10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

☒     ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2020

OR

☐     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission File Number 001-36109

QTS Realty Trust, Inc.

(Exact name of registrant as specified in its charter)

Maryland

(State or other jurisdiction of

incorporation or organization)

46-2809094

(I.R.S. Employer

Identification No.)

12851 Foster Street, Overland Park, Kansas

(Address of principal executive offices)

66213

(Zip Code)

(913) 312-5503

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Class A common stock, $.01 par value	QTS	New York Stock Exchange
Preferred Stock, 7.125% Series A Cumulative Redeemable Perpetual, $0.01 par value	QTS.PRA	New York Stock Exchange
Preferred Stock, 6.50% Series B Cumulative Convertible Perpetual, $0.01 par value	QTS.PRB	New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes ☒ No ☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act.

Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.:

Large Accelerated Filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. □

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.

Yes ☒ No ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

The aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the Class A common stock, $0.01 par value per share, was last sold at June 30, 2020 was approximately $3.9 billion. There were 64,520,050 shares of Class A common stock and 124,995 shares of Class B common stock, $0.01 par value per share, of the registrant outstanding on February 22, 2021.

Documents Incorporated by Reference

Portions of the Definitive Proxy Statement for our 2021 Annual Meeting of Stockholders are incorporated by reference into Part III of this report. We expect to file our proxy statement within 120 days after December 31, 2020.

Table of Contents

TABLE OF CONTENTS

	Page
PART I
ITEM 1.	BUSINESS	5
ITEM 1A.	RISK FACTORS	13
ITEM 1B.	UNRESOLVED STAFF COMMENTS	41
ITEM 2.	PROPERTIES	41
ITEM 3.	LEGAL PROCEEDINGS	60
ITEM 4.	MINE SAFETY DISCLOSURES	60
PART II
ITEM 5.	MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	60
ITEM 6.	SELECTED FINANCIAL DATA	62
ITEM 7.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	69
ITEM 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	91
ITEM 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	92
ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	92
ITEM 9A.	CONTROLS AND PROCEDURES	92
ITEM 9B.	OTHER INFORMATION	93
PART III
ITEM 10.	DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE	94
ITEM 11.	EXECUTIVE COMPENSATION	94
ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	94
ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE	94
ITEM 14.	PRINCIPAL ACCOUNTING FEES AND SERVICES	94
PART IV
ITEM 15.	EXHIBITS, FINANCIAL STATEMENT SCHEDULES	95
	INDEX TO EXHIBITS	96
ITEM 16.	FORM 10-K SUMMARY	102
	SIGNATURES	103
INDEX TO FINANCIAL STATEMENTS		F-1

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

Some of the statements contained in this Form 10-K constitute forward-looking statements within the meaning of the federal securities laws. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. In particular, statements pertaining to the COVID-19 pandemic, its impact on us and our response thereto, and our strategy, plans, intentions, capital resources, liquidity, portfolio performance, results of operations, anticipated growth in our funds from operations and anticipated market conditions contain forward-looking statements. In some cases, you can identify forward-looking statements by the use of forward-looking terminology such as “may,” “will,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” or “potential” or the negative of these words and phrases or similar words or phrases which are predictions of or indicate future events or trends and which do not relate solely to historical matters.

The forward-looking statements contained in this Form 10-K reflect our current views about future events and are subject to numerous known and unknown risks, uncertainties, assumptions and changes in circumstances that may cause our actual results to differ significantly from those expressed in any forward-looking statement. We do not guarantee that the transactions and events described will happen as described (or that they will happen at all). The following factors, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements:

•adverse economic or real estate developments in our markets or the technology industry;

•obsolescence or reduction in marketability of our infrastructure due to changing industry demands;

•global, national and local economic conditions;

•risks related to the COVID-19 pandemic, including, but not limited to, the risk of business and/or operational disruptions, disruption of our customers’ businesses that could affect their ability to make rental payments to us, supply chain disruptions and delays in the construction or development of our data centers;

•risks related to our international operations;

•difficulties in identifying properties to acquire and completing acquisitions;

•our failure to successfully develop, redevelop and operate acquired properties or lines of business

•significant increases in construction and development costs;

•the increasingly competitive environment in which we operate;

•defaults on, or termination or non-renewal of, leases by customers;

•decreased rental rates or increased vacancy rates;

•increased interest rates and operating costs, including increased energy costs;

•financing risks, including our failure to obtain necessary outside financing;

•dependence on third parties to provide Internet, telecommunications and network connectivity to our data centers;

•our failure to qualify and maintain QTS’ qualification as a real estate investment trust (“REIT”);

•environmental uncertainties and risks related to natural disasters;

•financial market fluctuations;

•changes in real estate and zoning laws, revaluations for tax purposes and increases in real property tax rates; and;

•limitations inherent in our current and any future joint venture investments, such as lack of sole-decision making authority and reliance on our partners’ financial condition

While forward-looking statements reflect our good faith beliefs, they are not guarantees of future performance. Any forward-looking statement speaks only as of the date on which it was made. We disclaim any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, of new information, data or methods, future events or other changes. For a further discussion of these and other factors that could cause our future results to differ materially from any forward-looking statements, see the section entitled “Risk Factors”.

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RISK FACTOR SUMMARY

An investment in our common stock involves a high degree of risk. You should carefully consider the risks summarized below in evaluating our Company and our business. The risks summarized below are what we believe are the principal risk factors but these risks are not the only ones we face, and you should carefully review and consider the full discussion of our risk factors in the section titled “Risk Factors”, together with the other information in this Annual Report on Form 10-K. If any of the risks summarized below or discussed in this Form 10-K were to occur, our business, prospects, financial condition, liquidity, funds from operations and results of operations and our ability to service our debt and make distributions to our stockholders could be materially and adversely affected, which we refer to herein collectively as a “material adverse effect on us,”, the market price of our common stock could decline significantly and you could lose all or part of your investment. Some statements in this Form 10-K, including statements in the section titled “Risk Factors”, constitute forward-looking statements. Please refer to the section above entitled “Special Note Regarding Forward Looking Statements.”

Risks Related to COVID-19

•Our business may be adversely affected by the ongoing COVID-19 pandemic or by future outbreaks of highly infectious or contagious diseases or other public health crises.

Risks Related to Our Business and Operations

•Because we are focused on the ownership, operation, redevelopment and/or construction of data centers, any decrease in the demand for data center space could have a material adverse effect on us.

•Our data center infrastructure may become obsolete or unmarketable and we may not be able to upgrade our power, cooling, security or connectivity systems cost-effectively or at all.

•We face considerable competition in the data center industry and may be unable to renew existing leases, lease vacant space or re-let space on more favorable terms, or at all, as leases expire, which could have a material adverse effect on us.

•Our government customers, contracts and subcontracts may subject us to additional risks, including early termination, audits, investigations, sanctions and penalties, which could have a material adverse effect on us.

•Our future growth depends upon the successful expansion or redevelopment of our existing properties, the development of new properties, and any delays or unexpected costs in such expansion, redevelopment or development could have a material adverse effect on us.

•Security breaches at our facilities or affecting our networks may result in disclosure of sensitive customer information that could harm our reputation and expose us to liability from customers and government agencies, and we may incur increasing or uncertain compliance and prevention costs, all of which could have a material adverse effect on us.

•Any inability to recruit or retain qualified personnel, or maintain access to key third-party service providers and software developers, could have a material adverse effect on us.

Risks Related to Financing

•An inability to access external sources of capital on favorable terms or at all could limit our ability to execute our business and growth strategies.

•The agreements governing our existing indebtedness contain various covenants and other provisions which limit management’s discretion in the operation of our business, reduce our operational flexibility and create default risks.

Risks Related to the Real Estate Industry

•The operating performance and value of our properties is subject to risks associated with the real estate industry.

•The illiquidity of real estate investments could significantly impede our ability to respond to adverse changes in economic, financial, investment and other conditions.

•We could become subject to liability for failure to comply with environmental, health and safety requirements or zoning laws, which could cause us to incur additional expenses.

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Risks Related to Our Organizational Structure

•As of December 31, 2020, Chad L. Williams, our Chairman and Chief Executive Officer, owned approximately 9.1% of QTS’ outstanding common stock on a fully diluted basis and has the ability to exercise significant influence on the company and any matter presented to its stockholders.

•The tax protection agreement, during its term, could limit our ability to sell or otherwise dispose of certain properties and may require the Operating Partnership to maintain certain debt levels and agree to certain terms with lenders that otherwise would not be required to operate our business.

•Our rights and the rights of our stockholders to take action against our directors and officers are limited, which could limit our stockholders’ recourse in the even to factions not in our stockholders’ best interests.

Risks Related to our Class A Common Stock

•Our cash available for distribution to stockholders may not be sufficient to pay distributions at expected or REIT-required levels, or at all, and we may need to borrow or rely on other third-party capital in order to make such distributions, as to which no assurance can be given, which could cause the market price of our common stock to decline significantly.

Risks Related to QTS’ Status as a REIT

•If QTS does not qualify as a REIT, or fails to remain qualified as a REIT, we will be subject to U.S. federal income tax as a regular corporation and could face significant tax liability, which could reduce the amount of cash available for distribution to our stockholders, could have a material adverse effect on QTS, and could adversely affect the Operating Partnership’s ability to service its indebtedness.

•The REIT distribution requirements could adversely affect our ability to grow our business and may force us to seek third-party capital during unfavorable market conditions.

•Our ability to own stock and securities of TRSs is limited and our transactions with our TRSs will cause us to be subject to 100% penalty tax on certain income or deductions if those transactions are not conducted on arm’s-length terms.

General Risk Factors

•Our business could be negatively affected as a result of actions by activist stockholders.

•We are exposed to ongoing litigation and other legal and regulatory actions, which may divert management's time and attention, require us to pay damages and expenses or restrict the operation of our business.

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PART I

ITEM 1.    BUSINESS

Unless the context requires otherwise, references in this Form 10-K to “we,” “our,” “us,” “our company” and “the Company” refer to QTS Realty Trust, Inc. (“QTS”), a Maryland corporation, together with its consolidated subsidiaries, including QualityTech, LP, a Delaware limited partnership, which we refer to in this Form 10-K as the “Operating Partnership” or “predecessor.”

Overview

QTS is a leading provider of data center solutions to the world’s largest and most sophisticated hyperscale technology companies, enterprises and government agencies. Through our technology-enabled platform, delivered across mega scale data center infrastructure, we offer a comprehensive portfolio of secure and compliant IT solutions. Our data centers are facilities that power and support our customers’ IT infrastructure equipment and provide seamless access and connectivity to a range of communications and IT services providers. Across our broad footprint of strategically located data centers, we provide flexible, scalable and secure IT solutions, including data center space, power and cooling, connectivity and value-add managed services for more than 1,200 customers in the financial services, healthcare, retail, government, technology and various other industries. We build out our data center facilities depending on the needs of our customers to accommodate both multi-tenant environments (hybrid colocation) and customers that require significant amounts of space and power (hyperscale), including federal customers. We believe that we own and operate one of the largest portfolios of multi-tenant data centers in the United States, as measured by gross square footage, and have the capacity to nearly double our sellable data center raised floor space without constructing or acquiring any new buildings. In addition, we own more than 785 acres of land that is available at our data center properties that provides us with the opportunity to significantly expand our capacity to further support future demand from current and new potential customers.

As of December 31, 2020, our data center portfolio consisted of 28 data centers located throughout the United States, Canada and Europe. Across our footprint, our data centers are concentrated in the markets which we believe offer the highest growth opportunities. Our data centers are highly specialized, mission-critical facilities utilized by our customers to store, power and cool the server, storage, and networking equipment that support their most critical business systems and processes. We believe that our data centers are best-in-class and engineered to adhere to the highest specifications commercially available to customers, providing fully redundant, high-density power and cooling sufficient to meet the needs of the largest companies and organizations in the world. We have demonstrated a strong operating track record of “five-nines” (99.999%) reliability since QTS’ inception.

The COVID-19 Pandemic

The COVID-19 pandemic has caused significant disruptions to the United States and global economy and has contributed to significant volatility in financial markets, however, as of December 31, 2020, these developments have not had a known material adverse effect on our business. As of December 31, 2020, each of our data centers in North America and Europe are fully operational and operating in accordance with our business continuity plans. Across each of the respective jurisdictions in which we operate, our business has been deemed an essential operation, which has allowed us to remain fully staffed with critical personnel in place to continue to provide service and support for our customers.

The extent to which COVID-19 impacts our and our customers’ operations will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration of the pandemic, new information that may emerge concerning the severity, variants or mutations of COVID-19, vaccine efficacy and rollout and other actions taken to contain COVID-19 or treat its impact, among others. The COVID-19 pandemic presents material uncertainty and risk with respect to our business, financial performance, and results of operations and also may exacerbate many of the risks identified under the section entitled “Risk Factors”. For a further discussion of the risks related to the COVID-19 pandemic, see “Item 1A Risk Factors.”

Our Portfolio

As of December 31, 2020, including 100% of the unconsolidated entity with which we are affiliated, we operated 28 data center properties located throughout the United States, Canada and Europe, containing an aggregate of approximately 7.8

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million gross square feet of space, including approximately 3.5 million “basis-of-design” raised floor square feet (approximately 96.9% of which is wholly owned by us including our data center in Santa Clara which is subject to a long-term ground lease), which represents the total sellable data center raised floor potential of our existing data center facilities. This reflects the maximum amount of space in our existing buildings that could be leased following full build-out, depending on the space and power configuration that we deploy. As of December 31, 2020, this space included approximately 2.0 million raised floor operating net rentable square feet, or NRSF, plus approximately 1.6 million square feet of additional raised floor available for development, of which approximately 0.3 million raised floor square feet is expected to become operational by December 31, 2021. Of the total 1.6 million raised floor square feet available for development, approximately 0.2 million square feet was related to customer leases which had been executed as of December 31, 2020 but not yet commenced. Our facilities collectively have access to approximately 1,050 megawatts (“MW”) of available utility power. Access to power typically is the most limiting and expensive component in developing a data center and, as such, we believe our significant access to power represents an important competitive advantage.

We account for the operations of all our properties in one reporting segment.

