Investor Presentation. June 2015

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Johnathan Carr
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1 Investor Presentation June 2015

2 Forward Looking Statements This presentation may contain forward-looking statements within the meaning of the federal securities laws. Forwardlooking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. In some cases, you can identify forward-looking statements by the use of forward-looking terminology such as believes, expects, may, will, should, seeks, approximately, intends, plans, pro forma, estimates or anticipates or the negative of these words and phrases or similar words or phrases that are predictions of or indicate future events or trends and that do not relate solely to historical matters. Forward-looking statements involve known and unknown risks, uncertainties, assumptions and contingencies, many of which are beyond the company s control, that may cause actual results to differ significantly from those expressed in any forward-looking statement. These risks include, without limitation: the geographic concentration of the company s data centers in certain markets and any adverse developments in local economic conditions or the demand for data center space in these markets; fluctuations in interest rates and increased operating costs; difficulties in identifying properties to acquire and completing acquisitions; significant industry competition; the company s failure to obtain necessary outside financing; financial market fluctuations; changes in real estate and zoning laws and increases in real property tax rates; and other factors affecting the real estate industry generally. All forwardlooking statements reflect the company s good faith beliefs, assumptions and expectations, but they are not guarantees of future performance. Furthermore, the company disclaims any obligation to publicly update or revise any forwardlooking statement to reflect changes in underlying assumptions or factors, of new information, data or methods, future events or other changes. For a further discussion of these and other factors that could cause the company s future results to differ materially from any forward-looking statements, see the section entitled Risk Factors in the company s most recent annual report on Form 10-K, and other risks described in documents subsequently filed by the company from time to time with the Securities and Exchange Commission. 2

3 CoreSite at a Glance 3

$80 $75 $70 $65 $60 $55 $50 $45 $40 $35 $30 $25 $20 $35 Strong Historical Financial Performance $40 $35 $30 $25 $20 $15 $10 Q1`12 Q2`12 Q3`12 Q4`12 Q1`13 Q2`13 Q3`13 Q4`13 Q1`14 Q2`14 Q3`14 Q4`14

4 $80 $75 $70 $65 $60 $55 $50 $45 $40 $35 $30 $25 $20 $35 Strong Historical Financial Performance $40 $35 $30 $25 $20 $15 $10 Q1`12 Q2`12 Q3`12 Q4`12 Q1`13 Q2`13 Q3`13 Q4`13 Q1`14 Q2`14 Q3`14 Q4`14 Q1`15 Q1`12 Q2`12 Q3`12 Q4`12 Q1`13 Q2`13 Q3`13 Q4`13 Q1`14 Q2`14 Q3`14 Q4`14 Q1`15 Revenue $0.70 $0.45 Adjusted EBITDA Adjusted EBITDA Margin 52% 50% 48% 46% 44% 42% 40% 38% 36% $30 $25 $20 $15 $10 $5 $0.65 $0.60 $0.55 $0.50 $0.45 $0.40 $0.35 $0.30 $0.25 $0.40 $0.35 $0.30 $0.25 $0.20 $0.15 $0 $0.20 $0.10 Q1`12 Q2`12 Q3`12 Q4`12 Q1`13 Q2`13 Q3`13 Q4`13 Q1`14 Q2`14 Q3`14 Q4`14 Q1`15 Q1`12Q2`12Q3`12Q4`12Q1`13Q2`13Q3`13Q4`13Q1`14Q2`14Q3`14Q4`14Q1`15 Funds From Operations (FFO) FFO Per Share Dividend Per Share Note: First half 2014 adjusted EBITDA and FFO exclude a net benefit of $3.7 million and $0.04 per share, respectively, related to one-time items. 4

Our Focus and Strategy Bringing together a strong network and cloud community to support the needs of the enterprise, and create a highly diverse customer ecosystem.

5 Our Focus and Strategy Bringing together a strong network and cloud community to support the needs of the enterprise, and create a highly diverse customer ecosystem. Deploying infrastructure in network-dense markets Building high-performance data center campuses Connect campus developments connected to our existing networkdense, cloud-enabled assets in market Leveraging Ethernet and private IP on-ramps to the cloud Since 2001, CoreSite has focused on building secure, reliable, high-performance data center solutions supported by industry-leading customer service. 5

