costs, net of accumulated amortization, are as follows: March 31, December 31, (dollars in thousands) 2019 2018 (unaudited) Deferred leasing costs $ 65,655 $ 63,018 Accumulated amortization (27,134) (25,593) Deferred leasing costs, net $ 38,521 $ 37,425 |
Revenue Recognition | Revenue Recognition – The Company derives its revenues from leases with customers for data center space which include lease components and nonlease revenue components, such as power, tenant recoveries, cloud and managed services. The Company adopted Accounting Standards Codification (“ASC”) Topic 842, Leases , the new accounting standard for leases, effective January 1, 2019 using the modified retrospective approach. In addition, the Company adopted ASC Topic 606, Revenue from Contracts with Customers , the new accounting standard for revenue from contracts with customers, effective January 1, 2018 using the modified retrospective approach. The Company has elected the available practical expedient to combine its nonlease revenue components that have the same pattern of transfer as the related operating lease component into a single combined lease component under ASC 842. See the “Recently Adopted Accounting Standards” section below for further details. A description of each of the Company’s disaggregated revenue streams as presented on the face of the Consolidated Statements of Operations is as follows: Rental Revenue The Company’s leases with customers are classified as operating leases and rental revenue is recognized on a straight-line basis over the customer lease term. Occasionally, customer leases include options to extend or terminate the lease agreements. The Company does not include any of these extension or termination options in a customer’s lease term for lease classification purposes or recognizing rental revenue unless it is reasonably certain the customer will exercise these extension or termination options. Rental revenue also includes revenue from power delivery on fixed power arrangements, whereby customers are billed and pay a fixed monthly fee per committed available amount of connected power. These fixed power arrangements require the Company to provide a series of distinct services of standing ready to deliver the power over the contracted term which is co-terminus with the lease. Customer fixed power arrangements have the same pattern of transfer over the lease term as the lease component and are therefore combined with the lease component to form a single lease component that is recognized over the term of the lease on a straight line basis. In addition, rental revenue includes straight line rent. Straight line rent represents the difference in rents recognized during the period versus amounts contractually due pursuant to the underlying leases and is recorded as deferred rent receivable/payable in the consolidated balance sheets. For lease agreements that provide for scheduled rent increases, rental income is recognized on a straight-line basis over the non-cancellable term of the leases, which commences when control of the space has been provided to the customer. The amount of the straight-line rent receivable on the balance sheets included in rents and other receivables, net was $31.4 million and $29.7 million as of March 31, 2019 and December 31, 2018, respectively. Rental revenue also includes amortization of set-up fees which are amortized over the term of the respective lease as discussed below. Variable Lease Revenue from Recoveries Certain customer leases contain provisions under which customers reimburse the Company for power and cooling-related charges as well as a portion of the property’s real estate taxes, insurance and other operating expenses. Recoveries of power and cooling-related expenses relate specifically to the Company’s variable power arrangements, whereby customers pay variable monthly fees for the specific amount of power utilized at the current utility rates. The Company’s performance obligation is to stand ready to deliver power over the life of the customer contract up to a contracted power capacity. Customers have the flexibility to increase or decrease the amount of power consumed, and therefore sub-metered power revenue is constrained at contract inception. The reimbursements are included in revenue as recoveries from customers and are recognized each month as the uncertainty related to the consideration is resolved (i.e. the Company provides power to its customers) and customers utilize the power. Reimbursement of real estate taxes, insurance, common area maintenance, or other operating expenses are accounted for as variable payments under lease guidance pursuant to the practical expedient and are recognized as revenue in the period that the expenses are recognized. Variable lease revenue from recoveries discussed above, including power, common area maintenance or other operating costs, have the same pattern of transfer over the lease term as the lease component and are therefore combined with the lease component to form a single lease component. Other Revenue Other revenue primarily consists of revenue from the Company’s cloud and managed service offerings. The Company, through its TRS, may provide both its cloud product and use of its managed services to its customers on an individual or combined basis. In both its cloud and managed services offerings the TRS’s performance obligation is to provide services (e.g. cloud hosting, data backup, data storage or data center personnel labor hours) to facilitate a fully integrated information technology (“IT”) outsourcing environment over a contracted term. Although underlying services may vary, over the contracted term monthly service offerings are substantially the same and the Company accounts for the services as a series of distinct services in accordance with ASC 606. Service fee revenue is recognized as the revenue is earned, which generally coincides with the services being provided. As the Company has the right to consideration from customers in an amount that corresponds directly with the value to the customer of the TRS’s performance of providing continuous services, the Company recognizes monthly revenue for the amount invoiced. With respect to the transaction price allocated to remaining performance obligations within the Company’s cloud and managed service contracts, the Company has elected to use the optional exemption provided by ASC 606 whereby the Company is not required to estimate the total transaction price allocated to remaining performance obligations as the Company applies the “right-to-invoice” practical expedient. As described above, the nature of our performance obligation in these contracts is to provide monthly services that are substantially the same and accounted for as a series of distinct services. These contracts generally have a remaining term ranging from month-to-month to three years. Management fees and other revenues are generally received from the Company’s unconsolidated affiliate properties as well as third parties. Management fee revenue is earned based on a contractual percentage of unconsolidated affiliate property revenue. Development fee revenue is earned on a contractual percentage of hard costs to develop a property. The Company recognizes revenue for these services provided when earned based on the performance criteria in ASC 606, with such revenue recorded in “Other” revenue on the consolidated statement of operations. The Company records a provision for uncollectible accounts if a receivable balance relating to contractual rent, rental revenue recorded on a straight-line basis, tenant recoveries or other billed amounts is considered by management to be uncollectible. The provision is based on management’s historical experience and a review of the current status of the Company’s receivables. The aggregate allowance for doubtful accounts on the consolidated balance sheet was $3.3 million and $3.8 million as of March 31, 2019 and December 31, 2018, respectively. |
Advance Rents and Security Deposits | Advance Rents and Security Deposits – Advance rents, typically prepayment of the following month’s rent, consist of payments received from customers prior to the time they are earned and are recognized as revenue in subsequent periods when earned. Security deposits are collected from customers at the lease origination and are generally refunded to customers upon lease expiration. |
Deferred Income | Deferred Income – Deferred income generally results from non-refundable charges paid by the customer at lease inception to prepare their space for occupancy. The Company records this initial payment, commonly referred to as set-up fees, as a deferred income liability which amortizes into rental revenue over the term of the related lease on a straight-line basis. Deferred income was $38.2 million and $33.2 million as of March 31, 2019 and December 31, 2018, respectively. Additionally, $3.2 million and $2.9 million of deferred income was amortized into revenue for the three months ended March 31, 2019 and 2018, respectively. |
Equity-based Compensation | Equity-based Compensation – Equity-based compensation costs are measured based upon their estimated fair value on the date of grant or modification and amortized ratably over their respective service periods. The Company has elected to account for forfeitures as they occur. Equity-based compensation expense net of forfeited and repurchased awards was $3.3 million and $3.5 million for the three months ended March 31, 2019 and 2018, respectively. Equity based compensation expense for the three months ended March 31, 2018 excludes $1.4 million of equity based compensation expense associated with the acceleration of equity awards related to certain employees impacted by the Company’s strategic growth plan. The aforementioned equity based compensation expense is included in the “Restructuring” expense line item on the consolidated statements of operations. |
Segment Information | Segment Information – The Company manages its business as one operating segment and thus one reportable segment consisting of a portfolio of investments in data centers located primarily in the United States. |
Customer Concentrations | Customer Concentrations – As of March 31, 2019, one of the Company’s customers represented 12.5% of its total monthly rental revenue. No other customers exceeded 6% of total monthly rental revenue. As of March 31, 2019, three of the Company’s customers exceeded 5% of trade accounts receivable. In aggregate, these three customers accounted for approximately 24% of trade accounts receivable. One of these customers individually exceeded 10% of trade accounts receivable. |
Income Taxes | Income Taxes – The Company has elected for two of its existing subsidiaries to be taxed as taxable REIT subsidiaries pursuant to the REIT rules of the U.S. Internal Revenue Code. For the taxable REIT subsidiaries, income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. A current and deferred tax expense has been recognized in the three months ended March 31, 2019, in connection with recorded operating activity. As of March 31, 2019, one of the Company’s taxable REIT subsidiaries is in a net deferred tax liability position primarily due to a valuation allowance against certain deferred tax assets. In considering whether it is more likely than not that some portion or all of the deferred tax assets will be realized, it has been determined that it is possible that some or all of our deferred tax assets could ultimately expire unused. The Company establishes valuation allowances against deferred tax assets when the ability to fully utilize these benefits is determined to be uncertain. The Company provides a valuation allowance against deferred tax assets if, based on management’s assessment of operating results and other available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The evidence contemplated by management at March 31, 2019 consists of current and prior operating results, available tax planning strategies, and the scheduled reversal of existing taxable temporary differences. Evidence from the scheduled reversal of taxable temporary differences relies on management judgements based on the accumulation of available evidence. Those judgements may be subject to change in the future as evidence available to management changes. Management’s assessment of the Company’s valuation allowance may further change based on our generation of or ability to project future operating income, and changes in tax policy or tax planning strategies. The Company provides for income taxes during interim periods based on the estimated effective tax rate for the year. The effective tax rate is subject to change in the future due to various factors such as the operating performance of the taxable REIT subsidiaries, tax law changes, and future business acquisitions or divestitures. The taxable REIT subsidiaries’ effective tax rates were (6.3%) and 23.1% for the three months ended March 31, 2019 and 2018, respectively. |