Our Customer Base

Our data center facilities are designed with the flexibility to support a diverse set of solutions and customers. Our customer base is comprised of more than 1,200 different companies of all sizes representing an array of industries, each with unique and varied business models and needs. We serve Fortune 1000 companies as well as small and medium-sized businesses, or SMBs, including financial institutions, healthcare companies, retail companies, government agencies, communications service providers, software companies and global Internet companies.

We have customers that range from large enterprise and technology companies with significant IT expertise and data center requirements, including financial institutions, “Big Four” accounting firms and the world’s largest global Internet and cloud companies, to major healthcare, government agencies, telecommunications and software and web-based companies.

As a result of our diverse customer base, customer concentration in our portfolio is limited. As of December 31, 2020, only five of our more than 1,200 customers individually accounted for more than 3% of our monthly recurring revenue (“MRR”), with the largest customer accounting for approximately 13.1% of our MRR and the next largest customer accounting for only 5.4% of our MRR.

The majority of our MRR is generated from customers deployed in our U.S. data center locations. Customers deployed in our U.S. data center locations accounted for $38.0 million, $33.6 million and $31.0 million of total MRR as of December 31, 2020, 2019 and 2018, respectively, and MRR from our international locations represented $0.6 million, $0.5 million and $0.2 million of MRR as of December 31, 2020, 2019 and 2018, respectively. As of December 31, 2020, our booked-not-billed MRR balance (which represents customer leases that have been executed, but for which lease payments have not commenced as of December 31, 2020) was approximately $12.9 million, or $154.4 million of annualized rent. As of December 31, 2019, our booked-not-billed MRR balance was approximately $7.8 million, or $93.1 million of annualized rent.

Our Structure

Substantially all of our assets are held by, and all of our operations are conducted through, the Operating Partnership. Our interest in the Operating Partnership entitles us to share in cash distributions from, and in the profits and losses of, the Operating Partnership in proportion to our percentage ownership. As the sole general partner of the Operating Partnership, we generally have the exclusive power under the Operating Partnership’s partnership agreement to manage and conduct the Operating Partnership’s business and affairs.

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The following diagram depicts our ownership structure, on a non-diluted basis as of December 31, 2020.

Our Competitive Strengths

We believe that we are uniquely positioned in the data center industry and distinguish ourselves from other data center providers through the following competitive strengths:

•Software-Defined Data Center Platform. QTS’ Service Delivery Platform (“SDP”) is a software-defined orchestration platform that empowers customers to interact with their data and QTS services by providing real-time visibility, access and dynamic control of critical metrics across hybrid environments from a single platform. Collectively, the ability to digitize, analyze and automate significant amounts of data through SDP enables customers to innovate, make better business decisions and maximize their outsourced IT investments both within QTS and across multiple integrated service providers.

•Platform Anchored by Strategically Located, Owned “Mega” Data Centers. Our larger “mega” data centers are located in Ashburn (DC-1 & DC-2), Atlanta (DC-1 & DC-2), Atlanta-Suwanee, Chicago, Fort Worth, Irving, Piscataway, Princeton, Richmond, Hillsboro and Manassas (including one facility which we contributed to an unconsolidated entity and a separate facility under development in Manassas that is 100% owned by us). Our facilities are constructed with the flexibility and capacity to support multi-tenant environments across a broad range of customer types, sizes and IT infrastructure requirements, which we believe delivers greater efficiency than single-use or smaller scale data centers. We believe that our data centers are engineered to among the highest specifications commercially available. As of December 31, 2020, our portfolio of 28 data center properties (18 of which are wholly owned, representing 96.9% of our raised square feet, including our data center in Santa Clara which is subject to a long-term ground lease) provides the opportunity to significantly expand our sellable data

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center raised floor capacity without constructing or acquiring any new buildings. In addition, we own approximately 785 acres of land at our existing data center properties that provides us with the opportunity to significantly expand our capacity to further support future demand from current and new potential customers.

•Substantial Data Center Development Expertise. We have gained substantial expertise in developing data center facilities through the acquisition and redevelopment and/or construction of our operating facilities. Our data center development strategy is primarily focused on “mega” scale facilities that allow for significant incremental growth opportunity, either through ground up development or redevelopment of existing data center powered shell footprint. Our data center development strategy allows us to rapidly scale our developments in a modular manner to coincide with customer demand, and drives higher efficiency into our model through increased operating and build cost leverage at scale.

•Balanced Approach to Hyperscale and Hybrid Colocation Verticals. The scale of our facilities combined with our innovative SDP platform and world-class customer service capability, gives us the ability to meet the needs of a broad set of customers ranging from large hyperscale users to smaller enterprises and government agencies. We believe customers will continue to have evolving and diverse IT needs and will prefer providers that can offer the flexibility, scalability and technology solutions that de-risk their future IT journey. We believe our ability to provide solutions to a broad addressable market enhances our leasing velocity, diversifies our customer mix, results in more balanced lease terms and optimizes cash flows from our assets.

•Diversified, High-Quality Customer Base. As of December 31, 2020, our customer base consists of over 1,200 customers, with our largest customer accounting for approximately 13.1% of our MRR and no others greater than 5.4%. Only five of our customers exceeded 3% of our MRR. Our focus on premium customer service and our ability to grow with their IT needs allows us to achieve a low rental churn rate (which is the MRR lost in the period to a customer intending to fully exit our platform in the near term compared to the total MRR at the beginning of the period).

•Robust In-House Sales Capabilities. Our in-house sales force has deep knowledge of our customers’ businesses and IT infrastructure needs and is supported by sophisticated sales management, reporting and incentive systems. Our internal sales force is structured by product offerings, specialized industry segments and, with respect to our colocation product, by geographical region. Therefore, unlike certain other data center companies, we are less dependent on data center brokers to identify and acquire or renew our customers, which we believe is a key enabler of our integrated strategy.

•Security and Compliance Focused. Our operations and compliance teams, led by seasoned management, are focused on providing a high level of physical security, cybersecurity and compliance solutions and consulting in all of our data centers and integrated across our product offerings.

•Balance Sheet Positioned to Fund Continued Growth. As of December 31, 2020, we had approximately $1.2 billion of available liquidity consisting of cash and cash equivalents, net proceeds available under forward equity agreements, and the ability to borrow under our unsecured senior revolving credit facility and our additional term loan. As we continue to expand our real estate portfolio, we can increase availability under our unsecured credit facilities by an additional $750 million, through an accordion feature, as well as access additional net proceeds available under forward equity agreements.

•Seasoned Management Team with Proven Track Record and Strong Alignment with Our Stockholders. Our senior management team represents a strong balance of significant experience across the commercial real estate and technology services industries. We believe our senior management team’s experience will enable us to capitalize on industry relationships by accessing capital from various sources and by providing an ongoing pipeline of attractive leasing and development opportunities while ensuring the future differentiation of our technology-enabled platform.

•Ability to Increase Our Margins Through Our Operating Leverage. We anticipate that our business and growth strategies can be substantially supported by our existing platform. The scale of our data center facilities provides a significant opportunity to realize positive operating leverage as we achieve higher customer occupancy.

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•Continuing to Selectively Expand Our Platform to Other Strategic Markets. We expect to continue to selectively pursue attractive opportunities in strategic locations where we believe our fully integrated platform would give us a competitive advantage in the leasing of a facility or portfolio of assets. We also believe we can integrate additional data center facilities into our platform without adding significant incremental headcount or general and administrative expenses.

•Commitment to Environmental Sustainability. We have committed to leading the industry in sustainability by implementing cost effective, impactful programs that create value for investors and benefit society. We have committed to procuring 100% of our energy from renewable sources by 2025. We build world class LEED-designed facilities, and conserve millions of gallons of water each year through rainwater collection and greywater reuse systems. Our second annual ESG report was released during the year ended December 31, 2020, which highlighted environmental results, introduced new social programs, and discussed our governance structure.

Competition

We compete with developers, owners and operators of data centers and with IT infrastructure companies in the market for data center customers, properties for acquisition and the services of key third-party providers. In addition, we continue to compete with owners and operators of data centers and providers of managed services that follow other business models and may offer one or more of these services. We believe, however, that our product offerings set us apart from our competitors in the data center industry and makes us more attractive to customers, both large and small. In addition, we believe other providers are seeking ways to enter or strengthen their positions in the data center market.

We compete for customers based on factors including location, network connectivity, critical load capacity, flexibility and expertise in the design and operation of data centers. New customers who consider leasing space at our properties and using our products and existing customers evaluating whether to renew or extend a lease also may consider our competitors, including wholesale infrastructure providers and colocation and managed services providers. In addition, our customers may choose to own and operate their own data centers rather than lease from us.

As an owner, developer and operator of data centers, we depend on certain third-party service providers, including engineers and contractors with expertise in the development of data centers and the provision of managed services. The level of competition for the services of specialized contractors and other third-party providers increases the cost of engaging such providers and the risk of delays in operating our data centers and completing our development and redevelopment projects. We also rely upon the services of specialized contractors for the provision of internet connectivity and software-related platforms and services. Competition for their services could lead to a negative impact on our business if they became unavailable to us.

In addition, we face competition for the acquisition of additional properties suitable for the development of data centers from real estate developers in our industry and in other industries and from customers who develop their own data center facilities. Such competition may have the effect of reducing the number of available properties for acquisition, increasing the price of any acquisition and reducing the demand for data center space in the markets we seek to serve.

Regulation

General

Data centers in our markets are subject to various laws, ordinances and regulations, including regulations relating to common areas. We believe that each of our properties has the necessary permits and approvals to operate its business.

Americans With Disabilities Act

Our properties must comply with Title III of the Americans With Disabilities Act (“ADA”) to the extent that such properties are “public accommodations” or “commercial facilities” as defined by the ADA. The ADA may require, for example, removal of structural barriers to access by persons with disabilities in certain public areas of our properties where such removal is readily achievable. We believe that our properties are in substantial compliance with the ADA and that we will not be required to make substantial capital expenditures to address the requirements of the ADA. However, noncompliance with the ADA could result in imposition of fines or an award of damages to private litigants. The obligation to make readily

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achievable accommodations is an ongoing one, and we will continue to assess our properties and to make alterations as appropriate in this respect.

Environmental Matters

Under various federal, state and local laws and regulations, a current or former owner or operator of real property may be liable for the cost to remove or remediate contamination resulting from the presence or discharge of hazardous or toxic substances, wastes or petroleum products on, under, from or in such property. These costs could be substantial, liability under these laws may attach without regard to whether the owner or operator knew of, or was responsible for, the presence of the contaminants, and the liability may be joint and several. Most of our properties presently contain large underground or aboveground fuel storage tanks for emergency power, which is critical to our operations. If any of our tanks has a release of fuel to the environment, we likely would have to pay to clean up the contamination. In addition, prior owners and operators used some of our current properties for industrial and other purposes, which could have resulted in environmental contamination. Moreover, the presence of contamination or the failure to remediate contamination at our properties may (1) expose us to third-party liability (e.g., for cleanup costs, bodily injury or property damage), (2) subject our properties to liens in favor of the government for damages and costs the government incurs in connection with the contamination, (3) impose restrictions on the manner in which a property may be used or businesses may be operated, or (4) materially adversely affect our ability to sell, lease or develop the real estate or to borrow using the real estate as collateral. We also may be liable for the costs of remediating contamination at off-site disposal or treatment facilities where we arranged for disposal or treatment of hazardous substances at such facilities, without regard to whether we comply with environmental laws in doing so. Finally, there may be material environmental liabilities at our properties of which we are not aware. Any of these matters could have a material adverse effect on us.

Our properties are subject to federal, state, and local environmental, health, and safety laws and regulations and zoning requirements, including those regarding the handling of regulated substances and wastes, emissions to the environment, and fire codes. For instance, our properties are subject to regulations regarding the storage of petroleum for auxiliary or emergency power and air emissions arising from the use of power generators. In particular, generators at our data center facilities are subject to strict emissions limitations, which could preclude us from using critical back-up systems and lead to significant business disruptions at such facilities and loss of our reputation. In addition, we lease some of our properties to our customers who also are subject to such environmental, health and safety laws and zoning requirements. If we, or our customers, fail to comply with these various requirements, we might incur costs and liabilities, including governmental fines and penalties. Moreover, we do not know whether existing requirements will change or whether future requirements will require us to make significant unanticipated expenditures that will materially and adversely affect us. Environmental noncompliance liability also could affect a customer’s ability to make rental payments to us. We require our customers to comply with these environmental and health and safety laws and regulations.

See ITEM 1A. RISK FACTORS, Risks Related to the Real Estate Industry, for additional information regarding these risks.

Privacy and Cybersecurity

We may be directly and/or contractually subject to laws, regulations and policies for protecting sensitive data, consumer privacy and vital national interests, some of which are new or evolving. For example, the U.S. government has promulgated regulations and standards subject to authority provided through the enactment of a number of laws, such as the Health Insurance Portability and Accountability Act (“HIPAA”), the Health Information Technology for Economic and Clinical Health Act (“HITECH Act”), the Gramm-Leach-Bliley Act (“GLBA”), and the Federal Information Security Management Act of 2002 (“FISMA”), which require many corporations and federal, state and local governmental entities to control the security of, access to and configuration of their IT systems. A number of states also have enacted laws and regulations that require covered entities, such as data center operators, to implement and maintain security measures to protect certain types of information, such as Social Security numbers, payment card information, and other types of data, from unauthorized use and disclosure. In recent years, three states have passed biometric data security laws and a number of other states and municipalities are exploring similar laws. QTS designed its policies and practices based on the Illinois Biometric Information Privacy Act (“BIPA”), which we believe is the most comprehensive and restrictive law. In addition, industry organizations have adopted and implemented various security and compliance policies. For example, the Payment Card Industry Security Standards Council has issued its mandatory Payment Card Industry Data Security Standard (“PCI DSS”) which is applicable to all organizations processing payment card transactions. In addition to federal laws, the California Consumer Privacy Act (“CCPA”), which regulates data collection and privacy collection, took effect in 2020. Less than a year after the CCPA went

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into effect, California voters passed the California Privacy Rights Act (“CPRA”), which amends various parts of the CCPA. The CPRA, which becomes effective January 1, 2023, will provide significant new rights to California consumers, create new compliance obligations for covered businesses, establish a new enforcement agency, and provide for data minimization and retention obligations. In addition to California, several other states, including Virginia and Washington, continue to consider passing their own comprehensive privacy laws.

