Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended |
Sep. 30, 2014 | |
Document And Entity Information [Abstract] | |
Document Type | S-4 |
Amendment Flag | FALSE |
Document Period End Date | 30-Sep-14 |
Entity Registrant Name | QualityTech, LP |
Entity Central Index Key | 1561164 |
Entity Filer Category | Non-accelerated Filer |
Current Fiscal Year End Date | -19 |
BALANCE_SHEETS
BALANCE SHEETS (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | |||
Real Estate Assets | |||
Land | $48,576 | $30,601 | $24,713 |
Buildings and improvements | 894,014 | 728,230 | 622,506 |
Less: Accumulated depreciation | -168,210 | -137,725 | -102,900 |
Total real estate assets | 774,380 | 621,106 | 544,319 |
Construction in progress | 174,470 | 146,904 | 87,609 |
Real Estate Assets, net | 948,850 | 768,010 | 631,928 |
Cash and cash equivalents | 5,045 | 5,210 | 8,232 |
Restricted cash | 146 | ||
Rents and other receivables, net | 13,928 | 14,434 | 11,943 |
Acquired intangibles, net | 18,745 | 5,396 | 9,145 |
Deferred costs, net | 33,686 | 19,150 | 15,062 |
Prepaid expenses | 4,042 | 1,797 | 1,011 |
Other assets, net | 25,853 | 17,359 | 7,976 |
TOTAL ASSETS | 1,050,149 | 831,356 | 685,443 |
LIABILITIES | |||
Mortgage notes payable | 87,175 | 88,839 | 171,291 |
Secured credit facility | 316,500 | ||
Unsecured credit facility | 197,000 | 256,500 | |
Senior notes | 297,671 | ||
Capital lease obligations | 9,042 | 2,538 | 2,491 |
Accounts payable and accrued liabilities | 52,094 | 63,204 | 36,001 |
Dividends payable | 10,541 | 8,965 | |
Advance rents, security deposits and other liabilities | 3,217 | 3,261 | 3,011 |
Deferred income | 9,529 | 7,892 | 6,745 |
Derivative liability | 453 | 767 | |
Member advances and notes payable | 26,958 | ||
TOTAL LIABILITIES | 666,269 | 431,652 | 563,764 |
EQUITY | |||
Common stock | 290 | 289 | |
Partners' capital | 121,679 | ||
Additional paid-in capital | 321,119 | 318,834 | |
Accumulated other comprehensive income (loss) | -357 | ||
Accumulated dividends in excess of earnings | -18,599 | -3,799 | |
Accumulated deficit | -3,799 | ||
Total stockholders' equity | 302,810 | 314,967 | 121,679 |
Noncontrolling interests | 81,070 | 84,737 | |
TOTAL EQUITY | 383,880 | 399,704 | 121,679 |
TOTAL LIABILITIES AND EQUITY | 1,050,149 | 831,356 | 685,443 |
Qualitytech, LP [Member] | |||
Real Estate Assets | |||
Land | 48,576 | 30,601 | 24,713 |
Buildings and improvements | 894,014 | 728,230 | 622,506 |
Less: Accumulated depreciation | -168,210 | -137,725 | -102,900 |
Total real estate assets | 774,380 | 621,106 | 544,319 |
Construction in progress | 174,470 | 146,904 | 87,609 |
Real Estate Assets, net | 948,850 | 768,010 | 631,928 |
Cash and cash equivalents | 5,045 | 5,210 | 8,232 |
Restricted cash | 146 | ||
Rents and other receivables, net | 13,928 | 14,434 | 11,943 |
Acquired intangibles, net | 18,745 | 5,396 | 9,145 |
Deferred costs, net | 33,686 | 19,150 | 15,062 |
Prepaid expenses | 4,042 | 1,797 | 1,011 |
Other assets, net | 25,853 | 17,359 | 7,976 |
TOTAL ASSETS | 1,050,149 | 831,356 | 685,443 |
LIABILITIES | |||
Mortgage notes payable | 87,175 | 88,839 | 171,291 |
Secured credit facility | 316,500 | ||
Unsecured credit facility | 197,000 | 256,500 | |
Senior notes | 297,671 | ||
Capital lease obligations | 9,042 | 2,538 | 2,491 |
Accounts payable and accrued liabilities | 52,094 | 63,204 | 36,001 |
Dividends payable | 10,541 | 8,965 | |
Advance rents, security deposits and other liabilities | 3,217 | 3,261 | 3,011 |
Deferred income | 9,529 | 7,892 | 6,745 |
Derivative liability | 453 | 767 | |
Member advances and notes payable | 26,958 | ||
TOTAL LIABILITIES | 666,269 | 431,652 | 563,764 |
EQUITY | |||
Partners' capital | 383,880 | 399,704 | 121,679 |
TOTAL LIABILITIES AND EQUITY | $1,050,149 | $831,356 | $685,443 |
BALANCE_SHEETS_Parenthetical
BALANCE SHEETS (Parenthetical) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Statement Of Financial Position [Abstract] | |||
Common stock, par value | $0.01 | $0.01 | $0.01 |
Common stock, shares authorized | 450,133,000 | 450,133,000 | 450,133,000 |
Common stock, shares issued | 29,016,774 | 28,972,774 | 28,972,774 |
Common stock, shares outstanding | 29,016,774 | 28,972,774 | 28,972,774 |
STATEMENTS_OF_OPERATIONS_AND_C
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (UNAUDITED) (USD $) | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||
In Thousands, except Share data, unless otherwise specified | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2013 | Oct. 14, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | |||
Revenues: | ||||||||||||
Rental | $45,448 | $33,304 | $127,993 | |||||||||
Recoveries from customers | 6,131 | 2,674 | 13,674 | |||||||||
Cloud and managed services | 5,242 | 4,074 | 14,443 | |||||||||
Other | 1,124 | 410 | 2,116 | |||||||||
Total revenues | 57,945 | 40,462 | 158,226 | |||||||||
Operating Expenses: | ||||||||||||
Property operating costs | 20,369 | 13,482 | 53,121 | |||||||||
Real estate taxes and insurance | 1,377 | 1,016 | 3,713 | |||||||||
Depreciation and amortization | 15,210 | 11,238 | 42,274 | |||||||||
General and administrative | 11,045 | 8,457 | 33,296 | |||||||||
Transaction costs | -195 | 66 | 958 | |||||||||
Restructuring charge | 226 | 1,272 | ||||||||||
Total operating expenses | 48,032 | 34,259 | 134,634 | |||||||||
Operating income | 9,913 | 6,203 | 23,592 | |||||||||
Other income and expenses: | ||||||||||||
Interest income | 1 | 8 | ||||||||||
Interest expense | -5,410 | -2,049 | -9,683 | |||||||||
Other (expense) income, net | -470 | -153 | -580 | |||||||||
Income (loss) before gain on sale of real estate | 4,002 | |||||||||||
Income (loss) before taxes | 4,033 | 13,337 | ||||||||||
Tax expense of taxable REIT subsidiaries | -27 | -82 | ||||||||||
Net income (loss) | 4,006 | 4,002 | 13,255 | |||||||||
Net income attributable to noncontrolling interests | -849 | -848 | -2,810 | |||||||||
Net income (loss) attributable to QTS Realty Trust, Inc | 3,157 | 3,154 | 10,445 | |||||||||
Unrealized gain (loss) on swap | 74 | |||||||||||
Comprehensive income (loss) | 3,157 | 3,228 | 10,445 | |||||||||
Net income per share attributable to common shares: | ||||||||||||
Basic | $0.11 | $0.11 | $0.36 | |||||||||
Diluted | $0.11 | $0.11 | $0.36 | |||||||||
Weighted average common shares outstanding: | ||||||||||||
Basic | 29,016,774 | 28,972,774 | 29,006,620 | |||||||||
Diluted | 37,251,769 | [1] | 36,794,215 | [2] | 37,039,603 | [1] | ||||||
Historical Predecessor [Member] | ||||||||||||
Revenues: | ||||||||||||
Rental | 37,595 | 106,184 | 112,002 | 120,758 | 104,051 | |||||||
Recoveries from customers | 3,603 | 9,925 | 10,424 | 9,294 | 12,154 | |||||||
Cloud and managed services | 4,393 | 12,828 | 13,457 | 14,497 | 12,173 | |||||||
Other | 429 | 1,521 | 1,542 | 1,210 | 2,018 | |||||||
Total revenues | 46,020 | 130,458 | 137,425 | 145,759 | 130,396 | |||||||
Operating Expenses: | ||||||||||||
Property operating costs | 15,638 | 44,930 | 47,268 | 51,506 | 57,900 | |||||||
Real estate taxes and insurance | 1,101 | 3,304 | 3,476 | 3,632 | 2,621 | |||||||
Depreciation and amortization | 12,136 | 34,197 | 36,120 | 34,932 | 26,165 | |||||||
General and administrative | 10,097 | 29,387 | 30,726 | 35,986 | 28,470 | |||||||
Transaction costs | 52 | 897 | ||||||||||
Gain on legal settlement | -3,357 | |||||||||||
Restructuring charge | 3,291 | |||||||||||
Total operating expenses | 38,972 | 111,818 | 117,642 | 130,244 | 111,799 | |||||||
Operating income | 7,048 | 18,640 | 19,783 | 15,515 | 18,597 | |||||||
Other income and expenses: | ||||||||||||
Interest income | 4 | 17 | 17 | 61 | 71 | |||||||
Interest expense | -4,343 | -15,977 | -16,675 | -25,140 | -19,713 | |||||||
Other (expense) income, net | -3,277 | -3,277 | -1,151 | 136 | ||||||||
Income (loss) before gain on sale of real estate | -152 | -10,715 | -909 | |||||||||
Gain on sale of real estate | 948 | |||||||||||
Income (loss) before taxes | 2,709 | -597 | ||||||||||
Net income (loss) | 2,709 | -597 | -152 | -9,767 | -909 | |||||||
Net income (loss) attributable to QTS Realty Trust, Inc | 2,709 | -597 | -152 | -9,767 | -909 | |||||||
Unrealized gain (loss) on swap | 8 | 220 | 220 | -766 | ||||||||
Comprehensive income (loss) | 2,717 | -377 | 68 | -10,533 | -909 | |||||||
Qualitytech, LP [Member] | ||||||||||||
Revenues: | ||||||||||||
Rental | 45,448 | 127,993 | 37,595 | 106,184 | 120,758 | 104,051 | 145,306 | |||||
Recoveries from customers | 6,131 | 13,674 | 3,603 | 9,925 | 9,294 | 12,154 | 13,098 | |||||
Cloud and managed services | 5,242 | 14,443 | 4,393 | 12,828 | 14,497 | 12,173 | 17,531 | |||||
Other | 1,124 | 2,116 | 429 | 1,521 | 1,210 | 2,018 | 1,952 | |||||
Total revenues | 57,945 | 158,226 | 46,020 | 130,458 | 145,759 | 130,396 | 177,887 | |||||
Operating Expenses: | ||||||||||||
Property operating costs | 20,369 | 53,121 | 15,638 | 44,930 | 51,506 | 57,900 | 60,750 | |||||
Real estate taxes and insurance | 1,377 | 3,713 | 1,101 | 3,304 | 3,632 | 2,621 | 4,492 | |||||
Depreciation and amortization | 15,210 | 42,274 | 12,136 | 34,197 | 34,932 | 26,165 | 47,358 | |||||
General and administrative | 11,045 | 33,296 | 10,097 | 29,387 | 35,986 | 28,470 | 39,183 | |||||
Transaction costs | -195 | 958 | 897 | 118 | ||||||||
Gain on legal settlement | -3,357 | |||||||||||
Restructuring charge | 226 | 1,272 | 3,291 | |||||||||
Total operating expenses | 48,032 | 134,634 | 38,972 | 111,818 | 130,244 | 111,799 | 151,901 | |||||
Operating income | 9,913 | 23,592 | 7,048 | 18,640 | 15,515 | 18,597 | 25,986 | |||||
Other income and expenses: | ||||||||||||
Interest income | 8 | 4 | 17 | 61 | 71 | 18 | ||||||
Interest expense | -5,410 | -9,683 | -4,343 | -15,977 | -25,140 | -19,713 | -18,724 | |||||
Other (expense) income, net | -470 | -580 | -3,277 | -1,151 | 136 | -3,430 | ||||||
Income (loss) before gain on sale of real estate | -10,715 | -909 | 3,850 | |||||||||
Gain on sale of real estate | 948 | |||||||||||
Income (loss) before taxes | 4,033 | 13,337 | 2,709 | -597 | ||||||||
Tax expense of taxable REIT subsidiaries | -27 | -82 | ||||||||||
Net income (loss) | 4,006 | 13,255 | 2,709 | -597 | -9,767 | -909 | 3,850 | |||||
Net income (loss) attributable to QTS Realty Trust, Inc | 2,709 | |||||||||||
Unrealized gain (loss) on swap | 8 | 220 | -766 | 294 | ||||||||
Comprehensive income (loss) | $4,006 | $13,255 | $2,717 | ($377) | ($10,533) | ($909) | $4,144 | |||||
Weighted average common shares outstanding: | ||||||||||||
Diluted | 8,104,000 | 7,821,000 | 7,939,000 | |||||||||
[1] | Includes 8,104 and 7,939 units of the Operating Partnership as of the three and nine months ended September 30, 2014, respectively. | |||||||||||
[2] | Includes 7,821 shares of the Operating Partnership |
CONSOLIDATED_STATEMENTS_OF_EQU
CONSOLIDATED STATEMENTS OF EQUITY (UNAUDITED) (USD $) | Qualitytech, LP [Member] | Qualitytech, LP [Member] | Qualitytech, LP [Member] | Qualitytech, LP [Member] | Partnership Units [Member] | Partners Capital [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated other Comprehensive Income (Loss) [Member] | Accumulated Dividends in Excess of Earnings [Member] | Total stockholders' Equity [Member] | Noncontrolling Interest [Member] | Total |
In Thousands | Partnership Units [Member] | Partnership Units [Member] | Partnership Units [Member] | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | |
General Partner [Member] | Limited Partner [Member] | ||||||||||||
USD ($) | USD ($) | ||||||||||||
Beginning balance at Dec. 31, 2010 | $2 | $40,007 | $40,009 | ||||||||||
Beginning balance at Dec. 31, 2010 | 40,009 | 40,009 | |||||||||||
Beginning balance, shares at Dec. 31, 2010 | 1 | 16,049 | 16,050 | ||||||||||
Equity-based compensation expense | 765 | 765 | 765 | 765 | |||||||||
Net income (loss) | -1 | -908 | -909 | -909 | -909 | ||||||||
Ending balance at Dec. 31, 2011 | 39,864 | 39,865 | 39,865 | ||||||||||
Ending balance at Dec. 31, 2011 | 39,865 | ||||||||||||
Ending balance, shares at Dec. 31, 2011 | 1 | 16,049 | 16,050 | ||||||||||
Equity-based compensation expense | 412 | 412 | 412 | 412 | |||||||||
Issuance of RS LTIP Units | 150 | 150 | |||||||||||
Equity investment in Class D units, net of costs | 91,935 | 91,935 | 91,935 | 91,935 | |||||||||
Equity investment in Class D units, net of costs, shares | 3,680 | 3,680 | |||||||||||
PIK settlement | 2,294 | 2,294 | |||||||||||
Other comprehensive loss | -766 | -766 | -766 | -766 | |||||||||
Net income (loss) | -1 | -9,766 | -9,767 | -9,767 | -9,767 | ||||||||
Ending balance at Dec. 31, 2012 | 121,679 | 121,679 | 121,679 | ||||||||||
Ending balance at Dec. 31, 2012 | 121,679 | ||||||||||||
Ending balance, shares at Dec. 31, 2012 | 1 | 22,173 | 22,174 | ||||||||||
Equity-based compensation expense | 1,305 | ||||||||||||
Ending balance at Sep. 30, 2013 | |||||||||||||
Beginning balance at Dec. 31, 2012 | 121,679 | ||||||||||||
Beginning balance at Dec. 31, 2012 | 121,679 | ||||||||||||
Beginning balance, shares at Dec. 31, 2012 | 22,174 | ||||||||||||
Equity-based compensation expense | 1,369 | 1,369 | |||||||||||
Member advances exchanged for LP units | 10,000 | 10,000 | |||||||||||
Member advances exchanged for LP units, shares | 400 | ||||||||||||
Partnership distributions | -7,633 | -7,633 | |||||||||||
Other comprehensive loss | 220 | 220 | |||||||||||
Net income (loss) | -152 | -152 | |||||||||||
Ending balance at Oct. 14, 2013 | 125,483 | ||||||||||||
Ending balance at Oct. 14, 2013 | 125,483 | ||||||||||||
Ending balance, shares at Oct. 14, 2013 | 22,574 | ||||||||||||
Beginning balance at Dec. 31, 2012 | 121,679 | 121,679 | |||||||||||
Beginning balance, shares at Dec. 31, 2012 | 22,173 | ||||||||||||
Net proceeds from IPO | 279,059 | 279,059 | |||||||||||
Net proceeds from IPO, shares | 14,197 | ||||||||||||
Equity-based compensation expense | 1,960 | ||||||||||||
Equity-based compensation expense, net of equity awards repurchased | 1,947 | 1,947 | |||||||||||
Member advances exchanged for LP units | 10,000 | 10,000 | |||||||||||
Member advances exchanged for LP units, shares | 400 | ||||||||||||
Partnership distributions | -9,645 | -9,645 | |||||||||||
Other comprehensive loss | -233 | -233 | |||||||||||
Dividend to shareholders | -6,953 | -6,953 | |||||||||||
Net income (loss) | 3,850 | 3,850 | |||||||||||
Ending balance at Dec. 31, 2013 | 399,704 | 399,704 | |||||||||||
Ending balance, shares at Dec. 31, 2013 | 1 | 36,770 | |||||||||||
Beginning balance at Oct. 14, 2013 | 125,483 | ||||||||||||
Beginning balance at Oct. 14, 2013 | 125,483 | 125,483 | |||||||||||
Beginning balance, shares at Oct. 14, 2013 | 22,574 | ||||||||||||
Reclassify partners capital | -125,483 | 148 | 39,338 | -85,997 | 85,997 | ||||||||
Reclassify partners capital, shares | -22,574 | 14,776 | |||||||||||
Net proceeds from IPO | 141 | 278,918 | 279,059 | 279,059 | |||||||||
Net proceeds from IPO, shares | 14,197 | ||||||||||||
Equity-based compensation expense | 578 | 578 | 578 | ||||||||||
Other comprehensive loss | -357 | -357 | -96 | -453 | |||||||||
Dividend to shareholders | -6,953 | -6,953 | -6,953 | ||||||||||
Distribution to noncontrolling interests | -2,012 | -2,012 | |||||||||||
Net income (loss) | 3,154 | 3,154 | 848 | 4,002 | |||||||||
Ending balance at Dec. 31, 2013 | 289 | 318,834 | -357 | -3,799 | 314,967 | 84,737 | 399,704 | ||||||
Ending balance, shares at Dec. 31, 2013 | 1 | 36,770 | 36,770 | ||||||||||
Ending balance, shares at Dec. 31, 2013 | 28,973 | ||||||||||||
Beginning balance at Dec. 31, 2013 | 399,704 | 399,704 | |||||||||||
Issuance of shares through equity award plan | 1 | -1 | |||||||||||
Issuance of shares through equity award plan, shares | 44 | 44 | |||||||||||
Equity-based compensation expense | 2,901 | 2,901 | 2,286 | 2,286 | 615 | 2,901 | |||||||
Partnership distributions | -7,188 | -7,188 | |||||||||||
Other comprehensive loss | 453 | 453 | 357 | 357 | 96 | 453 | |||||||
Dividend to shareholders | -25,245 | -25,245 | -25,245 | -25,245 | -25,245 | ||||||||
Distribution to noncontrolling interests | -7,188 | -7,188 | |||||||||||
Net income (loss) | 13,255 | 13,255 | 10,445 | 10,445 | 2,810 | 13,255 | |||||||
Ending balance at Sep. 30, 2014 | 383,880 | 383,880 | |||||||||||
Ending balance at Sep. 30, 2014 | $290 | $321,119 | ($18,599) | $302,810 | $81,070 | $383,880 | |||||||
Ending balance, shares at Sep. 30, 2014 | 1 | 36,814 | |||||||||||
Ending balance, shares at Sep. 30, 2014 | 29,017 |
STATEMENTS_OF_CASH_FLOW_UNAUDI
STATEMENTS OF CASH FLOW (UNAUDITED) (USD $) | 9 Months Ended | 12 Months Ended | 9 Months Ended | |||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Oct. 14, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Sep. 30, 2013 |
Cash flow from operating activities: | ||||||
Net income (loss) | $13,255 | |||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities | ||||||
Depreciation and amortization | 40,070 | |||||
Amortization of deferred loan costs | 1,894 | 2,800 | 3,400 | 3,400 | ||
Write off of deferred loan costs relating to retired debt | 580 | |||||
Amortization of bond discount | 38 | |||||
Equity-based compensation expense | 2,901 | 1,369 | 412 | 765 | ||
Bad debt expense | 402 | |||||
Changes in operating assets and liabilities | ||||||
Rents and other receivables, net | 104 | |||||
Prepaid expenses | -2,245 | |||||
Other assets | 596 | |||||
Accounts payable and accrued liabilities | -7,833 | |||||
Advance rents, security deposits and other liabilities | -44 | |||||
Deferred income | 1,637 | |||||
Net cash provided by operating activities | 51,355 | |||||
Cash flow from investing activities: | ||||||
Acquisition of real estate | -91,064 | |||||
Additions to property and equipment | -156,008 | |||||
Net cash used for investing activities | -247,072 | |||||
Cash flow from financing activities: | ||||||
Credit facility proceeds | 230,500 | |||||
Senior Notes proceeds | 297,633 | |||||
Debt repayment | -290,000 | |||||
Payment of deferred financing costs | -9,648 | |||||
Payment of cash dividend | -23,783 | |||||
Distribution to noncontrolling interest | -6,932 | |||||
Principal payments on capital lease obligation | -553 | |||||
Scheduled mortgage principal debt repayments | -1,665 | |||||
Net cash provided by financing activities | 195,552 | |||||
Net increase (decrease) in cash and cash equivalents | -165 | |||||
Cash and cash equivalents, beginning of period | 5,210 | 8,232 | 8,232 | 8,232 | ||
Cash and cash equivalents, end of period | 5,045 | 7,726 | 5,210 | 8,232 | ||
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | ||||||
Cash paid for interest (excluding deferred financing costs and amounts capitalized) | 4,599 | |||||
Noncash investing and financing activities: | ||||||
Accrued capital additions | 36,381 | |||||
Historical Predecessor [Member] | ||||||
Cash flow from operating activities: | ||||||
Net income (loss) | -152 | -9,767 | -909 | -597 | ||
Adjustments to reconcile net income (loss) to net cash provided by operating activities | ||||||
Depreciation and amortization | 34,624 | 33,688 | 25,077 | 32,701 | ||
Amortization of deferred loan costs | 2,281 | 3,384 | 3,441 | 2,193 | ||
Write off of deferred loan costs relating to retired debt | 2,031 | 1,434 | 2,031 | |||
Equity-based compensation expense | 1,382 | 412 | 765 | 1,305 | ||
Bad debt expense | 174 | -192 | 328 | 169 | ||
Change in fair value of derivative | -307 | -4,830 | ||||
Amortization of acquired above and below-market leases, net | -960 | |||||
Gain on sale/disposal of property | -948 | 544 | ||||
Other | -99 | |||||
Changes in operating assets and liabilities | ||||||
Rents and other receivables, net | -617 | -406 | -2,437 | -756 | ||
Accrued interest on member advances | 2,332 | 2,125 | ||||
Prepaid expenses | -1,464 | 58 | -188 | -1,510 | ||
Restricted cash | 146 | 1,294 | -679 | 146 | ||
Other assets | 486 | -783 | -540 | 291 | ||
Accounts payable and accrued liabilities | -9,234 | 5,322 | 2,574 | -4,888 | ||
Advance rents, security deposits and other liabilities | 244 | -1,586 | -163 | 244 | ||
Deferred income | 610 | 1,163 | 327 | 816 | ||
Net cash provided by operating activities | 30,511 | 35,098 | 24,374 | 32,145 | ||
Cash flow from investing activities: | ||||||
Proceeds from sale of property | 1,549 | |||||
Acquisition of real estate | -21,174 | -63,250 | -21,174 | |||
Additions to property and equipment | -99,701 | -133,226 | -118,746 | -102,924 | ||
Net cash used for investing activities | -120,875 | -194,927 | -118,746 | -124,098 | ||
Cash flow from financing activities: | ||||||
Credit facility proceeds | 563,500 | 180,000 | 54,000 | 563,500 | ||
Debt proceeds | 120,000 | 50,000 | ||||
Debt repayment | -456,994 | -216,637 | -456,994 | |||
Payment of swap liability | -4,070 | -4,120 | ||||
Payment of deferred financing costs | -4,483 | -6,243 | -1,920 | -4,483 | ||
Partnership distributions | -7,633 | -7,633 | ||||
Repurchase of equity awards | -13 | -13 | ||||
Principal payments on capital lease obligation | -496 | -790 | -76 | -496 | ||
Scheduled mortgage principal debt repayments | -2,057 | -3,476 | -3,215 | -1,880 | ||
Equity issuance costs | -1,966 | 91,935 | -1,776 | |||
Net cash provided by financing activities | 89,858 | 160,719 | 94,669 | 90,225 | ||
Net increase (decrease) in cash and cash equivalents | -506 | 890 | 297 | -1,728 | ||
Cash and cash equivalents, beginning of period | 8,232 | 8,232 | 7,342 | 7,045 | 8,232 | |
Cash and cash equivalents, end of period | 7,726 | 8,232 | 7,342 | 6,504 | ||
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | ||||||
Cash paid for interest (excluding deferred financing costs and amounts capitalized) | 15,974 | 21,291 | 18,804 | 14,265 | ||
Noncash investing and financing activities: | ||||||
Accrued capital additions | 20,939 | 18,789 | 20,493 | 20,939 | ||
Accrued deferred financing costs | 990 | 990 | ||||
Accrued equity issuance costs | 257 | 447 | ||||
Member advances exchanged for LP units | 10,000 | 10,000 | ||||
Qualitytech, LP [Member] | ||||||
Cash flow from operating activities: | ||||||
Net income (loss) | 13,255 | 3,850 | -9,767 | -909 | -597 | |
Adjustments to reconcile net income (loss) to net cash provided by operating activities | ||||||
Depreciation and amortization | 40,070 | 45,260 | 33,688 | 25,077 | 32,701 | |
Amortization of deferred loan costs | 1,894 | 2,777 | 3,384 | 3,441 | 2,193 | |
Write off of deferred loan costs relating to retired debt | 580 | 2,184 | 1,434 | 2,031 | ||
Amortization of bond discount | 38 | |||||
Equity-based compensation expense | 2,901 | 1,960 | 412 | 765 | 1,305 | |
Bad debt expense | 402 | 545 | -192 | 328 | 169 | |
Change in fair value of derivative | -307 | -4,830 | ||||
Amortization of acquired above and below-market leases, net | -960 | |||||
Gain on sale/disposal of property | -948 | 544 | ||||
Other | -99 | |||||
Changes in operating assets and liabilities | ||||||
Rents and other receivables, net | 104 | -3,036 | -406 | -2,437 | -756 | |
Accrued interest on member advances | 2,332 | 2,125 | ||||
Prepaid expenses | -2,245 | -786 | 58 | -188 | -1,510 | |
Restricted cash | 146 | 1,294 | -679 | 146 | ||
Other assets | 596 | 23 | -783 | -540 | 291 | |
Accounts payable and accrued liabilities | -7,833 | 5,827 | 5,322 | 2,574 | -4,888 | |
Advance rents, security deposits and other liabilities | -44 | 250 | -1,586 | -163 | 244 | |
Deferred income | 1,637 | 1,146 | 1,163 | 327 | 816 | |
Net cash provided by operating activities | 51,355 | 60,146 | 35,098 | 24,374 | 32,145 | |
Cash flow from investing activities: | ||||||
Proceeds from sale of property | 1,549 | |||||
Acquisition of real estate | -91,064 | -21,174 | -63,250 | -21,174 | ||
Additions to property and equipment | -156,008 | -147,664 | -133,226 | -118,746 | -102,924 | |
Net cash used for investing activities | -247,072 | -168,838 | -194,927 | -118,746 | -124,098 | |
Cash flow from financing activities: | ||||||
Credit facility proceeds | 230,500 | 578,000 | 180,000 | 54,000 | 563,500 | |
Debt proceeds | 120,000 | 50,000 | ||||
Senior Notes proceeds | 297,633 | |||||
Debt repayment | -290,000 | -734,994 | -216,637 | -456,994 | ||
Payment of swap liability | -4,070 | -4,120 | ||||
Payment of deferred financing costs | -9,648 | -5,473 | -6,243 | -1,920 | -4,483 | |
Payment of cash dividend | -23,783 | -7,633 | ||||
Partnership distributions | -6,932 | -7,633 | ||||
Repurchase of equity awards | -13 | -13 | ||||
Principal payments on capital lease obligation | -553 | -676 | -790 | -76 | -496 | |
Scheduled mortgage principal debt repayments | -1,665 | -2,416 | -3,476 | -3,215 | -1,880 | |
Equity issuance costs | 278,875 | 91,935 | -1,776 | |||
Net cash provided by financing activities | 195,552 | 105,670 | 160,719 | 94,669 | 90,225 | |
Net increase (decrease) in cash and cash equivalents | -165 | -3,022 | 890 | 297 | -1,728 | |
Cash and cash equivalents, beginning of period | 5,210 | 8,232 | 8,232 | 7,342 | 7,045 | 8,232 |
Cash and cash equivalents, end of period | 5,045 | 5,210 | 8,232 | 7,342 | 6,504 | |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | ||||||
Cash paid for interest (excluding deferred financing costs and amounts capitalized) | 4,599 | 17,969 | 21,291 | 18,804 | 14,265 | |
Noncash investing and financing activities: | ||||||
Accrued capital additions | 36,381 | 60,740 | 18,789 | 20,493 | 20,939 | |
Accrued deferred financing costs | 990 | 990 | ||||
Accrued equity issuance costs | 621 | 447 | ||||
Member advances exchanged for LP units | $10,000 | $10,000 |
Description_of_Business
Description of Business | 9 Months Ended | 12 Months Ended |
Sep. 30, 2014 | Dec. 31, 2013 | |
Description of Business | 1. 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 operating subsidiaries, the “Company”), is engaged in the business of owning, acquiring, redeveloping and managing multi-tenant data centers. As of December 31, 2013 the Company’s portfolio consists of 10 properties with data centers spread throughout the continental United States. | ||
QTS Realty Trust, Inc. (“QTS”) through its controlling interest in QualityTech, LP (the “Operating Partnership” and collectively with QTS and their operating subsidiaries, the “Company”), is engaged in the business of owning, acquiring, redeveloping and managing multi-tenant data centers. The Company’s portfolio consists of 12 properties with data centers located throughout the continental United States. | The Company was formed as a Maryland corporation on May 17, 2013. On October 15, 2013, the Company completed its initial public offering of 14,087,500 shares of Class A common stock, $0.01 par value per share (the “IPO”), including shares issued pursuant to the underwriters’ option to purchase additional shares, which was exercised in full, and received net proceeds of approximately $279 million. The Company 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. | |
Prior to the IPO, the Company had no assets other than cash and deferred offering costs, and had not had any operations other than the issuance of 1,000 shares of common stock to Chad L. Williams in connection with its initial capitalization. The Operating Partnership is a Delaware limited partnership formed on August 5, 2009 and is QTS’ historical predecessor. | ||
QTS was formed as a Maryland corporation on May 17, 2013. On October 15, 2013, the Company completed its initial public offering of 14,087,500 shares of Class A common stock, $0.01 par value per share (the “IPO”), including shares issued pursuant to the underwriters’ option to purchase additional shares, which was exercised in full, and received net proceeds of approximately $279 million. QTS has 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. The Operating Partnership is a Delaware limited partnership formed on August 5, 2009 and is QTS’ historical predecessor. | Concurrently with the completion of the IPO, the Company consummated a series of transactions, including the merger of General Atlantic REIT, Inc. with the Company, pursuant to which it became the sole general partner and majority owner of the QualityTech, LP, a Delaware limited partnership (the “Operating Partnership”). The Company contributed the net proceeds received from the IPO to the Operating Partnership in exchange for partnership units therein. As of December 31, 2013, the Company owned approximately 78.8% of the interests in the Operating Partnership. Substantially all of the Company’s assets are held by, and the Company’s operations are conducted through, the Operating Partnership. The Company’s interest in the Operating Partnership entitles the Company to share in cash distributions from, and in the profits and losses of, the Operating Partnership in proportion to the Company’s percentage ownership. As the sole general partner of the Operating Partnership, the Company generally has the exclusive power under the partnership agreement to manage and conduct the Operating Partnership’s business and affairs, subject to certain limited approval and voting rights of the limited partners. The Company’s board of directors manages the Company’s business and affairs. | |
Concurrently with the completion of the IPO, the Company consummated a series of transactions, including the merger of General Atlantic REIT, Inc. with QTS, pursuant to which it became the sole general partner and majority owner of the Operating Partnership. QTS contributed the net proceeds received from the IPO to the Operating Partnership in exchange for partnership units therein. As of September 30, 2014, QTS owned approximately 78.8% 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 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. | ||
Qualitytech, LP [Member] | ||
Description of Business | 1. 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 operating subsidiaries, the “Company”), is engaged in the business of owning, acquiring, redeveloping and managing multi-tenant data centers. As of December 31, 2013 the Company’s portfolio consists of 10 properties with data centers spread throughout the continental United States. | ||
QTS Realty Trust, Inc. (“QTS”) through its controlling interest in QualityTech, LP (the “Operating Partnership” and collectively with QTS and their operating subsidiaries, the “Company”), is engaged in the business of owning, acquiring, redeveloping and managing multi-tenant data centers. The Company’s portfolio consists of 12 properties with data centers located throughout the continental United States. | The Company was formed as a Maryland corporation on May 17, 2013. On October 15, 2013, the Company completed its initial public offering of 14,087,500 shares of Class A common stock, $0.01 par value per share (the “IPO”), including shares issued pursuant to the underwriters’ option to purchase additional shares, which was exercised in full, and received net proceeds of approximately $279 million. The Company 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. | |
Prior to the IPO, the Company had no assets other than cash and deferred offering costs, and had not had any operations other than the issuance of 1,000 shares of common stock to Chad L. Williams in connection with its initial capitalization. The Operating Partnership is a Delaware limited partnership formed on August 5, 2009 and is QTS’ historical predecessor. | ||
QTS was formed as a Maryland corporation on May 17, 2013. On October 15, 2013, the Company completed its initial public offering of 14,087,500 shares of Class A common stock, $0.01 par value per share (the “IPO”), including shares issued pursuant to the underwriters’ option to purchase additional shares, which was exercised in full, and received net proceeds of approximately $279 million. QTS has 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. The Operating Partnership is a Delaware limited partnership formed on August 5, 2009 and is QTS’ historical predecessor. | Concurrently with the completion of the IPO, the Company consummated a series of transactions, including the merger of General Atlantic REIT, Inc. with the Company, pursuant to which it became the sole general partner and majority owner of the QualityTech, LP, a Delaware limited partnership (the “Operating Partnership”). The Company contributed the net proceeds received from the IPO to the Operating Partnership in exchange for partnership units therein. As of December 31, 2013, the Company owned approximately 78.8% of the interests in the Operating Partnership. Substantially all of the Company’s assets are held by, and the Company’s operations are conducted through, the Operating Partnership. The Company’s interest in the Operating Partnership entitles the Company to share in cash distributions from, and in the profits and losses of, the Operating Partnership in proportion to the Company’s percentage ownership. As the sole general partner of the Operating Partnership, the Company generally has the exclusive power under the partnership agreement to manage and conduct the Operating Partnership’s business and affairs, subject to certain limited approval and voting rights of the limited partners. The Company’s board of directors manages the Company’s business and affairs. | |
Concurrently with the completion of the IPO, the Company consummated a series of transactions, including the merger of General Atlantic REIT, Inc. with QTS, pursuant to which it became the sole general partner and majority owner of the Operating Partnership. QTS contributed the net proceeds received from the IPO to the Operating Partnership in exchange for partnership units therein. As of September 30, 2014, QTS owned approximately 78.8% 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 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_Account
Summary of Significant Accounting Policies | 9 Months Ended | 12 Months Ended | ||||||||||||||||||||
Sep. 30, 2014 | Dec. 31, 2013 | |||||||||||||||||||||
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies | ||||||||||||||||||||
Basis of Presentation—The accompanying financial statements for the year ended December 31, 2013 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. | ||||||||||||||||||||||
Basis of Presentation – The accompanying financial statements for the quarter ended September 30, 2014 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. | ||||||||||||||||||||||
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 is the sole general partner of the Operating Partnership, and its only material asset consisted of its ownership interest in 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 our 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. | ||||||||||||||||||||||
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 is the sole general partner of the Operating Partnership, and its only material asset consisted of its ownership interest in 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 our 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: | ||||||||||||||||||||||
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; | |||||||||||||||||||||
· | 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 in this report applies to both QTS and the Operating Partnership; and | |||||||||||||||||||||
· | eliminates duplicative disclosure and provides a more streamlined and readable presentation since a substantial portion of the disclosure in this report 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. | |||||||||||||||||||||
· | 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 disclosures, 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. 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. The Operating Partnership’s capital includes general and limited common units that are owned by QTS and the other partners. QTS' stockholders’ equity includes common stock, additional paid in capital, accumulated other comprehensive income (loss) and accumulated dividends in excess of earnings. The remaining equity is the portion of net assets that are retained by partners other than QTS, referred to as noncontrolling interests. The primary difference in QTS' Statements of Operations and Comprehensive Income (Loss) is that for net income (loss), QTS retains its proportionate portion of the net income (loss) based on its ownership of the Operating Partnership, with the remaining balance being retained by the Operating Partnership. | ||||||||||||||||||||||
In addition, in light of these combined disclosures, 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. 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. The Operating Partnership’s capital includes general and limited common units that are owned by QTS and the other partners. QTS' stockholders’ equity includes common stock, additional paid in capital, accumulated other comprehensive income (loss) and accumulated dividends in excess of earnings. The remaining equity is the portion of net assets that are retained by partners other than QTS, referred to as noncontrolling interests. The primary difference in QTS' Statements of Operations and Comprehensive Income (Loss) is that for net income (loss), QTS retains its proportionate portion of the net income (loss) based on its ownership of the Operating Partnership, with the remaining balance being retained by the Operating Partnership. | ||||||||||||||||||||||
As discussed above, QTS owns no operating assets and has no operations independent of the Operating Partnership and its subsidiaries. Obligations under the 5.875% Senior Notes due 2022 and the unsecured credit facility, both discussed in Note 5, are fully, unconditionally, and jointly and severally guaranteed by the Operating Partnership’s existing subsidiaries, other than QTS Finance Corporation, the co-issuer of the 5.875% Senior Notes due 2022. As such, condensed consolidating financial information for the guarantors is not being presented in the notes to the condensed consolidated financial statements. However, the indenture governing the 5.875% Senior Notes due 2022 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 consolidated financial statements of QTS Realty Trust, Inc. for the period from October 15, 2013 through December 31, 2013 include the accounts of QTS Realty Trust, Inc. and its majority owned subsidiaries. This includes the operating results of the Operating Partnership for the period from October 15, 2013 through December 31, 2013. While the Company was formed on May 17, 2013, the Company had no independent operations prior to October 15, 2013. The historical predecessor financial statements for the periods ended October 14, 2013, December 31, 2012, and December 31, 2011 include the accounts of QualityTech, LP and its majority owned subsidiaries. | |||||||||||||||||||||
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 and 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. | ||||||||||||||||||||||
The Interim Condensed Consolidated Statements of Operations and Comprehensive Income and the Statements of Cash Flows of QTS Realty Trust, Inc. for the three and nine months ended September 30, 2014 and the Balance Sheets as of September 30, 2014 and December 31, 2013 present the accounts of QTS Realty Trust, Inc. and its majority owned subsidiaries, which includes the Operating Partnership. The Interim Condensed Consolidated Statement of Operations and Comprehensive Income and the Statement of Cash Flows for the three and nine months ended September 30, 2013 present the accounts of QualityTech, LP and its majority owned subsidiaries (the “Historical Predecessor”). | Principles of Consolidation—The consolidated financial statements of QTS Realty Inc. include the accounts of QTS Realty Trust, Inc. and its majority-owned 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. | |||||||||||||||||||||
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 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. The aggregate depreciation charged to related operations was $36.7 million, $29.8 million and $22.1 million for the years ended December 31, 2013, 2012 and 2011, respectively. 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 $8.5 million, $6.7 million and $6.1 million for the years ended December 31, 2013, 2012 and 2011, respectively. Interest is capitalized during the period of development by first applying the Company’s actual borrowing rate on the related asset and second, to the extent necessary, by applying the Company’s weighted average effective borrowing rate to the actual development and other costs expended during the construction period. Interest is capitalized until the property is ready for its intended use. Interest costs capitalized totaled $4.1 million, $2.2 million and $2.6 million for the years ended December 31, 2013, 2012 and 2011, respectively. | ||||||||||||||||||||||
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. | Acquisition of Real Estate—Acquisitions of real estate are either accounted for as asset acquisitions or business combinations depending on facts and circumstances. Purchase accounting is applied to the assets and liabilities related to all real estate investments acquired in accordance to 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 real estate acquired is allocated to the acquired tangible assets, consisting primarily of land, 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 and value of customer relationships. | |||||||||||||||||||||
Principles of Consolidation – The consolidated financial statements of QTS Realty Inc. include the accounts of QTS Realty Trust, Inc. and its majority-owned 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. | 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. | |||||||||||||||||||||
Intangible assets and liabilities include acquired above-market leases, below-market leases, in-place leases and customer relationships. | ||||||||||||||||||||||
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 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. Depreciation expense was $11.9 million and $9.7 million for the three months ended September 30, 2014 and 2013, respectively, and $32.8 million and $27.2 million for the nine months ended September 30, 2014 and 2013, respectively. 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 $2.9 million and $2.4 million for the three months ended September 30, 2014 and 2013, respectively, and $7.5 million and $6.3 million for the nine months ended September 30, 2014 and 2013, respectively. Interest is capitalized during the period of development by first applying the Company’s actual borrowing rate on the related asset and second, to the extent necessary, by applying the Company’s weighted average effective borrowing rate to the actual development and other costs expended during the construction period. Interest is capitalized until the property is ready for its intended use. Interest costs capitalized totaled $1.3 million and $0.9 million for the three months ended September 30, 2014 and 2013, respectively, and $4.7 million and $3.0 million for the nine months ended September 30, 2014 and 2013, respectively. | Acquired below-market leases are amortized on a straight-line basis as an increase to rental revenue over the remaining term of the underlying leases, including fixed option renewal periods, if any. Accretion of acquired below-market leases, including write-offs for terminated leases, totaled $1.0 million for the year ended December 31, 2011, with no material accretion for the years ended December 31, 2013 and 2012. Acquired in-place leases are amortized as amortization expense on a straight-line basis over the remaining life of the underlying leases. Amortization of acquired in-place leases, including write-offs for terminated leases, totaled $2.6 million and $0.1 million for the years ended December 31, 2013 and 2011, with no material amortization for the year ended December 31, 2012. | |||||||||||||||||||||
Acquired customer relationships are amortized as amortization expense on a straight-line basis over the expected life of the customer relationship. Amortization of acquired customer relationships, including write-offs for terminated leases, totaled $1.5 million, $0.6 million and $1.2 million for the years ended December 31, 2013, 2012 and 2011, respectively. | ||||||||||||||||||||||
Acquisition of Real Estate – Acquisitions of real estate are either accounted for as asset acquisitions or business combinations depending on facts and circumstances. 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 real estate acquired is allocated to the acquired tangible assets, consisting primarily of land, 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 and value of customer relationships. | Annual amortization for intangible assets recorded as of December 31, 2013 is estimated to be $2.7 million in 2014, $1.3 million in 2015 and $1.3 million in 2016. The remaining weighted average amortization period at December 31, 2013 for intangible assets is 2.4 years. | |||||||||||||||||||||
Impairment of Long-Lived and Intangible Assets—The Company reviews its long-lived 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 generally 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 any of the years ended December 31, 2013, 2012 and 2011, respectively. | ||||||||||||||||||||||
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. | 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, therefore, does not believe that the risk is significant. | |||||||||||||||||||||
Restricted Cash—Restricted cash includes accounts restricted by the Company’s loan agreements and escrow deposits for interest, insurance, taxes and capital improvements held by the various banks and financial institutions as required by the loan agreements. Such deposits are held in bank checking or investment accounts with original maturities of three months or less. | ||||||||||||||||||||||
Acquired in-place leases are amortized as amortization expense on a straight-line basis over the remaining life of the underlying leases. Amortization of acquired in place lease costs totaled $0.5 million and $0.5 million for the three months ended September 30, 2014 and 2013, respectively, and $1.8 million and $1.5 million for the nine months ended September 30, 2014 and 2013, respectively. | 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. Amortization of the deferred financing costs was $2.8 million, $3.4 million and $3.4 million for the years ended December 31, 2013, 2012 and 2011, respectively. During the year ended December 31, 2013, the Company wrote off unamortized financing costs of $2.2 million in connection with the expansion of its revolving and term credit facilities. In addition, during the year ended December 31, 2013, the Company wrote off unamortized financing costs of $1.3 million in connection with an asset securitization which the Company is no longer pursuing due to the expansion of the credit facility. During the year ended December 31, 2012, the Company wrote off unamortized financing costs of $1.4 million, primarily relating to former loans secured by the Richmond and Atlanta-Suwanee data center facilities that were repaid during the first quarter of 2012. Deferred financing costs, net of accumulated amortization are as follows: | ||||||||||||||||||||||
Acquired customer relationships are amortized as amortization expense on a straight-line basis over the expected life of the customer relationship. Amortization of acquired customer relationships totaled $0.3 million and $0.4 million for the three months ended September 30, 2014 and 2013, respectively, and $1.0 million and $1.2 million for the nine months ended September 30, 2014 and 2013, respectively. | ||||||||||||||||||||||
See Note 3 for discussion of the preliminary purchase price allocation for the Princeton facility that the Company acquired on June 30, 2014. | ||||||||||||||||||||||
(dollars in thousands) | December 31, | December 31, | ||||||||||||||||||||
Impairment of Long-Lived and Intangible Assets – The Company reviews its long-lived 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 generally 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 and nine months ended September 30, 2014 and 2013, respectively. | 2013 | 2012 | ||||||||||||||||||||
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, therefore, does not believe that the risk is significant. | Deferred financing costs................................................................................................................................................................................................. | $ | $ | |||||||||||||||||||
9,159 | 10,165 | |||||||||||||||||||||
Deferred Costs – Deferred costs, net, on the Company’s balance sheets include both financing costs and leasing costs. | Accumulated amortization............................................................................................................................................................................................... | -1,867 | -3,309 | |||||||||||||||||||
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. Amortization of the deferred financing costs was $0.5 million and $0.6 million for the three months ended September 30, 2014 and 2013, respectively, and $1.7 million and $2.2 million for the nine months ended September 30, 2014 and 2013, respectively. During the three months ended September 30, 2014, the Company wrote off unamortized financing costs of $0.5 million primarily in connection with paying down $75 million of its unsecured credit facility. During the three months ended September 30, 2013, the Company had no unamortized financing cost write offs. During the nine months ended September 30, 2014, in addition to the aforementioned $0.5 million write off, the Company wrote off unamortized financing costs of $0.1 million in connection with the modification of its credit facility that is secured by the Richmond data center. During the nine months ended September 30, 2013, the Company wrote off unamortized financing costs of $3.3 million in connection with both the restructuring of its unsecured credit facility and an asset securitization which the Company did not pursue. Deferred financing costs, net of accumulated amortization are as follows: | Deferred financing costs, net........................................................................................................................................................................................... | $ | $ | |||||||||||||||||||
7,292 | 6,856 | |||||||||||||||||||||
September 30, | December 31, | |||||||||||||||||||||
(dollars in thousands) | 2014 | 2013 | Deferred leasing costs consist of external fees and internal costs incurred in the successful negotiations of leases and are deferred and amortized over the terms of the related leases on a straight-line basis. If an applicable lease terminates prior to the expiration of its initial term, the carrying amount of the costs are written off to amortization expense. Amortization of deferred leasing costs totaled $4.7 million, $3.4 million and $2.3 million for the years ended December 31, 2013, 2012 and 2011, respectively. Deferred leasing costs, net of accumulated amortization are as follows: | |||||||||||||||||||
(unaudited) | ||||||||||||||||||||||
Deferred financing costs | $ | 18,226 | $ | 9,159 | ||||||||||||||||||
Accumulated amortization | (3,761 | ) | (1,867 | ) | (dollars in thousands) | December 31, | December 31, | |||||||||||||||
Deferred financing costs, net | $ | 14,465 | $ | 7,292 | 2013 | 2012 | ||||||||||||||||
Deferred leasing costs................................................................................................................................................................................................... | $ | $ | ||||||||||||||||||||
Deferred leasing costs consist of external fees and internal costs incurred in the successful negotiations of leases and are deferred and amortized over the terms of the related leases on a straight-line basis. If an applicable lease terminates prior to the expiration of its initial term, the carrying amount of the costs are written off to amortization expense. Amortization of deferred leasing costs totaled $1.8 million and $1.1 million for the three months ended September 30, 2014 and 2013, respectively, and $4.6 million and $3.2 million for the nine months ended September 30, 2014 and 2013, respectively. Deferred leasing costs, net of accumulated amortization are as follows: | 17,374 | 12,567 | ||||||||||||||||||||
Accumulated amortization............................................................................................................................................................................................... | -5,516 | -4,361 | ||||||||||||||||||||
Deferred leasing costs, net............................................................................................................................................................................................. | $ | $ | ||||||||||||||||||||
September 30, | December 31, | 11,858 | 8,206 | |||||||||||||||||||
(dollars in thousands) | 2014 | 2013 | ||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||
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 leasing costs | $ | 24,348 | $ | 17,374 | ||||||||||||||||||
Accumulated amortization | (8,379 | ) | (5,516 | ) | 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 $7.9 million, $6.8 million and $5.6 million as of December 31, 2013, 2012 and 2011, respectively. Additionally, $4.7 million, $4.3 million and $3.0 million were amortized into revenue for the years ended December 31, 2013, 2012 and 2011, respectively. | |||||||||||||||||
Deferred leasing costs, net | $ | 15,969 | $ | 11,858 | Interest Rate Derivative Instruments—The Company utilizes derivatives to manage its interest rate exposure. The interest rate swaps entered into in September 2006 did not meet the criteria for hedge accounting and accordingly, the Company reported the change in the fair value of the derivative in interest expense in the accompanying Statements of Operations and Comprehensive Loss. | |||||||||||||||||
During February 2012, the Company entered into interest rate swaps with a notional amount of $150 million which are cash flow hedges and qualify for hedge accounting. For these hedges, the effective portion of the change in fair value is recognized through other comprehensive income or loss. Amounts are reclassified out of other comprehensive income (loss) as the hedged item is recognized in earnings, either for ineffectiveness or for amounts paid relating to the hedge. As there was no ineffectiveness recorded in the periods presented, the Company has reflected the change in the fair value of the instrument in other comprehensive income (loss). | ||||||||||||||||||||||
For derivative instruments that are not accounted for using hedge accounting, or for the ineffective portions of qualifying hedges, the change in fair value is recorded through interest expense in the respective period. | ||||||||||||||||||||||
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. | Equity-based Compensation—All equity-based compensation is measured at fair value on the grant date or date of modification, as applicable, and recognized in earnings over the requisite service period. Depending upon the settlement terms of the awards, all or a portion of the fair value of equity-based awards may be presented as a liability or as equity in the consolidated balance sheets. Equity-based compensation costs are measured based upon their estimated fair value on the date of grant or modification. The Company recorded equity-based compensation expense net of forfeited and repurchased awards acquired of $2.0 million, $0.4 million and $0.8 million for the years ended December 31, 2013, 2012 and 2011, respectively. | |||||||||||||||||||||
Rental Revenue—The Company, as a lessor, has retained substantially all of the risks and benefits of ownership and accounts for its leases as operating leases. 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 $2.9 million and $2.4 million as of December 31, 2013 and 2012, respectively. Rental revenue also includes amortization of set-up fees which are amortized over the term of the respective lease as discussed above. | ||||||||||||||||||||||
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 $9.5 million and $7.9 million as of September 30, 2014 and December 31, 2013, respectively. Additionally, $1.1 million and $1.3 million of deferred income were amortized into revenue for the three months ended September 30, 2014 and 2013, respectively, and $3.5 million and $3.5 million for the nine months ended September 30, 2014 and 2013, respectively. | Allowance for Uncollectible Accounts Receivable—Rents receivable are recognized when due and are carried at cost, less an allowance for doubtful accounts. The Company records a provision for losses on rents receivable equal to the estimated uncollectible accounts, which is based on management’s historical experience and a review of the current status of the Company’s receivables. As necessary, the Company also establishes an appropriate allowance for doubtful accounts for receivables arising from the straight-lining of rents. The aggregate allowance for doubtful accounts was $0.9 million and $0.5 million as of December 31, 2013 and 2012, respectively. | |||||||||||||||||||||
Capital Lease—The Company evaluates leased real estate to determine whether the lease should be classified as a capital or operating lease in accordance with U.S GAAP. | ||||||||||||||||||||||
Interest Rate Derivative Instruments – The Company utilizes derivatives to manage its interest rate exposure. During February 2012, the Company entered into interest rate swaps with a notional amount of $150 million which were cash flow hedges and qualified for hedge accounting. For these hedges, the effective portion of the change in fair value was recognized through other comprehensive income or loss. Amounts were reclassified out of other comprehensive income (loss) as the hedged item was recognized in earnings, either for ineffectiveness or for amounts paid relating to the hedge. The Company reflected all changes in the fair value of the swaps in other comprehensive income (loss) during the nine months ended September 30, 2014, as there was no ineffectiveness recorded in that period. The Company’s interest rate swaps matured on September 28, 2014, and as such, there are no amounts outstanding on the consolidated balance sheet at September 30, 2014 relating to these swaps. | The Company periodically enters into capital leases for certain equipment. The outstanding liabilities for the capital leases were $2.5 million and $2.5 million as of December 31, 2013 and 2012, respectively. Depreciation related to the associated assets is included in depreciation and amortization expense in the Statements of Operations and Comprehensive Income (Loss). | |||||||||||||||||||||
Recoveries from Customers—Certain customer leases contain provisions under which the customers reimburse the Company for a portion of the property’s real estate taxes, insurance and other operating expenses, which include certain power and cooling-related charges. The reimbursements are included in revenue as recoveries from customers in the Statements of Operations and Comprehensive Income (Loss) in the period the applicable expenditures are incurred. Certain customer leases are structured to provide a fixed monthly billing amount that includes an estimate of various operating expenses, with all revenue from such leases included in rental revenues. | ||||||||||||||||||||||
[Equity-based Compensation – All equity-based compensation is measured at fair value on the grant date or date of modification, as applicable, and recognized in earnings over the requisite service period. Depending upon the settlement terms of the awards, all or a portion of the fair value of equity-based awards may be presented as a liability or as equity in the consolidated balance sheets. Equity-based compensation costs are measured based upon their estimated fair value on the date of grant or modification. Equity-based compensation expense net of forfeited and repurchased awards was $0.9 million and $0.5 million for the three months ended September 30, 2014 and 2013, respectively, and $2.9 million and $1.3 million for the nine months ended September 30, 2014 and 2013, respectively.] | Cloud and Managed Services Revenue—The Company may provide both its cloud product and use of its managed services to its customers on an individual or combined basis. Service fee revenue is recognized as the revenue is earned, which generally coincides with the services being provided. | |||||||||||||||||||||
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 in the United States. | ||||||||||||||||||||||
Rental Revenue – The Company, as a lessor, has retained substantially all of the risks and benefits of ownership and accounts for its leases as operating leases. 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 $4.2 million and $2.9 million as of September 30, 2014 and December 31, 2013, respectively. Rental revenue also includes amortization of set-up fees which are amortized over the term of the respective lease as discussed above. | Restructuring—In March 2012, the Company decided to consolidate its New York area operations into the New Jersey data center facility. The Company transferred certain customers from the New York City facility to the New Jersey facility. As of December 31, 2012, the Company had completed the consolidation of its operations into the Jersey City facility and recognized $3.3 million in expense primarily related to terminating the New York facility lease. As this consolidation was completed in 2012, there were no restructuring costs incurred during the period from October 15, 2013 to December 31, 2013 and during the period from January 1, 2013 to October 14, 2013. | |||||||||||||||||||||
Customer Concentrations—As of December 31, 2013, two of the Company’s customers represented 7.5% and 5.7%, respectively, of its total monthly rental revenue. No other customers exceeded 5% of total monthly rental revenue. | ||||||||||||||||||||||
Allowance for Uncollectible Accounts Receivable – Rents receivable are recognized when due and are carried at cost, less an allowance for doubtful accounts. The Company records a provision for losses on rents receivable equal to the estimated uncollectible accounts, which is based on management’s historical experience and a review of the current status of the Company’s receivables. As necessary, the Company also establishes an appropriate allowance for doubtful accounts for receivables arising from the straight-lining of rents. The aggregate allowance for doubtful accounts was $0.9 million as of September 30, 2014 and December 31, 2013. | As of December 31, 2013, five of the Company’s customers exceeded 5% of total accounts receivable. In aggregate, these five customers accounted for 32.1% of total accounts receivable. None of these five customers individually exceeded 10% of total accounts receivable. | |||||||||||||||||||||
Capital Leases – The Company evaluates leased real estate to determine whether the lease should be classified as a capital or operating lease in accordance with U.S GAAP. | Income Taxes—The Operating Partnership is obligated to comply with Internal Revenue Service real estate investment trust (“IRS REIT”) tax regulations in accordance with the unitholders agreement. In order to comply with this obligation, the Company elected for one of its existing subsidiaries to be taxed as a taxable REIT subsidiary under the IRS REIT tax regulations. The taxable REIT subsidiary is allocated income and expense based on IRS REIT tax regulations. | |||||||||||||||||||||
For the taxable REIT subsidiary, 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. | ||||||||||||||||||||||
The Company periodically enters into capital leases for certain equipment. The outstanding liabilities for the capital leases were $9.0 million and $2.5 million as of September 30, 2014 and December 31, 2013, respectively. Depreciation related to the associated assets is included in depreciation and amortization expense in the Statements of Operations and Comprehensive Income (Loss). | The taxable REIT subsidiary offsets 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 taxable subsidiary did not generate taxable income for the years ended December 31, 2013, 2012, or 2011. Accordingly, no provision for income taxes was recorded nor was an income tax benefit recorded for the last four years. Due to the lack of sufficient historical evidence to indicate it is more likely than not that the deferred tax assets will be utilized, the valuation allowance relating to deferred tax assets continue to be recorded at December 31, 2013. The change in valuation allowance during 2013 was a decrease of $0.5 million. | |||||||||||||||||||||