6 Nationwide In-House Support Staff 6

7 Secure, Reliable and High-Performance Secure, Reliable and Compliant Six 9s ( %) historical portfolio uptime In-house facilities and security organizations Rigorous internal security training and certification PCI DSS and SSAE-16 SOC 1 Type 2 Infrastructure and physical security standards enable HIPAA compliance Remote hands High-Performance Cloud-enabled, network-rich data center campuses Over 275 network service providers supported by robust IX services to key public clouds Enabling enterprise with support ecosystems CoreSite covers more than 75% of US industries within 5 milliseconds Scalable 17 operating data centers, scalable campus model 8 of the US largest commercial and data center markets Ability to nearly double occupied data center NRSF Approximately 90% of data center square feet owned vs. leased Best-in-Class Customer Experience Experienced and committed operations and facility personnel with an average tenure of 5 years Ranked 70 th percentile of all North American B2B businesses for customer satisfaction Scored 2x s the industry average net promoter score (NPS) for telecommunications companies Dedicated implementation resources to ensure a seamless onboarding process 7

8 Where We Are Presence in Strategic Markets BOSTON BO1 SILICON VALLEY SV1 SV3 SV5 SV2 SV4 SV6* LOS ANGELES LA1 LA2 DENVER HQ DE1 DE2 CHICAGO CH1 N VIRGINIA/DC VA1 DC NEW YORK NY1 NY2 VA2 MIAMI MI1 CoreSite s Open Cloud Exchange * Expected completion 1H

9 Continued Growth Via Development Four new ground-up data centers NY2 VA2 SV6 (1) SV7 Total Total forecasted data center NRSF 189, , , , ,066 Operating NRSF (stable & pre-stable) Leased 35,929 44, ,965 Available 16, ,763 Total operating NRSF 52,692 44, ,728 % leased 68% 100% 0% 0% 83% Capital 3/31/15 ($ in 000s) $128,000 $88,000 $5,400 $9,000 $230,400 NRSF under construction 49,050 48, ,580 70,000 (2) 303,767 Estimated incremental capital 3/31/15 ($ in 000s) $21,330 $13,300 $27,000 $93,500 $155,130 Core and shell NRSF for follow-on TKD build out 87,297 96, , ,571 Associated incremental capital ($ in 000s) $57,000 $35,000 $0 $44,000 $136,000 Phase 1 completion Q4'13 Q4'14 1H'16 Q2'16 Phase 2 completion (estimated) Q2'15 Q2'15 (1) SV6 is a 100% pre-leased build-to-suit powered shell; (2) Construction on SV7 Phase 1 expected to commence in Q

CoreSite Capital Spending Breakdown Greenfield Development: $800 to $1,200 per NRSF/$7,500 to $9,000 per ckw Incremental Capacity in Core and Shell : $300 to $600 per NRSF/$4,500 to $6,500 per ckw

(~ 20-25%) Generators, chillers, switchgear, piping, distribution Cost: $200-$300/NRSF Depreciation: 10-30 years Longer-Lived Computer Room (~ 15-20%) Life-safety systems, raised flooring,

10 CoreSite Capital Spending Breakdown Greenfield Development: $800 to $1,200 per NRSF/$7,500 to $9,000 per ckw Incremental Capacity in Core and Shell : $300 to $600 per NRSF/$4,500 to $6,500 per ckw Soft Costs (~ 10-25%) Financing, commission, lease-up deficit Cost: $150-$250/NRSF Depreciation: 40 years* Land, Core & Shell (~ 20-25%) Cost: $150-$250/NRSF Depreciation: 40 years* Base Building (~ 20-25%) Generators, chillers, switchgear, piping, distribution Cost: $200-$300/NRSF Depreciation: years Longer-Lived Computer Room (~ 15-20%) Life-safety systems, raised flooring, architectural Cost: $100-$200/NRSF Depreciation: years Shorter-Lived Computer Room (~ 20-25%) Batteries, CRAC/CRAH, UPS, PDU Cost: $150-$220/NRSF Depreciation: 5-15 years * Land is not depreciated 10

11 Customer Mix Overview We bring together a strong network and cloud community to support the needs of the enterprise Enterprise Digital Content & Multimedia (26%) Enterprise Other Enterprise (12%) Enterprise SI and MSP (13%) Network & Mobility (25%) Cloud (23%) Note: percentages based on total data center annualized rent 11

