CoreSite Realty Corp

On April 17, 2019, our Operating Partnership entered into a note purchase agreement (the “Note Purchase Agreement”) pursuant to which the Operating Partnership agreed to issue and sell an aggregate principal amount of $200 million of the Operating Partnership’s 4.11% Series A Senior Notes (the “Series A Notes”) due April 17, 2026, and $200 million of its 4.31% Series B Senior Notes (the “Series B Notes” and, together with the Series A Notes, the “Notes”) due April 17, 2029. In connection with the issuance of the Notes, on April 3, 2019, we settled our $175 million forward-starting seven-year interest rate swap. After giving effect to cancellation costs incurred in connection with the termination of this swap agreement entered into in anticipation of the issuance of the Notes, the Series A Notes will bear an effective interest rate of 4.52% per annum. An aggregate principal amount of $200 million of the Series A Notes and $125 million of the Series B Notes were issued on April 17, 2019. The Operating Partnership expects to issue $75 million aggregate principal amount of the Series B Notes prior to July 17, 2019. Interest on the Notes is payable semiannually on the 15th day of August and February in each year, commencing on February 15, 2020.

The Notes rank pari passu with the 2020 Term Loan, the 2021 Term Loan, the 2022 Term Loan, the 2023 Term Loan, the 2023 Notes, the 2024 Notes and the Amended and Restated Credit Agreement. The Notes are senior unsecured obligations of the Operating Partnership and are jointly and severally guaranteed by the Company and each of the Operating Partnership’s subsidiaries that guarantees indebtedness under its senior unsecured credit facilities. The Operating Partnership used the proceeds from the Notes to pay down outstanding amounts on the revolving portion of its senior unsecured credit facilities, and it will use the remaining proceeds for general corporate purposes.

Results of operations may be affected by the amount of pre-stabilized properties in our portfolio. As we place new development projects into service, the initial investment returns may be lower compared to stabilized properties due to operating expenses being less dependent on occupancy levels than revenues. We expect property operating expenses to increase as we place new data center NRSF into service. As projects become stabilized, we expect the investment returns to increase as operating expenses become more dependent on occupancy levels.

The amount of revenue generated by the properties in our portfolio depends on several factors, including our ability to lease available unoccupied and under construction space at attractive rental rates. As of March 31, 2019, we had approximately 741,000 NRSF of unoccupied or under construction data center space of which approximately 53,000 NRSF is leased with a future commencement date. Subsequent to March 31, 2019, we pre-leased an additional 108,000 NRSF of the SV8 development project, half of the NRSF commencing late in the third quarter of 2019 and the remaining half commencing late in the fourth quarter of 2019.

The loss of multiple significant customers could have a material adverse effect on our results of operations because our top ten customers in the aggregate account for 29.5% of our total operating NRSF and 36.2% of our total annualized rent. During the three months ended March 31, 2019, we entered into new and expansion leases totaling approximately 32,000 NRSF. The following table summarizes our leasing activity during the three months ended March 31, 2019:

On April 17, 2019, our Operating Partnership entered into a note purchase agreement (the “Note Purchase Agreement”) pursuant to which the Operating Partnership agreed to issue and sell an aggregate principal amount of $200 million of the Operating Partnership’s 4.11% Series A Senior Notes (the “Series A Notes”) due April 17, 2026, and $200 million of its 4.31% Series B Senior Notes (the “Series B Notes” and, together with the Series A Notes, the “Notes”) due April 17, 2029. An aggregate principal amount of $200 million of the Series A Notes and $125 million of the Series B Notes were issued on April 17, 2019. The Operating Partnership expects to issue $75 million aggregate principal amount of the Series B Notes prior to July 17, 2019. The Operating Partnership used the proceeds from the Notes to pay down all outstanding amounts on the revolving portion of its senior unsecured credit facilities, and it will use the remainder for general corporate purposes. Including the subsequent repayment of outstanding amounts on the revolving credit facility, we have the ability to borrow $445.1 million under the revolving credit facility. Refer to Item 1. Financial Statements — Note 7 — Debt for additional information.

On April 19, 2018, our Operating Partnership and certain subsidiary co-borrowers amended and restated our previous credit agreement (as amended and restated, the “Amended and Restated Credit Agreement”), which provides a total commitment of $850 million. The accordion feature under the Amended and Restated Credit Agreement was also increased, which allows our Operating Partnership to increase the total commitment to $1.2 billion, under specified circumstances, including securing capital from new or existing lenders.