Thank you. Good morning, and welcome to CoreSite's Second Quarter 2021 Earnings Conference Call. I'm joined today by Paul Szurek, President and CEO; Steve Smith, Chief Revenue Officer; and Jeff Finnin, Chief Financial Officer. Before we begin, I would like to remind everyone that our remarks on today's call may include forward-looking statements as defined by federal securities laws, including statements addressing projections, plans or future expectations. These statements are subject to a number of risks and uncertainties that could cause actual results or facts to differ materially from such statements for a variety of reasons. We assume no obligation to update these forward-looking statements and can give no assurance that the expectations will be obtained. Detailed information about these risks is included in our filings with the SEC. Also on this conference call, we refer to certain non-GAAP financial measures, such as funds from operations. Reconciliations of these non-GAAP financial measures are available in the supplemental information that is part of our full earnings release, which can be found on the Investor Relations pages of our website at coresite.com. With that, I'll turn the call over to Paul.

Good morning, and thank you for joining our second quarter earnings call. Today, I will cover the quarter's highlights, and Steve and Jeff will discuss sales and financial results in more detail. We delivered another strong quarter of financial results, including operating revenues of $162 million, resulting in 7.7% year-over-year growth and FFO per share as adjusted of $1.42, which is year-over-year growth of 5.2%, excluding the impact of a one-time benefit of $0.06 per share that Jeff will discuss later. Second quarter sales results included new and expansion leases of $7.8 million of annualized GAAP rent, which consisted of $7 million of retail colocation and small scale leasing, above the trailing 12-month average and $0.8 million of large-scale leasing. We are pleased with our retail and small-scale leasing so far this year. And as Steve will discuss, we expect more volume in large-scale leases in future months as the funnel of these longer cycle opportunities should bear fruit. Our sales trends confirm the findings in the 2021 state of the Data Center Survey that the International Data Group recently published, which shows colocation emerging as a key element for modern IT enterprises, bridging multiple cloud and service providers to provide a robust foundation for driving innovation. The full survey is available on our website. Turning to our property development. The LA3 Phase 2 construction project remains on track for Q4 2021 delivery, and we completed a pre-lease for a scale deployment this quarter to an existing customer. We also achieved a lease percentage of 89% at LA3 Phase 1, reflecting the strength of our position in the Los Angeles market and solid sales activity. In addition, we placed a new 4-megawatt computer room at NY2 under development with an estimated Q1 2022 delivery date. We continue to see strong demand in the New York market, particularly in the financial services industry. The new Boston chiller plant project has been completed. We expect the chiller to provide a positive return on investment through improved power efficiency and utilization. As you know from our 2020 sustainability report, energy efficiency is a key focus for CoreSite. And finally, we received zoning approval from the Santa Clara City Council for our SV9 development, an important entitlement, and we continue to work through the remaining pre-construction activities to bring SV9 to a shovel-ready state. We achieved a valuable milestone at our SV8 data center, which reached stabilization during the quarter at 98% occupancy, less than two years from the delivery of Phase 1 with financial returns expected to achieve our underwriting with some additional time and maturation. On the connectivity front, we recently announced on-net availability to Google Cloud natively on our Chicago and Silicon Valley campuses, further supporting Google's partner interconnect and validating the importance attributed to our portfolio by key cloud partners. In summary, we have solid accomplishments for the first half of the year, and Jeff will discuss their positive impact on guidance. We are executing well on our 2021 goals to translate our new and vacant capacity into sales opportunities to attract high-quality logos that value our campus ecosystems, to expand our connectivity options and relationships to assist enterprises with their hybrid and multi-cloud needs and to return to mid to high single-digit growth in revenues, earnings and FFO per share. We remain optimistic about the fundamental market drivers supporting our go-to-market strategy, technology requiring low latency, high performance, hybrid cloud IT architectures continue to play an increasingly important role in the success of businesses. And CoreSite is well positioned to capture an attractive share of the edge needs in our major metropolitan markets. With that, I will turn the call over to Steve.