Fair Value Measurements | Fair Value Measurements – ASC Topic 820, Fair Value Measurement , emphasizes that fair value is a market-based measurement, not an entity-specific measurement. Therefore, a fair value measurement should be determined based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, a fair value hierarchy is established that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy). Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access. Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability (other than quoted prices), such as interest rates, foreign exchange rates, and yield curves that are observable at commonly quoted intervals. Level 3 inputs are unobservable inputs for the asset or liability, which are typically based on an entity’s own assumptions, as there is little, if any, related market activity. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability. As of March 31, 2019, the Company valued its derivative instruments primarily utilizing Level 2 inputs. See Note 15 – ‘Fair Value of Financial Instruments’ for additional details. |
Interest Rate Swaps | From time to time, the Company enters into derivative financial instruments to manage certain cash flow risks. Derivatives designated and qualifying as a hedge of the exposure to variability in the cash flows of a specific asset or liability that is attributable to a particular risk, such as interest rate risk, are considered cash flow hedges. Interest Rate Swaps The Company’s objectives in using interest rate swaps are to reduce variability in interest expense and to manage exposure to adverse interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps as part of its 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. On April 5, 2017, the Company entered into forward interest rate swap agreements with an aggregate notional amount of $400 million. The forward swap agreements effectively fix the interest rate on $400 million of term loan borrowings, $200 million of swaps allocated to each term loan, from January 2, 2018 through December 17, 2021 and April 27, 2022, respectively, at approximately 3.3% assuming the current LIBOR spread of 1.3%. On December 20, 2018, the Company entered into additional forward interest rate swap agreements with an aggregate notional amount of $400 million. The forward swap agreements effectively fix the interest rate on $400 million of term loan borrowings, $200 million of swaps allocated to each term loan, from December 17, 2021 and April 27, 2022 through the current maturity dates of the respective term loans which are December 17, 2023 and April 27, 2024, respectively. The weighted average effective fixed interest rate on the $400 million notional amount of term loan financing following the execution of these swap agreements will approximate 3.9%, commencing on December 17, 2021 and April 27, 2022, assuming the current LIBOR spread of 1.3%. Additionally, the Company entered into forward interest rate swap agreements with an aggregate notional amount of $200 million. The forward swap agreements effectively fix the interest rate on $200 million of additional term loan borrowings, $100 million of swaps allocated to each term loan, from January 2, 2020 through the current maturity dates of December 17, 2023 and April 27, 2024, respectively. The weighted average effective fixed interest rate on the $200 million notional amount of term loan financing, following the execution of these swap agreements, will approximate 3.9%, commencing on January 2, 2020, assuming the current LIBOR spread of 1.3%. The Company reflects its interest rate swap agreements, which are designated as cash flow hedges, at fair value as either assets or liabilities on the consolidated balance sheets within the “Other assets, net” or “Advance rents, security deposits and other liabilities” line items, as applicable. As of March 31, 2019, the fair value of interest rate swaps included an asset of $1.9 million as well as a liability of $7.7 million. As of December 31, 2018, the fair value of interest rate swaps included an asset of $5.3 million as well as a liability of $3.0 million. The forward interest rate swap agreements are derivatives that currently qualify for hedge accounting whereby the Company records the effective portion of changes in fair value of the interest rate swaps in accumulated other comprehensive income or loss on the consolidated balance sheets and statements of comprehensive income which is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. Any ineffective portion of a derivative's change in fair value is immediately recognized within net income. The amount reclassified from other comprehensive income to interest income on the consolidated statements of operations was $0.5 million for the three months ended March 31, 2019. The amount reclassified from other comprehensive income to interest expense on the consolidated statements of operations was $0.4 million for the three months ended March 31, 2018. There was no ineffectiveness recognized for the three months ended March 31, 2019, and 2018. During the subsequent twelve months, beginning April 1, 2019, we estimate that $1.3 million will be reclassified from other comprehensive income as a reduction to interest expense. |
Recently Adopted Accounting Standards | Recently Adopted Accounting Standards Revenue from Contracts with Customers In May 2014, the Financial Accounting Standards Board (“FASB”) issued guidance codified in ASC Topic 606, Revenue from Contracts with Customers , which supersedes the former revenue recognition requirements in ASC Topic 605, Revenue Recognition . Under this new guidance, entities should recognize revenues to depict the transfer of promised goods or services to customers in an amount that reflects the consideration the entity expects to receive in exchange for those goods or services. 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 Company adopted ASC Topic 606 effective January 1, 2018, and elected the modified retrospective transition approach. The adoption did not result in a cumulative catch-up adjustment to opening equity and does not change the recognition pattern of the Company’s operating revenues. Leases In February 2016, and further amended in 2018, the FASB issued ASC Topic 842, Leases , which supersedes the former lease guidance in ASC 840, Lease s. The new standard increases transparency and comparability most significantly 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. The Company adopted ASC 842 effective January 1, 2019 using the modified retrospective approach, which applied the provisions of the new guidance at the effective date without adjusting comparative periods presented. The Company elected a package of practical expedients permitted under the transition guidance within the new standard which allowed the Company to not reassess (i) whether expired or existing contracts contain a lease under the new standard, (ii) the lease classification for existing leases or (iii) whether previously-capitalized initial direct costs would qualify for capitalization under the new standard. The Company did not elect the hindsight practical expedient which permits entities to use hindsight in determining the lease term and assessing impairment. The adoption of ASC 842 impacted our consolidated balance sheet with the recognition of existing operating leases as lessee resulting in $62.9 million of ROU assets and $70.7 million of lease liabilities recorded as of January 1, 2019. The Company also recognized a $1.8 million cumulative effect adjustment to retained earnings. The adjustment to retained earnings was due to an impairment of certain ROU assets associated with vacant office space the Company is party to related to a prior acquisition. See the table below for the impact of adoption of the lease standard on our consolidated balance sheet as of January 1, 2019 (in thousands): As Previously New Lease Standard Reported Adjustment As Adjusted Operating lease right-of-use assets $ — $ 62,922 $ 62,922 Operating lease liabilities — 70,657 70,657 Deferred rent payable 5,922 (5,922) — As lessor, accounting for our leases will remain largely unchanged from ASC 840. The new lease standard more narrowly defines initial direct costs as only costs that are incremental to origination of a lease (i.e. costs that would not have been incurred had the lease not been obtained). The Company did not historically capitalize non-incremental costs, therefore this change will have no impact on the accounting for initial direct costs in the consolidated financial statements on a prospective basis. Additionally, from a lessor perspective, the Company elected a practical expedient which allows lessors to combine nonlease components with the related lease components if both the timing and pattern of transfer are the same for the nonlease component(s) and related lease component, and the lease component would be classified as an operating lease. The single combined component is accounted for under ASC 842 if the lease component is the predominant component and is accounted for under ASC 606 if the nonlease components are the predominant components. Lessors are permitted to apply the practical expedient to all existing leases on a retrospective or prospective basis. The Company elected the practical expedient to combine its lease and nonlease components that meet the defined criteria and will account for the combined lease component under ASC 842 on a prospective basis. New Accounting Pronouncements In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement. The amendments in ASU 2018-13 eliminate the requirements to disclose the amount and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, valuation processes for Level 3 fair value measurements, and policy for timing of transfers between levels. ASU 2018-13 also provides clarification in the measurement uncertainty disclosure by explaining that the disclosure is to communicate information about the uncertainty in measurement as of the reporting date. In addition, ASU 2018-13 added the following requirements: changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period; and range and weighted average of significant unobservable inputs used in Level 3 fair value measurements. Finally, ASU 2018-13 updated language to further encourage entities to apply materiality when considering de minimus for disclosure requirements. The guidance will be applied retrospectively for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, with the exception of amendments to changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used for Level 3 fair value measurements, and the narrative description of measurement uncertainty which will be applied prospectively. Early adoption is permitted. The Company is currently assessing the impact of this standard on its consolidated financial statements. In August 2018, the FASB issued ASU 2018-15, Intangibles – Goodwill and Other – Internal-Use Software ( Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract. The amendments in ASU 2018-15 require an entity in a service contract hosting arrangement apply Subtopic 350-40 to identify costs to capitalize or expense related to the service contract. ASU 2018-15 also requires the entity to capitalize the implementation costs of the service contract hosting arrangement and amortize such costs over the life of the contract and present the capitalized costs in the same line item as fees associated with the hosting service on the statement of income and statement of cash flows. The guidance will be applied retrospectively for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, with the exception of all implementation costs incurred after the date of adoption which will be applied prospectively. Early adoption is permitted. The Company is currently assessing the impact of this standard on its consolidated financial statements. The Company has determined that all other recently issued accounting pronouncements will not have a material impact on its consolidated financial statements or do not materially apply to its operations. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Deferred Financing Costs, Net of Accumulated Amortization | March 31, December 31, (dollars in thousands) 2019 2018 (unaudited) Deferred financing costs $ 11,488 $ 11,530 Accumulated amortization (4,335) (3,859) Deferred financing costs, net $ 7,153 $ 7,671 |