Temporary differences and carry forwards which give rise to the deferred tax assets and liabilities are as follows: | ||||||||||||||||||||||
Recoveries from Customers – Certain customer leases contain provisions under which the customers reimburse the Company for a portion of the property’s real estate taxes, insurance and other operating expenses, which include certain power and cooling-related charges. The reimbursements are included in revenue as recoveries from customers in the Statements of Operations and Comprehensive Income (Loss) in the period the applicable expenditures are incurred. Certain customer leases are structured to provide a fixed monthly billing amount that includes an estimate of various operating expenses, with all revenue from such leases included in rental revenues. | ||||||||||||||||||||||
Cloud and Managed Services Revenue – The Company may provide both its cloud product and use of its managed services to its customers on an individual or combined basis. Service fee revenue is recognized as the revenue is earned, which generally coincides with the services being provided. | ||||||||||||||||||||||
For the year ended December 31, | ||||||||||||||||||||||
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 in the United States. | (in thousands) | |||||||||||||||||||||
Customer Concentrations – As of September 30, 2014, one of the Company’s customers represented 8.4% of its total monthly rental revenue. No other customers exceeded 5% of total monthly rental revenue. | 2013 | 2012 | 2011 | |||||||||||||||||||
As of September 30, 2014, eight of the Company’s customers exceeded 5% of total accounts receivable. In aggregate, these eight customers accounted for 58% of total accounts receivable. One of these eight customers individually exceeded 10% of total accounts receivable. | Deferred tax liabilities | |||||||||||||||||||||
Property and equipment................................................................................................................................................................................................. | $ | $ | $ | |||||||||||||||||||
Income Taxes – One of the Operating Partnership’s existing subsidiaries has elected to be taxed as a taxable REIT subsidiary under the Internal Revenue Service real estate investment trust (the “IRS REIT”) tax regulations. The taxable REIT subsidiary is allocated income and expense based on IRS REIT tax regulations. | -4,905 | -4,852 | -3,533 | |||||||||||||||||||
Other............................................................................................................................................................................................................................. | -873 | -551 | -287 | |||||||||||||||||||
For the taxable REIT subsidiary, 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. | ||||||||||||||||||||||
Gross Deferred Tax Liabilities......................................................................................................................................................................................... | -5,778 | -5,403 | -3,820 | |||||||||||||||||||
The Company’s tax provision has not changed materially subsequent to December 31, 2013. The Company is not currently under examination by the Internal Revenue Service. | Deferred tax assets | |||||||||||||||||||||
Net operating loss carryforwards..................................................................................................................................................................................... | 5,861 | 6,694 | 3,410 | |||||||||||||||||||
Fair Value Measurements – ASC Topic 820, Fair Value Measurements and Disclosures, 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). | Deferred revenue and setup charges................................................................................................................................................................................. | 583 | 467 | 372 | ||||||||||||||||||
Derivative liability......................................................................................................................................................................................................... | — | — | 81 | |||||||||||||||||||
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. | Other............................................................................................................................................................................................................................. | 699 | 113 | 101 | ||||||||||||||||||
Financial assets and liabilities measured at fair value in the financial statements on a recurring basis consist of the Company’s derivatives. The fair values of the derivatives are determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative. The analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves (“significant other observable inputs”). The fair value calculation also includes an amount for risk of non-performance using “significant unobservable inputs” such as estimates of current credit spreads to evaluate the likelihood of default. The Company has concluded as of September 30, 2014 and December 31, 2013 that the fair value associated to “significant unobservable inputs” for risk of non-performance was insignificant to the overall fair value of the derivative agreements and, as a result, have determined that the relevant inputs for purposes of calculating the fair value of the derivative agreements, in their entirety, were based upon “significant other observable inputs.” The Company determined the fair value of derivatives using Level 2 inputs. These methods of assessing fair value result in a general approximation of value, and such value may never be realized. | Gross deferred tax assets............................................................................................................................................................................................... | 7,143 | 7,274 | 3,964 | ||||||||||||||||||
The Company’s financial instruments held at fair value are presented below as of September 30, 2014 and December 31, 2013 (dollars in thousands): | Net deferred tax assets................................................................................................................................................................................................... | 1,365 | 1,871 | 144 | ||||||||||||||||||
Valuation allowance....................................................................................................................................................................................................... | -1,365 | -1,871 | -144 | |||||||||||||||||||
Fair Value Measurements | Net deferred................................................................................................................................................................................................................. | $— | $— | $— | ||||||||||||||||||
Carrying Value | Level 1 | Level 2 | Level 3 | |||||||||||||||||||
30-Sep-14 | ||||||||||||||||||||||
Financial Liabilities: | ||||||||||||||||||||||
Interest rate swap liability(1) | $ | - | $ | - | $ | - | $ | - | The taxable REIT subsidiary currently has $15.8 million of net operating loss carryforwards related to federal income taxes that expire in 16-20 years. The taxable REIT subsidiary also has $10.1 million of net operating loss carryforwards relating to state income taxes that expire in 11-20 years. | |||||||||||||
31-Dec-13 | As of December 31, 2013 and 2012, the Company has no uncertain tax positions. If the Company incurs any interest or penalties on tax liabilities from significant uncertain tax positions, those items will be classified as interest expense and general and administrative expense, respectively, in the Statements of Operations and Comprehensive Income (Loss). For the years ended December 31, 2013, 2012 and 2011, the Company had no such interest or penalties. | |||||||||||||||||||||
Financial Liabilities: | The Company is not currently under examination by the Internal Revenue Service. | |||||||||||||||||||||
Interest rate swap liability(1) | $ | 453 | $ | - | $ | 453 | $ | - | Fair Value Measurements—ASC Topic 820 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. | ||||||||||||||||||||||
Financial assets and liabilities measured at fair value in the financial statements on a recurring basis consist of the Company’s derivatives. The fair values of the derivatives are determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative. The analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves (“significant other observable inputs”). The fair value calculation also includes an amount for risk of non-performance using “significant unobservable inputs” such as estimates of current credit spreads to evaluate the likelihood of default. The Company has concluded as of December 31, 2013 and 2012 that the fair value associated to “significant unobservable inputs” for risk of non-performance was insignificant to the overall fair value of the derivative agreements and, as a result, have determined that the relevant inputs for purposes of calculating the fair value of the derivative agreements, in their entirety, were based upon “significant other observable inputs.” The Company determined the fair value of derivatives using level 2 inputs. These methods of assessing fair value result in a general approximation of value, and such value may never be realized. | ||||||||||||||||||||||
The Company’s financial instruments held at fair value are presented below as of December 31, 2013 and 2012 (dollars in thousands): | ||||||||||||||||||||||
-1 | The Company used inputs from quoted prices for similar assets and liabilities in active markets that are directly or indirectly observable relating to the measurement of the interest rate swaps at December 31, 2013. The fair value measurement of the interest rate swaps have been classified as Level 2. The swaps matured on September 28, 2014, and as such, there were no amounts outstanding on the consolidated balance sheet as of September 30, 2014 related to interest rate swaps. | |||||||||||||||||||||
New Accounting Pronouncements | Fair Value Measurements | |||||||||||||||||||||
In April 2014, the Financial Accounting Standards Board (“FASB”) issued ASU 2014-08, “Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity”. The amendments in the ASU change the criteria for reporting discontinued operations while enhancing disclosures in this area. The new guidance narrows the definition of discontinued operations to disposals that represent a strategic shift in operations and requires expanded disclosures about discontinued operations that will provide financial statement users with more information about the assets, liabilities, income and expenses of discontinued operations. The new guidance also requires disclosure of the pre-tax income attributable to a disposal of a significant part of an organization that does not qualify for discontinued operations reporting. The amendments in the ASU are effective for annual and interim reporting periods beginning on and after December 15, 2014. Early adoption is permitted. Adoption of this standard will currently have no effect on the Company’s financial statements. | Carrying Value | Level 1 | Level 2 | Level 3 | ||||||||||||||||||
In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606),” which supersedes the current revenue recognition requirements in ASC 606, 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. This ASU also requires enhanced disclosures. The amendments in this ASU are effective for annual and interim periods beginning after December 15, 2016. Early adoption is not permitted. Retrospective and modified retrospective application is allowed. The Company is currently assessing the impact of this amendment on its Consolidated Financial Statements. | December 31, 2013 | |||||||||||||||||||||
Financial Liabilities: | ||||||||||||||||||||||
Interest rate swap liability(1)........................................................................................................................................................................................... | $ | $— | $ | $— | ||||||||||||||||||
453 | 453 | |||||||||||||||||||||
December 31, 2012 | ||||||||||||||||||||||
Financial Assets: | ||||||||||||||||||||||
Restricted deposits, held at fair value............................................................................................................................................................................... | $ | $ | $— | $— | ||||||||||||||||||
146 | 146 | |||||||||||||||||||||
Financial Liabilities: | ||||||||||||||||||||||
Interest rate swap liability(1)........................................................................................................................................................................................... | $ | $— | $ | $— | ||||||||||||||||||
767 | 767 | |||||||||||||||||||||
(1)The Company used inputs from quoted prices for similar assets and liabilities in active markets that are directly or indirectly observable relating to the measurement of the interest rate swaps. The fair value measurement of the interest rate swaps have been classified as Level 2. | ||||||||||||||||||||||
New Accounting Pronouncements Fair Value Measurement (Topic 820). In May 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update Topic 820 “Fair Value Measurement Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. Generally Accepted Accounting Principles and International Financial Reporting Standards.” The amendments in this update result in common fair value measurement and disclosure requirements under U.S. Generally Accepted Accounting Principles and International Financial Reporting Standards. Consequently, the amendments change the terminology used to describe many of the requirements under U.S. Generally Accepted Accounting Principles for measuring fair value and for disclosing information about fair value measurements. For many of the requirements, the FASB does not intend for the amendments in this update to result in a change in the application of the requirements in Topic 820. Some of the amendments clarify the FASB’s intent about the application of existing fair value measurement requirements. Other amendments change a particular principle or requirement for measuring fair value or for disclosing information about fair value measurements. The amendments in this update were effective for the Company beginning January 1, 2012 and do not have a material effect on the Company’s consolidated financial statements. | ||||||||||||||||||||||
Comprehensive Income (Topic 220). In June 2011, the FASB issued Accounting Standards Update Topic 220 “Presentation of Comprehensive Income.” Under the amendments in this update, an entity has the option to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The amendments in this update were effective for the Company beginning January 1, 2012 and do not have a material effect on the Company’s consolidated financial statements. | ||||||||||||||||||||||
Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income. In February 2013, the FASB issued Accounting Standards Update No. 2013-02, “Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income,” requiring companies to present current period reclassifications out of accumulated other comprehensive income (“AOCI”). For significant items reclassified out of AOCI to net income in their entirety in the period, companies must report the effect of the reclassifications on the respective line items in the statement where net income is presented. In certain circumstances, this can be done on the face of that statement. Otherwise, it must be presented in the notes. The amendments in this update are effective for the Company beginning January 1, 2013 and did not have any impact on the Company’s consolidated financial statements. | ||||||||||||||||||||||
Qualitytech, LP [Member] | ||||||||||||||||||||||
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies | ||||||||||||||||||||
Basis of Presentation—The accompanying financial statements for the year ended December 31, 2013 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. | ||||||||||||||||||||||
Basis of Presentation – The accompanying financial statements for the quarter ended September 30, 2014 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. | ||||||||||||||||||||||
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 is the sole general partner of the Operating Partnership, and its only material asset consisted of its ownership interest in 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 our 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. | ||||||||||||||||||||||
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 is the sole general partner of the Operating Partnership, and its only material asset consisted of its ownership interest in 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 our 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: | ||||||||||||||||||||||
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; | |||||||||||||||||||||
· | 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 in this report applies to both QTS and the Operating Partnership; and | |||||||||||||||||||||
· | eliminates duplicative disclosure and provides a more streamlined and readable presentation since a substantial portion of the disclosure in this report 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. | |||||||||||||||||||||
· | 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 disclosures, 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. 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. The Operating Partnership’s capital includes general and limited common units that are owned by QTS and the other partners. QTS' stockholders’ equity includes common stock, additional paid in capital, accumulated other comprehensive income (loss) and accumulated dividends in excess of earnings. The remaining equity is the portion of net assets that are retained by partners other than QTS, referred to as noncontrolling interests. The primary difference in QTS' Statements of Operations and Comprehensive Income (Loss) is that for net income (loss), QTS retains its proportionate portion of the net income (loss) based on its ownership of the Operating Partnership, with the remaining balance being retained by the Operating Partnership. | ||||||||||||||||||||||
In addition, in light of these combined disclosures, 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. 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. The Operating Partnership’s capital includes general and limited common units that are owned by QTS and the other partners. QTS' stockholders’ equity includes common stock, additional paid in capital, accumulated other comprehensive income (loss) and accumulated dividends in excess of earnings. The remaining equity is the portion of net assets that are retained by partners other than QTS, referred to as noncontrolling interests. The primary difference in QTS' Statements of Operations and Comprehensive Income (Loss) is that for net income (loss), QTS retains its proportionate portion of the net income (loss) based on its ownership of the Operating Partnership, with the remaining balance being retained by the Operating Partnership. | ||||||||||||||||||||||
As discussed above, QTS owns no operating assets and has no operations independent of the Operating Partnership and its subsidiaries. Obligations under the 5.875% Senior Notes due 2022 and the unsecured credit facility, both discussed in Note 5, are fully, unconditionally, and jointly and severally guaranteed by the Operating Partnership’s existing subsidiaries, other than QTS Finance Corporation, the co-issuer of the 5.875% Senior Notes due 2022. As such, condensed consolidating financial information for the guarantors is not being presented in the notes to the condensed consolidated financial statements. However, the indenture governing the 5.875% Senior Notes due 2022 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 consolidated financial statements of QTS Realty Trust, Inc. for the period from October 15, 2013 through December 31, 2013 include the accounts of QTS Realty Trust, Inc. and its majority owned subsidiaries. This includes the operating results of the Operating Partnership for the period from October 15, 2013 through December 31, 2013. While the Company was formed on May 17, 2013, the Company had no independent operations prior to October 15, 2013. The historical predecessor financial statements for the periods ended October 14, 2013, December 31, 2012, and December 31, 2011 include the accounts of QualityTech, LP and its majority owned subsidiaries. | |||||||||||||||||||||
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 and 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. | ||||||||||||||||||||||
The Interim Condensed Consolidated Statements of Operations and Comprehensive Income and the Statements of Cash Flows of QTS Realty Trust, Inc. for the three and nine months ended September 30, 2014 and the Balance Sheets as of September 30, 2014 and December 31, 2013 present the accounts of QTS Realty Trust, Inc. and its majority owned subsidiaries, which includes the Operating Partnership. The Interim Condensed Consolidated Statement of Operations and Comprehensive Income and the Statement of Cash Flows for the three and nine months ended September 30, 2013 present the accounts of QualityTech, LP and its majority owned subsidiaries (the “Historical Predecessor”). | Principles of Consolidation—The consolidated financial statements of QTS Realty Inc. include the accounts of QTS Realty Trust, Inc. and its majority-owned 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. | |||||||||||||||||||||
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 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. The aggregate depreciation charged to related operations was $36.7 million, $29.8 million and $22.1 million for the years ended December 31, 2013, 2012 and 2011, respectively. 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 $8.5 million, $6.7 million and $6.1 million for the years ended December 31, 2013, 2012 and 2011, respectively. Interest is capitalized during the period of development by first applying the Company’s actual borrowing rate on the related asset and second, to the extent necessary, by applying the Company’s weighted average effective borrowing rate to the actual development and other costs expended during the construction period. Interest is capitalized until the property is ready for its intended use. Interest costs capitalized totaled $4.1 million, $2.2 million and $2.6 million for the years ended December 31, 2013, 2012 and 2011, respectively. | ||||||||||||||||||||||
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. | Acquisition of Real Estate—Acquisitions of real estate are either accounted for as asset acquisitions or business combinations depending on facts and circumstances. Purchase accounting is applied to the assets and liabilities related to all real estate investments acquired in accordance to 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 real estate acquired is allocated to the acquired tangible assets, consisting primarily of land, 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 and value of customer relationships. | |||||||||||||||||||||
Principles of Consolidation – The consolidated financial statements of QTS Realty Inc. include the accounts of QTS Realty Trust, Inc. and its majority-owned 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. | 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. | |||||||||||||||||||||
Intangible assets and liabilities include acquired above-market leases, below-market leases, in-place leases and customer relationships. | ||||||||||||||||||||||
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 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. Depreciation expense was $11.9 million and $9.7 million for the three months ended September 30, 2014 and 2013, respectively, and $32.8 million and $27.2 million for the nine months ended September 30, 2014 and 2013, respectively. 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 $2.9 million and $2.4 million for the three months ended September 30, 2014 and 2013, respectively, and $7.5 million and $6.3 million for the nine months ended September 30, 2014 and 2013, respectively. Interest is capitalized during the period of development by first applying the Company’s actual borrowing rate on the related asset and second, to the extent necessary, by applying the Company’s weighted average effective borrowing rate to the actual development and other costs expended during the construction period. Interest is capitalized until the property is ready for its intended use. Interest costs capitalized totaled $1.3 million and $0.9 million for the three months ended September 30, 2014 and 2013, respectively, and $4.7 million and $3.0 million for the nine months ended September 30, 2014 and 2013, respectively. | Acquired below-market leases are amortized on a straight-line basis as an increase to rental revenue over the remaining term of the underlying leases, including fixed option renewal periods, if any. Accretion of acquired below-market leases, including write-offs for terminated leases, totaled $1.0 million for the year ended December 31, 2011, with no material accretion for the years ended December 31, 2013 and 2012. Acquired in-place leases are amortized as amortization expense on a straight-line basis over the remaining life of the underlying leases. Amortization of acquired in-place leases, including write-offs for terminated leases, totaled $2.6 million and $0.1 million for the years ended December 31, 2013 and 2011, with no material amortization for the year ended December 31, 2012. | |||||||||||||||||||||
Acquired customer relationships are amortized as amortization expense on a straight-line basis over the expected life of the customer relationship. Amortization of acquired customer relationships, including write-offs for terminated leases, totaled $1.5 million, $0.6 million and $1.2 million for the years ended December 31, 2013, 2012 and 2011, respectively. | ||||||||||||||||||||||
Acquisition of Real Estate – Acquisitions of real estate are either accounted for as asset acquisitions or business combinations depending on facts and circumstances. 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 real estate acquired is allocated to the acquired tangible assets, consisting primarily of land, 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 and value of customer relationships. | Annual amortization for intangible assets recorded as of December 31, 2013 is estimated to be $2.7 million in 2014, $1.3 million in 2015 and $1.3 million in 2016. The remaining weighted average amortization period at December 31, 2013 for intangible assets is 2.4 years. | |||||||||||||||||||||
Impairment of Long-Lived and Intangible Assets—The Company reviews its long-lived 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 generally 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 any of the years ended December 31, 2013, 2012 and 2011, respectively. | ||||||||||||||||||||||
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. | 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, therefore, does not believe that the risk is significant. | |||||||||||||||||||||
Restricted Cash—Restricted cash includes accounts restricted by the Company’s loan agreements and escrow deposits for interest, insurance, taxes and capital improvements held by the various banks and financial institutions as required by the loan agreements. Such deposits are held in bank checking or investment accounts with original maturities of three months or less. | ||||||||||||||||||||||
Acquired in-place leases are amortized as amortization expense on a straight-line basis over the remaining life of the underlying leases. Amortization of acquired in place lease costs totaled $0.5 million and $0.5 million for the three months ended September 30, 2014 and 2013, respectively, and $1.8 million and $1.5 million for the nine months ended September 30, 2014 and 2013, respectively. | 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. Amortization of the deferred financing costs was $2.8 million, $3.4 million and $3.4 million for the years ended December 31, 2013, 2012 and 2011, respectively. During the year ended December 31, 2013, the Company wrote off unamortized financing costs of $2.2 million in connection with the expansion of its revolving and term credit facilities. In addition, during the year ended December 31, 2013, the Company wrote off unamortized financing costs of $1.3 million in connection with an asset securitization which the Company is no longer pursuing due to the expansion of the credit facility. During the year ended December 31, 2012, the Company wrote off unamortized financing costs of $1.4 million, primarily relating to former loans secured by the Richmond and Atlanta-Suwanee data center facilities that were repaid during the first quarter of 2012. Deferred financing costs, net of accumulated amortization are as follows: | ||||||||||||||||||||||
Acquired customer relationships are amortized as amortization expense on a straight-line basis over the expected life of the customer relationship. Amortization of acquired customer relationships totaled $0.3 million and $0.4 million for the three months ended September 30, 2014 and 2013, respectively, and $1.0 million and $1.2 million for the nine months ended September 30, 2014 and 2013, respectively. | ||||||||||||||||||||||
See Note 3 for discussion of the preliminary purchase price allocation for the Princeton facility that the Company acquired on June 30, 2014. | ||||||||||||||||||||||
(dollars in thousands) | December 31, | December 31, | ||||||||||||||||||||
Impairment of Long-Lived and Intangible Assets – The Company reviews its long-lived 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 generally 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 and nine months ended September 30, 2014 and 2013, respectively. | 2013 | 2012 | ||||||||||||||||||||
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, therefore, does not believe that the risk is significant. | Deferred financing costs................................................................................................................................................................................................. | $ | $ | |||||||||||||||||||
9,159 | 10,165 | |||||||||||||||||||||
Deferred Costs – Deferred costs, net, on the Company’s balance sheets include both financing costs and leasing costs. | Accumulated amortization............................................................................................................................................................................................... | -1,867 | -3,309 | |||||||||||||||||||
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. Amortization of the deferred financing costs was $0.5 million and $0.6 million for the three months ended September 30, 2014 and 2013, respectively, and $1.7 million and $2.2 million for the nine months ended September 30, 2014 and 2013, respectively. During the three months ended September 30, 2014, the Company wrote off unamortized financing costs of $0.5 million primarily in connection with paying down $75 million of its unsecured credit facility. During the three months ended September 30, 2013, the Company had no unamortized financing cost write offs. During the nine months ended September 30, 2014, in addition to the aforementioned $0.5 million write off, the Company wrote off unamortized financing costs of $0.1 million in connection with the modification of its credit facility that is secured by the Richmond data center. During the nine months ended September 30, 2013, the Company wrote off unamortized financing costs of $3.3 million in connection with both the restructuring of its unsecured credit facility and an asset securitization which the Company did not pursue. Deferred financing costs, net of accumulated amortization are as follows: | Deferred financing costs, net........................................................................................................................................................................................... | $ | $ | |||||||||||||||||||
7,292 | 6,856 | |||||||||||||||||||||
September 30, | December 31, | |||||||||||||||||||||
(dollars in thousands) | 2014 | 2013 | Deferred leasing costs consist of external fees and internal costs incurred in the successful negotiations of leases and are deferred and amortized over the terms of the related leases on a straight-line basis. If an applicable lease terminates prior to the expiration of its initial term, the carrying amount of the costs are written off to amortization expense. Amortization of deferred leasing costs totaled $4.7 million, $3.4 million and $2.3 million for the years ended December 31, 2013, 2012 and 2011, respectively. Deferred leasing costs, net of accumulated amortization are as follows: | |||||||||||||||||||
(unaudited) | ||||||||||||||||||||||
Deferred financing costs | $ | 18,226 | $ | 9,159 | ||||||||||||||||||
Accumulated amortization | (3,761 | ) | (1,867 | ) | (dollars in thousands) | December 31, | December 31, | |||||||||||||||
Deferred financing costs, net | $ | 14,465 | $ | 7,292 | 2013 | 2012 | ||||||||||||||||
Deferred leasing costs................................................................................................................................................................................................... | $ | $ | ||||||||||||||||||||
Deferred leasing costs consist of external fees and internal costs incurred in the successful negotiations of leases and are deferred and amortized over the terms of the related leases on a straight-line basis. If an applicable lease terminates prior to the expiration of its initial term, the carrying amount of the costs are written off to amortization expense. Amortization of deferred leasing costs totaled $1.8 million and $1.1 million for the three months ended September 30, 2014 and 2013, respectively, and $4.6 million and $3.2 million for the nine months ended September 30, 2014 and 2013, respectively. Deferred leasing costs, net of accumulated amortization are as follows: | 17,374 | 12,567 | ||||||||||||||||||||
Accumulated amortization............................................................................................................................................................................................... | -5,516 | -4,361 | ||||||||||||||||||||
Deferred leasing costs, net............................................................................................................................................................................................. | $ | $ | ||||||||||||||||||||
September 30, | December 31, | 11,858 | 8,206 | |||||||||||||||||||
(dollars in thousands) | 2014 | 2013 | ||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||
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 leasing costs | $ | 24,348 | $ | 17,374 | ||||||||||||||||||
Accumulated amortization | (8,379 | ) | (5,516 | ) | 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 $7.9 million, $6.8 million and $5.6 million as of December 31, 2013, 2012 and 2011, respectively. Additionally, $4.7 million, $4.3 million and $3.0 million were amortized into revenue for the years ended December 31, 2013, 2012 and 2011, respectively. | |||||||||||||||||
Deferred leasing costs, net | $ | 15,969 | $ | 11,858 | Interest Rate Derivative Instruments—The Company utilizes derivatives to manage its interest rate exposure. The interest rate swaps entered into in September 2006 did not meet the criteria for hedge accounting and accordingly, the Company reported the change in the fair value of the derivative in interest expense in the accompanying Statements of Operations and Comprehensive Loss. | |||||||||||||||||
During February 2012, the Company entered into interest rate swaps with a notional amount of $150 million which are cash flow hedges and qualify for hedge accounting. For these hedges, the effective portion of the change in fair value is recognized through other comprehensive income or loss. Amounts are reclassified out of other comprehensive income (loss) as the hedged item is recognized in earnings, either for ineffectiveness or for amounts paid relating to the hedge. As there was no ineffectiveness recorded in the periods presented, the Company has reflected the change in the fair value of the instrument in other comprehensive income (loss). | ||||||||||||||||||||||
For derivative instruments that are not accounted for using hedge accounting, or for the ineffective portions of qualifying hedges, the change in fair value is recorded through interest expense in the respective period. | ||||||||||||||||||||||
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. | Equity-based Compensation—All equity-based compensation is measured at fair value on the grant date or date of modification, as applicable, and recognized in earnings over the requisite service period. Depending upon the settlement terms of the awards, all or a portion of the fair value of equity-based awards may be presented as a liability or as equity in the consolidated balance sheets. Equity-based compensation costs are measured based upon their estimated fair value on the date of grant or modification. The Company recorded equity-based compensation expense net of forfeited and repurchased awards acquired of $2.0 million, $0.4 million and $0.8 million for the years ended December 31, 2013, 2012 and 2011, respectively. | |||||||||||||||||||||
Rental Revenue—The Company, as a lessor, has retained substantially all of the risks and benefits of ownership and accounts for its leases as operating leases. 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 $2.9 million and $2.4 million as of December 31, 2013 and 2012, respectively. Rental revenue also includes amortization of set-up fees which are amortized over the term of the respective lease as discussed above. | ||||||||||||||||||||||
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 $9.5 million and $7.9 million as of September 30, 2014 and December 31, 2013, respectively. Additionally, $1.1 million and $1.3 million of deferred income were amortized into revenue for the three months ended September 30, 2014 and 2013, respectively, and $3.5 million and $3.5 million for the nine months ended September 30, 2014 and 2013, respectively. | Allowance for Uncollectible Accounts Receivable—Rents receivable are recognized when due and are carried at cost, less an allowance for doubtful accounts. The Company records a provision for losses on rents receivable equal to the estimated uncollectible accounts, which is based on management’s historical experience and a review of the current status of the Company’s receivables. As necessary, the Company also establishes an appropriate allowance for doubtful accounts for receivables arising from the straight-lining of rents. The aggregate allowance for doubtful accounts was $0.9 million and $0.5 million as of December 31, 2013 and 2012, respectively. | |||||||||||||||||||||
Capital Lease—The Company evaluates leased real estate to determine whether the lease should be classified as a capital or operating lease in accordance with U.S GAAP. | ||||||||||||||||||||||
Interest Rate Derivative Instruments – The Company utilizes derivatives to manage its interest rate exposure. During February 2012, the Company entered into interest rate swaps with a notional amount of $150 million which were cash flow hedges and qualified for hedge accounting. For these hedges, the effective portion of the change in fair value was recognized through other comprehensive income or loss. Amounts were reclassified out of other comprehensive income (loss) as the hedged item was recognized in earnings, either for ineffectiveness or for amounts paid relating to the hedge. The Company reflected all changes in the fair value of the swaps in other comprehensive income (loss) during the nine months ended September 30, 2014, as there was no ineffectiveness recorded in that period. The Company’s interest rate swaps matured on September 28, 2014, and as such, there are no amounts outstanding on the consolidated balance sheet at September 30, 2014 relating to these swaps. | The Company periodically enters into capital leases for certain equipment. The outstanding liabilities for the capital leases were $2.5 million and $2.5 million as of December 31, 2013 and 2012, respectively. Depreciation related to the associated assets is included in depreciation and amortization expense in the Statements of Operations and Comprehensive Income (Loss). | |||||||||||||||||||||
Recoveries from Customers—Certain customer leases contain provisions under which the customers reimburse the Company for a portion of the property’s real estate taxes, insurance and other operating expenses, which include certain power and cooling-related charges. The reimbursements are included in revenue as recoveries from customers in the Statements of Operations and Comprehensive Income (Loss) in the period the applicable expenditures are incurred. Certain customer leases are structured to provide a fixed monthly billing amount that includes an estimate of various operating expenses, with all revenue from such leases included in rental revenues. | ||||||||||||||||||||||
[Equity-based Compensation – All equity-based compensation is measured at fair value on the grant date or date of modification, as applicable, and recognized in earnings over the requisite service period. Depending upon the settlement terms of the awards, all or a portion of the fair value of equity-based awards may be presented as a liability or as equity in the consolidated balance sheets. Equity-based compensation costs are measured based upon their estimated fair value on the date of grant or modification. Equity-based compensation expense net of forfeited and repurchased awards was $0.9 million and $0.5 million for the three months ended September 30, 2014 and 2013, respectively, and $2.9 million and $1.3 million for the nine months ended September 30, 2014 and 2013, respectively.] | Cloud and Managed Services Revenue—The Company may provide both its cloud product and use of its managed services to its customers on an individual or combined basis. Service fee revenue is recognized as the revenue is earned, which generally coincides with the services being provided. | |||||||||||||||||||||
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 in the United States. | ||||||||||||||||||||||
Rental Revenue – The Company, as a lessor, has retained substantially all of the risks and benefits of ownership and accounts for its leases as operating leases. 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 $4.2 million and $2.9 million as of September 30, 2014 and December 31, 2013, respectively. Rental revenue also includes amortization of set-up fees which are amortized over the term of the respective lease as discussed above. | Restructuring—In March 2012, the Company decided to consolidate its New York area operations into the New Jersey data center facility. The Company transferred certain customers from the New York City facility to the New Jersey facility. As of December 31, 2012, the Company had completed the consolidation of its operations into the Jersey City facility and recognized $3.3 million in expense primarily related to terminating the New York facility lease. As this consolidation was completed in 2012, there were no restructuring costs incurred during the period from October 15, 2013 to December 31, 2013 and during the period from January 1, 2013 to October 14, 2013. | |||||||||||||||||||||
Customer Concentrations—As of December 31, 2013, two of the Company’s customers represented 7.5% and 5.7%, respectively, of its total monthly rental revenue. No other customers exceeded 5% of total monthly rental revenue. | ||||||||||||||||||||||
Allowance for Uncollectible Accounts Receivable – Rents receivable are recognized when due and are carried at cost, less an allowance for doubtful accounts. The Company records a provision for losses on rents receivable equal to the estimated uncollectible accounts, which is based on management’s historical experience and a review of the current status of the Company’s receivables. As necessary, the Company also establishes an appropriate allowance for doubtful accounts for receivables arising from the straight-lining of rents. The aggregate allowance for doubtful accounts was $0.9 million as of September 30, 2014 and December 31, 2013. | As of December 31, 2013, five of the Company’s customers exceeded 5% of total accounts receivable. In aggregate, these five customers accounted for 32.1% of total accounts receivable. None of these five customers individually exceeded 10% of total accounts receivable. | |||||||||||||||||||||
Capital Leases – The Company evaluates leased real estate to determine whether the lease should be classified as a capital or operating lease in accordance with U.S GAAP. | Income Taxes—The Operating Partnership is obligated to comply with Internal Revenue Service real estate investment trust (“IRS REIT”) tax regulations in accordance with the unitholders agreement. In order to comply with this obligation, the Company elected for one of its existing subsidiaries to be taxed as a taxable REIT subsidiary under the IRS REIT tax regulations. The taxable REIT subsidiary is allocated income and expense based on IRS REIT tax regulations. | |||||||||||||||||||||
For the taxable REIT subsidiary, 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. | ||||||||||||||||||||||
The Company periodically enters into capital leases for certain equipment. The outstanding liabilities for the capital leases were $9.0 million and $2.5 million as of September 30, 2014 and December 31, 2013, respectively. Depreciation related to the associated assets is included in depreciation and amortization expense in the Statements of Operations and Comprehensive Income (Loss). | The taxable REIT subsidiary offsets 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 taxable subsidiary did not generate taxable income for the years ended December 31, 2013, 2012, or 2011. Accordingly, no provision for income taxes was recorded nor was an income tax benefit recorded for the last four years. Due to the lack of sufficient historical evidence to indicate it is more likely than not that the deferred tax assets will be utilized, the valuation allowance relating to deferred tax assets continue to be recorded at December 31, 2013. The change in valuation allowance during 2013 was a decrease of $0.5 million. | |||||||||||||||||||||
Temporary differences and carry forwards which give rise to the deferred tax assets and liabilities are as follows: | ||||||||||||||||||||||
Recoveries from Customers – Certain customer leases contain provisions under which the customers reimburse the Company for a portion of the property’s real estate taxes, insurance and other operating expenses, which include certain power and cooling-related charges. The reimbursements are included in revenue as recoveries from customers in the Statements of Operations and Comprehensive Income (Loss) in the period the applicable expenditures are incurred. Certain customer leases are structured to provide a fixed monthly billing amount that includes an estimate of various operating expenses, with all revenue from such leases included in rental revenues. | ||||||||||||||||||||||
Cloud and Managed Services Revenue – The Company may provide both its cloud product and use of its managed services to its customers on an individual or combined basis. Service fee revenue is recognized as the revenue is earned, which generally coincides with the services being provided. | ||||||||||||||||||||||
For the year ended December 31, | ||||||||||||||||||||||
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 in the United States. | (in thousands) | |||||||||||||||||||||
Customer Concentrations – As of September 30, 2014, one of the Company’s customers represented 8.4% of its total monthly rental revenue. No other customers exceeded 5% of total monthly rental revenue. | 2013 | 2012 | 2011 | |||||||||||||||||||
As of September 30, 2014, eight of the Company’s customers exceeded 5% of total accounts receivable. In aggregate, these eight customers accounted for 58% of total accounts receivable. One of these eight customers individually exceeded 10% of total accounts receivable. | Deferred tax liabilities | |||||||||||||||||||||
Property and equipment................................................................................................................................................................................................. | $ | $ | $ | |||||||||||||||||||
Income Taxes – One of the Operating Partnership’s existing subsidiaries has elected to be taxed as a taxable REIT subsidiary under the Internal Revenue Service real estate investment trust (the “IRS REIT”) tax regulations. The taxable REIT subsidiary is allocated income and expense based on IRS REIT tax regulations. | -4,905 | -4,852 | -3,533 | |||||||||||||||||||
Other............................................................................................................................................................................................................................. | -873 | -551 | -287 | |||||||||||||||||||
For the taxable REIT subsidiary, 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. | ||||||||||||||||||||||
Gross Deferred Tax Liabilities......................................................................................................................................................................................... | -5,778 | -5,403 | -3,820 | |||||||||||||||||||
The Company’s tax provision has not changed materially subsequent to December 31, 2013. The Company is not currently under examination by the Internal Revenue Service. | Deferred tax assets | |||||||||||||||||||||
Net operating loss carryforwards..................................................................................................................................................................................... | 5,861 | 6,694 | 3,410 | |||||||||||||||||||
Fair Value Measurements – ASC Topic 820, Fair Value Measurements and Disclosures, 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). | Deferred revenue and setup charges................................................................................................................................................................................. | 583 | 467 | 372 | ||||||||||||||||||
Derivative liability......................................................................................................................................................................................................... | — | — | 81 | |||||||||||||||||||
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. | Other............................................................................................................................................................................................................................. | 699 | 113 | 101 | ||||||||||||||||||
Financial assets and liabilities measured at fair value in the financial statements on a recurring basis consist of the Company’s derivatives. The fair values of the derivatives are determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative. The analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves (“significant other observable inputs”). The fair value calculation also includes an amount for risk of non-performance using “significant unobservable inputs” such as estimates of current credit spreads to evaluate the likelihood of default. The Company has concluded as of September 30, 2014 and December 31, 2013 that the fair value associated to “significant unobservable inputs” for risk of non-performance was insignificant to the overall fair value of the derivative agreements and, as a result, have determined that the relevant inputs for purposes of calculating the fair value of the derivative agreements, in their entirety, were based upon “significant other observable inputs.” The Company determined the fair value of derivatives using Level 2 inputs. These methods of assessing fair value result in a general approximation of value, and such value may never be realized. | Gross deferred tax assets............................................................................................................................................................................................... | 7,143 | 7,274 | 3,964 | ||||||||||||||||||
The Company’s financial instruments held at fair value are presented below as of September 30, 2014 and December 31, 2013 (dollars in thousands): | Net deferred tax assets................................................................................................................................................................................................... | 1,365 | 1,871 | 144 | ||||||||||||||||||
Valuation allowance....................................................................................................................................................................................................... | -1,365 | -1,871 | -144 | |||||||||||||||||||
Fair Value Measurements | Net deferred................................................................................................................................................................................................................. | $— | $— | $— | ||||||||||||||||||
Carrying Value | Level 1 | Level 2 | Level 3 | |||||||||||||||||||
30-Sep-14 | ||||||||||||||||||||||
Financial Liabilities: | ||||||||||||||||||||||
Interest rate swap liability(1) | $ | - | $ | - | $ | - | $ | - | The taxable REIT subsidiary currently has $15.8 million of net operating loss carryforwards related to federal income taxes that expire in 16-20 years. The taxable REIT subsidiary also has $10.1 million of net operating loss carryforwards relating to state income taxes that expire in 11-20 years. | |||||||||||||
31-Dec-13 | As of December 31, 2013 and 2012, the Company has no uncertain tax positions. If the Company incurs any interest or penalties on tax liabilities from significant uncertain tax positions, those items will be classified as interest expense and general and administrative expense, respectively, in the Statements of Operations and Comprehensive Income (Loss). For the years ended December 31, 2013, 2012 and 2011, the Company had no such interest or penalties. | |||||||||||||||||||||
Financial Liabilities: | The Company is not currently under examination by the Internal Revenue Service. | |||||||||||||||||||||
Interest rate swap liability(1) | $ | 453 | $ | - | $ | 453 | $ | - | Fair Value Measurements—ASC Topic 820 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. | ||||||||||||||||||||||
Financial assets and liabilities measured at fair value in the financial statements on a recurring basis consist of the Company’s derivatives. The fair values of the derivatives are determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative. The analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves (“significant other observable inputs”). The fair value calculation also includes an amount for risk of non-performance using “significant unobservable inputs” such as estimates of current credit spreads to evaluate the likelihood of default. The Company has concluded as of December 31, 2013 and 2012 that the fair value associated to “significant unobservable inputs” for risk of non-performance was insignificant to the overall fair value of the derivative agreements and, as a result, have determined that the relevant inputs for purposes of calculating the fair value of the derivative agreements, in their entirety, were based upon “significant other observable inputs.” The Company determined the fair value of derivatives using level 2 inputs. These methods of assessing fair value result in a general approximation of value, and such value may never be realized. | ||||||||||||||||||||||
The Company’s financial instruments held at fair value are presented below as of December 31, 2013 and 2012 (dollars in thousands): | ||||||||||||||||||||||
-1 | The Company used inputs from quoted prices for similar assets and liabilities in active markets that are directly or indirectly observable relating to the measurement of the interest rate swaps at December 31, 2013. The fair value measurement of the interest rate swaps have been classified as Level 2. The swaps matured on September 28, 2014, and as such, there were no amounts outstanding on the consolidated balance sheet as of September 30, 2014 related to interest rate swaps. | |||||||||||||||||||||
New Accounting Pronouncements | Fair Value Measurements | |||||||||||||||||||||
In April 2014, the Financial Accounting Standards Board (“FASB”) issued ASU 2014-08, “Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity”. The amendments in the ASU change the criteria for reporting discontinued operations while enhancing disclosures in this area. The new guidance narrows the definition of discontinued operations to disposals that represent a strategic shift in operations and requires expanded disclosures about discontinued operations that will provide financial statement users with more information about the assets, liabilities, income and expenses of discontinued operations. The new guidance also requires disclosure of the pre-tax income attributable to a disposal of a significant part of an organization that does not qualify for discontinued operations reporting. The amendments in the ASU are effective for annual and interim reporting periods beginning on and after December 15, 2014. Early adoption is permitted. Adoption of this standard will currently have no effect on the Company’s financial statements. | Carrying Value | Level 1 | Level 2 | Level 3 | ||||||||||||||||||
In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606),” which supersedes the current revenue recognition requirements in ASC 606, 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. This ASU also requires enhanced disclosures. The amendments in this ASU are effective for annual and interim periods beginning after December 15, 2016. Early adoption is not permitted. Retrospective and modified retrospective application is allowed. The Company is currently assessing the impact of this amendment on its Consolidated Financial Statements. | December 31, 2013 | |||||||||||||||||||||
Financial Liabilities: | ||||||||||||||||||||||
Interest rate swap liability(1)........................................................................................................................................................................................... | $ | $— | $ | $— | ||||||||||||||||||
453 | 453 | |||||||||||||||||||||
December 31, 2012 | ||||||||||||||||||||||
Financial Assets: | ||||||||||||||||||||||
Restricted deposits, held at fair value............................................................................................................................................................................... | $ | $ | $— | $— | ||||||||||||||||||
146 | 146 | |||||||||||||||||||||
Financial Liabilities: | ||||||||||||||||||||||
Interest rate swap liability(1)........................................................................................................................................................................................... | $ | $— | $ | $— | ||||||||||||||||||
767 | 767 | |||||||||||||||||||||
(1)The Company used inputs from quoted prices for similar assets and liabilities in active markets that are directly or indirectly observable relating to the measurement of the interest rate swaps. The fair value measurement of the interest rate swaps have been classified as Level 2. | ||||||||||||||||||||||
New Accounting Pronouncements Fair Value Measurement (Topic 820). In May 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update Topic 820 “Fair Value Measurement Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. Generally Accepted Accounting Principles and International Financial Reporting Standards.” The amendments in this update result in common fair value measurement and disclosure requirements under U.S. Generally Accepted Accounting Principles and International Financial Reporting Standards. Consequently, the amendments change the terminology used to describe many of the requirements under U.S. Generally Accepted Accounting Principles for measuring fair value and for disclosing information about fair value measurements. For many of the requirements, the FASB does not intend for the amendments in this update to result in a change in the application of the requirements in Topic 820. Some of the amendments clarify the FASB’s intent about the application of existing fair value measurement requirements. Other amendments change a particular principle or requirement for measuring fair value or for disclosing information about fair value measurements. The amendments in this update were effective for the Company beginning January 1, 2012 and do not have a material effect on the Company’s consolidated financial statements. | ||||||||||||||||||||||
Comprehensive Income (Topic 220). In June 2011, the FASB issued Accounting Standards Update Topic 220 “Presentation of Comprehensive Income.” Under the amendments in this update, an entity has the option to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The amendments in this update were effective for the Company beginning January 1, 2012 and do not have a material effect on the Company’s consolidated financial statements. | ||||||||||||||||||||||
Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income. In February 2013, the FASB issued Accounting Standards Update No. 2013-02, “Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income,” requiring companies to present current period reclassifications out of accumulated other comprehensive income (“AOCI”). For significant items reclassified out of AOCI to net income in their entirety in the period, companies must report the effect of the reclassifications on the respective line items in the statement where net income is presented. In certain circumstances, this can be done on the face of that statement. Otherwise, it must be presented in the notes. The amendments in this update are effective for the Company beginning January 1, 2013 and did not have any impact on the Company’s consolidated financial statements. | ||||||||||||||||||||||
Acquisition_of_Real_Estate
Acquisition of Real Estate | 9 Months Ended | 12 Months Ended | ||||||||||||
Sep. 30, 2014 | Dec. 31, 2013 | |||||||||||||
Acquisition of Real Estate | 3. Acquisition of Real Estate | 3. Acquisitions of Real Estate | ||||||||||||
In February 2013, the Company completed its acquisition of a site in Dallas, Texas. The Company paid cash of $10.25 million for the Dallas-Fort Worth facility. In connection with the transaction, the Company obtained $10.25 million of seller-financed debt that was repaid in June 2013 as outlined in Note 5. Additionally, the Company incurred transaction costs of $0.6 million, which were capitalized, providing an aggregate cost of $21.2 million. Upon completion of the redevelopment, the former 700,000 square foot semiconductor plant will be converted into a data center facility on the existing campus. In accordance with ASC 805, the Company accounted for this acquisition as an asset purchase. | ||||||||||||||
