CoreSite Realty Corporation (NYSE:COR.PRA) Q1 2016 Earnings Conference Call - Preliminary Transcript

Apr 28, 2016 • 12:00 pm ET

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CoreSite Realty Corporation (NYSE:COR.PRA) Q1 2016 Earnings Conference Call - Preliminary Transcript

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Presentation
Operator
Operator

Greetings and welcome to the CoreSite Realty Corporation First Quarter 2016 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.

I would now like to turn the conference over to your host, Mr. Derek McCandless. Thank you. You may begin.

Executive
Derek McCandless

Thank you. Hello, everyone, and welcome to our first quarter 2016 conference call. I'm joined here today by Tom Ray, our President and CEO; Steve Smith, our Senior Vice President, Sales and Marketing; and Jeff Finnin, our Chief Financial Officer. As we begin our call, I would like to remind everyone that our remarks on today's call include forward-looking statements within the meaning of applicable securities laws, including statements regarding projections, plans or future expectations.

These forward-looking statements reflect current views and expectations, which are based on currently available information and management's judgment. We assume no obligation to update these forward-looking statements and we can give no assurance that the expectations will be obtained. Actual results may differ materially from those described in the forward-looking statements and may be affected by a variety of risks and uncertainties, including those set forth in our SEC filings.

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 the full earnings release, which can be accessed on the investor relations pages of our website at coresite.com. And now, I'll turn the call over to Tom.

Executive
Tom Ray

Good morning and welcome to our first quarter call. In Q1, we continued to execute our business plan, resulting in solid financial and operational performance. Looking at Q1 2016 over Q1 2015, we reported 34% growth in FFO per share driven by 24% growth in revenue and 28% growth in adjusted EBITDA. We continued to expand our margins with our adjusted EBITDA margin expanding to 51.4%, measured over the trailing four quarters ending with and including Q1 2016. This represents an increase of 285 basis points over the comparable period ending with and including Q1 2015.

With regard to leasing, during the quarter we executed new and expansion leases totaling 103,000 square feet, representing $22.5 million in annualized GAAP rent. Our average GAAP rental rate associated with this leasing was strong at $219 per square foot. This rate was influenced by power density and Steve will put this into context a bit later in the call.

As previously announced, our Q1 leasing results include 80,000 square feet under one lease at our SV7 facility currently under construction. Regarding the rest of our new and expansion leasing in the quarter, lease executions were well distributed across our portfolio with our strongest signings in terms of annualized GAAP rent occurring in Los Angeles, New York, New Jersey and Boston.

The number of leases signed in the quarter was well distributed across our three verticals, with our