Thanks, Paul, and hello, everyone. I will start by recapping our second quarter sales results and then discuss some key themes and notable wins. As Paul mentioned, we delivered new and expansion sales of $7.8 million of annualized GAAP rent during the second quarter, which included $3.4 million annualized GAAP rent from retail colocation leases and $4.4 million of GAAP rent from scale leases. Our new and expansion sales were comprised of 33,000 net rentable square feet, reflecting an average annualized GAAP rate of $235 per square foot, as well as 26 new logos that were added to our customer ecosystem with opportunities for future growth. I will highlight a few specific use cases from these new logos in a moment. New and expansion pricing on a kilowatt basis this quarter was above the trailing 12-month average by low to mid-teens, reflecting the unique use cases and mix of both size and location of leases signed this quarter. Contributing to this, our new and expansion sales of retail and small scale leasing was also above the trailing 12-month average. These leasing categories are a primary focus as they often represent performance-sensitive applications requiring high interoperability and hybrid cloud architectures. These deployments also typically drive incremental power margin and interconnection revenues, improving profitability while enhancing the ecosystem. To supplement the retail and small-scale sales results, our team is working hard to deliver more value add, large scale and hyperscale leasing throughout the second half of 2021, although, actual timing can be affected by the complexities and longer sales cycles of these larger deployments. Consistent with our strategy, we saw strong organic growth and demand from existing customers, who accounted for 86% of annualized GAAP rents signed during the second quarter as their digital architectures evolved and expanded. Noteworthy expansions from existing customers included scaled edge deployments from a digital content customer and a public cloud customer expanding their footprints in the Los Angeles market to support their growing customer demand; a scaled expansion from a higher education customer in the New York market leading to support for its high-performance research computing; and scaled expansions from a financial derivatives exchange and a global investment management firm, enhancing our high-quality financial services ecosystem in the New York market. From a geographic perspective, our strongest markets for new and expansion leases in terms of annualized GAAP rents signed were Los Angeles, New York and Northern Virginia, which combined represented 75% of our annualized GAAP rent signed during the quarter. Turning to notable new customer wins, the 26 new logos signed represent $1.1 million of annualized GAAP rent or approximately 14% of our sales during the quarter, including six new customers executing multi-market contracts. We effectively competed for and won 15 separate deployments across multiple markets from these six customers as they looked to solve for their distributed technical requirements, including high interoperability, robust security and enhanced reliability. Attracting high-quality new logos looking for this type of interoperability further strengthens the flywheel effect of our densely interconnected campus model and portfolio ecosystem. Enterprises contributed 93% of new logo annualized GAAP rents signed during this quarter and included an investment management firm joining our rising financial services ecosystem in the New York market and another prominent law firm, known for its strategic work for major enterprises deploying in both New York and the Northern Virginia markets. Finally, we ended the second quarter at 84.1% of total data center occupancy, increasing our occupancy by 220 basis points since the beginning of the year and furthering our progress towards our targeted goal in the high 80s range. As we look to the second half of 2021, we are well positioned to capture the demand for edge use cases with high performance, hybrid and multi-cloud IT requirements, which we expect to drive significant value to the lease-up of our available capacity. We are working on attractive large-scale and selective hyperscale opportunities that align with our campus value and shareholder objectives, and we remain optimistic about the sales funnel for the second half of 2021.

Thanks, Steve. Today, I will review our second quarter financial results, balance sheet, leverage and liquidity, and then review our financial outlook and updated 2021 guidance. We achieved another strong quarter of financial results. Operating revenues were $162.1 million, an increase of 7.7% year-over-year. Year-to-date through Q2, the three components of data center revenues, rents, power and interconnection revenues, increased year-over-year at 6%, 10% and 9% respectively. As a reminder, our reported new and expansion sales results only include the rental revenue component of the new leases. Lease renewals equaling $20.4 million of annualized GAAP rent were finalized during the quarter, resulting in cash rent mark-to-market of 4.2% and GAAP mark-to-market of 7.1%. Year-to-date, our cash rent mark-to-market equals 3.4%, exceeding our initial guidance range. We also incurred churn of 1.3% for the quarter within our more normal historical range as we expected. Commencement of new and expansion leases of $8.4 million of annualized GAAP rent, revenue backlog consisting of $8.1 million of annualized GAAP rent or $15.6 million on a cash basis for leases signed but not yet commenced. The difference between the GAAP and cash backlog is primarily driven by a handful of scale leases with power ramps in the early portion of their lease terms. We expect approximately 70% of the GAAP backlog to commence in the third quarter of 2021 and substantially all of the remaining GAAP backlog to commence during the fourth quarter of 2021. Adjusted EBITDA was $87.4 million for the quarter, an increase of 7.1% year-over-year. Year-to-date, our adjusted EBITDA has increased 8.2%, representing an adjusted EBITDA margin of 54.3%, also an improvement over the guidance provided at the beginning of the year. Net income was $0.59 per diluted share, an increase of $0.07 year-over-year and $0.08 sequentially. FFO per share was $1.48. I recommend you look at the FFO per share results on an adjusted basis of $1.42 per share, which removes the impact of a one-time benefit of $3.1 million or $0.06 per share, resulting from the release of a tax liability that we no longer expect to be incurred. FFO per share as adjusted of $1.42 is an increase of $0.07 or 5.2% year-over-year. Year-to-date, FFO per share as adjusted increased 6.8%. Moving to our balance sheet. Our debt to annualized adjusted EBITDA decreased to 5 times as of June 30th. We saw organic deleveraging again this quarter as we continue to lease the capacity we developed over the last few years and realize the corresponding adjusted EBITDA growth. Inclusive of the current GAAP backlog mentioned earlier, our leverage ratio is 4.9 times. We ended the quarter with approximately $264.3 million of liquidity and therefore, the capital to fully fund our 2021 business plan. Turning to 2021 guidance. We are increasing our guidance related to net income attributable to common diluted shares to our new range of $1.99 to $2.07 per share. In addition, our guidance related to 2021 FFO per share as adjusted has been increased from our previous range of $5.42 to $5.52 per share to our new guidance range of $5.52 to $5.6 per share. The increase of $0.09 at the midpoint or approximately 1.6% is largely driven by an increase in operating revenues, improved adjusted EBITDA margins and to a lesser extent by lower than anticipated interest expense. We also increased our cash rent mark-to-market guidance to a range of 2% to 4% from our previous range of 0% to 2%. Other than the changes noted here and those on page 21 of our supplemental, our 2021 guidance and related drivers remain unchanged. A few items to keep in mind related to our capital expenditures guidance. A portion of expansion capital spend in the second half of 2021 depends on the timing of our development at SV9, which could push into 2022, resulting in lower than anticipated capital spend this year. And with the completion of our investments in the SV1 office floor build-out and the Boston cooling infrastructure, both of which are expected to generate attractive returns on investment, our recurring CapEx will decrease and return to more normal levels in the second half of this year. And therefore, increase our AFFO to FFO ratio prospectively. In closing, as we move into the second half of 2021, we will continue to focus on our goal to lease-up our available capacity to achieve a portfolio occupancy percentage in the high 80s. As Steve said, we increased occupancy 220 basis points since the beginning of the year. We expect the increase in occupancy to create better revenue growth flow through and incremental margin expansion, ultimately resulting in incremental value for our shareholders. The incremental NOI resulting from ongoing lease-up highlights the value creation of our development and the implicit value of our currently available and buildable capacity. We remain focused on thoughtfully balancing future capacity development with customer opportunities. Our balance sheet remains strong. We have plenty of liquidity and we believe we are well positioned to drive long-term value creation. With that, operator, we would now like to open the call for questions.