12 Top Ten Customers As of 3/31/15 Customer Industry CoreSite Vertical Number of Locations Total Occupied NRSF Percentage of Total Operating NRSF Annualized Rent ($000) Percentage of Total Annualized Rent Weighted Average Remaining Lease Term in Months 1 Technology Cloud 8 142, % $10, % 52 2 Technology Enterprise SI & MSP 3 68, , Technology Enterprise Digital Content 10 66, , Technology Enterprise Digital Content 4 17, , Technology Cloud 1 28, , Government* Enterprise Other Enterprise 1 130, , Technology Enterprise Digital Content 2 15, , Financial Enterprise Other Enterprise 2 12, , Technology Enterprise SI & MSP 1 6, , Technology Network 12 12, , Total/Weighted Average 501, % $50, % 41 * Denotes customer using space for general office purposes 12

providers 55+ content providers A virtual campus connected via dark fiber Our Entertainment

13 Our Highly Diverse Customer Ecosystem CoreSite One Wilshire Campus Los Angeles Cloud Content Distribution Network Enterprise Studios and Post Production 170+ networks 70+ cloud providers 55+ content providers A virtual campus connected via dark fiber Our Entertainment and Gaming ecosystem in Los Angeles is interconnected using more than 2,000 cross connections 13

Robust Portfolio of Products and Services Scalable Options Flexible Deployments Customer Support Services Connectivity Solutions Cabinet Cage Private Suite Full

relocation/migration and implementation Regulatory compliant security Environmental monitoring Customer concierge Cross connections Open IX (global partnerships)

14 Robust Portfolio of Products and Services Scalable Options Flexible Deployments Customer Support Services Connectivity Solutions Cabinet Cage Private Suite Full building Infrastructured shell Powered shell N+1 and 2N systems Common or dedicated infrastructure High-density configurations Remote hands Data center assessment, relocation/migration and implementation Regulatory compliant security Environmental monitoring Customer concierge Cross connections Open IX (global partnerships) Intra- and inter-market connectivity lit transport, dark fiber Any2Exchange CoreSite s Open Cloud Exchange Private portal On-site amenities Blended IP AWS and cloud partners 14

15 Enabling the Enterprise Embedded value in cloud and network capabilities Interconnection into a community of cloud providers 15

upon its first partnerships in 2012 with NYIIX, AMS-IX, and DE-CIX, and adding LINX in 2013, CoreSite

16 Enabling Network Service Providers Higher performance, greater reliability, and lower TCO through interconnection into a community of partner enterprises and network and cloud service providers Building upon its first partnerships in 2012 with NYIIX, AMS-IX, and DE-CIX, and adding LINX in 2013, CoreSite offers an array of choices supporting IP exchange, providing customers with enhanced vendor and network diversity 16

17 The CoreSite Open Internet Exchange ( OIX ) Provides access to best-of-breed internet exchange partners in addition to our own Any2 Internet Exchange with the goal of creating and facilitating global ecosystem communities The CoreSite Open Internet Exchange CoreSite Peering Customer Other Developing IX Partnerships 17

The CoreSite Open Cloud Exchange Providing access into

solutions through secure, real-time, one-to-many

Customer Edge (CE inside building) Enterprise / Carrier

Cloud A Access Provider NNI NNI NNI Cloud B Cloud C

Online portal or API Physical Port - User Network

18 The CoreSite Open Cloud Exchange Providing access into a community of public, private and hybrid cloud solutions through secure, real-time, one-to-many interconnections. Customer Edge (CE inside building) Enterprise / Carrier Customers CoreSite Open Cloud Exchange Cloud Providers Cloud A Access Provider NNI NNI NNI Cloud B Cloud C Secure connections Guaranteed throughput On-demand Online portal or API Physical Port - User Network Interface (UNI) Ethernet Virtual Connection (EVC) CoreSite Data Center Physical Port - User Network Interface (UNI) 18

19 Financial Strength a Competitive Advantage Line of credit Capacity of $405 million with accordion to $500 million Term to January 2017 plus one-year extension option Unsecured Interest at L depending upon corporate leverage Term loan $100 million, five-year term loan (expires January, 2019) swapped to fixed interest of 3.23% Accordion for incremental $100 million Unsecured Pre-payable Preferred stock $115 million perpetual preferred stock outstanding Coupon 7.25% Callable in December 2017 NYSE-traded with strong balance sheet REIT status $300 million annual revenue as of 3/31/15 Component of S&P Small-Cap 600 Index, Russell 2000 Index, and MSCI US REIT Index Equity market cap of $2.4 billion and enterprise value of $2.8 billion as of 3/31/15 Total debt plus preferred stock of $449 million at 3/31/15 Debt / LQA adjusted EBITDA at 2.2x and debt + preferred stock / LQA adjusted EBITDA at 3.0x as of 3/31/15 ~2.49% weighted-average cost of in-place debt at 3/31/15 Current annualized dividend of $1.68 per share Historical 34% compounded annual dividend growth rate as a public company Substantially unsecured borrower with staggered debt maturities; targeting to achieve an investment-grade debt rating 19