Deferred Leasing Costs, Net of Accumulated Amortization | March 31, December 31, (dollars in thousands) 2019 2018 (unaudited) Deferred leasing costs $ 65,655 $ 63,018 Accumulated amortization (27,134) (25,593) Deferred leasing costs, net $ 38,521 $ 37,425 |
Summary of impact of adoption of the lease standard on our condensed consolidated balance sheet | As Previously New Lease Standard Reported Adjustment As Adjusted Operating lease right-of-use assets $ — $ 62,922 $ 62,922 Operating lease liabilities — 70,657 70,657 Deferred rent payable 5,922 (5,922) — |
Fixed debt arrangements | |
Deferred Financing Costs, Net of Accumulated Amortization | March 31, December 31, (dollars in thousands) 2019 2018 (unaudited) Deferred financing costs $ 14,641 $ 14,501 Accumulated amortization (2,944) Deferred financing costs, net $ 11,195 $ 11,557 |
Acquired Intangibles Assets a_2
Acquired Intangibles Assets and Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Acquired Intangible Assets and Liabilities [Abstract] | |
Schedule of carrying values for the major classes of intangible assets and liabilities | Summarized below are the carrying values for the major classes of intangible assets and liabilities (unaudited and in thousands): March 31, 2019 December 31, 2018 Gross Gross Carrying Accumulated Net Carrying Carrying Accumulated Net Carrying Useful Lives Value Amortization Value Value Amortization Value Customer Relationships 1 to 12 years $ 95,705 $ (30,449) $ 65,256 $ 95,705 $ (28,461) $ 67,244 In-Place Leases 0.5 to 10 years 32,066 (18,701) 13,365 32,066 (17,670) 14,396 Solar Power Agreement (1) 17 years 13,747 (3,841) 9,906 13,747 (3,639) 10,108 Platform Intangible 3 years — — — 9,600 (9,600) — Acquired Favorable Leases Acquired below market leases - as Lessee 46 years 2,301 (8) 2,293 2,301 — 2,301 Acquired above market leases - as Lessor 0.5 to 8 years 4,649 (3,416) 1,233 4,649 (3,247) 1,402 Tradenames 3 years — — — 3,100 (3,100) — Total Intangible Assets $ 148,468 $ (56,415) $ 92,053 $ 161,168 $ (65,717) $ 95,451 Solar Power Agreement (1) 17 years 13,747 (3,841) 9,906 13,747 (3,639) 10,108 Acquired Unfavorable Leases Acquired below market leases - as Lessor 3 to 4 years 809 (671) 138 809 (611) 198 Acquired above market leases - as Lessee 11 to 12 years 2,453 (821) 1,632 2,453 (767) 1,686 Total Intangible Liabilities (2) $ 17,009 $ (5,333) $ 11,676 $ 17,009 $ (5,017) $ 11,992 (1) Amortization related to the Solar Power Agreement asset and liability is recorded at the same rate and therefore has no net impact on the statement of operations. (2) Intangible liabilities are included within the “Advance rents, security deposits and other liabilities” line item of the consolidated balance sheets. |
Schedule of estimated amortization of acquired favorable and unfavorable leases | The estimated amortization of acquired favorable and unfavorable leases for each of the five succeeding fiscal years ending December 31 is as follows (unaudited and in thousands): Net Rental Revenue Net Rental Expense Decrease Increase/(Decrease) 2019 (April - December) $ 368 $ (121) 2020 647 (166) 2021 46 (166) 2022 17 (166) 2023 17 (166) Thereafter — 1,446 Total $ 1,095 $ 661 |
Schedule of estimated amortization of all other identified intangible assets | The estimated net amortization of all other identified intangible assets and liabilities for each of the five succeeding fiscal years ending December 31 is as follows (unaudited and in thousands): 2019 (April - December) $ 8,946 2020 11,379 2021 10,137 2022 9,910 2023 9,910 Thereafter 28,339 Total $ 78,621 |
Real Estate Assets and Constr_2
Real Estate Assets and Construction in Progress (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Real Estate Assets and Construction in Progress [Abstract] | |
Summary of Properties Owned or Leased by the Company | The following is a summary of properties owned or leased by the Company as of March 31, 2019 and December 31, 2018 (in thousands): As of March 31, 2019 (unaudited): Buildings, Improvements Construction Property Location Land and Equipment in Progress Total Cost Atlanta, Georgia (Atlanta-Metro) $ 20,416 $ 497,111 $ 110,769 $ 628,296 Irving, Texas 8,606 346,276 104,988 459,870 Richmond, Virginia 2,180 253,593 68,059 323,832 Chicago, Illinois 9,400 152,704 120,999 283,103 Suwanee, Georgia (Atlanta-Suwanee) 3,521 167,173 2,977 173,671 Ashburn, Virginia (1) 17,326 95,585 166,484 279,395 Piscataway, New Jersey 7,466 98,501 34,141 140,108 Santa Clara, California (2) — 105,386 1,250 106,636 Dulles, Virginia 3,154 72,756 4,018 79,928 Sacramento, California 1,481 64,904 91 66,476 Leased Facilities (3) — 89,331 9,449 98,780 Fort Worth, Texas 9,078 18,619 50,869 78,566 Princeton, New Jersey 20,700 34,083 424 55,207 Phoenix, Arizona (1) — — 30,016 30,016 Hillsboro, Oregon (1) — — 44,942 44,942 Manassas, Virginia (1) — 8 54,245 54,253 Other (4) 2,213 35,795 167 38,175 $ 105,541 $ 2,031,825 $ 803,888 $ 2,941,254 (1) Represent land purchases. Land acquisition costs, as well as subsequent development costs, are included within construction in progress until development on the land has ended and the asset is ready for its intended use. (2) Owned facility subject to long-term ground sublease. (3) Includes 9 facilities. All facilities are leased, including those subject to finance leases. (4) Consists of Miami, FL; Lenexa, KS and Overland Park, KS facilities. As of December 31, 2018: Buildings, Improvements Construction Property Location Land and Equipment in Progress Total Cost Atlanta, Georgia (Atlanta-Metro) $ 20,416 $ 493,446 $ 88,253 $ 602,115 Irving, Texas 8,606 345,615 99,445 453,666 Richmond, Virginia 2,180 253,098 67,932 323,210 Chicago, Illinois 9,400 130,150 133,095 272,645 Ashburn, Virginia (1) 17,325 63,245 184,951 265,521 Suwanee, Georgia (Atlanta-Suwanee) 3,521 166,298 3,188 173,007 Piscataway, New Jersey 7,466 97,806 33,472 138,744 Manassas, Virginia (1) (2) — — 45,194 45,194 Santa Clara, California (3) — 98,548 7,600 106,148 Dulles, Virginia 3,154 72,435 3,852 79,441 Fort Worth, Texas 9,079 18,623 43,715 71,417 Sacramento, California 1,481 64,874 92 66,447 Princeton, New Jersey 20,700 34,046 431 55,177 Leased Facilities (4) — 43,347 9,334 52,681 Hillsboro, Oregon (1) — — 39,835 39,835 Phoenix, Arizona (1) — — 29,562 29,562 Other (5) 2,213 35,720 113 38,046 $ 105,541 $ 1,917,251 $ 790,064 $ 2,812,856 (1) Represent land purchases. Land acquisition costs, as well as subsequent development costs, are included within construction in progress until development on the land has ended and the asset is ready for its intended use. (2) Excludes $71.0 million of construction in progress included within the “Assets held for sale” line item of the consolidated balance sheets. (3) Owned facility subject to long-term ground sublease. (4) Includes 10 facilities. All facilities are leased, including those subject to finance leases. (5) Consists of Miami, FL; Lenexa, KS; Overland Park, KS; and Duluth, GA facilities. |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Schedule of components of lease expenses | Components of lease expense were as follows (unaudited and in thousands): Three months ended March 31, 2019 Operating lease cost $ 3,543 Finance lease cost: Amortization of assets 386 Interest on lease liabilities 245 Sublease income (46) Total lease costs $ 4,128 |
Schedule of supplemental balance sheet information | Supplemental balance sheet information related to leases was as follows (unaudited and in thousands, except lease term and discount rate): March 31, 2019 Operating leases: Operating lease right-of-use assets $ 61,585 Operating lease liabilities 69,346 Finance leases: Property and equipment, at cost 48,233 Accumulated amortization (1,477) Property and equipment, net $ 46,756 Finance lease liabilities $ 47,196 Weighted average remaining lease term (in years): Operating leases 14.0 Finance leases 12.1 Weighted average discount rate: Operating leases Finance leases |
Schedule of cash flow information and other information | Supplemental cash flow and other information related to leases was as follows (unaudited and in thousands): Three months ended March 31, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 2,523 Operating cash flows from finance leases $ 196 Financing cash flows from finance leases $ 799 |
Schedule of maturities of operating lease liabilities | Maturities of lease liabilities were as follows (unaudited and in thousands): March 31, 2019 Operating Leases Finance Leases 2019 (April - December) $ 7,281 $ 3,561 2020 9,605 4,493 2021 9,834 4,514 2022 10,283 4,639 2023 10,409 4,776 Thereafter 57,889 39,908 Total Lease Payments $ 105,301 $ 61,891 Less: Imputed Interest 35,955 14,695 Total Lease Obligations $ 69,346 $ 47,196 |
Schedule of maturities of finance lease liabilities | March 31, 2019 Operating Leases Finance Leases 2019 (April - December) $ 7,281 $ 3,561 2020 9,605 4,493 2021 9,834 4,514 2022 10,283 4,639 2023 10,409 4,776 Thereafter 57,889 39,908 Total Lease Payments $ 105,301 $ 61,891 Less: Imputed Interest 35,955 14,695 Total Lease Obligations $ 69,346 $ 47,196 |
Schedule of components of lease revenue | The components of the Company’s lease revenue were as follows (in thousands): Three months ended March 31, 2019 2018 Lease revenue: Minimum lease revenue $ $ Variable lease revenue (recoveries from customers) Total lease revenue $ $ |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Debt [Abstract] | |
Outstanding Debt Including Capital Leases and Lease Financing Obligations | Below is a listing of the Company’s outstanding debt, including finance leases, as of March 31, 2019 and December 31, 2018 (in thousands): Weighted Average Coupon Interest Rate at March 31, December 31, March 31, 2019 (1) Maturities 2019 2018 (unaudited) (unaudited) Unsecured Credit Facility Revolving Credit Facility 3.83% December 17, 2022 $ 135,000 $ 252,000 Term Loan I 3.50% December 17, 2023 350,000 350,000 Term Loan II 3.53% April 27, 2024 350,000 350,000 Senior Notes 4.75% November 15, 2025 400,000 400,000 Lenexa Mortgage 4.10% May 1, 2022 1,791 1,801 Finance Leases 4.33% 2019 - 2038 47,197 2,873 3.96% 1,283,988 1,356,674 Less net debt issuance costs (11,195) (11,557) Total outstanding debt, net $ 1,272,793 $ 1,345,117 (1) The coupon interest rates associated with Term Loan I and Term Loan II incorporate the effects of the Company’s interest rate swaps in effect as of March 31, 2019. |
Annual Remaining Principal Payment | The annual remaining principal payment requirements as of March 31, 2019 per the contractual maturities, excluding extension options and excluding finance leases, are as follows (unaudited and in thousands): 2019 $ 52 2020 71 2021 74 2022 136,594 2023 350,000 Thereafter 750,000 Total $ 1,236,791 |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Derivative Instruments [Abstract] | |