Your first question comes from Sami Badri with Credit Suisse.

I want to address the cash renewal spreads and how you see those increasing. I would like to understand what is happening at the customer level that allows CoreSite to implement these price increases or negotiate them. I'm trying to grasp the structural changes in the demand environment and how customers are responding, as well as how you are executing this strategy. This will help us understand the shift.

Sami, I want to share something for you to consider, and then I'll let Steve provide more details regarding the discussions relevant to your question. Over the past several years as a public company, our rent growth has typically ranged from 2% to 5%. Last year, we were somewhat below that range, and we began the year anticipating continued lower growth. However, we have been able to perform better than we expected at the start of the year. Therefore, I believe that the 2% to 5% range is something to keep in mind as we move forward with our renewals. Steve can offer additional insights specific to your inquiry.

Yes, I think the 2% to 5% spread is the right thing to focus on. There are variables that come into play in any given quarter. Our goal is to align with market trends and what customers value, which is what we strive for. We also aim to create unique value for our customers that they are willing to pay for. So it's about finding the right balance with our customers and their leasing history, and this overall mix influences the spread. However, it's more important to stay focused on the spread that Jeff mentioned.

And maybe just customer level conversations. I mean, we started off the year with a much different cash rent growth profile. And I hear you guys on the typical spread. But I think like what I'm really trying to understand is, has something functionally changed in the industry and the supply-demand dynamic that enabled this revision and outlook?

No, I don't think so. I don't think anything has changed dramatically as far as supply-demand or anything like that. I do think that our market and our model, and how we really try to provide more embedded services around interconnection and the stickiness of that helps overall. So as much as we can differentiate our portfolio from others, I think that provides additional value and stickiness and ability to hopefully have that be reflected in the rate. But it's also important for us to maintain that win-win scenario with our customers and make sure that we're being fair with the market.

Your next question comes from Frank Louthan with Raymond James.

Can you talk to us a little bit about the impacts of inflation, both on how you're looking at current jobs you're bidding for currently and how you've maybe protected yourself on the backlog and so forth, and how you're viewing that over the next 12 or 18 months?

I'll talk about construction and then pass it over to Jeff to cover the rest of the question, Frank, and thanks for it. I mean, I think we're like all the other data center builders and builders in general that we are expecting increases in prices on future projects. SV9 would probably be the first major one where we would deal with that. All of our current projects were already bought out and we don't see any issues there. I don't know exactly what that number is going to be, because some things are, as Chairman Powell says, transitory and others may not be, but I know that our construction team will work hard to manage those cost increases down. And I expect that all of our peers will be facing the same, and that may have some impact on market pricing as well. So there's a lot of variables, and we'll just try to manage our way through it as best we can.