20 Summary of Financial Data (in thousands, except per share data) Three Months Ended Summary of Results March 31, 2015 December 31, 2014 March 31, 2014 Y/Y Growth Operating revenues $ 74,757 $ 72,492 $ 63, % Data center revenues 72,623 70,632 61, % Net income 12,060 12,306 8, % Net income attributable to common shares 4,568 4,664 2, % Funds from operations (FFO) to shares and units 30,193 28,981 22, % Adjusted funds from operations (AFFO) 25,154 23,143 19, % EBITDA 36,188 36,107 27, % Adjusted EBITDA 37,951 36,258 30, % Per share - diluted: Net income attributable to common shares $ 0.21 $ 0.21 $ % FFO per common share and OP unit $ 0.64 $ 0.61 $ % Note: Q includes a $0.9 million, or $0.02 per share, impairment charge. 20

21 Summary of Financial Data (in thousands, except per share and NRSF data) March 31, 2015 December 31, 2014 As of September 30, 2014 June 30, 2014 March 31, 2014 Dividend Activity Dividends declared per share and OP unit $ 0.42 $ 0.42 $ 0.35 $ 0.35 $ 0.35 AFFO payout ratio 79.1% 85.4% 86.2% 76.2% 84.4% Operating Portfolio Statistics Operating data center properties Stabilized operating data center NRSF 1,354,235 1,323,210 1,334,914 1,326,332 1,326,332 Stabilized data center NRSF occupied 1,194,994 1,156,486 1,153,345 1,132,894 1,101,305 Stabilized data center % occupied 88.2% 87.4% 86.4% 85.4% 83.0% Turn-Key Data Center Same Store Statistics MRR per Cabinet Equivalent $ 1,408 $ 1,413 $ 1,390 $ 1,364 $ 1,340 Data center NRSF % occupied 83.1% 80.2% 78.4% 76.4% 71.6% Market Capitalization, Debt & Preferred Stock Total enterprise value $ 2,755,403 $ 2,273,458 $ 1,967,868 $ 1,945,279 $ 1,831,690 Total debt outstanding 333, , , , ,000 Total debt and preferred stock outstanding 448, , , , ,000 Debt to: Annualized Adjusted EBITDA 2.2x 2.2x 2.3x 2.0x 2.2x Undepreciated book value of total assets 25.3% 24.7% 24.2% 22.3% 21.6% Debt & Preferred Stock to: Annualized Adjusted EBITDA 3.0x 3.0x 3.2x 2.9x 3.1x Undepreciated book value of total assets 34.0% 33.6% 33.3% 31.5% 31.1% 21

22 2015 Guidance Projected per share and OP unit information: 2015 Implied Low High Mid 2014 Growth (2) Net income attributable to common shares $ 0.75 $ 0.85 $ 0.80 $ % Real estate depreciation and amortization Gain on land disposal - - (0.02) FFO $ 2.55 $ 2.65 $ 2.60 $ 2.22 Non-recurring items: Q2 benefit from real estate tax accrual true-up (0.08) Q1 and Q2 charges for software impairment FFO - excluding non-recurring items (1) $ 2.55 $ 2.65 $ 2.60 $ % Projected operating results: Total operating revenues $ 313,000 $ 323,000 $ 318,000 $ 272,420 17% Data center revenue 305, , , ,578 17% General and administrative expenses 30,000 32,000 31,000 27,842 11% Adjusted EBITDA (1) 153, , , ,634 20% Guidance drivers: Annual rental churn rate 6.0% 8.0% 7.0% 5.6% Cash rent growth on data center renewals 2.0% 5.0% 3.5% 2.9% Capital expenditures: Data center expansion $ 95,000 $ 110,000 $ 102,500 $ 84,312 Non-recurring investments 10,000 15,000 12,500 12,527 Tenant improvements 5,000 10,000 7,500 4,512 Recurring capital expenditures 5,000 10,000 7,500 4,429 Total capital expenditures $ 115,000 $ 145,000 $ 130,000 $ 105,780 For all footnotes, please see our earnings supplemental for the quarter ended March 31,

23 Components of Net Asset Value (NAV) For all footnotes, please see our earnings supplemental for the quarter ended March 31,