In connection with certain of these laws, we are subject to audits and assessments, and we may be required to obtain certain certifications. Audit failure or findings of non-compliance can lead to significant fines or decertification from engaging in certain activities. For example, violations of HIPAA/HITECH Act regulations can lead to fines of up to $1.5 million for all violations of a particular provision in a calendar year and our failure to demonstrate compliance in an annual PCI DSS audit may result in fines and exclusion from payment card networks. Additionally, violations of privacy or security laws, regulations or standards increasingly lead to class-action litigation, which can result in substantial monetary judgments or settlements. We cannot assure you that future laws, regulations and standards, or future interpretations of current laws, regulations and standards, related to privacy and security will not have a material adverse effect on us.

As a company that may process European personal data, we also may be subject to European data protection laws and regulations. The European General Data Protection Regulation (“GDPR”) which took effect in 2018, increases the likelihood of applicability of European data protection law to entities like us, which are established outside the EU but may process data of European data subjects. Under the GDPR, there can be fines of up to €10,000,000 or up to 2% of the global sales, whichever is greater, for certain comparatively minor offenses, or up to €20,000,000 or up to 4% of the global sales, whichever is greater, for more serious offenses. Among other requirements, the GDPR prohibits the transfer of personal information to countries outside of the European Economic Area ("EEA") that are not considered by the European Commission to provide an adequate level of data protection, such as the U.S., unless there is a suitable data transfer solution in place to safeguard personal data. On July 16, 2020, the Court of Justice of the European Union (CJEU) invalidated the European Commission’s adequacy decision that allowed companies, such as QTS, to self-certify under the EU-U.S. Privacy Shield. As a result, organizations are no longer able to use this framework to transfer personal data, and thus must use alternative transfer mechanisms.

Also in 2018, EU member states were required to enact national laws to enforce the EU’s “Directive on security of network and information systems” (the “NIS Directive”), which lays out a number of cybersecurity expectations and notification obligations for regulated entities. In December 2020, the EU released proposed revisions to the NIS Directive that would, among other things, enhance specific cybersecurity requirements and require EU member states to have authority to issue fines of up to €10,000,000 or up to 2% of the global sales, whichever is greater.

Insurance

We carry comprehensive general liability, property, earthquake, flood, business interruption and rental loss insurance covering all of the properties in our portfolio. We also carry coverage for technology professional liability, and cybersecurity. We have selected policy specifications and insured limits that we believe to be appropriate given the relative risk of loss, the cost of the coverage and industry practice. In the opinion of our management, the properties in our portfolio are currently adequately insured and the risk for any failure related to professional liability or a physical or cybersecurity breach are adequately covered by our insurance. We will not carry insurance for generally uninsured losses such as loss from riots, war, wet or dry rot, vermin and, in some cases, flooding and earthquake, because such coverage is not available or is not available at commercially reasonable rates. In addition, although we carry earthquake and flood insurance on our properties in an amount and with deductibles that we believe are commercially reasonable, such policies are subject to limitations in certain flood and seismically active zones. Certain of the properties in our portfolio are located in areas known to be seismically active. See “Risk Factors—Risks Related to the Real Estate Industry—Uninsured and underinsured losses could have a material adverse effect on us.”

Human Capital Management

As evidenced by our Powered by People approach, we believe that how we deliver our services is just as important as what is delivered. This means, among other things, caring for and improving the lives of our current and future employees. We believe our success depends in large part on our ability to recruit, develop and retain a productive and engaged workforce. Accordingly, investing in our employees and their well-being, offering competitive compensation and benefits, and implementing effective and thoughtful human capital management practices constitute key elements of our corporate strategy.

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Headcount Data

As of December 31, 2020, our data center solutions were marketed, provided and supported by talented individuals that comprise our workforce of 634 employees. Our Facilities Operations comprised 41% of our total employee base, directly responsible for the operation of our data centers spanning 28 locations. Our management and executive employees comprise 28% of QTS’ workforce.

Recruitment

From our inception, we have been Powered by People and recognize how critical it is to invest in all QTS employees ranging from the way we attract and develop talent through accelerating engagement and fostering retention. Attracting the right talent is a foundation that supports QTS’ continued growth and success. We have broadened our traditional recruiting channels in order to discover top talent, which has, consequently, produced more diverse candidate pools. We have found success in working with organizations focused on serving transitioning service members, minorities and women.

We recognize attracting talent is also driven by ensuring our current employees are engaged. We foster employee engagement by regularly seeking feedback through surveys, focus groups and social media, as further described below. We also prioritize attracting talent by offering our current employees referral bonuses for recruiting colleagues to join QTS.

Diversity and Inclusion

We believe a focus on diversity and inclusion is important to achieve our long-term growth objectives, and we strive to build an even more diverse and inclusive organization. Moreover, we believe that creating an environment where everyone feels they belong is simply the right thing to do. Our ongoing diversity efforts include recruitment at women’s technology group events, targeted recruitment campaigns aimed at attracting diverse employees, involvement with local diverse organizations focused on building bench strength, mentorship programs for women and minorities, inclusive professional groups, and involvement within the Veterans community to target a more diverse workforce. Our Women Inspiring Leadership ("WIL") program is open to all employees to participate in on a voluntary basis. We have seen the success of this internally developed program focused on developing and inspiring leaders through focus panels, training events, partnering with a professional association for women in technology and hosting guest speakers from all backgrounds. WIL also coordinates a mentoring program that is available to all QTS employees. The WIL mentoring program provides structured relationships to drive employees to their potential and provide an opportunity for QTS employees to give back to those earlier in their respective careers. The WIL program creates a natural outlet for QTS employees to have open dialogue around thoughts and feelings related to diversity.

Employee Development/Training

We focus on equipping QTS employees with the tools to grow, connect and reach their fullest potential through our various development programs. Our state-of-the-art training facilities allow us to reach across the organization and bring QTS employees together and foster professional growth, whether it be in person or virtual. We have established leadership competencies for all employees and ensure leaders at every level work to engrain these competencies within their teams through their everyday actions. We believe our leaders are our strongest conduit to fostering our culture and driving employee engagement and are pleased at the success that has come from our Lead the Way program which provides tailored content and development training so that our leaders have the tools they need to be successful.

Our strategy behind investing in employee development has better prepared and equipped employees to serve our clients, increased our internal hiring opportunities, attracted candidates committed to continuous learning and enabled a higher level of employee fulfillment and satisfaction.

Employee Engagement

Maintaining employee engagement, energy and satisfaction is a top priority. We execute on this priority in several ways including acknowledging employee effort and performance, reinforcing behaviors that align with our Core Values, supporting a variety of wellness programs and opportunities and providing competitive compensation based on merit.

We continue to engage employees through our succession planning initiatives, focusing on developing and rewarding QTS employees who are most critical to achieving our business objectives and make the largest impact. We ensure succession

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plans are built for our critical roles, leveraging insights to build internal pipelines of candidates. Our leaders complete company-wide talent reviews on a regular basis to ensure we maximize our talent landscape.

We recognize the need to consistently focus on the evolving needs of employees and have introduced several programs to drive engagement and ensure employee needs are being met, including:

•Employee Value Proposition ("EVP") - QTS’ EVP program is comprised of employee volunteers at each QTS location who meet regularly to discuss local employee concerns and feedback. Their direct connection to senior leadership provides QTS senior leadership the ability to quickly understand needs and define where to focus its resources and benefits.

•Employee Experience - QTS’ Employee Experience program focuses on broad topics across the organization that drive employee engagement. In 2020, our areas of focus and key wins addressed tools needed to drive efficiency and ease of use, communication methods and vehicles, and recognition and rewards.

•Wellness - QTS’ Wellness program focuses on mental, physical and financial health and includes quarterly wellness challenges. The top challenges in 2020 were ‘Step It Up’, a friendly step-counting competition to promote physical health, as well as ‘QTS Chef’ featuring themed weekly cooking competitions.

•Facilities Career Pathing - Our Facilities Career Pathing program clearly defines the career roadmap for our facilities employees including the necessary steps to complete for promotion. The program provides clarity, consistency and recognition for those who wish to grow their career at QTS within the facilities organizations.

•QTS Journey - QTS Journey is a robust onboarding initiative which brings new employees from across the organization together to efficiently learn about QTS’ business and functions, build an immediate network and enable quick contributions and performance.

•Eagle Club - The purpose of the QTS Eagle Club is to give recognition and acknowledgement to employees for their exceptional contributions and accomplishments within their role over a 12-month period.

Community Service and Volunteerism

Community service and volunteerism are pillars of our culture and engrained in our people. Every year, QTS provides all QTS employees three (3) paid days to volunteer and give back to QTS communities. While many volunteer events were impacted by the COVID-19 pandemic during 2020, our employees continued to support the local communities in which we operate in various forms, including donations to food banks and hosting toy and winter coat drives.

Offices

Our executive headquarters is located at 12851 Foster Street, Overland Park, Kansas 66213, where our telephone number is (913) 814-9988. We believe that our current offices are adequate for our present operations; however, based on the anticipated growth of our company, we may add regional offices depending upon our future operational needs.

Available Information

Our Internet website address is www.qtsdatacenters.com. You can obtain on our website, free of charge, a copy of our Annual Report on Form 10-K, our quarterly reports on Form 10-Q, our current reports on Form 8-K, and any amendments to those reports, as soon as reasonably practicable after we electronically file such reports or amendments with, or furnish them to, the SEC. Our Internet website and the information contained therein or connected thereto are not intended to be incorporated into this Annual Report on Form 10-K.

Also available on our website, free of charge, are copies of our Code of Business Conduct and Ethics, our Corporate Governance Guidelines, and the charters for each of the committees of our board of directors—the Audit Committee, the Nominating and Corporate Governance Committee, the Compensation Committee and the Security Committee.

ITEM 1A.    RISK FACTORS

Set forth below are the risks that we believe are material to our stockholders. You should carefully consider the following risks in evaluating our Company and our business. If any of the risks discussed in this Form 10-K were to occur, our business, prospects, financial condition, liquidity, funds from operations and results of operations and our ability to service our debt and make distributions to our stockholders could be materially and adversely affected, which we refer to herein

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collectively as a “material adverse effect on us,” the market price of our common stock could decline significantly and you could lose all or part of your investment. Some statements in this Form 10-K, including statements in the following risk factors, constitute forward-looking statements. Please refer to the section entitled “Special Note Regarding Forward-Looking Statements” at the beginning of this Form 10-K.

Risks Related to COVID-19

Our business may be adversely affected by the ongoing coronavirus (COVID-19) pandemic or by future outbreaks of highly infectious or contagious diseases or other public health crises.

The ongoing coronavirus (COVID-19) pandemic is causing significant disruptions to the United States and global economy and has contributed to significant volatility and negative pressure in financial markets. The global impact of the outbreak is rapidly evolving and, as cases, and new strains, of the virus have continued to be identified, many countries, including the United States, have reacted by instituting or reinstituting quarantines, restrictions on travel and mandatory closures of businesses. The COVID-19 pandemic or any other future outbreaks of highly infectious or contagious diseases or other public health crises, and any preventative or protective actions that we or others may take in response thereto, may result in business and/or operational disruption for us and/or our customers, suppliers, contractors, capital sources and other business partners. For example, our customers’ businesses have been and may continue to be disrupted due to the COVID-19 pandemic, which affected their ability to make rental payments to us, and if this were to continue to occur, our revenues could be negatively affected.

Furthermore, the COVID-19 pandemic has and may continue to negatively impact our supply chain, increase the costs of development and cause delays in the construction or development of our data centers due to delays in the ability to obtain permits, disruptions in the availability of contractors, disruptions in the supply of materials or products or the inability of our contractors to perform on a timely basis or at all, and it may not be possible to find replacement products or supplies. Any such disruptions or delays such could adversely affect our business and growth.

Additional factors that could negatively impact our ability to successfully operate during or following the COVID-19 pandemic or similar public health crises, or that could otherwise significantly adversely impact and disrupt our business, financial condition and results of operations, include, but are not limited to, the risk of unanticipated operating costs and expenses related to measures taken to ensure health and safety and business continuity; difficulty in accessing debt and equity capital on attractive terms, or at all, or a severe disruption and instability in the global financial markets or deteriorations in credit and financing conditions, which could affect our access to capital necessary to fund our operations and liquidity needs; the increased risk of cyber incidents and disruptions to our internal control procedures due to increased teleworking and state and local stay-at-home orders, and the processes, procedures and controls that we have implemented to help mitigate cyber risks may not be sufficient or that our internal control procedures may experience challenges or delays; the continued service and availability of personnel, including our executive officers and other leaders who are part of our management team and our ability to recruit, attract and retain skilled personnel to the extent our management or personnel are impacted in significant numbers or in other significant ways by the outbreak of this or another pandemic or epidemic disease and are not available or allowed to conduct work; the risk of asset impairments due to future changes in expectations for sales, earnings and cash flows related to fixed assets, intangible assets and goodwill; and increased susceptibility to litigation related to, among other things, the financial impacts of COVID-19 on our business.

Any of the foregoing risks and developments, as well as others, could have a material adverse effect on our business, financial condition and results of operations. The extent to which the COVID-19 pandemic impacts our business and operations remains largely uncertain and will depend on future developments that are highly uncertain and cannot be predicted with confidence, including the duration and scope of the pandemic, new information that may emerge concerning the severity of COVID-19, the response of the overall economy and financial markets and the actions taken to contain COVID-19 or treat its impact, such as the availability and efficacy of the COVID-19 vaccine, government actions, laws or orders or any changes or amendments thereto and the success of any lifting or easing of, or the risk of any premature lifting or easing of, any such restrictions, among others. The COVID-19 pandemic presents material uncertainty and risk with respect to our business, financial performance, and results of operations and may also exacerbate many of the risks identified below.

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Risks Related to Our Business and Operations

Because we are focused on the ownership, operation, redevelopment and/or construction of data centers, any decrease in the demand for data center space could have a material adverse effect on us.

