COR
#I can kind of start with the ---+ answer that question.
Then I'll let <UNK> or <UNK> fill in there.
Overall as far as the likes of SDN providers in our buildings and the value that they bring there, I guess first question, I guess, is relative to the economic relationship we have there.
I don't think I can really get into too much detail there other than just letting you know they're similar to other providers and carriers that are in our facilities, and we're continuing to evolve that relationship.
But it's very important to us to maintain the strategy that we've had going forward, which is really to provide a carrier-neutral type of facility that provides our customers choice and flexibility as to how they interconnect to other networks as well as other cloud providers.
And we look at those SDN providers as an extension of that.
As to the value that they provide in our data centers, while we do have many of our direct on-ramps from many of the big cloud providers native in our data centers ---+ and we feel like that brings significant value and differentiation in the marketplace ---+ having other connectivity options we feel like is also a benefit, not only in providing access to those clouds and other networks but from campus to campus and just to other facilities around the world.
So it really just gives them more choice and more flexibility, and we feel like that's a positive thing and just providing them more attractive options for those customers.
I would only add to what <UNK> said, reiterate our strategy of having ecosystems that provide all the options, all the business partners, all the various ways of interconnecting and getting around the world that our customers might conceivably need.
That openness has benefited us strategically and we believe it will continue to do so going forward.
Thank you.
To an extent we're involved in international activities already.
We've seen a large number of non-US companies coming into our data centers.
We do have a small percentage of our customers that like our platform, like our service levels and agreements, and have asked us to look outside the US, but they also have a very cost-conscious approach to it.
So we've tried to address that with a curated referral program, and we continue to evolve and improve that.
That seems to be going well and seems to have opportunity for improvement going forward.
Perhaps more importantly, we're seeing an increasing volume of our customers who are going global via cloud or content providers or similar companies that are in our data centers that already have a global platform.
And so we focus tremendously on making sure they have the facilities and business partners they need in our centers to go global through that methodology.
Hello, <UNK>.
This is <UNK>.
I'll try to answer that for you.
Just to piggyback on what <UNK> had just mentioned regarding whether it's international expansion or even domestic expansion.
I think what we're seeing is that customers are getting more and more sophisticated on how they evaluate and select a data center provider, and as such, as long as they're looking for a deployment in our markets, we feel like we stand a very competitive opportunity to win that business.
And not being in more markets or even international doesn't seem to be slowing us down in winning those deployments.
So just give you a little bit of color there.
Relative to industries and vertical strength across the board, I would say it's very market-driven.
As you look at industries that are most interested in New York are very different than they might be in LA versus the Bay Area versus even Virginia.
So we try to take a very pointed approach to ensure we have a geographical focus in each of those markets, trying to ensure that our data center as well as our offering there resonates well with the key industries that happen to be present there.
And we continue to refine those efforts.
It's just different from market to market.
Thanks.
Let me try to address those.
The first question, I think as you saw at both our VA2 expansion and our SV7 expansion, we have moved to a model of pre-leasing of new developments and new construction and our preference for that type of pre-leasing is to find and sign up strategic anchors for those new developments.
It's worked very well in both of those cases, and we expect to continue to follow that model going forward, including for the Reston expansion.
As it relates to M&A, we believe we have a business model and a platform that has consistently delivered opportunities for attractive organic growth, and that's how we designed the Company.
And I think that's consistent with how most studies of companies have guided for the best long-term shareholder value.
I think this approach also enables us to provide more value to our customers because we deploy our capital where their growth and expansion needs are, consistent with the scale that we have.
Having said that, we recognize that there are occasionally opportunities when M&A or other inorganic growth avenues can be very attractive.
So we study the vast majority of the opportunities that are out there with an open mind.
We're trying to discover opportunities to accelerate our ability to deliver value to customers and shareholders.
Any transaction, however, would have to make sense strategically, culturally and mathematically, meaning it would be good for our customers and would most likely be accretive to share value on a risk-adjusted basis.
I think I kind of just restated what we have said at every quarterly call for the last couple years, so I don't think that indicates any real change in our approach.
I did want to make sure the philosophy behind it was well understood and assure you that we do look at this stuff, and if a good opportunity is out there, we wouldn't be averse to taking advantage of it.
Nothing that we have seen so far appears to be any threat to our sales funnel or our ability to close deals.
Please remember, we have focused our scale and our strength in these eight very strong markets and we provide a fairly unique value proposition, as well as the hybrid flexibility for customers that need to scale in those markets.
And we don't see that changing with the M&A activity we've seen out there.
Hello, Lucas.
This is <UNK>.
I would say that I don't think we see anything that would prohibit us from continuing to lease up our same-store to beyond the 90% that we're at today.
There's nothing that physically limits us.
The space is still there.
Power and cooling capabilities are still there.
So there's nothing there that limits us from an infrastructure standpoint to continue to increase that leasing.
As it relates to the overall growth on ---+ call it an MRR per cabbie basis ---+ you can see that overall, based on the same store pool we had in effect for 2016, produced very good results, increasing, call it 6% to 8% on average year-over-year.