And Frank, the only other thing I would add is maybe just three real quick items, in addition to the construction side that Paul alluded to. Obviously, we watch closely on the impact to our cost structure, salaries and related costs, and it's something we're continuing to watch. And we obviously work with our HR team and advisers as to what we need to do there. Secondly, customers, we got to be aware of what it does from a customer standpoint. Our typical lease on a three to four-year basis does give us that opportunity to renegotiate where those economics are in a fairly near-term basis. So I don't see a significant impact from that perspective. And then third, the other area that we're obviously watching and paying attention to is the extent that we do start seeing that inflation on a consistent basis, what does that do to interest rates and then how does that impact our overall timing associated with our capital needs and plans there.

The only other thing I'd add is that as it relates to the buildings that we've already built, a lot of the inflation risk is taken out as we just need to build out additional floors and computer rooms.

Your next question, Nate Crossett with Berenberg.

I just wanted to go back to the re-leasing spread question again. I get that 2% to 5% is what you've historically done. But if I'm looking at kind of the expiration schedule over the next few years, it kind of looks like the rates that are expiring are pretty similar to what you've done year-to-date. So I'm just curious, after this year, what are you kind of thinking for what renewal spreads could look like?

Nate, let me try and address that as best as I can. But I think the best way to think of it is in line with what Steve talked about from an analytical perspective. I think our best data point is how we've been able to execute in the past. The thing that will impact that positively and/or negatively ultimately is the types of customer and leases that we're renewing, i.e. is it more of our retail and scale versus large scale and hyperscale. Those do play some impact. And then the geographical dispersion of where those leases are being renewed, how is the supply and demand look in each of those markets and how hard is it really to lift and shift some of this deployment. So those are other things that enter into and factor into how we're able to execute there. Hard to say where that's going to head over the next couple of years, but obviously, we'll provide additional details as we get closer to next year.

I think in the prepared remarks, there was kind of an allusion to larger deals maybe in the back half. I'm just curious if any of those looking at SV7, what's the update there? And then I think it sounded like there was a move forward of the SV9 after a council meeting. So I'm just wondering what exactly are the next steps for that project?

Just to give you some color on SV7. As I mentioned in my prepared remarks, we're excited to see where SV8 has come and reaching 98% occupancy. And as I've mentioned in prior calls, I think it's important to take a look at the campus overall as to how we manage space and try to drive efficient use of that, and maximizing shareholder value throughout the campus. So as we have now filled up really all of SV8, we now turn to the remaining larger spaces that are available, including SV7 and look to populate that with customer demand. So the pipeline still is encouraging in the Santa Clara market. And without saying too much, I think we're well positioned. So that's where I just believe SV7 and I guess as far as SV9 is concerned, Paul, I don't know if you wanted to mention anything that's on SV9?

So we were very glad to receive the unanimous approval of the Santa Clara City Council. And that's probably the biggest step in the process but there are a couple of other steps. We've got to complete the detailed permitting, finalizing the power station plan. But meanwhile, with this zoning entitlement, we can do a lot of pre-construction work that will shorten the put once we start construction. When that start will occur will depend upon market conditions, i.e., supply and demand in the market, what our absorption rate and funnel looks like in the Santa Clara market, as well as what kind of pre-construction commitments we can achieve to accelerate that. So I can't really predict when we'll start construction, but we'll have a lot more optionality around that with this zoning approval behind us.

Nate, one more thing I should also address with you, specific to your questions on lease spreads, as I'm thinking more about your question. In this quarter, we did sign and renew a power shell customer inside one of our locations. That did bring that rate down, as you know, power shell rates are lower than our typical turnkey. So just so you're aware, as you think about that $1.49 for this quarter, you exclude that one power shell deal, those rates would be much more in line with what we've done over the last several quarters. So just to give you some additional insight there and thinking about for the next couple of years.

Our goal is to maximize the space that we have before we start building new. We obviously don't want to go dark in a market, but we've got good runway. And if you look at the historical absorption that we've seen in that market, we typically sold roughly 6 megawatts in a year in Santa Clara, and we've got room to run there. So we'll sell the capacity that we have while we work on building SV9.

The next question, Jon Atkin with RBC.

I would like to ask more broadly about the inventory. At the start of the year, you mentioned having 40 megawatts available for sale. Can you update us on that and your confidence in selling that capacity? Additionally, as you assess the markets with substantial capacity, such as the West Coast, Chicago, or Virginia, where do you feel most optimistic about the supply-demand dynamics?

