5 Top Data Center REITs to Consider

By: April Thompson

Added: 10th July 2019

  • Equinix, Inc. (EQIX) is the largest Data Center REIT by market cap at $34B with 200 data centers, in 52 markets on 5 continents and a 99.9999% uptime record. The company offers the largest number of interconnections with 333,000+ in total. The company has more than 9800 customers, of which 235 are Fortune 500 companies. Equinix has a well-established customer base that they’ve cultivated trusted relationships with. Over the last five years EQIX has performed third best among peers, with 21.48% total return, and is trending at a 10% total return over the last 12 months.  Part of the EQIX value proposition is to position as industry experts, to stay ahead of the technology curve and to support customers as businesses evolve. They grow strategically to support customers, with trusted, reliable facilities. Equinix recently committed to using 100% renewable and clean energy sources for data centers. (Equinix, 2019)
  • Digital Realty (DLR) Digital Realty is the second largest data center REIT by market cap at $23.3B and is outperforming all but one of its peers this year. The company owns 214 data centers, in 35 markets internationally, encompassing more than 34 million square feet, and 2,300 customers. They are the 8th largest publicly traded US REIT. The company bought DuPont Fabros Technology in a $7.8 Billion deal in 2017 and has been an aggressive acquirer of competitors. The company also banks $236 million in land in Northern Virginia for future development, which is unusual for a REIT due to investors demand for yields. (Digital Realty, 2019)
  • CyrusOne (CONE) Cyrus One has 45 data centers in the US, Europe and Singapore, and is third in the subsector by size with a market cap of $5.3B CyrusOne. CONE has seen performance slide since its IPO in 2013, with a total TTM return of 3.22%, lowest among the subsector. The company acquired Zenium in 2018 for $442M and focuses on reaching customers who have historically owned and operated data center facilities independently. CONE promotes the value of interconnections, colocations and professional management. They currently provide service to 200 of the Fortune 1000 companies. (CyrusOne, 2019)
  • CoreSite Realty Corporation (COR) CoreSite is smaller in size relative to the other data center REITs with a market cap of $3.7B. Over the last 5 years COR has led data center REITs in total return and is trending above average this year. COR was founded in 2001 and went public in 2009. With 4.4 million square feet, 1,350 customers and 27,000 interconnections, they are located in 8 US markets and are able to reach 75% of US companies within 5 milliseconds. The company is well located and has strong organic growth within its portfolio. COR has its origin in providing interconnection sites for phone companies during the dial up era, and successfully built upon relationships to transition into data center facilities. (CoreSite, 2019)
  • QTS Realty Trust (QTS) QTS is the smallest among the subsector with a market cap of $2.13B. The company owns 25 locations in 14 markets, encompassing 5.7M square feet of space. QTS shifted its strategy in 2017 to focus more on cloud services.  It has taken time for the new strategy to be as profitable as anticipated but appears to be gaining strength over the last 12 months as the company is leading peers with 34.82% total return. As the smallest data center REIT, with a well-located portfolio and established client relationships, the possibility of acquisition by a larger competitor may be likely. (QTS, 2019)