On July 8, 2014, the Company completed the acquisition of the former Sun Times Press facility in downtown Chicago, Illinois, for approximately $18 million. The facility consists of approximately 317,000 gross square feet with capacity for approximately 133,000 square feet of raised floor and 24 megawatts (“MW”) of power. The Company intends to redevelop the facility which will increase its size to approximately 400,000 gross square feet with raised floor capacity of approximately 215,000 square feet and 37MW of power. The facility also has access to long haul fiber and is situated on 30 acres of developable land. This acquisition was funded with a draw on the unsecured revolving credit facility. In accordance with ASC 805, Business Combinations, the Company accounted for this acquisition as an asset acquisition. | In December 2012, the Company purchased a data center facility located in Sacramento, California for which the Company paid approximately $63.3 million. The preliminary purchase price allocation was based on an assessment of the fair value of the assets acquired. The preliminary purchase price allocation recorded for the year ended December 31, 2012, was adjusted in 2013. The following table summarizes the consideration for the Sacramento facility and the final purchase price allocation (in thousands). | |||||||||||||
On June 30, 2014 the Company completed the acquisition of a data center facility in New Jersey (the “Princeton facility”), from McGraw Hill Financial, Inc., for an aggregate cost of approximately $73.3 million. This facility is located on approximately 194 acres and consists of approximately 560,000 gross square feet, including approximately 58,000 square feet of raised floor, and 12 MW of gross power. This acquisition was funded with a draw on the unsecured revolving credit facility. Concurrently with acquiring this data center the Company entered into a 10 year lease for the facility’s 58,000 square feet of raised floor with Atos, an international information technology services company headquartered in Bezos, France. The lease includes a 15 year renewal at the option of Atos. | ||||||||||||||
The Company accounted for this acquisition in accordance with ASC 805, Business Combinations as a business combination. The preliminary purchase price allocation was based on an assessment of the fair value of the assets acquired, and excludes acquisition-related costs which in accordance with ASC 805 were expensed as incurred. The Company acquired the Princeton facility on June 30, 2014. The Company is valuing the assets acquired using Level 3 inputs. | Final | Original | Adjustment | Weighted average | ||||||||||
Sacramento facility | Sacramento facility | useful life | ||||||||||||
The following table summarizes the consideration for the Princeton facility and the preliminary allocation of the fair value of assets acquired as of September 30, 2014 (in thousands): | as of December 31, | as of December 31, | ||||||||||||
2013 | 2012 | |||||||||||||
Princeton facility as of | Weighted average | Buildings......................................................................................................................................................................................................................... | $ | $ | $ | 40 | ||||||||
September 30, 2014 | useful life | 52,439 | 52,753 | -314 | ||||||||||
Buildings | $ | 35,574 | 40 | Land............................................................................................................................................................................................................................. | 1,481 | 1,485 | -4 | |||||||
Land | 17,976 | N/A | Tenant relationship......................................................................................................................................................................................................... | 5,366 | 5,029 | 337 | 4 | |||||||
Acquired Intangibles | 16,114 | 10 | In place leases............................................................................................................................................................................................................... | 3,964 | 3,202 | 762 | 2 | |||||||
Deferred Costs | 3,335 | 10 | Above (below) market leases........................................................................................................................................................................................... | — | 781 | -781 | 1 | |||||||
Other | 301 | 10 | ||||||||||||
Total purchase price | $ | 73,300 | Total purchase price....................................................................................................................................................................................................... | $ | $ | $— | ||||||||
63,250 | 63,250 | |||||||||||||
The purchase price allocation remains provisional pending completion of further valuation analysis. Any further revisions will be recorded as adjustments to the final purchase price allocation. | ||||||||||||||
Qualitytech, LP [Member] | ||||||||||||||
Acquisition of Real Estate | 3. Acquisition of Real Estate | 3. Acquisitions of Real Estate | ||||||||||||
In February 2013, the Company completed its acquisition of a site in Dallas, Texas. The Company paid cash of $10.25 million for the Dallas-Fort Worth facility. In connection with the transaction, the Company obtained $10.25 million of seller-financed debt that was repaid in June 2013 as outlined in Note 5. Additionally, the Company incurred transaction costs of $0.6 million, which were capitalized, providing an aggregate cost of $21.2 million. Upon completion of the redevelopment, the former 700,000 square foot semiconductor plant will be converted into a data center facility on the existing campus. In accordance with ASC 805, the Company accounted for this acquisition as an asset purchase. | ||||||||||||||
On July 8, 2014, the Company completed the acquisition of the former Sun Times Press facility in downtown Chicago, Illinois, for approximately $18 million. The facility consists of approximately 317,000 gross square feet with capacity for approximately 133,000 square feet of raised floor and 24 megawatts (“MW”) of power. The Company intends to redevelop the facility which will increase its size to approximately 400,000 gross square feet with raised floor capacity of approximately 215,000 square feet and 37MW of power. The facility also has access to long haul fiber and is situated on 30 acres of developable land. This acquisition was funded with a draw on the unsecured revolving credit facility. In accordance with ASC 805, Business Combinations, the Company accounted for this acquisition as an asset acquisition. | In December 2012, the Company purchased a data center facility located in Sacramento, California for which the Company paid approximately $63.3 million. The preliminary purchase price allocation was based on an assessment of the fair value of the assets acquired. The preliminary purchase price allocation recorded for the year ended December 31, 2012, was adjusted in 2013. The following table summarizes the consideration for the Sacramento facility and the final purchase price allocation (in thousands). | |||||||||||||
On June 30, 2014 the Company completed the acquisition of a data center facility in New Jersey (the “Princeton facility”), from McGraw Hill Financial, Inc., for an aggregate cost of approximately $73.3 million. This facility is located on approximately 194 acres and consists of approximately 560,000 gross square feet, including approximately 58,000 square feet of raised floor, and 12 MW of gross power. This acquisition was funded with a draw on the unsecured revolving credit facility. Concurrently with acquiring this data center the Company entered into a 10 year lease for the facility’s 58,000 square feet of raised floor with Atos, an international information technology services company headquartered in Bezos, France. The lease includes a 15 year renewal at the option of Atos. | ||||||||||||||
The Company accounted for this acquisition in accordance with ASC 805, Business Combinations as a business combination. The preliminary purchase price allocation was based on an assessment of the fair value of the assets acquired, and excludes acquisition-related costs which in accordance with ASC 805 were expensed as incurred. The Company acquired the Princeton facility on June 30, 2014. The Company is valuing the assets acquired using Level 3 inputs. | Final | Original | Adjustment | Weighted average | ||||||||||
Sacramento facility | Sacramento facility | useful life | ||||||||||||
The following table summarizes the consideration for the Princeton facility and the preliminary allocation of the fair value of assets acquired as of September 30, 2014 (in thousands): | as of December 31, | as of December 31, | ||||||||||||
2013 | 2012 | |||||||||||||
Princeton facility as of | Weighted average | Buildings......................................................................................................................................................................................................................... | $ | $ | $ | 40 | ||||||||
September 30, 2014 | useful life | 52,439 | 52,753 | -314 | ||||||||||
Buildings | $ | 35,574 | 40 | Land............................................................................................................................................................................................................................. | 1,481 | 1,485 | -4 | |||||||
Land | 17,976 | N/A | Tenant relationship......................................................................................................................................................................................................... | 5,366 | 5,029 | 337 | 4 | |||||||
Acquired Intangibles | 16,114 | 10 | In place leases............................................................................................................................................................................................................... | 3,964 | 3,202 | 762 | 2 | |||||||
Deferred Costs | 3,335 | 10 | Above (below) market leases........................................................................................................................................................................................... | — | 781 | -781 | 1 | |||||||
Other | 301 | 10 | ||||||||||||
Total purchase price | $ | 73,300 | Total purchase price....................................................................................................................................................................................................... | $ | $ | $— | ||||||||
63,250 | 63,250 | |||||||||||||
The purchase price allocation remains provisional pending completion of further valuation analysis. Any further revisions will be recorded as adjustments to the final purchase price allocation. | ||||||||||||||
Real_Estate_Assets_and_Constru
Real Estate Assets and Construction in Progress | 9 Months Ended | 12 Months Ended | ||||||||||||||||||||
Sep. 30, 2014 | Dec. 31, 2013 | |||||||||||||||||||||
Real Estate Assets and Construction in Progress | 4. 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 December 31, 2013 and 2012 (in thousands): | ||||||||||||||||||||||
The following is a summary of properties owned or leased by the Company as of September 30, 2014 and December 31, 2013 (in thousands): | As of December 31, 2013: | |||||||||||||||||||||
As of September 30, 2014: | ||||||||||||||||||||||
Property Location | Land | Buildings and | Construction | Total Cost | ||||||||||||||||||
Property Location | Land | Buildings and | Construction | Total Cost | Improvements | in Progress | ||||||||||||||||
Improvements | in Progress | |||||||||||||||||||||
Owned Properties | ||||||||||||||||||||||
Owned Properties | Suwanee, Georgia (Atlanta-Suwanee)............................................................................................................................................................................... | $ | $ | $ | $ | |||||||||||||||||
Suwanee, Georgia (Atlanta-Suwanee) | $ | 3,521 | $ | 134,931 | 3,799 | $ | 142,251 | 3,521 | 126,486 | 3,270 | 133,277 | |||||||||||
Atlanta, Georgia (Atlanta-Metro) | 15,397 | 350,728 | 13,770 | 379,895 | Atlanta, Georgia (Atlanta-Metro)..................................................................................................................................................................................... | 15,397 | 296,547 | 32,456 | 344,400 | |||||||||||||
Santa Clara, California* | - | 88,891 | 662 | 89,553 | Santa Clara, California*................................................................................................................................................................................................. | — | 86,544 | 1,249 | 87,793 | |||||||||||||
Richmond, Virginia | 2,180 | 126,659 | 62,301 | 191,140 | Richmond, Virginia....................................................................................................................................................................................................... | 2,180 | 108,979 | 67,155 | 178,314 | |||||||||||||
Sacramento, California | 1,481 | 57,892 | 1,362 | 60,735 | Sacramento, California................................................................................................................................................................................................... | 1,481 | 52,841 | 4,273 | 58,595 | |||||||||||||
Princeton, New Jersey | 17,975 | 36,346 | 43 | 54,364 | Dallas, Texas............................................................................................................................................................................................................... | 5,808 | — | 38,501 | 44,309 | |||||||||||||
Dallas-Fort Worth, Texas | 5,808 | 42,121 | 69,909 | 117,838 | Miami, Florida............................................................................................................................................................................................................... | 1,777 | 27,553 | — | 29,330 | |||||||||||||
Chicago, Illinois | - | - | 18,605 | 18,605 | Lenexa, Kansas............................................................................................................................................................................................................. | 437 | 3,298 | — | 3,735 | |||||||||||||
Miami, Florida | 1,777 | 27,818 | 5 | 29,600 | Wichita, Kansas............................................................................................................................................................................................................. | — | 1,409 | — | 1,409 | |||||||||||||
Lenexa, Kansas | 437 | 24 | 3,108 | 3,569 | ||||||||||||||||||
Wichita, Kansas | - | 1,409 | - | 1,409 | 30,601 | 703,657 | 146,904 | 881,162 | ||||||||||||||
48,576 | 866,819 | 173,564 | 1,088,959 | Leased Properties | ||||||||||||||||||
Jersey City, New Jersey................................................................................................................................................................................................. | — | 23,811 | — | 23,811 | ||||||||||||||||||
Leased Properties | Overland Park, Kansas................................................................................................................................................................................................... | — | 762 | — | 762 | |||||||||||||||||
Jersey City, New Jersey | - | 26,406 | 885 | 27,291 | ||||||||||||||||||
Overland Park, Kansas | - | 789 | 21 | 810 | — | 24,573 | — | 24,573 | ||||||||||||||
- | 27,195 | 906 | 28,101 | $ | $ | $ | $ | |||||||||||||||
30,601 | 728,230 | 146,904 | 905,735 | |||||||||||||||||||
$ | 48,576 | $ | 894,014 | $ | 174,470 | $ | 1,117,060 | |||||||||||||||
*Owned facility subject to long-term ground sublease. | ||||||||||||||||||||||
* Owned facility subject to long-term ground sublease. | As of December 31, 2012: | |||||||||||||||||||||
As of December 31, 2013: | ||||||||||||||||||||||
Property Location | Land | Buildings and | Construction | Total Cost | ||||||||||||||||||
Improvements | in Progress | |||||||||||||||||||||
Property Location | Land | Buildings and | Construction | Total Cost | ||||||||||||||||||
Improvements | in Progress | Owned Properties | ||||||||||||||||||||
Suwanee, Georgia (Atlanta-Suwanee)............................................................................................................................................................................... | $ | $ | $ | $ | ||||||||||||||||||
Owned Properties | 3,521 | 103,438 | 3,572 | 110,531 | ||||||||||||||||||
Suwanee, Georgia (Atlanta-Suwanee) | $ | 3,521 | $ | 126,486 | 3,270 | $ | 133,277 | Atlanta, Georgia (Atlanta-Metro)..................................................................................................................................................................................... | 15,314 | 263,192 | 6,658 | 285,164 | ||||||||||
Atlanta, Georgia (Atlanta-Metro) | 15,397 | 296,547 | 32,456 | 344,400 | Santa Clara, California*................................................................................................................................................................................................. | — | 83,536 | 245 | 83,781 | |||||||||||||
Santa Clara, California* | - | 86,544 | 1,249 | 87,793 | Richmond, Virginia....................................................................................................................................................................................................... | 2,179 | 71,629 | 71,986 | 145,794 | |||||||||||||
Richmond, Virginia | 2,180 | 108,979 | 67,155 | 178,314 | Sacramento, California................................................................................................................................................................................................... | 1,485 | 52,753 | — | 54,238 | |||||||||||||
Sacramento, California | 1,481 | 52,841 | 4,273 | 58,595 | Miami, Florida............................................................................................................................................................................................................... | 1,777 | 27,111 | — | 28,888 | |||||||||||||
Dallas-Fort Worth, Texas | 5,808 | - | 38,501 | 44,309 | Lenexa, Kansas............................................................................................................................................................................................................. | 437 | 54 | 3,260 | 3,751 | |||||||||||||
Miami, Florida | 1,777 | 27,553 | - | 29,330 | Wichita, Kansas............................................................................................................................................................................................................. | — | 1,408 | — | 1,408 | |||||||||||||
Lenexa, Kansas | 437 | 3,298 | - | 3,735 | ||||||||||||||||||
Wichita, Kansas | - | 1,409 | - | 1,409 | 24,713 | 603,121 | 85,721 | 713,555 | ||||||||||||||
30,601 | 703,657 | 146,904 | 881,162 | Leased Properties | ||||||||||||||||||
Jersey City, New Jersey................................................................................................................................................................................................. | — | 18,666 | 1,888 | 20,554 | ||||||||||||||||||
Leased Properties | Overland Park, Kansas................................................................................................................................................................................................... | — | 719 | — | 719 | |||||||||||||||||
Jersey City, New Jersey | - | 23,811 | - | 23,811 | ||||||||||||||||||
Overland Park, Kansas | - | 762 | 762 | — | 19,385 | 1,888 | 21,273 | |||||||||||||||
- | 24,573 | - | 24,573 | $ | $ | $ | $ | |||||||||||||||
24,713 | 622,506 | 87,609 | 734,828 | |||||||||||||||||||
$ | 30,601 | $ | 728,230 | $ | 146,904 | $ | 905,735 | |||||||||||||||
*Owned facility subject to long-term ground sublease. | ||||||||||||||||||||||
* Owned facility subject to long-term ground sublease. | ||||||||||||||||||||||
Qualitytech, LP [Member] | ||||||||||||||||||||||
Real Estate Assets and Construction in Progress | 4. 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 December 31, 2013 and 2012 (in thousands): | ||||||||||||||||||||||
The following is a summary of properties owned or leased by the Company as of September 30, 2014 and December 31, 2013 (in thousands): | As of December 31, 2013: | |||||||||||||||||||||
As of September 30, 2014: | ||||||||||||||||||||||
Property Location | Land | Buildings and | Construction | Total Cost | ||||||||||||||||||
Property Location | Land | Buildings and | Construction | Total Cost | Improvements | in Progress | ||||||||||||||||
Improvements | in Progress | |||||||||||||||||||||
Owned Properties | ||||||||||||||||||||||
Owned Properties | Suwanee, Georgia (Atlanta-Suwanee)............................................................................................................................................................................... | $ | $ | $ | $ | |||||||||||||||||
Suwanee, Georgia (Atlanta-Suwanee) | $ | 3,521 | $ | 134,931 | 3,799 | $ | 142,251 | 3,521 | 126,486 | 3,270 | 133,277 | |||||||||||
Atlanta, Georgia (Atlanta-Metro) | 15,397 | 350,728 | 13,770 | 379,895 | Atlanta, Georgia (Atlanta-Metro)..................................................................................................................................................................................... | 15,397 | 296,547 | 32,456 | 344,400 | |||||||||||||
Santa Clara, California* | - | 88,891 | 662 | 89,553 | Santa Clara, California*................................................................................................................................................................................................. | — | 86,544 | 1,249 | 87,793 | |||||||||||||
Richmond, Virginia | 2,180 | 126,659 | 62,301 | 191,140 | Richmond, Virginia....................................................................................................................................................................................................... | 2,180 | 108,979 | 67,155 | 178,314 | |||||||||||||
Sacramento, California | 1,481 | 57,892 | 1,362 | 60,735 | Sacramento, California................................................................................................................................................................................................... | 1,481 | 52,841 | 4,273 | 58,595 | |||||||||||||
Princeton, New Jersey | 17,975 | 36,346 | 43 | 54,364 | Dallas, Texas............................................................................................................................................................................................................... | 5,808 | — | 38,501 | 44,309 | |||||||||||||
Dallas-Fort Worth, Texas | 5,808 | 42,121 | 69,909 | 117,838 | Miami, Florida............................................................................................................................................................................................................... | 1,777 | 27,553 | — | 29,330 | |||||||||||||
Chicago, Illinois | - | - | 18,605 | 18,605 | Lenexa, Kansas............................................................................................................................................................................................................. | 437 | 3,298 | — | 3,735 | |||||||||||||
Miami, Florida | 1,777 | 27,818 | 5 | 29,600 | Wichita, Kansas............................................................................................................................................................................................................. | — | 1,409 | — | 1,409 | |||||||||||||
Lenexa, Kansas | 437 | 24 | 3,108 | 3,569 | ||||||||||||||||||
Wichita, Kansas | - | 1,409 | - | 1,409 | 30,601 | 703,657 | 146,904 | 881,162 | ||||||||||||||
48,576 | 866,819 | 173,564 | 1,088,959 | Leased Properties | ||||||||||||||||||
Jersey City, New Jersey................................................................................................................................................................................................. | — | 23,811 | — | 23,811 | ||||||||||||||||||
Leased Properties | Overland Park, Kansas................................................................................................................................................................................................... | — | 762 | — | 762 | |||||||||||||||||
Jersey City, New Jersey | - | 26,406 | 885 | 27,291 | ||||||||||||||||||
Overland Park, Kansas | - | 789 | 21 | 810 | — | 24,573 | — | 24,573 | ||||||||||||||
- | 27,195 | 906 | 28,101 | $ | $ | $ | $ | |||||||||||||||
30,601 | 728,230 | 146,904 | 905,735 | |||||||||||||||||||
$ | 48,576 | $ | 894,014 | $ | 174,470 | $ | 1,117,060 | |||||||||||||||
*Owned facility subject to long-term ground sublease. | ||||||||||||||||||||||
* Owned facility subject to long-term ground sublease. | As of December 31, 2012: | |||||||||||||||||||||
As of December 31, 2013: | ||||||||||||||||||||||
Property Location | Land | Buildings and | Construction | Total Cost | ||||||||||||||||||
Improvements | in Progress | |||||||||||||||||||||
Property Location | Land | Buildings and | Construction | Total Cost | ||||||||||||||||||
Improvements | in Progress | Owned Properties | ||||||||||||||||||||
Suwanee, Georgia (Atlanta-Suwanee)............................................................................................................................................................................... | $ | $ | $ | $ | ||||||||||||||||||
Owned Properties | 3,521 | 103,438 | 3,572 | 110,531 | ||||||||||||||||||
Suwanee, Georgia (Atlanta-Suwanee) | $ | 3,521 | $ | 126,486 | 3,270 | $ | 133,277 | Atlanta, Georgia (Atlanta-Metro)..................................................................................................................................................................................... | 15,314 | 263,192 | 6,658 | 285,164 | ||||||||||
Atlanta, Georgia (Atlanta-Metro) | 15,397 | 296,547 | 32,456 | 344,400 | Santa Clara, California*................................................................................................................................................................................................. | — | 83,536 | 245 | 83,781 | |||||||||||||
Santa Clara, California* | - | 86,544 | 1,249 | 87,793 | Richmond, Virginia....................................................................................................................................................................................................... | 2,179 | 71,629 | 71,986 | 145,794 | |||||||||||||
Richmond, Virginia | 2,180 | 108,979 | 67,155 | 178,314 | Sacramento, California................................................................................................................................................................................................... | 1,485 | 52,753 | — | 54,238 | |||||||||||||
Sacramento, California | 1,481 | 52,841 | 4,273 | 58,595 | Miami, Florida............................................................................................................................................................................................................... | 1,777 | 27,111 | — | 28,888 | |||||||||||||
Dallas-Fort Worth, Texas | 5,808 | - | 38,501 | 44,309 | Lenexa, Kansas............................................................................................................................................................................................................. | 437 | 54 | 3,260 | 3,751 | |||||||||||||
Miami, Florida | 1,777 | 27,553 | - | 29,330 | Wichita, Kansas............................................................................................................................................................................................................. | — | 1,408 | — | 1,408 | |||||||||||||
Lenexa, Kansas | 437 | 3,298 | - | 3,735 | ||||||||||||||||||
Wichita, Kansas | - | 1,409 | - | 1,409 | 24,713 | 603,121 | 85,721 | 713,555 | ||||||||||||||
30,601 | 703,657 | 146,904 | 881,162 | Leased Properties | ||||||||||||||||||
Jersey City, New Jersey................................................................................................................................................................................................. | — | 18,666 | 1,888 | 20,554 | ||||||||||||||||||
Leased Properties | Overland Park, Kansas................................................................................................................................................................................................... | — | 719 | — | 719 | |||||||||||||||||
Jersey City, New Jersey | - | 23,811 | - | 23,811 | ||||||||||||||||||
Overland Park, Kansas | - | 762 | 762 | — | 19,385 | 1,888 | 21,273 | |||||||||||||||
- | 24,573 | - | 24,573 | $ | $ | $ | $ | |||||||||||||||
24,713 | 622,506 | 87,609 | 734,828 | |||||||||||||||||||
$ | 30,601 | $ | 728,230 | $ | 146,904 | $ | 905,735 | |||||||||||||||
*Owned facility subject to long-term ground sublease. | ||||||||||||||||||||||
* Owned facility subject to long-term ground sublease. | ||||||||||||||||||||||
Credit_Facilities_and_Mortgage
Credit Facilities and Mortgage Notes Payable | 9 Months Ended | 12 Months Ended | ||||||||||
Sep. 30, 2014 | Dec. 31, 2013 | |||||||||||
Credit Facilities and Mortgage Notes Payable | 5. Credit Facilities, Senior Notes and Mortgage Notes Payable | 5. Credit Facilities and Mortgage Notes Payable | ||||||||||
Below is a listing of our outstanding debt, excluding capital leases, as of December 31, 2013 and 2012 (in thousands): | ||||||||||||
Below is a listing of our outstanding debt, excluding capital leases, as of September 30, 2014 and December 31, 2013 (in thousands): | ||||||||||||
September 30, | December 31, | December 31, | December 31, | |||||||||
2014 | 2013 | 2013 | 2012 | |||||||||
(Unaudited) | ||||||||||||
Unsecured Credit Facility............................................................................................................................................................................................... | $ | $— | ||||||||||
Unsecured Credit Facility | $ | 197,000 | $ | 256,500 | 256,500 | |||||||
Senior Notes, net of discount | 297,671 | - | Secured Credit Facility................................................................................................................................................................................................... | — | 316,500 | |||||||
Richmond Credit Facility | 70,000 | 70,000 | Richmond Credit Facility................................................................................................................................................................................................. | 70,000 | 70,000 | |||||||
Atlanta-Metro Equipment Loan | 17,175 | 18,839 | Atlanta-Metro Equipment Loan......................................................................................................................................................................................... | 18,839 | 20,931 | |||||||
Total | $ | 581,846 | $ | 345,339 | Miami Loan................................................................................................................................................................................................................. | — | 26,048 | |||||
Atlanta-Suwanee Land Loan........................................................................................................................................................................................... | — | 1,600 | ||||||||||
Lenexa Loan................................................................................................................................................................................................................. | — | 2,712 | ||||||||||
(a) Unsecured Credit Facility – On May 1, 2013, the Company entered into an unsecured credit facility agreement with a syndicate of financial institutions in which KeyBank National Association serves as administrative agent (the “Unsecured Credit Facility”). The Unsecured Credit Facility consists of a term loan of $150 million, with a term of five years, and an unsecured revolving credit facility of $410 million, with a term of four years, for aggregate capacity of the Unsecured Credit Facility of $560 million. On July 23, 2014, the Company repaid $75 million of the term loan portion of the Unsecured Credit Facility and repaid a portion of the outstanding balance of the revolving portion of the Unsecured Credit Facility with proceeds from the issuance of its 5.875% Senior Notes due 2022, reducing the balance to the amounts described above. The Unsecured Credit Facility may be increased to up to $600 million, subject to certain conditions, including the consent of the administrative agent and obtaining necessary commitments. On December 17, 2014 the Company amended and restated its Unsecured Credit Facility. See “Note 14 – Subsequent Events” for a discussion of this amendment. | Santa Clara Bridge Loan................................................................................................................................................................................................. | — | 50,000 | |||||||||
The Unsecured Credit Facility requires monthly interest payments and requires the Company to comply with various quarterly covenant requirements relating to debt service coverage ratio, fixed charge ratio, leverage ratio and tangible net worth and various other operational requirements. In connection with the Unsecured Credit Facility, as of September 30, 2014, the Company had an additional $3.0 million letter of credit outstanding. The letter of credit was reduced to $2.5 million on October 1, 2014. | Total............................................................................................................................................................................................................................. | $ | $ | |||||||||
345,339 | 487,791 | |||||||||||
Amounts outstanding under the Unsecured Credit Facility bear interest at a variable rate equal to, at our election, LIBOR or a base rate, plus a spread that will range, depending upon the Company’s leverage ratio, from 2.10% to 2.85% for LIBOR loans or 1.10% to 1.85% for base rate loans. As of September 30, 2014, the interest rate for amounts outstanding under the Unsecured Credit Facility was 2.26%. | ||||||||||||
(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 notes described below (collectively, the “Issuers”), issued $300 million aggregate principal amount of 5.875% Senior Notes due 2022 (the “Senior Notes”). The Senior Notes have an interest rate of 5.875% per annum, were issued at a price equal to 99.211% of their face value and mature on August 1, 2022. The proceeds from the offering were used to repay amounts outstanding under the Unsecured Credit Facility, including $75 million outstanding under the term loan. The Senior Notes are unconditionally guaranteed, jointly and severally, on a senior unsecured basis by all of the Operating Partnership’s existing and future subsidiaries (other than foreign subsidiaries and receivables entities) that guarantee any indebtedness of QTS Realty Trust, Inc., the Issuers or any other subsidiary guarantor. The Company will not initially 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 July 23, 2014, among the Operating Partnership, QTS Finance Corporation, the Company, the guarantors named therein, and Deutsche Bank Trust Company Americas, as trustee (the “Indenture”). | (a) Unsecured Credit Facility—On May 1, 2013, the Company entered into an unsecured credit facility agreement with a syndicate of financial institutions in which KeyBank National Association serves as administrative agent (the “Unsecured Credit Facility”). Proceeds from the Unsecured Credit Facility were used to repay the Secured Credit Facility (as defined below). This new unsecured credit facility has a term loan of $225 million, with a term of five years, and a revolving credit facility of $350 million, with a term of four years, for an aggregate borrowing capacity of $575 million. The credit facility also provides for a $100 million accordion feature that could increase the amount of the facility up to $675 million, subject to certain conditions, including the consent of the administrative agent and obtaining necessary commitments. | |||||||||||
During the second quarter of 2013, the Company used proceeds from the Unsecured Credit Facility to pay the outstanding balances under the Secured Credit Facility, loans secured by the Miami and Santa Clara data centers, seller financing to acquire the Lenexa and Dallas-Fort Worth facilities, a loan agreement for the purchase of land adjacent to the Atlanta-Suwanee facility and a loan from Chad L. Williams and entities controlled by Mr. Williams. | ||||||||||||
(c) Richmond Credit Facility – In December 2012, the Company entered into a credit facility secured by the Company’s Richmond data center (the “Richmond Credit Facility”). As of September 30, 2014, the Richmond Credit Facility had capacity of $120 million, as amended, and includes an accordion feature that allows the Company to increase the size of the credit facility up to $200 million. The Richmond Credit Facility matures June 30, 2019. The Richmond Credit Facility requires the Company to comply with covenants similar to the Unsecured Credit Facility. | The Unsecured Credit Facility requires monthly interest payments and requires the Company to comply with various quarterly covenant requirements relating to debt service coverage ratio, fixed charge ratio, leverage ratio and tangible net worth and various other operational requirements. In connection with the Unsecured Credit Facility, as of December 31, 2013, the Company had an additional $3 million letter of credit outstanding. | |||||||||||
Amounts outstanding under the unsecured credit facility bear interest at a variable rate equal to, at our election, LIBOR or a base rate, plus a spread that will range, depending upon our leverage ratio, from 2.10% to 2.85% for LIBOR loans or 1.10% to 1.85% for base rate loans. As of December 31, 2013, the interest rate for amounts outstanding under our credit facility was 2.53%. | ||||||||||||
Amounts outstanding under the Richmond Credit Facility bear interest at a variable rate equal to, at our election, LIBOR or a base rate, plus a spread that will range, depending upon the Company’s leverage ratio, from 2.10% to 2.85% for LIBOR loans or 1.10% to 1.85% for base rate loans. As of September 30, 2014, the interest rate for amounts outstanding under the Richmond Credit Facility was 2.25%. | In February 2014, the Company expanded the capacity of its unsecured revolving credit facility by $50 million, increasing the unsecured revolving credit facility capacity to $400 million. | |||||||||||
(b) Secured Credit Facility—On September 28, 2010, the Company entered into a secured credit facility agreement with KeyBank National Association (the “Secured Credit Facility”) and various other lenders with a total borrowing capacity of $125 million. During 2011, the Company expanded the facility, increasing the borrowing capacity to $170 million. On February 8, 2012, the Company increased the capacity of its credit facility by $270 million and extended the maturity date to September 28, 2014. The amended and extended credit facility, which then totaled $440 million, was secured by the Atlanta-Metro and Atlanta-Suwanee data center facilities. Of the $440 million credit facility, $125 million was a term loan and $315 million was a revolving credit facility. The credit facility also provided a $100 million accordion feature that could increase the amount of the facility up to $540 million. | ||||||||||||
(d) Atlanta-Metro Equipment Loan – On April 9, 2010, the Company entered into a $25 million loan to finance equipment related to an expansion project at the Company’s Atlanta-Metro data center (the “Atlanta-Metro Equipment Loan”). The loan originally featured monthly interest-only payments but now requires monthly interest and principal payments. The loan bears interest at 6.85%, amortizes over ten years and matures on June 1, 2020. | Concurrently with the closing of the amended and extended credit facility, the Company entered into an interest rate cap agreement with a notional amount of $150 million. This instrument provided a one month LIBOR cap of 2.05% and had an effective date of February 8, 2012 and a termination date of February 8, 2013. The Company also entered into two interest rate swaps with an aggregate $150 million notional amount and an effective date of February 8, 2013 to succeed the interest rate caps. These swaps have a maturity date of September 28, 2014, provide for a fixed one month LIBOR rate of 0.5825% from February 8, 2013 through September 28, 2014 and qualify for cash flow hedge accounting. | |||||||||||
As discussed above, the Secured Credit Facility was repaid with proceeds of the Unsecured Credit Facility the Company entered into on May 1, 2013. | ||||||||||||
The annual remaining principal payment requirements as of September 30, 2014 per the contractual maturities and excluding extension options are as follows (in thousands): | (c) Richmond Credit Facility—In December 2012, the Company entered into a credit facility secured by the Company’s Richmond data center (the “Richmond Credit Facility”). This credit facility had a total borrowing capacity of $80 million at December 31, 2012, which was increased to $100 million in January 2013. This credit facility also includes an accordion feature that allows the Company to increase the size of the credit facility up to $125 million and requires the Company to comply with covenants similar to the Unsecured Credit Facility. This credit facility bears interest at variable rates ranging from LIBOR plus 4.0% to LIBOR plus 4.5%. The interest rate at December 31, 2013 was Libor plus 4.00%, or 4.16% per annum based on the Company’s overall leverage ratio as defined in the agreement, and the loan has a stated maturity date of December 18, 2015 with an option to extend for one additional year. | |||||||||||
(d) Atlanta-Metro Equipment Loan—On April 9, 2010, the Company entered into a $25 million loan to finance equipment related to an expansion project at the Company’s Atlanta-Metro data center (the “Atlanta-Metro Equipment Loan”). The loan originally featured monthly interest-only payments but now requires monthly interest and principal payments. The loan bears interest at 6.85%, amortizes over ten years and matures on June 1, 2020. | ||||||||||||
(e) Miami Loan—In March 2008, the Company obtained a mortgage loan with a maximum borrowing capacity of $32.8 million secured by the Company’s Miami data center (“Miami Loan”). In December 2012, the Company extended the maturity date to allow repayment using proceeds from the Unsecured Credit Facility and also fixed the interest rate at 7%. As discussed above, this loan was repaid with proceeds of the Unsecured Credit Facility the Company entered into on May 1, 2013. | ||||||||||||
2014 | $ | 574 | (f) Atlanta-Suwanee Land Loan—In 2011, the Company executed a $1.6 million loan agreement for the purchase of land adjacent to the Atlanta-Suwanee facility (the “Atlanta-Suwanee Land Loan”). The interest rate on the loan was 10% with a maturity date of September 26, 2013. In June 2013, the Company repaid the outstanding balance of the Atlanta-Suwanee Land Loan. | |||||||||
2015 | 2,397 | |||||||||||
2016 | 2,567 | (g) Lenexa Loan—In June 2011, the Company entered into a $2.8 million seller financing to acquire the Lenexa facility (the “Lenexa Loan”). The interest rate on this loan was 5.43% and it matured on May 26, 2013. This loan was repaid at maturity. | ||||||||||
2017 | 49,748 | (h) Santa Clara Bridge Loan—In November 2012, the Company entered into a $50 million bridge loan with Key Bank (the “Santa Clara Bridge Loan”). The loan had an interest rate of LIBOR plus 3.50% and a maturity date of February 11, 2013 with a three month extension option, which the Company exercised. As discussed above, this loan was repaid with proceeds of the Unsecured Credit Facility the Company entered into on May 1, 2013. | ||||||||||
2018 | 152,943 | (i) Dallas Note—In connection with the Dallas-Fort Worth data center acquisition, the Company obtained $10.25 million of seller-financed debt (the “Dallas Note”) which was due no later than December 31, 2013 and carried an escalating interest rate between 2.5% and 10% based on the repayment date of the loan. In June 2013, the Company repaid the outstanding balance of the seller-financed debt. | ||||||||||
Thereafter | 375,945 | The weighted average interest rate of the Company’s unsecured debt, which includes the effect of deferred financing costs and swap derivatives, was 3.73% as of December 31, 2013. | ||||||||||
Total | $ | 584,175 | The annual remaining principal payment requirements as of December 31, 2013 per the contractual maturities and excluding extension options are as follows (in thousands): | |||||||||
As of September 30, 2014, the Company was in compliance with all of its covenants. | ||||||||||||
2014............................................................................................................................................................................................................................. | $ | |||||||||||
2,239 | ||||||||||||
2015............................................................................................................................................................................................................................. | 72,397 | |||||||||||
2016............................................................................................................................................................................................................................. | 2,567 | |||||||||||
2017............................................................................................................................................................................................................................. | 34,248 | |||||||||||
2018............................................................................................................................................................................................................................. | 227,943 | |||||||||||
Thereafter................................................................................................................................................................................................................... | 5,945 | |||||||||||
Total............................................................................................................................................................................................................................. | $ | |||||||||||
345,339 | ||||||||||||
As of December 31, 2013, the Company was in compliance with all of its covenants. | ||||||||||||
Qualitytech, LP [Member] | ||||||||||||
Credit Facilities and Mortgage Notes Payable | 5. Credit Facilities, Senior Notes and Mortgage Notes Payable | 5. Credit Facilities and Mortgage Notes Payable | ||||||||||
Below is a listing of our outstanding debt, excluding capital leases, as of December 31, 2013 and 2012 (in thousands): | ||||||||||||
Below is a listing of our outstanding debt, excluding capital leases, as of September 30, 2014 and December 31, 2013 (in thousands): | ||||||||||||
September 30, | December 31, | December 31, | December 31, | |||||||||
2014 | 2013 | 2013 | 2012 | |||||||||
(Unaudited) | ||||||||||||
Unsecured Credit Facility............................................................................................................................................................................................... | $ | $— | ||||||||||
Unsecured Credit Facility | $ | 197,000 | $ | 256,500 | 256,500 | |||||||
Senior Notes, net of discount | 297,671 | - | Secured Credit Facility................................................................................................................................................................................................... | — | 316,500 | |||||||
Richmond Credit Facility | 70,000 | 70,000 | Richmond Credit Facility................................................................................................................................................................................................. | 70,000 | 70,000 | |||||||
Atlanta-Metro Equipment Loan | 17,175 | 18,839 | Atlanta-Metro Equipment Loan......................................................................................................................................................................................... | 18,839 | 20,931 | |||||||
Total | $ | 581,846 | $ | 345,339 | Miami Loan................................................................................................................................................................................................................. | — | 26,048 | |||||
Atlanta-Suwanee Land Loan........................................................................................................................................................................................... | — | 1,600 | ||||||||||
Lenexa Loan................................................................................................................................................................................................................. | — | 2,712 | ||||||||||
(a) Unsecured Credit Facility – On May 1, 2013, the Company entered into an unsecured credit facility agreement with a syndicate of financial institutions in which KeyBank National Association serves as administrative agent (the “Unsecured Credit Facility”). The Unsecured Credit Facility consists of a term loan of $150 million, with a term of five years, and an unsecured revolving credit facility of $410 million, with a term of four years, for aggregate capacity of the Unsecured Credit Facility of $560 million. On July 23, 2014, the Company repaid $75 million of the term loan portion of the Unsecured Credit Facility and repaid a portion of the outstanding balance of the revolving portion of the Unsecured Credit Facility with proceeds from the issuance of its 5.875% Senior Notes due 2022, reducing the balance to the amounts described above. The Unsecured Credit Facility may be increased to up to $600 million, subject to certain conditions, including the consent of the administrative agent and obtaining necessary commitments. On December 17, 2014 the Company amended and restated its Unsecured Credit Facility. See “Note 14 – Subsequent Events” for a discussion of this amendment. | Santa Clara Bridge Loan................................................................................................................................................................................................. | — | 50,000 | |||||||||
The Unsecured Credit Facility requires monthly interest payments and requires the Company to comply with various quarterly covenant requirements relating to debt service coverage ratio, fixed charge ratio, leverage ratio and tangible net worth and various other operational requirements. In connection with the Unsecured Credit Facility, as of September 30, 2014, the Company had an additional $3.0 million letter of credit outstanding. The letter of credit was reduced to $2.5 million on October 1, 2014. | Total............................................................................................................................................................................................................................. | $ | $ | |||||||||
345,339 | 487,791 | |||||||||||
Amounts outstanding under the Unsecured Credit Facility bear interest at a variable rate equal to, at our election, LIBOR or a base rate, plus a spread that will range, depending upon the Company’s leverage ratio, from 2.10% to 2.85% for LIBOR loans or 1.10% to 1.85% for base rate loans. As of September 30, 2014, the interest rate for amounts outstanding under the Unsecured Credit Facility was 2.26%. | ||||||||||||
(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 notes described below (collectively, the “Issuers”), issued $300 million aggregate principal amount of 5.875% Senior Notes due 2022 (the “Senior Notes”). The Senior Notes have an interest rate of 5.875% per annum, were issued at a price equal to 99.211% of their face value and mature on August 1, 2022. The proceeds from the offering were used to repay amounts outstanding under the Unsecured Credit Facility, including $75 million outstanding under the term loan. The Senior Notes are unconditionally guaranteed, jointly and severally, on a senior unsecured basis by all of the Operating Partnership’s existing and future subsidiaries (other than foreign subsidiaries and receivables entities) that guarantee any indebtedness of QTS Realty Trust, Inc., the Issuers or any other subsidiary guarantor. The Company will not initially 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 July 23, 2014, among the Operating Partnership, QTS Finance Corporation, the Company, the guarantors named therein, and Deutsche Bank Trust Company Americas, as trustee (the “Indenture”). | (a) Unsecured Credit Facility—On May 1, 2013, the Company entered into an unsecured credit facility agreement with a syndicate of financial institutions in which KeyBank National Association serves as administrative agent (the “Unsecured Credit Facility”). Proceeds from the Unsecured Credit Facility were used to repay the Secured Credit Facility (as defined below). This new unsecured credit facility has a term loan of $225 million, with a term of five years, and a revolving credit facility of $350 million, with a term of four years, for an aggregate borrowing capacity of $575 million. The credit facility also provides for a $100 million accordion feature that could increase the amount of the facility up to $675 million, subject to certain conditions, including the consent of the administrative agent and obtaining necessary commitments. | |||||||||||
During the second quarter of 2013, the Company used proceeds from the Unsecured Credit Facility to pay the outstanding balances under the Secured Credit Facility, loans secured by the Miami and Santa Clara data centers, seller financing to acquire the Lenexa and Dallas-Fort Worth facilities, a loan agreement for the purchase of land adjacent to the Atlanta-Suwanee facility and a loan from Chad L. Williams and entities controlled by Mr. Williams. | ||||||||||||
(c) Richmond Credit Facility – In December 2012, the Company entered into a credit facility secured by the Company’s Richmond data center (the “Richmond Credit Facility”). As of September 30, 2014, the Richmond Credit Facility had capacity of $120 million, as amended, and includes an accordion feature that allows the Company to increase the size of the credit facility up to $200 million. The Richmond Credit Facility matures June 30, 2019. The Richmond Credit Facility requires the Company to comply with covenants similar to the Unsecured Credit Facility. | The Unsecured Credit Facility requires monthly interest payments and requires the Company to comply with various quarterly covenant requirements relating to debt service coverage ratio, fixed charge ratio, leverage ratio and tangible net worth and various other operational requirements. In connection with the Unsecured Credit Facility, as of December 31, 2013, the Company had an additional $3 million letter of credit outstanding. | |||||||||||
Amounts outstanding under the unsecured credit facility bear interest at a variable rate equal to, at our election, LIBOR or a base rate, plus a spread that will range, depending upon our leverage ratio, from 2.10% to 2.85% for LIBOR loans or 1.10% to 1.85% for base rate loans. As of December 31, 2013, the interest rate for amounts outstanding under our credit facility was 2.53%. | ||||||||||||
Amounts outstanding under the Richmond Credit Facility bear interest at a variable rate equal to, at our election, LIBOR or a base rate, plus a spread that will range, depending upon the Company’s leverage ratio, from 2.10% to 2.85% for LIBOR loans or 1.10% to 1.85% for base rate loans. As of September 30, 2014, the interest rate for amounts outstanding under the Richmond Credit Facility was 2.25%. | In February 2014, the Company expanded the capacity of its unsecured revolving credit facility by $50 million, increasing the unsecured revolving credit facility capacity to $400 million. | |||||||||||
(b) Secured Credit Facility—On September 28, 2010, the Company entered into a secured credit facility agreement with KeyBank National Association (the “Secured Credit Facility”) and various other lenders with a total borrowing capacity of $125 million. During 2011, the Company expanded the facility, increasing the borrowing capacity to $170 million. On February 8, 2012, the Company increased the capacity of its credit facility by $270 million and extended the maturity date to September 28, 2014. The amended and extended credit facility, which then totaled $440 million, was secured by the Atlanta-Metro and Atlanta-Suwanee data center facilities. Of the $440 million credit facility, $125 million was a term loan and $315 million was a revolving credit facility. The credit facility also provided a $100 million accordion feature that could increase the amount of the facility up to $540 million. | ||||||||||||
(d) Atlanta-Metro Equipment Loan – On April 9, 2010, the Company entered into a $25 million loan to finance equipment related to an expansion project at the Company’s Atlanta-Metro data center (the “Atlanta-Metro Equipment Loan”). The loan originally featured monthly interest-only payments but now requires monthly interest and principal payments. The loan bears interest at 6.85%, amortizes over ten years and matures on June 1, 2020. | Concurrently with the closing of the amended and extended credit facility, the Company entered into an interest rate cap agreement with a notional amount of $150 million. This instrument provided a one month LIBOR cap of 2.05% and had an effective date of February 8, 2012 and a termination date of February 8, 2013. The Company also entered into two interest rate swaps with an aggregate $150 million notional amount and an effective date of February 8, 2013 to succeed the interest rate caps. These swaps have a maturity date of September 28, 2014, provide for a fixed one month LIBOR rate of 0.5825% from February 8, 2013 through September 28, 2014 and qualify for cash flow hedge accounting. | |||||||||||
As discussed above, the Secured Credit Facility was repaid with proceeds of the Unsecured Credit Facility the Company entered into on May 1, 2013. | ||||||||||||
The annual remaining principal payment requirements as of September 30, 2014 per the contractual maturities and excluding extension options are as follows (in thousands): | (c) Richmond Credit Facility—In December 2012, the Company entered into a credit facility secured by the Company’s Richmond data center (the “Richmond Credit Facility”). This credit facility had a total borrowing capacity of $80 million at December 31, 2012, which was increased to $100 million in January 2013. This credit facility also includes an accordion feature that allows the Company to increase the size of the credit facility up to $125 million and requires the Company to comply with covenants similar to the Unsecured Credit Facility. This credit facility bears interest at variable rates ranging from LIBOR plus 4.0% to LIBOR plus 4.5%. The interest rate at December 31, 2013 was Libor plus 4.00%, or 4.16% per annum based on the Company’s overall leverage ratio as defined in the agreement, and the loan has a stated maturity date of December 18, 2015 with an option to extend for one additional year. | |||||||||||
(d) Atlanta-Metro Equipment Loan—On April 9, 2010, the Company entered into a $25 million loan to finance equipment related to an expansion project at the Company’s Atlanta-Metro data center (the “Atlanta-Metro Equipment Loan”). The loan originally featured monthly interest-only payments but now requires monthly interest and principal payments. The loan bears interest at 6.85%, amortizes over ten years and matures on June 1, 2020. | ||||||||||||
(e) Miami Loan—In March 2008, the Company obtained a mortgage loan with a maximum borrowing capacity of $32.8 million secured by the Company’s Miami data center (“Miami Loan”). In December 2012, the Company extended the maturity date to allow repayment using proceeds from the Unsecured Credit Facility and also fixed the interest rate at 7%. As discussed above, this loan was repaid with proceeds of the Unsecured Credit Facility the Company entered into on May 1, 2013. | ||||||||||||
2014 | $ | 574 | (f) Atlanta-Suwanee Land Loan—In 2011, the Company executed a $1.6 million loan agreement for the purchase of land adjacent to the Atlanta-Suwanee facility (the “Atlanta-Suwanee Land Loan”). The interest rate on the loan was 10% with a maturity date of September 26, 2013. In June 2013, the Company repaid the outstanding balance of the Atlanta-Suwanee Land Loan. | |||||||||
2015 | 2,397 | |||||||||||
2016 | 2,567 | (g) Lenexa Loan—In June 2011, the Company entered into a $2.8 million seller financing to acquire the Lenexa facility (the “Lenexa Loan”). The interest rate on this loan was 5.43% and it matured on May 26, 2013. This loan was repaid at maturity. | ||||||||||
2017 | 49,748 | (h) Santa Clara Bridge Loan—In November 2012, the Company entered into a $50 million bridge loan with Key Bank (the “Santa Clara Bridge Loan”). The loan had an interest rate of LIBOR plus 3.50% and a maturity date of February 11, 2013 with a three month extension option, which the Company exercised. As discussed above, this loan was repaid with proceeds of the Unsecured Credit Facility the Company entered into on May 1, 2013. | ||||||||||
2018 | 152,943 | (i) Dallas Note—In connection with the Dallas-Fort Worth data center acquisition, the Company obtained $10.25 million of seller-financed debt (the “Dallas Note”) which was due no later than December 31, 2013 and carried an escalating interest rate between 2.5% and 10% based on the repayment date of the loan. In June 2013, the Company repaid the outstanding balance of the seller-financed debt. | ||||||||||
Thereafter | 375,945 | The weighted average interest rate of the Company’s unsecured debt, which includes the effect of deferred financing costs and swap derivatives, was 3.73% as of December 31, 2013. | ||||||||||
Total | $ | 584,175 | The annual remaining principal payment requirements as of December 31, 2013 per the contractual maturities and excluding extension options are as follows (in thousands): | |||||||||
As of September 30, 2014, the Company was in compliance with all of its covenants. | ||||||||||||
2014............................................................................................................................................................................................................................. | $ | |||||||||||
2,239 | ||||||||||||
2015............................................................................................................................................................................................................................. | 72,397 | |||||||||||
2016............................................................................................................................................................................................................................. | 2,567 | |||||||||||