Schedule of interest rate derivatives and their fair values | Interest rate derivatives and their fair values as of March 31, 2019 and December 31, 2018 were as follows (unaudited and in thousands): Fixed One Month Notional Amount LIBOR rate per Fair Value March 31, 2019 December 31, 2018 annum Effective Date Expiration Date March 31, 2019 December 31, 2018 $ 25,000 $ 25,000 January 2, 2018 December 17, 2021 $ 131 $ 331 100,000 100,000 January 2, 2018 December 17, 2021 523 1,318 75,000 75,000 January 2, 2018 December 17, 2021 392 990 50,000 50,000 January 2, 2018 April 27, 2022 213 667 100,000 100,000 January 2, 2018 April 27, 2022 436 1,341 50,000 50,000 January 2, 2018 April 27, 2022 212 666 100,000 100,000 January 2, 2020 December 17, 2023 (1,935) (782) 100,000 100,000 January 2, 2020 April 27, 2024 (2,071) (818) 200,000 200,000 December 17, 2021 December 17, 2023 (1,911) (722) 200,000 200,000 April 27, 2022 April 27, 2024 (1,809) (648) $ 1,000,000 $ 1,000,000 $ (5,819) $ 2,343 |
Schedule of power purchase agreement derivatives | Power purchase agreement derivatives and their fair values as of March 31, 2019 and December 31, 2018 were as follows (unaudited and in thousands): Fair Value Counterparty Facility Effective Date Expiration Date March 31, 2019 December 31, 2018 Calpine Energy Solutions, LLC Piscataway 3/8/2019 2/28/2029 $ (636) $ — Calpine Energy Solutions, LLC Chicago 3/8/2019 2/28/2029 (1,055) — $ (1,691) $ — |
Partners' Capital, Equity and_2
Partners' Capital, Equity and Incentive Compensation Plans (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Partners' Capital, Equity and Incentive Compensation Plans [Abstract] | |
Summary of Award Activity Under 2010 Equity Incentive Plan and 2013 Equity Incentive Plan and Related Information | 2010 Equity Incentive Plan 2013 Equity Incentive Plan Weighted Weighted Restricted Weighted average Weighted average Stock / Weighted Weighted Weighted Number of average fair average fair Deferred average average average Class O units exercise price value Options exercise price value Stock grant price TSR Units grant price FFO Units grant price Outstanding at December 31, 2018 102,279 $ 24.05 $ 5.67 2,037,163 $ $ 420,309 $ 37.83 — $ — — $ — Granted — — — 124,955 265,231 86,089 86,089 Exercised/Vested (1) — — — (96,589) — — — — Cancelled/Expired — — — (60,285) (2) — — — — Outstanding at March 31, 2019 102,279 $ 24.05 $ 2,005,244 $ $ 7.12 $ $ $ (1) This represents the Class A common stock that has been released from restriction and which was not surrendered by the holder to satisfy their statutory minimum federal and state tax obligations associated with the vesting of restricted common stock. This also represents Class O units which were converted to Class A units and options to purchase Class A common stock which were exercised for their respective columns. (2) Includes restricted Class A common stock surrendered by certain employees to satisfy their statutory minimum federal and state tax obligations associated with the vesting of restricted common stock. |
Summary of Assumptions and Fair Values for Restricted Stock and Options to Purchase Shares of Class A Common Stock Granted | Three Months Ended Fair value of FFO units and restricted stock granted $ Fair value of TSR units granted $ Fair value of options granted $ Expected term (years) Expected volatility Expected dividend yield Expected risk-free interest rates |
Summary of Information About Awards Outstanding | The following tables summarize information about awards outstanding as of March 31, 2019 (unaudited). Operating Partnership Awards Outstanding Weighted average Awards remaining Exercise prices outstanding vesting period (years) Class O Units $ 20.00 - 25.00 102,279 — Total Operating Partnership awards outstanding 102,279 QTS Realty Trust, Inc. Awards Outstanding Weighted average Awards remaining Exercise prices outstanding vesting period (years) Restricted stock $ — 2.0 TSR units — 2.8 FFO units — 2.8 Options to purchase Class A common stock $ 21.00 - 50.66 0.8 Total QTS Realty Trust, Inc. awards outstanding |
Schedule of Quarterly Cash Dividends | The following tables present quarterly cash dividends and distributions paid to QTS’ common and preferred stockholders and the Operating Partnership’s unit holders for the three months ended March 31, 2019 and 2018 (unaudited): Three Months Ended March 31, 2019 Aggregate Per Share and Dividend/Distribution Record Date Payment Date Per Unit Rate Amount (in millions) Common Stock December 21, 2018 January 8, 2019 $ 0.41 $ 23.7 $ 23.7 Series A Preferred Stock December 31, 2018 January 15, 2019 $ 0.45 $ 1.9 $ 1.9 Series B Preferred Stock December 31, 2018 January 15, 2019 $ 1.63 $ 5.1 $ 5.1 Three Months Ended March 31, 2018 Aggregate Per Common Share and Dividend/Distribution Record Date Payment Date Per Unit Rate Amount (in millions) Common Stock December 5, 2017 January 5, 2018 $ 0.39 $ 22.2 $ 22.2 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Related Party Transactions [Abstract] | |
Summary of Related Party Transactions | The transactions which occurred during the three months ended March 31, 2019 and 2018 are outlined below (unaudited and in thousands): Three Months Ended March 31, 2019 2018 Tax, utility, insurance and other reimbursement $ 261 $ 261 Rent expense 254 254 Capital assets acquired 54 158 Total $ 569 $ 673 |
Earnings per share of QTS Rea_2
Earnings per share of QTS Realty Trust, Inc. (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Earnings per Share [Abstract] | |
Summary of Basic and Diluted Earnings Per Share | The computation of basic and diluted net income per share is as follows (in thousands, except per share data, and unaudited): Three Months Ended March 31, 2019 2018 Numerator: Net income (loss) $ 21,148 $ (252) Loss (income) attributable to noncontrolling interests (1,590) 29 Preferred stock dividends (7,045) (328) Earnings attributable to participating securities (1,935) (258) Net income (loss) available to common stockholders after allocation of participating securities $ 10,578 $ (809) Denominator: Weighted average shares outstanding - basic 51,948 50,279 Effect of Class O units, TSR units and options to purchase Class A common stock on an "as if" converted basis 347 — Weighted average shares outstanding - diluted 52,295 50,279 Basic net income (loss) per share $ 0.20 $ Diluted net income (loss) per share $ 0.20 $ Note: The table above does not include Class A partnership units of 6.7 million and 6.6 million for the three months ended March 31, 2019, and 2018, respectively, as their inclusion would have been antidilutive. Also does not include 0.5 million reflecting the effects of Class O units and options to purchase common stock on an "as if" converted basis for the three months ended March 31, 2018, and 6.7 million reflecting the effects of Series B Convertible preferred stock on an “as if” converted basis for the three months ended March 31, 2019, as their respective inclusion would have also been antidilutive. |
Contracts with Customers (Table
Contracts with Customers (Table) | 3 Months Ended |
Mar. 31, 2019 | |
Contracts with Customers [Abstract] | |
Schedule of Future minimum payments to be received under non-cancelable customer contracts | Future minimum payments to be received under non-cancelable customer contracts including both lease rental revenue components and nonlease revenue components (inclusive of payments for contracts which have not yet commenced, and exclusive of recoveries of operating costs from customers) are as follows for the years ending December 31 (unaudited and in thousands): 2019 (April - December) $ 277,683 2020 308,650 2021 250,263 2022 163,494 2023 88,227 Thereafter 107,386 Total $ 1,195,703 |
Description of Business (Detail
Description of Business (Details) | 3 Months Ended |
Mar. 31, 2019property | |
Organization And Description Of Business [Line Items] | |
Number of properties | 24 |
QualityTech LP | |
Organization And Description Of Business [Line Items] | |
Limited Liability Company (LLC) or Limited Partnership (LP), Managing Member or General Partner, Ownership Interest | 89.20% |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Narrative) (Details) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2019USD ($)categoryitem | Mar. 31, 2018USD ($)category | Dec. 31, 2018USD ($) | Jul. 23, 2014 | |
Summary Of Significant Accounting Policies [Line Items] | ||||
Interest rate | 5.875% | |||
Operating assets independent of the Operating Partnership | $ 0 | |||
Maximum exposure to losses | $ 44,000,000 | |||
Number of Revenue Categories | category | 3 | 4 | ||
Rental | $ 98,596,000 | $ 88,415,000 | ||
Useful life of property | 40 years | |||
Depreciation expense from operation | $ 30,300,000 | 26,900,000 | ||
Real estate cost capitalized excluding interest cost | 4,500,000 | 3,500,000 | ||
Real estate interest cost capitalized incurred | 7,800,000 | 5,400,000 | ||
Transaction cost | 5,800,000 | |||
Gain on sale of real estate, net | 13,408,000 | |||
Impairment losses | $ 0 | |||
Number of reporting units | item | 1 | |||
Reclassification from Other Revenue to Rental Income [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Prior Period Reclassification Adjustment | 2,700,000 | |||
Qualitytech, LP | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Operating assets independent of the Operating Partnership | $ 0 | |||
Rental | 98,596,000 | 88,415,000 | ||
Gain on sale of real estate, net | $ 13,408,000 | |||
Term Loan Maturing 2025 | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Interest rate | 4.75% | |||
Real Estate Assets | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Depreciation expense from operation | $ 27,400,000 | 23,700,000 | ||
Non-Real Estate Assets | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Depreciation expense from operation | $ 2,900,000 | 3,200,000 | ||
Other | Reclassification from Cloud and Managed Services to Other Revenue[Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Prior Period Reclassification Adjustment | 13,200,000 | |||
Other | Reclassification Other Revenue [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Prior Period Reclassification Adjustment | $ 600,000 | |||
Minimum | Real Property | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Useful life of property | 20 years | |||
Maximum | Real Property | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Useful life of property | 40 years | |||
Maximum | Leasehold Improvements | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Useful life of property | 20 years | |||
Restructuring Charges [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Impairment losses | $ 4,000,000 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Additional Information 1) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Summary of Significant Accounting Policies [Abstract] | |||
Assets held for sale | $ 71,800 | ||
Liabilities held for sale | 24,349 | ||
Amortization of the deferred financing costs | $ 978 | $ 962 | |
Amortization of deferred leasing costs totaled | 5,400 | 4,900 | |
Deferred income | 38,167 | 33,241 | |
Amortization of deferred revenue | 3,200 | 2,900 | |
Company recorded equity-based compensation expense net of repurchased awards and forfeits | $ 3,300 | 3,500 | |
Equity based compensation associated with the acceleration of equity awards | $ 1,400 | ||
Practical Expedient, remaining term | true | ||
Amount of the straight-line rent receivable on the balance sheets included in rents and other receivables, net | $ 31,400 | $ 29,700 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Deferred Financing Costs, Net of Accumulated Amortization) (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Deferred financing costs | $ 11,488 | $ 11,530 |
Accumulated amortization | (4,335) | (3,859) |
Deferred financing costs, net | 7,153 | 7,671 |
Fixed debt arrangements | ||
Deferred financing costs | 14,641 | 14,501 |
Accumulated amortization | (3,446) | (2,944) |
Deferred financing costs, net | $ 11,195 | $ 11,557 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies (Deferred Leasing Costs, Net of Accumulated Amortization) (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Summary of Significant Accounting Policies [Abstract] | ||
