Commitments and Contingencies

12 Months Ended

Dec. 31, 2013

Commitments and Contingencies

Commitments and Contingencies

15. Commitments and Contingencies

        Our properties require periodic investments of capital for general capital improvements and for tenant related capital expenditures. Additionally, the Company enters into various construction and equipment contracts with third parties for the development of our properties. At December 31, 2013, we had open commitments related to construction contracts of approximately $28.9 million.

        Additionally, the Company has commitments related to telecommunications capacity used to connect data centers located within the same market or geographical area and power usage. At December 31, 2013, we had open commitments related to these contracts of approximately $5.6 million.

        We have agreed with each of the Funds or their affiliates that have directly or indirectly contributed their interests in the properties in our portfolio to our operating partnership that if we directly or indirectly sell, convey, transfer or otherwise dispose of all or any portion of these interests in a taxable transaction, we will make an interest-free loan to the contributors in an amount equal to the contributor's tax liabilities, based on an assumed tax rate, with respect to built-in-gains generated from the initial contribution. These tax protection provisions apply for a period expiring on the earliest of (i) the seventh anniversary of the completion of our IPO and (ii) the date on which these contributors (or certain transferees) dispose in certain taxable transactions of 90% of the operating partnership units that were issued to them in connection with the contribution of these properties.

        As part of our 2012 acquisition of Comfluent, a Denver, Colorado based data center operator, the former Comfluent owner was hired and is compensated based upon successfully renewing and increasing revenue from the customer base that existed at the date of acquisition. We currently estimate that this amount is $8.0 million, assuming all customers are renewed beyond January 2015. We currently have $1.2 million accrued as a leasing commission related to those customers that have been renewed as of December 31, 2013.

        Effective January 24, 2014, Jarrett Appleby, our former Chief Operating Officer, separated from the Company. In accordance with Mr. Appleby's employment agreement, we estimated $0.9 million of expense during the first quarter of 2014 associated with cash severance benefits and acceleration of share-based compensation.

        From time to time, we are party to a variety of legal proceedings arising in the ordinary course of business. We believe that, with respect to any such matters to which we currently are a party, the ultimate disposition of any such matter will not result in a material adverse effect on us.