2017............................................................................................................................................................................................................................. | 34,248 | |||||||||||
2018............................................................................................................................................................................................................................. | 227,943 | |||||||||||
Thereafter................................................................................................................................................................................................................... | 5,945 | |||||||||||
Total............................................................................................................................................................................................................................. | $ | |||||||||||
345,339 | ||||||||||||
As of December 31, 2013, the Company was in compliance with all of its covenants. | ||||||||||||
Interest_Rate_Derivative_Instr
Interest Rate Derivative Instruments | 9 Months Ended | 12 Months Ended |
Sep. 30, 2014 | Dec. 31, 2013 | |
Interest Rate Derivative Instruments | 6. Interest Rate Derivative Instruments | 6. Interest Rate Derivative Instruments |
As discussed in Note 5, the Company entered into interest rate cap and swap agreements with a notional amount of $150 million on February 8, 2012. Derivatives that were entered into in September 2006 did not qualify for hedge accounting treatment, and therefore were not accounted for as hedges. Those derivative instruments were settled in February 2012 and were replaced by derivative instruments designated as cash flow hedges for hedge accounting. In addition, an interest rate cap of an additional $50 million was in place as of December 31, 2013 with a capped LIBOR rate of 3% through December 18, 2015. For derivative instruments that are accounted for as hedges, or for the effective portions of qualifying hedges, the change in fair value is recorded through other comprehensive income (loss). The total amount of unrealized gains recorded in other comprehensive income (loss) was $0.3 million for the year ended December 31, 2013, compared to the total amount of unrealized losses of $0.8 million for the year ended December 31, 2012. | ||
The Company entered into interest rate swap agreements with a notional amount of $150 million on February 8, 2012, which were designated as cash flow hedges for hedge accounting, and matured on September 28, 2014. For derivative instruments that are accounted for as hedges, the change in fair value for the effective portions of qualifying hedges is recorded through other comprehensive income (loss). The total amount of unrealized gains recorded in other comprehensive income (loss) for the nine months ended September 30, 2013 was $0.2 million, with no unrealized gains or losses recorded for the nine months ended September 30, 2014. Interest expense related to payments on interest rate swaps for the three and nine months ended September 30, 2014 was $0.2 million and $0.5 million, respectively, and $0.1 million and $0.4 million for the three and nine months ended September 30, 2013, respectively. | Interest expense related to payments on interest rate swaps for the years ended December 31, 2013, 2012 and 2011 were $0.5 million, $0.5 million and $4.8 million, respectively. | |
As the interest rate swaps matured in September 2014, there were no amounts outstanding on the consolidated balance sheet relating to interest rate swaps as of September 30, 2014. At December 31, 2013 the value of the interest rate swaps was a liability of $0.5 million. This value was determined using Level 2 inputs within the valuation hierarchy. | As of December 31, 2013 and 2012, the value of the interest rate swaps was a liability of $0.5 million and $0.8 million, respectively. These values were determined using Level 2 inputs within the valuation hierarchy. | |
Qualitytech, LP [Member] | ||
Interest Rate Derivative Instruments | 6. Interest Rate Derivative Instruments | 6. Interest Rate Derivative Instruments |
As discussed in Note 5, the Company entered into interest rate cap and swap agreements with a notional amount of $150 million on February 8, 2012. Derivatives that were entered into in September 2006 did not qualify for hedge accounting treatment, and therefore were not accounted for as hedges. Those derivative instruments were settled in February 2012 and were replaced by derivative instruments designated as cash flow hedges for hedge accounting. In addition, an interest rate cap of an additional $50 million was in place as of December 31, 2013 with a capped LIBOR rate of 3% through December 18, 2015. For derivative instruments that are accounted for as hedges, or for the effective portions of qualifying hedges, the change in fair value is recorded through other comprehensive income (loss). The total amount of unrealized gains recorded in other comprehensive income (loss) was $0.3 million for the year ended December 31, 2013, compared to the total amount of unrealized losses of $0.8 million for the year ended December 31, 2012. | ||
The Company entered into interest rate swap agreements with a notional amount of $150 million on February 8, 2012, which were designated as cash flow hedges for hedge accounting, and matured on September 28, 2014. For derivative instruments that are accounted for as hedges, the change in fair value for the effective portions of qualifying hedges is recorded through other comprehensive income (loss). The total amount of unrealized gains recorded in other comprehensive income (loss) for the nine months ended September 30, 2013 was $0.2 million, with no unrealized gains or losses recorded for the nine months ended September 30, 2014. Interest expense related to payments on interest rate swaps for the three and nine months ended September 30, 2014 was $0.2 million and $0.5 million, respectively, and $0.1 million and $0.4 million for the three and nine months ended September 30, 2013, respectively. | Interest expense related to payments on interest rate swaps for the years ended December 31, 2013, 2012 and 2011 were $0.5 million, $0.5 million and $4.8 million, respectively. | |
As the interest rate swaps matured in September 2014, there were no amounts outstanding on the consolidated balance sheet relating to interest rate swaps as of September 30, 2014. At December 31, 2013 the value of the interest rate swaps was a liability of $0.5 million. This value was determined using Level 2 inputs within the valuation hierarchy. | As of December 31, 2013 and 2012, the value of the interest rate swaps was a liability of $0.5 million and $0.8 million, respectively. These values were determined using Level 2 inputs within the valuation hierarchy. | |
Member_Advances_and_Notes_Paya
Member Advances and Notes Payable | 12 Months Ended |
Dec. 31, 2013 | |
Member Advances and Notes Payable | 7. Member Advances and Notes Payable |
In October 2009, the Company amended and restated its outstanding loans with Chad L. Williams and entities controlled by Chad L. Williams into a loan in the original principal amount of $20.4 million (the “Member Advances”). The Member Advances were unsecured and had a maturity date of the earliest of December 31, 2013 or upon certain specified transactions. The Member Advances were subordinate in priority to the Company’s mortgage notes payable. Interest under the Member Advances accrued monthly at the rate of 9% per annum, which was added to the principal balance of the Member Advances if not paid. The balance of the Member Advances is separately disclosed on the face of the financial statements. On May 1, 2013, the lender under the Member Advances exercised an option to purchase $10 million of the Operating Partnership’s Class D units in exchange for the cancellation of $10 million of the outstanding balance under the Member Advances. The Company repaid the remaining outstanding balance of the Member Advances in the second quarter of 2013. | |
Qualitytech, LP [Member] | |
Member Advances and Notes Payable | 7. Member Advances and Notes Payable |
In October 2009, the Company amended and restated its outstanding loans with Chad L. Williams and entities controlled by Chad L. Williams into a loan in the original principal amount of $20.4 million (the “Member Advances”). The Member Advances were unsecured and had a maturity date of the earliest of December 31, 2013 or upon certain specified transactions. The Member Advances were subordinate in priority to the Company’s mortgage notes payable. Interest under the Member Advances accrued monthly at the rate of 9% per annum, which was added to the principal balance of the Member Advances if not paid. The balance of the Member Advances is separately disclosed on the face of the financial statements. On May 1, 2013, the lender under the Member Advances exercised an option to purchase $10 million of the Operating Partnership’s Class D units in exchange for the cancellation of $10 million of the outstanding balance under the Member Advances. The Company repaid the remaining outstanding balance of the Member Advances in the second quarter of 2013. | |
Commitments_and_Contingencies
Commitments and Contingencies | 9 Months Ended | 12 Months Ended |
Sep. 30, 2014 | Dec. 31, 2013 | |
Commitments and Contingencies | 7. Commitments and Contingencies | 8. Commitments and Contingencies |
The Company is subject to various routine legal proceedings and other matters in the ordinary course of business. While resolution of these matters cannot be predicted with certainty, management believes, based upon information currently available, that the final outcome will not have a material adverse impact on the Company’s financial statements. | ||
The Company is subject to various routine legal proceedings and other matters in the ordinary course of business. While resolution of these matters cannot be predicted with certainty, management believes, based upon information currently available, that the final outcome will not have a material adverse impact on the Company’s financial statements. The Company previously entered into a master service agreement with a third party Internet service provider. The Company was not receiving industry-standard quality of Internet and connectivity services and terminated the contract. The third party Internet service provider challenged the grounds for the Company’s termination and sued the Company in Georgia state court seeking a termination fee equal to the amount the Company would have paid had it not terminated the agreement. The Georgia state court ruled to limit damages, if any, to six months of unpaid fees. Additional claims related to a prior settlement agreement between the parties and the enforceability of an early termination clause in a separate agreement have been raised and are being litigated. Various issues are on appeal. The Company has established an accrual associated with this matter which is recorded as a component of accrued liabilities. | The Company previously entered into a master service agreement with a third party Internet service provider. The Company was not receiving industry-standard quality of Internet and connectivity services and terminated the contract. The third party Internet service provider challenged the grounds for the Company’s termination and sued the Company in Georgia state court seeking the fees the Company owed prior to the termination plus a termination fee equal to the amount the Company would have paid had it not terminated the agreement. The Georgia state court ruled to limit damages, if any, to six months of unpaid fees. Additional claims related to a prior settlement agreement between the parties and the enforceability of an early termination clause in a separate agreement have been raised and are being litigated. The Company has established an accrual associated with this matter which is recorded as a component of accrued liabilities. | |
Qualitytech, LP [Member] | ||
Commitments and Contingencies | 7. Commitments and Contingencies | 8. Commitments and Contingencies |
The Company is subject to various routine legal proceedings and other matters in the ordinary course of business. While resolution of these matters cannot be predicted with certainty, management believes, based upon information currently available, that the final outcome will not have a material adverse impact on the Company’s financial statements. | ||
The Company is subject to various routine legal proceedings and other matters in the ordinary course of business. While resolution of these matters cannot be predicted with certainty, management believes, based upon information currently available, that the final outcome will not have a material adverse impact on the Company’s financial statements. The Company previously entered into a master service agreement with a third party Internet service provider. The Company was not receiving industry-standard quality of Internet and connectivity services and terminated the contract. The third party Internet service provider challenged the grounds for the Company’s termination and sued the Company in Georgia state court seeking a termination fee equal to the amount the Company would have paid had it not terminated the agreement. The Georgia state court ruled to limit damages, if any, to six months of unpaid fees. Additional claims related to a prior settlement agreement between the parties and the enforceability of an early termination clause in a separate agreement have been raised and are being litigated. Various issues are on appeal. The Company has established an accrual associated with this matter which is recorded as a component of accrued liabilities. | The Company previously entered into a master service agreement with a third party Internet service provider. The Company was not receiving industry-standard quality of Internet and connectivity services and terminated the contract. The third party Internet service provider challenged the grounds for the Company’s termination and sued the Company in Georgia state court seeking the fees the Company owed prior to the termination plus a termination fee equal to the amount the Company would have paid had it not terminated the agreement. The Georgia state court ruled to limit damages, if any, to six months of unpaid fees. Additional claims related to a prior settlement agreement between the parties and the enforceability of an early termination clause in a separate agreement have been raised and are being litigated. The Company has established an accrual associated with this matter which is recorded as a component of accrued liabilities. | |
Partners_Capital_Equity_and_In
Partners' Capital, Equity and Incentive Compensation Plans | 9 Months Ended | 12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||
Sep. 30, 2014 | Dec. 31, 2013 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Partners' Capital, Equity and Incentive Compensation Plans | 8. Partners’ Capital, Equity and Incentive Compensation Plans | 9. Partners’ Capital, Equity and Incentive Compensation Plans | ||||||||||||||||||||||||||||||||||||||||||||||||||
QualityTech, LP | ||||||||||||||||||||||||||||||||||||||||||||||||||||
As of September 30, 2014, the Operating Partnership had three classes of limited partnership units outstanding: Class A units of limited partnership interest (“Class A units”), Class RS LTIP units of limited partnership interest (“Class RS units”) and Class O LTIP units of limited partnership units (“Class O Units”). The Class A Units are redeemable at any time on or after one year following the later of November 1, 2013 (which is the beginning of the first full calendar month following the completion of the IPO) or the date of initial issuance. The Company may in its sole discretion elect to assume and satisfy the redemption amount with cash or its shares. Class RS units or Class O units were issued upon grants made under the QualityTech, LP 2010 Equity Incentive Plan (the “2010 Equity Incentive Plan”). Class RS units and Class O units may be subject to vesting and are pari passu with Class A units. Vested Class RS units and Class O units are convertible into Class A units based on formulas contained in the partnership agreement of the Operating Partnership. | QTS has the full power and authority to do all the things necessary to conduct the business of the Operating Partnership. | |||||||||||||||||||||||||||||||||||||||||||||||||||
As of December 31, 2013, the Operating Partnership had three classes of limited partnership units outstanding: Class A units of limited partnership interest (“Class A Units”), Class RS LTIP units of limited partnership interest (“Class RS Units”) and Class O LTIP units of limited partnership units (“Class O Units”). The Class A Units are redeemable at any time on or after one year following the later of the beginning of the first full calendar month following the completion of the IPO, which was November 1, 2014, or the date of initial issuance. The Company may in its sole discretion elect to assume and satisfy the redemption amount with cash or its shares. Class RS Units or Class O Units were issued upon grants made under the QualityTech, LP 2010 Equity Incentive Plan (the “2010 Equity Incentive Plan”). Class RS Units and Class O Units may be subject to vesting and are pari passu with Class A units. Each Class RS Unit and 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. In addition, upon certain circumstances set forth in the partnership agreement, vested Class RS Units automatically convert into Class A Units. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
In connection with its IPO, the Company 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, the Company adopted the QTS Realty Trust, Inc. 2013 Equity Incentive plan (the “2013 Equity Incentive Plan”), which authorized 1.75 million shares to be issued under the plan, including options to purchase Class A common stock, restricted Class A common stock, Class O units, and Class RS units. | As of December 31, 2012, which was prior to the IPO, the Operating Partnership had five classes of limited partnership units outstanding: Class A Units, Class C units of limited partnership interest (“Class C Units”), Class D units of limited partnership interest (“Class D Units”), Class RS Units and Class O Units. | |||||||||||||||||||||||||||||||||||||||||||||||||||
Class C Units and Class D Units were preferred units that were pari passu with each other and senior to the Class A Units, Class RS Units and Class O Units. Class C Units and Class D Units generally had the same designation, preferences, rights, powers and duties as Class A Units; however, in accordance with the provisions of the partnership agreement in effect at that time, upon certain liquidity events, Class C Units and Class D Units ranked senior to Class A units and were entitled to a liquidation preference equal the greater of (i) $20 for Class C Units and $25 for Class D Units, in each case plus declared but unpaid distributions, subject to anti-dilution adjustments, or (ii) the amount the holder would have been entitled to receive in respect of each such Class C Unit or Class D Unit if, immediately prior to the applicable Liquidity Event, such units were converted into Class A Units at a conversion ratio equal to the amount in clause (i) divided by $20 for Class C Units and $25 for Class D Units. Immediately prior to the consummation of the IPO, the Class C Units and Class D Units automatically converted into Class A units in accordance with the partnership agreement in effect at that time at the conversion ratio described in clause (ii) above. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
The following is a summary of award activity under the 2010 Equity Incentive Plan and 2013 Equity Incentive Plan and related information for the nine months ended September 30, 2014: | In October 2009, 7.5 million Class A Units were issued to Chad L. Williams and Mark D. Waddington in exchange for the contribution to the Operating Partnership of their ownership interests in various limited liability companies. Immediately following such issuance, 7.5 million Class C Units were issued to General Atlantic REIT, Inc., a subsidiary of General Atlantic, in exchange for a contribution of $150 million (initially representing a 50% ownership interest in the Operating Partnership) and a warrant to purchase an additional 1.25 million Class C Units at $20 per unit (the “Warrant”). The Operating Partnership subsequently repurchased 250,000 Class A Units held by Chad Williams and Mark Waddington for $5 million, and, in April 2010, issued 1.25 million Class C Units to General Atlantic in exchange for $25 million upon exercise of its Warrant. On September 28, 2012, the Operating Partnership issued an additional 2.4 million Class D Units to General Atlantic in exchange for a contribution of $60 million. At the same time, the Operating Partnership issued an additional 2.3 million Class C Units to General Atlantic to settle the amount owed to General Atlantic under the paid-in-kind feature of the Class C Units, which simultaneously was eliminated from the terms of the Class C Units. In December 2012, the Operating Partnership issued an additional 1.2 million Class D Units to General Atlantic for a contribution of $30 million. Accordingly, General Atlantic’s aggregate economic ownership interest increased to approximately 62% at December 31, 2012. As a result of the above transactions, Chad L. Williams and Mark D. Waddington indirectly or directly in aggregate owned 7.25 million Class A Units and General Atlantic owned 14.64 million Class C and Class D Units in the Operating Partnership as of December 31, 2012. In addition to the above transaction, during the second half of 2012, certain directors and officers of the Operating Partnership contributed an aggregate of $2.0 million in exchange for 80,000 Class D Units and 21,250 RS Units converted to Class A Units. | |||||||||||||||||||||||||||||||||||||||||||||||||||
Net income and net loss of the Operating Partnership were allocated with respect to each fiscal year of the Operating Partnership in accordance with the terms of the partnership agreement. Prior to the September 2012 Class D Unit and Class C Unit issuance noted above, due to the paid-in-kind feature of the Class C Units and subject to certain special allocations, net income was generally first allocated to the Class C Units to the extent of their rights to a cumulative preferred return of 9%, with the remaining balance allocated to the Class A Units. Net loss for the nine months ended September 30, 2012 was allocated to the Class A units in accordance with the partnership agreement in effect at that time. Subsequent to September 30, 2012, however, both net income and net loss were proportionally allocated to Class A, Class C, and Class D units. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
QTS Realty Trust, Inc. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
2010 Equity Incentive Plan | 2013 Equity Incentive Plan | 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 to be issued under the plan. Under the 2013 Equity Incentive Plan, QTS granted in connection with its IPO, subject to certain vesting requirements, executive officers 108,629 shares of restricted Class A common stock and options to purchase 370,410 shares of Class A common stock to executive officers, directors and certain of its employees. The Company may also issue Class RS units or Class O units pursuant to the 2013 Equity Incentive Plan. | ||||||||||||||||||||||||||||||||||||||||||||||||||
Number of | Weighted | Weighted | Number of | Weighted | Options | Weighted | Weighted | Restricted | Weighted | For the year ended December 31, 2013, 224,244 Class O units were granted, 73,440 Class O units were forfeited and 5,000 Class RS units converted into Class A units. Options to purchase 2,500 shares of Class A common stock were forfeited during the year ended December 31, 2013. | ||||||||||||||||||||||||||||||||||||||||||
Class O units | average | average | Class RS units | average | average | average | Stock | average | The following is a summary of award activity under the 2013 and 2010 Equity Incentive Plans and related information for 2013, 2012 and 2011: | |||||||||||||||||||||||||||||||||||||||||||
exercise price | fair | price | exercise price | fair | price | |||||||||||||||||||||||||||||||||||||||||||||||
value | value | |||||||||||||||||||||||||||||||||||||||||||||||||||
Outstanding at December 31, 2013 | 1,622,747 | $ | 23.44 | $ | 3.84 | 173,750 | $ | 21.86 | 367,910 | $ | 21 | $ | 3.5 | 108,629 | $ | 21 | Number | Weighted- | Weighted | Number of | Weighted- | Options | Weighted- | Weighted | Restricted | Weighted- | ||||||||||||||||||||||||||
Granted | — | — | — | — | — | 238,039 | 25.59 | 4.96 | 44,000 | 25.51 | of | average | average | Class RS | average | average | average | Stock | average | |||||||||||||||||||||||||||||||||
Exercised | — | — | — | — | — | — | — | — | — | — | Class O | exercise | Fair value | units | price | exercise | Fair value | price | ||||||||||||||||||||||||||||||||||
Released from restriction (1) | — | — | — | (90,437 | ) | 24.93 | — | — | — | — | — | units | price | price | ||||||||||||||||||||||||||||||||||||||
Cancelled/Expired | (75,454 | ) | 23.21 | 5.48 | — | — | (14,000 | ) | 21 | 3.52 | — | — | ||||||||||||||||||||||||||||||||||||||||
Outstanding at September 30, 2014 | 1,547,293 | $ | 23.45 | $ | 3.76 | 83,313 | $ | 23.65 | 591,949 | $ | 22.85 | $ | 4.25 | 152,629 | $ | 22.3 | Outstanding at January 1, 2011....................................................................................................................................................................................................................................................................................................................................... | 592,068 | $ | $ | 50,000 | $— | — | $ — | $ — | — | $ — | |||||||||||||||||||||||||
20.00 | 4.41 | |||||||||||||||||||||||||||||||||||||||||||||||||||
-1 | This represents Class RS units that upon vesting have converted to Operating Partnership units. | Granted................................................................................................................................................................................................................................................................................................................................................................................. | 114,676 | $ | $ | — | $— | — | $ — | $ — | — | $ — | ||||||||||||||||||||||||||||||||||||||||
20.00 | 4.18 | |||||||||||||||||||||||||||||||||||||||||||||||||||
The assumptions and fair values for restricted stock and options to purchase shares of Class A common stock granted for the nine months ended September 30, 2014 is included in the following table on a per unit basis. Class O units and options to purchase shares of Class A common stock were valued using the Black-Scholes model. | Exercised............................................................................................................................................................................................................................................................................................................................................................................... | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
Released from restriction................................................................................................................................................................................................................................................................................................................................................... | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Cancelled/ | -7,376 | — | 4.41 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Three and Nine | Expired............................................................................................................................................................................................................................................................................................................................................................. | |||||||||||||||||||||||||||||||||||||||||||||||||||
Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||
September 30, 2014 | Outstanding at December 31, | 699,368 | $ | $ | 50,000 | $— | — | $ — | $ — | — | $ — | |||||||||||||||||||||||||||||||||||||||||
Fair value of restricted stock granted | $25.51-$28.82 | 2011................................................................................................................................................................................................................................................................................................................................. | 20.00 | 4.38 | ||||||||||||||||||||||||||||||||||||||||||||||||
Fair value of options granted | $4.94-$5.98 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Expected term (years) | 5.5-6.1 | Granted................................................................................................................................................................................................................................................................................................................................................................................. | 908,925 | $ | $ | 150,000 | $— | — | $ — | $ — | — | $ — | ||||||||||||||||||||||||||||||||||||||||
Expected volatility | 33 | % | 25.00 | 1.99 | ||||||||||||||||||||||||||||||||||||||||||||||||
Expected dividend yield | 4.02-4.55 | % | Exercised............................................................................................................................................................................................................................................................................................................................................................................... | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Expected risk-free interest rates | 1.7-1.9 | % | Released from restriction................................................................................................................................................................................................................................................................................................................................................... | — | — | -21,250 | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Cancelled/ | -136,350 | — | 4.41 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Expired............................................................................................................................................................................................................................................................................................................................................................. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
The following table summarizes information about awards outstanding as of September 30, 2014. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Outstanding at December 31, | 1,471,943 | $ | $ | 178,750 | $— | — | $ — | $ — | — | $ — | ||||||||||||||||||||||||||||||||||||||||||
2012................................................................................................................................................................................................................................................................................................................................. | 23.09 | 2.84 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Operating Partnership Awards Outstanding | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Exercise prices | Awards | Weighted average | Granted................................................................................................................................................................................................................................................................................................................................................................................. | 224,244 | $ | $ | — | $— | 370,410 | $ | $ | 108,629 | $ | |||||||||||||||||||||||||||||||||||||||
outstanding | remaining | 25.00 | 10.62 | 21.00 | 3.50 | 21.00 | ||||||||||||||||||||||||||||||||||||||||||||||
vesting period (years) | Exercised............................................................................................................................................................................................................................................................................................................................................................................... | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
Class RS Units | $ | - | 83,313 | 2 | Released from restriction................................................................................................................................................................................................................................................................................................................................................... | — | — | -5,000 | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Class O Units | $ | 20-25 | 1,547,293 | 2 | Cancelled/Expired............................................................................................................................................................................................................................................................................................................................................................. | -73,440 | — | 5.31 | — | — | -2,500 | — | 3.52 | — | — | |||||||||||||||||||||||||||||||||||||
Total Operating Partnership awards outstanding | 1,630,606 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Outstanding at December 31, | 1,622,747 | $ | $ | 173,750 | $— | 367,910 | $ | $ | 108,629 | $ | ||||||||||||||||||||||||||||||||||||||||||
2013................................................................................................................................................................................................................................................................................................................................. | 23.44 | 3.84 | 21.00 | 3.50 | 21.00 | |||||||||||||||||||||||||||||||||||||||||||||||
QTS Realty Trust, Inc. Awards Outstanding | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Exercise prices | Awards | Weighted average | ||||||||||||||||||||||||||||||||||||||||||||||||||
outstanding | remaining | The assumptions and fair values for Class O units, Class RS units, restricted stock and options to purchase shares of Class A common stock granted for the years ended December 31, 2013, 2012 and 2011 are included in the following table on a per unit basis. Class O units and options to purchase shares of Class A common stock were valued using the Black-Scholes model. | ||||||||||||||||||||||||||||||||||||||||||||||||||
vesting period (years) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Restricted stock | $ | - | 152,629 | 3 | ||||||||||||||||||||||||||||||||||||||||||||||||
Options to purchase Class A common stock | $ | 21-28.82 | 591,949 | 1 | ||||||||||||||||||||||||||||||||||||||||||||||||
Total QTS Realty Trust, Inc awards outstanding | 744,578 | 2013 | 2012 | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||
Fair value of Class RS Units granted................................................................................................................................................................................. | $ — | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||
All nonvested LTIP unit awards are valued as of the grant date and generally vest ratably over a defined service period. Certain nonvested LTIP unit awards vest on the earlier of achievement by the Company of various performance goals or specified dates in 2015 and 2016. As of September 30, 2014 there were 0.8 million, 0.1 million, 0.2 million and 0.6 million nonvested Class O units, Class RS units, restricted Class A common stock and options to purchase Class A common stock outstanding, respectively. As of September 30, 2014 the Company had $7.3 million of unrecognized equity-based compensation expense which will be recognized over the remaining vesting period of up to 4 years. The total intrinsic value of the awards outstanding at September 30, 2014 was $20.9 million. | 7.15 | 6.95 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value of Class O Units granted................................................................................................................................................................................... | $10.26-10.92 | $1.79-2.32 | $ | |||||||||||||||||||||||||||||||||||||||||||||||||
On January 7, 2014 the Company paid a dividend to common stockholders of $0.24 per common share and the Operating Partnership made a distribution to its partners of $0.24 per unit in an aggregate amount of $9.0 million. On April 8, July 8 and October 7, 2014, the Company paid its regular quarterly cash dividend of $0.29 per common share and the Operating Partnership made a distribution to its partners of $0.29 per unit in an aggregate amount of $10.7 million, $10.7 million and $10.5 million, respectively. Additionally, a distribution of approximately $200,000 was made to Class O LTIP holders during the three months ended June 30, 2014 to cover federal, state and local taxes on the allocated taxable income of the O LTIPs. | 2.94 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value of Restricted stock granted............................................................................................................................................................................... | $ | $ — | $ — | |||||||||||||||||||||||||||||||||||||||||||||||||
21.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value of options granted........................................................................................................................................................................................... | $3.45-3.52 | $ — | $ — | |||||||||||||||||||||||||||||||||||||||||||||||||
Expected term (years)................................................................................................................................................................................................... | 5.5-7.0 | 4 | 4 | |||||||||||||||||||||||||||||||||||||||||||||||||
Expected volatility......................................................................................................................................................................................................... | 32%-40% | 55% | 60% | |||||||||||||||||||||||||||||||||||||||||||||||||
Expected Dividend yield................................................................................................................................................................................................. | 5.5% | 0% | 0% | |||||||||||||||||||||||||||||||||||||||||||||||||
Expected Risk-free interest rates..................................................................................................................................................................................... | 1.4-1.8% | 0.17% | 0.61% | |||||||||||||||||||||||||||||||||||||||||||||||||
The following table summarizes information about awards outstanding as of December 31, 2013. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Operating Partnership Awards Outstanding | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Exercise prices | Awards | Weighted average | ||||||||||||||||||||||||||||||||||||||||||||||||||
outstanding | remaining | |||||||||||||||||||||||||||||||||||||||||||||||||||
vesting period | ||||||||||||||||||||||||||||||||||||||||||||||||||||
(years) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Class RS Units............................................................................................................................................................................................................. | $— | 173,750 | 3 | |||||||||||||||||||||||||||||||||||||||||||||||||
Class O Units............................................................................................................................................................................................................... | $20-25 | 1,622,747 | 3 | |||||||||||||||||||||||||||||||||||||||||||||||||
Total Operating Partnership awards outstanding................................................................................................................................................................. | 1,796,497 | |||||||||||||||||||||||||||||||||||||||||||||||||||
QTS Realty Trust, Inc. Awards Outstanding | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Exercise prices | Awards | Weighted average | ||||||||||||||||||||||||||||||||||||||||||||||||||
outstanding | remaining | |||||||||||||||||||||||||||||||||||||||||||||||||||
vesting period | ||||||||||||||||||||||||||||||||||||||||||||||||||||
(years) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Restricted stock........................................................................................................................................................................................................... | $— | 108,629 | 4 | |||||||||||||||||||||||||||||||||||||||||||||||||
Options to purchase Class A common stock....................................................................................................................................................................... | $ | 367,910 | 3 | |||||||||||||||||||||||||||||||||||||||||||||||||
21 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Total QTS Realty Trust, Inc awards outstanding................................................................................................................................................................. | 476,539 | |||||||||||||||||||||||||||||||||||||||||||||||||||
All nonvested LTIP unit awards are valued as of the grant date and generally vest ratably over a defined service period. Certain nonvested LTIP unit awards vest on the earlier of achievement by the Company of various performance goals or specified dates in 2015 and 2016. As of December 31, 2013 nonvested awards outstanding were 1.1 million and 0.1 million for the Class O units and Class RS units, respectively. Class O units were not included in the Statements of Changes in Partners’ (Deficit) Capital. As of December 31, 2013 the Company had $8.3 million of unrecognized equity-based compensation expense which will be recognized over the remaining vesting period or approximately three years. The total intrinsic value of the awards outstanding at December 31, 2013 was $9.0 million. As of December 31, 2013, vested awards outstanding included 0.6 million of Class O units with a weighted average fair value per unit of $3.33 and 0.1 million of Class RS units with a weighted average fair value per unit of $7.15. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
On August 14, 2013, the Operating Partnership made a distribution to its partners in an aggregate amount of $7.6 million. In January 2014 QTS paid a dividend to common stockholders of $0.24 per common share and the Operating Partnership made a distribution to its partners of $0.24 per unit in an aggregate amount of $9.0 million. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Qualitytech, LP [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Partners' Capital, Equity and Incentive Compensation Plans | 8. Partners’ Capital, Equity and Incentive Compensation Plans | 9. Partners’ Capital, Equity and Incentive Compensation Plans | ||||||||||||||||||||||||||||||||||||||||||||||||||
QualityTech, LP | ||||||||||||||||||||||||||||||||||||||||||||||||||||
As of September 30, 2014, the Operating Partnership had three classes of limited partnership units outstanding: Class A units of limited partnership interest (“Class A units”), Class RS LTIP units of limited partnership interest (“Class RS units”) and Class O LTIP units of limited partnership units (“Class O Units”). The Class A Units are redeemable at any time on or after one year following the later of November 1, 2013 (which is the beginning of the first full calendar month following the completion of the IPO) or the date of initial issuance. The Company may in its sole discretion elect to assume and satisfy the redemption amount with cash or its shares. Class RS units or Class O units were issued upon grants made under the QualityTech, LP 2010 Equity Incentive Plan (the “2010 Equity Incentive Plan”). Class RS units and Class O units may be subject to vesting and are pari passu with Class A units. Vested Class RS units and Class O units are convertible into Class A units based on formulas contained in the partnership agreement of the Operating Partnership. | QTS has the full power and authority to do all the things necessary to conduct the business of the Operating Partnership. | |||||||||||||||||||||||||||||||||||||||||||||||||||
As of December 31, 2013, the Operating Partnership had three classes of limited partnership units outstanding: Class A units of limited partnership interest (“Class A Units”), Class RS LTIP units of limited partnership interest (“Class RS Units”) and Class O LTIP units of limited partnership units (“Class O Units”). The Class A Units are redeemable at any time on or after one year following the later of the beginning of the first full calendar month following the completion of the IPO, which was November 1, 2014, or the date of initial issuance. The Company may in its sole discretion elect to assume and satisfy the redemption amount with cash or its shares. Class RS Units or Class O Units were issued upon grants made under the QualityTech, LP 2010 Equity Incentive Plan (the “2010 Equity Incentive Plan”). Class RS Units and Class O Units may be subject to vesting and are pari passu with Class A units. Each Class RS Unit and 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. In addition, upon certain circumstances set forth in the partnership agreement, vested Class RS Units automatically convert into Class A Units. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
In connection with its IPO, the Company 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, the Company adopted the QTS Realty Trust, Inc. 2013 Equity Incentive plan (the “2013 Equity Incentive Plan”), which authorized 1.75 million shares to be issued under the plan, including options to purchase Class A common stock, restricted Class A common stock, Class O units, and Class RS units. | As of December 31, 2012, which was prior to the IPO, the Operating Partnership had five classes of limited partnership units outstanding: Class A Units, Class C units of limited partnership interest (“Class C Units”), Class D units of limited partnership interest (“Class D Units”), Class RS Units and Class O Units. | |||||||||||||||||||||||||||||||||||||||||||||||||||
Class C Units and Class D Units were preferred units that were pari passu with each other and senior to the Class A Units, Class RS Units and Class O Units. Class C Units and Class D Units generally had the same designation, preferences, rights, powers and duties as Class A Units; however, in accordance with the provisions of the partnership agreement in effect at that time, upon certain liquidity events, Class C Units and Class D Units ranked senior to Class A units and were entitled to a liquidation preference equal the greater of (i) $20 for Class C Units and $25 for Class D Units, in each case plus declared but unpaid distributions, subject to anti-dilution adjustments, or (ii) the amount the holder would have been entitled to receive in respect of each such Class C Unit or Class D Unit if, immediately prior to the applicable Liquidity Event, such units were converted into Class A Units at a conversion ratio equal to the amount in clause (i) divided by $20 for Class C Units and $25 for Class D Units. Immediately prior to the consummation of the IPO, the Class C Units and Class D Units automatically converted into Class A units in accordance with the partnership agreement in effect at that time at the conversion ratio described in clause (ii) above. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
The following is a summary of award activity under the 2010 Equity Incentive Plan and 2013 Equity Incentive Plan and related information for the nine months ended September 30, 2014: | In October 2009, 7.5 million Class A Units were issued to Chad L. Williams and Mark D. Waddington in exchange for the contribution to the Operating Partnership of their ownership interests in various limited liability companies. Immediately following such issuance, 7.5 million Class C Units were issued to General Atlantic REIT, Inc., a subsidiary of General Atlantic, in exchange for a contribution of $150 million (initially representing a 50% ownership interest in the Operating Partnership) and a warrant to purchase an additional 1.25 million Class C Units at $20 per unit (the “Warrant”). The Operating Partnership subsequently repurchased 250,000 Class A Units held by Chad Williams and Mark Waddington for $5 million, and, in April 2010, issued 1.25 million Class C Units to General Atlantic in exchange for $25 million upon exercise of its Warrant. On September 28, 2012, the Operating Partnership issued an additional 2.4 million Class D Units to General Atlantic in exchange for a contribution of $60 million. At the same time, the Operating Partnership issued an additional 2.3 million Class C Units to General Atlantic to settle the amount owed to General Atlantic under the paid-in-kind feature of the Class C Units, which simultaneously was eliminated from the terms of the Class C Units. In December 2012, the Operating Partnership issued an additional 1.2 million Class D Units to General Atlantic for a contribution of $30 million. Accordingly, General Atlantic’s aggregate economic ownership interest increased to approximately 62% at December 31, 2012. As a result of the above transactions, Chad L. Williams and Mark D. Waddington indirectly or directly in aggregate owned 7.25 million Class A Units and General Atlantic owned 14.64 million Class C and Class D Units in the Operating Partnership as of December 31, 2012. In addition to the above transaction, during the second half of 2012, certain directors and officers of the Operating Partnership contributed an aggregate of $2.0 million in exchange for 80,000 Class D Units and 21,250 RS Units converted to Class A Units. | |||||||||||||||||||||||||||||||||||||||||||||||||||
Net income and net loss of the Operating Partnership were allocated with respect to each fiscal year of the Operating Partnership in accordance with the terms of the partnership agreement. Prior to the September 2012 Class D Unit and Class C Unit issuance noted above, due to the paid-in-kind feature of the Class C Units and subject to certain special allocations, net income was generally first allocated to the Class C Units to the extent of their rights to a cumulative preferred return of 9%, with the remaining balance allocated to the Class A Units. Net loss for the nine months ended September 30, 2012 was allocated to the Class A units in accordance with the partnership agreement in effect at that time. Subsequent to September 30, 2012, however, both net income and net loss were proportionally allocated to Class A, Class C, and Class D units. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
QTS Realty Trust, Inc. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
2010 Equity Incentive Plan | 2013 Equity Incentive Plan | 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 to be issued under the plan. Under the 2013 Equity Incentive Plan, QTS granted in connection with its IPO, subject to certain vesting requirements, executive officers 108,629 shares of restricted Class A common stock and options to purchase 370,410 shares of Class A common stock to executive officers, directors and certain of its employees. The Company may also issue Class RS units or Class O units pursuant to the 2013 Equity Incentive Plan. | ||||||||||||||||||||||||||||||||||||||||||||||||||
Number of | Weighted | Weighted | Number of | Weighted | Options | Weighted | Weighted | Restricted | Weighted | For the year ended December 31, 2013, 224,244 Class O units were granted, 73,440 Class O units were forfeited and 5,000 Class RS units converted into Class A units. Options to purchase 2,500 shares of Class A common stock were forfeited during the year ended December 31, 2013. | ||||||||||||||||||||||||||||||||||||||||||
Class O units | average | average | Class RS units | average | average | average | Stock | average | The following is a summary of award activity under the 2013 and 2010 Equity Incentive Plans and related information for 2013, 2012 and 2011: | |||||||||||||||||||||||||||||||||||||||||||
exercise price | fair | price | exercise price | fair | price | |||||||||||||||||||||||||||||||||||||||||||||||
value | value | |||||||||||||||||||||||||||||||||||||||||||||||||||
Outstanding at December 31, 2013 | 1,622,747 | $ | 23.44 | $ | 3.84 | 173,750 | $ | 21.86 | 367,910 | $ | 21 | $ | 3.5 | 108,629 | $ | 21 | Number | Weighted- | Weighted | Number of | Weighted- | Options | Weighted- | Weighted | Restricted | Weighted- | ||||||||||||||||||||||||||
Granted | — | — | — | — | — | 238,039 | 25.59 | 4.96 | 44,000 | 25.51 | of | average | average | Class RS | average | average | average | Stock | average | |||||||||||||||||||||||||||||||||
Exercised | — | — | — | — | — | — | — | — | — | — | Class O | exercise | Fair value | units | price | exercise | Fair value | price | ||||||||||||||||||||||||||||||||||
Released from restriction (1) | — | — | — | (90,437 | ) | 24.93 | — | — | — | — | — | units | price | price | ||||||||||||||||||||||||||||||||||||||
Cancelled/Expired | (75,454 | ) | 23.21 | 5.48 | — | — | (14,000 | ) | 21 | 3.52 | — | — | ||||||||||||||||||||||||||||||||||||||||
Outstanding at September 30, 2014 | 1,547,293 | $ | 23.45 | $ | 3.76 | 83,313 | $ | 23.65 | 591,949 | $ | 22.85 | $ | 4.25 | 152,629 | $ | 22.3 | Outstanding at January 1, 2011....................................................................................................................................................................................................................................................................................................................................... | 592,068 | $ | $ | 50,000 | $— | — | $ — | $ — | — | $ — | |||||||||||||||||||||||||
20.00 | 4.41 | |||||||||||||||||||||||||||||||||||||||||||||||||||
-1 | This represents Class RS units that upon vesting have converted to Operating Partnership units. | Granted................................................................................................................................................................................................................................................................................................................................................................................. | 114,676 | $ | $ | — | $— | — | $ — | $ — | — | $ — | ||||||||||||||||||||||||||||||||||||||||
20.00 | 4.18 | |||||||||||||||||||||||||||||||||||||||||||||||||||
The assumptions and fair values for restricted stock and options to purchase shares of Class A common stock granted for the nine months ended September 30, 2014 is included in the following table on a per unit basis. Class O units and options to purchase shares of Class A common stock were valued using the Black-Scholes model. | Exercised............................................................................................................................................................................................................................................................................................................................................................................... | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
Released from restriction................................................................................................................................................................................................................................................................................................................................................... | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Cancelled/ | -7,376 | — | 4.41 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Three and Nine | Expired............................................................................................................................................................................................................................................................................................................................................................. | |||||||||||||||||||||||||||||||||||||||||||||||||||
Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||
September 30, 2014 | Outstanding at December 31, | 699,368 | $ | $ | 50,000 | $— | — | $ — | $ — | — | $ — | |||||||||||||||||||||||||||||||||||||||||
Fair value of restricted stock granted | $25.51-$28.82 | 2011................................................................................................................................................................................................................................................................................................................................. | 20.00 | 4.38 | ||||||||||||||||||||||||||||||||||||||||||||||||
Fair value of options granted | $4.94-$5.98 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Expected term (years) | 5.5-6.1 | Granted................................................................................................................................................................................................................................................................................................................................................................................. | 908,925 | $ | $ | 150,000 | $— | — | $ — | $ — | — | $ — | ||||||||||||||||||||||||||||||||||||||||
Expected volatility | 33 | % | 25.00 | 1.99 | ||||||||||||||||||||||||||||||||||||||||||||||||
Expected dividend yield | 4.02-4.55 | % | Exercised............................................................................................................................................................................................................................................................................................................................................................................... | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Expected risk-free interest rates | 1.7-1.9 | % | Released from restriction................................................................................................................................................................................................................................................................................................................................................... | — | — | -21,250 | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Cancelled/ | -136,350 | — | 4.41 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Expired............................................................................................................................................................................................................................................................................................................................................................. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
The following table summarizes information about awards outstanding as of September 30, 2014. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Outstanding at December 31, | 1,471,943 | $ | $ | 178,750 | $— | — | $ — | $ — | — | $ — | ||||||||||||||||||||||||||||||||||||||||||
2012................................................................................................................................................................................................................................................................................................................................. | 23.09 | 2.84 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Operating Partnership Awards Outstanding | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Exercise prices | Awards | Weighted average | Granted................................................................................................................................................................................................................................................................................................................................................................................. | 224,244 | $ | $ | — | $— | 370,410 | $ | $ | 108,629 | $ | |||||||||||||||||||||||||||||||||||||||
outstanding | remaining | 25.00 | 10.62 | 21.00 | 3.50 | 21.00 | ||||||||||||||||||||||||||||||||||||||||||||||
vesting period (years) | Exercised............................................................................................................................................................................................................................................................................................................................................................................... | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
Class RS Units | $ | - | 83,313 | 2 | Released from restriction................................................................................................................................................................................................................................................................................................................................................... | — | — | -5,000 | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Class O Units | $ | 20-25 | 1,547,293 | 2 | Cancelled/Expired............................................................................................................................................................................................................................................................................................................................................................. | -73,440 | — | 5.31 | — | — | -2,500 | — | 3.52 | — | — | |||||||||||||||||||||||||||||||||||||
Total Operating Partnership awards outstanding | 1,630,606 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Outstanding at December 31, | 1,622,747 | $ | $ | 173,750 | $— | 367,910 | $ | $ | 108,629 | $ | ||||||||||||||||||||||||||||||||||||||||||
2013................................................................................................................................................................................................................................................................................................................................. | 23.44 | 3.84 | 21.00 | 3.50 | 21.00 | |||||||||||||||||||||||||||||||||||||||||||||||
QTS Realty Trust, Inc. Awards Outstanding | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Exercise prices | Awards | Weighted average | ||||||||||||||||||||||||||||||||||||||||||||||||||