Jon, just to answer your first part of your question, we ended the quarter with 37 megawatts of capacity we can sell into the marketplace. That includes the 4 megawatts that will be vacated here at the end of the third quarter/early fourth quarter from SV7. And when you look at the distribution of those 37 megawatts, it is in large part in our top five markets. So think about the Bay Area, where I think we've got about 12 megawatts. LA, Chicago, New York and Virginia each have somewhere between 4 to 6, just depending on the market.

And ironically, as I look to the overall supply-demand and overall customer’s requirements in each of those markets, I would say that is a good position to be in because we've seen good growth in each of those markets, a good opportunity, I would say. As you look at New York, we've seen good growth in the financial sector there and continue to see good momentum there and have good capacity to build additional growth there. Santa Clara between SV7 and SV9, we've got good capacity there, and the market continues to support that. We saw good growth out of LA in additional phases there. So I think across the board, we've got good capacity where we built out and where the customer demand is. And overall, I think the supply and demand dynamics remain in balance. So Virginia also remains, I think, a good opportunity for us. So collectively, I think we're in a better position than we have been in the past where we've really had just kind of spotty capacity in certain markets and now we're able to address that in multiple markets, which is a nice place to be.

And then as you talked about the sales pipeline, any way to qualitatively give a little bit more color at historically the upper end of the range or record levels, near record levels, or kind of on par with historical levels as you think about late-stage sales pipeline?

I think the overall size of the pipeline has remained fairly consistent over the last several quarters. I think the quality of the pipeline has actually gotten better. And as you look at our retail and small-scale leasing being above the 12-month trail, I think that's a representation of that. And as I already mentioned, I think as we go forward, we look to build on that and then also execute opportunistically around that large-scale and hyperscale opportunity as they present themselves and either contribute value to the ecosystem or value what we bring to them. So we'll play that out as it goes.

Next question, Jordan Sadler with KeyBanc Capital Markets.

So I just wanted to follow-up. So Jeff, I think on maybe the fourth quarter call, we talked a little bit about commencements and the potential for you guys to be or see something north of $40 million in this year in commencements. So you're sitting at $14 million or so year-to-date. Is that still on the table?

Jordan, I'm not sure if we mentioned commencements or more specific, I think it was just to our sales targets for the year that Steve just alluded to. So I think that's what...

I'll just give you a little comment there, Jordan. I mean, as you look to where we pay so far, I think we're pacing towards that. And we expect some lumps as we go through the second half of the year. I think the $40 million is a general target and that can be north of that or slightly less of that depending upon the mix of opportunities and the profitability and the flow through. So as you saw in some of the pricing and the smaller scale and retail sales that have been generated, we'll see how that overall mix plays out. But so far, we're still targeting that $40 million.

And then coming back to the lease spreads in the quarter, obviously, a good number historically when you've seen something unusual you flagged it. But was this plus 4%, plus 7% on the cash and GAAP renewals, was that broad-based on the 330 leases or was there a big lease or two that kind of drove the upside?

Jordan, it was fairly dispersed across all of our markets, nothing in which we would point out that was unusually high or low in the market or in the quarter. So overall, it was pretty well dispersed throughout all the renewals we did this quarter.

And then lastly, maybe, Jeff, while I have you, the chiller replacement, I'm trying to better understand this. Is this maintenance CapEx or is it revenue or return generating CapEx? And maybe you can walk us through the ROIC math on this chiller plant, total cost versus savings?

No, that investment we made is included in our recurring CapEx dollars. So that overall investment is inside there and some of it is in expansion, just to give you some idea. Since the chiller will facilitate cooling in the entire data center, the portion that replaces current cooling infrastructure is going through maintenance capital; anything for new infrastructure is going through our expansion capital. But we've got about, in total, through several quarters here over the last three quarters, about $15 million going through recurring. Overall investment, I think, was somewhere right around $25 million. And returns are expected, Paul could clarify, but it's somewhere in the mid to upper teens overall once it gets up and running.

And just to add to what Jeff said. When we did this chiller replacement, we actually replaced some chillers that were quite at end of life, but it just made a whole lot more sense to replace them now and build a chiller with tremendously greater economies of scale and efficiency. And it's the energy savings that primarily drives return but it also enables us to better utilize the power throughout the data center, because of the cooling capacity it provides. And on top of everything else, it tremendously strengthens the resiliency of that facility, especially from a cooling perspective because the new chiller plant is dramatically more effective in that regard than what we had before. So I mean these are small projects. I hate to sound overly excited about them, but they make a big difference. I love it when we get one of these done.

Next question, Michael Rollins with Citi.

A couple of questions, first is, if you were to take the bookings and results from the retail and the small scale and look at the revenue that creates from rent, power, interconnection. What is that revenue stream growing at within your overall portfolio revenue versus the large and hyperscale? And just a second one, if I could, just with regards to the topic on pricing. Are there any significant leases that you may have or groups of leases at some point down the road where we just need to be mindful that for whatever the reason, those rents got to be significantly above market?

