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CoreSite Announces Hyperscale Leasing at Santa Clara Campus

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CoreSite Realty Corporation (COR - Free Report) is witnessing decent demand for its Santa Clara campus’ data center. The company recently announced the execution of hyperscale pre-lease for phases 1 and 2 at SV8 data center which is currently under construction. The company is also exploring scale opportunities of the Santa Clara campus and as part of such efforts, it closed on property purchase for future development of SV9 data center.

Regarding the pre-lease, the company said that around 108,000 net rentable square feet, or about two-thirds of its SV8 data center were pre-leased in April. Construction of phase 1 and phase 2 are likely to be completed late in the third and fourth quarters of 2019, respectively. The Santa Clara campus serves an extensive range of core retail, scale and hyperscale colocation customers, and the latest hyperscale lease complements that.

Notably, CoreSite Silicon Valley portfolio already includes seven operational data centers, apart from this SV8 facility that is under construction, and the planned future SV9 data center development. With this portfolio, the company offers colocation solutions to one of the prime hubs of the Internet and technology companies in the world. CoreSite’s Silicon Valley data centers are being used by more than 250 international and national carriers, social media companies, cloud computing providers, media and entertainment firms, and enterprise customers to connect for conducting business.

Notably, with growing popularity of cloud computing, Internet of Things and big data, as well as the use of third-party IT infrastructure by several companies, data-center REITs are experiencing a boom. Additionally, the estimated growth rates for the artificial intelligence, autonomous vehicle and virtual/augmented reality markets will remain robust over the next five to eight years.

These factors are expected to significantly propel growth of data-center REITs, such as Digital Realty (DLR - Free Report) , Equinix, Inc. (EQIX - Free Report) , CoreSite, CyrusOne Inc. and others. Nevertheless, aggressive pricing pressure might continue in the upcoming period.

CoreSite currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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