Equinix, Inc. EQIX recently announced the opening of an International Business Exchange (“IBX”) data center — DC21 — in sync with its expansion efforts in the Washington, D.C. area. This facility also marks the company’s 16th IBX data center in the region and in total, these data centers house more than 200 network service providers.
Particularly, with the Washington, D.C. metro representing the largest colocation market in the United States, Equinix has been making investments in this region to bank on favorable trends. The company has invested more than $200 million in 2020, with this latest addition of DC21 and the unveiling of the DC15 data center earlier this year.
The latest two-story data center DC21 is capable of delivering both small- and large-capacity deployments. The $95-million first phase of the facility will offer more than 41,000 square feet of colocation space, providing an initial capacity of 925 cabinets. At full built, more than 124,000 square feet of colocation space will be provided, delivering a total capacity of 3,100 cabinet equivalents.
Moreover, the $111-million first phase of the other facility, DC15, which opened in the second quarter this year, provides colocation space of roughly 23,000 square feet and an initial capacity of 1,600 cabinet equivalents.
These latest data centers in the Washington, D.C. area are part of Equinix's data-center campus in Ashburn, VA. This campus is home to the largest internet peering point in North America, besides being a strategic communication hub for the Eastern United States and a major gateway to Europe.
Therefore, expansion of the Ashburn campus with these new facilities adds scale and strengthens Equinix's position in the market, helping capitalize on the robust demand for digital infrastructure within the fast growing enterprise, government, cloud and financial services industries. Businesses can leverage on Platform Equinix, the global footprint of which encompasses more than 225 IBX data centers across 63 markets and 26 countries.
Moreover, leveraging on strong industry fundamentals, Equinix seems to be firing on all cylinders as reflected by its organic and inorganic growth strategies, and robust operating metrics. Recently, the company reported third-quarter revenues of $1.52 billion. The top-line figure improved 8.8% year over year, marking the 71st consecutive quarter of revenue growth. Revenues from the three geographic regions increased on a year-over-year basis as well.
However, Equinix competes with Internet data centers operated by established communications carriers and other REITs. In addition to competing with neutral colocation providers, the company competes with traditional colocation providers and Internet service providers. Considering the strong growth potential, competition is expected to increase from the existing players and the entry of new players into the space. The intensified competition could prompt competitors to resort to aggressive pricing policies, making Equinix vulnerable to pricing pressure.
Shares of this Zacks Rank #3 (Hold) have rallied 33.7% over the past year as against the real estate market’s decline of 5.9%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Alpine Income Property Trust, Inc.’s PINE FFO per share estimate for 2020 has been revised upward by 1.7% to $1.21 over the past month. The company carries a Zacks Rank of 2 (Buy), currently.
Extra Space Storage Inc.’s EXR Zacks Consensus Estimate for the current-year FFO per share has moved up marginally to $5.02 over the past week. The company currently carries a Zacks Rank of 2.
City Office REIT, Inc.’s CIO Zacks Consensus Estimate for 2020 FFO per share has improved 2.6% to $1.17 in a month’s time. The company holds a Zacks Rank of 2, at present.
Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
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