Michael, the answer to your first question, here's probably the best way to think about it. When you look at the rent component of our sales during the quarter, as Steve alluded to, $7.8 million and focus just on those smaller two components, the retail and small scale, on average, our rent makes up about 55% of our overall revenue associated with those deals. So the other 45% is going to be comprised of power, generally around 25% to 30% and then the rest of it is going to be interconnection. The important thing then to understand is the overall economics that flow down to the bottom line, obviously, as we refer to it as RPX, which is rent, power margin and cross-connect revenue. And those are the deals where we get better power margins on them, because most of those deals are not on a metered power model. So they are, overall, as Steve alluded to, better economics for us. In terms of overall growth, I have to get back on a specific number, but that gives you some idea how to gauge the math around each of those deals. In terms of your other question around leases longer term on pricing, nothing we would highlight today. The only other thing I would add is, as you think about our business, maybe relative to some of our peers, where there's been some concern on some rent roll downs. Keep in mind, our business being much different. We've only got 12 hyperscale leases in the entire portfolio. And that's the area that I think has received most of that commentary out to the marketplace. And it's just a different business model. Obviously, as you saw, we've increased our rent growth guidance for this year, as Steve and his team continue to execute on those lease renewals coming up through the rest of the year. But just keep that in mind as you think about us relative to what else you might be hearing in the industry.

Next question, Erik Rasmussen with Stifel.

It sounds like with SV8 near full capacity, you have a good opportunity to focus on SV7. Can we expect to hear of an update soon regarding sort of backfilling this space? And at this point, are you still expecting to do that with smaller retail leases rather than scale type deals?

I mean, overall, that is the space, the larger space that we have to sell on the campus at this point. So it can be anywhere from 6 to 9 megawatts, depending upon the mix and the density. But that is the space that we're selling into today. So you can expect to see some leasing in that space and it will be likely multi-tenant. So that's probably the best color I can give you.

The only thing I'd add, though, is that we haven't in the past said it would be focused on retail. We've said multi-tenant, and we do expect some of that to be scale.

It's primarily a matter of timing and fit rather than anything else. If you examine the last two years of our leasing trend and exclude the three hyperscale deals we've completed, the sales results have actually increased by about 5%. These three deals significantly impact the averages. We anticipate more variability as we move forward, but the timing and how they align with our portfolio, as well as the value they add to our ecosystem or what we can offer them, are crucial. We won't compete for every hyperscale deal available, but for those that meet our criteria, we expect to be successful, and there are opportunities out there. We are actively pursuing several of these opportunities, and we'll see how they develop.

Next question, Colby Synesael with Cowen.

Two questions. One, for Silicon Valley 9, great to see the local board approval. But one of the things that we've heard of is just there's the power constraints, particularly Silicon Valley power. Is that a real concern for you? Do you think that when you finally get to that point, you will be allocated power or is that potentially a long pole in the tent that could delay the project by a pretty material amount of time, months, if not quarters? And then secondly, you mentioned the word edge a few times. I'm just curious if you could be a little bit more descriptive in terms of what you mean by you're seeing edge deployments and how these might be different than what you've historically seen from these types of customers?

I'll let Steve handle the second part of that question. Colby, good question about power. We've obviously been working with the local utility extensively through the process. We won't start the construction, as you implied, until we have secure power for the facility. Our discussions are going well from what we've seen of their path to providing the power. It looks very reasonable and achievable. The I's need to be dotted and the T's crossed. But so far, the timeline for that should not lead to a significant delay. But as you know, in that market, you can be surprised.

As far as the edge piece is concerned, Colby, as you've heard from us and I think you're seeing broad base across the market. The hybrid multi-cloud edge use cases continue to grow and become more commonplace with enterprises, and with them become more demand for close proximity of cloud-adjacent types of services. So we're seeing more build-out and more demand around that. They may not be hyperscale type of deployments, but they are more resident in the campus where customers can gain close access to them and in many cases, on-ramps. You may have seen some of the press releases earlier this quarter around GCI having their native deployments, both in Chicago and the Bay Area. And we also had Express Route from Microsoft be delivered in Chicago as well. So having those two on-ramps being native in our Chicago campus, we feel like really bolsters those edge type of deployments and the overall ecosystem there.

Next question, David Guarino with Green Street.

Going back to the chiller plant project in Boston and I think you did one in LA a couple of years ago. How much of that maintenance CapEx is being driven by CoreSite's desires versus tenants' desires? And have you had any conversations with some of your larger customers that are pushing you towards upgrading equipment in order to meet some of their environmental goals?