Deferred leasing costs | $ 65,655 | $ 63,018 |
Accumulated amortization | (27,134) | (25,593) |
Deferred leasing costs, net | $ 38,521 | $ 37,425 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies (Additional Information 2) (Details) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2019USD ($)segment | Mar. 31, 2018 | Jan. 01, 2019USD ($) | Dec. 31, 2018USD ($) | |
Summary Of Significant Accounting Policies [Line Items] | ||||
Aggregate allowance for doubtful accounts | $ 3,300 | $ 3,800 | ||
Number of operating segments | segment | 1 | |||
Number of reportable segments | segment | 1 | |||
Effective tax rate | (6.30%) | 23.10% | ||
Initial lease liability | $ 69,346 | $ 70,657 | ||
Lease, Practical Expedients, Package [true/false] | true | |||
Lease, Practical Expedient, Use of Hindsight [true/false] | false | |||
Operating lease right-of-use assets, net | $ 61,585 | $ 62,922 | ||
Customer One | Rental Revenue | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Percentage of total revenue | 12.50% | |||
Three Customers [Member] | Accounts Receivable | Trade Accounts Receivable | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Percentage of trade accounts receivable | 24.00% | |||
Three Customers [Member] | Accounts Receivable | Minimum | Trade Accounts Receivable | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Percentage of trade accounts receivable | 5.00% | |||
One of Three Customers [Member] | Accounts Receivable | Minimum | Trade Accounts Receivable | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Percentage of trade accounts receivable | 10.00% | |||
No Other Customers | Rental Revenue | Minimum | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Percentage of total revenue | 6.00% |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - Recently Adopted Accounting Standards (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Jan. 01, 2019 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Cumulative effect adjustment to retained earnings | $ 1,800 | |
Operating lease right-of-use assets, net | 61,585 | $ 62,922 |
Operating lease liabilities | $ 69,346 | 70,657 |
ASU 2016-02 | Original Allocation Reported | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Deferred rent payable | 5,922 | |
ASU 2016-02 | Restatement Adjustment [Member] | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Operating lease right-of-use assets, net | 62,922 | |
Operating lease liabilities | 70,657 | |
Deferred rent payable | $ (5,922) |
Acquired Intangibles Assets a_3
Acquired Intangibles Assets and Liabilities (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Finite-lived intangible assets | ||
Gross Carrying Value | $ 148,468 | $ 161,168 |
Accumulated Amortization | (56,415) | (65,717) |
Net Carrying Value | 92,053 | 95,451 |
Acquired Intangible Liabilities | ||
Acquired intangible liabilities | 17,009 | 17,009 |
Accumulated Amortization | (5,333) | (5,017) |
New Carrying Value | 11,676 | 11,992 |
Customer Relationships | ||
Finite-lived intangible assets | ||
Gross Carrying Value | 95,705 | 95,705 |
Accumulated Amortization | (30,449) | (28,461) |
Net Carrying Value | $ 65,256 | $ 67,244 |
Customer Relationships | Minimum | ||
Finite-lived intangible assets | ||
Useful Lives | 1 year | 1 year |
Customer Relationships | Maximum | ||
Finite-lived intangible assets | ||
Useful Lives | 12 years | 12 years |
In Place Leases | ||
Finite-lived intangible assets | ||
Gross Carrying Value | $ 32,066 | $ 32,066 |
Accumulated Amortization | (18,701) | (17,670) |
Net Carrying Value | $ 13,365 | $ 14,396 |
In Place Leases | Minimum | ||
Finite-lived intangible assets | ||
Useful Lives | 6 months | 6 months |
In Place Leases | Maximum | ||
Finite-lived intangible assets | ||
Useful Lives | 10 years | 10 years |
Solar Power Agreement | ||
Finite-lived intangible assets | ||
Useful Lives | 17 years | 17 years |
Gross Carrying Value | $ 13,747 | $ 13,747 |
Accumulated Amortization | (3,841) | (3,639) |
Net Carrying Value | $ 9,906 | $ 10,108 |
Platform Intangible | ||
Finite-lived intangible assets | ||
Useful Lives | 3 years | 3 years |
Gross Carrying Value | $ 9,600 | |
Accumulated Amortization | $ (9,600) | |
Below Market Leases As Lessee | ||
Acquired below market leases - as Lessor | ||
Useful Lives | 46 years | 46 years |
Gross Carrying Value | $ 2,301 | $ 2,301 |
Accumulated Amortization | (8) | |
Net Carrying Value | 2,293 | 2,301 |
Above Market Leases As Lessor | ||
Acquired above market leases - as Lessee | ||
Gross Carrying Value | 4,649 | 4,649 |
Accumulated Amortization | (3,416) | (3,247) |
Net Carrying Value | $ 1,233 | $ 1,402 |
Above Market Leases As Lessor | Minimum | ||
Acquired above market leases - as Lessee | ||
Useful Lives | 6 months | 6 months |
Above Market Leases As Lessor | Maximum | ||
Acquired above market leases - as Lessee | ||
Useful Lives | 8 years | 8 years |
Below Market Leases As Lessor | ||
Acquired below market leases - as Lessor | ||
Gross Carrying Value | $ 809 | $ 809 |
Accumulated Amortization | (671) | (611) |
Net Carrying Value | $ 138 | $ 198 |
Below Market Leases As Lessor | Minimum | ||
Acquired below market leases - as Lessor | ||
Useful Lives | 3 years | 3 years |
Below Market Leases As Lessor | Maximum | ||
Acquired below market leases - as Lessor | ||
Useful Lives | 4 years | 4 years |
Above Market Lease As Lessee | ||
Acquired above market leases - as Lessee | ||
Gross Carrying Value | $ 2,453 | $ 2,453 |
Accumulated Amortization | (821) | (767) |
Net Carrying Value | $ 1,632 | $ 1,686 |
Above Market Lease As Lessee | Minimum | ||
Acquired above market leases - as Lessee | ||
Useful Lives | 11 years | 11 years |
Above Market Lease As Lessee | Maximum | ||
Acquired above market leases - as Lessee | ||
Useful Lives | 12 years | 12 years |
Tradenames | ||
Finite-lived intangible assets | ||
Useful Lives | 3 years | 3 years |
Gross Carrying Value | $ 3,100 | |
Accumulated Amortization | $ (3,100) |
Acquired Intangibles Assets a_4
Acquired Intangibles Assets and Liabilities - Amortization (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Finite-Lived Intangible Assets [Line Items] | |||
Amortization of acquired above and below-market leases, net | $ 64 | $ 139 | |
Amortization of all other identified intangible assets | 3,100 | $ 4,000 | |
Estimated amortization of all other identified intangible assets | |||
Net Carrying Value | 92,053 | $ 95,451 | |
Acquired favorable and unfavorable leases | |||
Estimated amortization of acquired favorable and unfavorable leases Rental Revenue | |||
2019 (April - December) | 368 | ||
2020 | 647 | ||
2021 | 46 | ||
2022 | 17 | ||
2023 | 17 | ||
Total | 1,095 | ||
Estimated amortization of acquired favorable and unfavorable leases Rental Expense | |||
2019 (April - December) | (121) | ||
2020 | (166) | ||
2021 | (166) | ||
2022 | (166) | ||
2023 | (166) | ||
Thereafter | 1,446 | ||
Total | 661 | ||
All other identified intangible assets | |||
Estimated amortization of all other identified intangible assets | |||
2019 (April - December) | 8,946 | ||
2020 | 11,379 | ||
2021 | 10,137 | ||
2022 | 9,910 | ||
2023 | 9,910 | ||
Thereafter | 28,339 | ||
Net Carrying Value | $ 78,621 |
Real Estate Assets and Constr_3
Real Estate Assets and Construction in Progress (Summary of Properties Owned or Leased by the Company) (Details) $ in Thousands | Mar. 31, 2019USD ($)property | Dec. 31, 2018USD ($)property |
Real Estate Properties [Line Items] | ||
Land | $ 105,541 | $ 105,541 |
Buildings, Improvements and Equipment | 2,031,825 | 1,917,251 |
Construction in progress | 803,888 | 790,064 |
Total cost | 2,941,254 | 2,812,856 |
Manassas, Virginia | Assets Held For Sale | ||
Real Estate Properties [Line Items] | ||
Construction in progress | 71,000 | |
Owned Properties | Atlanta, Georgia (Atlanta-Metro) | ||
Real Estate Properties [Line Items] | ||
Land | 20,416 | 20,416 |
Buildings, Improvements and Equipment | 497,111 | 493,446 |
Construction in progress | 110,769 | 88,253 |
Total cost | 628,296 | 602,115 |
Owned Properties | Irving Texas | ||
Real Estate Properties [Line Items] | ||
Land | 8,606 | 8,606 |
Buildings, Improvements and Equipment | 346,276 | 345,615 |
Construction in progress | 104,988 | 99,445 |
Total cost | 459,870 | 453,666 |
Owned Properties | Richmond, Virginia | ||
Real Estate Properties [Line Items] | ||
Land | 2,180 | 2,180 |
Buildings, Improvements and Equipment | 253,593 | 253,098 |
Construction in progress | 68,059 | 67,932 |
Total cost | 323,832 | 323,210 |
Owned Properties | Chicago, Illinois | ||
Real Estate Properties [Line Items] | ||
Land | 9,400 | 9,400 |
Buildings, Improvements and Equipment | 152,704 | 130,150 |
Construction in progress | 120,999 | 133,095 |
Total cost | 283,103 | 272,645 |
Owned Properties | Suwanee, Georgia (Atlanta-Suwanee) | ||
Real Estate Properties [Line Items] | ||
Land | 3,521 | 3,521 |
Buildings, Improvements and Equipment | 167,173 | 166,298 |
Construction in progress | 2,977 | 3,188 |
Total cost | 173,671 | 173,007 |
Owned Properties | Ashburn, Virginia | ||
Real Estate Properties [Line Items] | ||
Land | 17,326 | 17,325 |
Buildings, Improvements and Equipment | 95,585 | 63,245 |
Construction in progress | 166,484 | 184,951 |
Total cost | 279,395 | 265,521 |
Owned Properties | Piscataway New Jersey | ||
Real Estate Properties [Line Items] | ||
Land | 7,466 | 7,466 |
Buildings, Improvements and Equipment | 98,501 | 97,806 |
Construction in progress | 34,141 | 33,472 |
Total cost | 140,108 | 138,744 |
Owned Properties | Santa Clara, California | ||
Real Estate Properties [Line Items] | ||
Buildings, Improvements and Equipment | 105,386 | 98,548 |
Construction in progress | 1,250 | 7,600 |
Total cost | 106,636 | 106,148 |
Owned Properties | Dulles, Virginia | ||
Real Estate Properties [Line Items] | ||
Land | 3,154 | 3,154 |
Buildings, Improvements and Equipment | 72,756 | 72,435 |
Construction in progress | 4,018 | 3,852 |
Total cost | 79,928 | 79,441 |
Owned Properties | Sacramento, California | ||
Real Estate Properties [Line Items] | ||
Land | 1,481 | 1,481 |
Buildings, Improvements and Equipment | 64,904 | 64,874 |
Construction in progress | 91 | 92 |
Total cost | 66,476 | 66,447 |
Owned Properties | Fort Worth, Texas | ||
Real Estate Properties [Line Items] | ||
Land | 9,078 | 9,079 |
Buildings, Improvements and Equipment | 18,619 | 18,623 |
Construction in progress | 50,869 | 43,715 |
Total cost | 78,566 | 71,417 |
Owned Properties | Princeton, New Jersey | ||
Real Estate Properties [Line Items] | ||
Land | 20,700 | 20,700 |
Buildings, Improvements and Equipment | 34,083 | 34,046 |
Construction in progress | 424 | 431 |
Total cost | 55,207 | 55,177 |
Owned Properties | Phoenix, Arizona | ||
Real Estate Properties [Line Items] | ||
Construction in progress | 30,016 | 29,562 |
Total cost | 30,016 | 29,562 |
Owned Properties | Hillsboro, Oregon | ||
Real Estate Properties [Line Items] | ||
Construction in progress | 44,942 | 39,835 |
Total cost | 44,942 | 39,835 |
Owned Properties | Manassas, Virginia | ||
Real Estate Properties [Line Items] | ||
Buildings, Improvements and Equipment | 8 | |
Construction in progress | 54,245 | 45,194 |
Total cost | 54,253 | 45,194 |
Owned Properties | Other | ||
Real Estate Properties [Line Items] | ||
Land | 2,213 | 2,213 |
Buildings, Improvements and Equipment | 35,795 | 35,720 |
Construction in progress | 167 | 113 |
Total cost | $ 38,175 | $ 38,046 |
Leased Properties | ||
Real Estate Properties [Line Items] | ||
Number of facilities leased | property | 9 | 10 |
Leased Properties | Owned Properties | ||
Real Estate Properties [Line Items] | ||
Buildings, Improvements and Equipment | $ 89,331 | $ 43,347 |
Construction in progress | 9,449 | 9,334 |
Total cost | $ 98,780 | $ 52,681 |
Leases - Finance leases (Detail
Leases - Finance leases (Details) | 3 Months Ended |
Mar. 31, 2019item | |
Lease as Lessee | |
Number of finance leases | 1 |
Options to extend - finance leases | true |
Minimum | |
Lease as Lessee | |
Remaining terms - finance leases | 1 year |
