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Iron Mountain Incorporated IRM has signed a 6-megawatt data-center lease deal for its AZP-2 Data Center in Phoenix, AZ. This preleasing with a U.S.-based Fortune 100 customer reflects decent demand for the company’s data-center space.The lease is expected to commence in the third quarter of 2021.
At full build out, the three-story facility will encompass more than 530,000 gross square feet and offer 48 megawatts of total IT capacity. There will be campus connectivity to the current 47 megawatts operating at AZP-1 in Phoenix and AZS-1 in Scottsdale. Considering the land held for future development, the Phoenix campus, spanning 40 acres, has the capability to support more than 100 megawatts of IT load after being fully developed.
Remarkably, with lower costs and negligible risk for natural disasters, Phoenix has emerged as an active data-center market. Iron Mountain, with its premium facilities, remains well poised to capitalize on such trend. This hyperscale lease particularly complements the company’s Phoenix data-center campus which presently includes a vast array of core retail enterprise and hyperscale colocation clients.
With growth in cloud computing, Internet of Things and big data, and an increasing number of companies opting for third-party IT infrastructure, data-center REITs are witnessing a boom in Phoenix as well as worldwide. Furthermore, the estimated growth rates for the artificial intelligence, autonomous vehicle and virtual/augmented reality markets will remain robust over the next five to six years.
Apart from these, data centers are poised to benefit from the heightening reliance on technology in wake of the coronavirus pandemic. As such data-center landlords, including Iron Mountain, Digital Realty DLR, Equinix, Inc. EQIX and CoreSite Realty Corporation COR, will keep witnessing significant demand.
Iron Mountain is supplementing its storage segment’s performance with expansion in the company’s faster-growing businesses, most notably being the data-center segment. Data-center wins and a robust leasing pipeline highlight the company’s solid data-center platform which offers a long growth runway.
Robust demand for connectivity, interconnection and colocation spaces is driving leasing. With Iron Mountain's global data-center platform comprising 15 operational facilities across 13 markets, with the ability to support more than 350 megawatts of capacity at full build-out, the company remains well poised to capitalize on favorable trends. Thus, such moves will diversify the company’s revenue mix and improve adjusted EBITDA margins.
Shares of this Zacks Rank #3 (Hold) company have gained 7.4% over the past three months as against the industry’s 0.2% decline. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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