Because our portfolio consists entirely of data centers, or land to be developed or converted into data centers, we are subject to risks inherent in investments in a single industry. Adverse developments in the data center market or in the industries in which our customers operate could lead to a decrease in the demand for data center space, which could have a greater material adverse effect on us than if we owned a more diversified real estate portfolio. These adverse developments could include: a decline in the technology industry, such as a decrease in the use of mobile or web-based commerce, industry slowdowns, business layoffs or downsizing, relocation of businesses, increased costs of complying with existing or new government regulations and other factors; a slowdown in the growth of the Internet generally as a medium for commerce and communication; a downturn in the market for data center space generally such as oversupply of or reduced demand for space; and the rapid development of new technologies or the adoption of new industry standards that render our or our customers’ current products and services obsolete or unmarketable and, in the case of our customers, that contribute to a downturn in their businesses, increasing the likelihood of a default under their leases or that they become insolvent or file for bankruptcy protection. To the extent that any of these or other adverse conditions occur, they are likely to impact market rents for, and cash flows from, our data center space, which could have a material adverse effect on us.

Our data center infrastructure may become obsolete or unmarketable and we may not be able to upgrade our power, cooling, security or connectivity systems cost-effectively or at all.

The markets for the data centers we own and operate, as well as certain of the industries in which our customers operate, are characterized by rapidly changing technology, evolving industry standards, frequent new service introductions, shifting distribution channels and changing customer demands. As a result, the infrastructure at our data centers may become obsolete or unmarketable due to demand for new processes and/or technologies, including, without limitation: (i) new processes to deliver power to, or eliminate heat from, computer systems; (ii) customer demand for additional redundancy capacity or, conversely, reduced redundancy capacity; or (iii) new technology that permits lower levels of critical load and heat removal than our data centers are currently designed to provide. In addition, the systems that connect our data centers to the Internet and other external networks may become outdated, including with respect to latency, reliability and diversity of connectivity. When customers demand new processes or technologies, we may not be able to upgrade our data centers on a cost-effective basis, or at all, due to, among other things, increased expenses to us that cannot be passed on to customers or insufficient revenue to fund the necessary capital expenditures. The obsolescence of our power and cooling systems and/or our inability to upgrade our data centers, including associated connectivity, could reduce revenue at our data centers and could have a material adverse effect on us. Furthermore, potential future regulations that apply to industries we serve may require customers in those industries to seek specific requirements from their data centers that we are unable to provide. These may include physical security regulations applicable to the defense industry and government contractors and privacy and security requirements applicable to the financial services and health care industries. If such regulations were adopted, we could lose customers or be unable to attract new customers in certain industries, which could have a material adverse effect on us.

We face considerable competition in the data center industry and may be unable to renew existing leases, lease vacant space or re-let space on more favorable terms, or at all, as leases expire, which could have a material adverse effect on us.

Leases representing approximately 24% of our leased raised floor and approximately 33% of our annualized rent (including all month-to-month leases), in each case as of December 31, 2020, are scheduled to expire by the end of 2021. The global multi-tenant data center market is highly fragmented and we compete with numerous developers, owners and operators in the data center industry, including managed service providers and other REITs, some of which own or lease properties similar to ours, or may do so in the future, in the same submarkets in which our properties are located. Our competitors may have significant advantages over us, including greater name recognition, longer operating histories, higher operating margins, pre-existing relationships with current or potential customers, greater financial, marketing and other resources, and access to greater and less expensive power. These advantages could allow our competitors to respond more quickly to strategic opportunities or changes in our industry or markets. If our competitors offer space at rental rates below current market rates or below the rental rates we currently charge our customers, or if our competitors offer products and services in a greater variety, that are more state-of-the-art or that are more competitively priced than the products and services we offer, we may lose customers or be unable to attract new customers without lowering our rental rates and improving the quality, mix and technology of our products and services. We cannot assure you that we will be able to lease vacant space, renew leases with our existing customers or re-let space to new customers if our current customers do not renew their leases. Even if our

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customers renew their leases or we are able to re-let the space, the terms (including rental rates and lease periods) and costs (including capital) of renewal or re-letting may be less favorable than the terms of our current leases. In addition, there can be no assurances that the type of space and/or services currently available at our properties will be sufficient to retain current customers or attract new customers in the future. Although we offer a full spectrum of data center products from hyperscale to hybrid colocation to certain managed services, our competitors that specialize in only one of our products and service offerings may have competitive advantages in that space. If rental rates for our properties decline, we are unable to lease vacant space, our existing customers do not renew their leases or we do not re-let space from expiring leases, in each case, on favorable terms, it could have a material adverse effect on us.

Our customers may choose to develop new data centers, expand their own existing data centers, or choose to go to a cloud provider, which could result in the loss of one or more key customers or reduce demand and pricing for our data centers and could have a material adverse effect on us.

Some of our customers may develop or expand their own data center facilities or choose to take their data to a cloud provider. Our customers may also merge with or be acquired by other entities that are not our customers, and may discontinue or reduce the use of our data centers in the future. If any of these events occurs with respect to our key customers, it could result in a loss of business to us or put downward pressure on our pricing. If we lose a customer, there is no assurance that we would be able to replace that customer at the same or a higher rate, or at all, which could have a material adverse effect on us.

The bankruptcy, insolvency or financial difficulties of a major customer could have a material adverse effect on us.

The bankruptcy or insolvency of a major customer could have significant consequences for us. If any customer becomes a debtor in a case under the federal Bankruptcy Code, we cannot evict the customer solely because of the bankruptcy. In addition, the bankruptcy court might authorize the customer to reject and terminate its lease with us. Our claim against the customer for unpaid future rent would be subject to a statutory cap that might be substantially less than the remaining rent owed under the lease. In either case, our claim for unpaid rent likely would not be paid in full. If any of our significant customers were to become bankrupt or insolvent or suffer a downturn in their business, they may fail to renew, or reject or terminate, their leases with us and/or fail to pay unpaid or future rent owed to us, which could have a material adverse effect on us.

Any inability, temporarily or permanently, to fully and consistently operate either of our Atlanta (DC-1) and Atlanta-Suwanee properties could have a material adverse effect on us.

Our two largest wholly-owned properties in terms of annualized rent, Atlanta (DC-1) (formerly known as our Atlanta Metro facility) and Atlanta-Suwanee, collectively accounted for approximately 39% of our annualized rent as of December 31, 2020. Therefore, any inability, temporarily or permanently, to fully and consistently operate either of these properties could have a material adverse effect on us. In addition, because both properties are located in the Atlanta metropolitan area, we are particularly susceptible to adverse developments in that area, including as a result of natural disasters (such as hurricanes, floods, tornadoes and other events), that could cause, among other things, permanent damage to the properties and electrical power outages that may last beyond our backup and alternative power arrangements. Further, Atlanta (DC-1) and Atlanta-Suwanee account for several of our largest leases in terms of MRR. Any nonrenewal, credit or other issues with large customers could adversely affect the performance of these properties.

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We may be adversely affected by the economies and other conditions of the markets in which we operate, particularly in Atlanta and other metropolitan areas, where we have a high concentration of our data center properties.

We are susceptible to adverse economic or other conditions in the geographic markets in which we operate, such as periods of economic slowdown or recession, the oversupply of, or a reduction in demand for, data centers in a particular area, industry slowdowns, layoffs or downsizings, relocation of businesses, increases in real estate and other taxes and changing demographics. The occurrence of these conditions in the specific markets in which we have concentrations of properties could have a material adverse effect on us. Our Atlanta area data centers and our data centers in Virginia (including Richmond, Ashburn, the Vault facility in Dulles, Virginia and leased facilities acquired in 2015), accounted for approximately 42% and 16%, respectively, of our consolidated annualized rent as of December 31, 2020. We also own a 50% interest in the Manassas, Virginia data center that was contributed to an unconsolidated entity, as well as a 100% interest in a new data center for which we have commenced construction in Manassas, Virginia. As a result, we are particularly susceptible to adverse market conditions in these areas. In addition, other geographic markets could become more attractive for developers, operators and customers of data center facilities based on favorable costs and other conditions to construct or operate data center facilities in those markets. For example, some states have created tax incentives for developers and operators to locate data center facilities in their jurisdictions. These changes in other markets may increase demand in those markets and result in a corresponding decrease in demand in our markets. Any adverse economic or real estate developments in the geographic markets in which we have a concentration of properties, or in any of the other markets in which we operate, or any decrease in demand for data center space resulting from the local business climate or business climate in other markets, could have a material adverse effect on us.

Future consolidation and competition in our customers’ industries could reduce the number of our existing and potential customers and make us dependent on a more limited number of customers.

Mergers or consolidations in our customers’ industries in the future could reduce the number of our existing and potential customers and make us dependent on a more limited number of customers. If our customers merge with or are acquired by other entities that are not our customers, they may discontinue or reduce the use of our data centers in the future. Any of these developments could have a material adverse effect on us.

Our government customers, contracts and subcontracts may subject us to additional risks, including early termination, audits, investigations, sanctions and penalties, which could have a material adverse effect on us.

We derive revenue from contracts with the U.S. government, state and local governments and from subcontracts with government contractors. Some of these customers may be entitled to terminate all or part of their contracts at any time, without cause.

To the extent that funding underlying any of our federal, state or local government contracts or subcontracts is reduced or eliminated, whether by failure to get Congressional approval or other funding authorization or as a result of partial U.S. government shutdowns, there is an increased risk of termination by the counterparties, which could have a material adverse effect on us.

Government contracts and subcontracts also are generally subject to government audits and investigations. To the extent we fail to comply with laws or regulations related to such contracts, any such audit or investigation of us could result in various civil and criminal penalties and administrative sanctions, including termination of such contracts, refund of a portion of fees received, forfeiture of profits, suspension of payments, fines and suspensions or debarment from future government business, any of which could have a material adverse effect on us.

We derive significant revenue from our largest customers, and the loss or significant reduction in business from one or more of these customers could have a material adverse effect on us.

Our top 10 customers collectively accounted for approximately 39% of our portfolio’s total MRR as of December 31, 2020. We have one customer that accounted for approximately 13.1% of our MRR and the next largest customer accounted for only 5.4% of our MRR as of December 31, 2020. As a result, if we lose and are unable to replace one or more of these customers, if these customers significantly reduce their business with us or default on their obligations to us or if we choose not to enforce, or to enforce less vigorously, any rights that we may have now or in the future against these significant customers because of our desire to maintain our relationship with them, our business, financial condition and results of operations, including the amount of cash available for distribution to our stockholders, could be materially adversely affected.

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Our future growth depends upon the successful expansion or redevelopment of our existing properties, the development of new properties, and any delays or unexpected costs in such expansion, redevelopment or development could have a material adverse effect on us.

We have initiated or are contemplating the expansion or redevelopment of multiple of our existing data center properties including: Richmond, Irving, Piscataway, Hillsboro, Chicago, Santa Clara, Ashburn (DC-1), Atlanta (DC-2) and the Manassas facility which was contributed to an unconsolidated entity. Our future growth depends upon the successful completion of these efforts, as well as on development of new properties such as Ashburn (DC-2) and Manassas (DC-2). With respect to our current and any future expansions, developments and redevelopments, we will be subject to certain risks, including the following:

•financing risks;

•increases in interest rates or credit spreads;

•site selection and lack of availability of adequate properties for development;

•construction and/or lease-up delays;

•changes to plans or specifications;

•construction site accidents or other casualties;

•lack of availability of, and/or increased costs for, specialized data center components, including long lead-time items such as generators;

•cost overruns, including construction or labor costs that exceed our original estimates;

•failure of contractors to perform on a timely basis or at all, or other misconduct on the part of contractors;

•contractor and subcontractor disputes, strikes, labor disputes or supply disruptions;

•environmental issues, fire, flooding, earthquakes and other natural disasters;

•delays with respect to obtaining or the inability to obtain necessary zoning, occupancy, environmental, land use and other governmental permits, and changes in zoning and land use laws, particularly with respect to build-outs at our Santa Clara facility;

•failure to achieve expected occupancy and/or rental rate levels within the projected time frame, if at all; and

•sub-optimal mix of products.

In addition, with respect to any expansions, developments or redevelopments, we will be subject to risks and, potentially, unanticipated costs associated with obtaining access to a sufficient amount of power from local utilities, including the need, in some cases, to develop utility substations on our properties in order to accommodate our power needs, constraints on the amount of electricity that a particular locality’s power grid is capable of providing at any given time, and risks associated with the negotiation of long-term power contracts with utility providers. Local utilities may also experience unexpected costs relating to the production or transmission of power, including environmental and other variability associated with downed utility lines. Similarly, we will be subject to the risks and, potentially, unanticipated costs associated with obtaining access to sufficient internet, telecommunication and fiber optic network connectivity. We may not be able to successfully negotiate such contracts on favorable terms, or at all. Any inability to negotiate utility or telecommunications contracts on a timely basis or on favorable terms or in volumes sufficient to supply the critical load and connectivity anticipated for future developments could have a material adverse effect on us.

While we intend to develop data center properties primarily in markets with which we are familiar, we have and may in the future acquire properties in new geographic markets where we expect to achieve favorable risk-adjusted returns on our investment. We may not possess the same level of familiarity with development or redevelopment in these new markets and therefore cannot assure you that our development activities will generate attractive returns. Furthermore, development and redevelopment activities, regardless of whether they are ultimately successful, also typically require a substantial portion of our management’s time and attention. This may distract our management from focusing on other operational activities of our business.

These and other risks could result in delays, increased costs and a lower stabilized return on invested capital and could prevent completion of our development and expansion projects once undertaken, which could have a material adverse effect on us.

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We may commence development of a data center facility prior to having received any commitments from customers to lease any space in the facility and any extended vacancies could have a material adverse effect on our business, results of operations and financial condition.

As part of our growth strategy, we intend to commit substantial operational and financial resources to develop new data centers and expand existing ones. However, we may not require pre‑leasing commitments from customers before we develop or expand a data center, and we may not have sufficient customer demand to lease the new data center space when completed. Once development of a data center is complete, we incur a certain amount of operating expenses even if there are no tenants occupying the space. A lack of customer demand for data center space or excess capacity in the data center market could impair our ability to achieve our expected rate of return on our investment, which could have a material adverse effect on our financial condition, operating results and the market price of our common stock.

