Cencora, Inc.

Greetings and welcome to the CoreSite Realty's first quarter 2021 earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during a conference, please press star zero on your telephone keypad. As a reminder, this conference call is being recorded. I would now like to turn the conference over to your host, Kate Ruppe, Manager of Investor Relations. Please go ahead.

Thank you. Good morning and welcome to CoreSite's first quarter 2021 earnings conference call. I'm joined today by Paul Zurich, President and CEO, Steve Smith, Chief Revenue Officer, and Jeff Finnan, Chief Financial Officer. Before we begin, I would like to remind everyone that our remarks on today's call may include forward-looking statements as defined by federal securities laws, including statements addressing projections, plans, or future expectations. These statements are subject to a number of risks and uncertainties that could cause actual results or facts to differ materially from such statements for a variety of reasons. We assume no obligation to update these forward-looking statements and can give no assurance that the expectations will be obtained. Detailed information about these risks is included in our filings with the SEC. Also, on this conference call, we refer to certain non-GAAP financial measures such as funds from operations. Reconciliations of these non-GAAP financial measures are available in the supplemental information that is part of our full earnings release, which can be found on the investor relations pages of our website at CoreSite.com. With that, I'll turn the call over to Paul.

Good morning, and thank you for joining our first quarter earnings call. Today, I will cover the quarter's highlights, and Steve and Jeff will discuss sales and financial results in more detail. We delivered strong first quarter financial results including operating revenues of $157.6 million, resulting in 7% year-over-year growth, and FFO per share of $1.40, a year-over-year increase of 8.5%. First quarter sales results included new and expansion leases of $7 million of annualized gap rent, which consisted of $6.2 million of retail co-location and small-scale leasing, slightly below the trailing 12-month average, and $0.8 million of large-scale leasing. We remain encouraged by our funnel and ongoing customer discussions, coupled with extensive available capacity, which makes us more competitive for a wider range of large contiguous deployments. As a result, we expect more large-scale and hyperscale leasing in future quarters, the timing of which is always hard to predict. We will continue to bring together on our campuses retail and scale customers of various sizes along with selective hyperscale deployments in order to both benefit from and to continue to grow the value of our diverse customer ecosystems. Turning to our property development, the LA3 Phase 2 construction project is on track for its estimated Q4 2021 delivery And we signed a $0.8 million large-scale lease on April 1st, not included in the Q1 results, which brings LA3 Phase 1 leasing to 89%, just six months after being placed into service. We also continue to labor through permitting and power procurement for SD9 and hope to start the site work preceding vertical construction sometime this summer. Having said that, we have experienced a slower-than-expected process and cannot predict with certainty when it will be concluded. On the operational front, we achieved power and cooling uptime of 100% for the quarter. We also continued to expand our connectivity options and relationships. In Chicago, we added on-net connectivity to Microsoft Azure ExpressRoute, bolstering our campus model and hybrid cloud performance and optionality in the Chicago market. We announced the availability of VMware Cloud on Dell EMC, a fully managed local cloud as a service offering available across our national platform, which strongly supports hybrid cloud, AI, machine learning, Internet of Things, and 5G use cases. And we announced upgraded on-net availability of AWS Direct Connect, supporting 100 gigabits in four of our markets, Los Angeles, New York, Northern Virginia, and the Bay Area, demonstrating our strength as a leading integration point for hybrid IT architectures. This past year, pandemic-ridden as it has been, highlighted the resiliency of CoreSight's data center space and our unique positioning through differentiated, network-dense data center campuses with robust ecosystems of enterprises, networks, and cloud providers in key U.S. markets. A year later, these extensive customer communities are even more clearly essential for the most interactive elements of digital transformation for businesses, governments, finance, healthcare, and academia as they grow and operate in a world moving toward continuous digital access, increased collaboration, and unprecedented improvements in data utilization. By providing such unique major market campuses and interoperability with superior flexibility and scalability and secure high performance connectivity options, we feel well positioned to capitalize on the higher value elements of the secular tailwinds in the data center space. In closing, We have a lot of work ahead of us to build on our solid start to the year by continuing our success in retail co-location and small-scale leasing while adding large-scale and hyperscale leases throughout the rest of the year. And we believe the fundamental drivers of our customer-focused strategy will combine well with market forces to drive long-term value creation. With that, I will turn the call over to Steve.