24 Operating Portfolio as of 3/31/15 * Indicates properties where we have a leasehold interest For all footnotes, please see our 10-Q for the quarter ended March 31,

25 Definition of Non-GAAP Financial Measures This document includes certain non-gaap financial measures that management believes are helpful in understanding our business, as further described below. Our definition and calculation of non-gaap financial measures may differ from those of other REITs, and therefore, may not be comparable. The non-gaap measures should not be considered an alternative to net income as an indicator of our performance and should be considered only a supplement to net income, cash flows from operating, investing or financing activities as a measure of profitability and/or liquidity, computed in accordance with GAAP. Definitions Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA) and Adjusted EBITDA EBITDA is defined as earnings before interest, taxes, depreciation and amortization. We calculate Adjusted EBITDA by adding our non-cash compensation expense, transaction costs and litigation settlement expense to EBITDA as well as adjusting for the impact of gains or losses on early extinguishment of debt. Management uses EBITDA and adjusted EBITDA as indicators of our ability to incur and service debt. In addition, we consider EBITDA and adjusted EBITDA to be appropriate supplemental measures of our performance because they eliminate depreciation and interest, which permits investors to view income from operations without the impact of non-cash depreciation or the cost of debt. However, because EBITDA and adjusted EBITDA are calculated before recurring cash charges including interest expense and taxes, and are not adjusted for capital expenditures or other recurring cash requirements of our business, their utilization as a cash flow measurement is limited. Funds from Operations FFO FFO is a supplemental measure of our performance which should be considered along with, but not as an alternative to, net income and cash provided by operating activities as a measure of operating performance and liquidity. We calculate FFO in accordance with the standards established by the National Association of Real Estate Investment Trusts ( NAREIT ). FFO represents net income (loss) (computed in accordance with GAAP), excluding gains (or losses) from sales of property and impairment write-downs of depreciable real estate, plus real estate related depreciation and amortization (excluding amortization of deferred financing costs) and after adjustments for unconsolidated partnerships and joint ventures. We use FFO as a supplemental performance measure because, in excluding real estate related depreciation and amortization and gains and losses from property dispositions, it provides a performance measure that, when compared year over year, captures trends in occupancy rates, rental rates and operating costs. Additional definitions can be found in our earnings supplemental for the quarter ended March 31,

26 Definition of Non-GAAP Financial Measures Adjusted Funds from Operations AFFO AFFO is a non-gaap measure that is used as a supplemental operating measure specifically for comparing year over year ability to fund dividend distribution from operating activities. AFFO is used by us as a basis to address our ability to fund our dividend payments. We calculate adjusted funds from operations by adding to or subtracting from FFO: 1. Plus: Amortization of deferred financing costs 2. Plus: Non-cash compensation 3. Plus: Non-real estate depreciation 4. Plus: Impairment charges 5. Plus: Below market debt amortization 6. Less: Straight line rents adjustments 7. Less: Above and below market leases 8. Less: Maintenance capital investment 9. Less: Tenant improvement capital investment 10. Less: Capitalized leasing commissions AFFO is not intended to represent cash flow from operations for the period, and is only intended to provide an additional measure of performance by adjusting the effect of certain items noted above included in FFO. AFFO is a widely reported measure by other REITs, however, other REITs may use different methodologies for calculating AFFO and, accordingly, our AFFO may not be comparable to other REITs. We offer this measure because we recognize that FFO will be used by investors as a basis to compare our operating performance with that of other REITs. However, because FFO excludes depreciation and amortization and captures neither the changes in the value of our properties that result from use or market conditions, nor the level of capital expenditures and capitalized leasing commissions necessary to maintain the operating performance of our properties, all of which have real economic effect and could materially impact our financial condition and results from operations, the utility of FFO as a measure of our performance is limited. FFO is a non-gaap measure and should not be considered a measure of liquidity, an alternative to net income, cash provided by operating activities or any other performance measure determined in accordance with GAAP, nor is it indicative of funds available to fund our cash needs, including our ability to pay dividends or make distributions. In addition, our calculations of FFO are not necessarily comparable to FFO as calculated by other REITs that do not use the same definition or implementation guidelines or interpret the standards differently from us. Investors in our securities should not rely on these measures as a substitute for any GAAP measure, including net income. Additional definitions can be found in our earnings supplemental for the quarter ended March 31,

Thank You CoreSite Investor Relations 1001 17 th Street, Suite 500 Denver, CO

27 Thank You CoreSite Investor Relations th Street, Suite 500 Denver, CO USA CORE CoreSite.com