The ground sublease structure at our Santa Clara property could prevent us from developing the property as we desire, and we may have to incur additional expenses prior to the end of the ground sublease to restore the property to its prelease state.

Our interest in the Santa Clara property is subject to a ground sublease granted by a third party, as ground sublessor, to our indirect subsidiary Quality Investment Properties Santa Clara, LLC (“QIP Santa Clara”). The ground sublease terminates in 2052 and we have two options to extend the original term for consecutive ten-year terms. The ground sublease structure presents special risks. We, as ground sublessee, will own all improvements on the land, including the buildings in which the data centers are located during the term of the ground sublease. Upon the expiration or earlier termination of the ground sublease, however, the improvements on the land will become the property of the ground sublessor. Unless we purchase a fee interest in the land and improvements subject to the ground sublease, we will not have any economic interest in the land or improvements at the expiration of the ground sublease. Therefore, we will not share in any increase in value of the land or improvements beyond the term of the ground sublease, notwithstanding our capital outlay to purchase our interest in the data center or fund improvements thereon, and will lose our right to use the building on the subleased property. In addition, upon the expiration of the ground sublease, the ground sublessor may require the removal of the improvements or the restoration of the improvements to their condition prior to any permitted alterations at our sole cost and expense. If we do not meet a certain net worth test, we also will be required to provide the ground sublessor with a bond in connection with such removal and restoration requirements. In addition, while we generally have the right to undertake alterations to the demised premises, the ground sublessor has the right to reasonably approve the quality of such work and the form and content of certain financial information of QIP Santa Clara. The ground sublessor need not give its approval to alterations if it or its affiliate determines that the work will have a material adverse impact on the fee interest in property adjacent to the demised premises. In addition, though the ground sublease provides that we may exercise the rights of ground lessor in the event of a rejection of the master ground lease, each of the master ground lease and the ground sublease may be rejected in bankruptcy. Finally, in the event of a condemnation, the ground lessor is entitled to an allocable share of any condemnation proceeds. The ground sublease, however, does contain important nondisturbance protections and provides that, in event of the termination of the master ground lease, the ground sublease will become a direct lease between the ground lessor and QIP Santa Clara.

We depend on third parties to provide Internet, telecommunication and fiber optic network connectivity to the customers in our data centers, and any delays or disruptions in service, availability, or additional costs could have a material adverse effect on us.

Our products and infrastructure rely on third-party service providers. In particular, we depend on third parties to provide Internet, telecommunication and fiber optic network connectivity to the customers in our data centers, and we have no control over the reliability of the services provided by these suppliers. Our customers may in the future experience difficulties due to service failures unrelated to our systems and services. Any Internet, telecommunication or fiber optic network failures may result in significant loss of connectivity to our data centers, which could subject the company to potential litigation or reduce the confidence of our customers and could consequently impair our ability to retain existing customers or attract new customers and have a material adverse effect on us.

Similarly, we depend upon the presence of Internet, telecommunications and fiber optic networks serving the locations of our data centers in order to attract and retain customers. The construction required to connect multiple carrier facilities to our data centers is complex, requiring a sophisticated redundant fiber network, and involves matters outside of our control, including regulatory requirements and the availability of construction resources. Each new data center that we develop requires significant amounts of capital for the construction and operation of a sophisticated redundant fiber network. We believe that the availability of carrier capacity affects our business and future growth. We cannot assure you that any carrier will elect to

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offer its services within our data centers or that once a carrier has decided to provide connectivity to our data centers that it will continue to do so for any period of time or at a cost that is feasible to our customers. Furthermore, some carriers are experiencing business difficulties or have announced consolidations or mergers. As a result, some carriers may be forced to downsize or terminate connectivity within our data centers, which could adversely affect our customers and could have a material adverse effect on us.

Power outages, limited availability of electrical resources and increased energy costs could have a material adverse effect on us.

Our data centers are subject to electrical power outages, regional competition for available power and increased energy costs. We attempt to limit exposure to system downtime by using backup generators and power supplies generally at a significantly higher operating cost than we would pay for an equivalent amount of power from a local utility. However, we may not be able to limit our exposure entirely even with these protections in place. Power outages, which have and may last beyond our backup and alternative power arrangements, may harm our customers and our business. During power outages, changes in humidity and temperature can cause permanent damage to servers and other electrical equipment. We could incur financial obligations or be subject to lawsuits by our customers in connection with a loss of power. Any loss of services or equipment damage could reduce the confidence of our customers in our services and could consequently impair our ability to attract and retain customers, which could have a material adverse effect on us.

In addition, power and cooling requirements at our data centers are increasing as a result of the increasing power and cooling demands of modern servers. Since we rely on third parties to provide our data centers with sufficient power to meet our customers’ needs, and we generally do not control the amount of power drawn by our customers, our data centers could have a limited or inadequate amount of electrical resources.

We also may be subject to risks and unanticipated costs associated with obtaining power from various utility companies. Utilities that serve our data centers may be dependent on, and sensitive to price increases for, a particular type of fuel, such as coal, oil or natural gas. The price of these fuels and the electricity generated from them could increase as a result of proposed legislative measures related to climate change or efforts to regulate carbon emissions. For example, under the U.S. Environmental Protection Agency’s “Affordable Clean Energy” rule, coal-fired power plants are required to make efficiency improvements to reduce their greenhouse gases emissions, and they may increase their prices to make these improvements. While our wholesale customers are billed on a pass-through basis for their direct energy usage, our retail customers pay a fixed cost for services, including power, so any excess energy costs above such fixed costs are borne by us. Although, for technical and practical reasons, our retail customers often use less power than the amount we are required to provide pursuant to their leases, there is no assurance that this will always be the case. Although we have a diverse customer base, the concentration and mix of our customers may change and increases in the cost of power at any of our data centers would put those locations at a competitive disadvantage relative to data centers served by utilities that can provide less expensive power. This could adversely affect our relationships with our customers and hinder our ability to operate our data centers, which could have a material adverse effect on us.

We rely on the proper and efficient functioning of computer and data-processing systems, and a large-scale malfunction could have a material adverse effect on us.

Our ability to keep our data centers operating depends on the proper and efficient functioning of computer and data-processing systems. Since computer and data-processing systems are susceptible to malfunctions and interruptions, including those due to equipment damage, power outages, cyber-attacks and a range of other hardware, software and network problems, we cannot guarantee that our data centers will not experience such malfunctions or interruptions in the future. Additionally, expansions and developments in the products and services that we offer, including our managed services, could increasingly add a measure of complexity that may overburden our data center, network resources and human capital, making service interruptions and failures more likely. A significant or large-scale malfunction or interruption of one or more of any of our data centers’ computer or data-processing systems could adversely affect our ability to keep such data centers running efficiently. If a malfunction results in a wider or sustained disruption to business at a property, it could have a material adverse effect on us.

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Interruptions in our provision of products or services could result in a loss of customers and damage our reputation, which could have a material adverse effect on us.

Our business and reputation could be adversely affected by any interruption or failure in the provision of products and services, even if such events occur as a result of a natural disaster, human error, landlord maintenance failure, water damage, fiber cuts, extreme temperature or humidity, sabotage, vandalism, terrorist acts, unauthorized entry or other unanticipated problems. If a significant disruption occurs, we may be unable to implement disaster recovery or security measures in a timely manner or, if and when implemented, these measures may not be sufficient or could be circumvented through the reoccurrence of a natural disaster or other unanticipated problem, or as a result of accidental or intentional actions. Furthermore, such disruptions can cause damage to servers and may result in legal liability where interruptions in service violate service commitments in customer leases. Resolving network failures or alleviating security problems also may require interruptions, delays, or cessation of service to our customers. Accordingly, failures in our products and services, including problems at our data centers or network interruptions may result in significant liability, a loss of customers and damage to our reputation, which could have a material adverse effect on us.

Security breaches at our facilities or affecting our networks may result in disclosure of sensitive customer information that could harm our reputation and expose us to liability from customers and government agencies, and we may incur increasing or uncertain compliance and prevention costs, all of which could have a material adverse effect on us.

Our network could be subject to unauthorized access, computer viruses, cyber-attacks or cyber intrusions and other disruptive problems, including malware, computer viruses and attachments to e-mails caused by customers, employees, or others inside or outside of our organization. Our exposure to cybersecurity threats and negative consequences of security breaches will likely increase as we store increasing amounts of customer data. Additionally, as we increasingly market the security features in our data centers, our data centers may be further targeted by cyber attackers seeking to compromise data security. Because a portion of our business focuses on serving U.S. government agencies and their contractors with a general focus on data security and information technology, we may be especially likely to be targeted by cyber-attacks, including by organizations or persons that may be affiliated with nation-states or otherwise hostile to the U.S. government. Despite our activities to maintain the security and integrity of our networks and related systems, there can be no assurance that these activities will be effective.

Unauthorized access, computer viruses or other disruptive problems could lead to interruptions, delays and cessation of service to our customers and the compromise or loss of our, our customers’ or our customers’ end-users’ information. We routinely process, store and transmit large amounts of data for our customers, which includes sensitive and personally identifiable information. Loss or compromise of this data could cost us monetarily, in terms of lost business or damages, as well as loss of customer goodwill and harm to our reputation, even if we do not ourselves process the data. Unauthorized access could also potentially jeopardize the security of our confidential information or confidential information of our customers or our customers’ end-users, which might expose us to liability from customers and from the government agencies that regulate us or our customers, as well as harm our brand and deter potential customers from renting our space and purchasing our services. For example, violations of HIPAA and its implementing regulations, as amended by the HITECH Act, can lead to fines of up to $1.5 million for identical violations of a particular provision in a calendar year, and under the GDPR, there can be fines of up to €10,000,000 or up to 2% of the global sales, whichever is greater, for certain comparatively minor offenses and up to €20,000,000 or up to 4% of the global sales, whichever is greater, for more serious offenses. Additionally, violations of privacy or cybersecurity laws (including the CCPA and recently-passed CPRA), regulations or standards increasingly lead to class-action and other types of litigation, which can result in substantial monetary judgments or settlements. We also may suffer increased remediation, security, and insurance costs in the event of a security breach. Therefore, any such security breaches could have a material adverse effect on us.

In addition, the regulatory framework around data custody, cybersecurity, data privacy and breaches varies by jurisdiction and is an evolving area of law. We cannot predict how future laws, regulations and standards, or future interpretations of current laws, regulations and standards, related to privacy and cybersecurity will affect our business, and we cannot predict the cost of compliance. Furthermore, we may be required to expend significant attention and financial resources to protect against physical or cybersecurity breaches that could result in the misappropriation of our or our customers’ information. As techniques used to breach security change frequently, and generally are not recognized until launched against a target, we may not be able to implement security measures in a timely manner or, if and when implemented, we may not be able to determine the extent to which these measures could be circumvented. Any internal or external breach in our network could severely harm our business and result in costly litigation and potential liability for us. We also may be liable for, and suffer reputational harm if, any of our third-party service providers or subcontractors suffers security breaches. To the extent our

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customers demand that we accept unlimited liability and to the extent there is a competitive trend to accept it, such a trend could affect our ability to retain these limitations in our leases at the risk of losing the business. Such a trend may be particularly likely to occur with regard to our managed services. These potential costs and liabilities could have a material adverse effect on us.

Any inability to recruit or retain qualified personnel, or maintain access to key third-party service providers and software developers, could have a material adverse effect on us.

We must continue to identify, hire, train, and retain IT professionals, technical engineers, operations employees, and sales and senior management personnel who maintain relationships with our customers and who can provide the technical, strategic and marketing skills required to grow our company, develop and expand our data centers, maximize our rental and services income and achieve the highest sustainable rent levels at each of our facilities. There is a shortage of qualified personnel in these fields, and we compete with other companies for the limited pool of these personnel. Competitive pressures may require that we enhance our pay and benefits package to compete effectively for such personnel. An increase in these costs or our inability to recruit and retain necessary technical, managerial, sales and marketing personnel or to maintain access to key third-party providers could have a material adverse effect on us. For example, for certain products, we partner or collaborate with third parties such as software developers. Our failure to maintain such relationships could impact our ability to provide certain services, in particular, government-related services, which could have a material adverse effect on us.

We may be unable to identify and complete acquisitions on favorable terms or at all, which may inhibit our growth and have a material adverse effect on us.

We continually evaluate the market of available properties and businesses and may acquire additional properties and businesses when opportunities exist. Our ability to acquire properties and businesses on favorable terms is subject to the following significant risks:

•we may be unable to acquire a desired property or business because of competition from other real estate investors with significant resources and/or access to capital, including both publicly traded REITs and institutional investment funds;

•even if we are able to acquire a desired property or business, competition from other potential acquirers may significantly increase the purchase price or result in other less favorable terms;

•even if we enter into agreements for the acquisition of a desired property or business, these agreements are subject to customary conditions to closing, including completion of due diligence investigations to our satisfaction, and we may incur significant expenses for properties or businesses we never actually acquire;

•we may be unable to finance acquisitions on favorable terms or at all; and

•we may acquire properties subject to liabilities and without any recourse, or with only limited recourse, with respect to such liabilities such as liabilities for clean-up of environmental contamination, claims by customers, vendors or other persons dealing with the former owners of the properties and claims for indemnification by general partners, directors, officers and others indemnified by the former owners of the properties.

Any inability to complete property or business acquisitions on favorable terms or at all could have a material adverse effect on us.

We may be unable to successfully integrate and operate acquired properties and achieve the intended benefits of our other acquisitions, which could have a material adverse effect on us.

Even if we are able to make acquisitions on favorable terms, our ability to successfully integrate and operate them is subject to various risks. We may be unable to accomplish the integration of an acquired property smoothly, successfully or within anticipated cost estimates. The diversion of our management’s attention from our operations to any such integration efforts, and any difficulties encountered, could prevent us from realizing the full benefits we anticipated to result from such acquisition and could have a material adverse effect on us. Additional risks include, among others:

•we may spend more than budgeted amounts to make necessary improvements or renovations to acquired properties, as well as require substantial management time and attention;

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•the inability to successfully integrate the operations, particularly acquisitions of operating businesses or portfolios of properties, into our existing operations, maintain consistent standards, controls, policies and procedures, or realize the benefits we anticipate of the acquisition within the anticipated timeframe or at all;

•the inability to effectively monitor and manage our expanded business, retain customers, suppliers and business partners, attract new customers, retain key employees or attract highly qualified new employees;

•anticipated future synergies, accretion, revenues, cost savings or operating metrics may fail to materialize or our estimates thereof may prove to be inaccurate;

•the acquired business may fail to perform as expected;

•certain portions of businesses we may acquire may be located in new markets, including foreign markets, in which we have not previously operated and in which we may face risks associated with an incomplete knowledge or understanding of the local market;

•the market price of our common stock may decline if we do not achieve the benefits we anticipate of the transaction as rapidly or to the extent anticipated by financial or industry analysts or if the effect of the transaction on our financial results is not consistent with the expectations of financial or industry analysts; and

•potential unknown liabilities with limited or no recourse against the seller and unforeseen increased expenses related to the acquisitions.