We made an effort with these two projects, but they did not meet customer demands. However, if you review our ESG report on our website, you'll find that energy efficiency is a major focus for us. I believe we perform quite well against the industry in terms of our achievements and improvements over recent years. Customers are increasingly looking for their suppliers to enhance energy efficiency and other environmental aspects, and we are committed to progressing in these areas. Additionally, we aim to ensure that our facilities are resilient, well-equipped, and managed effectively. Our team excels in this regard, and we are also exploring areas where we can invest to facilitate this work.

And do you anticipate a trend, I guess, of maybe customers pushing more towards upgrading data centers? Is that something you guys are thinking about over the next few years?

Honestly, we're not hearing it significantly from most customers, and it's something that we're already doing and focused on anyway. So I don't know that we would feel the pressure as much as others would.

I have one more question. Following up on your earlier comments, Jeff, regarding the re-leasing rates that are performing better for CoreSite's portfolio compared to some hyperscale-focused portfolios. Is this trend seen throughout the entire retail colocation market, or is your portfolio simply doing better? Additionally, how do customer negotiations typically proceed? Do customers come prepared with data, stating the market rents they observe and what they are looking for, while you respond with counteroffers? I would appreciate any details on how these negotiations unfold.

David, we certainly pay attention to what our competitors are doing, particularly those in the retail colocation sector that aligns with our offerings. However, I believe it's important to note that our situations aren't directly comparable due to the variations in our assets, including the network-intensive and cloud-enabled data centers we operate. While it's not a straightforward comparison, it is something we monitor closely. I can't provide insights into how private companies are performing, but we feel confident in our capacity to secure value from our unique platform. Steve can share more details about those discussions.

As far as the conversations are concerned, it's really customer-by-customer and what their deployment looks like, what their use case is, how long they've been with us, their historical rent role and how that is relative to market. So all of that comes into play in each customer conversation and they're all different. So we manage those accordingly based off of the market dynamics and the customer situation, and that's probably the best, I guess, color I can give you as to how those conversations go.

Next question, Richard Choe with JPMorgan.

The retail business has been pretty steady, but the small-scale business has kind of ramped from under $2 million a quarter to well over that. Can you let us know what's going on there in terms of the strength? And then also, is that return profile any different than the retail, small scale versus retail?

It really depends on the deployment, but overall, we tend to group those into similar categories. It's beneficial to examine them individually, as the use cases can be alike. Most of our leasing, particularly the new leasing, has been focused on enterprise sales, which is the primary goal of our team: to bring in new enterprise clients that add value to the ecosystem. I don't see any significant trends aside from the fact that more enterprises are moving towards a hybrid multi-cloud setup. They are establishing their own presence in our data center while also utilizing cloud on-ramps to enhance their overall cloud architecture. There isn't a major shift, just that we are performing better with enterprise clients. Enterprises are continuing to assess the balance between cloud and on-prem solutions. No, I don't think so. Our guidance is our guidance because it's the best estimate that we have. So we'll continue to monitor it. And as I mentioned earlier, our goal is to sell unique value that customers want to come and stay. And once they do build out their architecture, it is a bit more complex than a single network connection that makes it easier to leave. So if we can provide more value that makes them want to stay longer, then hopefully, that reduces the churn risk long term, but we'll see how that plays out.

Next question, Brendan Lynch with Barclays.

It sounded like you had about 26 new logos in the quarter and six with multi-metro deployments. If you can just put this in the context of what has been your traditional historical run rate?

As far as the number of logos at 26, it's a little bit lower than the trail. Typically, we're in the roughly 30-ish range is probably the best way to think of the numbers. But if you look at the dollars that are contributing from those logos, it's actually one of our higher quarters in terms of true dollars. So the size has come up a bit. I think the quality has come up a bit. The actual numbers were a little lower but not outside the trail.

I think some of your peers have suggested that they're starting to see more new logos kind of emerging post pandemic. Is that something you're seeing as well that these customers have kind of been on the sidelines, but they're coming back more aggressively at this point?

Overall, the pipeline is strong, as I mentioned earlier. It's been strong for the last year and a half, I would say, as we entered the pandemic, it really highlighted those enterprises that were challenged with distributed work, how they manage their supply chain, how they sell remotely. So it's been at the forefront for a lot of enterprises. And now that they're kind of coming out of it, we'll see how the latest dynamics play out. But they're really trying to figure out how they rationalize that for their long-term strategy. And all of the trends that we see and the analysts that we talk to point towards this hybrid multi-cloud environment, which we think we're well positioned for. So yes, we're encouraged with where things are headed.

Next question, Nick del Deo with MoffetNathanson.

I guess, first, there's obviously been a lot of noise regarding new regulations on Chinese tech companies and the kind of general friction between the US and China. I was wondering if you could update us on your exposure to Chinese tech companies, whether they've contributed at all to leasing in recent periods? And whether you've observed any shift in tone or commentary regarding their intentions to remain in the US or exit the market?