outstanding | remaining | The assumptions and fair values for Class O units, Class RS units, restricted stock and options to purchase shares of Class A common stock granted for the years ended December 31, 2013, 2012 and 2011 are included in the following table on a per unit basis. Class O units and options to purchase shares of Class A common stock were valued using the Black-Scholes model. | ||||||||||||||||||||||||||||||||||||||||||||||||||
vesting period (years) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Restricted stock | $ | - | 152,629 | 3 | ||||||||||||||||||||||||||||||||||||||||||||||||
Options to purchase Class A common stock | $ | 21-28.82 | 591,949 | 1 | ||||||||||||||||||||||||||||||||||||||||||||||||
Total QTS Realty Trust, Inc awards outstanding | 744,578 | 2013 | 2012 | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||
Fair value of Class RS Units granted................................................................................................................................................................................. | $ — | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||
All nonvested LTIP unit awards are valued as of the grant date and generally vest ratably over a defined service period. Certain nonvested LTIP unit awards vest on the earlier of achievement by the Company of various performance goals or specified dates in 2015 and 2016. As of September 30, 2014 there were 0.8 million, 0.1 million, 0.2 million and 0.6 million nonvested Class O units, Class RS units, restricted Class A common stock and options to purchase Class A common stock outstanding, respectively. As of September 30, 2014 the Company had $7.3 million of unrecognized equity-based compensation expense which will be recognized over the remaining vesting period of up to 4 years. The total intrinsic value of the awards outstanding at September 30, 2014 was $20.9 million. | 7.15 | 6.95 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value of Class O Units granted................................................................................................................................................................................... | $10.26-10.92 | $1.79-2.32 | $ | |||||||||||||||||||||||||||||||||||||||||||||||||
On January 7, 2014 the Company paid a dividend to common stockholders of $0.24 per common share and the Operating Partnership made a distribution to its partners of $0.24 per unit in an aggregate amount of $9.0 million. On April 8, July 8 and October 7, 2014, the Company paid its regular quarterly cash dividend of $0.29 per common share and the Operating Partnership made a distribution to its partners of $0.29 per unit in an aggregate amount of $10.7 million, $10.7 million and $10.5 million, respectively. Additionally, a distribution of approximately $200,000 was made to Class O LTIP holders during the three months ended June 30, 2014 to cover federal, state and local taxes on the allocated taxable income of the O LTIPs. | 2.94 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value of Restricted stock granted............................................................................................................................................................................... | $ | $ — | $ — | |||||||||||||||||||||||||||||||||||||||||||||||||
21.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value of options granted........................................................................................................................................................................................... | $3.45-3.52 | $ — | $ — | |||||||||||||||||||||||||||||||||||||||||||||||||
Expected term (years)................................................................................................................................................................................................... | 5.5-7.0 | 4 | 4 | |||||||||||||||||||||||||||||||||||||||||||||||||
Expected volatility......................................................................................................................................................................................................... | 32%-40% | 55% | 60% | |||||||||||||||||||||||||||||||||||||||||||||||||
Expected Dividend yield................................................................................................................................................................................................. | 5.5% | 0% | 0% | |||||||||||||||||||||||||||||||||||||||||||||||||
Expected Risk-free interest rates..................................................................................................................................................................................... | 1.4-1.8% | 0.17% | 0.61% | |||||||||||||||||||||||||||||||||||||||||||||||||
The following table summarizes information about awards outstanding as of December 31, 2013. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Operating Partnership Awards Outstanding | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Exercise prices | Awards | Weighted average | ||||||||||||||||||||||||||||||||||||||||||||||||||
outstanding | remaining | |||||||||||||||||||||||||||||||||||||||||||||||||||
vesting period | ||||||||||||||||||||||||||||||||||||||||||||||||||||
(years) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Class RS Units............................................................................................................................................................................................................. | $— | 173,750 | 3 | |||||||||||||||||||||||||||||||||||||||||||||||||
Class O Units............................................................................................................................................................................................................... | $20-25 | 1,622,747 | 3 | |||||||||||||||||||||||||||||||||||||||||||||||||
Total Operating Partnership awards outstanding................................................................................................................................................................. | 1,796,497 | |||||||||||||||||||||||||||||||||||||||||||||||||||
QTS Realty Trust, Inc. Awards Outstanding | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Exercise prices | Awards | Weighted average | ||||||||||||||||||||||||||||||||||||||||||||||||||
outstanding | remaining | |||||||||||||||||||||||||||||||||||||||||||||||||||
vesting period | ||||||||||||||||||||||||||||||||||||||||||||||||||||
(years) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Restricted stock........................................................................................................................................................................................................... | $— | 108,629 | 4 | |||||||||||||||||||||||||||||||||||||||||||||||||
Options to purchase Class A common stock....................................................................................................................................................................... | $ | 367,910 | 3 | |||||||||||||||||||||||||||||||||||||||||||||||||
21 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Total QTS Realty Trust, Inc awards outstanding................................................................................................................................................................. | 476,539 | |||||||||||||||||||||||||||||||||||||||||||||||||||
All nonvested LTIP unit awards are valued as of the grant date and generally vest ratably over a defined service period. Certain nonvested LTIP unit awards vest on the earlier of achievement by the Company of various performance goals or specified dates in 2015 and 2016. As of December 31, 2013 nonvested awards outstanding were 1.1 million and 0.1 million for the Class O units and Class RS units, respectively. Class O units were not included in the Statements of Changes in Partners’ (Deficit) Capital. As of December 31, 2013 the Company had $8.3 million of unrecognized equity-based compensation expense which will be recognized over the remaining vesting period or approximately three years. The total intrinsic value of the awards outstanding at December 31, 2013 was $9.0 million. As of December 31, 2013, vested awards outstanding included 0.6 million of Class O units with a weighted average fair value per unit of $3.33 and 0.1 million of Class RS units with a weighted average fair value per unit of $7.15. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
On August 14, 2013, the Operating Partnership made a distribution to its partners in an aggregate amount of $7.6 million. In January 2014 QTS paid a dividend to common stockholders of $0.24 per common share and the Operating Partnership made a distribution to its partners of $0.24 per unit in an aggregate amount of $9.0 million. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Related_Party_Transactions
Related Party Transactions | 9 Months Ended | 12 Months Ended | |||||||||||||||||||
Sep. 30, 2014 | Dec. 31, 2013 | ||||||||||||||||||||
Related Party Transactions | 9. Related Party Transactions | 10. Related Party Transactions | |||||||||||||||||||
In addition to the member advances and notes payable and the repayment thereof discussed in Note 7, the Company executed 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, an allocation of insurance expense and reimbursement at the related party’s cost for the use of a private aircraft service by our officers and directors. | |||||||||||||||||||||
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 an allocation of insurance expense and reimbursement at the related party’s cost for the use of a private aircraft service by our officers and directors. | The transactions which occurred during the years ended December 31, 2013, 2012 and 2011 are outlined below (in thousands): | ||||||||||||||||||||
The transactions which occurred during the three and nine months ended September 30, 2014 and 2013 are outlined below (in thousands): | |||||||||||||||||||||
December 31, | |||||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||
September 30, | September 30, | 2013 | 2012 | 2011 | |||||||||||||||||
(dollars in thousands) | 2014 | 2013 | 2014 | 2013 | |||||||||||||||||
Tax, utility, insurance and other reimbursement................................................................................................................................................................... | $ | $ | $ | ||||||||||||||||||
Tax, utility, insurance and other reimbursement | $ | 296 | $ | 18 | $ | 464 | $ | 121 | 336 | 234 | 248 | ||||||||||
Rent expense | 253 | 264 | 772 | 712 | Rent expense............................................................................................................................................................................................................... | 977 | 572 | 572 | |||||||||||||
Capital assets acquired | 86 | 126 | 160 | 141 | Capital assets acquired................................................................................................................................................................................................... | 625 | 568 | 1,807 | |||||||||||||
Total | $ | 635 | $ | 408 | $ | 1,396 | $ | 974 | |||||||||||||
Total............................................................................................................................................................................................................................. | $ | $ | $ | ||||||||||||||||||
1,938 | 1,374 | 2,627 | |||||||||||||||||||
Certain employees of the Company provided services to companies outside the consolidated group for which the Company is not reimbursed. These amounts were not material for the nine months ended September 30, 2013. This activity was discontinued by the Company during the second quarter of 2013. | |||||||||||||||||||||
In the third quarter of 2012, the Company revised its related party capital asset purchasing arrangement. The Company now pays vendors directly for such purchases and pays only an agent fee to the related party. Only the agent fee is recognized as a related party transaction subsequent to August 2012. | |||||||||||||||||||||
Certain employees of the Company provided services to companies outside the consolidated group for which the Company is not reimbursed. These amounts were not material for any of the years ended December 31, 2013, 2012 and 2011.This activity was discontinued by the Company during the second quarter of 2013. | |||||||||||||||||||||
Qualitytech, LP [Member] | |||||||||||||||||||||
Related Party Transactions | 9. Related Party Transactions | 10. Related Party Transactions | |||||||||||||||||||
In addition to the member advances and notes payable and the repayment thereof discussed in Note 7, the Company executed 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, an allocation of insurance expense and reimbursement at the related party’s cost for the use of a private aircraft service by our officers and directors. | |||||||||||||||||||||
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 an allocation of insurance expense and reimbursement at the related party’s cost for the use of a private aircraft service by our officers and directors. | The transactions which occurred during the years ended December 31, 2013, 2012 and 2011 are outlined below (in thousands): | ||||||||||||||||||||
The transactions which occurred during the three and nine months ended September 30, 2014 and 2013 are outlined below (in thousands): | |||||||||||||||||||||
December 31, | |||||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||
September 30, | September 30, | 2013 | 2012 | 2011 | |||||||||||||||||
(dollars in thousands) | 2014 | 2013 | 2014 | 2013 | |||||||||||||||||
Tax, utility, insurance and other reimbursement................................................................................................................................................................... | $ | $ | $ | ||||||||||||||||||
Tax, utility, insurance and other reimbursement | $ | 296 | $ | 18 | $ | 464 | $ | 121 | 336 | 234 | 248 | ||||||||||
Rent expense | 253 | 264 | 772 | 712 | Rent expense............................................................................................................................................................................................................... | 977 | 572 | 572 | |||||||||||||
Capital assets acquired | 86 | 126 | 160 | 141 | Capital assets acquired................................................................................................................................................................................................... | 625 | 568 | 1,807 | |||||||||||||
Total | $ | 635 | $ | 408 | $ | 1,396 | $ | 974 | |||||||||||||
Total............................................................................................................................................................................................................................. | $ | $ | $ | ||||||||||||||||||
1,938 | 1,374 | 2,627 | |||||||||||||||||||
Certain employees of the Company provided services to companies outside the consolidated group for which the Company is not reimbursed. These amounts were not material for the nine months ended September 30, 2013. This activity was discontinued by the Company during the second quarter of 2013. | |||||||||||||||||||||
In the third quarter of 2012, the Company revised its related party capital asset purchasing arrangement. The Company now pays vendors directly for such purchases and pays only an agent fee to the related party. Only the agent fee is recognized as a related party transaction subsequent to August 2012. | |||||||||||||||||||||
Certain employees of the Company provided services to companies outside the consolidated group for which the Company is not reimbursed. These amounts were not material for any of the years ended December 31, 2013, 2012 and 2011.This activity was discontinued by the Company during the second quarter of 2013. | |||||||||||||||||||||
Employee_Benefit_Plan
Employee Benefit Plan | 12 Months Ended |
Dec. 31, 2013 | |
Employee Benefit Plan | 11. Employee Benefit Plan |
The Company sponsors a defined contribution 401(k) retirement plan covering all eligible employees. | |
Qualified employees may elect to contribute to our 401(k) Plan on a pre-tax basis. The maximum amount of employee contribution is subject only to statutory limitations. Beginning in 2005 the Company made contributions at a rate of 25% of the first 4% of employee compensation contributed. The Company contributed $0.3 million, $0.3 million and $0.2 million to the 401(k) Plan for the years ended December 31, 2013, 2012, and 2011, respectively. | |
In addition, starting on January 1, 2014, the Company began making contributions at a rate of 50% on an additional 2% of employees compensation contributed up to 6%. As a result, the Company is currently matching 25% of the first 4% of employee contributions and 50% of employee contributions between 4% and 6%. | |
Qualitytech, LP [Member] | |
Employee Benefit Plan | 11. Employee Benefit Plan |
The Company sponsors a defined contribution 401(k) retirement plan covering all eligible employees. | |
Qualified employees may elect to contribute to our 401(k) Plan on a pre-tax basis. The maximum amount of employee contribution is subject only to statutory limitations. Beginning in 2005 the Company made contributions at a rate of 25% of the first 4% of employee compensation contributed. The Company contributed $0.3 million, $0.3 million and $0.2 million to the 401(k) Plan for the years ended December 31, 2013, 2012, and 2011, respectively. | |
In addition, starting on January 1, 2014, the Company began making contributions at a rate of 50% on an additional 2% of employees compensation contributed up to 6%. As a result, the Company is currently matching 25% of the first 4% of employee contributions and 50% of employee contributions between 4% and 6%. | |
Noncontrolling_Interest
Noncontrolling Interest | 9 Months Ended | 12 Months Ended |
Sep. 30, 2014 | Dec. 31, 2013 | |
Noncontrolling Interest | 10. Noncontrolling Interest | 12. Noncontrolling Interest |
Concurrently with the completion of the IPO, QTS Realty Trust, Inc. consummated a series of transactions pursuant to which the Company 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 December 31, 2013. | ||
Concurrently with the completion of the IPO, the Company consummated a series of transactions pursuant to which the Company 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 September 30, 2014. | Commencing at any time beginning November 1, 2014, at the election of the holders of the noncontrolling interest, the Class A units are redeemable for cash or, at the election of the Company, common stock of the Company on a one-for-one basis. | |
Commencing at any time beginning November 1, 2014, at the election of the holders of the noncontrolling interest, the Class A units are redeemable for cash or, at the election of the Company common stock of the Company on a one-for-one basis. | ||
Qualitytech, LP [Member] | ||
Noncontrolling Interest | 10. Noncontrolling Interest | 12. Noncontrolling Interest |
Concurrently with the completion of the IPO, QTS Realty Trust, Inc. consummated a series of transactions pursuant to which the Company 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 December 31, 2013. | ||
Concurrently with the completion of the IPO, the Company consummated a series of transactions pursuant to which the Company 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 September 30, 2014. | Commencing at any time beginning November 1, 2014, at the election of the holders of the noncontrolling interest, the Class A units are redeemable for cash or, at the election of the Company, common stock of the Company on a one-for-one basis. | |
Commencing at any time beginning November 1, 2014, at the election of the holders of the noncontrolling interest, the Class A units are redeemable for cash or, at the election of the Company common stock of the Company on a one-for-one basis. | ||
Earnings_per_Share
Earnings per Share | 9 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2014 | Dec. 31, 2013 | ||||||||||
Earnings per Share | 11. Earnings per share of QTS | 13. Earnings per share of QTS Realty Trust, Inc. | |||||||||
Basic income (loss) per share is calculated by dividing the net income (loss) attributable to common shares by the weighted average number of common shares outstanding during the period. Diluted income (loss) per share adjusts basic income (loss) per share for the effects of potentially dilutive common shares. | Basic income (loss) per share is calculated by dividing the net income (loss) attributable to common shares by the weighted average number of common shares outstanding during the period. Diluted income (loss) per share adjusts basic income (loss) per share for the effects of potentially dilutive common shares, if the effect is not antidilutive. | ||||||||||
(in thousands, except per share data) | For the period October 15, | ||||||||||
2013 through | |||||||||||
Three Months Ended | Nine Months Ended | December 31, 2013 | |||||||||
(in thousands, except per share data) | 30-Sep-14 | 30-Sep-14 | |||||||||
Net income available to common stockholders | $ | 3,157 | $ | 10,445 | Net income available to common stockholders................................................................................................................................................................... | $ | |||||
Weighted average shares outstanding—basic | 29,017 | 29,007 | 3,154 | ||||||||
Net income per share—basic | $ | 0.11 | $ | 0.36 | Weighted average shares outstanding—basic..................................................................................................................................................................... | 28,973 | |||||
Net income per share—basic........................................................................................................................................................................................... | $ | ||||||||||
Net income | $ | 4,006 | $ | 13,255 | 0.11 | ||||||
Weighted average shares outstanding—diluted (1) | 37,252 | 37,040 | Net income................................................................................................................................................................................................................... | $ | |||||||
Net income per share—diluted | $ | 0.11 | $ | 0.36 | 4,002 | ||||||
Weighted average shares outstanding—diluted(1)............................................................................................................................................................... | 36,794 | ||||||||||
Net income per share—diluted......................................................................................................................................................................................... | $ | ||||||||||
(1) Includes 8,104 and 7,939 units of the Operating Partnership as of the three and nine months ended September 30, 2014, respectively. | 0.11 | ||||||||||
(1)Includes 7,821 shares of the Operating Partnership. | |||||||||||
Qualitytech, LP [Member] | |||||||||||
Earnings per Share | 11. Earnings per share of QTS | 13. Earnings per share of QTS Realty Trust, Inc. | |||||||||
Basic income (loss) per share is calculated by dividing the net income (loss) attributable to common shares by the weighted average number of common shares outstanding during the period. Diluted income (loss) per share adjusts basic income (loss) per share for the effects of potentially dilutive common shares. | Basic income (loss) per share is calculated by dividing the net income (loss) attributable to common shares by the weighted average number of common shares outstanding during the period. Diluted income (loss) per share adjusts basic income (loss) per share for the effects of potentially dilutive common shares, if the effect is not antidilutive. | ||||||||||
(in thousands, except per share data) | For the period October 15, | ||||||||||
2013 through | |||||||||||
Three Months Ended | Nine Months Ended | December 31, 2013 | |||||||||
(in thousands, except per share data) | 30-Sep-14 | 30-Sep-14 | |||||||||
Net income available to common stockholders | $ | 3,157 | $ | 10,445 | Net income available to common stockholders................................................................................................................................................................... | $ | |||||
Weighted average shares outstanding—basic | 29,017 | 29,007 | 3,154 | ||||||||
Net income per share—basic | $ | 0.11 | $ | 0.36 | Weighted average shares outstanding—basic..................................................................................................................................................................... | 28,973 | |||||
Net income per share—basic........................................................................................................................................................................................... | $ | ||||||||||
Net income | $ | 4,006 | $ | 13,255 | 0.11 | ||||||
Weighted average shares outstanding—diluted (1) | 37,252 | 37,040 | Net income................................................................................................................................................................................................................... | $ | |||||||
Net income per share—diluted | $ | 0.11 | $ | 0.36 | 4,002 | ||||||
Weighted average shares outstanding—diluted(1)............................................................................................................................................................... | 36,794 | ||||||||||
Net income per share—diluted......................................................................................................................................................................................... | $ | ||||||||||
(1) Includes 8,104 and 7,939 units of the Operating Partnership as of the three and nine months ended September 30, 2014, respectively. | 0.11 | ||||||||||
(1)Includes 7,821 shares of the Operating Partnership. | |||||||||||
Operating_Leases_as_Lessee
Operating Leases, as Lessee | 12 Months Ended | |
Dec. 31, 2013 | ||
Operating Leases, as Lessee | 14. Operating Leases, as Lessee | |
The Company leases and/or licenses two data center facilities and related equipment, our corporate headquarters and additional office space. In addition, the Company has entered into a long-term ground sublease for its Santa Clara property through October 2052. Rent expense for the aforementioned leases was $5.8 million, $6.5 million and $6.6 million for the years ended December 31, 2013, 2012 and 2011, respectively, and is classified in property operating costs and general and administrative expenses in the accompanying Statements of Operations and Comprehensive Income (Loss). The Company recorded $0.2 million in capitalized rent for the year ended December 31, 2011, with no rent capitalized for the years ended December 31, 2013 and 2012. The future non-cancellable minimum rental payments required under operating leases and/or licenses at December 31, 2013 are as follows (in thousands): | ||
Year Ending December 31, | ||
2014............................................................................................................................................................................................................................. | $ | |
5,464 | ||
2015............................................................................................................................................................................................................................. | 5,470 | |
2016............................................................................................................................................................................................................................. | 5,545 | |
2017............................................................................................................................................................................................................................. | 5,618 | |
2018............................................................................................................................................................................................................................. | 5,618 | |
Thereafter................................................................................................................................................................................................................... | 67,547 | |
Total............................................................................................................................................................................................................................. | $ | |
95,262 | ||
Qualitytech, LP [Member] | ||
Operating Leases, as Lessee | 14. Operating Leases, as Lessee | |
The Company leases and/or licenses two data center facilities and related equipment, our corporate headquarters and additional office space. In addition, the Company has entered into a long-term ground sublease for its Santa Clara property through October 2052. Rent expense for the aforementioned leases was $5.8 million, $6.5 million and $6.6 million for the years ended December 31, 2013, 2012 and 2011, respectively, and is classified in property operating costs and general and administrative expenses in the accompanying Statements of Operations and Comprehensive Income (Loss). The Company recorded $0.2 million in capitalized rent for the year ended December 31, 2011, with no rent capitalized for the years ended December 31, 2013 and 2012. The future non-cancellable minimum rental payments required under operating leases and/or licenses at December 31, 2013 are as follows (in thousands): | ||
Year Ending December 31, | ||
2014............................................................................................................................................................................................................................. | $ | |
5,464 | ||
2015............................................................................................................................................................................................................................. | 5,470 | |
2016............................................................................................................................................................................................................................. | 5,545 | |
2017............................................................................................................................................................................................................................. | 5,618 | |
2018............................................................................................................................................................................................................................. | 5,618 | |
Thereafter................................................................................................................................................................................................................... | 67,547 | |
Total............................................................................................................................................................................................................................. | $ | |
95,262 | ||
Customer_Leases_as_Lessor
Customer Leases, as Lessor | 9 Months Ended | 12 Months Ended | |||||||
Sep. 30, 2014 | Dec. 31, 2013 | ||||||||
Customer Leases, as Lessor | 12. Customer Leases, as Lessor | 15. Customer Leases, as Lessor | |||||||
Future minimum lease payments to be received under non-cancelable operating customer leases (exclusive of recoveries of operating costs from customers) are as follows for the years ending December 31 (in thousands): | |||||||||
Future minimum lease payments to be received under non-cancelable operating customer leases (exclusive of recoveries of operating costs from customers) are as follows for the years ending December 31 (in thousands): | |||||||||
Period Ending December 31, | 2014............................................................................................................................................................................................................................. | $ | |||||||
2014 (October - December) | $ | 50,029 | 149,158 | ||||||
2015 | 186,248 | 2015............................................................................................................................................................................................................................. | 121,105 | ||||||
2016 | 166,060 | 2016............................................................................................................................................................................................................................. | 93,411 | ||||||
2017 | 130,052 | 2017............................................................................................................................................................................................................................. | 70,203 | ||||||
2018 | 104,754 | 2018............................................................................................................................................................................................................................. | 54,212 | ||||||
Thereafter | 278,147 | Thereafter................................................................................................................................................................................................................... | 56,981 | ||||||
Total | $ | 915,290 | |||||||
Total............................................................................................................................................................................................................................. | $ | ||||||||
545,070 | |||||||||
Qualitytech, LP [Member] | |||||||||
Customer Leases, as Lessor | 12. Customer Leases, as Lessor | 15. Customer Leases, as Lessor | |||||||
Future minimum lease payments to be received under non-cancelable operating customer leases (exclusive of recoveries of operating costs from customers) are as follows for the years ending December 31 (in thousands): | |||||||||
Future minimum lease payments to be received under non-cancelable operating customer leases (exclusive of recoveries of operating costs from customers) are as follows for the years ending December 31 (in thousands): | |||||||||
Period Ending December 31, | 2014............................................................................................................................................................................................................................. | $ | |||||||
2014 (October - December) | $ | 50,029 | 149,158 | ||||||
2015 | 186,248 | 2015............................................................................................................................................................................................................................. | 121,105 | ||||||
2016 | 166,060 | 2016............................................................................................................................................................................................................................. | 93,411 | ||||||
2017 | 130,052 | 2017............................................................................................................................................................................................................................. | 70,203 | ||||||
2018 | 104,754 | 2018............................................................................................................................................................................................................................. | 54,212 | ||||||
Thereafter | 278,147 | Thereafter................................................................................................................................................................................................................... | 56,981 | ||||||
Total | $ | 915,290 | |||||||
Total............................................................................................................................................................................................................................. | $ | ||||||||
545,070 | |||||||||
Fair_Value_of_Financial_Instru
Fair Value of Financial Instruments | 9 Months Ended | 12 Months Ended |
Sep. 30, 2014 | Dec. 31, 2013 | |
Fair Value of Financial Instruments | 13. Fair Value of Financial Instruments | 16. Fair Value of Financial Instruments |
ASC Topic 825 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. | ||
ASC Topic 825 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, restricted cash approximate fair value. | ||
Short-term instruments: The carrying amounts of cash and cash equivalents, restricted cash approximate fair value. | Credit facilities and mortgage notes payable: The fair value of the Company’s floating rate mortgage loans was estimated using Level 2 “significant other observable inputs” such as available market information based on borrowing rates that the Company believes it could obtain with similar terms and maturities. The Company did not have interest rates which were materially different than current market conditions and therefore, the fair value of each of the mortgage notes payable approximated the carrying value of each note. | |
Other debt instruments: The fair value of the Company’s other debt instruments (including capital leases) were estimated in the same manner as the credit facilities and mortgage notes payable above. Similarly, because 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. | ||
Credit facilities, Senior Notes and mortgage notes payable: The fair value of the Company’s floating rate mortgage loans was estimated using Level 2 “significant other observable inputs” such as available market information based on borrowing rates that the Company believes it could obtain with similar terms and maturities. At September 30, 2014, the fair value of Atlanta-Metro Equipment Loan, based on current market rates, was approximately $17.2 million. The Company’s Unsecured Credit Facility and Richmond Credit Facility did not have interest rates which were materially different than current market conditions and therefore, the fair value of each of the credit facilities approximated the carrying value of each note. 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 September 30, 2014, the fair value of the Senior Notes was approximately $290.2 million. | ||
Other debt instruments: The fair value of the Company’s other debt instruments (including capital leases) were estimated in the same manner as the credit facilities and mortgage notes payable above. Similarly, because 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. | ||
Qualitytech, LP [Member] | ||
Fair Value of Financial Instruments | 13. Fair Value of Financial Instruments | 16. Fair Value of Financial Instruments |
ASC Topic 825 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. | ||
ASC Topic 825 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, restricted cash approximate fair value. | ||
Short-term instruments: The carrying amounts of cash and cash equivalents, restricted cash approximate fair value. | Credit facilities and mortgage notes payable: The fair value of the Company’s floating rate mortgage loans was estimated using Level 2 “significant other observable inputs” such as available market information based on borrowing rates that the Company believes it could obtain with similar terms and maturities. The Company did not have interest rates which were materially different than current market conditions and therefore, the fair value of each of the mortgage notes payable approximated the carrying value of each note. | |
Other debt instruments: The fair value of the Company’s other debt instruments (including capital leases) were estimated in the same manner as the credit facilities and mortgage notes payable above. Similarly, because 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. | ||
Credit facilities, Senior Notes and mortgage notes payable: The fair value of the Company’s floating rate mortgage loans was estimated using Level 2 “significant other observable inputs” such as available market information based on borrowing rates that the Company believes it could obtain with similar terms and maturities. At September 30, 2014, the fair value of Atlanta-Metro Equipment Loan, based on current market rates, was approximately $17.2 million. The Company’s Unsecured Credit Facility and Richmond Credit Facility did not have interest rates which were materially different than current market conditions and therefore, the fair value of each of the credit facilities approximated the carrying value of each note. 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 September 30, 2014, the fair value of the Senior Notes was approximately $290.2 million. | ||
Other debt instruments: The fair value of the Company’s other debt instruments (including capital leases) were estimated in the same manner as the credit facilities and mortgage notes payable above. Similarly, because 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. | ||
Quarterly_Financial_Informatio
Quarterly Financial Information | 12 Months Ended | |||||
Dec. 31, 2013 | ||||||
Quarterly Financial Information (unaudited) | 17. Quarterly Financial Information (unaudited) | |||||
The tables below reflect the selected quarterly information for QTS for the years ended December 31, 2013 and 2012 (in thousands except share data): | ||||||
Historical Predecessor | ||||||
The Company | Three Months Ended | |||||
For the period | For the period | September 30, | June 30, | March 31, | ||
October 15, 2013 | October 1, 2013 | 2013 | 2013 | 2013 | ||
through | through | |||||
December 31, | October 14, | |||||
2013 | 2013 | |||||
Revenues....................................................................................................................................................................................................................... | $ | $ | $ | $ | $ | |
40,462 | 6,967 | 46,020 | 42,940 | 41,498 | ||
Operating income......................................................................................................................................................................................................... | 6,203 | 1,143 | 7,048 | 6,024 | 5,568 | |
Net income (loss)......................................................................................................................................................................................................... | 4,002 | 445 | 2,709 | -1,232 | -2,074 | |
Net income (loss) attributable to common shares............................................................................................................................................................... | 3,154 | N/A | N/A | N/A | N/A | |
Net income per share attributable to common shares—basic(1)............................................................................................................................................. | $ | $N/A | $N/A | $N/A | $N/A | |
0.11 | ||||||
Net income per share attributable to common shares—diluted(1)........................................................................................................................................... | $ | $N/A | $N/A | $N/A | $N/A | |
0.11 | ||||||
-1 | Net income per share attributable to QTS Realty Trust, Inc. for the period October 15, 2013 through December 31, 2013. | |||||
Historical Predecessor | ||||||
Three Months Ended | ||||||
December 31, | September 30, | June 30, | March 31, | |||
2012 | 2012 | 2012 | 2012 | |||
Revenues....................................................................................................................................................................................................................... | $ | $ | $ | $ | ||
38,173 | 36,254 | 36,689 | 34,643 | |||
Operating income......................................................................................................................................................................................................... | 4,203 | 3,933 | 6,014 | 1,365 | ||
Net loss......................................................................................................................................................................................................................... | -1,608 | -1,757 | -266 | -6,136 | ||
The table below reflects the selected quarterly information for the Operating Partnership for the years ended December 31, 2013 and 2012 (in thousands): | ||||||
Three Months Ended | ||||||
December 31 | September 30 | June 30 | March 31 | |||
2013 | ||||||
Revenues....................................................................................................................................................................................................................... | $ | $ | $ | $ | ||
47,429 | 46,020 | 42,940 | 41,498 | |||
Operating income......................................................................................................................................................................................................... | 7,346 | 7,048 | 6,024 | 5,568 | ||
Net income (loss)......................................................................................................................................................................................................... | 4,447 | 2,709 | -1,232 | -2,074 | ||
2012 | ||||||
Revenues....................................................................................................................................................................................................................... | $ | $ | $ | $ | ||
38,173 | 36,254 | 36,689 | 34,643 | |||
Operating income......................................................................................................................................................................................................... | 4,203 | 3,933 | 6,014 | 1,365 | ||
Net loss......................................................................................................................................................................................................................... | -1,608 | -1,757 | -266 | -6,136 | ||
Qualitytech, LP [Member] | ||||||
Quarterly Financial Information (unaudited) | 17. Quarterly Financial Information (unaudited) | |||||
The tables below reflect the selected quarterly information for QTS for the years ended December 31, 2013 and 2012 (in thousands except share data): | ||||||
Historical Predecessor | ||||||
The Company | Three Months Ended | |||||
For the period | For the period | September 30, | June 30, | March 31, | ||
October 15, 2013 | October 1, 2013 | 2013 | 2013 | 2013 | ||
through | through | |||||
December 31, | October 14, | |||||
2013 | 2013 | |||||
Revenues....................................................................................................................................................................................................................... | $ | $ | $ | $ | $ | |
40,462 | 6,967 | 46,020 | 42,940 | 41,498 | ||
Operating income......................................................................................................................................................................................................... | 6,203 | 1,143 | 7,048 | 6,024 | 5,568 | |
Net income (loss)......................................................................................................................................................................................................... | 4,002 | 445 | 2,709 | -1,232 | -2,074 | |
Net income (loss) attributable to common shares............................................................................................................................................................... | 3,154 | N/A | N/A | N/A | N/A | |
Net income per share attributable to common shares—basic(1)............................................................................................................................................. | $ | $N/A | $N/A | $N/A | $N/A | |
0.11 | ||||||
Net income per share attributable to common shares—diluted(1)........................................................................................................................................... | $ | $N/A | $N/A | $N/A | $N/A | |
0.11 | ||||||
-1 | Net income per share attributable to QTS Realty Trust, Inc. for the period October 15, 2013 through December 31, 2013. | |||||
Historical Predecessor | ||||||
Three Months Ended | ||||||
December 31, | September 30, | June 30, | March 31, | |||
2012 | 2012 | 2012 | 2012 | |||
Revenues....................................................................................................................................................................................................................... | $ | $ | $ | $ | ||
38,173 | 36,254 | 36,689 | 34,643 | |||
Operating income......................................................................................................................................................................................................... | 4,203 | 3,933 | 6,014 | 1,365 | ||
Net loss......................................................................................................................................................................................................................... | -1,608 | -1,757 | -266 | -6,136 | ||
The table below reflects the selected quarterly information for the Operating Partnership for the years ended December 31, 2013 and 2012 (in thousands): | ||||||
Three Months Ended | ||||||
December 31 | September 30 | June 30 | March 31 | |||
2013 | ||||||
Revenues....................................................................................................................................................................................................................... | $ | $ | $ | $ | ||
47,429 | 46,020 | 42,940 | 41,498 | |||
Operating income......................................................................................................................................................................................................... | 7,346 | 7,048 | 6,024 | 5,568 | ||
Net income (loss)......................................................................................................................................................................................................... | 4,447 | 2,709 | -1,232 | -2,074 | ||
2012 | ||||||
Revenues....................................................................................................................................................................................................................... | $ | $ | $ | $ | ||
38,173 | 36,254 | 36,689 | 34,643 | |||
Operating income......................................................................................................................................................................................................... | 4,203 | 3,933 | 6,014 | 1,365 | ||
Net loss......................................................................................................................................................................................................................... | -1,608 | -1,757 | -266 | -6,136 | ||
Subsequent_Events
Subsequent Events | 9 Months Ended | 12 Months Ended |
Sep. 30, 2014 | Dec. 31, 2013 | |
Subsequent Events | 14. Subsequent Events | 18. Subsequent Events |
As previously announced, on November 20, 2013, the Company’s Board of Directors authorized payment of its first, and prorated, quarterly cash dividend of $0.24 per common share to stockholders of record as of the close of business on December 20, 2013. On January 7, 2014, the Company paid its first dividend to its stockholders in the aggregate amount of $7.0 million. In addition, on January 7, 2014, the Company made a distribution to the holders of Class A units of limited partnership of the operating partnership in an aggregate amount of approximately $2.0 million in connection with the quarterly dividend on our common stock. | ||
On October 7, 2014, QTS paid its regular quarterly cash dividend of $0.29 per common share to stockholders and Operating Partnership unit holders of record as of the close of business on September 19, 2014. | On February 13, 2014, the Company’s Board of Directors authorized payment of a regular quarterly cash dividend of $0.29 per common share, payable on April 8, 2014, to stockholders of record as of the close of business on March 20, 2014. | |
On December 17, 2014, the Company amended and restated its Unsecured Credit Facility and amended its Richmond Credit Facility. The modification to the Unsecured Credit Facility, among other things, increased the facility to $650 million, with an accordion feature that permits a further increase to up to $850 million (subject to certain conditions, including obtaining additional commitments of lenders), extended the maturity date of the term loan portion to December 17, 2019 and the revolving credit portion to December 17, 2018, reduced the applicable interest rates, and made certain of the financial covenants more favorable to the Company. The modification to the Richmond Credit Facility, among other things, conformed certain terms of the Richmond Credit Facility to the Unsecured Credit Facility and allowed two subsidiaries of the Operating Partnership that were parties to the Richmond Credit Facility to guarantee unsecured obligations of the Operating Partnership and its subsidiaries including the Unsecured Credit Facility and the Senior Notes. | In February 2014, the Company expanded the capacity of its unsecured credit facility by $50 million, increasing the total revolving credit facility capacity to $400 million. | |
On October 7, 2014, QTS paid its regular quarterly cash dividend of $0.29 per common share to stockholders and Operating Partnership unit holders of record as of the close of business on September 19, 2014. | ||
On January 7, 2015, the Company paid its regular quarterly cash dividend of $0.29 per common share to stockholders and Operating Partnership unit holders of record as of the close of business on December 19, 2014. | On December 17, 2014, the Company amended and restated its Unsecured Credit Facility and amended its Richmond Credit Facility. The modification to the Unsecured Credit Facility, among other things, increased the facility to $650 million, with an accordion feature that permits a further increase to up to $850 million (subject to certain conditions, including obtaining additional commitments of lenders), extended the maturity date of the term loan portion to December 17, 2019 and the revolving credit portion to December 17, 2018, reduced the applicable interest rates, and made certain of the financial covenants more favorable to the Company. The modification to the Richmond Credit Facility, among other things, conformed certain terms of the Richmond Credit Facility to the Unsecured Credit Facility and allowed two subsidiaries of the Operating Partnership that were parties to the Richmond Credit Facility to guarantee unsecured obligations of the Operating Partnership and its subsidiaries including the Unsecured Credit Facility and the Senior Notes. | |
On January 7, 2015, the Company paid its regular quarterly cash dividend of $0.29 per common share to stockholders and Operating Partnership unit holders of record as of the close of business on December 19, 2014 | ||
Qualitytech, LP [Member] | ||
Subsequent Events | 14. Subsequent Events | 18. Subsequent Events |
As previously announced, on November 20, 2013, the Company’s Board of Directors authorized payment of its first, and prorated, quarterly cash dividend of $0.24 per common share to stockholders of record as of the close of business on December 20, 2013. On January 7, 2014, the Company paid its first dividend to its stockholders in the aggregate amount of $7.0 million. In addition, on January 7, 2014, the Company made a distribution to the holders of Class A units of limited partnership of the operating partnership in an aggregate amount of approximately $2.0 million in connection with the quarterly dividend on our common stock. | ||
On October 7, 2014, QTS paid its regular quarterly cash dividend of $0.29 per common share to stockholders and Operating Partnership unit holders of record as of the close of business on September 19, 2014. | On February 13, 2014, the Company’s Board of Directors authorized payment of a regular quarterly cash dividend of $0.29 per common share, payable on April 8, 2014, to stockholders of record as of the close of business on March 20, 2014. | |
On December 17, 2014, the Company amended and restated its Unsecured Credit Facility and amended its Richmond Credit Facility. The modification to the Unsecured Credit Facility, among other things, increased the facility to $650 million, with an accordion feature that permits a further increase to up to $850 million (subject to certain conditions, including obtaining additional commitments of lenders), extended the maturity date of the term loan portion to December 17, 2019 and the revolving credit portion to December 17, 2018, reduced the applicable interest rates, and made certain of the financial covenants more favorable to the Company. The modification to the Richmond Credit Facility, among other things, conformed certain terms of the Richmond Credit Facility to the Unsecured Credit Facility and allowed two subsidiaries of the Operating Partnership that were parties to the Richmond Credit Facility to guarantee unsecured obligations of the Operating Partnership and its subsidiaries including the Unsecured Credit Facility and the Senior Notes. | In February 2014, the Company expanded the capacity of its unsecured credit facility by $50 million, increasing the total revolving credit facility capacity to $400 million. | |
On October 7, 2014, QTS paid its regular quarterly cash dividend of $0.29 per common share to stockholders and Operating Partnership unit holders of record as of the close of business on September 19, 2014. | ||
On January 7, 2015, the Company paid its regular quarterly cash dividend of $0.29 per common share to stockholders and Operating Partnership unit holders of record as of the close of business on December 19, 2014. | On December 17, 2014, the Company amended and restated its Unsecured Credit Facility and amended its Richmond Credit Facility. The modification to the Unsecured Credit Facility, among other things, increased the facility to $650 million, with an accordion feature that permits a further increase to up to $850 million (subject to certain conditions, including obtaining additional commitments of lenders), extended the maturity date of the term loan portion to December 17, 2019 and the revolving credit portion to December 17, 2018, reduced the applicable interest rates, and made certain of the financial covenants more favorable to the Company. The modification to the Richmond Credit Facility, among other things, conformed certain terms of the Richmond Credit Facility to the Unsecured Credit Facility and allowed two subsidiaries of the Operating Partnership that were parties to the Richmond Credit Facility to guarantee unsecured obligations of the Operating Partnership and its subsidiaries including the Unsecured Credit Facility and the Senior Notes. | |
On January 7, 2015, the Company paid its regular quarterly cash dividend of $0.29 per common share to stockholders and Operating Partnership unit holders of record as of the close of business on December 19, 2014 | ||
Schedule_III_Real_Estate_Inves
Schedule III - Real Estate Investments | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
SCHEDULE III - REAL ESTATE INVESTMENTS | QTS REALTY TRUST, INC. | ||||||||||
QUALITYTECH, LP | |||||||||||
CONSOLIDATED FINANCIAL STATEMENTS | |||||||||||
SCHEDULE III - REAL ESTATE INVESTMENTS | |||||||||||
December 31, 2013 | |||||||||||
As of December 31, 2013 | Accumulated | ||||||||||
(dollars in thousands) | Initial Costs | Costs Capitalized Subsequent to Acquisition | Gross Carrying Amount | Depreciation | Date of | ||||||
Property Location | Land | Buildings and | Land | Buildings and | Construction | Land | Buildings and | Construction | and Amortization | Acquisition | |
Improvements | Improvements | in Progress | Improvements | in Progress | |||||||
Owned Properties | |||||||||||
Suwanee, | $ | $ | $ | $ | $ | $ | $ | $ | $ | 9/1/05 | |
Georgia......................................................................................................................................................................................................... | 1,395 | 29,802 | 2,126 | 96,684 | 3,270 | 3,521 | 126,486 | 3,270 | -34,590 | ||
Atlanta, Georgia............................................................................................................................................................................................................. | 12,647 | 35,473 | 2,750 | 261,074 | 32,456 | 15,397 | 296,547 | 32,456 | -58,272 | 10/3/06 | |
Santa Clara, California*................................................................................................................................................................................................. | — | 15,838 | — | 70,706 | 1,249 | — | 86,544 | 1,249 | -19,102 | 11/1/07 | |
Richmond, | 2,000 | 11,200 | 180 | 97,779 | 67,155 | 2,180 | 108,979 | 67,155 | -8,996 | 3/20/10 | |
Virginia....................................................................................................................................................................................................... | |||||||||||
Sacramento, California................................................................................................................................................................................................... | 1,481 | 52,753 | — | 88 | 4,273 | 1,481 | 52,841 | 4,273 | -1,403 | 12/21/12 | |
Dallas, Texas............................................................................................................................................................................................................... | — | 5,808 | 5,808 | -5,808 | 38,501 | 5,808 | — | 38,501 | — | 2/8/13 | |
Miami, Florida............................................................................................................................................................................................................... | 1,777 | 6,955 | — | 20,598 | — | 1,777 | 27,553 | — | -5,662 | 3/6/08 | |
Lenexa, Kansas............................................................................................................................................................................................................. | 400 | 3,100 | 37 | 198 | — | 437 | 3,298 | — | -82 | 6/3/11 | |
Wichita, Kansas............................................................................................................................................................................................................. | — | 686 | — | 723 | — | — | 1,409 | — | -498 | 3/31/05 | |
$ | $ | $ | $ | $ | $ | $ | $ | $ | |||
19,700 | 161,615 | 10,901 | 542,042 | 146,904 | 30,601 | 703,657 | 146,904 | -128,605 | |||
Leased Properties | |||||||||||
Jersey City, New Jersey................................................................................................................................................................................................. | — | 1,985 | — | 21,826 | — | — | 23,811 | — | -8,686 | 11/1/06 | |