We cannot assure you that we will be able to complete any integration without encountering difficulties or that any such difficulties will not have a material adverse effect on us. Failure to realize the intended benefits of an acquisition could have a material adverse effect on us.

We may be subject to unknown or contingent liabilities related to properties or businesses that we acquire, which may result in damages and investment losses.

Assets and entities that we have acquired or may acquire in the future may be subject to unknown or contingent liabilities for which we may have limited or no recourse against the sellers. Unknown or contingent liabilities might include liabilities for clean-up or remediation of environmental conditions, claims of customers, vendors or other persons dealing with the acquired entities, tax liabilities and other liabilities whether incurred in the ordinary course of business or otherwise. In the future we may enter into transactions with limited representations and warranties or with representations and warranties that do not survive the closing of the transactions, in which event we would have no or limited recourse against the sellers of such properties. Customers increasingly are looking to pass through their regulatory obligations and other liabilities to their outsourced data center providers and we may not be able to limit our liability or damages in an event of loss suffered by such customers whether as a result of our breach of agreement or otherwise.

While we usually require the sellers to indemnify us with respect to breaches of representations and warranties that survive, such indemnification is often limited and subject to various materiality thresholds, a significant deductible or an aggregate cap on losses. As a result, there is no guarantee that we will recover any amounts with respect to losses due to breaches by the sellers of their representations and warranties. In addition, the total amount of costs and expenses that we may incur with respect to liabilities associated with acquired properties and entities may exceed our expectations. Finally, indemnification agreements between us and the sellers typically provide that the sellers will retain certain specified liabilities relating to the assets and entities acquired by us. While the sellers are generally contractually obligated to pay all losses and other expenses relating to such retained liabilities, there can be no guarantee that such arrangements will not require us to incur losses or other expenses as well. Additionally, in connection with our acquisitions, we may assume agreements with customers that may subject us to greater liability for an event of loss compared to our typical customer agreements. If an event of loss occurred, we could be liable for material monetary damages and could incur significant legal fees in defending against such an action. Any of these matters could have a material adverse effect on us.

Our international operations expose us to regulatory, currency, legal, tax and other risks distinct from those faced by us in the United States.

Although our operations are primarily based in the United States, we also have a presence outside of the United States. Foreign operations involve risks not generally associated with investments in the United States, including:

•our limited knowledge of and relationships with customers, contractors, suppliers or other parties in these markets;

•complexity and costs associated with managing international development and operations;

•difficulty in hiring qualified management, sales and other personnel and service providers;

•differing employment practices and labor issues;

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•multiple, conflicting, changing and uncertain legal, regulatory, entitlement and permitting, and tax and treaty environments;

•rapid changes in governmental, economic and political policy, political or civil unrest, acts of terrorism or the threat of international boycotts or U.S. anti-boycott legislation;

•exposure to increased taxation, confiscation or expropriation and the risk of forced nationalization;

•currency transfer restrictions and limitations on our ability to distribute cash earned in foreign jurisdictions to the United States;

•difficulty in enforcing agreements in non-U.S. jurisdictions, including those entered into in connection with our acquisitions or in the event of a default by one or more of our customers, suppliers or contractors;

•compliance with anti-bribery and corruption laws;

•local business and cultural factors;

•political and economic instability, including sovereign credit risk, in certain geographic regions; and

•difficulties in complying with U.S. rules governing REITs while operating outside of the United States.

In addition, the GDPR, which took effect in 2018, imposes detailed privacy requirements and increases the likelihood of applicability of European law to entities like us, which are established outside the EU but may process data of European data subjects. Among other requirements, the GDPR prohibits the transfer of personal information to countries outside of the European Economic Area ("EEA") that are not considered by the European Commission to provide an adequate level of data protection, such as the U.S., unless there is a suitable data transfer solution in place to safeguard personal data. On July 16, 2020, the Court of Justice of the European Union (CJEU) invalidated the European Commission’s adequacy decision that allowed companies to self-certify under the EU-U.S. Privacy Shield. As a result, organizations such as QTS that self-certified under the EU-U.S. Privacy Shield are no longer able to use this framework to transfer personal data, and thus must use alternative transfer mechanisms, which are facing or may face similar legal challenges in the EU. To the extent we are not in compliance with the GDPR, the EU authorities may investigate or bring enforcement actions against us that may result in criminal and administrative sanctions. Such actions could have a material adverse effect on us and harm our reputation.

Our inability to overcome these risks could adversely affect our foreign operations and growth prospects and could have a material adverse effect on us.

Government regulation could have a material adverse effect on us.

Various laws and governmental regulations, both in the U.S. and abroad, governing internet related services, related communications services and information technologies remain largely unsettled, even in areas where there has been some legislative action. We remain focused on whether and how existing and changing laws, such as those governing cybersecurity, data privacy and data security, intellectual property, libel, telecommunications services, consumer protection and taxation, apply to the internet and to related offerings such as ours, and substantial resources may be required to comply with regulations or bring any non-compliant business practices into compliance with such regulations.

In addition, the regulatory framework around data custody, data privacy and breaches varies by jurisdiction and is an evolving area of law with increasingly complex and rigorous regulatory standards enacted to protect business and personal data in the U.S. and elsewhere. We may not be able to limit our liability or damages in the event of such a loss. Data protection legislation is becoming increasingly common in the United States at both the federal and state level and may require us to further modify our data processing practices and policies. Compliance with existing and proposed laws and regulations can be costly; any failure to comply with these regulatory standards could subject us to legal and reputational risks. Misuse of or failure to secure personal information could also result in violation of data privacy laws and regulations, proceedings against us by governmental entities or others, fines and penalties, damage to our reputation and credibility and could have a negative impact on our business and results of operations.

We may co-invest in joint ventures with third parties from time to time, and such investments could be adversely affected by the capital markets, lack of sole decision-making authority, reliance on joint venture partners’ financial condition and any disputes that may arise between us and our joint venture partners.

We currently own one property, our Manassas (DC-1) data center, through a 50% joint venture with Alinda Capital Partners (“Alinda”). Under the joint venture agreement, we serve as the entity’s operating member, subject to authority and oversight of a board appointed by us and Alinda, and separately we serve as manager and developer of the facility in exchange for management and development fees. In addition, we have agreed to provide Alinda an opportunity to invest in future similar joint ventures based on similar terms and a comparable capitalization rate. See “Management’s Discussion and Analysis of

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Financial Condition and Results of Operations—Factors That May Influence Future Results of Operations and Cash Flows—Unconsolidated Entity.”

In addition to this agreement, we may in the future co-invest with third parties through partnerships, joint ventures or other structures in which we acquire noncontrolling interests in, or share responsibility for, managing the affairs of a property, partnership, co-tenancy or other entity. Even if we have general management authority over joint ventures, we expect that our joint venture partners would have customary approval rights over certain major decisions. We may not be in a position to exercise sole decision-making authority regarding any properties owned through joint ventures or similar ownership structures. In addition, investments in joint ventures may, under certain circumstances, involve risks not present when a third party is not involved, including potential deadlocks in making major decisions, restrictions on our ability to exit the joint venture, reliance on joint venture partners and the possibility that a joint venture partner might become bankrupt or fail to fund its share of required capital contributions, thus exposing us to liabilities in excess of our share of the joint venture. Furthermore, our joint venture partners may take actions that are not within our control that could jeopardize our REIT status. The funding of our capital contributions to such joint ventures may be dependent on proceeds from asset sales, credit facility advances or sales of equity securities. Joint venture partners may have business interests or goals that are inconsistent with our business interests or goals, and may be in a position to take actions contrary to our policies or objectives. We may, in specific circumstances, be liable for the actions of our joint venture partners. In addition, any disputes that may arise between us and joint venture partners may result in litigation or arbitration that would increase our expenses. Any of the foregoing may have a material adverse effect on our business, financial condition and results of operations.

Risks Related to Financing

An inability to access external sources of capital on favorable terms or at all could limit our ability to execute our business and growth strategies.

In order to qualify and maintain our qualification as a REIT and eliminate our federal income tax liability, we distribute at least 90% of our “REIT taxable income.” Because of these distribution requirements, we may not be able to fund future capital needs, including capital for development projects and acquisition opportunities, from operating cash flow. Consequently, we intend to rely on third-party sources of capital to fund a substantial amount of our future capital needs. We may not be able to obtain such financing on favorable terms or at all. Any additional debt we incur will increase our leverage, expose us to the risk of default and impose operating restrictions on us. In addition, any equity financing could be materially dilutive to the equity interests held by our stockholders. Our access to third-party sources of capital depends, in part, on general market conditions, the market’s perception of our growth potential, our leverage, our current and expected results of operations, liquidity, financial condition and cash distributions to stockholders and the market price of our common stock. If we cannot obtain capital when needed, we may not be able to execute our business and growth strategies (including redeveloping or acquiring properties when strategic opportunities exist), satisfy our debt service obligations, make the cash distributions to our stockholders necessary to qualify and maintain our qualification as a REIT (which would expose us to corporate and/or income tax), or fund our other business needs, which could have a material adverse effect on us.

Our indebtedness outstanding as of December 31, 2020 was approximately $1,884.1 million, which exposes us to interest rate fluctuations and the risk of default thereunder, among other risks.

Our net indebtedness outstanding as of December 31, 2020 was approximately $1,884.1 million. Approximately $642.3 million of this indebtedness bears interest at a variable rate after taking into account $700 million of swaps which effectively convert our floating rate debt into fixed rate debt. Increases in interest rates, or the loss of the benefits of our existing or future hedging agreements, would increase our interest expense, which would adversely affect our cash flow and our ability to service our debt. Our organizational documents contain no limitations regarding the maximum level of indebtedness, as a percentage of our market capitalization or otherwise, that we may incur. We may incur significant additional indebtedness, including mortgage indebtedness, in the future. Our substantial outstanding indebtedness, and the limitations imposed on us by our debt agreements, could have other significant adverse consequences, including the following:

•our cash flow may be insufficient to meet our required principal and interest payments;

•we may use a substantial portion of our cash flows to make principal and interest payments and we may be unable to obtain additional financing as needed or on favorable terms, which could, among other things, have a material adverse effect on our ability to complete our development and redevelopment pipeline, capitalize upon acquisition opportunities, fund working capital, make capital expenditures, make cash distributions to our stockholders, or meet our other business needs;

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•we may be unable to refinance our indebtedness at maturity or the refinancing terms may be less favorable than the terms of our original indebtedness;

•we may be forced to dispose of one or more of our properties, possibly on unfavorable terms or in violation of certain covenants to which we may be subject;

•we may be required to maintain certain debt and coverage and other financial ratios at specified levels, thereby reducing our financial flexibility;

•our vulnerability to general adverse economic and industry conditions may be increased;

•greater exposure to increases in interest rates for our variable rate debt and to higher interest expense on future fixed rate debt;

•we may be at a competitive disadvantage relative to our competitors that have less indebtedness;

•our flexibility in planning for, or reacting to, changes in our business and the markets in which we operate may be limited; and

•we may default on our indebtedness by failure to make required payments or violation of covenants, which would entitle holders of such indebtedness and possibly other indebtedness to accelerate the maturity of their indebtedness and, if such indebtedness is secured, to foreclose on our properties that secure their loans and receive an assignment of our rents and leases.

The occurrence of any one of these events could have a material adverse effect on us.

The agreements governing our existing indebtedness contain various covenants and other provisions which limit management’s discretion in the operation of our business, reduce our operational flexibility and create default risks.

The agreements governing our existing indebtedness contain, and agreements governing our future indebtedness may contain, covenants and other provisions that impose significant restrictions on us and our subsidiaries. These covenants restrict, among other things, our and our subsidiaries’ ability to:

•incur or guarantee additional indebtedness;

•pay dividends and make certain investments and other restricted payments;

•incur restrictions on the payment of dividends or other distributions from subsidiaries of the Operating Partnership;

•create or incur certain liens;

•transfer or sell certain assets;

•engage in certain transactions with affiliates; and

•merge or consolidate with other companies or transfer or sell all or substantially all of our assets.

Each of our significant debt instruments also requires that we maintain certain financial ratios. If we do not continue to satisfy these ratios or tests, we will be in default under the applicable debt instrument, which in turn may trigger defaults under our other debt instruments, which could result in the maturities of all of our debt obligations being accelerated. These events would have a material adverse effect on our liquidity.

Our unsecured credit facilities and the indenture governing our 3.875% Senior Notes due 2028 (the “3.875% Senior Notes”) also contain provisions that may limit QTS’ ability to make distributions to its stockholders and the Operating Partnership’s ability to make distributions to QTS.

These covenants could impair our ability to grow our business, take advantage of attractive business opportunities or successfully compete. In addition, failure to meet the covenants may result in an event of default under the applicable indebtedness, which could result in the acceleration of the applicable indebtedness and potentially other indebtedness, which could have a material adverse effect on us.

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Any hedging transactions involve costs and expose us to potential losses.

Hedging agreements enable us to convert floating rate liabilities to fixed rate liabilities or fixed rate liabilities to floating rate liabilities. Hedging transactions expose us to certain risks, including that losses on a hedge position may reduce the cash available for distribution to stockholders and such losses may exceed the amount invested in such instruments and that counterparties to such agreements could default on their obligations, which could increase our exposure to fluctuating interest rates.