Maximum | |
Lease as Lessee | |
Remaining terms - finance leases | 19 years |
Leases - Operating leases (Deta
Leases - Operating leases (Details) | 3 Months Ended |
Mar. 31, 2019Yitem | |
Lease as Lessee | |
Number of operating lease | 7 |
Options to extend - operating leases | true |
Number of ground leases under operating leases | 2 |
Number of ground leases under operating leases, is material | 1 |
Minimum | |
Lease as Lessee | |
Remaining terms - operating leases | Y | 1 |
Maximum | |
Lease as Lessee | |
Remaining terms - operating leases | 8 |
Leases - Components of lease ex
Leases - Components of lease expenses (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Components of lease expenses: | |
Operating lease cost | $ 3,543 |
Finance lease cost: | |
Amortization of assets | 386 |
Interest on lease liabilities | 245 |
Sublease income | (46) |
Total lease costs | $ 4,128 |
Leases - Supplemental balance s
Leases - Supplemental balance sheet information (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
Lease as Lessee | |||
Operating lease right-of-use assets, net | $ 61,585 | $ 62,922 | |
Operating lease liabilities | 69,346 | $ 70,657 | |
Property and equipment, at cost | 2,941,254 | $ 2,812,856 | |
Accumulated amortization | (494,787) | (467,644) | |
Real Estate Assets, net | 2,446,467 | $ 2,345,212 | |
Finance lease liabilities | 47,196 | ||
Finance leased assets | |||
Lease as Lessee | |||
Property and equipment, at cost | 48,233 | ||
Accumulated amortization | (1,477) | ||
Real Estate Assets, net | $ 46,756 |
Leases - Other information (Det
Leases - Other information (Details) | Mar. 31, 2019 |
Leases [Abstract] | |
Operating leases - Weighted average remaining lease term (in years) | 14 years |
Finance leases - Weighted average remaining lease term (in years) | 12 years 1 month 6 days |
Operating leases - Weighted average discount rate | 5.10% |
Finance leases - Weighted average discount rate | 4.60% |
Leases - Supplemental cash flow
Leases - Supplemental cash flow and other information (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Leases [Abstract] | |
Operating cash flows from operating leases | $ 2,523 |
Operating cash flows from finance leases | 196 |
Financing cash flows from finance leases | $ 799 |
Leases - Maturities of lease li
Leases - Maturities of lease liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Jan. 01, 2019 |
Operating Leases Maturities: | ||
2019 (April - December) | $ 7,281 | |
2020 | 9,605 | |
2021 | 9,834 | |
2022 | 10,283 | |
2023 | 10,409 | |
Thereafter | 57,889 | |
Total Lease Payments | 105,301 | |
Less: Imputed Interest | 35,955 | |
Operating lease liabilities | 69,346 | $ 70,657 |
Finance Leases Maturities: | ||
2019 (April - December) | 3,561 | |
2020 | 4,493 | |
2021 | 4,514 | |
2022 | 4,639 | |
2023 | 4,776 | |
Thereafter | 39,908 | |
Total Lease Payments | 61,891 | |
Less: Imputed Interest | 14,695 | |
Finance lease liabilities | $ 47,196 |
Leases - Leases as lessor (Deta
Leases - Leases as lessor (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Lease revenue: | ||
Minimum lease revenue | $ 98,596 | $ 88,415 |
Variable lease revenue (recoveries from customers) | 10,793 | 11,513 |
Total lease revenue | $ 109,389 | $ 99,928 |
Investments in Unconsolidated_2
Investments in Unconsolidated Entity (Details) $ in Millions | Mar. 31, 2019USD ($)ft² |
Investments in Unconsolidated Joint Ventures | |
Ownership interest (as a percent) | 50.00% |
Joint venture with Alinda | |
Investments in Unconsolidated Joint Ventures | |
Area of land contributed | ft² | 118,000 |
Lease term of facility with global cloud-based software company | 10 years |
Equity method investments | $ 44.2 |
Ownership interest (as a percent) | 50.00% |
Assets | $ 130.7 |
Debt outstanding | $ 52.4 |
Debt (Outstanding Debt Includin
Debt (Outstanding Debt Including Capital Leases) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2018 | |
Debt Instrument [Line Items] | ||
Weighted average coupon interest rate | 3.96% | |
Total debt and lease obligations | $ 1,283,988 | $ 1,356,674 |
Less discount and debt issuance costs | (11,195) | (11,557) |
Total outstanding debt, net | $ 1,272,793 | 1,345,117 |
Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Weighted average coupon interest rate | 3.83% | |
Maturity date | Dec. 17, 2022 | |
Outstanding debt | $ 135,000 | 252,000 |
Term Loan | ||
Debt Instrument [Line Items] | ||
Outstanding debt | $ 700,000 | |
Term Loan I [Member] | ||
Debt Instrument [Line Items] | ||
Weighted average coupon interest rate | 3.50% | |
Maturity date | Dec. 17, 2023 | |
Outstanding debt | $ 350,000 | 350,000 |
Term Loan II [Member] | ||
Debt Instrument [Line Items] | ||
Weighted average coupon interest rate | 3.53% | |
Maturity date | Apr. 27, 2024 | |
Outstanding debt | $ 350,000 | 350,000 |
Lenexa Mortgage | ||
Debt Instrument [Line Items] | ||
Weighted average coupon interest rate | 4.10% | |
Maturity date | May 1, 2022 | |
Outstanding debt | $ 1,791 | 1,801 |
Finance Leases | ||
Debt Instrument [Line Items] | ||
Weighted average coupon interest rate | 4.33% | |
Maturity date description | 2019 - 2038 | |
Outstanding debt | $ 47,197 | 2,873 |
Operating Partnership Quality Tech LP And QTS Finance Corporation | ||
Debt Instrument [Line Items] | ||
Weighted average coupon interest rate | 4.75% | |
Maturity date | Nov. 15, 2025 | |
Outstanding debt | $ 400,000 | $ 400,000 |
Debt (Unsecured Credit Facility
Debt (Unsecured Credit Facility Narrative) (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | ||||
Nov. 30, 2018 | Mar. 31, 2019 | Dec. 31, 2018 | Dec. 20, 2018 | Apr. 05, 2017 | Jul. 23, 2014 | |
Debt Instrument [Line Items] | ||||||
Interest rate | 5.875% | |||||
Term Loan | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument Carrying Amount | $ 700,000 | |||||
Outstanding debt | $ 700,000 | |||||
Term Loan | Interest Rate Swap | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument Carrying Amount | $ 400,000 | |||||
Outstanding debt | $ 400,000 | |||||
Term Loan Maturing December 17,2021 | Interest Rate Swap | ||||||
Debt Instrument [Line Items] | ||||||
Weighted average effective fixed interest rate | 3.30% | |||||
Average variable interest rate | 1.30% | |||||
Term Loan Maturing April 27, 2022 | Interest Rate Swap | ||||||
Debt Instrument [Line Items] | ||||||
Weighted average effective fixed interest rate | 3.90% | |||||
Revolving Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Maturity date | Dec. 17, 2022 | |||||
Debt Instrument Carrying Amount | $ 135,000 | $ 252,000 | ||||
Outstanding debt | 135,000 | $ 252,000 | ||||
Letter of Credit [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Letter of credit outstanding | $ 4,100 | |||||
Line of credit facility weighted average interest rate outstanding percentage | 3.57% | |||||
Unsecured Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Line of credit facility accordion feature | $ 500,000 | |||||
Minimum | Term Loan | LIBOR | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument spread on variable interest rate | 1.30% | |||||
Minimum | Term Loan | Base Rate | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument spread on variable interest rate | 0.30% | |||||
Minimum | Revolving Credit Facility | LIBOR | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument spread on variable interest rate | 1.35% | |||||
Minimum | Revolving Credit Facility | Base Rate | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument spread on variable interest rate | 0.35% | |||||
Maximum | Term Loan | LIBOR | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument spread on variable interest rate | 1.90% | |||||
Maximum | Term Loan | Base Rate | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument spread on variable interest rate | 0.90% | |||||
Maximum | Revolving Credit Facility | LIBOR | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument spread on variable interest rate | 1.95% | |||||
Maximum | Revolving Credit Facility | Base Rate | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument spread on variable interest rate | 0.95% | |||||
Unsecured Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Credit facility maximum borrowing capacity | $ 1,520,000 | |||||
Debt extension period | 1 year | |||||
Additional contingent borrowing capacity, maximum | $ 2,020,000 | |||||
Debt Instrument Carrying Amount | 835,000 | |||||
Outstanding debt | $ 835,000 | |||||
Debt Instrument, Covenant Compliance | the Company was in compliance with all of its covenants | |||||
Unsecured Credit Facility | Term Loan Maturing December 17,2021 | ||||||
Debt Instrument [Line Items] | ||||||
Maturity date | Dec. 17, 2022 | |||||
Unsecured Credit Facility | Term Loan Maturing April 27, 2022 | ||||||
Debt Instrument [Line Items] | ||||||
Credit facility maximum borrowing capacity | $ 820,000 | |||||
Unsecured Credit Facility | Term Loan Maturing April 27 2024 | ||||||
Debt Instrument [Line Items] | ||||||
Credit facility maximum borrowing capacity | $ 350,000 | |||||
Maturity date | Apr. 27, 2024 | |||||
Unsecured Credit Facility | Term Loan Maturing December 17 2023 | ||||||
Debt Instrument [Line Items] | ||||||
Credit facility maximum borrowing capacity | $ 350,000 | |||||
Maturity date | Dec. 17, 2023 | |||||
Unsecured Credit Facility | Maximum | ||||||
Debt Instrument [Line Items] | ||||||
Credit facility maximum borrowing capacity | $ 200,000 |
Debt (Senior Notes) (Details)
Debt (Senior Notes) (Details) - USD ($) $ in Thousands | Jul. 23, 2014 | Nov. 30, 2018 | Mar. 31, 2019 | Dec. 31, 2018 | Apr. 05, 2017 |
Debt Instrument [Line Items] | |||||
Interest rate | 5.875% | ||||
Debt issuance costs, net | $ 7,153 | $ 7,671 | |||
Operating Partnership Quality Tech LP And QTS Finance Corporation | |||||
Debt Instrument [Line Items] | |||||
Aggregate principal amount | $ 400,000 | ||||
Interest rate | 4.75% | ||||
Senior notes due | 2025 | ||||
Maturity date | Nov. 15, 2025 | ||||
Debt issuance costs, net | $ 5,200 | ||||
Percentage of issued price equal to face value | 100.00% | ||||
Term Loan | |||||
Debt Instrument [Line Items] | |||||
Debt issuance costs, net | $ 6,100 | ||||
Term Loan | Interest Rate Swap | |||||
Debt Instrument [Line Items] | |||||
Aggregate principal amount | $ 400,000 | ||||
Term Loan Maturing December 17,2021 | Unsecured Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Maturity date | Dec. 17, 2022 | ||||
Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Maturity date | Dec. 17, 2022 |
Debt (Annual Remaining Principa
Debt (Annual Remaining Principal Payment) (Details) $ in Thousands | Mar. 31, 2019USD ($) |
Debt [Abstract] | |
2019 | $ 52 |
2020 | 71 |
2021 | 74 |
2022 | 136,594 |
2023 | 350,000 |
Thereafter | 750,000 |
Total | $ 1,236,791 |
Derivative Instruments (Details
Derivative Instruments (Details) - USD ($) $ in Thousands | 3 Months Ended | 15 Months Ended | ||||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Dec. 31, 2018 | Dec. 20, 2018 | Apr. 05, 2017 | |
Derivative [Line Items] | ||||||
Interest expense related to payments on interest rate swaps | $ 7,146 | $ 8,110 | ||||
Increase (decrease) in fair value of derivative contracts | (9,853) | $ 5,982 | ||||
Term Loan | ||||||
Derivative [Line Items] | ||||||
Outstanding debt | $ 700,000 | $ 700,000 | ||||
Interest Rate Swap | ||||||
Derivative [Line Items] | ||||||
Derivative instruments, notional amount | $ 400,000 | $ 400,000 | ||||
Ineffectiveness recognized | $ 0 | |||||
Interest Rate Swap | Term Loan | ||||||
Derivative [Line Items] | ||||||
Outstanding debt | 400,000 | |||||
Interest Rate Swap | Term Loan Maturing April 27, 2022 | ||||||
Derivative [Line Items] | ||||||
Derivative instruments, notional amount | 200,000 | 200,000 | ||||
Weighted average effective fixed interest rate | 3.90% | 3.90% | ||||
Interest Rate Swap | Term Loan Maturing December 17,2021 | ||||||
Derivative [Line Items] | ||||||
Derivative instruments, notional amount | $ 200,000 | $ 200,000 | ||||
Weighted average effective fixed interest rate | 3.30% | |||||
Average variable interest rate | 1.30% | 1.30% | ||||
