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Iron Mountain (IRM) Signs Expansion Lease for Six MW in Phoenix

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Iron Mountain Incorporated (IRM - Free Report) is seeing encouraging demand for its data-center space not only from new customers but also from existing tenants. Recently, the company signed a new pre-lease expansion for six megawatts (MW) with a U.S.-based Fortune 100 customer in Phoenix, AZ, at its AZP-2 data center. The lease is expected to commence in the third quarter of 2021.

This September, the company signed a 6-MW data-center lease deal with the customer at the facility. (Read more: Iron Mountain Preleases 6 Megawatt at Phoenix Data Center)

At the full build-out, the three-story facility will encompass more than 530,000 gross square feet and offer 48 MW of total IT capacity. There will be campus connectivity to the current 47 MW, operating at AZP-1 in Phoenix and AZS-1 in Scottsdale. Considering the land held for future development, the Phoenix campus, spanning 40 acres, has the capability to support more than 100 MW of IT load after being fully developed.

Per management, “we continue to see strong demand in the Phoenix market and are pleased that we are able to differentiate our solution offerings, including our compliance and sustainability certifications, which enable us to partner with prestigious global customers.”

Notably, with growth in cloud computing, Internet of Things and big data, and an increasing number of companies opting for third-party IT infrastructure; data-center REITs are witnessing a boom in Phoenix as well as worldwide. Furthermore, the estimated growth rates for the artificial intelligence, autonomous vehicle and virtual/augmented reality markets will remain robust over the next five to six years.

Apart from these, data centers are poised to benefit from the heightening reliance on technology in the wake of the coronavirus pandemic. As such data-center landlords, including Iron Mountain, Digital Realty (DLR - Free Report) , Equinix, Inc. (EQIX - Free Report) and CoreSite Realty Corporation (COR - Free Report) , will keep witnessing significant demand.

Hence, Iron Mountain’s effort to supplement its storage segment’s performance by expanding its faster-growing businesses, most notable being the data center segment, is a strategic fit.

In fact, the company’s global data center platform consists of 15 operational facilities across 13 markets that can support more than 350 MW of IT capacity at full build-out. Further, expansion projects and development efforts strengthen its data-center platform, offering a long growth runway.

Iron Mountain currently carries a Zacks Rank #3 (Hold). The company’s shares have gained 4.6%, outperforming the industry’s rally of 0.3% over the past three months. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

 

 

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