In addition, we use interest rate swaps to hedge our exposure to interest rate fluctuations. For example, as of December 31, 2020, we had interest rate swap agreements in place with an aggregate notional amount of $700 million. The forward swap agreements effectively fix the interest rate on $700 million of term loan borrowings, $225 million of swaps allocated to Term Loan A, $225 million allocated to Term Loan B and $250 million allocated to Term Loan C, through the current maturity dates of the respective term loans. We may use interest rate swaps or other forms of hedging again in the future.

The REIT rules impose certain restrictions on our ability to utilize hedges, swaps and other types of derivatives to hedge our liabilities. We may use hedging instruments in our risk management strategy to limit the effects of changes in interest rates on our operations. However, future hedges may be ineffective in eliminating all of the risks inherent in any particular position due to the fact that, among other things, the duration of the hedge may not match the duration of the related liability, the credit quality of the hedging counterparty owing money on the hedge may be downgraded to such an extent that it impairs our ability to sell or assign our side of the hedging transaction and the hedging counterparty owing money in the hedging transaction may default on its obligation to pay. The use of derivatives could have a material adverse effect on us.

We may be adversely affected by changes in LIBOR reporting practices, the method in which LIBOR is determined or the use of alternative reference rates.

As of December 31, 2020, we had approximately $1.3 billion of debt outstanding that was indexed to the London Interbank Offered Rate (“LIBOR”). On November 30, 2020, the ICE Benchmark Administration (“IBA”) announced that it intends to publish one week and two month USD-LIBOR settings until December 31, 2021, and the remaining USD-LIBOR settings until the end of June 2023. The IBA announcement was supported by similar announcements from the United Kingdom’s Financial Conduct Authority (“FCA”), which regulates LIBOR, and the Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation and Office of the Comptroller of the Currency (collectively, the “ U.S. Regulators”). Both the FCA and the U.S. Regulators in their announcements also encouraged banks to cease entering into new contracts referencing USD-LIBOR after December 2021. These announcements indicate that the continuation of LIBOR on the current basis may not be assured after 2021. In April 2018, the New York Federal Reserve commenced publishing an alternative reference rate to LIBOR as calculated for the U.S. dollar (“USD-LIBOR”), the Secured Overnight Financing Rate (“SOFR”). Though an alternative reference rate for USD-LIBOR, SOFR, exists, significant uncertainties still remain. We can provide no assurance regarding the future of LIBOR and when our LIBOR-based instruments will transition from USD-LIBOR as a reference rate to SOFR or another reference rate. The discontinuation of a benchmark rate or other financial metric, changes in a benchmark rate or other financial metric, or changes in market perceptions of the acceptability of a benchmark rate or other financial metric, including LIBOR, could, among other things result in increased interest payments, changes to our risk exposures, or require renegotiation of previous transactions. In addition, any such discontinuation or changes, whether actual or anticipated, could result in market volatility, adverse tax or accounting effects, increased compliance, legal and operational costs, and risks associated with contract negotiations. Additional risks may arise in connection with transitioning contracts to a new alternative rate, such as SOFR, including any resulting value transfer that may occur and changes in how we monitor our market risk exposures through sensitivity analysis.

Risks Related to the Real Estate Industry

The operating performance and value of our properties are subject to risks associated with the real estate industry.

As a real estate company, we are subject to all of the risks associated with owning and operating real estate, including:

•adverse changes in international, national or local economic and demographic conditions;

•vacancies or our inability to rent space on favorable terms, including possible market pressures to offer customers rent abatements, customer improvements, early termination rights or below-market renewal options;

•adverse changes in the financial condition or liquidity of buyers, sellers and customers (including their ability to pay rent to us) of properties, including data centers;

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•the attractiveness of our properties to customers;

•competition from other real estate investors with significant resources and access to capital, including other real estate operating companies, publicly traded REITs and institutional investment funds;

•reductions in the level of demand for data center space;

•increases in the supply of data center space;

•fluctuations in interest rates, which could have a material adverse effect on our ability, or the ability of buyers and customers of properties, including data centers, to obtain financing on favorable terms or at all;

•increases in expenses that are not paid for by, or cannot be passed on to, our customers, such as the cost of complying with laws, regulations and governmental policies;

•the relative illiquidity of real estate investments, especially the specialized real estate properties that we hold and seek to acquire and develop;

•changes in, and changes in enforcement of, laws, regulations and governmental policies, including, without limitation, health, safety, environmental, zoning and tax laws, and governmental fiscal policies;

•property restrictions and/or operational requirements pursuant to restrictive covenants, reciprocal easement agreements, operating agreements or historical landmark designations; and

•civil unrest, acts of war, terrorist attacks and natural disasters, including earthquakes, tornados, hurricanes and floods, which may result in uninsured and underinsured losses.

In addition, periods of economic slowdown or recession, rising interest rates or declining demand for real estate, or the public perception that any of these events may occur, could result in a general decline in occupancy and rental sales, and therefore revenues, or an increased incidence of defaults under existing leases. Accordingly, we cannot assure you that we will be able to execute our business and growth strategies. Any inability to operate our properties to meet our financial, operational and strategic expectations could have a material adverse effect on us.

The illiquidity of real estate investments could significantly impede our ability to respond to adverse changes in economic, financial, investment and other conditions.

Because real estate investments are relatively illiquid, our ability to promptly sell one or more properties in our portfolio in response to changing economic, financial, investment or other conditions is limited. The real estate market is affected by many factors that are beyond our control, including those described above. In particular, data centers represent a particularly illiquid part of the overall real estate market. This illiquidity is driven by a number of factors, including the relatively small number of potential purchasers of such data centers—including other data center operators and large corporate users—and the relatively high cost per square foot to develop data centers, which substantially limits a potential buyer’s ability to purchase a data center property with the intention of redeveloping it for an alternative use, such as an office building, or may substantially reduce the price buyers are willing to pay. Our inability to dispose of properties at opportune times or on favorable terms could have a material adverse effect on us.

In addition, the Code imposes restrictions on a REIT’s ability to dispose of properties that are not applicable to other types of real estate companies. In particular, the tax laws applicable to REITs require that we hold our properties for investment, rather than primarily for sale in the ordinary course of business, which may cause us to forego or defer sales of properties that otherwise would be in our best interest. Therefore, we may not be able to vary our portfolio in response to economic, financial, investment or other conditions promptly or on favorable terms, which could have a material adverse effect on us.

Declining real estate valuations could result in impairment charges, the determination of which involves a significant amount of judgment on our part. Any impairment charge could have a material adverse effect on us.

We review our properties for impairment on a quarterly and annual basis and whenever events or changes in circumstances indicate that the carrying amount may not be recoverable, and in the fourth quarter of 2019 we recognized an impairment charge of $11.5 million related to a write-down of certain data center assets and equipment in one of our Dulles, Virginia data centers. Indicators of impairment include, but are not limited to, a sustained significant decrease in the market price of or the cash flows expected to be derived from a property. A significant amount of judgment is involved in determining the presence of an indicator of impairment. If the total of the expected undiscounted future cash flows is less than the carrying amount of a property on our balance sheet, a loss is recognized for the difference between the fair value and carrying value of the property. The evaluation of anticipated cash flows requires a significant amount of judgment regarding assumptions that could differ materially from actual results in future periods, including assumptions regarding future occupancy, rental rates and capital requirements. Any impairment charge could have a material adverse effect on us.

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Increased tax rates and reassessments could significantly increase our property taxes and have a material adverse effect on us.

Our properties are subject to real and personal property taxes. These taxes may increase as tax rates change and as the properties are assessed or reassessed by taxing authorities. It is likely that the properties will be reassessed by taxing authorities as a result of (i) the acquisition of the properties by us and (ii) the informational returns that we must file. Some of our customer contracts do not contain provisions requiring our customers to pay their proportionate share of those taxes. Any increase in property taxes on the properties could have a material adverse effect on us.

If California changes its property tax scheme, our California properties could be subject to significantly higher tax levies.

Owners of California property are subject to particularly high property taxes. Voters in the State of California previously passed Proposition 13, which generally limits annual real estate tax increases to 2% of assessed value per annum. From time to time, various groups have proposed repealing Proposition 13, or providing for modifications such as a “split roll tax,” whereby commercial property, for example, would be taxed at a higher rate than residential property. Given the uncertainty, it is not possible to quantify the risk to us of a tax increase or the resulting impact on us of any increase, but any tax increase could be significant at our California properties.

Uninsured and underinsured losses could have a material adverse effect on us.

We carry comprehensive liability, fire, extended coverage, earthquake, business interruption and rental loss insurance with respect to our properties, as well as cybersecurity insurance, and we plan to obtain similar coverage for properties we acquire in the future. However, certain types of losses, generally of a catastrophic nature, such as earthquakes and floods, may be either uninsurable or not economically insurable. Should a property sustain damage, we may incur losses due to insurance deductibles, to co-payments on insured losses or to uninsured losses. In the event of a substantial property loss, the insurance coverage may not be sufficient to pay the full current market value or current replacement cost of the property. Inflation, changes in building codes and ordinances, environmental considerations, and other factors also might make it infeasible to use insurance proceeds to replace a property after it has been damaged or destroyed. Under such circumstances, the insurance proceeds we receive might not be adequate to restore our economic position with respect to such property. Lenders may require such insurance and our failure to obtain such insurance may constitute default under loan agreements, which could have a material adverse effect on us. Finally, a disruption in the financial markets may make it more difficult to evaluate the stability, net assets and capitalization of insurance companies and any insurer’s ability to meet its claim payment obligations. A failure of an insurance company to make payments to us upon an event of loss covered by an insurance policy could have a material adverse effect on us. In the event of an uninsured or partially insured loss, we could lose some or all of our capital investment, cash flow and revenues related to one or more properties, which could also have a material adverse effect on us.

As the current or former owner or operator of real property, we could become subject to liability for environmental contamination, regardless of whether we caused such contamination, which could have a material adverse effect on us.

Under various federal, state and local statutes, regulations and ordinances relating to the protection of the environment, a current or former owner or operator of real property may be liable for the cost to remove or remediate contamination resulting from the presence or discharge of hazardous substances, wastes or petroleum products on, under, from or in such property. These costs could be substantial, liability under these laws may attach without regard to whether the owner or operator knew of, or was responsible for, the presence of the contaminants, and the liability may be joint and several. Most of our properties presently contain large underground or above ground fuel storage tanks used to fuel generators for emergency power, which is critical to our operations. If any of the tanks that we own or operate releases fuel to the environment, we would likely have to pay to clean up the contamination. In addition, prior owners and operators used some of our current properties for industrial and commercial purposes, which could have resulted in environmental contamination, including our Irving and Richmond data center properties, which were previously used as semiconductor plants. Moreover, the presence of contamination or the failure to remediate contamination at our properties may (1) expose us to third-party liability (e.g., for cleanup costs, bodily injury or property damage), (2) subject our properties to liens in favor of the government for damages and costs the government incurs in connection with the contamination, (3) impose restrictions on the manner in which a property may be used or businesses may be operated, or (4) materially adversely affect our ability to sell, lease or develop the real estate or to borrow using the real estate as collateral. In addition, there may be material environmental liabilities at our properties of which we are not aware. We also may be liable for the costs of remediating contamination at off-site facilities at which we have arranged, or will arrange, for disposal or treatment of our hazardous substances without regard to whether we

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complied or will comply with environmental laws in doing so. Any of these matters could have a material adverse effect on us.

We could become subject to liability for failure to comply with environmental, health and safety requirements or zoning laws, which could cause us to incur additional expenses.

Our properties are subject to federal, state and local environmental, health and safety laws and regulations and zoning requirements, including those regarding the handling of regulated substances and wastes, emissions to the environment and fire codes. For instance, our properties are subject to regulations regarding the storage of petroleum for auxiliary or emergency power and air emissions arising from the use of power generators. In particular, generators at our data center facilities are subject to strict emissions limitations, which could preclude us from using critical back-up systems and lead to significant business disruptions at such facilities and loss of our reputation. If we exceed these emissions limits, we may be exposed to fines and/or other penalties. In addition, we lease some of our properties to our customers who also are subject to such environmental, health and safety laws and zoning requirements. In addition, our properties are subject to the ADA, which may require modifications to our properties, or restrict our ability to renovate our properties. If we, or our customers, fail to comply with these various laws and requirements, we might incur costs and liabilities, including governmental fines and penalties. Moreover, we do not know whether existing laws and requirements will change or, if they do, whether future laws and requirements will require us to make significant unanticipated expenditures that could have a material adverse effect on us. Environmental noncompliance liability also could affect a customer’s ability to make rental payments to us.

Our properties may contain or develop harmful mold or suffer from other adverse conditions, such as asbestos, which could lead to liability for adverse health effects and costs of remediation.

When excessive moisture accumulates in buildings or on building materials, mold growth may occur, particularly if the moisture problem remains undiscovered or is not addressed over a period of time. Some molds may produce airborne toxins or irritants. Indoor air quality issues also can stem from inadequate ventilation, chemical contamination from indoor or outdoor sources and other biological contaminants such as pollen, viruses and bacteria. Indoor exposure to airborne toxins or irritants above certain levels can be alleged to cause a variety of adverse health effects and symptoms, including allergic or other reactions. As a result, the presence of significant mold or other airborne contaminants at any of our properties could require us to undertake a costly remediation program to contain or remove the mold or other airborne contaminants from the affected property or increase indoor ventilation. In addition, the presence of significant mold or other airborne contaminants could expose us to liability from our customers, employees of our customers and others if property damage or personal injury occurs.

Additionally, some of our properties may contain, or may have contained, asbestos-containing building materials, which may subject us to additional costs to comply with laws relating to the management and removal of these materials, or fines if we fail to comply with such laws.

Thus, conditions related to mold or other airborne contaminants as well as becoming subject to penalties or other liabilities as a result of ACM at one or more of our properties, could have a material adverse effect on us.

Laws, regulations or other issues related to climate change could have a material adverse effect on us.

