QTS Realty Trust today announced its Q2 2021 earnings, provided updates on its data center leasing and development activity, as well as its pending acquisition by Blackstone.

In Q2 2021, QTS Realty reported revenue of $155m, an 18% increase year-over-year, and adjusted EBITDA of $87.7m, a 20% increase year-over-year. Therefore, the company’s EBITDA margin was 56.5% in Q2 2021, a ~120 bps improvement year-over-year.

Leasing Activity in Q2 2021 – QTS Realty Trust

In Q2 2021, QTS secured new and renewal data center lease signings of $26.7m in annualized rent, an increase from $20.6m last quarter. Importantly, lease signings of $26.7m are in-line with the company’s historical quarterly averages of ~$27m per quarter.

In terms of mix, QTS’ Q2 2021 leasing results include several multi-megawatt hyperscale leases and steady performance in its hybrid colocation product. Notable lease signings during the quarter include:

  • Ashburn, Virginia: 5 megawatts with hyperscale customer Oracle Cloud
  • Federal (Government & Security): multi-megawatt lease signings. Additionally, the segment increased to 7.3% of annualized rent as of Q2 2021, from 6.4% in the prior quarter


At the end of Q2 2021, QTS’ backlog stood at $158m, which was up 4% compared to $152m last quarter. Of this total backlog, $60.1m (38%) is commencing in 2021 and $43.9m (28%) is commencing in 2022. Indeed, this backlog gives QTS strong visibility for the coming years.

Development Capital Expenditures – QTS Realty Trust

During Q2 2021, QTS brought on-line 22 megawatts of gross power and 88.0k sqft of raised floor. Specifically, this capacity came within the company’s Atlanta (DC – 2), Ashburn (DC – 2), Chicago, Hillsboro, and Santa Clara facilities.

By year-end 2021, QTS expects to complete 11 development projects, which in total will comprise 275k sqft and cost $543m. Notably, 70%+ of the investment for these development projects is going into the Northern Virginia and Atlanta markets.

Blackstone Acquires QTS Realty Trust at $10bn Valuation

In June 2021, QTS Realty announced that it would be acquired by Blackstone Infrastructure Partners and Blackstone Real Estate Income Trust (BREIT) at an enterprise value of $10bn. As part of its merger agreement, QTS Realty was entitled to a “Go-Shop” period of 40 days which ended on July 17, 2021. Currently, QTS Realty is under a “No-Shop” period, which limits the company’s ability to negotiate alternative acquisition proposals to Blackstone’s.

Finally, the Blackstone transaction will close in the second-half of 2021.

Mary Zhang covers Data Centers for Dgtl Infra, including Equinix (NASDAQ: EQIX), Digital Realty (NYSE: DLR), CyrusOne, CoreSite Realty, QTS Realty, Switch Inc, Iron Mountain (NYSE: IRM), Cyxtera (NASDAQ: CYXT), and many more. Within Data Centers, Mary focuses on the sub-sectors of hyperscale, enterprise / colocation, cloud service providers, and edge computing. Mary has over 5 years of experience in research and writing for Data Centers.


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