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CoreSite Picked by Faction for Multi-Cloud Service Expansion

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CoreSite Realty Corporation (COR - Free Report) has been selected by enterprise-class private cloud and backup infrastructure provider — Faction — as its partner for rolling out multi-cloud storage and network solutions, and expand its VMware private-cloud services.

This partnership with CoreSite has taken place in both the Northern Virginia and Silicon Valley markets. The company’s scalable data center platform, high-performance interconnection solutions and proximity to the key public cloud providers are the reasons for being selected by Faction.

Notably, CoreSite Silicon Valley market includes seven operational data centers. The company offers colocation solutions to one of the prime hubs of the Internet and technology companies in the world. In fact, over 185 international and national carriers, social media companies, cloud computing providers, media and entertainment firms, and enterprise customers connect for conducting business in this market.

Also, the Northern Virginia data-center market currently includes three highly scalable facilities, two on its Reston, VA campus, and the other one in Washington, D.C. Amid the rising prominence of Northern Virginia as a communications and enterprise hub, CoreSite has, of late, announced campus expansion in both Reston and Washington, D.C. On completion of construction, this would comprise more than 1,097,000 square feet of colocation data center space in total.

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 experiencing a boom. In fact, demand is outpacing supply in top-tier data center markets, and despite enjoying high occupancy, these are absorbing new construction at a faster pace. Also, data center REITs pulled in their capital and scored well on the return book in the first seven months of 2017, registering total returns of 26.6%.

CoreSite Realty currently carries a Zacks Rank #3 (Hold). The stock has gained 48.5% year to date, substantially outperforming the industry’s growth of 3.7%.

Stocks to Consider

Better-ranked stocks in the real estate space include Communications Sales & Leasing, Inc. (UNIT - Free Report) , InfraREIT Inc. (HIFR - Free Report) and Rexford Industrial Realty, Inc. (REXR - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

While Communications Sales & Leasing and Rexford Industrial Realty have expected long-term growth rates of 7.5% and 6.8%, respectively, the expected long-term growth rate for InfraREIT is currently pegged at around 8%.

Note: All EPS numbers presented in this write up represent funds from operations (“FFO”) per share. FFO, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.

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