I think as you look forward, we would expect that MRR per cabbie growth to moderate a little bit just based upon the type of sales activity we had in the previous 12 months, but still healthy, somewhere between 5% to 7% year-over-year growth as we look forward, just to give you some idea of where we think it's headed.
Right in line, I think, with our prepared remarks.
We've got about $165 million of debt capacity today and about $150 million of liquidity as we sit here at year end.
And so obviously it will fund the development needed in the near term, but we're going to have to term out some level of our credit facility, and we've guided to $150 million to $250 million of additional debt sometime here in the first half of 2017.
Ballpark just depending upon pace of development.
You could see our CapEx that would give you some idea about where we would end up.
That's correct.
I don't know that I can add much to what I said earlier.
The size of a market is important because of the scale that you can achieve and also the resilience that you have going forward via diversity of customer base and how tech-reliant and data-reliant the economy in a particular market is.
Boston and Denver are both very strong tech and data economies, and because of their proximity to headquarters in one case and our northeastern operations in the other case, we're able to achieve scale of both the sales and the operating organizations in those markets.
And we expect good growth in them in the future.
Probably as important, we were able to enter those markets at very attractive price points and begin to scale accordingly.
So when you think about scale and data dependence in the economy and the ability to have operations ---+ economies of scale in a market, Tier 2 markets are just harder to make the numbers work.
And as you go down in the tiers it gets progressively harder.
The other thing I would just add, <UNK>, is if you look at our strategy around really the three pillars of enterprise, cloud, and network, having a heavy density of all three of those factors is important.
And as <UNK> mentioned in Denver and Boston, those are high-tech centric and fast-growing markets already, so we see good growth there.
But also interconnection is critical too, and Denver specifically being the intersection of the fiber backbone that crisscrosses the country speaks to that well, as far as the attractiveness to cloud and network providers providing services here as well as Boston.
So they're a bit unique in that regard.
Hello, <UNK>.
This is <UNK>.
It's one of those areas where we just believe as the number of kilowatts that we have in our portfolio increase, it is going to drive an increased level of recurring CapEx.
That's just the expectation that we have.
And that's kind of how we manage and model it.
Solely driven on the number of kilowatts we have deployed out through our portfolio, and when you look at how much of those kilowatts commenced during 2016, we're just expecting to have some recurring CapEx increase over prior years.
It did occur, and <UNK> alluded to it in his prepared remarks.
We actually ended up having a total on that particular customer of 135 basis points, so just slightly higher than what we had anticipated.
But that did actually occur in Q4.
So absent that customer, actually churn results were fairly good in Q4 when you look at our long-term average is somewhere between 1% to 2%.
The other component that you're probably referring to and I alluded to it ---+ some elevated churn in Q2, which is about an incremental 180 basis points, which is the last component of our original customer at SV3 that will burn off.
And that is about $4.2 million of annualized rent that will terminate in the second quarter of 2017.
And that's not new churn.
We pre-announced that churn in other calls.
You bet.
<UNK>, we can't hear you if you're talking.
You might check your mute button.
That's accurate.
Yes, I think that's fair, <UNK>.
The only real visibility we have as we sit here today as we mentioned, when you look at our backlog, our GAAP backlog of $5 million at the end of the year, we expect substantially all of that to commence in the first quarter of the year.
So then everything else would commence subsequent to that.
I think the decrease in the number ---+ just look back at our backlog and just go back to where we started 2016, and then as we migrated through the year, those backlog numbers were very substantial.
And that's largely due to the fact of the pre-leasing that occurred at SV7 and some of our other developments, as <UNK> alluded to earlier.
As we sit here today, you just look at what we have under development, we just don't have the enormous amount of space under development right now.
We're obviously planning things as it relates to Reston, and as <UNK> and <UNK> both alluded to, we would look to try and drive some anchor customer there to help kick start the cash flow soon upon completion of that construction.
So I just think as we sit here today, I can't give you that golden nugget you're looking for, but we hope to find it somewhere as we migrate through the year, and we'll see how we operate here.
<UNK>, I'm glad you asked that question because it's probably worth reminding everybody.
I know that it's real important the way most of you look at the companies and do your job, and we in our SEC reporting ---+ we all have to report quarter-by-quarter, and in those results are important.
But this business doesn't really run on a quarter-to-quarter cycle.
The transaction engine does and that stays pretty consistent from quarter to quarter and has generally been on an upward trend for the last three years.
But other parts of the business, the hybrid part of our business where we take on larger deployments is lumpy and also less predictable.
So as you look at the business going forward, I think <UNK>'s given you the best guidance we can give, and we continue to believe that there will be good opportunities that may enable us to outperform, but we can't predict those.
Thanks, <UNK>.
First, I'd like to thank all of you for your interest in the Company and participating in this call, and we appreciate it very much.
<UNK> and <UNK> and I would like to thank our colleagues for a great 2016 and congratulate them on an excellent year.
We're looking forward to the rest of 2017.
We have many opportunities and a lot of work ahead of us.
And again, thank you for your interest and have a great rest of your day.
