Equity Incentive Plan

9 Months Ended

Sep. 30, 2011

Equity Incentive Plan [Abstract]

Equity Incentive Plan

9. Equity Incentive Plan

In connection with our initial public offering, the Company’s Board of Directors adopted the 2010 equity incentive plan, which we refer to as the 2010 Plan. The 2010 Plan is administered by the Board of Directors, or the plan administrator. Awards issuable under the 2010 Plan include common stock, stock options, restricted stock, stock appreciation rights, dividend equivalents and other incentive awards. We have reserved a total of 3,000,000 shares of our common stock for issuance pursuant to the 2010 Plan, which may be adjusted for changes in our capitalization and certain corporate transactions. To the extent that an award expires, terminates or lapses, or an award is settled in cash without the delivery of shares of common stock to the participant, then any unexercised shares subject to the award will be available for future grant or sale under the 2010 Plan. Shares of restricted stock which are forfeited or repurchased by us pursuant to the 2010 Plan may again be optioned, granted or awarded under the 2010 Plan. The payment of dividend equivalents in cash in conjunction with any outstanding awards will not be counted against the shares available for issuance under the 2010 Plan.

Stock Options

Stock option awards are granted with an exercise price equal to the closing market price of the Company’s common stock at the date of grant. The fair value of each option granted under the 2010 Plan is estimated on the date of the grant using the Black-Scholes option-pricing model. For the nine months ended September 30, 2011, options to purchase 526,257 shares of common stock were granted. The fair values are being expensed on a straight-line basis over the vesting periods.

The following table sets forth the 2010 Plan’s stock option activity for the nine months ended September 30, 2011:

	Number of			Weighted
	Shares Subject to			Average Exercise
	Option			Price
Options outstanding, December 31, 2010		587,555		$	16.00
Granted		526,257			15.24
Forfeited		(119,783	)		15.81
Exercised		—			—
Options outstanding, September 30, 2011		994,029		$	15.62

The following table sets forth the number of shares subject to option that are unvested as of September 30, 2011 and the fair value of these options at the grant date:

				Weighted
	Number of			Average Fair
	Shares Subject to			Value at Grant
	Option			Date
Unvested balance, December 31, 2010		587,555		$	4.95
Granted		526,257			4.88
Forfeited		(119,783	)		4.94
Vested		(140,978	)		4.92
Unvested balance, September 30, 2011		853,051		$	4.91

As of September 30, 2011, total unearned compensation on options was approximately $3.5 million, and the weighted average vesting period was 3.2 years.

Restricted Awards

During the nine months ended September 30, 2011, the Company issued 255,638 shares of restricted stock. Additionally, the Company issued 9,900 restricted stock units, or RSUs. The principal difference between these instruments is that RSUs are not shares of CoreSite Realty Corporation common stock and do not have any of the rights or privileges thereof, including voting rights. On the applicable vesting date, the holder of an RSU becomes entitled to a share of common stock. The restricted awards will be amortized on a straight-line basis to expense over the vesting period. The following table sets forth the number of unvested restricted awards and the weighted average fair value of these awards at the date of grant:

				Weighted
				Average Fair
	Restricted			Value at Grant
	Awards			Date
Unvested balance, December 31, 2010		195,437		$	15.98
Granted		265,538			15.14
Forfeited		(50,458	)		15.82
Vested		(74,466	)		16.10
Unvested balance, September 30, 2011		336,051		$	15.31

As of September 30, 2011, total unearned compensation on restricted awards was approximately $4.3 million, and the weighted average vesting period was 3.0 years.

Operating Partnership Units

In connection with the Company’s IPO, we issued 25,883 Operating Partnership units, which were fair valued at $15.98 per unit or $0.4 million in total. The Operating Partnership units will be amortized on a straight-line basis to expense over the vesting period. As of September 30, 2011, 8,627 units have vested and 17,256 units were unvested. As of September 30, 2011, total unearned compensation on Operating Partnership units was approximately $0.3 million, and the weighted average vesting period was 2.0 years.