Overland Park, Kansas................................................................................................................................................................................................... | — | — | — | 762 | — | — | 762 | — | -434 | ||
— | 1,985 | — | 22,588 | — | — | 24,573 | — | -9,120 | |||
$ | $ | $ | $ | $ | $ | $ | $ | $ | |||
19,700 | 163,600 | 10,901 | 564,630 | 146,904 | 30,601 | 728,230 | 146,904 | -137,725 | |||
*Owned facility subject to long-term ground sublease. | |||||||||||
The following table reconciles the historical cost and accumulated depreciation for the years ended December 31, 2013, 2012 and 2011. | |||||||||||
Years Ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Property | |||||||||||
Balance, beginning of period........................................................................................................................................................................................... | $ | $ | $ | ||||||||
734,828 | 555,586 | 432,889 | |||||||||
Disposals....................................................................................................................................................................................................................... | — | -794 | -463 | ||||||||
Additions (acquisitions and improvements)......................................................................................................................................................................... | 170,907 | 180,036 | 123,160 | ||||||||
Balance, end of period................................................................................................................................................................................................... | $ | $ | $ | ||||||||
905,735 | 734,828 | 555,586 | |||||||||
Accumulated depreciation | |||||||||||
Balance, beginning of period........................................................................................................................................................................................... | $ | $ | $ | ||||||||
-102,900 | -74,536 | -52,923 | |||||||||
Disposals....................................................................................................................................................................................................................... | — | 162 | 46 | ||||||||
Additions (depreciation and amortization expense)............................................................................................................................................................... | -34,825 | -28,526 | -21,659 | ||||||||
Balance, end of period................................................................................................................................................................................................... | $ | $ | $ | ||||||||
-137,725 | -102,900 | -74,536 | |||||||||
Qualitytech, LP [Member] | |||||||||||
SCHEDULE III - REAL ESTATE INVESTMENTS | QTS REALTY TRUST, INC. | ||||||||||
QUALITYTECH, LP | |||||||||||
CONSOLIDATED FINANCIAL STATEMENTS | |||||||||||
SCHEDULE III - REAL ESTATE INVESTMENTS | |||||||||||
December 31, 2013 | |||||||||||
As of December 31, 2013 | Accumulated | ||||||||||
(dollars in thousands) | Initial Costs | Costs Capitalized Subsequent to Acquisition | Gross Carrying Amount | Depreciation | Date of | ||||||
Property Location | Land | Buildings and | Land | Buildings and | Construction | Land | Buildings and | Construction | and Amortization | Acquisition | |
Improvements | Improvements | in Progress | Improvements | in Progress | |||||||
Owned Properties | |||||||||||
Suwanee, | $ | $ | $ | $ | $ | $ | $ | $ | $ | 9/1/05 | |
Georgia......................................................................................................................................................................................................... | 1,395 | 29,802 | 2,126 | 96,684 | 3,270 | 3,521 | 126,486 | 3,270 | -34,590 | ||
Atlanta, Georgia............................................................................................................................................................................................................. | 12,647 | 35,473 | 2,750 | 261,074 | 32,456 | 15,397 | 296,547 | 32,456 | -58,272 | 10/3/06 | |
Santa Clara, California*................................................................................................................................................................................................. | — | 15,838 | — | 70,706 | 1,249 | — | 86,544 | 1,249 | -19,102 | 11/1/07 | |
Richmond, | 2,000 | 11,200 | 180 | 97,779 | 67,155 | 2,180 | 108,979 | 67,155 | -8,996 | 3/20/10 | |
Virginia....................................................................................................................................................................................................... | |||||||||||
Sacramento, California................................................................................................................................................................................................... | 1,481 | 52,753 | — | 88 | 4,273 | 1,481 | 52,841 | 4,273 | -1,403 | 12/21/12 | |
Dallas, Texas............................................................................................................................................................................................................... | — | 5,808 | 5,808 | -5,808 | 38,501 | 5,808 | — | 38,501 | — | 2/8/13 | |
Miami, Florida............................................................................................................................................................................................................... | 1,777 | 6,955 | — | 20,598 | — | 1,777 | 27,553 | — | -5,662 | 3/6/08 | |
Lenexa, Kansas............................................................................................................................................................................................................. | 400 | 3,100 | 37 | 198 | — | 437 | 3,298 | — | -82 | 6/3/11 | |
Wichita, Kansas............................................................................................................................................................................................................. | — | 686 | — | 723 | — | — | 1,409 | — | -498 | 3/31/05 | |
$ | $ | $ | $ | $ | $ | $ | $ | $ | |||
19,700 | 161,615 | 10,901 | 542,042 | 146,904 | 30,601 | 703,657 | 146,904 | -128,605 | |||
Leased Properties | |||||||||||
Jersey City, New Jersey................................................................................................................................................................................................. | — | 1,985 | — | 21,826 | — | — | 23,811 | — | -8,686 | 11/1/06 | |
Overland Park, Kansas................................................................................................................................................................................................... | — | — | — | 762 | — | — | 762 | — | -434 | ||
— | 1,985 | — | 22,588 | — | — | 24,573 | — | -9,120 | |||
$ | $ | $ | $ | $ | $ | $ | $ | $ | |||
19,700 | 163,600 | 10,901 | 564,630 | 146,904 | 30,601 | 728,230 | 146,904 | -137,725 | |||
*Owned facility subject to long-term ground sublease. | |||||||||||
The following table reconciles the historical cost and accumulated depreciation for the years ended December 31, 2013, 2012 and 2011. | |||||||||||
Years Ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Property | |||||||||||
Balance, beginning of period........................................................................................................................................................................................... | $ | $ | $ | ||||||||
734,828 | 555,586 | 432,889 | |||||||||
Disposals....................................................................................................................................................................................................................... | — | -794 | -463 | ||||||||
Additions (acquisitions and improvements)......................................................................................................................................................................... | 170,907 | 180,036 | 123,160 | ||||||||
Balance, end of period................................................................................................................................................................................................... | $ | $ | $ | ||||||||
905,735 | 734,828 | 555,586 | |||||||||
Accumulated depreciation | |||||||||||
Balance, beginning of period........................................................................................................................................................................................... | $ | $ | $ | ||||||||
-102,900 | -74,536 | -52,923 | |||||||||
Disposals....................................................................................................................................................................................................................... | — | 162 | 46 | ||||||||
Additions (depreciation and amortization expense)............................................................................................................................................................... | -34,825 | -28,526 | -21,659 | ||||||||
Balance, end of period................................................................................................................................................................................................... | $ | $ | $ | ||||||||
-137,725 | -102,900 | -74,536 | |||||||||
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 9 Months Ended | 12 Months Ended | ||||||||||||||||||||
Sep. 30, 2014 | Dec. 31, 2013 | |||||||||||||||||||||
Summary of Significant Accounting Policies [Abstract] | ||||||||||||||||||||||
Basis of Presentation | Basis of Presentation – The accompanying financial statements for the quarter ended September 30, 2014 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. | Basis of Presentation—The accompanying financial statements for the year ended December 31, 2013 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. | ||||||||||||||||||||
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 is the sole general partner of the Operating Partnership, and its only material asset consisted of its ownership interest in 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 our 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. | 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 is the sole general partner of the Operating Partnership, and its only material asset consisted of its ownership interest in 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 our 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: | 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; | · | 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 in this report applies to both QTS and the Operating Partnership; and | · | eliminates duplicative disclosure and provides a more streamlined and readable presentation since a substantial portion of the disclosure in this report 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. | · | 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 disclosures, 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. 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. The Operating Partnership’s capital includes general and limited common units that are owned by QTS and the other partners. QTS' stockholders’ equity includes common stock, additional paid in capital, accumulated other comprehensive income (loss) and accumulated dividends in excess of earnings. The remaining equity is the portion of net assets that are retained by partners other than QTS, referred to as noncontrolling interests. The primary difference in QTS' Statements of Operations and Comprehensive Income (Loss) is that for net income (loss), QTS retains its proportionate portion of the net income (loss) based on its ownership of the Operating Partnership, with the remaining balance being retained by the Operating Partnership. | In addition, in light of these combined disclosures, 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. 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. The Operating Partnership’s capital includes general and limited common units that are owned by QTS and the other partners. QTS' stockholders’ equity includes common stock, additional paid in capital, accumulated other comprehensive income (loss) and accumulated dividends in excess of earnings. The remaining equity is the portion of net assets that are retained by partners other than QTS, referred to as noncontrolling interests. The primary difference in QTS' Statements of Operations and Comprehensive Income (Loss) is that for net income (loss), QTS retains its proportionate portion of the net income (loss) based on its ownership of the Operating Partnership, with the remaining balance being retained by the Operating Partnership. | |||||||||||||||||||||
As discussed above, QTS owns no operating assets and has no operations independent of the Operating Partnership and its subsidiaries. Obligations under the 5.875% Senior Notes due 2022 and the unsecured credit facility, both discussed in Note 5, are fully, unconditionally, and jointly and severally guaranteed by the Operating Partnership’s existing subsidiaries, other than QTS Finance Corporation, the co-issuer of the 5.875% Senior Notes due 2022. As such, condensed consolidating financial information for the guarantors is not being presented in the notes to the condensed consolidated financial statements. However, the indenture governing the 5.875% Senior Notes due 2022 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 consolidated financial statements of QTS Realty Trust, Inc. for the period from October 15, 2013 through December 31, 2013 include the accounts of QTS Realty Trust, Inc. and its majority owned subsidiaries. This includes the operating results of the Operating Partnership for the period from October 15, 2013 through December 31, 2013. While the Company was formed on May 17, 2013, the Company had no independent operations prior to October 15, 2013. The historical predecessor financial statements for the periods ended October 14, 2013, December 31, 2012, and December 31, 2011 include the accounts of QualityTech, LP and its majority owned subsidiaries. | ||||||||||||||||||||||
The Interim Condensed Consolidated Statements of Operations and Comprehensive Income and the Statements of Cash Flows of QTS Realty Trust, Inc. for the three and nine months ended September 30, 2014 and the Balance Sheets as of September 30, 2014 and December 31, 2013 present the accounts of QTS Realty Trust, Inc. and its majority owned subsidiaries, which includes the Operating Partnership. The Interim Condensed Consolidated Statement of Operations and Comprehensive Income and the Statement of Cash Flows for the three and nine months ended September 30, 2013 present the accounts of QualityTech, LP and its majority owned subsidiaries (the “Historical Predecessor”). | ||||||||||||||||||||||
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. | 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 and 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 Inc. include the accounts of QTS Realty Trust, Inc. and its majority-owned 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. | Principles of Consolidation—The consolidated financial statements of QTS Realty Inc. include the accounts of QTS Realty Trust, Inc. and its majority-owned 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. | ||||||||||||||||||||
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 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. Depreciation expense was $11.9 million and $9.7 million for the three months ended September 30, 2014 and 2013, respectively, and $32.8 million and $27.2 million for the nine months ended September 30, 2014 and 2013, respectively. 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 $2.9 million and $2.4 million for the three months ended September 30, 2014 and 2013, respectively, and $7.5 million and $6.3 million for the nine months ended September 30, 2014 and 2013, respectively. Interest is capitalized during the period of development by first applying the Company’s actual borrowing rate on the related asset and second, to the extent necessary, by applying the Company’s weighted average effective borrowing rate to the actual development and other costs expended during the construction period. Interest is capitalized until the property is ready for its intended use. Interest costs capitalized totaled $1.3 million and $0.9 million for the three months ended September 30, 2014 and 2013, respectively, and $4.7 million and $3.0 million for the nine months ended September 30, 2014 and 2013, respectively. | 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 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. The aggregate depreciation charged to related operations was $36.7 million, $29.8 million and $22.1 million for the years ended December 31, 2013, 2012 and 2011, respectively. 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 $8.5 million, $6.7 million and $6.1 million for the years ended December 31, 2013, 2012 and 2011, respectively. Interest is capitalized during the period of development by first applying the Company’s actual borrowing rate on the related asset and second, to the extent necessary, by applying the Company’s weighted average effective borrowing rate to the actual development and other costs expended during the construction period. Interest is capitalized until the property is ready for its intended use. Interest costs capitalized totaled $4.1 million, $2.2 million and $2.6 million for the years ended December 31, 2013, 2012 and 2011, respectively. | ||||||||||||||||||||
Acquisition of Real Estate | Acquisition of Real Estate – Acquisitions of real estate are either accounted for as asset acquisitions or business combinations depending on facts and circumstances. 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 real estate acquired is allocated to the acquired tangible assets, consisting primarily of land, 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 and value of customer relationships. | Acquisition of Real Estate—Acquisitions of real estate are either accounted for as asset acquisitions or business combinations depending on facts and circumstances. Purchase accounting is applied to the assets and liabilities related to all real estate investments acquired in accordance to 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 real estate acquired is allocated to the acquired tangible assets, consisting primarily of land, 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 and value of customer relationships. | ||||||||||||||||||||
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. | 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. | |||||||||||||||||||||
Intangible assets and liabilities include acquired above-market leases, below-market leases, in-place leases and customer relationships. | ||||||||||||||||||||||
Acquired in-place leases are amortized as amortization expense on a straight-line basis over the remaining life of the underlying leases. Amortization of acquired in place lease costs totaled $0.5 million and $0.5 million for the three months ended September 30, 2014 and 2013, respectively, and $1.8 million and $1.5 million for the nine months ended September 30, 2014 and 2013, respectively. | Acquired below-market leases are amortized on a straight-line basis as an increase to rental revenue over the remaining term of the underlying leases, including fixed option renewal periods, if any. Accretion of acquired below-market leases, including write-offs for terminated leases, totaled $1.0 million for the year ended December 31, 2011, with no material accretion for the years ended December 31, 2013 and 2012. Acquired in-place leases are amortized as amortization expense on a straight-line basis over the remaining life of the underlying leases. Amortization of acquired in-place leases, including write-offs for terminated leases, totaled $2.6 million and $0.1 million for the years ended December 31, 2013 and 2011, with no material amortization for the year ended December 31, 2012. | |||||||||||||||||||||
Acquired customer relationships are amortized as amortization expense on a straight-line basis over the expected life of the customer relationship. Amortization of acquired customer relationships, including write-offs for terminated leases, totaled $1.5 million, $0.6 million and $1.2 million for the years ended December 31, 2013, 2012 and 2011, respectively. | ||||||||||||||||||||||
Acquired customer relationships are amortized as amortization expense on a straight-line basis over the expected life of the customer relationship. Amortization of acquired customer relationships totaled $0.3 million and $0.4 million for the three months ended September 30, 2014 and 2013, respectively, and $1.0 million and $1.2 million for the nine months ended September 30, 2014 and 2013, respectively. | Annual amortization for intangible assets recorded as of December 31, 2013 is estimated to be $2.7 million in 2014, $1.3 million in 2015 and $1.3 million in 2016. The remaining weighted average amortization period at December 31, 2013 for intangible assets is 2.4 years. | |||||||||||||||||||||
See Note 3 for discussion of the preliminary purchase price allocation for the Princeton facility that the Company acquired on June 30, 2014. | ||||||||||||||||||||||
Impairment of Long-Lived and Intangible Assets | Impairment of Long-Lived and Intangible Assets – The Company reviews its long-lived 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 generally 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 and nine months ended September 30, 2014 and 2013, respectively. | Impairment of Long-Lived and Intangible Assets—The Company reviews its long-lived 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 generally 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 any of the years ended December 31, 2013, 2012 and 2011, respectively. | ||||||||||||||||||||
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, therefore, does not believe that the risk is significant. | 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, therefore, does not believe that the risk is significant. | ||||||||||||||||||||
Restricted Cash | Restricted Cash—Restricted cash includes accounts restricted by the Company’s loan agreements and escrow deposits for interest, insurance, taxes and capital improvements held by the various banks and financial institutions as required by the loan agreements. Such deposits are held in bank checking or investment accounts with original maturities of three months or less. | |||||||||||||||||||||
Deferred Costs | Deferred Costs – Deferred costs, net, on the Company’s balance sheets include both financing costs and leasing 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. Amortization of the deferred financing costs was $2.8 million, $3.4 million and $3.4 million for the years ended December 31, 2013, 2012 and 2011, respectively. During the year ended December 31, 2013, the Company wrote off unamortized financing costs of $2.2 million in connection with the expansion of its revolving and term credit facilities. In addition, during the year ended December 31, 2013, the Company wrote off unamortized financing costs of $1.3 million in connection with an asset securitization which the Company is no longer pursuing due to the expansion of the credit facility. During the year ended December 31, 2012, the Company wrote off unamortized financing costs of $1.4 million, primarily relating to former loans secured by the Richmond and Atlanta-Suwanee data center facilities that were repaid during the first quarter of 2012. Deferred financing costs, net of accumulated amortization are as follows: | ||||||||||||||||||||||
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. Amortization of the deferred financing costs was $0.5 million and $0.6 million for the three months ended September 30, 2014 and 2013, respectively, and $1.7 million and $2.2 million for the nine months ended September 30, 2014 and 2013, respectively. During the three months ended September 30, 2014, the Company wrote off unamortized financing costs of $0.5 million primarily in connection with paying down $75 million of its unsecured credit facility. During the three months ended September 30, 2013, the Company had no unamortized financing cost write offs. During the nine months ended September 30, 2014, in addition to the aforementioned $0.5 million write off, the Company wrote off unamortized financing costs of $0.1 million in connection with the modification of its credit facility that is secured by the Richmond data center. During the nine months ended September 30, 2013, the Company wrote off unamortized financing costs of $3.3 million in connection with both the restructuring of its unsecured credit facility and an asset securitization which the Company did not pursue. Deferred financing costs, net of accumulated amortization are as follows: | ||||||||||||||||||||||
September 30, | December 31, | (dollars in thousands) | December 31, | December 31, | ||||||||||||||||||
(dollars in thousands) | 2014 | 2013 | 2013 | 2012 | ||||||||||||||||||
(unaudited) | ||||||||||||||||||||||
Deferred financing costs................................................................................................................................................................................................. | $ | $ | ||||||||||||||||||||
Deferred financing costs | $ | 18,226 | $ | 9,159 | 9,159 | 10,165 | ||||||||||||||||
Accumulated amortization | (3,761 | ) | (1,867 | ) | Accumulated amortization............................................................................................................................................................................................... | -1,867 | -3,309 | |||||||||||||||
Deferred financing costs, net | $ | 14,465 | $ | 7,292 | ||||||||||||||||||
Deferred financing costs, net........................................................................................................................................................................................... | $ | $ | ||||||||||||||||||||
7,292 | 6,856 | |||||||||||||||||||||
Deferred leasing costs consist of external fees and internal costs incurred in the successful negotiations of leases and are deferred and amortized over the terms of the related leases on a straight-line basis. If an applicable lease terminates prior to the expiration of its initial term, the carrying amount of the costs are written off to amortization expense. Amortization of deferred leasing costs totaled $1.8 million and $1.1 million for the three months ended September 30, 2014 and 2013, respectively, and $4.6 million and $3.2 million for the nine months ended September 30, 2014 and 2013, respectively. Deferred leasing costs, net of accumulated amortization are as follows: | ||||||||||||||||||||||
Deferred leasing costs consist of external fees and internal costs incurred in the successful negotiations of leases and are deferred and amortized over the terms of the related leases on a straight-line basis. If an applicable lease terminates prior to the expiration of its initial term, the carrying amount of the costs are written off to amortization expense. Amortization of deferred leasing costs totaled $4.7 million, $3.4 million and $2.3 million for the years ended December 31, 2013, 2012 and 2011, respectively. Deferred leasing costs, net of accumulated amortization are as follows: | ||||||||||||||||||||||
September 30, | December 31, | |||||||||||||||||||||
(dollars in thousands) | 2014 | 2013 | ||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||
Deferred leasing costs | $ | 24,348 | $ | 17,374 | ||||||||||||||||||
Accumulated amortization | (8,379 | ) | (5,516 | ) | ||||||||||||||||||
Deferred leasing costs, net | $ | 15,969 | $ | 11,858 | ||||||||||||||||||
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. | |||||||||||||||||||||
(dollars in thousands) | December 31, | December 31, | ||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||||
Deferred leasing costs................................................................................................................................................................................................... | $ | $ | ||||||||||||||||||||
17,374 | 12,567 | |||||||||||||||||||||
Accumulated amortization............................................................................................................................................................................................... | -5,516 | -4,361 | ||||||||||||||||||||
Deferred leasing costs, net............................................................................................................................................................................................. | $ | $ | ||||||||||||||||||||
11,858 | 8,206 | |||||||||||||||||||||
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 $9.5 million and $7.9 million as of September 30, 2014 and December 31, 2013, respectively. Additionally, $1.1 million and $1.3 million of deferred income were amortized into revenue for the three months ended September 30, 2014 and 2013, respectively, and $3.5 million and $3.5 million for the nine months ended September 30, 2014 and 2013, respectively. | 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 $7.9 million, $6.8 million and $5.6 million as of December 31, 2013, 2012 and 2011, respectively. Additionally, $4.7 million, $4.3 million and $3.0 million were amortized into revenue for the years ended December 31, 2013, 2012 and 2011, respectively. | ||||||||||||||||||||
Interest Rate Derivative Instruments | Interest Rate Derivative Instruments – The Company utilizes derivatives to manage its interest rate exposure. During February 2012, the Company entered into interest rate swaps with a notional amount of $150 million which were cash flow hedges and qualified for hedge accounting. For these hedges, the effective portion of the change in fair value was recognized through other comprehensive income or loss. Amounts were reclassified out of other comprehensive income (loss) as the hedged item was recognized in earnings, either for ineffectiveness or for amounts paid relating to the hedge. The Company reflected all changes in the fair value of the swaps in other comprehensive income (loss) during the nine months ended September 30, 2014, as there was no ineffectiveness recorded in that period. The Company’s interest rate swaps matured on September 28, 2014, and as such, there are no amounts outstanding on the consolidated balance sheet at September 30, 2014 relating to these swaps. | Interest Rate Derivative Instruments—The Company utilizes derivatives to manage its interest rate exposure. The interest rate swaps entered into in September 2006 did not meet the criteria for hedge accounting and accordingly, the Company reported the change in the fair value of the derivative in interest expense in the accompanying Statements of Operations and Comprehensive Loss. | ||||||||||||||||||||
During February 2012, the Company entered into interest rate swaps with a notional amount of $150 million which are cash flow hedges and qualify for hedge accounting. For these hedges, the effective portion of the change in fair value is recognized through other comprehensive income or loss. Amounts are reclassified out of other comprehensive income (loss) as the hedged item is recognized in earnings, either for ineffectiveness or for amounts paid relating to the hedge. As there was no ineffectiveness recorded in the periods presented, the Company has reflected the change in the fair value of the instrument in other comprehensive income (loss). | ||||||||||||||||||||||
For derivative instruments that are not accounted for using hedge accounting, or for the ineffective portions of qualifying hedges, the change in fair value is recorded through interest expense in the respective period. | ||||||||||||||||||||||
Equity-based Compensation | [Equity-based Compensation – All equity-based compensation is measured at fair value on the grant date or date of modification, as applicable, and recognized in earnings over the requisite service period. Depending upon the settlement terms of the awards, all or a portion of the fair value of equity-based awards may be presented as a liability or as equity in the consolidated balance sheets. Equity-based compensation costs are measured based upon their estimated fair value on the date of grant or modification. Equity-based compensation expense net of forfeited and repurchased awards was $0.9 million and $0.5 million for the three months ended September 30, 2014 and 2013, respectively, and $2.9 million and $1.3 million for the nine months ended September 30, 2014 and 2013, respectively.] | Equity-based Compensation—All equity-based compensation is measured at fair value on the grant date or date of modification, as applicable, and recognized in earnings over the requisite service period. Depending upon the settlement terms of the awards, all or a portion of the fair value of equity-based awards may be presented as a liability or as equity in the consolidated balance sheets. Equity-based compensation costs are measured based upon their estimated fair value on the date of grant or modification. The Company recorded equity-based compensation expense net of forfeited and repurchased awards acquired of $2.0 million, $0.4 million and $0.8 million for the years ended December 31, 2013, 2012 and 2011, respectively. | ||||||||||||||||||||
Rental Revenue | Rental Revenue – The Company, as a lessor, has retained substantially all of the risks and benefits of ownership and accounts for its leases as operating leases. 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 $4.2 million and $2.9 million as of September 30, 2014 and December 31, 2013, respectively. Rental revenue also includes amortization of set-up fees which are amortized over the term of the respective lease as discussed above. | Rental Revenue—The Company, as a lessor, has retained substantially all of the risks and benefits of ownership and accounts for its leases as operating leases. 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 $2.9 million and $2.4 million as of December 31, 2013 and 2012, respectively. Rental revenue also includes amortization of set-up fees which are amortized over the term of the respective lease as discussed above. | ||||||||||||||||||||
Allowance for Uncollectible Accounts Receivable | Allowance for Uncollectible Accounts Receivable – Rents receivable are recognized when due and are carried at cost, less an allowance for doubtful accounts. The Company records a provision for losses on rents receivable equal to the estimated uncollectible accounts, which is based on management’s historical experience and a review of the current status of the Company’s receivables. As necessary, the Company also establishes an appropriate allowance for doubtful accounts for receivables arising from the straight-lining of rents. The aggregate allowance for doubtful accounts was $0.9 million as of September 30, 2014 and December 31, 2013. | Allowance for Uncollectible Accounts Receivable—Rents receivable are recognized when due and are carried at cost, less an allowance for doubtful accounts. The Company records a provision for losses on rents receivable equal to the estimated uncollectible accounts, which is based on management’s historical experience and a review of the current status of the Company’s receivables. As necessary, the Company also establishes an appropriate allowance for doubtful accounts for receivables arising from the straight-lining of rents. The aggregate allowance for doubtful accounts was $0.9 million and $0.5 million as of December 31, 2013 and 2012, respectively. | ||||||||||||||||||||
Capital Leases | Capital Leases – The Company evaluates leased real estate to determine whether the lease should be classified as a capital or operating lease in accordance with U.S GAAP. | Capital Lease—The Company evaluates leased real estate to determine whether the lease should be classified as a capital or operating lease in accordance with U.S GAAP. | ||||||||||||||||||||
The Company periodically enters into capital leases for certain equipment. The outstanding liabilities for the capital leases were $2.5 million and $2.5 million as of December 31, 2013 and 2012, respectively. Depreciation related to the associated assets is included in depreciation and amortization expense in the Statements of Operations and Comprehensive Income (Loss). | ||||||||||||||||||||||
The Company periodically enters into capital leases for certain equipment. The outstanding liabilities for the capital leases were $9.0 million and $2.5 million as of September 30, 2014 and December 31, 2013, respectively. Depreciation related to the associated assets is included in depreciation and amortization expense in the Statements of Operations and Comprehensive Income (Loss). | ||||||||||||||||||||||
Recoveries from Customers | Recoveries from Customers – Certain customer leases contain provisions under which the customers reimburse the Company for a portion of the property’s real estate taxes, insurance and other operating expenses, which include certain power and cooling-related charges. The reimbursements are included in revenue as recoveries from customers in the Statements of Operations and Comprehensive Income (Loss) in the period the applicable expenditures are incurred. Certain customer leases are structured to provide a fixed monthly billing amount that includes an estimate of various operating expenses, with all revenue from such leases included in rental revenues. | Recoveries from Customers—Certain customer leases contain provisions under which the customers reimburse the Company for a portion of the property’s real estate taxes, insurance and other operating expenses, which include certain power and cooling-related charges. The reimbursements are included in revenue as recoveries from customers in the Statements of Operations and Comprehensive Income (Loss) in the period the applicable expenditures are incurred. Certain customer leases are structured to provide a fixed monthly billing amount that includes an estimate of various operating expenses, with all revenue from such leases included in rental revenues. | ||||||||||||||||||||
Cloud and Managed Services Revenue | Cloud and Managed Services Revenue – The Company may provide both its cloud product and use of its managed services to its customers on an individual or combined basis. Service fee revenue is recognized as the revenue is earned, which generally coincides with the services being provided. | Cloud and Managed Services Revenue—The Company may provide both its cloud product and use of its managed services to its customers on an individual or combined basis. Service fee revenue is recognized as the revenue is earned, which generally coincides with the services being provided. | ||||||||||||||||||||
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 in the United States. | 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 in the United States | ||||||||||||||||||||
Restructuring | Restructuring—In March 2012, the Company decided to consolidate its New York area operations into the New Jersey data center facility. The Company transferred certain customers from the New York City facility to the New Jersey facility. As of December 31, 2012, the Company had completed the consolidation of its operations into the Jersey City facility and recognized $3.3 million in expense primarily related to terminating the New York facility lease. As this consolidation was completed in 2012, there were no restructuring costs incurred during the period from October 15, 2013 to December 31, 2013 and during the period from January 1, 2013 to October 14, 2013. | |||||||||||||||||||||
Customer Concentrations | Customer Concentrations – As of September 30, 2014, one of the Company’s customers represented 8.4% of its total monthly rental revenue. No other customers exceeded 5% of total monthly rental revenue. | Customer Concentrations—As of December 31, 2013, two of the Company’s customers represented 7.5% and 5.7%, respectively, of its total monthly rental revenue. No other customers exceeded 5% of total monthly rental revenue. | ||||||||||||||||||||
As of December 31, 2013, five of the Company’s customers exceeded 5% of total accounts receivable. In aggregate, these five customers accounted for 32.1% of total accounts receivable. None of these five customers individually exceeded 10% of total accounts receivable. | ||||||||||||||||||||||
As of September 30, 2014, eight of the Company’s customers exceeded 5% of total accounts receivable. In aggregate, these eight customers accounted for 58% of total accounts receivable. One of these eight customers individually exceeded 10% of total accounts receivable. | ||||||||||||||||||||||
Income Taxes | Income Taxes – One of the Operating Partnership’s existing subsidiaries has elected to be taxed as a taxable REIT subsidiary under the Internal Revenue Service real estate investment trust (the “IRS REIT”) tax regulations. The taxable REIT subsidiary is allocated income and expense based on IRS REIT tax regulations. | Income Taxes—The Operating Partnership is obligated to comply with Internal Revenue Service real estate investment trust (“IRS REIT”) tax regulations in accordance with the unitholders agreement. In order to comply with this obligation, the Company elected for one of its existing subsidiaries to be taxed as a taxable REIT subsidiary under the IRS REIT tax regulations. The taxable REIT subsidiary is allocated income and expense based on IRS REIT tax regulations. | ||||||||||||||||||||
For the taxable REIT subsidiary, 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. | ||||||||||||||||||||||
For the taxable REIT subsidiary, 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. | The taxable REIT subsidiary offsets 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 taxable subsidiary did not generate taxable income for the years ended December 31, 2013, 2012, or 2011. Accordingly, no provision for income taxes was recorded nor was an income tax benefit recorded for the last four years. Due to the lack of sufficient historical evidence to indicate it is more likely than not that the deferred tax assets will be utilized, the valuation allowance relating to deferred tax assets continue to be recorded at December 31, 2013. The change in valuation allowance during 2013 was a decrease of $0.5 million. | |||||||||||||||||||||
Temporary differences and carry forwards which give rise to the deferred tax assets and liabilities are as follows: | ||||||||||||||||||||||
The Company’s tax provision has not changed materially subsequent to December 31, 2013. The Company is not currently under examination by the Internal Revenue Service. | ||||||||||||||||||||||
For the year ended December 31, | ||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||
2013 | 2012 | 2011 | ||||||||||||||||||||
Deferred tax liabilities | ||||||||||||||||||||||
Property and equipment................................................................................................................................................................................................. | $ | $ | $ | |||||||||||||||||||
-4,905 | -4,852 | -3,533 | ||||||||||||||||||||
Other............................................................................................................................................................................................................................. | -873 | -551 | -287 | |||||||||||||||||||
Gross Deferred Tax Liabilities......................................................................................................................................................................................... | -5,778 | -5,403 | -3,820 | |||||||||||||||||||
Deferred tax assets | ||||||||||||||||||||||
Net operating loss carryforwards..................................................................................................................................................................................... | 5,861 | 6,694 | 3,410 | |||||||||||||||||||
Deferred revenue and setup charges................................................................................................................................................................................. | 583 | 467 | 372 | |||||||||||||||||||
Derivative liability......................................................................................................................................................................................................... | — | — | 81 | |||||||||||||||||||
Other............................................................................................................................................................................................................................. | 699 | 113 | 101 | |||||||||||||||||||
Gross deferred tax assets............................................................................................................................................................................................... | 7,143 | 7,274 | 3,964 | |||||||||||||||||||
Net deferred tax assets................................................................................................................................................................................................... | 1,365 | 1,871 | 144 | |||||||||||||||||||
Valuation allowance....................................................................................................................................................................................................... | -1,365 | -1,871 | -144 | |||||||||||||||||||
Net deferred................................................................................................................................................................................................................. | $— | $— | $— | |||||||||||||||||||
The taxable REIT subsidiary currently has $15.8 million of net operating loss carryforwards related to federal income taxes that expire in 16-20 years. The taxable REIT subsidiary also has $10.1 million of net operating loss carryforwards relating to state income taxes that expire in 11-20 years. | ||||||||||||||||||||||
As of December 31, 2013 and 2012, the Company has no uncertain tax positions. If the Company incurs any interest or penalties on tax liabilities from significant uncertain tax positions, those items will be classified as interest expense and general and administrative expense, respectively, in the Statements of Operations and Comprehensive Income (Loss). For the years ended December 31, 2013, 2012 and 2011, the Company had no such interest or penalties. | ||||||||||||||||||||||
The Company is not currently under examination by the Internal Revenue Service. | ||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements – ASC Topic 820, Fair Value Measurements and Disclosures, 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). | Fair Value Measurements—ASC Topic 820 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. | ||||||||||||||||||||||
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. | Financial assets and liabilities measured at fair value in the financial statements on a recurring basis consist of the Company’s derivatives. The fair values of the derivatives are determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative. The analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves (“significant other observable inputs”). The fair value calculation also includes an amount for risk of non-performance using “significant unobservable inputs” such as estimates of current credit spreads to evaluate the likelihood of default. The Company has concluded as of December 31, 2013 and 2012 that the fair value associated to “significant unobservable inputs” for risk of non-performance was insignificant to the overall fair value of the derivative agreements and, as a result, have determined that the relevant inputs for purposes of calculating the fair value of the derivative agreements, in their entirety, were based upon “significant other observable inputs.” The Company determined the fair value of derivatives using level 2 inputs. These methods of assessing fair value result in a general approximation of value, and such value may never be realized. | |||||||||||||||||||||
The Company’s financial instruments held at fair value are presented below as of December 31, 2013 and 2012 (dollars in thousands): | ||||||||||||||||||||||
Financial assets and liabilities measured at fair value in the financial statements on a recurring basis consist of the Company’s derivatives. The fair values of the derivatives are determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative. The analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves (“significant other observable inputs”). The fair value calculation also includes an amount for risk of non-performance using “significant unobservable inputs” such as estimates of current credit spreads to evaluate the likelihood of default. The Company has concluded as of September 30, 2014 and December 31, 2013 that the fair value associated to “significant unobservable inputs” for risk of non-performance was insignificant to the overall fair value of the derivative agreements and, as a result, have determined that the relevant inputs for purposes of calculating the fair value of the derivative agreements, in their entirety, were based upon “significant other observable inputs.” The Company determined the fair value of derivatives using Level 2 inputs. These methods of assessing fair value result in a general approximation of value, and such value may never be realized. | ||||||||||||||||||||||
The Company’s financial instruments held at fair value are presented below as of September 30, 2014 and December 31, 2013 (dollars in thousands): | ||||||||||||||||||||||
Fair Value Measurements | ||||||||||||||||||||||
Fair Value Measurements | Carrying Value | Level 1 | Level 2 | Level 3 | ||||||||||||||||||
Carrying Value | Level 1 | Level 2 | Level 3 | |||||||||||||||||||
30-Sep-14 | December 31, 2013 | |||||||||||||||||||||
Financial Liabilities: | Financial Liabilities: | |||||||||||||||||||||
Interest rate swap liability(1) | $ | - | $ | - | $ | - | $ | - | Interest rate swap liability(1)........................................................................................................................................................................................... | $ | $— | $ | $— | |||||||||
31-Dec-13 | 453 | 453 | ||||||||||||||||||||
Financial Liabilities: | December 31, 2012 | |||||||||||||||||||||
Interest rate swap liability(1) | $ | 453 | $ | - | $ | 453 | $ | - | Financial Assets: | |||||||||||||
Restricted deposits, held at fair value............................................................................................................................................................................... | $ | $ | $— | $— | ||||||||||||||||||
146 | 146 | |||||||||||||||||||||
Financial Liabilities: | ||||||||||||||||||||||
Interest rate swap liability(1)........................................................................................................................................................................................... | $ | $— | $ | $— | ||||||||||||||||||
-1 | The Company used inputs from quoted prices for similar assets and liabilities in active markets that are directly or indirectly observable relating to the measurement of the interest rate swaps at December 31, 2013. The fair value measurement of the interest rate swaps have been classified as Level 2. The swaps matured on September 28, 2014, and as such, there were no amounts outstanding on the consolidated balance sheet as of September 30, 2014 related to interest rate swaps. | 767 | 767 | |||||||||||||||||||
(1)The Company used inputs from quoted prices for similar assets and liabilities in active markets that are directly or indirectly observable relating to the measurement of the interest rate swaps. The fair value measurement of the interest rate swaps have been classified as Level 2. | ||||||||||||||||||||||
New Accounting Pronouncement | New Accounting Pronouncements | New Accounting Pronouncements Fair Value Measurement (Topic 820). In May 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update Topic 820 “Fair Value Measurement Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. Generally Accepted Accounting Principles and International Financial Reporting Standards.” The amendments in this update result in common fair value measurement and disclosure requirements under U.S. Generally Accepted Accounting Principles and International Financial Reporting Standards. Consequently, the amendments change the terminology used to describe many of the requirements under U.S. Generally Accepted Accounting Principles for measuring fair value and for disclosing information about fair value measurements. For many of the requirements, the FASB does not intend for the amendments in this update to result in a change in the application of the requirements in Topic 820. Some of the amendments clarify the FASB’s intent about the application of existing fair value measurement requirements. Other amendments change a particular principle or requirement for measuring fair value or for disclosing information about fair value measurements. The amendments in this update were effective for the Company beginning January 1, 2012 and do not have a material effect on the Company’s consolidated financial statements. | ||||||||||||||||||||
Comprehensive Income (Topic 220). In June 2011, the FASB issued Accounting Standards Update Topic 220 “Presentation of Comprehensive Income.” Under the amendments in this update, an entity has the option to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The amendments in this update were effective for the Company beginning January 1, 2012 and do not have a material effect on the Company’s consolidated financial statements. | ||||||||||||||||||||||
In April 2014, the Financial Accounting Standards Board (“FASB”) issued ASU 2014-08, “Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity”. The amendments in the ASU change the criteria for reporting discontinued operations while enhancing disclosures in this area. The new guidance narrows the definition of discontinued operations to disposals that represent a strategic shift in operations and requires expanded disclosures about discontinued operations that will provide financial statement users with more information about the assets, liabilities, income and expenses of discontinued operations. The new guidance also requires disclosure of the pre-tax income attributable to a disposal of a significant part of an organization that does not qualify for discontinued operations reporting. The amendments in the ASU are effective for annual and interim reporting periods beginning on and after December 15, 2014. Early adoption is permitted. Adoption of this standard will currently have no effect on the Company’s financial statements. | ||||||||||||||||||||||
Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income. In February 2013, the FASB issued Accounting Standards Update No. 2013-02, “Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income,” requiring companies to present current period reclassifications out of accumulated other comprehensive income (“AOCI”). For significant items reclassified out of AOCI to net income in their entirety in the period, companies must report the effect of the reclassifications on the respective line items in the statement where net income is presented. In certain circumstances, this can be done on the face of that statement. Otherwise, it must be presented in the notes. The amendments in this update are effective for the Company beginning January 1, 2013 and did not have any impact on the Company’s consolidated financial statements. | ||||||||||||||||||||||
In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606),” which supersedes the current revenue recognition requirements in ASC 606, 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. This ASU also requires enhanced disclosures. The amendments in this ASU are effective for annual and interim periods beginning after December 15, 2016. Early adoption is not permitted. Retrospective and modified retrospective application is allowed. The Company is currently assessing the impact of this amendment on its Consolidated Financial Statements | ||||||||||||||||||||||
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 9 Months Ended | 12 Months Ended | ||||||||||||||||||||
Sep. 30, 2014 | Dec. 31, 2013 | |||||||||||||||||||||
Summary of Significant Accounting Policies [Abstract] | ||||||||||||||||||||||
Deferred Financing Costs, Net of Accumulated Amortization | Deferred financing costs, net of accumulated amortization are as follows: | Deferred financing costs, net of accumulated amortization are as follows: | ||||||||||||||||||||
September 30, | December 31, | |||||||||||||||||||||
(dollars in thousands) | 2014 | 2013 | (dollars in thousands) | December 31, | December 31, | |||||||||||||||||
(unaudited) | 2013 | 2012 | ||||||||||||||||||||
Deferred financing costs | $ | 18,226 | $ | 9,159 | Deferred financing costs................................................................................................................................................................................................. | $ | $ | |||||||||||||||
Accumulated amortization | (3,761 | ) | (1,867 | ) | 9,159 | 10,165 | ||||||||||||||||
Deferred financing costs, net | $ | 14,465 | $ | 7,292 | Accumulated amortization............................................................................................................................................................................................... | -1,867 | -3,309 | |||||||||||||||
Deferred financing costs, net........................................................................................................................................................................................... | $ | $ | ||||||||||||||||||||
7,292 | 6,856 | |||||||||||||||||||||
Deferred Leasing Costs, Net of Accumulated Amortization | Deferred leasing costs, net of accumulated amortization are as follows: | Amortization of deferred leasing costs totaled $4.7 million, $3.4 million and $2.3 million for the years ended December 31, 2013, 2012 and 2011, respectively. Deferred leasing costs, net of accumulated amortization are as follows: | ||||||||||||||||||||
September 30, | December 31, | (dollars in thousands) | December 31, | December 31, | ||||||||||||||||||
(dollars in thousands) | 2014 | 2013 | 2013 | 2012 | ||||||||||||||||||
(unaudited) | ||||||||||||||||||||||
Deferred leasing costs................................................................................................................................................................................................... | $ | $ | ||||||||||||||||||||
Deferred leasing costs | $ | 24,348 | $ | 17,374 | 17,374 | 12,567 | ||||||||||||||||
Accumulated amortization | (8,379 | ) | (5,516 | ) | Accumulated amortization............................................................................................................................................................................................... | -5,516 | -4,361 | |||||||||||||||
Deferred leasing costs, net | $ | 15,969 | $ | 11,858 | ||||||||||||||||||
Deferred leasing costs, net............................................................................................................................................................................................. | $ | $ | ||||||||||||||||||||
11,858 | 8,206 | |||||||||||||||||||||
Summary of Temporary Differences and Carry Forwards Which Give Rise to the Deferred Tax Assets and Liabilities | Temporary differences and carry forwards which give rise to the deferred tax assets and liabilities are as follows: | |||||||||||||||||||||
For the year ended December 31, | ||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||
2013 | 2012 | 2011 | ||||||||||||||||||||
Deferred tax liabilities | ||||||||||||||||||||||
Property and equipment................................................................................................................................................................................................. | $ | $ | $ | |||||||||||||||||||
-4,905 | -4,852 | -3,533 | ||||||||||||||||||||
Other............................................................................................................................................................................................................................. | -873 | -551 | -287 | |||||||||||||||||||
Gross Deferred Tax Liabilities......................................................................................................................................................................................... | -5,778 | -5,403 | -3,820 | |||||||||||||||||||
Deferred tax assets | ||||||||||||||||||||||
Net operating loss carryforwards..................................................................................................................................................................................... | 5,861 | 6,694 | 3,410 | |||||||||||||||||||
Deferred revenue and setup charges................................................................................................................................................................................. | 583 | 467 | 372 | |||||||||||||||||||
Derivative liability......................................................................................................................................................................................................... | — | — | 81 | |||||||||||||||||||
Other............................................................................................................................................................................................................................. | 699 | 113 | 101 | |||||||||||||||||||
Gross deferred tax assets............................................................................................................................................................................................... | 7,143 | 7,274 | 3,964 | |||||||||||||||||||
Net deferred tax assets................................................................................................................................................................................................... | 1,365 | 1,871 | 144 | |||||||||||||||||||
Valuation allowance....................................................................................................................................................................................................... | -1,365 | -1,871 | -144 | |||||||||||||||||||
Net deferred................................................................................................................................................................................................................. | $— | $— | $— | |||||||||||||||||||
Financial Instruments Held at Fair Value | The Company’s financial instruments held at fair value are presented below as of September 30, 2014 and December 31, 2013 (dollars in thousands): | The Company’s financial instruments held at fair value are presented below as of December 31, 2013 and 2012 (dollars in thousands): | ||||||||||||||||||||
Fair Value Measurements | ||||||||||||||||||||||
Carrying Value | Level 1 | Level 2 | Level 3 | Fair Value Measurements | ||||||||||||||||||
30-Sep-14 | ||||||||||||||||||||||
Financial Liabilities: | Carrying Value | Level 1 | Level 2 | Level 3 | ||||||||||||||||||
