Iron Mountain Incorporated ( IRM Quick Quote IRM - Free Report) has signed two leases with an existing U.S.-based Fortune 100 customer for 6 megawatts of data-center space at its AZP-2 facility in Phoenix, AZ. The first agreement for one megawatt is an expansion lease, which is anticipated to begin in third-quarter 2021. The second lease is for the remaining five megawatts, which is expected to start in fourth-quarter 2021.
The lease reflects a decent demand for the company’s data-center space. At full build-out, the three-story facility will encompass more than 530,000 gross square feet and offer 48 megawatts of total IT capacity. There will be campus connectivity to the current 47 megawatts 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 megawatts of IT load after being fully developed.
Remarkably, with lower costs and negligible risk for natural disasters, Phoenix has emerged as an active data-center market. Iron Mountain, with its premium facilities, remains well-poised to capitalize on such trends. The hyperscale lease particularly complements the company’s Phoenix data-center campus, which presently includes a vast array of core retail enterprise and hyperscale co-location clients.
Markedly, 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 providers are witnessing a boom in Phoenix as well as worldwide. Furthermore, the estimated growth rates for 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 wake of the coronavirus pandemic. Data-center landlords, including Iron Mountain,
Digital Realty ( DLR Quick Quote DLR - Free Report) , Equinix, Inc. ( EQIX Quick Quote EQIX - Free Report) and CoreSite Realty Corporation ( COR Quick Quote COR - Free Report) , are expected to keep witnessing significant demand.
As for Iron Mountain, the company is supplementing its storage segment’s performance with expansion in the data center segment. Particularly, its global data-center platform comprises 15 data centers across 13 markets and can support more than 375 megawatts of IT capacity at the full build-out. Further, expansion projects and development efforts strengthen its data-center platform, offering a long growth runway.
Per management, “we expect to continue our balanced leasing strategy, and will pursue the right hyperscale opportunities that complement our core retail colocation ecosystem.”
Shares of this Zacks Rank #3 (Hold) company have jumped 54.2% over the past year compared with the
industry’s 24% growth. You can see . the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
However, the shift in data storage through non-paper-based technologies is resulting in declining physical storage volume and low demand for record handling. This is reducing service activity levels and record management volume. Moreover, moderation in economic activity amid the pandemic is likely to impact the physical storage business’s volumes. Zacks Top 10 Stocks for 2021
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