Will the upgrade enable CoreSite to attract new tenants or increase lease rates at One Wilshire?
Fundamental outlook
The completed infrastructure upgrade at One Wilshire — CoreSite’s flagship carrier‑hotel — addresses a critical gap for a legacy data‑center that now must support modern, hybrid‑IT workloads. By modernising power, cooling and fiber capacity, the building can host a broader mix of hyperscalers, cloud providers and enterprise tenants that require higher‑density, low‑latency connectivity. In a market where colocation space is scarce on the West Coast and where trans‑Pacific traffic still funnels through the tower, the upgrade is likely to drive new tenant demand and give CoreSite leverage to raise lease rates on existing space, especially for premium, high‑performance suites.
Market and technical considerations
The news comes on a backdrop of a tightening supply‑side environment for data‑center real estate in California, which has been pushing lease spreads higher across the sector. CoreSite’s stock (NASDAQ: COR) has been trading near its 20‑day moving average with modest upside momentum (≈ 2 % above the 10‑day EMA). The upgrade removes a material operational risk, which should reduce the discount to earnings that the market has historically applied to legacy carrier‑hotels. Assuming the upgrade translates into a 3‑5 % uplift in occupancy or a 2‑4 % lift in average rent per square foot, the forward‑P/E could compress by 0.5–1.0 ×, delivering mid‑single‑digit upside for the equity.
Actionable insight
Given the strong fundamental catalyst and the relatively clean technical set‑up, the upgrade is more likely to attract new tenants and enable higher lease rates rather than merely improve existing contracts. For investors, the event supports a short‑to‑mid‑term bullish stance on CoreSite: consider taking a modest long position or adding to existing exposure, with a price target of roughly 5–7 % above current levels, while keeping a stop just below the 20‑day moving average to guard against any residual market‑wide risk. The catalyst should be reflected in the next earnings call and any subsequent leasing activity updates.