Interest rate swap liability(1) | $ | - | $ | - | $ | - | $ | - | ||||||||||||||
31-Dec-13 | December 31, 2013 | |||||||||||||||||||||
Financial Liabilities: | Financial Liabilities: | |||||||||||||||||||||
Interest rate swap liability(1) | $ | 453 | $ | - | $ | 453 | $ | - | Interest rate swap liability(1)........................................................................................................................................................................................... | $ | $— | $ | $— | |||||||||
453 | 453 | |||||||||||||||||||||
December 31, 2012 | ||||||||||||||||||||||
Financial Assets: | ||||||||||||||||||||||
Restricted deposits, held at fair value............................................................................................................................................................................... | $ | $ | $— | $— | ||||||||||||||||||
-1 | The Company used inputs from quoted prices for similar assets and liabilities in active markets that are directly or indirectly observable relating to the measurement of the interest rate swaps at December 31, 2013. The fair value measurement of the interest rate swaps have been classified as Level 2. The swaps matured on September 28, 2014, and as such, there were no amounts outstanding on the consolidated balance sheet as of September 30, 2014 related to interest rate swaps. | 146 | 146 | |||||||||||||||||||
Financial Liabilities: | ||||||||||||||||||||||
Interest rate swap liability(1)........................................................................................................................................................................................... | $ | $— | $ | $— | ||||||||||||||||||
767 | 767 | |||||||||||||||||||||
(1)The Company used inputs from quoted prices for similar assets and liabilities in active markets that are directly or indirectly observable relating to the measurement of the interest rate swaps. The fair value measurement of the interest rate swaps have been classified as Level 2. | ||||||||||||||||||||||
Acquisition_of_Real_Estate_Tab
Acquisition of Real Estate (Tables) | 9 Months Ended | 12 Months Ended | ||||||||||||
Sep. 30, 2014 | Dec. 31, 2013 | |||||||||||||
Acquisition of Real Estate [Abstract] | ||||||||||||||
Consideration for the New Jersey Facility and the Preliminary Allocation of the Fair Value of Assets Acquired | The following table summarizes the consideration for the Princeton facility and the preliminary allocation of the fair value of assets acquired as of September 30, 2014 (in thousands): | The following table summarizes the consideration for the Sacramento facility and the final purchase price allocation (in thousands). | ||||||||||||
Princeton facility as of | Weighted average | |||||||||||||
September 30, 2014 | useful life | Final | Original | Adjustment | Weighted average | |||||||||
Buildings | $ | 35,574 | 40 | Sacramento facility | Sacramento facility | useful life | ||||||||
Land | 17,976 | N/A | as of December 31, | as of December 31, | ||||||||||
Acquired Intangibles | 16,114 | 10 | 2013 | 2012 | ||||||||||
Deferred Costs | 3,335 | 10 | ||||||||||||
Other | 301 | 10 | Buildings......................................................................................................................................................................................................................... | $ | $ | $ | 40 | |||||||
Total purchase price | $ | 73,300 | 52,439 | 52,753 | -314 | |||||||||
Land............................................................................................................................................................................................................................. | 1,481 | 1,485 | -4 | |||||||||||
Tenant relationship......................................................................................................................................................................................................... | 5,366 | 5,029 | 337 | 4 | ||||||||||
In place leases............................................................................................................................................................................................................... | 3,964 | 3,202 | 762 | 2 | ||||||||||
Above (below) market leases........................................................................................................................................................................................... | — | 781 | -781 | 1 | ||||||||||
Total purchase price....................................................................................................................................................................................................... | $ | $ | $— | |||||||||||
63,250 | 63,250 | |||||||||||||
Real_Estate_Assets_and_Constru1
Real Estate Assets and Construction in Progress (Tables) | 9 Months Ended | 12 Months Ended | ||||||||||||||||||||
Sep. 30, 2014 | Dec. 31, 2013 | |||||||||||||||||||||
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 September 30, 2014 and December 31, 2013 (in thousands): | The following is a summary of properties owned or leased by the Company as of December 31, 2013 and 2012 (in thousands): | ||||||||||||||||||||
As of December 31, 2013: | ||||||||||||||||||||||
As of September 30, 2014: | ||||||||||||||||||||||
Property Location | Land | Buildings and | Construction | Total Cost | Property Location | Land | Buildings and | Construction | Total Cost | |||||||||||||
Improvements | in Progress | Improvements | in Progress | |||||||||||||||||||
Owned Properties | Owned Properties | |||||||||||||||||||||
Suwanee, Georgia (Atlanta-Suwanee) | $ | 3,521 | $ | 134,931 | 3,799 | $ | 142,251 | Suwanee, Georgia (Atlanta-Suwanee)............................................................................................................................................................................... | $ | $ | $ | $ | ||||||||||
Atlanta, Georgia (Atlanta-Metro) | 15,397 | 350,728 | 13,770 | 379,895 | 3,521 | 126,486 | 3,270 | 133,277 | ||||||||||||||
Santa Clara, California* | - | 88,891 | 662 | 89,553 | Atlanta, Georgia (Atlanta-Metro)..................................................................................................................................................................................... | 15,397 | 296,547 | 32,456 | 344,400 | |||||||||||||
Richmond, Virginia | 2,180 | 126,659 | 62,301 | 191,140 | Santa Clara, California*................................................................................................................................................................................................. | — | 86,544 | 1,249 | 87,793 | |||||||||||||
Sacramento, California | 1,481 | 57,892 | 1,362 | 60,735 | Richmond, Virginia....................................................................................................................................................................................................... | 2,180 | 108,979 | 67,155 | 178,314 | |||||||||||||
Princeton, New Jersey | 17,975 | 36,346 | 43 | 54,364 | Sacramento, California................................................................................................................................................................................................... | 1,481 | 52,841 | 4,273 | 58,595 | |||||||||||||
Dallas-Fort Worth, Texas | 5,808 | 42,121 | 69,909 | 117,838 | Dallas, Texas............................................................................................................................................................................................................... | 5,808 | — | 38,501 | 44,309 | |||||||||||||
Chicago, Illinois | - | - | 18,605 | 18,605 | Miami, Florida............................................................................................................................................................................................................... | 1,777 | 27,553 | — | 29,330 | |||||||||||||
Miami, Florida | 1,777 | 27,818 | 5 | 29,600 | Lenexa, Kansas............................................................................................................................................................................................................. | 437 | 3,298 | — | 3,735 | |||||||||||||
Lenexa, Kansas | 437 | 24 | 3,108 | 3,569 | Wichita, Kansas............................................................................................................................................................................................................. | — | 1,409 | — | 1,409 | |||||||||||||
Wichita, Kansas | - | 1,409 | - | 1,409 | ||||||||||||||||||
30,601 | 703,657 | 146,904 | 881,162 | |||||||||||||||||||
48,576 | 866,819 | 173,564 | 1,088,959 | |||||||||||||||||||
Leased Properties | ||||||||||||||||||||||
Leased Properties | Jersey City, New Jersey................................................................................................................................................................................................. | — | 23,811 | — | 23,811 | |||||||||||||||||
Jersey City, New Jersey | - | 26,406 | 885 | 27,291 | Overland Park, Kansas................................................................................................................................................................................................... | — | 762 | — | 762 | |||||||||||||
Overland Park, Kansas | - | 789 | 21 | 810 | ||||||||||||||||||
— | 24,573 | — | 24,573 | |||||||||||||||||||
- | 27,195 | 906 | 28,101 | |||||||||||||||||||
$ | $ | $ | $ | |||||||||||||||||||
$ | 48,576 | $ | 894,014 | $ | 174,470 | $ | 1,117,060 | 30,601 | 728,230 | 146,904 | 905,735 | |||||||||||
* Owned facility subject to long-term ground sublease. | *Owned facility subject to long-term ground sublease. | |||||||||||||||||||||
As of December 31, 2012: | ||||||||||||||||||||||
As of December 31, 2013: | ||||||||||||||||||||||
Property Location | Land | Buildings and | Construction | Total Cost | ||||||||||||||||||
Property Location | Land | Buildings and | Construction | Total Cost | Improvements | in Progress | ||||||||||||||||
Improvements | in Progress | |||||||||||||||||||||
Owned Properties | ||||||||||||||||||||||
Owned Properties | Suwanee, Georgia (Atlanta-Suwanee)............................................................................................................................................................................... | $ | $ | $ | $ | |||||||||||||||||
Suwanee, Georgia (Atlanta-Suwanee) | $ | 3,521 | $ | 126,486 | 3,270 | $ | 133,277 | 3,521 | 103,438 | 3,572 | 110,531 | |||||||||||
Atlanta, Georgia (Atlanta-Metro) | 15,397 | 296,547 | 32,456 | 344,400 | Atlanta, Georgia (Atlanta-Metro)..................................................................................................................................................................................... | 15,314 | 263,192 | 6,658 | 285,164 | |||||||||||||
Santa Clara, California* | - | 86,544 | 1,249 | 87,793 | Santa Clara, California*................................................................................................................................................................................................. | — | 83,536 | 245 | 83,781 | |||||||||||||
Richmond, Virginia | 2,180 | 108,979 | 67,155 | 178,314 | Richmond, Virginia....................................................................................................................................................................................................... | 2,179 | 71,629 | 71,986 | 145,794 | |||||||||||||
Sacramento, California | 1,481 | 52,841 | 4,273 | 58,595 | Sacramento, California................................................................................................................................................................................................... | 1,485 | 52,753 | — | 54,238 | |||||||||||||
Dallas-Fort Worth, Texas | 5,808 | - | 38,501 | 44,309 | Miami, Florida............................................................................................................................................................................................................... | 1,777 | 27,111 | — | 28,888 | |||||||||||||
Miami, Florida | 1,777 | 27,553 | - | 29,330 | Lenexa, Kansas............................................................................................................................................................................................................. | 437 | 54 | 3,260 | 3,751 | |||||||||||||
Lenexa, Kansas | 437 | 3,298 | - | 3,735 | Wichita, Kansas............................................................................................................................................................................................................. | — | 1,408 | — | 1,408 | |||||||||||||
Wichita, Kansas | - | 1,409 | - | 1,409 | ||||||||||||||||||
24,713 | 603,121 | 85,721 | 713,555 | |||||||||||||||||||
30,601 | 703,657 | 146,904 | 881,162 | |||||||||||||||||||
Leased Properties | ||||||||||||||||||||||
Leased Properties | Jersey City, New Jersey................................................................................................................................................................................................. | — | 18,666 | 1,888 | 20,554 | |||||||||||||||||
Jersey City, New Jersey | - | 23,811 | - | 23,811 | Overland Park, Kansas................................................................................................................................................................................................... | — | 719 | — | 719 | |||||||||||||
Overland Park, Kansas | - | 762 | 762 | |||||||||||||||||||
— | 19,385 | 1,888 | 21,273 | |||||||||||||||||||
- | 24,573 | - | 24,573 | |||||||||||||||||||
$ | $ | $ | $ | |||||||||||||||||||
$ | 30,601 | $ | 728,230 | $ | 146,904 | $ | 905,735 | 24,713 | 622,506 | 87,609 | 734,828 | |||||||||||
*Owned facility subject to long-term ground sublease. | ||||||||||||||||||||||
* Owned facility subject to long-term ground sublease | ||||||||||||||||||||||
Credit_Facilities_and_Mortgage1
Credit Facilities and Mortgage Notes Payable (Tables) | 9 Months Ended | 12 Months Ended | ||||||||||
Sep. 30, 2014 | Dec. 31, 2013 | |||||||||||
Credit Facilities and Mortgage Notes Payable [Abstract] | ||||||||||||
Outstanding Debt Excluding Capital Leases | Below is a listing of our outstanding debt, excluding capital leases, as of September 30, 2014 and December 31, 2013 (in thousands): | Below is a listing of our outstanding debt, excluding capital leases, as of December 31, 2013 and 2012 (in thousands): | ||||||||||
September 30, | December 31, | |||||||||||
2014 | 2013 | December 31, | December 31, | |||||||||
(Unaudited) | 2013 | 2012 | ||||||||||
Unsecured Credit Facility | $ | 197,000 | $ | 256,500 | Unsecured Credit Facility............................................................................................................................................................................................... | $ | $— | |||||
Senior Notes, net of discount | 297,671 | - | 256,500 | |||||||||
Richmond Credit Facility | 70,000 | 70,000 | Secured Credit Facility................................................................................................................................................................................................... | — | 316,500 | |||||||
Atlanta-Metro Equipment Loan | 17,175 | 18,839 | Richmond Credit Facility................................................................................................................................................................................................. | 70,000 | 70,000 | |||||||
Total | $ | 581,846 | $ | 345,339 | Atlanta-Metro Equipment Loan......................................................................................................................................................................................... | 18,839 | 20,931 | |||||
Miami Loan................................................................................................................................................................................................................. | — | 26,048 | ||||||||||
Atlanta-Suwanee Land Loan........................................................................................................................................................................................... | — | 1,600 | ||||||||||
Lenexa Loan................................................................................................................................................................................................................. | — | 2,712 | ||||||||||
Santa Clara Bridge Loan................................................................................................................................................................................................. | — | 50,000 | ||||||||||
Total............................................................................................................................................................................................................................. | $ | $ | ||||||||||
345,339 | 487,791 | |||||||||||
Annual Remaining Principal Payment | The annual remaining principal payment requirements as of September 30, 2014 per the contractual maturities and excluding extension options are as follows (in thousands): | The annual remaining principal payment requirements as of December 31, 2013 per the contractual maturities and excluding extension options are as follows (in thousands): | ||||||||||
2014 | $ | 574 | ||||||||||
2015 | 2,397 | 2014............................................................................................................................................................................................................................. | $ | |||||||||
2016 | 2,567 | 2,239 | ||||||||||
2017 | 49,748 | 2015............................................................................................................................................................................................................................. | 72,397 | |||||||||
2018 | 152,943 | 2016............................................................................................................................................................................................................................. | 2,567 | |||||||||
Thereafter | 375,945 | 2017............................................................................................................................................................................................................................. | 34,248 | |||||||||
Total | $ | 584,175 | 2018............................................................................................................................................................................................................................. | 227,943 | ||||||||
Thereafter................................................................................................................................................................................................................... | 5,945 | |||||||||||
Total............................................................................................................................................................................................................................. | $ | |||||||||||
345,339 | ||||||||||||
Partners_Capital_Equity_and_In1
Partners' Capital, Equity and Incentive Compensation Plans (Tables) | 9 Months Ended | 12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||
Sep. 30, 2014 | Dec. 31, 2013 | |||||||||||||||||||||||||||||||||||||||||||||||||||
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 | The following is a summary of award activity under the 2010 Equity Incentive Plan and 2013 Equity Incentive Plan and related information for the nine months ended September 30, 2014: | The following is a summary of award activity under the 2013 and 2010 Equity Incentive Plans and related information for 2013, 2012 and 2011: | ||||||||||||||||||||||||||||||||||||||||||||||||||
2010 Equity Incentive Plan | 2013 Equity Incentive Plan | |||||||||||||||||||||||||||||||||||||||||||||||||||
Number of | Weighted | Weighted | Number of | Weighted | Options | Weighted | Weighted | Restricted | Weighted | Number | Weighted- | Weighted | Number of | Weighted- | Options | Weighted- | Weighted | Restricted | Weighted- | |||||||||||||||||||||||||||||||||
Class O units | average | average | Class RS units | average | average | average | Stock | average | of | average | average | Class RS | average | average | average | Stock | average | |||||||||||||||||||||||||||||||||||
exercise price | fair | price | exercise price | fair | price | Class O | exercise | Fair value | units | price | exercise | Fair value | price | |||||||||||||||||||||||||||||||||||||||
value | value | units | price | price | ||||||||||||||||||||||||||||||||||||||||||||||||
Outstanding at December 31, 2013 | 1,622,747 | $ | 23.44 | $ | 3.84 | 173,750 | $ | 21.86 | 367,910 | $ | 21 | $ | 3.5 | 108,629 | $ | 21 | Outstanding at January 1, 2011....................................................................................................................................................................................................................................................................................................................................... | 592,068 | $ | $ | 50,000 | $— | — | $ — | $ — | — | $ — | |||||||||||||||||||||||||
Granted | — | — | — | — | — | 238,039 | 25.59 | 4.96 | 44,000 | 25.51 | 20.00 | 4.41 | ||||||||||||||||||||||||||||||||||||||||
Exercised | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Released from restriction (1) | — | — | — | (90,437 | ) | 24.93 | — | — | — | — | — | Granted................................................................................................................................................................................................................................................................................................................................................................................. | 114,676 | $ | $ | — | $— | — | $ — | $ — | — | $ — | ||||||||||||||||||||||||||||||
Cancelled/Expired | (75,454 | ) | 23.21 | 5.48 | — | — | (14,000 | ) | 21 | 3.52 | — | — | 20.00 | 4.18 | ||||||||||||||||||||||||||||||||||||||
Outstanding at September 30, 2014 | 1,547,293 | $ | 23.45 | $ | 3.76 | 83,313 | $ | 23.65 | 591,949 | $ | 22.85 | $ | 4.25 | 152,629 | $ | 22.3 | Exercised............................................................................................................................................................................................................................................................................................................................................................................... | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
Released from restriction................................................................................................................................................................................................................................................................................................................................................... | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Cancelled/ | -7,376 | — | 4.41 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
-1 | This represents Class RS units that upon vesting have converted to Operating Partnership units. | Expired............................................................................................................................................................................................................................................................................................................................................................. | ||||||||||||||||||||||||||||||||||||||||||||||||||
Outstanding at December 31, | 699,368 | $ | $ | 50,000 | $— | — | $ — | $ — | — | $ — | ||||||||||||||||||||||||||||||||||||||||||
2011................................................................................................................................................................................................................................................................................................................................. | 20.00 | 4.38 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Granted................................................................................................................................................................................................................................................................................................................................................................................. | 908,925 | $ | $ | 150,000 | $— | — | $ — | $ — | — | $ — | ||||||||||||||||||||||||||||||||||||||||||
25.00 | 1.99 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Exercised............................................................................................................................................................................................................................................................................................................................................................................... | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Released from restriction................................................................................................................................................................................................................................................................................................................................................... | — | — | -21,250 | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Cancelled/ | -136,350 | — | 4.41 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Expired............................................................................................................................................................................................................................................................................................................................................................. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Outstanding at December 31, | 1,471,943 | $ | $ | 178,750 | $— | — | $ — | $ — | — | $ — | ||||||||||||||||||||||||||||||||||||||||||
2012................................................................................................................................................................................................................................................................................................................................. | 23.09 | 2.84 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Granted................................................................................................................................................................................................................................................................................................................................................................................. | 224,244 | $ | $ | — | $— | 370,410 | $ | $ | 108,629 | $ | ||||||||||||||||||||||||||||||||||||||||||
25.00 | 10.62 | 21.00 | 3.50 | 21.00 | ||||||||||||||||||||||||||||||||||||||||||||||||
Exercised............................................................................................................................................................................................................................................................................................................................................................................... | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Released from restriction................................................................................................................................................................................................................................................................................................................................................... | — | — | -5,000 | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Cancelled/Expired............................................................................................................................................................................................................................................................................................................................................................. | -73,440 | — | 5.31 | — | — | -2,500 | — | 3.52 | — | — | ||||||||||||||||||||||||||||||||||||||||||
Outstanding at December 31, | 1,622,747 | $ | $ | 173,750 | $— | 367,910 | $ | $ | 108,629 | $ | ||||||||||||||||||||||||||||||||||||||||||
2013................................................................................................................................................................................................................................................................................................................................. | 23.44 | 3.84 | 21.00 | 3.50 | 21.00 | |||||||||||||||||||||||||||||||||||||||||||||||
Summary of Assumptions and Fair Values for Restricted Stock and Options to Purchase Shares of Class A Common Stock Granted | The assumptions and fair values for restricted stock and options to purchase shares of Class A common stock granted for the nine months ended September 30, 2014 is included in the following table on a per unit basis. Class O units and options to purchase shares of Class A common stock were valued using the Black-Scholes model. | The assumptions and fair values for Class O units, Class RS units, restricted stock and options to purchase shares of Class A common stock granted for the years ended December 31, 2013, 2012 and 2011 are included in the following table on a per unit basis. Class O units and options to purchase shares of Class A common stock were valued using the Black-Scholes model. | ||||||||||||||||||||||||||||||||||||||||||||||||||
Three and Nine | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Months Ended | 2013 | 2012 | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||
September 30, 2014 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value of restricted stock granted | $25.51-$28.82 | Fair value of Class RS Units granted................................................................................................................................................................................. | $ — | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
Fair value of options granted | $4.94-$5.98 | 7.15 | 6.95 | |||||||||||||||||||||||||||||||||||||||||||||||||
Expected term (years) | 5.5-6.1 | Fair value of Class O Units granted................................................................................................................................................................................... | $10.26-10.92 | $1.79-2.32 | $ | |||||||||||||||||||||||||||||||||||||||||||||||
Expected volatility | 33 | % | 2.94 | |||||||||||||||||||||||||||||||||||||||||||||||||
Expected dividend yield | 4.02-4.55 | % | Fair value of Restricted stock granted............................................................................................................................................................................... | $ | $ — | $ — | ||||||||||||||||||||||||||||||||||||||||||||||
Expected risk-free interest rates | 1.7-1.9 | % | 21.00 | |||||||||||||||||||||||||||||||||||||||||||||||||
Fair value of options granted........................................................................................................................................................................................... | $3.45-3.52 | $ — | $ — | |||||||||||||||||||||||||||||||||||||||||||||||||
Expected term (years)................................................................................................................................................................................................... | 5.5-7.0 | 4 | 4 | |||||||||||||||||||||||||||||||||||||||||||||||||
Expected volatility......................................................................................................................................................................................................... | 32%-40% | 55% | 60% | |||||||||||||||||||||||||||||||||||||||||||||||||
Expected Dividend yield................................................................................................................................................................................................. | 5.5% | 0% | 0% | |||||||||||||||||||||||||||||||||||||||||||||||||
Expected Risk-free interest rates..................................................................................................................................................................................... | 1.4-1.8% | 0.17% | 0.61% | |||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Information About Awards Outstanding | The following table summarizes information about awards outstanding as of September 30, 2014. | The following table summarizes information about awards outstanding as of December 31, 2013. | ||||||||||||||||||||||||||||||||||||||||||||||||||
Operating Partnership Awards Outstanding | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Exercise prices | Awards | Weighted average | Operating Partnership Awards Outstanding | |||||||||||||||||||||||||||||||||||||||||||||||||
outstanding | remaining | |||||||||||||||||||||||||||||||||||||||||||||||||||
vesting period (years) | Exercise prices | Awards | Weighted average | |||||||||||||||||||||||||||||||||||||||||||||||||
Class RS Units | $ | - | 83,313 | 2 | outstanding | remaining | ||||||||||||||||||||||||||||||||||||||||||||||
Class O Units | $ | 20-25 | 1,547,293 | 2 | vesting period | |||||||||||||||||||||||||||||||||||||||||||||||
Total Operating Partnership awards outstanding | 1,630,606 | (years) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Class RS Units............................................................................................................................................................................................................. | $— | 173,750 | 3 | |||||||||||||||||||||||||||||||||||||||||||||||||
Class O Units............................................................................................................................................................................................................... | $20-25 | 1,622,747 | 3 | |||||||||||||||||||||||||||||||||||||||||||||||||
QTS Realty Trust, Inc. Awards Outstanding | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Exercise prices | Awards | Weighted average | Total Operating Partnership awards outstanding................................................................................................................................................................. | 1,796,497 | ||||||||||||||||||||||||||||||||||||||||||||||||
outstanding | remaining | |||||||||||||||||||||||||||||||||||||||||||||||||||
vesting period (years) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Restricted stock | $ | - | 152,629 | 3 | ||||||||||||||||||||||||||||||||||||||||||||||||
Options to purchase Class A common stock | $ | 21-28.82 | 591,949 | 1 | ||||||||||||||||||||||||||||||||||||||||||||||||
Total QTS Realty Trust, Inc awards outstanding | 744,578 | |||||||||||||||||||||||||||||||||||||||||||||||||||
QTS Realty Trust, Inc. Awards Outstanding | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Exercise prices | Awards | Weighted average | ||||||||||||||||||||||||||||||||||||||||||||||||||
outstanding | remaining | |||||||||||||||||||||||||||||||||||||||||||||||||||
vesting period | ||||||||||||||||||||||||||||||||||||||||||||||||||||
(years) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Restricted stock........................................................................................................................................................................................................... | $— | 108,629 | 4 | |||||||||||||||||||||||||||||||||||||||||||||||||
Options to purchase Class A common stock....................................................................................................................................................................... | $ | 367,910 | 3 | |||||||||||||||||||||||||||||||||||||||||||||||||
21 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Total QTS Realty Trust, Inc awards outstanding................................................................................................................................................................. | 476,539 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Related_Party_Transactions_Tab
Related Party Transactions (Tables) | 9 Months Ended | 12 Months Ended | |||||||||||||||||||
Sep. 30, 2014 | Dec. 31, 2013 | ||||||||||||||||||||
Member Advances and Related Party Transactions [Abstract] | |||||||||||||||||||||
Summary of Related Party Transactions | The transactions which occurred during the three and nine months ended September 30, 2014 and 2013 are outlined below (in thousands): | The transactions which occurred during the years ended December 31, 2013, 2012 and 2011 are outlined below (in thousands): | |||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||
September 30, | September 30, | December 31, | |||||||||||||||||||
(dollars in thousands) | 2014 | 2013 | 2014 | 2013 | |||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||||||
Tax, utility, insurance and other reimbursement | $ | 296 | $ | 18 | $ | 464 | $ | 121 | |||||||||||||
Rent expense | 253 | 264 | 772 | 712 | Tax, utility, insurance and other reimbursement................................................................................................................................................................... | $ | $ | $ | |||||||||||||
Capital assets acquired | 86 | 126 | 160 | 141 | 336 | 234 | 248 | ||||||||||||||
Total | $ | 635 | $ | 408 | $ | 1,396 | $ | 974 | Rent expense............................................................................................................................................................................................................... | 977 | 572 | 572 | |||||||||
Capital assets acquired................................................................................................................................................................................................... | 625 | 568 | 1,807 | ||||||||||||||||||
Total............................................................................................................................................................................................................................. | $ | $ | $ | ||||||||||||||||||
1,938 | 1,374 | 2,627 | |||||||||||||||||||
Earnings_per_Share_Tables
Earnings per Share (Tables) | 9 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2014 | Dec. 31, 2013 | ||||||||||
Earnings per Share [Abstract] | |||||||||||
Summary of Basic and Diluted Earnings Per Share | Basic income (loss) per share is calculated by dividing the net income (loss) attributable to common shares by the weighted average number of common shares outstanding during the period. Diluted income (loss) per share adjusts basic income (loss) per share for the effects of potentially dilutive common shares. | Basic income (loss) per share is calculated by dividing the net income (loss) attributable to common shares by the weighted average number of common shares outstanding during the period. Diluted income (loss) per share adjusts basic income (loss) per share for the effects of potentially dilutive common shares, if the effect is not antidilutive. | |||||||||
(in thousands, except per share data) | For the period October 15, | ||||||||||
2013 through | |||||||||||
Three Months Ended | Nine Months Ended | December 31, 2013 | |||||||||
(in thousands, except per share data) | 30-Sep-14 | 30-Sep-14 | |||||||||
Net income available to common stockholders | $ | 3,157 | $ | 10,445 | Net income available to common stockholders................................................................................................................................................................... | $ | |||||
Weighted average shares outstanding—basic | 29,017 | 29,007 | 3,154 | ||||||||
Net income per share—basic | $ | 0.11 | $ | 0.36 | Weighted average shares outstanding—basic..................................................................................................................................................................... | 28,973 | |||||
Net income per share—basic........................................................................................................................................................................................... | $ | ||||||||||
Net income | $ | 4,006 | $ | 13,255 | 0.11 | ||||||
Weighted average shares outstanding—diluted (1) | 37,252 | 37,040 | Net income................................................................................................................................................................................................................... | $ | |||||||
Net income per share—diluted | $ | 0.11 | $ | 0.36 | 4,002 | ||||||
Weighted average shares outstanding—diluted(1)............................................................................................................................................................... | 36,794 | ||||||||||
Net income per share—diluted......................................................................................................................................................................................... | $ | ||||||||||
(1) Includes 8,104 and 7,939 units of the Operating Partnership as of the three and nine months ended September 30, 2014, respectively | 0.11 | ||||||||||
(1)Includes 7,821 shares of the Operating Partnership. | |||||||||||
Operating_Leases_as_Lessee_Tab
Operating Leases, as Lessee (Tables) | 12 Months Ended | |
Dec. 31, 2013 | ||
Customer Leases, as Lessor [Abstract] | ||
Future Non-cancellable Minimum Rental Payments Required Under Operating Leases and/or Licenses | The future non-cancellable minimum rental payments required under operating leases and/or licenses at December 31, 2013 are as follows (in thousands): | |
Year Ending December 31, | ||
2014............................................................................................................................................................................................................................. | $ | |
5,464 | ||
2015............................................................................................................................................................................................................................. | 5,470 | |
2016............................................................................................................................................................................................................................. | 5,545 | |
2017............................................................................................................................................................................................................................. | 5,618 | |
2018............................................................................................................................................................................................................................. | 5,618 | |
Thereafter................................................................................................................................................................................................................... | 67,547 | |
Total............................................................................................................................................................................................................................. | $ | |
95,262 | ||
Customer_Leases_as_Lessor_Tabl
Customer Leases, as Lessor (Tables) | 9 Months Ended | 12 Months Ended | |||||||
Sep. 30, 2014 | Dec. 31, 2013 | ||||||||
Customer Leases, as Lessor [Abstract] | |||||||||
Future Minimum Lease Payments to be Received Under Non-Cancelable Operating Customer Leases | Future minimum lease payments to be received under non-cancelable operating customer leases (exclusive of recoveries of operating costs from customers) are as follows for the years ending December 31 (in thousands): | Future minimum lease payments to be received under non-cancelable operating customer leases (exclusive of recoveries of operating costs from customers) are as follows for the years ending December 31 (in thousands): | |||||||
Period Ending December 31, | |||||||||
2014 (October - December) | $ | 50,029 | 2014............................................................................................................................................................................................................................. | $ | |||||
2015 | 186,248 | 149,158 | |||||||
2016 | 166,060 | 2015............................................................................................................................................................................................................................. | 121,105 | ||||||
2017 | 130,052 | 2016............................................................................................................................................................................................................................. | 93,411 | ||||||
2018 | 104,754 | 2017............................................................................................................................................................................................................................. | 70,203 | ||||||
Thereafter | 278,147 | 2018............................................................................................................................................................................................................................. | 54,212 | ||||||
Total | $ | 915,290 | Thereafter................................................................................................................................................................................................................... | 56,981 | |||||
Total............................................................................................................................................................................................................................. | $ | ||||||||
545,070 | |||||||||
Quarterly_Financial_Informatio1
Quarterly Financial Information (unaudited) (Tables) | 12 Months Ended | |||||
Dec. 31, 2013 | ||||||
Summary of Selected Quarterly Information | The tables below reflect the selected quarterly information for QTS for the years ended December 31, 2013 and 2012 (in thousands except share data): | |||||
Historical Predecessor | ||||||
The Company | Three Months Ended | |||||
For the period | For the period | September 30, | June 30, | March 31, | ||
October 15, 2013 | October 1, 2013 | 2013 | 2013 | 2013 | ||
through | through | |||||
December 31, | October 14, | |||||
2013 | 2013 | |||||
Revenues....................................................................................................................................................................................................................... | $ | $ | $ | $ | $ | |
40,462 | 6,967 | 46,020 | 42,940 | 41,498 | ||
Operating income......................................................................................................................................................................................................... | 6,203 | 1,143 | 7,048 | 6,024 | 5,568 | |
Net income (loss)......................................................................................................................................................................................................... | 4,002 | 445 | 2,709 | -1,232 | -2,074 | |
Net income (loss) attributable to common shares............................................................................................................................................................... | 3,154 | N/A | N/A | N/A | N/A | |
Net income per share attributable to common shares—basic(1)............................................................................................................................................. | $ | $N/A | $N/A | $N/A | $N/A | |
0.11 | ||||||
Net income per share attributable to common shares—diluted(1)........................................................................................................................................... | $ | $N/A | $N/A | $N/A | $N/A | |
0.11 | ||||||
-1 | Net income per share attributable to QTS Realty Trust, Inc. for the period October 15, 2013 through December 31, 2013. | |||||
Historical Predecessor | ||||||
Three Months Ended | ||||||
December 31, | September 30, | June 30, | March 31, | |||
2012 | 2012 | 2012 | 2012 | |||
Revenues....................................................................................................................................................................................................................... | $ | $ | $ | $ | ||
38,173 | 36,254 | 36,689 | 34,643 | |||
Operating income......................................................................................................................................................................................................... | 4,203 | 3,933 | 6,014 | 1,365 | ||
Net loss......................................................................................................................................................................................................................... | -1,608 | -1,757 | -266 | -6,136 | ||
Qualitytech, LP [Member] | ||||||
Summary of Selected Quarterly Information | The table below reflects the selected quarterly information for the Operating Partnership for the years ended December 31, 2013 and 2012 (in thousands): | |||||
Three Months Ended | ||||||
December 31 | September 30 | June 30 | March 31 | |||
2013 | ||||||
Revenues....................................................................................................................................................................................................................... | $ | $ | $ | $ | ||
47,429 | 46,020 | 42,940 | 41,498 | |||
Operating income......................................................................................................................................................................................................... | 7,346 | 7,048 | 6,024 | 5,568 | ||
Net income (loss)......................................................................................................................................................................................................... | 4,447 | 2,709 | -1,232 | -2,074 | ||
2012 | ||||||
Revenues....................................................................................................................................................................................................................... | $ | $ | $ | $ | ||
38,173 | 36,254 | 36,689 | 34,643 | |||
Operating income......................................................................................................................................................................................................... | 4,203 | 3,933 | 6,014 | 1,365 | ||
Net loss......................................................................................................................................................................................................................... | -1,608 | -1,757 | -266 | -6,136 | ||
Description_of_Business_Narrat
Description of Business (Narrative) (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2012 | Oct. 15, 2013 |
property | property | |||||
Organization And Description Of Business [Line Items] | ||||||
Number of properties | 10 | 10 | 12 | |||
Common stock, par value | $0.01 | $0.01 | $0.01 | $0.01 | ||
Common stock, shares issued | 28,972,774 | 28,972,774 | 29,016,774 | 1,000 | 28,972,774 | |
Net proceeds from issuance of shares | $279 | |||||
Ownership interest | 78.80% | |||||
Common Class A [Member] | ||||||
Organization And Description Of Business [Line Items] | ||||||
Common stock, par value | $0.01 | $0.01 | $0.01 | |||
Common stock, shares issued | 14,087,500 | 14,087,500 | 14,087,500 | |||
Net proceeds from issuance of shares | $279 | |||||
Qualitytech, LP [Member] | ||||||
Organization And Description Of Business [Line Items] | ||||||
Ownership interest | 78.80% | 78.80% |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies (Narrative) (Details) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | 2 Months Ended | ||||||
Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Sep. 30, 2014 | Sep. 30, 2014 | |
Summary Of Significant Accounting Policies [Line Items] | ||||||||||
Useful life of property | 40 years | 40 years | ||||||||
Interest rate | 9.00% | 9.00% | ||||||||
Depreciation expense from operation | $11,900,000 | $9,700,000 | $32,800,000 | $27,200,000 | $36,700,000 | $29,800,000 | $22,100,000 | |||
Real estate cost capitalized excluding interest cost | 2,900,000 | 2,400,000 | 7,500,000 | 6,300,000 | 8,500,000 | 6,700,000 | 6,100,000 | |||
Real estate interest cost capitalized incurred | 1,300,000 | 900,000 | 4,700,000 | 3,000,000 | 4,100,000 | 2,200,000 | 2,600,000 | |||
Accretion of below-market leases | 0 | 0 | 1,000,000 | |||||||
Annual amortization for intangible assets for 2014 | 2,700,000 | 2,700,000 | ||||||||
Annual amortization for intangible assets for 2015 | 1,300,000 | 1,300,000 | ||||||||
Annual amortization for intangible assets for 2016 | 1,300,000 | 1,300,000 | ||||||||
Remaining weighted average amortization period | 2 years 4 months 24 days | |||||||||
Amortization of the deferred financing costs | 496,000 | 1,894,000 | 2,800,000 | 3,400,000 | 3,400,000 | |||||
In Place Leases [Member] | ||||||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||||||
Amortization of lease cost | 500,000 | 500,000 | 1,800,000 | 1,500,000 | 2,600,000 | 100,000 | ||||
Tenant Relationship [Member] | ||||||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||||||
Amortization of lease cost | 300,000 | 400,000 | 1,000,000 | 1,200,000 | 1,500,000 | 600,000 | 1,200,000 | |||
Leasehold Improvements [Member] | ||||||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||||||
Useful life of property | 20 years | |||||||||
Qualitytech, LP [Member] | ||||||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||||||
Amortization of the deferred financing costs | $1,894,000 | $2,193,000 | $2,777,000 | $3,384,000 | $3,441,000 | |||||
Minimum [Member] | Land, Buildings and Improvements [Member] | ||||||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||||||
Useful life of property | 20 years | 20 years | ||||||||
Maximum [Member] | Land, Buildings and Improvements [Member] | ||||||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||||||
Useful life of property | 40 years | 40 years | ||||||||
Maximum [Member] | Leasehold Improvements [Member] | ||||||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||||||
Useful life of property | 20 years | |||||||||
Senior Notes [Member] | ||||||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||||||
Interest rate | 5.88% | 5.88% | 5.88% | 5.88% | ||||||
Senior notes due | 2022 | |||||||||
Senior Notes [Member] | Qualitytech, LP [Member] | ||||||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||||||
Interest rate | 5.88% | 5.88% | 5.88% | 5.88% | ||||||
Senior notes due | 2022 | 2022 |
Summary_of_Significant_Account4
Summary of Significant Accounting Policies (Additional Information 1) (Details) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||
Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Feb. 08, 2013 | Feb. 29, 2012 | Feb. 08, 2012 | |
Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Impairment losses | $0 | $0 | $0 | $0 | $0 | $0 | $0 | ||||
Amortization of the deferred financing costs | 496,000 | 1,894,000 | 2,800,000 | 3,400,000 | 3,400,000 | ||||||
Written off unamortized debt cost | 500,000 | 0 | 2,200,000 | 1,400,000 | |||||||
Written off unamortization cost relation to assets securitization | 1,300,000 | ||||||||||
Amortization of deferred leasing costs totaled | 1,800,000 | 1,100,000 | 4,600,000 | 3,200,000 | 4,700,000 | 3,400,000 | 2,300,000 | ||||
Deferred income | 9,529,000 | 7,892,000 | 9,529,000 | 7,892,000 | 6,745,000 | 5,600,000 | |||||
Amortization of deferred revenue | 1,100,000 | 1,300,000 | 3,500,000 | 3,500,000 | 4,700,000 | 4,300,000 | 3,000,000 | ||||
Derivative liability | 453,000 | 453,000 | 767,000 | ||||||||
Company recorded equity-based compensation expense net of repurchased awards | 900,000 | 500,000 | 2,900,000 | 1,300,000 | 2,000,000 | 400,000 | 800,000 | ||||
Amount of the straight-line rent receivable on the balance sheets included in rents and other receivables | 4,200,000 | 2,900,000 | 4,200,000 | 2,900,000 | 2,400,000 | ||||||
Unsecured Revolving Credit Facility [Member] | |||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Amortization of the deferred financing costs | 500,000 | 600,000 | 1,700,000 | 2,200,000 | |||||||
Written off unamortized debt cost | 75,000,000 | ||||||||||
Written off unamortization cost relation to assets securitization | 3,300,000 | ||||||||||
Richmond Credit Facility [Member] | |||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Written off unamortized debt cost | 100,000 | ||||||||||
Interest Rate Swap [Member] | |||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Notional amount of derivative | 150,000,000 | ||||||||||
Interest Rate Swap [Member] | Cash Flow Hedging [Member] | |||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Derivative liability | 0 | 0 | |||||||||
Notional amount of derivative | $150,000,000 | $150,000,000 |
Summary_of_Significant_Account5
Summary of Significant Accounting Policies (Deferred Financing Costs, Net of Accumulated Amortization) (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | |||
Summary of Significant Accounting Policies [Abstract] | |||
Deferred financing costs | $18,226 | $9,159 | $10,165 |
Accumulated amortization | -3,761 | -1,867 | -3,309 |
Deferred financing costs, net | $14,465 | $7,292 | $6,856 |
Summary_of_Significant_Account6
Summary of Significant Accounting Policies (Deferred Leasing Costs, Net of Accumulated Amortization) (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | |||
Summary of Significant Accounting Policies [Abstract] | |||
Deferred leasing costs | $24,348 | $17,374 | $12,567 |
Accumulated amortization | -8,379 | -5,516 | -4,361 |
Deferred leasing costs, net | $15,969 | $11,858 | $8,206 |
Summary_of_Significant_Account7
Summary of Significant Accounting Policies (Summary of Temporary Differences and Carry Forwards Which Give Rise to Deferred Tax Assets and Liabilities) (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
In Thousands, unless otherwise specified | |||
Deferred tax liabilities | |||
Property and equipment | ($4,905) | ($4,852) | ($3,533) |
Other | -873 | -551 | -287 |
Gross Deferred Tax Liabilities | -5,778 | -5,403 | -3,820 |
Deferred tax assets | |||
Net operating loss carryforwards | 5,861 | 6,694 | 3,410 |
Deferred revenue and setup charges | 583 | 467 | 372 |
Derivative liability | 81 | ||
Other | 699 | 113 | 101 |
Gross deferred tax assets | 7,143 | 7,274 | 3,964 |
Net deferred tax assets | 1,365 | 1,871 | 144 |
Valuation allowance | -1,365 | -1,871 | -144 |
Net deferred |
Summary_of_Significant_Account8
Summary of Significant Accounting Policies (Additional Information 2) (Details) (USD $) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
segment | segment | |||
Summary Of Significant Accounting Policies [Line Items] | ||||
Aggregate allowance for doubtful accounts | $900,000 | $900,000 | $500,000 | |
Outstanding liabilities for the capital leases | 9,042,000 | 2,538,000 | 2,491,000 | |
Number of operating segments | 1 | 1 | ||
Number of reportable segments | 1 | 1 | ||
Restructuring costs | 3,300,000 | |||
Decrease in valuation allowance | -500,000 | |||
Uncertain tax positions | 0 | 0 | 0 | |
Interest and penalties related to income taxes | 0 | 0 | 0 | |
Federal [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Net operating loss carry forwards related to Federal income taxes | 15,800,000 | |||
State [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Net operating loss carry forwards related to State income taxes | 10,100,000 | |||
Minimum [Member] | Federal [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Net operating loss carry forwards related to Federal income taxes, expiration period | 16 years | |||
Minimum [Member] | State [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Net operating loss carry forwards related to Federal income taxes, expiration period | 11 years | |||
Maximum [Member] | Federal [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Net operating loss carry forwards related to Federal income taxes, expiration period | 20 years | |||
Maximum [Member] | State [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Net operating loss carry forwards related to Federal income taxes, expiration period | 20 years | |||
Rental Revenue [Member] | Maximum [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Percentage of total revenue | 5.00% | |||
Qualitytech, LP [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Outstanding liabilities for the capital leases | $9,042,000 | $2,538,000 | $2,491,000 | |
Number of subsidiaries taxed as taxable REIT | 1 | |||
Customer One [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Percentage of total revenue | 7.50% | |||
Customer One [Member] | Rental Revenue [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Percentage of total revenue | 8.40% | |||
Customer One [Member] | Accounts Receivable [Member] | Minimum [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Percentage of total accounts receivable | 10.00% | |||
Customer Two [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Percentage of total revenue | 5.70% | |||
Other Customers [Member] | Rental Revenue [Member] | Maximum [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Percentage of total revenue | 5.00% | |||
Five Customers [Member] | Maximum [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Percentage of total accounts receivable | 10.00% | |||
Five Customers [Member] | Accounts Receivable [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Percentage of total revenue | 5.00% | |||
Five Customers [Member] | Accounts Receivable [Member] | Maximum [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Percentage of total revenue | 32.10% | |||
Eight Customers [Member] | Accounts Receivable [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Percentage of total accounts receivable | 58.00% | |||
Eight Customers [Member] | Accounts Receivable [Member] | Minimum [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Percentage of total accounts receivable | 5.00% |
Summary_of_Significant_Account9
Summary of Significant Accounting Policies (Financial Instruments Held at Fair Value) (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
In Thousands, unless otherwise specified | ||||
Financial Liabilities: | ||||
Interest rate swap liability | $453 | $767 | ||
Fair Value Measurements, Level 1 [Member] | Interest Rate Swap [Member] | ||||
Financial Liabilities: | ||||
Interest rate swap liability | [1] | |||
Fair Value Measurements, Level 1 [Member] | Restricted Deposits [Member] | ||||