Obviously, there has been some noise, and we watch it closely as well. I would just point you to some information we had put into one of our investor presentations in early 2020. I want to say maybe second quarter 2020. Kate's shaking her head. So I think that's it. Whereby we quantified what that exposure is from some of our Chinese or I should say, our customers domiciled in China, and that was 7% at that time. It has not materially changed from that point in time. Obviously, something we continue to watch closely.

Any qualitative commentary regarding how customer intentions may have changed since then or nothing to update on?

Nick, I would say that as far as overall demand is concerned, I think that has a bit muted over the last year, I would say, maybe a bit longer. Some of that gets absorbed by other partners that we have that also support that market. So collectively, that helps us in that regard. But I think some of the larger players, the hyperscale providers, that's not really the market that we played in, in many cases anyway. So I think we're a bit removed from direct impact of what that might be anyway. I think it's all of that. I think you summed it up well. I mean there's a lot of larger opportunities and frankly, even smaller opportunities that just are not a good fit that are looking for the lowest cost provider out there with a network connection. And we're probably not a great fit for them. For those customers that are looking for high resiliency, high performance, interconnection, to multi-cloud types of architectures and multi markets that they can connect to, were a better fit for us. So that does not hold true for every single opportunity that's out there. But those that do value us, that's what we're really striving for. So I think our messaging is better on how we attract those. Our funnel is, I think, cleaner and better quality. And you're seeing some of that show up, I think. So we'll see how it all plays out, but we're encouraged by it so far.

Next question, Michael Funk with Bank of America.

First, on interconnection, I think last year, maybe third quarter, you mentioned that you thought maybe some demand got pulled forward into 2020 and we did see a sequential deceleration in the rate of growth there this quarter. Is that part of what you're seeing? And if not, do you expect that growth rate to pick back up exiting 2021?

Michael, I think as we came into 2021 what we anticipated, I should say, what we've seen historically is roughly two thirds of that. Revenue growth was really just coming from pure increase in volumes but the other third increases in rates around renewals, people migrating from a lower-priced product to a higher-priced product, et cetera. We felt as though that second portion, that one-third contribution would be more muted this year as we headed into 2021 just given some of the activity we've seen over the last couple of years. I think it has trended towards that direction, probably not as quickly as we anticipated. And so we're still getting about 85% of our revenue growth coming from pure increase in volumes. The other roughly 15% is coming from those customers who are migrating to higher-priced products as they expand their business or price increases on renewals with some of our customers, et cetera. I don't think about going forward your second part of your question, as you think about going forward. I don't know how that plays out for 2022 yet. We're still evaluating what that looks like based on the behavior of the rest of the year and the types of deployments we have. But we'll give some further clarification on it as we get a little bit closer.

And then on churn, the churn dynamics. Are you seeing different drivers of customer churn today versus a couple of years ago? Meaning either more customers remain in your facility but handing back some space or more customers that are fully vacating. Has there been a shift in the driver of churn or is that pretty consistent with where it has been historically?

The only thing I would add and maybe comment on, and we may have talked about this earlier, is that a couple of years ago we just saw some of that elevated churn resulting from those business models that we felt were a little bit more compromised from the cloud than others. And that is largely left our portfolio at this point. I think we got about 1% out. And what I'm talking about are some of those resellers and managed service providers, many of which we used to have in our portfolio. That's the only thing I would point to in terms of changing. I don't think the behavior themselves have changed. Customers are always looking to either grow or maybe shrink their portfolio based on what's going on with their individual applications. But I think that's been going on for years. I don't think that that dynamic has changed, unless Steve has anything else to add there.

No, I don't think so either. And I think we've often been asked, I think, less often now. Is cloud friend or foe? And I think the answer at this point is yes. But overall, I would say it's friend. And as you look at just the overall adoption of technology across any business that technology ends up in a data center somewhere, even those resellers or cloud providers, they end up in a data center and many times our data center. So the use cases may change, how they deploy them may change, but the overall pie continues to grow. And so we think we're well positioned to capture that.

Thank you. I will turn the call back to Paul Szurek for a few closing comments. Please go ahead.

Well, thank you all for your time and your interest in CoreSite. We're really glad for this quarter and we're looking forward to the future. Our business is built on the concept that in our data centers, enterprises doing hybrid and multi-cloud architectures can realize significant performance and agility improvements and overall cost savings by taking advantage of our campus ecosystems, as well as the fact that our network-dense data centers provide a tremendous location for servicing the customers in our major edge markets. I'm really grateful for the colleagues that I work with, that we all work with. They do a tremendous job, and they're the reason that we're able to continue to perform, and I expect them to enable us to continue to perform well going forward. So thank you very much, and have a great rest of your day.

This concludes today's conference. You may disconnect your lines at this time, and thank you for your participation.