CoreSite Realty Corporation (NYSE:COR) Q4 2017 Earnings Conference Call Transcript
Feb 08, 2018 • 12:00 pm ET
Greetings, and thank you for joining today's CoreSite Realty Corporation Fourth Quarter 2017 Earnings 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.
It is now my pleasure to introduce your host, Greer Aviv, IR and Corporate Communications for CoreSite. Thank you, Ms. Aviv, you may begin.
Thank you. Good morning, and welcome to CoreSite's Fourth Quarter 2017 Earnings Conference Call. I'm joined here today by Paul Szurek, President and CEO; Steve Smith, SVP, Sales and Marketing; and Jeff Finnin, CFO.
(Forward-Looking Cautionary Statements)
And now, I'll turn the call over to Paul.
Good morning, and thank you for joining us today to discuss our fourth quarter results. I will highlight our 2017 accomplishments, update you on our new developments and briefly comment on our markets. We finished out the year with solid fourth quarter financial results highlighted by year-over-year revenue, adjusted EBITDA and FFO growth of 14%, 13% and 11%, respectively, excluding the onetime preferred stock redemption charge.
Organic growth was driven primarily by ,the continued expansion of existing customers and also by new logo growth. We continue to operate our facilities as carrier, cloud and managed services neutral facilities, which attracts valuable deployments, which drive commerce and interconnections among our customers. We executed well on our strategic priorities in 2017 with full year organic revenue growth of 20% and FFO growth of 22%. We took important steps to grow our differentiated, scalable and flexible multitenant campuses in key markets, including Santa Clara, Northern Virginia, Los Angeles and, most recently, Chicago.
2018 will be a relaunch year for CoreSite, with the newest version of our enterprise-class multitenant buildings coming online or commencing construction in several of our strongest and most dynamic markets. These buildings, together with computer room buildouts in our other markets, support the foundation for another extended phase of attractive organic growth over the next few years.
Turning to sales performance. We signed $7.2 million in annualized GAAP rent in the fourth quarter. Retail signings were very strong, reflecting the value of our ecosystem for applications needing capacity in large edge facilities that can support latency-sensitive, data-intensive and hybrid cloud deployments. The amount and quality of new logos was also excellent, which Steve will comment on in more detail. We expect the rebound in retail leasing combined with a continuing strong funnel for larger deployments to support healthy pricing and the construction of additional leasable capacity.
Supply and demand seem to be in an acceptable balance in substantially all of our markets. We are keeping an eye on the amount of development and potential development in Northern Virginia, particularly in Ashburn, but demand is also very strong in this market. As I mentioned earlier, campus expansion in four excellent markets is a great opportunity for us in 2018 and beyond. Despite record levels of absorption in 2016, 440,000 square feet, followed by another strong year of commencements in