QTS Eyeing Another Giant Atlanta Data Center
QTS Realty Trust is known for building massive data centers, like this huge facility in Suwanee, Georgia. (Photo: QTS Realty)

QTS Eyeing Another Giant Atlanta Data Center

QTS is the largest data center player in Atlanta metro. It has been filing paperwork with the city for an undeveloped lot adjacent to its mega data center.

QTS Realty has plenty of room to grow in the Atlanta data center market despite already being a top dog there. The company recently filed paperwork with the city regarding an undeveloped property adjacent to its nearly 1 million square foot data center in the Atlanta Metro area.

QTS did not comment in regards to immediate expansion plans for the property, but the company is making sure the paperwork is in order. Chad Giddings, vice president of marketing, confirmed the company both owns the undeveloped property and has recently filed general course-of-business paperwork.

The speed in which the company will tap the undeveloped property is unknown, as it has some room to expand in existing facilities. The new location has room for hundreds of thousands of square feet.

In reporting results in February for its first full year as a Real Estate Investment Trust Atlanta continued to be a bright spot for the company with net operating income in the city up 19 percent.

According to anonymous sources, Twitter signed a major 80,000 square foot expansion deal in the provider's Atlanta data center last year.

However, investors have voiced concern in the past that Atlanta is too much a bright spot, in the sense that the company has too many eggs in one basket. Atlanta represented the lion’s share of revenue for a long time, but that is changing.

Having too much business in Atlanta is a pretty good problem to have. However, QTS has taken steps to alleviate those concerns in recent years by diversifying its footprint.

In 2014, the company brought Dallas-Fort Worth online, one of the 10 largest data center projects of last year. It also made data center and key acquisitions and deals in Chicago and New Jersey. Its Princeton, New Jersey, data center is now also acting as showcase for a recently launched critical facilities management practice. The company also achieved FedRAMP certification, which puts it in a strong position to win federal government deals. Richmond, another major bright spot in recent quarters, stands to continue to benefit from FedRAMP.

QTS has also expanded its service offerings with its "3 Cs" portfolio ranging from wholesale data center space to cloud and added disaster recovery as a service in September last year. Customers are tapping DRaaS to expand beyond one facility, adding more diversification to QTS’ customer makeup.

At the end of 2014, QTS raised $100 million to fuel additional data center construction. It is expanding capacity at several sites already in operation, including Atlanta. The company has added or will soon add capacity in Dallas, New Jersey, Northern Virginia, Silicon Valley, and Sacramento, California. Expansion plans for 2015 included 100,000 square feet at the time earnings were announced.

The company converted into a public REIT as part of its IPO late in 2013.

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