Interest Rate Swap | Term Loan Maturing December 17 2023 | ||||||
Derivative [Line Items] | ||||||
Derivative instruments, notional amount | $ 100,000 | $ 100,000 | ||||
Interest Rate Swap | Term Loan Maturing April 27 2024 | ||||||
Derivative [Line Items] | ||||||
Derivative instruments, notional amount | 100,000 | 100,000 | ||||
Interest Rate Swap | Term Loan Maturing January 2, 2020 | ||||||
Derivative [Line Items] | ||||||
Derivative instruments, notional amount | $ 200,000 | $ 200,000 | ||||
Weighted average effective fixed interest rate | 3.90% | 3.90% | ||||
Average variable interest rate | 1.30% | 1.30% | ||||
Cash flow hedging | Interest Rate Swap | ||||||
Derivative [Line Items] | ||||||
Derivative instruments, notional amount | $ 1,000,000 | $ 1,000,000 | $ 1,000,000 | |||
Derivative Asset, fair Value | 1,900 | 1,900 | 5,300 | |||
Derivative Liability, fair Value | 7,700 | 7,700 | 3,000 | |||
Derivative, Fair Value, Net | $ (5,819) | $ (5,819) | $ 2,343 |
Derivative Instruments - Intere
Derivative Instruments - Interest rate derivatives and their fair values (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 20, 2018 | Apr. 05, 2017 | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||
Reclassification of other comprehensive income to interest expense (income) | $ (494) | $ 402 | ||||
Forecast | ||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||
Reclassification of other comprehensive income to interest expense (income) | $ 1,300 | |||||
Interest Rate Swap | ||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||
Notional amount of derivative | $ 400,000 | $ 400,000 | ||||
Interest Rate Swap | Cash flow hedging | ||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||
Notional amount of derivative | 1,000,000 | $ 1,000,000 | ||||
Fair value | (5,819) | 2,343 | ||||
Swap instrument one matures on December 17, 2021 | Cash flow hedging | ||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||
Notional amount of derivative | $ 25,000 | 25,000 | ||||
Fixed Rate Per annum | 1.989% | |||||
Expiration Date | Dec. 17, 2021 | |||||
Fair value | $ 131 | 331 | ||||
Swap instrument two matures on December 17, 2021 | Cash flow hedging | ||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||
Notional amount of derivative | $ 100,000 | 100,000 | ||||
Fixed Rate Per annum | 1.989% | |||||
Expiration Date | Dec. 17, 2021 | |||||
Fair value | $ 523 | 1,318 | ||||
Swap instrument three matures on December 17, 2021 | Cash flow hedging | ||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||
Notional amount of derivative | $ 75,000 | 75,000 | ||||
Fixed Rate Per annum | 1.989% | |||||
Expiration Date | Dec. 17, 2021 | |||||
Fair value | $ 392 | 990 | ||||
Swap instrument one matures on April 27, 2022 | Cash flow hedging | ||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||
Notional amount of derivative | $ 50,000 | 50,000 | ||||
Fixed Rate Per annum | 2.033% | |||||
Expiration Date | Apr. 27, 2022 | |||||
Fair value | $ 213 | 667 | ||||
Swap instrument two matures on April 27, 2022 | Cash flow hedging | ||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||
Notional amount of derivative | $ 100,000 | 100,000 | ||||
Fixed Rate Per annum | 2.029% | |||||
Expiration Date | Apr. 27, 2022 | |||||
Fair value | $ 436 | 1,341 | ||||
Swap instrument three matures on April 27, 2022 | Cash flow hedging | ||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||
Notional amount of derivative | $ 50,000 | 50,000 | ||||
Fixed Rate Per annum | 2.033% | |||||
Expiration Date | Apr. 27, 2022 | |||||
Fair value | $ 212 | 666 | ||||
Swap instrument one matures on December 17, 2023 | Cash flow hedging | ||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||
Notional amount of derivative | $ 100,000 | 100,000 | ||||
Fixed Rate Per annum | 2.617% | |||||
Expiration Date | Dec. 17, 2023 | |||||
Fair value | $ (1,935) | (782) | ||||
Swap instrument one matures on April 27, 2024 | Cash flow hedging | ||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||
Notional amount of derivative | $ 100,000 | 100,000 | ||||
Fixed Rate Per annum | 2.621% | |||||
Expiration Date | Apr. 27, 2024 | |||||
Fair value | $ (2,071) | (818) | ||||
Swap instrument two matures on December 17, 2023 | Cash flow hedging | ||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||
Notional amount of derivative | $ 200,000 | 200,000 | ||||
Fixed Rate Per annum | 2.636% | |||||
Expiration Date | Dec. 17, 2023 | |||||
Fair value | $ (1,911) | (722) | ||||
Swap instrument two matures on April 27, 2024 | Cash flow hedging | ||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||
Notional amount of derivative | $ 200,000 | 200,000 | ||||
Fixed Rate Per annum | 2.642% | |||||
Expiration Date | Apr. 27, 2024 | |||||
Fair value | $ (1,809) | $ (648) |
Derivative Instruments - Power
Derivative Instruments - Power Purchase Agreements (Details) - Power Purchase Agreements $ in Thousands | 1 Months Ended | 3 Months Ended |
Mar. 31, 2019USD ($)agreement | Mar. 31, 2019USD ($)agreement | |
Derivative [Line Items] | ||
Number of agreements | agreement | 2 | 2 |
Term of agreement | 10 years | |
Cash flow hedging | ||
Derivative [Line Items] | ||
Fair value | $ (1,691) | $ (1,691) |
Cash flow hedging | Piscataway | Calpine Energy Solutions, LLC | ||
Derivative [Line Items] | ||
Expiration Date | Feb. 28, 2029 | |
Fair value | (636) | $ (636) |
Cash flow hedging | Chicago | Calpine Energy Solutions, LLC | ||
Derivative [Line Items] | ||
Expiration Date | Feb. 28, 2029 | |
Fair value | $ (1,055) | $ (1,055) |
Partners' Capital, Equity and_3
Partners' Capital, Equity and Incentive Compensation Plans (Narrative) (Details) | May 09, 2019shares | Apr. 04, 2019$ / shares | Jun. 25, 2018 | Jun. 22, 2018 | Apr. 16, 2018$ / shares | Mar. 15, 2018 | May 04, 2017USD ($)item | Mar. 31, 2019USD ($)itemshares | Mar. 31, 2019USD ($)item$ / sharesshares | Oct. 31, 2018$ / shares | Mar. 31, 2017USD ($) |
Partners Capital And Distributions [Line Items] | |||||||||||
Number of classes of partnership units outstanding | item | 4 | ||||||||||
Equity based compensation expense unrecognized | $ | $ 30,600,000 | $ 30,600,000 | |||||||||
Equity based compensation expense vesting period | 1 year 1 month 6 days | ||||||||||
Equity based compensation awards intrinsic value | $ | $ 20,500,000 | $ 20,500,000 | |||||||||
Preferred stock dividends per share cash paid | $ / shares | $ 0.14844 | ||||||||||
Partnership distribution per unit | $ / shares | $ 0.44 | ||||||||||
Preferred Stock, Dividend Rate, Percentage | 7.125% | ||||||||||
Net proceeds from stock offering | $ | $ 158,663,000 | ||||||||||
QTS Realty Trust, Inc. Employee Stock Purchase Plan | |||||||||||
Partners Capital And Distributions [Line Items] | |||||||||||
Shares reserved for purchase under plan | 250,000 | 250,000 | |||||||||
2017 Plan | |||||||||||
Partners Capital And Distributions [Line Items] | |||||||||||
Minimum period of service | 30 days | ||||||||||
Minimum hours per week of service | item | 30 | ||||||||||
Purchase period per year | item | 4 | ||||||||||
Class B Common Stock | |||||||||||
Partners Capital And Distributions [Line Items] | |||||||||||
Number of votes per share | item | 50 | 50 | |||||||||
Class A Common Stock | At Market | |||||||||||
Partners Capital And Distributions [Line Items] | |||||||||||
Maximum value of stock which may be issued | $ | $ 300,000,000 | ||||||||||
Class A Common Stock | 2017 Plan | |||||||||||
Partners Capital And Distributions [Line Items] | |||||||||||
Discount rate of purchase price of common stock | 10.00% | ||||||||||
Series A Redeemable Perpetual Preferred | |||||||||||
Partners Capital And Distributions [Line Items] | |||||||||||
Dividend paid to common stockholders | $ / shares | $ 0.45 | ||||||||||
Series A Redeemable Perpetual Preferred | Preferred stock | |||||||||||
Partners Capital And Distributions [Line Items] | |||||||||||
Shares issued | 4,280,000 | ||||||||||
Series B Convertible preferred stock [Member] | |||||||||||
Partners Capital And Distributions [Line Items] | |||||||||||
Dividend paid to common stockholders | $ / shares | $ 1.63 | ||||||||||
Preferred stock dividends per share cash paid | $ / shares | $ 1.9861111 | ||||||||||
Preferred Stock, Dividend Rate, Percentage | 6.50% | 6.50% | |||||||||
Chief Executive Officer | Class B Common Stock | |||||||||||
Partners Capital And Distributions [Line Items] | |||||||||||
Percentage of operating partnership unit exchanged | 2.00% | ||||||||||
Minimum | 2017 Plan | |||||||||||
Partners Capital And Distributions [Line Items] | |||||||||||
Minimum percentage of combined voting power | 5.00% | ||||||||||
Deductions per paycheck for purchase of shares | $ | $ 20 | ||||||||||
Holding period after purchase of share | 1 year | ||||||||||
Maximum | 2017 Plan | |||||||||||
Partners Capital And Distributions [Line Items] | |||||||||||
Deductions per paycheck for purchase of shares | $ | $ 1,000 | ||||||||||
Restricted Class A Common Stock | |||||||||||
Partners Capital And Distributions [Line Items] | |||||||||||
Nonvested awards outstanding | 600,000 | 600,000 | |||||||||
Performance-Based FFO Units | |||||||||||
Partners Capital And Distributions [Line Items] | |||||||||||
Options outstanding | 86,089 | 86,089 | |||||||||
Performance-Based FFO Units | Minimum | Class A Common Stock | |||||||||||
Partners Capital And Distributions [Line Items] | |||||||||||
Percentage of target award | 0.00% | ||||||||||
Performance-Based FFO Units | Maximum | Class A Common Stock | |||||||||||
Partners Capital And Distributions [Line Items] | |||||||||||
Percentage of target award | 200.00% | ||||||||||
Performance-Based Relative TSR Units | |||||||||||
Partners Capital And Distributions [Line Items] | |||||||||||
Vesting period | 3 years | ||||||||||
Options outstanding | 86,089 | 86,089 | |||||||||
Performance-Based Relative TSR Units | Minimum | Class A Common Stock | |||||||||||
Partners Capital And Distributions [Line Items] | |||||||||||
Percentage of target award | 0.00% | ||||||||||
Performance-Based Relative TSR Units | Maximum | Class A Common Stock | |||||||||||
Partners Capital And Distributions [Line Items] | |||||||||||
Percentage of target award | 200.00% | ||||||||||
Options to purchase Class A common stock | |||||||||||
Partners Capital And Distributions [Line Items] | |||||||||||
Options outstanding | 600,000 | 600,000 | |||||||||
2013 Equity Incentive Plan | Class A Common Stock | |||||||||||
Partners Capital And Distributions [Line Items] | |||||||||||
Authorized shares to be issued under the plan | 1,750,000 | 1,750,000 | |||||||||
Additional shares available for issuance under plan approved by stockholders | 1,110,000 | ||||||||||
Qualitytech, LP | |||||||||||
Partners Capital And Distributions [Line Items] | |||||||||||
Net proceeds from stock offering | $ | $ 158,663,000 | ||||||||||
First portion | Performance-Based FFO Units | |||||||||||
Partners Capital And Distributions [Line Items] | |||||||||||
Vesting period | 2 years | ||||||||||
Vesting percentage | 67.00% | ||||||||||
Second portion | Performance-Based FFO Units | |||||||||||
Partners Capital And Distributions [Line Items] | |||||||||||
Vesting period | 3 years | ||||||||||
Vesting percentage | 33.00% |
Partners' Capital, Equity and_4
Partners' Capital, Equity and Incentive Compensation Plans (Summary of Award Activity Under 2010 Equity Incentive Plan and 2013 Equity Incentive Plan and Related Information) (Details) - $ / shares | 1 Months Ended | 3 Months Ended |
Nov. 30, 2018 | Mar. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Reduction of price, percentage | 20.00% | |
Performance-Based Relative TSR Units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Options, Granted (in shares) | 86,089 | |
Ending balance, Options Outstanding (in shares) | 86,089 | |
Weighted average fair value, granted, options | $ 54.64 | |
Ending balance, weighted average fair value, options | $ 54.64 | |
Performance-Based FFO Units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Options, Granted (in shares) | 86,089 | |
Ending balance, Options Outstanding (in shares) | 86,089 | |
