Stocks

Equinix (EQIX) to Open Facility in Silicon Valley Campus

Equinix, Inc.  EQIX announced that it will unveil an International Business Exchange (“IBX”) data center in Silicon Valley, located at its Great Oaks campus in San Jose, with an investment of $142 million. The new facility will be named SV11 and is scheduled to open on Jun 30, 2021.

The first phase of SV11 is anticipated to offer an initial capacity of 1,450 cabinets, and co-location space of more than 61,000 square feet. At full build, the facility will have a capacity of 2,950 cabinets.

SV11 marks the company’s 14th facility in the Silicon Valley region. Being adjacent to SV1, SV5, and SV10 data centers, SV11 will offer campus cross connectivity to the facilities. In fact, given the growing demand for additional capacity for interconnection, multi-cloud deployments and connectivity needs; the two-story data center is well-poised to witness decent leasing activity.

The company also intends to deploy 20 megawatts of capacity on the campus, thereby, expanding its existing Bloom Energy fuel cell deployment. Also, focusing on energy efficiency, the company for the first time will use natural gas-powered cells for primary generation, and utility electrical grid and generators as backup sources.

Markedly, Silicon Valley has emerged as an important business hub, being the third-largest colocation metro in the Americas  and ninth globally. Hence, Equinix’s effort to further bolster presence in the region will add scale and strengthen its position in the region, while helping it benefit from the accelerations in digital infrastructure transformations.

In fact, including SV11 and its Great Oaks campus, Equinix has invested more than $1.25 billion in the local economy, with additional land in the area offering capacity for future expansion. Although such moves are strategic fits, it requires huge capital outlays. Given the company’s significant debt obligations, these capital-intensive activities are concerning.

In the past three months, shares of this Zacks Rank #3 (Hold) have appreciated 25.6% compared with the real estate market’s 16.7% growth. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

 

Zacks Investment ResearchImage Source: Zacks Investment Research

 

Stocks to Consider

Industrial Logistics Properties Trust’s ILPT funds from operations (FFO) per share estimate for the current year has moved up to $1.88 in the past month. The company currently carries a Zacks Rank of 2 (Buy).

Mack-Cali Realty Corporation’s CLI Zacks Consensus Estimate for 2021 FFO per share has moved marginally north to 54 cents in the past week. The company currently has a Zacks Rank of 2.

Braemar Hotels & Resorts Inc. BHR carries a Zacks Rank of 2 at present. The Zacks Consensus Estimate for the ongoing year’s FFO per share has been revised 37.5% upward in a month to 44 cents.

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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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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