Financial Assets: | ||||
Restriced deposits, held at fiar value | 146 | |||
Fair Value Measurements, Level 2 [Member] | Interest Rate Swap [Member] | ||||
Financial Liabilities: | ||||
Interest rate swap liability | 453 | [1] | 767 | |
Fair Value Measurements, Level 3 [Member] | Interest Rate Swap [Member] | ||||
Financial Liabilities: | ||||
Interest rate swap liability | [1] | |||
Carrying Value [Member] | Interest Rate Swap [Member] | ||||
Financial Liabilities: | ||||
Interest rate swap liability | 453 | [1] | 767 | |
Carrying Value [Member] | Restricted Deposits [Member] | ||||
Financial Assets: | ||||
Restriced deposits, held at fiar value | $146 | |||
[1] | The Company used inputs from quoted prices for similar assets and liabilities in active markets that are directly or indirectly observable relating to the measurement of the interest rate swaps at December 31, 2013. The fair value measurement of the interest rate swaps have been classified as Level 2. The swaps matured on September 28, 2014, and as such, there were no amounts outstanding on the consolidated balance sheet as of September 30, 2014 related to interest rate swaps. |
Acquisition_of_Real_Estate_Nar
Acquisition of Real Estate (Narrative) (Details) (USD $) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | 3 Months Ended | |||
Feb. 28, 2013 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2014 | Jun. 30, 2014 | Jul. 08, 2014 | |
sqft | sqft | sqft | sqft | |||||
acre | acre | |||||||
Business Acquisition [Line Items] | ||||||||
Cash consideration paid for acquisition | $10,250,000 | $47,963,000 | $156,008,000 | |||||
Debt finance obtained for acquisition | 10,250,000 | |||||||
Transaction costs related to acquisition | 600,000 | |||||||
Aggregate costs related to acquisition | 21,200,000 | 21,200,000 | ||||||
Area of facility | 700,000 | 700,000 | ||||||
Aggregate consideration related to acquisition | 63,300,000 | |||||||
Princeton Facility [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Aggregate costs related to acquisition | 73,300,000 | |||||||
Acres of real estate property | 194 | |||||||
Area of facility | 560,000 | |||||||
Lease period | 10 years | |||||||
Renewal of lease period | 15 years | |||||||
Princeton Facility [Member] | Raised Floor With Twelve MW Gross Power [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Area of facility | 58,000 | |||||||
Capacity of the plant | 12 | |||||||
Chicago Facility [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Aggregate costs related to acquisition | $18,000,000 | |||||||
Acres of real estate property | 30 | |||||||
Area of facility | 317,000 | |||||||
Chicago Facility [Member] | Scenario, Plan [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Area of facility | 400,000 | 400,000 | ||||||
Chicago Facility [Member] | Raised Floor With Twelve MW Gross Power [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Area of facility | 133,000 | |||||||
Capacity of the plant | 24 | |||||||
Chicago Facility [Member] | Raised Floor With Twelve MW Gross Power [Member] | Scenario, Plan [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Area of facility | 215,000 | 215,000 | ||||||
Capacity of the plant | 37 | 37 |
Acquisition_of_Real_Estate_Con
Acquisition of Real Estate (Consideration for the New Jersey Facility and the Preliminary Allocation of the Fair Value of Assets Acquired) (Details) (USD $) | 12 Months Ended | 9 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2014 |
Business Acquisition [Line Items] | ||
Buildings | $52,439 | |
Land | 1,481 | |
Total purchase price | 63,250 | |
Buildings, Weighted average useful life | 40 years | |
Princeton Facility [Member] | ||
Business Acquisition [Line Items] | ||
Buildings | 35,574 | |
Land | 17,976 | |
Other | 301 | |
Total purchase price | 73,300 | |
Buildings, Weighted average useful life | 40 years | |
Princeton Facility [Member] | Acquired Intangibles [Member] | ||
Business Acquisition [Line Items] | ||
Intangible assets | 16,114 | |
Intangible assets, Weighted average useful life | 10 years | |
Princeton Facility [Member] | Other [Member] | ||
Business Acquisition [Line Items] | ||
Intangible assets, Weighted average useful life | 10 years | |
Princeton Facility [Member] | Deferred Costs [Member] | ||
Business Acquisition [Line Items] | ||
Intangible assets | $3,335 | |
Intangible assets, Weighted average useful life | 10 years |
Acquisitions_of_Real_Estate_Co
Acquisitions of Real Estate (Consideration for the Sacramento Facility and the Final Purchase Price Allocation) (Details) (USD $) | 12 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2013 |
Business Acquisition [Line Items] | |
Buildings | $52,439 |
Land | 1,481 |
Total purchase price | 63,250 |
Buildings, Weighted average useful life | 40 years |
Original Sacramento Facility [Member] | |
Business Acquisition [Line Items] | |
Buildings | 52,753 |
Land | 1,485 |
Total purchase price | 63,250 |
Adjustment [Member] | |
Business Acquisition [Line Items] | |
Buildings | -314 |
Land | -4 |
Tenant Relationship [Member] | |
Business Acquisition [Line Items] | |
Intangible assets | 5,366 |
Intangible assets, Weighted average useful life | 4 years |
Tenant Relationship [Member] | Original Sacramento Facility [Member] | |
Business Acquisition [Line Items] | |
Intangible assets | 5,029 |
Tenant Relationship [Member] | Adjustment [Member] | |
Business Acquisition [Line Items] | |
Intangible assets | 337 |
In Place Leases [Member] | |
Business Acquisition [Line Items] | |
Intangible assets | 3,964 |
Intangible assets, Weighted average useful life | 2 years |
In Place Leases [Member] | Original Sacramento Facility [Member] | |
Business Acquisition [Line Items] | |
Intangible assets | 3,202 |
In Place Leases [Member] | Adjustment [Member] | |
Business Acquisition [Line Items] | |
Intangible assets | 762 |
Above (Below) Market Leases [Member] | |
Business Acquisition [Line Items] | |
Intangible assets, Weighted average useful life | 1 year |
Above (Below) Market Leases [Member] | Original Sacramento Facility [Member] | |
Business Acquisition [Line Items] | |
Intangible assets | 781 |
Above (Below) Market Leases [Member] | Adjustment [Member] | |
Business Acquisition [Line Items] | |
Intangible assets | ($781) |
Real_Estate_Assets_and_Constru2
Real Estate Assets and Construction in Progress (Summary of Properties Owned or Leased by the Company) (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |||
In Thousands, unless otherwise specified | ||||||
Real Estate Properties [Line Items] | ||||||
Land | $48,576 | $30,601 | $24,713 | |||
Buildings and improvements | 894,014 | 728,230 | 622,506 | |||
Construction in progress | 174,470 | 146,904 | 87,609 | |||
Total cost | 1,117,060 | 905,735 | 734,828 | |||
Owned Properties [Member] | ||||||
Real Estate Properties [Line Items] | ||||||
Land | 48,576 | 30,601 | 24,713 | |||
Buildings and improvements | 866,819 | 703,657 | 603,121 | |||
Construction in progress | 173,564 | 146,904 | 85,721 | |||
Total cost | 1,088,959 | 881,162 | 713,555 | |||
Owned Properties [Member] | Suwanee, Georgia (Atlanta-Suwanee) [Member] | ||||||
Real Estate Properties [Line Items] | ||||||
Land | 3,521 | 3,521 | 3,521 | |||
Buildings and improvements | 134,931 | 126,486 | 103,438 | |||
Construction in progress | 3,799 | 3,270 | 3,572 | |||
Total cost | 142,251 | 133,277 | 110,531 | |||
Owned Properties [Member] | Atlanta, Georgia (Atlanta-Metro) [Member] | ||||||
Real Estate Properties [Line Items] | ||||||
Land | 15,397 | 15,397 | 15,314 | |||
Buildings and improvements | 350,728 | 296,547 | 263,192 | |||
Construction in progress | 13,770 | 32,456 | 6,658 | |||
Total cost | 379,895 | 344,400 | 285,164 | |||
Owned Properties [Member] | Santa Clara, California [Member] | ||||||
Real Estate Properties [Line Items] | ||||||
Buildings and improvements | 88,891 | [1] | 86,544 | [1] | 83,536 | [1] |
Construction in progress | 662 | [1] | 1,249 | [1] | 245 | [1] |
Total cost | 89,553 | [1] | 87,793 | [1] | 83,781 | [1] |
Owned Properties [Member] | Richmond, Virginia [Member] | ||||||
Real Estate Properties [Line Items] | ||||||
Land | 2,180 | 2,180 | 2,179 | |||
Buildings and improvements | 126,659 | 108,979 | 71,629 | |||
Construction in progress | 62,301 | 67,155 | 71,986 | |||
Total cost | 191,140 | 178,314 | 145,794 | |||
Owned Properties [Member] | Sacramento, California [Member] | ||||||
Real Estate Properties [Line Items] | ||||||
Land | 1,481 | 1,481 | 1,485 | |||
Buildings and improvements | 57,892 | 52,841 | 52,753 | |||
Construction in progress | 1,362 | 4,273 | ||||
Total cost | 60,735 | 58,595 | 54,238 | |||
Owned Properties [Member] | Princeton New Jersey [Member] | ||||||
Real Estate Properties [Line Items] | ||||||
Land | 17,975 | |||||
Buildings and improvements | 36,346 | |||||
Construction in progress | 43 | |||||
Total cost | 54,364 | |||||
Owned Properties [Member] | Dallas, Texas [Member] | ||||||
Real Estate Properties [Line Items] | ||||||
Land | 5,808 | 5,808 | ||||
Buildings and improvements | 42,121 | |||||
Construction in progress | 69,909 | 38,501 | ||||
Total cost | 117,838 | 44,309 | ||||
Owned Properties [Member] | Chicago, Illinois [Member] | ||||||
Real Estate Properties [Line Items] | ||||||
Construction in progress | 18,605 | |||||
Total cost | 18,605 | |||||
Owned Properties [Member] | Miami, Florida [Member] | ||||||
Real Estate Properties [Line Items] | ||||||
Land | 1,777 | 1,777 | 1,777 | |||
Buildings and improvements | 27,818 | 27,553 | 27,111 | |||
Construction in progress | 5 | |||||
Total cost | 29,600 | 29,330 | 28,888 | |||
Owned Properties [Member] | Lenexa, Kansas [Member] | ||||||
Real Estate Properties [Line Items] | ||||||
Land | 437 | 437 | 437 | |||
Buildings and improvements | 24 | 3,298 | 54 | |||
Construction in progress | 3,108 | 3,260 | ||||
Total cost | 3,569 | 3,735 | 3,751 | |||
Owned Properties [Member] | Wichita, Kansas [Member] | ||||||
Real Estate Properties [Line Items] | ||||||
Buildings and improvements | 1,409 | 1,409 | 1,408 | |||
Total cost | 1,409 | 1,409 | 1,408 | |||
Leased Properties [Member] | ||||||
Real Estate Properties [Line Items] | ||||||
Buildings and improvements | 27,195 | 24,573 | 19,385 | |||
Construction in progress | 906 | 1,888 | ||||
Total cost | 28,101 | 24,573 | 21,273 | |||
Leased Properties [Member] | Jersey City, New Jersey [Member] | ||||||
Real Estate Properties [Line Items] | ||||||
Buildings and improvements | 26,406 | 23,811 | 18,666 | |||
Construction in progress | 885 | 1,888 | ||||
Total cost | 27,291 | 23,811 | 20,554 | |||
Leased Properties [Member] | Overland Park, Kansas [Member] | ||||||
Real Estate Properties [Line Items] | ||||||
Buildings and improvements | 789 | 762 | 719 | |||
Construction in progress | 21 | |||||
Total cost | $810 | $762 | $719 | |||
[1] | Owned facility subject to long-term ground sublease. |
Credit_Facilities_and_Mortgage2
Credit Facilities and Mortgage Notes Payable (Unsecured Credit Facility Narrative) (Details) (USD $) | 5 Months Ended | 12 Months Ended | 1 Months Ended | 9 Months Ended | 1 Months Ended | 2 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2014 | Dec. 31, 2013 | Jul. 31, 2014 | Sep. 30, 2014 | Feb. 28, 2014 | Sep. 30, 2014 | Dec. 14, 2014 | Oct. 01, 2014 |
Debt Instrument [Line Items] | ||||||||
Line of credit facility weighted average interest rate outstanding percentage | 2.53% | |||||||
Interest rate | 9.00% | |||||||
Term Loan [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Credit facility maximum borrowing capacity | $150 | $225 | $150 | 150 | ||||
Unsecured credit facility term | 5 years | 5 years | ||||||
Revolving Credit Facility [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Credit facility maximum borrowing capacity | 410 | 350 | 410 | 410 | ||||
Unsecured credit facility term | 4 years | 4 years | ||||||
Letter of Credit [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Additional letter of credit outstanding | 3 | 3 | 3 | 3 | ||||
Unsecured Credit Facility [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Credit facility agreement date | 1-May-13 | 1-May-13 | ||||||
Credit facility maximum borrowing capacity | 560 | 575 | 560 | 560 | 650 | |||
Line of credit facility accordion feature | 100 | |||||||
Increase the amount of line of credit facility | 675 | |||||||
Maximum the credit facility may be increased up until | 600 | 600 | 600 | 850 | ||||
Line of credit facility weighted average interest rate outstanding percentage | 2.26% | 2.26% | 2.26% | |||||
Repayment of term loan | 75 | |||||||
Subsequent Event [Member] | Revolving Credit Facility [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Amount of unsecured revolving credit facility expanded | 50 | |||||||
Subsequent Event [Member] | Letter of Credit [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Additional letter of credit outstanding | 2.5 | |||||||
Subsequent Event [Member] | Unsecured Credit Facility [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Credit facility maximum borrowing capacity | 400 | |||||||
Unsecured revolving credit facility | $50 | |||||||
Minimum [Member] | Libor Rate [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Leverage ratio | 2.10% | |||||||
Minimum [Member] | Base Rate [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Leverage ratio | 1.10% | |||||||
Minimum [Member] | Unsecured Credit Facility [Member] | Libor Rate [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Leverage ratio | 2.10% | 2.10% | 2.10% | |||||
Minimum [Member] | Unsecured Credit Facility [Member] | Base Rate [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Leverage ratio | 1.10% | 1.10% | 1.10% | |||||
Maximum [Member] | Libor Rate [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Leverage ratio | 2.85% | |||||||
Maximum [Member] | Base Rate [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Leverage ratio | 1.85% | |||||||
Maximum [Member] | Unsecured Credit Facility [Member] | Libor Rate [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Leverage ratio | 2.85% | 2.85% | 2.85% | |||||
Maximum [Member] | Unsecured Credit Facility [Member] | Base Rate [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Leverage ratio | 1.85% | 1.85% | 1.85% | |||||
Senior Notes [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Senior notes due | 2022 | |||||||
Interest rate | 5.88% | 5.88% | 5.88% |
Credit_Facilities_and_Mortgage3
Credit Facilities and Mortgage Notes Payable (Secured Credit Facility Narrative) (Details) (USD $) | 0 Months Ended | 12 Months Ended | 0 Months Ended | ||
In Millions, unless otherwise specified | Feb. 08, 2012 | Dec. 31, 2013 | Feb. 08, 2013 | Sep. 30, 2014 | Dec. 31, 2011 |
Interest Rate Cap [Member] | |||||
Debt Instrument [Line Items] | |||||
Derivative instruments, notional amount | $150 | ||||
Interest rate, description | one month LIBOR | ||||
Interest rate cap derivative contract effective date | 8-Feb-12 | ||||
Interest rate cap derivative contract cap rate | 2.05% | ||||
Interest Rate Swap [Member] | |||||
Debt Instrument [Line Items] | |||||
Derivative instruments, notional amount | 150 | ||||
Interest rate, description | one month LIBOR | ||||
Interest rate cap derivative contract effective date | 8-Feb-13 | ||||
Derivative maturity date | 28-Sep-14 | ||||
Interest rate swap derivative contract interest rate | 0.58% | ||||
Term Loan [Member] | |||||
Debt Instrument [Line Items] | |||||
Credit facility maximum borrowing capacity | 225 | 150 | |||
Revolving Credit Facility [Member] | |||||
Debt Instrument [Line Items] | |||||
Credit facility maximum borrowing capacity | 350 | 410 | |||
Secured Credit Facility [Member] | |||||
Debt Instrument [Line Items] | |||||
Credit facility agreement date | 28-Sep-10 | ||||
Credit facility maximum borrowing capacity | 125 | 170 | |||
Increase in Maximum borrowing facility of line of credit | 270 | ||||
Amended and extended credit facility | 440 | ||||
Possible increase in borrowing capacity due to accordion feature | 100 | ||||
Increased borrowing capacity after considering accordion feature | 540 | ||||
Secured Credit Facility [Member] | Term Loan [Member] | |||||
Debt Instrument [Line Items] | |||||
Amended and extended credit facility | 125 | ||||
Secured Credit Facility [Member] | Revolving Credit Facility [Member] | |||||
Debt Instrument [Line Items] | |||||
Amended and extended credit facility | $315 |
Credit_Facilities_and_Mortgage4
Credit Facilities and Mortgage Notes Payable (Senior Notes) (Details) (USD $) | 12 Months Ended | 0 Months Ended | 2 Months Ended | 9 Months Ended | |
Dec. 31, 2013 | Dec. 14, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | |
Debt Instrument [Line Items] | |||||
Interest rate | 9.00% | ||||
Notes maturity date | 31-Dec-13 | ||||
Term Loan [Member] | |||||
Debt Instrument [Line Items] | |||||
Notes maturity date | 17-Dec-19 | ||||
Unsecured Credit Facility [Member] | Qualitytech, LP [Member] | |||||
Debt Instrument [Line Items] | |||||
Unsecured term loan outstanding | 75,000,000 | $75,000,000 | $75,000,000 | ||
Senior Notes [Member] | |||||
Debt Instrument [Line Items] | |||||
Interest rate | 5.88% | 5.88% | 5.88% | ||
Senior notes due | 2022 | ||||
Senior Notes [Member] | Qualitytech, LP [Member] | |||||
Debt Instrument [Line Items] | |||||
Aggregate principal amount | 300,000,000 | $300,000,000 | $300,000,000 | ||
Interest rate | 5.88% | 5.88% | 5.88% | ||
Senior notes due | 2022 | 2022 | |||
Notes maturity date | 1-Aug-22 | ||||
Percentage of issued price equal to face value | 99.21% | 99.21% | 99.21% | ||
Notes issuance date | 23-Jul-14 |
Credit_Facilities_and_Mortgage5
Credit Facilities and Mortgage Notes Payable (Richmond Credit Facility Narrative) (Details) (USD $) | 9 Months Ended | 12 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Jan. 31, 2013 |
Debt Instrument [Line Items] | ||||
Line of credit facility weighted average interest rate outstanding percentage | 2.53% | |||
Richmond Credit Facility [Member] | ||||
Debt Instrument [Line Items] | ||||
Credit facility maximum borrowing capacity | $120 | |||
Credit facility, maturity date | 30-Jun-19 | 18-Dec-15 | ||
Increased borrowing capacity after considering accordion feature | 200 | |||
Line of credit facility weighted average interest rate outstanding percentage | 2.25% | |||
Maximum [Member] | Libor Rate [Member] | ||||
Debt Instrument [Line Items] | ||||
Leverage ratio | 2.85% | |||
Maximum [Member] | Libor Rate [Member] | Richmond Credit Facility [Member] | ||||
Debt Instrument [Line Items] | ||||
Leverage ratio | 2.85% | |||
Maximum [Member] | Base Rate [Member] | ||||
Debt Instrument [Line Items] | ||||
Leverage ratio | 1.85% | |||
Maximum [Member] | Base Rate [Member] | Richmond Credit Facility [Member] | ||||
Debt Instrument [Line Items] | ||||
Leverage ratio | 1.85% | |||
Minimum [Member] | Libor Rate [Member] | ||||
Debt Instrument [Line Items] | ||||
Leverage ratio | 2.10% | |||
Minimum [Member] | Libor Rate [Member] | Richmond Credit Facility [Member] | ||||
Debt Instrument [Line Items] | ||||
Leverage ratio | 2.10% | |||
Minimum [Member] | Base Rate [Member] | ||||
Debt Instrument [Line Items] | ||||
Leverage ratio | 1.10% | |||
Minimum [Member] | Base Rate [Member] | Richmond Credit Facility [Member] | ||||
Debt Instrument [Line Items] | ||||
Leverage ratio | 1.10% | |||
Richmond Credit Facility [Member] | ||||
Debt Instrument [Line Items] | ||||
Credit facility maximum borrowing capacity | 80 | 100 | ||
Increased borrowing capacity after considering accordion feature | $125 | |||
Credit facility base for variable interest rate spread rate | 4.00% | |||
Credit facility base for variable interest rate effective rate | 4.16% | |||
Debt instrument extension period for maturity | 1 year | |||
Richmond Credit Facility [Member] | Maximum [Member] | ||||
Debt Instrument [Line Items] | ||||
Credit facility base for variable interest rate spread rate | 4.50% | |||
Richmond Credit Facility [Member] | Minimum [Member] | ||||
Debt Instrument [Line Items] | ||||
Credit facility base for variable interest rate spread rate | 4.00% |
Credit_Facilities_and_Mortgage6
Credit Facilities and Mortgage Notes Payable (Atlanta-Metro Equipment Loan Narrative) (Details) (USD $) | 12 Months Ended | 1 Months Ended | 9 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2013 | Apr. 30, 2010 | Sep. 30, 2014 | Apr. 09, 2010 |
Debt Instrument [Line Items] | ||||
Loan agreement interest rate | 9.00% | |||
Member advances, maturity date | 31-Dec-13 | |||
Atlanta-Metro Equipment Loan [Member] | ||||
Debt Instrument [Line Items] | ||||
Loan agreement amount of loan | $25 | |||
Loan agreement interest rate | 6.85% | |||
Atlanta Metro equipment loan agreement aggregate term of loan | 10 years | 10 years | ||
Member advances, maturity date | 1-Jun-20 | 1-Jun-20 |
Credit_Facilities_and_Mortgage7
Credit Facilities and Mortgage Notes Payable (Miami Loan Narrative) (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Mar. 31, 2008 |
In Millions, unless otherwise specified | |||
Debt Instrument [Line Items] | |||
Interest rate | 9.00% | ||
Miami Loan [Member] | |||
Debt Instrument [Line Items] | |||
Loan agreement amount of loan | $32.80 | ||
Interest rate | 7.00% |
Credit_Facilities_and_Mortgage8
Credit Facilities and Mortgage Notes Payable (Atlanta-Suwanee Land Loan Narrative) (Details) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2011 |
Debt Instrument [Line Items] | ||
Interest rate | 9.00% | |
Member advances, maturity date | 31-Dec-13 | |
Atlanta-Suwanee Land Loan [Member] | ||
Debt Instrument [Line Items] | ||
Loan agreement amount of loan | $1.60 | |
Interest rate | 10.00% | |
Member advances, maturity date | 26-Sep-13 |
Credit_Facilities_and_Mortgage9
Credit Facilities and Mortgage Notes Payable (Lenexa Loan Narrative) (Details) (USD $) | 12 Months Ended | 1 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2013 | 31-May-13 | Jun. 30, 2011 |
Debt Instrument [Line Items] | |||
Interest rate | 9.00% | ||
Member advances, maturity date | 31-Dec-13 | ||
Lenexa Loan [Member] | |||
Debt Instrument [Line Items] | |||
Loan agreement amount of loan | $2.80 | ||
Interest rate | 5.43% | ||
Member advances, maturity date | 26-May-13 |
Recovered_Sheet1
Credit Facilities and Mortgage Notes Payable (Santa Clara Bridge Loan Narrative) (Details) (USD $) | 1 Months Ended | 12 Months Ended |
In Millions, unless otherwise specified | Nov. 30, 2012 | Dec. 31, 2013 |
Debt Instrument [Line Items] | ||
Member advances, maturity date | 31-Dec-13 | |
Santa Clara Bridge Loan [Member] | ||
Debt Instrument [Line Items] | ||
Loan agreement amount of loan | $50 | |
Interest rate description | LIBOR plus 3.50% | |
Debt instrument variable interest rate percentage | 3.50% | |
Member advances, maturity date | 1-May-13 |
Recovered_Sheet2
Credit Facilities and Mortgage Notes Payable (Dallas Note Narrative) (Details) (USD $) | 12 Months Ended |
In Millions, unless otherwise specified | Dec. 31, 2013 |
Debt Instrument [Line Items] | |
Member advances, maturity date | 31-Dec-13 |
Dallas Note [Member] | |
Debt Instrument [Line Items] | |
Weighted average interest rate for debt | 3.73% |
Loan agreement amount of loan | 10.25 |
Dallas Note [Member] | Minimum [Member] | |
Debt Instrument [Line Items] | |
Weighted average interest rate for debt | 2.50% |
Dallas Note [Member] | Maximum [Member] | |
Debt Instrument [Line Items] | |
Weighted average interest rate for debt | 10.00% |
Recovered_Sheet3
Credit Facilities and Mortgage Notes Payable (Outstanding Debt Excluding Capital Leases) (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | |||
Debt Instrument [Line Items] | |||
Outstanding debt | $581,846 | $345,339 | $487,791 |
Unsecured Credit Facility [Member] | |||
Debt Instrument [Line Items] | |||
Outstanding debt | 197,000 | 256,500 | |
Senior Notes Net of Discount [Member] | |||
Debt Instrument [Line Items] | |||
Outstanding debt | 297,671 | ||
Secured Credit Facility [Member] | |||
Debt Instrument [Line Items] | |||
Outstanding debt | 316,500 | ||
Richmond Credit Facility [Member] | |||
Debt Instrument [Line Items] | |||
Outstanding debt | 70,000 | 70,000 | 70,000 |
Atlanta-Metro Equipment Loan [Member] | |||
Debt Instrument [Line Items] | |||
Outstanding debt | 17,175 | 18,839 | 20,931 |
Miami Loan [Member] | |||
Debt Instrument [Line Items] | |||
Outstanding debt | 26,048 | ||
Atlanta-Suwanee Land Loan [Member] | |||
Debt Instrument [Line Items] | |||
Outstanding debt | 1,600 | ||
Lenexa Loan [Member] | |||
Debt Instrument [Line Items] | |||
Outstanding debt | 2,712 | ||
Santa Clara Bridge Loan [Member] | |||
Debt Instrument [Line Items] | |||
Outstanding debt | $50,000 |
Recovered_Sheet4
Credit Facilities and Mortgage Notes Payable (Annual Remaining Principal Payment) (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Credit Facilities and Mortgage Notes Payable [Abstract] | ||
2014 | $574 | $2,239 |
2015 | 2,397 | 72,397 |
2016 | 2,567 | 2,567 |
2017 | 49,748 | 34,248 |
2018 | 152,943 | 227,943 |
Thereafter | 375,945 | 5,945 |
Total | $584,175 | $345,339 |
Interest_Rate_Derivative_Instr1
Interest Rate Derivative Instruments (Narrative) (Details) (USD $) | 3 Months Ended | 9 Months Ended | 0 Months Ended | 3 Months Ended | 12 Months Ended | ||||||
Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Feb. 08, 2012 | Feb. 08, 2013 | Sep. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Feb. 29, 2012 | |
Derivative [Line Items] | |||||||||||
Unrealized gains or losses on cash flow hedge derivative effective portion | $0 | $200,000 | |||||||||
Interest expense related to payments on interest rate swaps | 5,410,000 | 2,049,000 | 9,683,000 | ||||||||
Interest Rate Cap [Member] | |||||||||||
Derivative [Line Items] | |||||||||||
Derivative inception date | 8-Feb-12 | ||||||||||
Derivative instruments, notional amount | 150,000,000 | ||||||||||
Capped LIBOR rate | 2.05% | ||||||||||
Interest Rate Swap [Member] | |||||||||||
Derivative [Line Items] | |||||||||||
Derivative inception date | 8-Feb-13 | ||||||||||
Derivative maturity date | 28-Sep-14 | ||||||||||
Derivative instruments, notional amount | 150,000,000 | ||||||||||
Interest expense related to payments on interest rate swaps | 200,000 | 100,000 | 400,000 | 500,000 | 500,000 | 500,000 | 4,800,000 | ||||
Interest Rate Swap [Member] | Fair Value Measurements, Level 2 [Member] | |||||||||||
Derivative [Line Items] | |||||||||||
Interest rate swap liability recorded at fair value | 0 | 500,000 | 0 | 500,000 | 800,000 | ||||||
Cash Flow Hedging [Member] | |||||||||||
Derivative [Line Items] | |||||||||||
Unrealized gains or losses on cash flow hedge derivative effective portion | 300,000 | 800,000 | |||||||||
Cash Flow Hedging [Member] | Interest Rate Cap [Member] | |||||||||||
Derivative [Line Items] | |||||||||||
Derivative instruments, notional amount | 50,000,000 | 50,000,000 | |||||||||
Cash Flow Hedging [Member] | Interest Rate Cap [Member] | LIBOR [Member] | |||||||||||
Derivative [Line Items] | |||||||||||
Capped LIBOR rate | 3.00% | 3.00% | |||||||||
Cash Flow Hedging [Member] | Interest Rate Swap [Member] | |||||||||||
Derivative [Line Items] | |||||||||||
Derivative inception date | 8-Feb-12 | ||||||||||
Derivative maturity date | 28-Sep-14 | ||||||||||
Derivative instruments, notional amount | $150,000,000 | $150,000,000 |
Member_Advances_and_Notes_Paya1
Member Advances and Notes Payable (Narrative) (Details) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2013 | 1-May-13 |
Member Advances and Related Party Transactions [Abstract] | ||
Amended and restated loan from related party original principal amount of loan | $20.40 | |
Member advances, maturity date | 31-Dec-13 | |
Interest rate | 9.00% | |
Amount received in exchange of option exercised in respect of member advances | 10 | |
Cancellation of outstanding members advance on exercise of option | $10 |
Partners_Capital_Equity_and_In2
Partners' Capital, Equity and Incentive Compensation Plans (Narrative) (Details) (USD $) | 0 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | 0 Months Ended | 1 Months Ended | 0 Months Ended | 1 Months Ended | 12 Months Ended | 1 Months Ended | 6 Months Ended | 1 Months Ended | 0 Months Ended | |||||||||
Jan. 07, 2014 | Nov. 20, 2013 | Aug. 14, 2013 | Sep. 30, 2014 | Jun. 30, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | Jan. 07, 2015 | Oct. 07, 2014 | Feb. 13, 2014 | Jan. 07, 2014 | Jan. 07, 2015 | Oct. 07, 2014 | Oct. 07, 2014 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Apr. 30, 2010 | Oct. 31, 2009 | Sep. 28, 2012 | Sep. 30, 2013 | Oct. 15, 2013 | |
security | item | |||||||||||||||||||||
Partners Capital And Distributions [Line Items] | ||||||||||||||||||||||
Number of classes of partnership units outstanding | 3 | |||||||||||||||||||||
Common stock, shares issued | 29,016,774 | 29,016,774 | 28,972,774 | 28,972,774 | 28,972,774 | 28,972,774 | 1,000 | |||||||||||||||
Equity based compensation expense unrecognized | $7,300,000 | $7,300,000 | $8,300,000 | |||||||||||||||||||
Equity based compensation expense vesting period | 4 years | 3 years | ||||||||||||||||||||
Equity based compensation awards intrinsic value | 20,900,000 | 20,900,000 | 9,000,000 | |||||||||||||||||||
Aggregate distribution made to stockholders and partners | 9,000,000 | 7,600,000 | 10,700,000 | 10,700,000 | ||||||||||||||||||
Dividend paid to common stockholders | $0.24 | $0.29 | $0.29 | |||||||||||||||||||
Dividends payable, date declared | 20-Nov-13 | |||||||||||||||||||||
Cash dividend per common share | $0.24 | |||||||||||||||||||||
Dividends payable, date of record | 20-Dec-13 | |||||||||||||||||||||
Subsequent Event [Member] | ||||||||||||||||||||||
Partners Capital And Distributions [Line Items] | ||||||||||||||||||||||
Aggregate distribution made to stockholders and partners | 9,000,000 | 10,500,000 | ||||||||||||||||||||
Dividend paid to common stockholders | $0.24 | |||||||||||||||||||||
Partnership distribution per unit | $0.24 | |||||||||||||||||||||
Dividends payable, date paid | 7-Jan-15 | 7-Oct-14 | 8-Apr-14 | 7-Jan-14 | 7-Jan-15 | 7-Oct-14 | ||||||||||||||||
Cash dividend per common share | $0.29 | $0.29 | $0.29 | $0.29 | $0.29 | $0.29 | ||||||||||||||||
Dividends payable, date of record | 19-Dec-14 | 19-Sep-14 | 20-Mar-14 | 19-Dec-14 | 19-Sep-14 | |||||||||||||||||
Class O Units [Member] | ||||||||||||||||||||||
Partners Capital And Distributions [Line Items] | ||||||||||||||||||||||
Number of units, granted | 224,244 | |||||||||||||||||||||
Number of units, forfeited | 73,440 | |||||||||||||||||||||
Nonvested awards outstanding | 800,000 | 800,000 | 1,100,000 | |||||||||||||||||||
Vested awards outstanding | 600,000 | |||||||||||||||||||||
Weighted average fair value per unit | $3.33 | |||||||||||||||||||||
Class O Units [Member] | Class O LTIP Holders [Member] | ||||||||||||||||||||||
Partners Capital And Distributions [Line Items] | ||||||||||||||||||||||
Aggregate distribution made to stockholders and partners | 200,000 | |||||||||||||||||||||
Class RS Units [Member] | ||||||||||||||||||||||
Partners Capital And Distributions [Line Items] | ||||||||||||||||||||||
Nonvested awards outstanding | 100,000 | 100,000 | 100,000 | |||||||||||||||||||
Vested awards outstanding | 100,000 | |||||||||||||||||||||
Weighted average fair value per unit | $7.15 | |||||||||||||||||||||
Common Class B [Member] | ||||||||||||||||||||||
Partners Capital And Distributions [Line Items] | ||||||||||||||||||||||
Number of votes per share | 50 | 50 | 50 | |||||||||||||||||||
Common Class A [Member] | ||||||||||||||||||||||
Partners Capital And Distributions [Line Items] | ||||||||||||||||||||||
Common stock, shares issued | 14,087,500 | 14,087,500 | ||||||||||||||||||||
Number of RS units converted | 5,000 | |||||||||||||||||||||
Option to purchase common stock forfeited | 2,500 | |||||||||||||||||||||
Chief Executive Officer [Member] | Common Class B [Member] | ||||||||||||||||||||||
Partners Capital And Distributions [Line Items] | ||||||||||||||||||||||
Percentage of operating partnership unit exchanged | 2.00% | 2.00% | ||||||||||||||||||||
Qualitytech, LP [Member] | ||||||||||||||||||||||
Partners Capital And Distributions [Line Items] | ||||||||||||||||||||||
Number of classes of partnership units outstanding | 3 | 5 | ||||||||||||||||||||
Partnership distribution per unit | $0.24 | $0.29 | $0.29 | |||||||||||||||||||
Qualitytech, LP [Member] | Chad L. Williams and Mark D. Waddington [Member] | ||||||||||||||||||||||
Partners Capital And Distributions [Line Items] | ||||||||||||||||||||||
Number of units outstanding | 7,250,000 | 7,250,000 | 7,250,000 | |||||||||||||||||||
Qualitytech, LP [Member] | General Atlantic REIT, Inc. [Member] | ||||||||||||||||||||||
Partners Capital And Distributions [Line Items] | ||||||||||||||||||||||
General Atlantic's ownership interest | 62.00% | |||||||||||||||||||||
Qualitytech, LP [Member] | Class C Units [Member] | ||||||||||||||||||||||
Partners Capital And Distributions [Line Items] | ||||||||||||||||||||||
Liquidation preference per share | $20 | |||||||||||||||||||||
Cumulative preferred return for income allocation | 9.00% | |||||||||||||||||||||
Qualitytech, LP [Member] | Class C Units [Member] | General Atlantic REIT, Inc. [Member] | ||||||||||||||||||||||
Partners Capital And Distributions [Line Items] | ||||||||||||||||||||||
Number of units issued | 1,250,000 | 7,500,000 | 2,300,000 | |||||||||||||||||||
Warrant to purchase units | 1,250,000 | |||||||||||||||||||||
Exercise price of warrants | $20 | |||||||||||||||||||||
General Atlantic's ownership interest | 50.00% | |||||||||||||||||||||
Capital contributions | 25,000,000 | 150,000,000 | ||||||||||||||||||||
Qualitytech, LP [Member] | Class C and Class D Units [Member] | General Atlantic REIT, Inc. [Member] | ||||||||||||||||||||||
Partners Capital And Distributions [Line Items] | ||||||||||||||||||||||
Number of units outstanding | 14,640,000 | 14,640,000 | 14,640,000 | |||||||||||||||||||
Qualitytech, LP [Member] | Class D Units [Member] | ||||||||||||||||||||||
Partners Capital And Distributions [Line Items] | ||||||||||||||||||||||
Liquidation preference per share | $25 | |||||||||||||||||||||
Qualitytech, LP [Member] | Class D Units [Member] | General Atlantic REIT, Inc. [Member] | ||||||||||||||||||||||
Partners Capital And Distributions [Line Items] | ||||||||||||||||||||||
Number of units issued | 1,200,000 | 1,200,000 | 1,200,000 | 2,400,000 | ||||||||||||||||||
Capital contributions | 30,000,000 | 60,000,000 | ||||||||||||||||||||
Qualitytech, LP [Member] | Common Class A [Member] | ||||||||||||||||||||||
Partners Capital And Distributions [Line Items] | ||||||||||||||||||||||
Number of RS units converted | 21,250 | |||||||||||||||||||||
Qualitytech, LP [Member] | Common Class A [Member] | Chad L. Williams and Mark D. Waddington [Member] | ||||||||||||||||||||||
Partners Capital And Distributions [Line Items] | ||||||||||||||||||||||
Number of units issued | 7,500,000 | |||||||||||||||||||||
Stock repurchased, shares | 250,000 | |||||||||||||||||||||
Stock repurchased | 5,000,000 | |||||||||||||||||||||
Qualitytech, LP [Member] | Certain Directors and Officers [Member] | Class D Units [Member] | ||||||||||||||||||||||
Partners Capital And Distributions [Line Items] | ||||||||||||||||||||||
Number of units issued | 80,000 | 80,000 | 80,000 | |||||||||||||||||||
Capital contributions | 2,000,000 | |||||||||||||||||||||
Restricted Class A Common Stock [Member] | ||||||||||||||||||||||
Partners Capital And Distributions [Line Items] | ||||||||||||||||||||||
Nonvested awards outstanding | 200,000 | 200,000 | ||||||||||||||||||||
Options to purchase Class A common stock [Member] | ||||||||||||||||||||||
Partners Capital And Distributions [Line Items] | ||||||||||||||||||||||
Nonvested awards outstanding | 600,000 | 600,000 | ||||||||||||||||||||
2013 Equity Incentive Plan [Member] | ||||||||||||||||||||||
Partners Capital And Distributions [Line Items] | ||||||||||||||||||||||
Authorized shares to be issued under the plan | 1,750,000 | 1,750,000 | 1,750,000 | |||||||||||||||||||
2013 Equity Incentive Plan [Member] | Common Class A [Member] | ||||||||||||||||||||||
Partners Capital And Distributions [Line Items] | ||||||||||||||||||||||
Common stock, shares issued | 108,629 | |||||||||||||||||||||
Option to purchase common stock shares | 370,410 |
Partners_Capital_Equity_and_In3
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) (USD $) | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | ||
2013 Equity Incentive Plan [Member] | Options [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Beginning balance, Weighted average fair value | $3.50 | |||||
Weighted average fair value, Granted | $4.96 | $3.50 | ||||
Weighted average fair value, Cancelled/Expired | $3.52 | $3.52 | ||||
Ending balance, Weighted average fair value | $4.25 | $3.50 | ||||
Beginning balance, Options Outstanding | 367,910 | |||||
Options, Granted | 238,039 | |||||
Options, Cancelled/Expired | -14,000 | |||||
Ending balance, Options Outstanding | 591,949 | 367,910 | ||||
Beginning balance, Weighted average exercise price options outstanding | $21 | |||||
Weighted average exercise price options outstanding, Granted | $25.59 | $21 | ||||
Weighted average exercise price options outstanding, Cancelled/Expired | $21 | |||||
Ending balance, Weighted average exercise price options outstanding | $22.85 | $21 | ||||
2013 Equity Incentive Plan [Member] | Restricted Stock [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Beginning balance, Number of units | 108,629 | |||||
Number of units, granted | 44,000 | |||||
Ending balance, Number of units | 152,629 | 108,629 | ||||
Beginning balance, Weighted average exercise price units | $21 | |||||
Weighted average exercise price units, Granted | $25.51 | |||||
Ending balance, Weighted average exercise price units | $22.30 | $21 | ||||
Beginning balance, Options Outstanding | 108,629 | |||||
Options, Granted | 108,629 | |||||
Ending balance, Options Outstanding | 108,629 | |||||
Beginning balance, Weighted average exercise price options outstanding | $21 | |||||
Weighted average exercise price options outstanding, Granted | $21 | |||||
Ending balance, Weighted average exercise price options outstanding | $21 | |||||
Class O Units [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of units, granted | 224,244 | |||||
Ending balance, Number of units | 800,000 | 1,100,000 | ||||
Class O Units [Member] | 2010 Equity Incentive Plan [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Beginning balance, Number of units | 1,622,747 | 1,471,943 | 699,368 | 592,068 | ||
Number of units, granted | 224,244 | 908,925 | 114,676 | |||
Number of units, Cancelled/Expired | -75,454 | -73,440 | -136,350 | -7,376 | ||
Ending balance, Number of units | 1,547,293 | 1,622,747 | 1,471,943 | 699,368 | ||
Beginning balance, Weighted average exercise price units | $23.44 | $23.09 | $20 | $20 | ||
Weighted average exercise price units, Granted | $25 | $25 | $20 | |||
Weighted average exercise price units, Cancelled/Expired | $23.21 | |||||
Ending balance, Weighted average exercise price units | $23.45 | $23.44 | $23.09 | $20 | ||
Beginning balance, Weighted average fair value | $3.84 | $2.84 | $4.38 | $4.41 | ||
Weighted average fair value, Granted | $10.62 | $1.99 | $4.18 | |||
Weighted average fair value, Cancelled/Expired | $5.48 | $5.31 | $4.41 | $4.41 | ||
Ending balance, Weighted average fair value | $3.76 | $3.84 | $2.84 | $4.38 | ||
Class RS Units [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Ending balance, Number of units | 100,000 | 100,000 | ||||
Class RS Units [Member] | 2013 Equity Incentive Plan [Member] | Options [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Options, Granted | 370,410 | |||||
Options, Cancelled/Expired | -2,500 | |||||
Ending balance, Options Outstanding | 367,910 | |||||
Class RS Units [Member] | 2010 Equity Incentive Plan [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Beginning balance, Number of units | 173,750 | 178,750 | 50,000 | 50,000 | ||
Number of units, granted | 150,000 | |||||
Number of units, Released from restriction | -90,437 | [1] | -5,000 | -21,250 | ||
Ending balance, Number of units | 83,313 | 173,750 | 178,750 | 50,000 | ||
Beginning balance, Weighted average exercise price units | $21.86 | |||||
Weighted average exercise price units, Released from restriction | $24.93 | [1] | ||||
Ending balance, Weighted average exercise price units | $23.65 | $21.86 | ||||
[1] | This represents Class RS units that upon vesting have converted to Operating Partnership units. |
Partners_Capital_Equity_and_In4
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) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Fair value of restricted stock granted | $21 | ||||
Expected term (years) | 4 years | 4 years | |||
Expected volatility | 33.00% | 33.00% | 55.00% | 60.00% | |
Expected dividend yield | 5.50% | 0.00% | 0.00% | ||
Expected risk-free interest rates | 0.17% | 0.61% | |||
Minimum [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Fair value of restricted stock granted | 25.51 | 25.51 | |||
Fair value of options granted | 4.94 | 4.94 | $3.45 | ||
Expected term (years) | 5 years 6 months | 5 years 6 months | 5 years 6 months | ||
Expected volatility | 32.00% | ||||
Expected dividend yield | 4.02% | 4.02% | |||
Expected risk-free interest rates | 1.70% | 1.70% | 1.40% | ||
Maximum [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Fair value of restricted stock granted | 28.82 | 28.82 | |||
Fair value of options granted | 5.98 | 5.98 | $3.52 | ||
Expected term (years) | 6 years 1 month 6 days | 6 years 1 month 6 days | 7 years | ||
Expected volatility | 40.00% | ||||
Expected dividend yield | 4.55% | 4.55% | |||
Expected risk-free interest rates | 1.90% | 1.90% | 1.80% | ||
Class O Units [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Fair value of restricted stock granted | 2.94 | ||||
Class O Units [Member] | Minimum [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Fair value of restricted stock granted | $10.26 | 1.79 | |||
Class O Units [Member] | Maximum [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Fair value of restricted stock granted | $10.92 | 2.32 | |||
Class RS Units [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Fair value of restricted stock granted | 7.15 | 6.95 |
Partners_Capital_Equity_and_In5
Partners' Capital, Equity and Incentive Compensation Plans (Summary of Information About Awards Outstanding) (Details) (USD $) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2014 | Dec. 31, 2013 | |
Operating Partnership Awards Outstanding [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Awards Outstanding | 1,630,606 | 1,796,497 |
QTS Realty Trust, Inc Awards Outstanding [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Awards Outstanding | 744,578 | 476,539 |
QTS Realty Trust, Inc Awards Outstanding [Member] | Restricted Stock [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Awards Outstanding | 152,629 | 108,629 |
Remaining term of awards | 3 years | 4 years |
QTS Realty Trust, Inc Awards Outstanding [Member] | Options to purchase Class A common stock [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Exercise price | 21 | |
Lower limit of exercise price | 21 | |
Upper limit of exercise price | 28.82 | |
Awards Outstanding | 591,949 | 367,910 |
Remaining term of awards | 1 year | 3 years |
Class O Units [Member] | Operating Partnership Awards Outstanding [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Lower limit of exercise price | 20 | 20 |
Upper limit of exercise price | 25 | 25 |
Awards Outstanding | 1,547,293 | 1,622,747 |
Remaining term of awards | 2 years | 3 years |
Class RS Units [Member] | Operating Partnership Awards Outstanding [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Awards Outstanding | 83,313 | 173,750 |
Remaining term of awards | 2 years | 3 years |
Related_Party_Transactions_Sum
Related Party Transactions (Summary of Related Party Transactions) (Details) (USD $) | 12 Months Ended | 3 Months Ended | 9 Months Ended | ||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Related Party Transaction [Line Items] | |||||||
Tax, utility, insurance and other reimbursement | $336 | $234 | $248 | ||||
Rent expense | 977 | 572 | 572 | ||||
Capital assets acquired | 625 | 568 | 1,807 | ||||
Total | 1,938 | 1,374 | 2,627 | ||||
Affiliated Entity [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Tax, utility, insurance and other reimbursement | 296 | 18 | 464 | 121 | |||
Rent expense | 253 | 264 | 772 | 712 | |||
Capital assets acquired | 86 | 126 | 160 | 141 | |||
Total | $635 | $408 | $1,396 | $974 |
Employee_Benefit_Plan_Narrativ
Employee Benefit Plan (Narrative) (Details) (USD $) | 12 Months Ended | 1 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Jan. 31, 2014 |
Defined Benefit Plan Disclosure [Line Items] | ||||
Employer Contribution on employee benefit plan | $0.30 | $0.30 | $0.20 | |
First 4% of Employee Contribution [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Employer contribution rate as a percentage of employee contribution | 25.00% | |||
Percentage contribution from employees | 4.00% | |||
Subsequent Event [Member] | Second 2% of Employee Contribution [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Employer contribution rate as a percentage of employee contribution | 50.00% | |||
Percentage contribution from employees | 2.00% | |||
Subsequent Event [Member] | Second 2% of Employee Contribution [Member] | Maximum [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Percentage contribution from employees | 6.00% |
Noncontrolling_Interest_Narrat
Noncontrolling Interest (Narrative) (Details) | 0 Months Ended | 1 Months Ended | ||
Nov. 02, 2014 | Nov. 30, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | |
Quality Tech LP ownership percentage in operating partnership | 21.20% | 21.20% | ||
Subsequent Event [Member] | ||||
Stock conversion ratio | 1 | 1 |
Earnings_per_Share_Summary_of_
Earnings per Share (Summary of Basic and Diluted Earnings per Share) (Details) (USD $) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||||
In Thousands, except Share data, unless otherwise specified | Oct. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | ||||
Earnings per Share [Abstract] | ||||||||
Net income available to common stockholders | $3,154 | [1] | $3,157 | $3,154 | $10,445 | |||
Weighted average shares outstanding-basic | 29,016,774 | 28,972,774 | 29,006,620 | |||||
Net income per share-basic | $0.11 | $0.11 | $0.11 | $0.36 | ||||
Net income | $4,006 | $4,002 | $13,255 | |||||
Weighted average shares outstanding-diluted | 37,251,769 | [2] | 36,794,215 | [3] | 37,039,603 | [2] | ||
Net income per share-diluted | $0.11 | [1],[4] | $0.11 | $0.11 | $0.36 | |||
[1] | ||||||||
[2] | Includes 8,104 and 7,939 units of the Operating Partnership as of the three and nine months ended September 30, 2014, respectively. | |||||||
[3] | Includes 7,821 shares of the Operating Partnership | |||||||
[4] | Net income per share attributable to QTS Realty Trust, Inc. for the period OctoberB 15, 2013 through DecemberB 31, 2013. |
Earnings_per_Share_Summary_of_1
Earnings per Share (Summary of Basic and Diluted Earnings per Share Footnote) (Details) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | ||||
Earnings per Share [Abstract] | ||||||
Weighted average shares outstanding-diluted | 37,251,769 | [1] | 36,794,215 | [2] | 37,039,603 | [1] |
[1] | Includes 8,104 and 7,939 units of the Operating Partnership as of the three and nine months ended September 30, 2014, respectively. | |||||
[2] | Includes 7,821 shares of the Operating Partnership |
Operating_Leases_as_Lessee_Nar
Operating Leases, as Lessee (Narrative) (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
property | |||
Operating Leased Assets [Line Items] | |||
Number of data center facilities on lease | 2 | ||
Rent expense under operating leases | $5.80 | $6.50 | $6.60 |
Capitalized rent | $0 | $0 | $0.20 |
Santa Clara [Member] | |||
Operating Leased Assets [Line Items] | |||
Sublease expiration period | 2052-10 |
Operating_Leases_as_Lessee_Fut
Operating Leases, as Lessee (Future Non-cancellable Minimum Rental Payments Required Under Operating Leases and/or Licenses) (Details) (USD $) | Dec. 31, 2013 |
In Thousands, unless otherwise specified | |
Customer Leases, as Lessor [Abstract] | |
2014 | $5,464 |
2015 | 5,470 |
2016 | 5,545 |
2017 | 5,618 |
2018 | 5,618 |
Thereafter | 67,547 |
Total | $95,262 |
Customer_Leases_as_Lessor_Futu
Customer Leases, as Lessor (Future Minimum Lease Payments to be Received Under Non-Cancelable Operating Customer Leases) (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Customer Leases, as Lessor [Abstract] | ||
2014 (October-December) | $50,029 | $149,158 |
2015 | 186,248 | 121,105 |
2016 | 166,060 | 93,411 |
2017 | 130,052 | 70,203 |
2018 | 104,754 | 54,212 |
Thereafter | 278,147 | 56,981 |
Total | $915,290 | $545,070 |
Fair_Value_of_Financial_Instru1
Fair Value of Financial Instruments (Narrative) (Details) (Fair Value Measurements, Level 2 [Member], USD $) | Sep. 30, 2014 |
In Millions, unless otherwise specified | |
Atlanta-Metro Equipment Loan [Member] | |
Fair Value Of Financial Instruments [Line Items] | |
Fair value of loan based on current market rates | $17.20 |
Senior Notes [Member] | |
Fair Value Of Financial Instruments [Line Items] | |
Fair value of loan based on current market rates | $290.20 |
Quarterly_Financial_Informatio2
Quarterly Financial Information (Summary of Selected Quarterly Information) (Details) (USD $) | 1 Months Ended | 0 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | 3 Months Ended | 12 Months Ended | ||||||||||
In Thousands, except Per Share data, unless otherwise specified | Oct. 31, 2013 | Oct. 14, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Sep. 30, 2013 | Oct. 14, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | |
Effect of Fourth Quarter Events [Line Items] | |||||||||||||||||||
Revenues | $40,462 | $6,967 | $57,945 | $40,462 | $158,226 | ||||||||||||||
Operating income | 6,203 | 1,143 | 9,913 | 6,203 | 23,592 | ||||||||||||||
Net income (loss) | 4,002 | 445 | 3,157 | 3,154 | 10,445 | ||||||||||||||
Net income available to common stockholders | 3,154 | [1] | 3,157 | 3,154 | 10,445 | ||||||||||||||
Net income per share-basic | $0.11 | $0.11 | $0.11 | $0.36 | |||||||||||||||
Net income per share-diluted | $0.11 | [1],[2] | $0.11 | $0.11 | $0.36 | ||||||||||||||
Historical Predecessor [Member] | |||||||||||||||||||
Effect of Fourth Quarter Events [Line Items] | |||||||||||||||||||
Revenues | 46,020 | 42,940 | 41,498 | 38,173 | 36,254 | 36,689 | 34,643 | 130,458 | 137,425 | 145,759 | 130,396 | ||||||||
Operating income | 7,048 | 6,024 | 5,568 | 4,203 | 3,933 | 6,014 | 1,365 | 18,640 | 19,783 | 15,515 | 18,597 | ||||||||
Net income (loss) | 2,709 | -1,232 | -2,074 | -1,608 | -1,757 | -266 | -6,136 | -597 | -152 | -9,767 | -909 | ||||||||
Qualitytech, LP [Member] | |||||||||||||||||||
Effect of Fourth Quarter Events [Line Items] | |||||||||||||||||||
Revenues | 57,945 | 158,226 | 46,020 | 42,940 | 41,498 | 38,173 | 36,254 | 36,689 | 34,643 | 130,458 | 145,759 | 130,396 | 47,429 | 177,887 | |||||
Operating income | 9,913 | 23,592 | 7,048 | 6,024 | 5,568 | 4,203 | 3,933 | 6,014 | 1,365 | 18,640 | 15,515 | 18,597 | 7,346 | 25,986 | |||||
Net income (loss) | $2,709 | ($1,232) | ($2,074) | ($1,608) | ($1,757) | ($266) | ($6,136) | $4,447 | |||||||||||
[1] | |||||||||||||||||||
[2] | Net income per share attributable to QTS Realty Trust, Inc. for the period OctoberB 15, 2013 through DecemberB 31, 2013. |
Subsequent_Events_Narrative_De
Subsequent Events (Narrative) (Details) (USD $) | 0 Months Ended | 9 Months Ended | 12 Months Ended | 0 Months Ended | 1 Months Ended | |||||||
Nov. 20, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Dec. 14, 2014 | Jan. 07, 2015 | Oct. 07, 2014 | Feb. 13, 2014 | Jan. 07, 2014 | Jan. 07, 2015 | Oct. 07, 2014 | Feb. 28, 2014 | Dec. 17, 2014 | |
Subsequent Event [Line Items] | ||||||||||||
Cash dividend per common share | $0.24 | |||||||||||
Dividends payable, date declared | 20-Nov-13 | |||||||||||
Dividends payable, date of record | 20-Dec-13 | |||||||||||
Payments of dividends | $23,783,000 | |||||||||||
Notes maturity date | 31-Dec-13 | |||||||||||
Unsecured Credit Facility [Member] | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Maximum the credit facility may be increased up until | 600,000,000 | 850,000,000 | ||||||||||
Credit facility maximum borrowing capacity | 560,000,000 | 575,000,000 | 650,000,000 | |||||||||
Richmond Credit Facility [Member] | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Credit facility maximum borrowing capacity | 120,000,000 | |||||||||||
Term Loan [Member] | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Credit facility maximum borrowing capacity | 150,000,000 | 225,000,000 | ||||||||||
Notes maturity date | 17-Dec-19 | |||||||||||
Revolving Credit Facility [Member] | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Credit facility maximum borrowing capacity | 410,000,000 | 350,000,000 | ||||||||||
Notes maturity date | 17-Dec-18 | |||||||||||
Subsequent Event [Member] | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Cash dividend per common share | $0.29 | $0.29 | $0.29 | $0.29 | $0.29 | |||||||
Dividends payable, date of record | 19-Dec-14 | 19-Sep-14 | 20-Mar-14 | 19-Dec-14 | 19-Sep-14 | |||||||
Dividends payable, date paid | 7-Jan-15 | 7-Oct-14 | 8-Apr-14 | 7-Jan-14 | 7-Jan-15 | 7-Oct-14 | ||||||
Payments of dividends | 7,000,000 | |||||||||||
Subsequent Event [Member] | Unsecured Credit Facility [Member] | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Unsecured revolving credit facility | 50,000,000 | |||||||||||
Credit facility maximum borrowing capacity | 400,000,000 | |||||||||||
Subsequent Event [Member] | Partners Capital [Member] | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Payments of dividends | 2,000,000 | |||||||||||
Subsequent Event [Member] | Unsecured Credit Facility [Member] | Richmond Credit Facility [Member] | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Maximum the credit facility may be increased up until | 850,000,000 | |||||||||||
Credit facility maximum borrowing capacity | $650,000,000 |
Schedule_III_Real_Estate_Inves1
Schedule III - Real Estate Investments (Details) (USD $) | 12 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 |
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] | ||||
Initial costs of land | $19,700 | |||
Initial costs of buildings and improvements | 163,600 | |||
Costs capitalized subsequent to acquisition, Land | 10,901 | |||
Costs capitalized subsequent to acquisition, Buildings and improvements | 564,630 | |||
Costs capitalized subsequent to acquisition, Construction in progress | 146,904 | |||
Gross carrying amount, Land | 30,601 | |||
Gross carrying amount, Buildings and improvements | 728,230 | |||
Gross carrying amount, Construction in progress | 146,904 | |||
Accumulated depreciation and amortization | -137,725 | -102,900 | -74,536 | -52,923 |
Owned Properties [Member] | ||||
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] | ||||
Initial costs of land | 19,700 | |||
Initial costs of buildings and improvements | 161,615 | |||
Costs capitalized subsequent to acquisition, Land | 10,901 | |||
Costs capitalized subsequent to acquisition, Buildings and improvements | 542,042 | |||
Costs capitalized subsequent to acquisition, Construction in progress | 146,904 | |||
Gross carrying amount, Land | 30,601 | |||
Gross carrying amount, Buildings and improvements | 703,657 | |||
Gross carrying amount, Construction in progress | 146,904 | |||
Accumulated depreciation and amortization | -128,605 | |||
Owned Properties [Member] | Suwanee, Georgia [Member] | ||||
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] | ||||
Initial costs of land | 1,395 | |||
Initial costs of buildings and improvements | 29,802 | |||
Costs capitalized subsequent to acquisition, Land | 2,126 | |||
Costs capitalized subsequent to acquisition, Buildings and improvements | 96,684 | |||
Costs capitalized subsequent to acquisition, Construction in progress | 3,270 | |||
Gross carrying amount, Land | 3,521 | |||
Gross carrying amount, Buildings and improvements | 126,486 | |||
Gross carrying amount, Construction in progress | 3,270 | |||
Accumulated depreciation and amortization | -34,590 | |||
Date of acquisition | 1-Sep-05 | |||
Owned Properties [Member] | Atlanta, Georgia (Atlanta-Metro) [Member] | ||||
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] | ||||
Initial costs of land | 12,647 | |||
Initial costs of buildings and improvements | 35,473 | |||
Costs capitalized subsequent to acquisition, Land | 2,750 | |||
Costs capitalized subsequent to acquisition, Buildings and improvements | 261,074 | |||
Costs capitalized subsequent to acquisition, Construction in progress | 32,456 | |||
Gross carrying amount, Land | 15,397 | |||
Gross carrying amount, Buildings and improvements | 296,547 | |||
Gross carrying amount, Construction in progress | 32,456 | |||
Accumulated depreciation and amortization | -58,272 | |||
Date of acquisition | 3-Oct-06 | |||
Owned Properties [Member] | Santa Clara, California [Member] | ||||
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] | ||||
Initial costs of buildings and improvements | 15,838 | |||
Costs capitalized subsequent to acquisition, Buildings and improvements | 70,706 | |||
Costs capitalized subsequent to acquisition, Construction in progress | 1,249 | |||
Gross carrying amount, Buildings and improvements | 86,544 | |||
Gross carrying amount, Construction in progress | 1,249 | |||
Accumulated depreciation and amortization | -19,102 | |||
Date of acquisition | 1-Nov-07 | |||
Owned Properties [Member] | Richmond, Virginia [Member] | ||||
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] | ||||
Initial costs of land | 2,000 | |||
Initial costs of buildings and improvements | 11,200 | |||
Costs capitalized subsequent to acquisition, Land | 180 | |||
Costs capitalized subsequent to acquisition, Buildings and improvements | 97,779 | |||
Costs capitalized subsequent to acquisition, Construction in progress | 67,155 | |||
Gross carrying amount, Land | 2,180 | |||
Gross carrying amount, Buildings and improvements | 108,979 | |||
Gross carrying amount, Construction in progress | 67,155 | |||
Accumulated depreciation and amortization | -8,996 | |||
Date of acquisition | 20-Mar-10 | |||
Owned Properties [Member] | Sacramento, California [Member] | ||||
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] | ||||
Initial costs of land | 1,481 | |||
Initial costs of buildings and improvements | 52,753 | |||
Costs capitalized subsequent to acquisition, Buildings and improvements | 88 | |||
Costs capitalized subsequent to acquisition, Construction in progress | 4,273 | |||
Gross carrying amount, Land | 1,481 | |||
Gross carrying amount, Buildings and improvements | 52,841 | |||
Gross carrying amount, Construction in progress | 4,273 | |||
Accumulated depreciation and amortization | -1,403 | |||
Date of acquisition | 21-Dec-12 | |||
Owned Properties [Member] | Dallas, Texas [Member] | ||||
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] | ||||
Initial costs of buildings and improvements | 5,808 | |||
Costs capitalized subsequent to acquisition, Land | 5,808 | |||
Costs capitalized subsequent to acquisition, Buildings and improvements | -5,808 | |||
Costs capitalized subsequent to acquisition, Construction in progress | 38,501 | |||
Gross carrying amount, Land | 5,808 | |||
Gross carrying amount, Construction in progress | 38,501 | |||
Date of acquisition | 8-Feb-13 | |||
Owned Properties [Member] | Miami, Florida [Member] | ||||
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] | ||||
Initial costs of land | 1,777 | |||
Initial costs of buildings and improvements | 6,955 | |||
Costs capitalized subsequent to acquisition, Buildings and improvements | 20,598 | |||
Gross carrying amount, Land | 1,777 | |||
Gross carrying amount, Buildings and improvements | 27,553 | |||
Accumulated depreciation and amortization | -5,662 | |||
Date of acquisition | 6-Mar-08 | |||
Owned Properties [Member] | Lenexa, Kansas [Member] | ||||
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] | ||||
Initial costs of land | 400 | |||
Initial costs of buildings and improvements | 3,100 | |||
Costs capitalized subsequent to acquisition, Land | 37 | |||
Costs capitalized subsequent to acquisition, Buildings and improvements | 198 | |||
Gross carrying amount, Land | 437 | |||
Gross carrying amount, Buildings and improvements | 3,298 | |||
Accumulated depreciation and amortization | -82 | |||
Date of acquisition | 3-Jun-11 | |||
Owned Properties [Member] | Wichita, Kansas [Member] | ||||
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] | ||||
Initial costs of buildings and improvements | 686 | |||
Costs capitalized subsequent to acquisition, Buildings and improvements | 723 | |||
Gross carrying amount, Buildings and improvements | 1,409 | |||
Accumulated depreciation and amortization | -498 | |||
Date of acquisition | 31-Mar-05 | |||
Leased Properties [Member] | ||||
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] | ||||
Initial costs of buildings and improvements | 1,985 | |||
Costs capitalized subsequent to acquisition, Buildings and improvements | 22,588 | |||
Gross carrying amount, Buildings and improvements | 24,573 | |||
Accumulated depreciation and amortization | -9,120 | |||
Leased Properties [Member] | Jersey City, New Jersey [Member] | ||||
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] | ||||
Initial costs of buildings and improvements | 1,985 | |||
Costs capitalized subsequent to acquisition, Buildings and improvements | 21,826 | |||
Gross carrying amount, Buildings and improvements | 23,811 | |||
Accumulated depreciation and amortization | -8,686 | |||
Date of acquisition | 1-Nov-06 | |||
Leased Properties [Member] | Overland Park, Kansas [Member] | ||||
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] | ||||
Costs capitalized subsequent to acquisition, Buildings and improvements | 762 | |||
Gross carrying amount, Buildings and improvements | 762 | |||
Accumulated depreciation and amortization | ($434) |
Schedule_III_Real_Estate_Inves2
Schedule III - Real Estate Investments (Summary of Historical Cost and Accumulated Depreciation) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Property | |||
Balance, beginning of period | $734,828 | $555,586 | $432,889 |
Disposals | -794 | -463 | |
Additions (acquisitions and improvements) | 170,907 | 180,036 | 123,160 |
Balance, end of period | 905,735 | 734,828 | 555,586 |
Accumulated depreciation | |||
Balance, beginning of period | -102,900 | -74,536 | -52,923 |
Disposals | 162 | 46 | |
Additions (depreciation and amortization expense) | -34,825 | -28,526 | -21,659 |
Balance, end of period | ($137,725) | ($102,900) | ($74,536) |
Uncategorized_Items
Uncategorized Items | 10/15/2013 - 12/31/2013 |
USD ($) | |
[qts_AccruedEquityIssuancesCosts] | 364,000 |
[qts_PaymentOfDeferredFinancingCost] | 990,000 |
[us-gaap_CapitalExpendituresIncurredButNotYetPaid] | 39,801,000 |
[us-gaap_CashAndCashEquivalentsPeriodIncreaseDecrease] | -2,516,000 |
[us-gaap_DepreciationDepletionAndAmortization] | 10,636,000 |
[us-gaap_IncreaseDecreaseInAccountsAndOtherReceivables] | 2,419,000 |
[us-gaap_IncreaseDecreaseInAccountsPayableAndAccruedLiabilities] | 15,061,000 |
[us-gaap_IncreaseDecreaseInDeferredRevenue] | 536,000 |
[us-gaap_IncreaseDecreaseInOtherOperatingAssets] | 463,000 |
[us-gaap_IncreaseDecreaseInOtherOperatingLiabilities] | 6,000 |
[us-gaap_IncreaseDecreaseInPrepaidExpense] | -678,000 |
[us-gaap_InterestPaidNet] | 1,995,000 |
[us-gaap_NetCashProvidedByUsedInFinancingActivitiesContinuingOperations] | 15,812,000 |
[us-gaap_NetCashProvidedByUsedInInvestingActivitiesContinuingOperations] | -47,963,000 |
[us-gaap_NetCashProvidedByUsedInOperatingActivitiesContinuingOperations] | 29,635,000 |
[us-gaap_PaymentsOfStockIssuanceCosts] | -280,841,000 |
[us-gaap_ProceedsFromLongTermLinesOfCredit] | 14,500,000 |
[us-gaap_ProvisionForDoubtfulAccounts] | 371,000 |
[us-gaap_RepaymentsOfLongTermCapitalLeaseObligations] | 180,000 |
[us-gaap_RepaymentsOfLongTermDebt] | 278,000,000 |
[us-gaap_RepaymentsOfOtherDebt] | 359,000 |
[us-gaap_WriteOffOfDeferredDebtIssuanceCost] | 153,000 |