Weighted average fair value, granted, options | $ 42.01 | |
Ending balance, weighted average fair value, options | $ 42.01 | |
2013 Equity Incentive Plan | Options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Beginning balance, Options Outstanding (in shares) | 2,037,163 | |
Options, Granted (in shares) | 124,955 | |
Options, Exercised (in shares) | (96,589) | |
Options, Cancelled/Expired (in shares) | (60,285) | |
Ending balance, Options Outstanding (in shares) | 2,005,244 | |
Beginning balance, Weighted average exercise price options outstanding | $ 36.86 | |
Weighted average exercise price options outstanding, Granted | 42.01 | |
Weighted average exercise price options outstanding, Exercised | 27.82 | |
Weighted average exercise price options outstanding, Cancelled/Expired | 46.07 | |
Ending balance, Weighted average exercise price options outstanding | 37.34 | |
Beginning balance, weighted average fair value, options | 7.10 | |
Weighted average fair value, granted, options | 7.56 | |
Weighted average fair value, vested, options | 5.58 | |
Weighted average fair value, cancelled/expired, options | 9.62 | |
Ending balance, weighted average fair value, options | $ 7.12 | |
2013 Equity Incentive Plan | Restricted Stock | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Beginning balance, Options Outstanding (in shares) | 420,309 | |
Options, Granted (in shares) | 265,231 | |
Options, Exercised (in shares) | (95,330) | |
Options, Cancelled/Expired (in shares) | (54,041) | |
Ending balance, Options Outstanding (in shares) | 536,169 | |
Beginning balance, weighted average fair value, options | $ 37.83 | |
Weighted average fair value, granted, options | 42.01 | |
Weighted average fair value, vested, options | 37.12 | |
Weighted average fair value, cancelled/expired, options | 38.73 | |
Ending balance, weighted average fair value, options | $ 39.93 | |
Class O Units | 2010 Equity Incentive Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Beginning balance, Number of units (in shares) | 102,279 | |
Ending balance, Number of units (in shares) | 102,279 | |
Beginning balance, Weighted average exercise price units | $ 24.05 | |
Ending balance, Weighted average exercise price units | 24.05 | |
Beginning balance, Weighted average fair value | 5.67 | |
Ending balance, Weighted average fair value | $ 5.67 |
Partners' Capital, Equity and_5
Partners' Capital, Equity and Incentive Compensation Plans (Summary of Assumptions and Fair Values for Restricted Stock and Options to Purchase Shares of Class A Common Stock Granted) (Details) | 3 Months Ended |
Mar. 31, 2019$ / shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Fair value of FFO units and restricted stock granted | 42.01 |
Fair value of TSR units granted | 54.64 |
Fair value of options granted | $ 7.56 |
Expected term (years) | 5 years 6 months |
Expected volatility | 28.00% |
Expected dividend yield | 4.19% |
Expected risk-free interest rates | 2.56% |
Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Fair value of restricted stock granted | $ 42.01 |
Fair value of options granted | $ 7.56 |
Expected risk-free interest rates | 2.56% |
Class O Units | Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected term (years) | 5 years 6 months |
Partners' Capital, Equity and_6
Partners' Capital, Equity and Incentive Compensation Plans (Summary of Information About Awards Outstanding) (Details) | 3 Months Ended |
Mar. 31, 2019$ / sharesshares | |
QualityTech LP | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Awards Outstanding | 102,279 |
QTS Realty Trust, Inc Awards Outstanding | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Awards Outstanding | 2,713,591 |
Remaining term of awards | 9 months 18 days |
QTS Realty Trust, Inc Awards Outstanding | Restricted Stock | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Awards Outstanding | 536,169 |
Remaining term of awards | 2 years |
QTS Realty Trust, Inc Awards Outstanding | Performance-Based Relative TSR Units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Awards Outstanding | 86,089 |
Remaining term of awards | 2 years 9 months 18 days |
QTS Realty Trust, Inc Awards Outstanding | Performance-Based FFO Units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Awards Outstanding | 86,089 |
Remaining term of awards | 2 years 9 months 18 days |
QTS Realty Trust, Inc Awards Outstanding | Options to purchase Class A common stock | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Lower limit of exercise price | $ / shares | $ 21 |
Upper limit of exercise price | $ / shares | $ 50.66 |
Awards Outstanding | 2,005,244 |
Class O Units | QualityTech LP | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Lower limit of exercise price | $ / shares | $ 20 |
Upper limit of exercise price | $ / shares | $ 25 |
Awards Outstanding | 102,279 |
Remaining term of awards | 0 years |
Partners' Capital, Equity and_7
Partners' Capital, Equity and Incentive Compensation Plans (Schedule of Quarterly Cash Dividends) (Details) - USD ($) $ / shares in Units, $ in Thousands | Apr. 04, 2019 | Mar. 20, 2019 | Dec. 21, 2018 | Jun. 25, 2018 | Jun. 22, 2018 | Apr. 16, 2018 | Mar. 15, 2018 | Dec. 05, 2017 | Mar. 31, 2019 | Mar. 31, 2018 | Oct. 31, 2018 | Dec. 31, 2018 |
Record Date | Mar. 20, 2019 | |||||||||||
Partnership distribution per unit | $ 0.44 | |||||||||||
Dividend rate (as a percent) | 7.125% | |||||||||||
Preferred stock, shares issued | 4,280,000 | |||||||||||
Preferred stock issuance proceeds, net of costs | $ 103,615 | |||||||||||
Preferred stock dividends per share cash paid | $ 0.14844 | |||||||||||
Preferred stock redemption price per share | $ 25 | |||||||||||
Threshold period of redemption of preferred stock | 120 days | |||||||||||
Ownership interest | 50.00% | |||||||||||
Convertible preferred stock par value | $ 0.01 | |||||||||||
Preferred stock, liquidation preference | $ 25 | 25 | ||||||||||
Share cap price | $ 1.46929 | |||||||||||
Series A Preferred Stock | ||||||||||||
Record Date | Dec. 31, 2018 | |||||||||||
Payment Date | Jan. 15, 2019 | |||||||||||
Per Common Share and Per Unit Rate | $ 0.45 | |||||||||||
Dividend/Distribution Amount | $ 1,900 | $ 1,900 | ||||||||||
Series B Preferred Stock | ||||||||||||
Record Date | Dec. 31, 2018 | |||||||||||
Payment Date | Jan. 15, 2019 | |||||||||||
Per Common Share and Per Unit Rate | $ 1.63 | |||||||||||
Dividend/Distribution Amount | $ 5,100 | $ 5,100 | ||||||||||
Series A Redeemable Perpetual Preferred | ||||||||||||
Per Common Share and Per Unit Rate | $ 0.45 | |||||||||||
Series B Convertible preferred stock [Member] | ||||||||||||
Per Common Share and Per Unit Rate | $ 1.63 | |||||||||||
Dividend rate (as a percent) | 6.50% | 6.50% | ||||||||||
Preferred stock, shares issued | 3,162,500 | |||||||||||
Preferred stock issuance proceeds, net of costs | $ 304,000 | |||||||||||
Minimum percentage of closing sale price of common stock under preferred stock conversion (as a percent) | 2.1278% | |||||||||||
Minimum trading days of closing sale price of common stock under preferred stock conversion (in days) | 20 years | |||||||||||
Maximum trading days of closing sale price of common stock under preferred stock conversion including the last trading day (in days) | 30 days | |||||||||||
Preferred stock dividends per share cash paid | $ 1.9861111 | |||||||||||
Preferred stock, liquidation preference | $ 100 | |||||||||||
Period of average daily volume weighted average price | 10 years | |||||||||||
Share cap price | $ 5.1020 | |||||||||||
Series B Convertible preferred stock [Member] | Minimum | ||||||||||||
Minimum percentage of closing sale price of common stock under preferred stock conversion (as a percent) | 150.00% | |||||||||||
Underwriter's Option | ||||||||||||
Preferred stock, shares issued | 280,000 | |||||||||||
Underwriter's Option | Series B Convertible preferred stock [Member] | ||||||||||||
Preferred stock, shares issued | 412,500 | |||||||||||
Common stock | ||||||||||||
Record Date | Dec. 21, 2018 | Dec. 5, 2017 | ||||||||||
Payment Date | Jan. 8, 2019 | Jan. 5, 2018 | ||||||||||
Per Common Share and Per Unit Rate | $ 0.41 | $ 0.39 | ||||||||||
Dividend/Distribution Amount | $ 23,700 | $ 22,200 | $ 23,700 | $ 22,200 | ||||||||
Common stock | Subsequent Event | ||||||||||||
Per Common Share and Per Unit Rate | $ 0.44 |
Partners' Capital, Equity and_8
Partners' Capital, Equity and Incentive Compensation Plans (Details) - Class A Common Stock - Underwritten Offering - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 3 Months Ended |
Feb. 28, 2019 | Mar. 31, 2019 | |
Partners Capital And Distributions [Line Items] | ||
Shares under underwritten offering | 7,762,500 | |
Shares issued | 4,000,000 | |
Common Stock, Capital Shares Reserved for Future Issuance | 3,762,500 | |
Share Price | $ 41.50 | |
Proceeds From Issuance Of Common Stock | $ 159 | $ 148 |
Related Party Transactions (Sum
Related Party Transactions (Summary of Related Party Transactions) (Details) - Affiliated Entity - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Related Party Transaction [Line Items] | ||
Tax, utility, insurance and other reimbursement | $ 261 | $ 261 |
Rent expense | 254 | 254 |
Capital assets acquired | 54 | 158 |
Total | $ 569 | $ 673 |
Noncontrolling Interest (Narrat
Noncontrolling Interest (Narrative) (Details) | 3 Months Ended | |
Mar. 31, 2019 | Oct. 13, 2013 | |
Stock conversion ratio | 1 | |
Qualitytech, LP | QTS Reality Trust | ||
Quality Tech LP ownership percentage in operating partnership | 10.80% | 21.20% |
Earnings per share of QTS Rea_3
Earnings per share of QTS Realty Trust, Inc. (Computation of Basic and Diluted Net Income per Share) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Earnings per Share [Abstract] | ||
Net income (loss) | $ 21,148 | $ (252) |
Loss (Income) attributable to noncontrolling interests | (1,590) | 29 |
Preferred stock dividends | (7,045) | (328) |
Earnings attributable to participating securities | (1,935) | (258) |
Net income (loss) available to common stockholders after allocation of participating securities | $ 10,578 | $ (809) |
Weighted average shares outstanding - basic | 51,948 | 50,279 |
Effect of Class O units and options to purchase Class A common stock and restricted Class A common stock on an "as if" converted basis | 347 | |
Weighted average shares outstanding - diluted | 52,295 | 50,279 |
Basic net income (loss) per share | $ 0.20 | $ (0.02) |
Diluted net income (loss) per share | $ 0.20 | $ (0.02) |
Earnings per share of QTS Rea_4
Earnings per share of QTS Realty Trust, Inc.(Narrative) (Details) - shares shares in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Class A Common Stock | ||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||
Antidilutive shares excluded from the computation of diluted net earning per share | 6.7 | 6.6 |
Class O Units | ||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||
Antidilutive shares excluded from the computation of diluted net earning per share | 0.5 | |
Series B Convertible preferred stock | ||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||
Antidilutive shares excluded from the computation of diluted net earning per share | 6.7 |
Contracts with Customers (Detai
Contracts with Customers (Details) $ in Thousands | Mar. 31, 2019USD ($) |
Contracts with Customers [Abstract] | |
2019 (April - December) | $ 277,683 |
2020 | 308,650 |
2021 | 250,263 |
2022 | 163,494 |
2023 | 88,227 |
Thereafter | 107,386 |
Total | $ 1,195,703 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Narrative) (Details) $ in Millions | Mar. 31, 2019USD ($) |
Senior Notes. | Fair Value Measurements, Level 2 | |
Fair Value Of Financial Instruments [Line Items] | |
Fair value of loan based on current market rates | $ 387 |
Subsequent Events (Narrative) (
Subsequent Events (Narrative) (Details) - Subsequent Event $ in Millions | 1 Months Ended |
Apr. 30, 2019USD ($)ft²MWhitem | |
Subsequent Event [Line Items] | |
Number of Data Centers Acquired | item | 2 |
Acquisition cost | $ | $ 44 |
Floor capacity (in square feet) | ft² | 160,000 |
Gross power capacity (in megawatt) | MWh | 30 |