If we, or other companies with which we do business, particularly utilities that provide our facilities with electricity, become subject to laws or regulations related to climate change, it could have a material adverse effect on us. The United States may enact new laws, regulations and interpretations relating to climate change, including potential cap-and-trade systems, carbon taxes and other requirements relating to reduction of carbon footprints and/or greenhouse gas emissions. Other countries have enacted climate change laws and regulations and the United States has been involved in discussions regarding international climate change treaties. The federal government and some of the states and localities in which we operate have enacted certain climate change laws and regulations and/or have begun regulating carbon footprints and greenhouse gas emissions. Although these laws and regulations have not had any known material adverse effect on us to date, they could limit our ability to develop new facilities or result in substantial costs, including compliance costs, retrofit costs and construction costs, monitoring and reporting costs and capital expenditures for environmental control facilities and other new equipment. In addition, these laws and regulations could lead to increased costs for the electricity that we require to conduct our operations. Furthermore, our reputation could be damaged if we violate climate change laws or regulations. We cannot predict how future laws and regulations, or future interpretations of current laws and regulations, related to climate change will affect our business, results of operations, liquidity and financial condition. Lastly, the potential physical impacts of climate change on

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our operations are highly uncertain, and would be particular to the geographic circumstances in areas in which we operate. These may include changes in rainfall and storm patterns and intensities, water shortages, which may result in water use restrictions and water efficiency mandates, changing sea levels and changing temperatures. Any of these matters could have a material adverse effect on us.

Risks Related to Our Organizational Structure

As of December 31, 2020, Chad L. Williams, our Chairman and Chief Executive Officer, owned approximately 9.1% of QTS’ outstanding common stock on a fully diluted basis and has the ability to exercise significant influence on the company and any matter presented to its stockholders.

As of December 31, 2020, Chad L. Williams, our Chairman, President and Chief Executive Officer owned approximately 9.1% of QTS’ outstanding common stock on a fully diluted basis. Mr. Williams has a significant vote in matters submitted to a vote of stockholders as a result of his ownership of Class B common stock, which gives him voting power equal to his economic interest in QTS as if he had exchanged all of his units of limited partnership interest (Operating Partnership units or "OP units"), for shares of Class A common stock, including in the election of directors. No other stockholder is permitted to own more than 7.5% of the aggregate of the outstanding shares of its common stock, except for certain designated investment entities that may own up to 9.8% of the aggregate of the outstanding shares of its common stock, subject to certain conditions, and except as approved by the board of directors pursuant to the terms of QTS’ charter. Consequently, Mr. Williams may be able to significantly influence the outcome of matters submitted for stockholder action, including the election of the board of directors and approval of significant corporate transactions, such as business combinations, consolidations and mergers, as well as the determination of its day-to-day business decisions and management policies. As a result, Mr. Williams could exercise his influence on QTS in a manner that conflicts with the interests of other stockholders. Mr. Williams may have interests that differ from other stockholders, including by reason of his remaining interest in the Operating Partnership, and may accordingly vote in ways that may not be consistent with the interests of holders of Class A common stock. Moreover, if Mr. Williams were to sell, or otherwise transfer, all or a large percentage of his holdings, the market price of QTS’ common stock could decline and QTS could find it difficult to raise the capital necessary for it to execute its business and growth strategies.

The tax protection agreement, during its term, could limit our ability to sell or otherwise dispose of certain properties and may require the Operating Partnership to maintain certain debt levels and agree to certain terms with lenders that otherwise would not be required to operate our business.

In connection with the IPO, we entered into a tax protection agreement with Chad L. Williams, our Chairman and Chief Executive Officer, and his affiliates and family members who own OP units that provides that if (1) we sell, exchange, transfer, convey or otherwise dispose of our Atlanta (DC-1), Atlanta-Suwanee or Santa Clara data centers in a taxable transaction prior to January 1, 2026, referred to as the protected period, (2) cause or permit any transaction that results in the disposition by Mr. Williams or his affiliates and family members who own OP units of all or any portion of their interests in the Operating Partnership in a taxable transaction during the protected period or (3) fail prior to the expiration of the protected period to maintain approximately $175 million of indebtedness that would be allocable to Mr. Williams and his affiliates for tax purposes or, alternatively, fail to offer Mr. Williams and his affiliates and family members who own OP units the opportunity to guarantee specific types of the Operating Partnership’s indebtedness in order to enable them to continue to defer certain tax liabilities, we will indemnify Mr. Williams and his affiliates and family members who own OP units against certain resulting tax liabilities. Therefore, although it may be in our stockholders’ best interests that we sell, transfer, convey or otherwise dispose of one of these properties, it may be economically prohibitive for us to do so during the protected period because of these indemnity obligations. Moreover, these obligations may require us to maintain more or different indebtedness or agree to terms with our lenders that we would not otherwise agree to. As a result, the tax protection agreement will, during its term, restrict our ability to take actions or make decisions that otherwise would be in our best interests. As of December 31, 2020, our Atlanta (DC-1), Atlanta-Suwanee and Santa Clara data centers represented approximately 44% of our annualized rent.

QTS’ charter and Maryland law contain provisions that may delay, defer or prevent a change in control of our company, even if such a change in control may be in your interest, and as a result may depress our common stock price.

The stock ownership limits imposed by the Code for REITs and imposed by QTS’ charter may restrict our business combination opportunities that might involve a premium price for shares of our common stock or otherwise be in the best interest of our stockholders.

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In order for QTS to maintain its qualification as a REIT under the Code, not more than 50% in value of our outstanding stock may be owned, directly or indirectly, by five or fewer individuals (defined in the Code to include certain entities) at any time during the last half of each taxable year. QTS’ charter, with certain exceptions, authorizes our board of directors to take the actions that are necessary and desirable to preserve our qualification as a REIT. Unless exempted by our board of directors, no person may actually or constructively own more than 7.5% of the aggregate of the outstanding shares of our common stock by value or by number of shares, whichever is more restrictive, or 7.5% of the aggregate of the outstanding shares of our preferred stock by value or by number of shares, whichever is more restrictive, subject to exceptions for certain designated investment entities and Chad L. Williams, his family members and entities owned by or for the benefit of them.

Our board of directors may, in its sole discretion, grant other exemptions to the stock ownership limits, subject to such conditions and the receipt by our board of directors of certain representations and undertakings.

In addition to these ownership limits, our charter also prohibits any person from (a) beneficially or constructively owning, as determined by applying certain attribution rules of the Code, our stock that would result in us being “closely held” under Section 856(h) of the Code or that would otherwise cause us to fail to qualify as a REIT, (b) transferring stock if such transfer would result in our stock being owned by fewer than 100 persons, (c) beneficially or constructively owning shares of our capital stock that would result in us owning (directly or indirectly) an interest in a tenant if the income derived by us from that tenant for our taxable year during which such determination is being made would reasonably be expected to equal or exceed the lesser of one percent of our gross income or an amount that would cause us to fail to satisfy any of the REIT gross income requirements and (d) beneficially or constructively owning shares of our capital stock that would cause us otherwise to fail to qualify as a REIT. The ownership limits imposed under the Code are based upon direct or indirect ownership by “individuals,” but only during the last half of a tax year. The ownership limits contained in our charter key off of the ownership at any time by any “person,” which term includes entities.

The ownership limits on our common stock also might delay, defer or prevent a transaction or a change in control of our company that might involve a premium price for shares of our common stock or otherwise be in the best interest of our stockholders.

Our authorized but unissued shares of common and preferred stock may prevent a change in control of our Company that might involve a premium price for shares of our common stock or otherwise be in the best interest of our stockholders.

QTS’ charter authorizes QTS to issue additional shares of common and preferred stock. In addition, our board of directors may, without stockholder approval, amend QTS’ charter to increase the aggregate number of shares of our common stock or the number of shares of stock of any class or series that we have authority to issue and classify or reclassify any unissued shares of common or preferred stock and set the preferences, rights and other terms of the classified or reclassified shares; provided that our board of directors may not amend QTS’ charter to increase the aggregate number of shares of Class B common stock that we have the authority to issue or reclassify any shares of our capital stock as Class B common stock without stockholder approval. In 2018, QTS issued 4,280,000 shares of 7.125% Series A Cumulative Redeemable Perpetual Preferred Stock (“Series A Preferred Stock”) and 3,162,500 shares of 6.50% Series B Cumulative Convertible Perpetual Preferred Stock (“Series B Preferred Stock”). As a result, the Series A Preferred Stock and Series B Preferred Stock, and the ability our board of directors to establish additional series of shares of common or preferred stock, could delay, defer or prevent a transaction or a change in control of our company that might involve a premium price for shares of our common stock or otherwise be in the best interest of our stockholders. In addition, our Series A Preferred Stock and Series B Preferred Stock rank, and any other Preferred Stock that we may issue would rank, senior to our common stock with respect to the payment of distributions and other amounts (including upon liquidation), in which case we could not pay any distributions on our common stock until full distributions have been paid with respect to such preferred stock.

Certain provisions of Maryland law could inhibit a change in control of our Company.

Certain provisions of the Maryland General Corporation Law (or MGCL) may have the effect of inhibiting a third party from making a proposal to acquire us or of impeding a change in control under circumstances that otherwise could provide the holders of shares of our common stock with the opportunity to realize a premium over the then-prevailing market price of such shares, including:

•“business combination” provisions that, subject to limitations, prohibit certain business combinations between us and an “interested stockholder” (defined generally as any person who beneficially owns 10% or more of our then outstanding voting power of our shares or an affiliate or associate of ours who, at any time within the two-year

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period prior to the date in question, was the beneficial owner of 10% or more of our then outstanding voting shares) or an affiliate thereof for five years after the most recent date on which the stockholder becomes an interested stockholder, and thereafter imposes special appraisal rights and special stockholder voting requirements on these combinations; and

•“control share” provisions that provide that “control shares” of our company (defined as shares which, when aggregated with other shares controlled by the stockholder, entitle the stockholder to exercise one of three increasing ranges of voting power in electing directors) acquired in a “control share acquisition” (defined as the direct or indirect acquisition of ownership or control of “control shares”) have no voting rights except to the extent approved by our stockholders by the affirmative vote of at least two-thirds of all the votes entitled to be cast on the matter, excluding all interested shares.

QTS has opted out of these provisions of the MGCL, in the case of the business combination provisions of the MGCL by resolution of its board of directors, and in the case of the control share provisions of the MGCL by a provision in its bylaws. However, our board of directors may by resolution elect to opt in to the business combination provisions of the MGCL and it may, by amendment to its bylaws (which such amendment could be adopted by its board of directors in its sole discretion), opt in to the control share provisions of the MGCL in the future.

Certain provisions in the partnership agreement of the Operating Partnership may delay, defer or prevent unsolicited acquisitions of us or changes in our control.

Provisions in the partnership agreement of the Operating Partnership may delay, defer or prevent unsolicited acquisitions of us or changes in our control. These provisions include, among others:

•redemption rights of qualifying parties;

•a requirement that we may not be removed as the general partner of the Operating Partnership without our consent;

•transfer restrictions on our OP units;

•our inability, as general partner, in some cases, to amend the partnership agreement without the consent of the limited partners; and

•the right of the limited partners to consent to transfers of the general partnership interest and mergers under specified circumstances.

These provisions could discourage third parties from making proposals involving an unsolicited acquisition of us or change of our control, although some stockholders might consider such proposals, if made, desirable.

QTS’ charter and bylaws, the partnership agreement of the Operating Partnership and Maryland law also contain other provisions that may delay, defer or prevent a transaction or a change in control of our company that might involve a premium price for our common stock or that our stockholders otherwise believe to be in their best interests.

Conflicts of interest exist or could arise in the future with holders of OP units, which may impede business decisions that could benefit our stockholders.

Conflicts of interest exist or could arise in the future as a result of the relationships between QTS and its affiliates, on the one hand, and the Operating Partnership or any partner thereof, on the other. Our directors and officers have duties to QTS and its stockholders under applicable Maryland law in connection with their management of our company. At the same time, we, as general partner, have fiduciary duties to the Operating Partnership and to its limited partners under Delaware law in connection with the management of the Operating Partnership. QTS’ duties as general partner to the Operating Partnership and its partners may come into conflict with the duties of our directors and officers to our company and our stockholders. These conflicts may be resolved in a manner that is not in the best interest of stockholders.

Additionally, the partnership agreement expressly limits our liability by providing that QTS and its officers, directors, agents and employees will not be liable or accountable to the Operating Partnership for losses sustained, liabilities incurred or benefits not derived if we or such officer, director, agent or employee acted in good faith. In addition, the Operating Partnership is required to indemnify QTS, and its officers, directors, agents, employees and designees to the extent permitted by applicable law from and against any and all claims arising from operations of the Operating Partnership, unless it is established that (1) the act or omission was committed in bad faith, was fraudulent or was the result of active and deliberate dishonesty, (2) the indemnified party received an improper personal benefit in money, property or services or (3) in the case

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of a criminal proceeding, the indemnified person had reasonable cause to believe that the act or omission was unlawful. The provisions of Delaware law that allow the fiduciary duties of a general partner to be modified by a partnership agreement have not been resolved in a court of law, and we have not obtained an opinion of counsel covering the provisions set forth in the partnership agreement that purport to waive or restrict our fiduciary duties that would be in effect were it not for the partnership agreement.

Our rights and the rights of our stockholders to take action against our directors and officers are limited, which could limit our stockholders’ recourse in the event of actions not in our stockholders’ best interests.

Under Maryland law generally, a director is required to perform his or her duties in good faith, in a manner he or she reasonably believes to be in the best interests of our company and with the care that an ordinarily prudent person in a like position would use under similar circumstances. Under Maryland law, directors are presumed to have acted with this standard of care. In addition, our charter limits the liability of our directors and officers to us and our stockholders for money damages, except for liability resulting from:

•actual receipt of an improper benefit or profit in money, property or services; or

•active and deliberate dishonesty by the director or officer that was established by a final judgment as being material to the cause of action adjudicated.

QTS’ charter obligates QTS to indemnify its directors and officers for actions taken by them in those capacities to the maximum extent permitted by Maryland law. QTS’ bylaws require it to indemnify each director or officer, to the maximum extent permitted by Maryland law, in the defense of any proceeding to which he or she is made, or threatened to be made, a party by reason of his or her service to us. In addition, QTS may be obligated to advance the defense costs incurred by its directors and officers. As a result, QTS and its stockholders may have more limited rights against its directors and officers than might otherwise exist absent the current provisions in QTS’ charter and bylaws or that might exist with other companies.

Risks Related to our Class A Common Stock

Our cash available for distribution to stockholders may not be sufficient to pay distributions at expected or REIT-required levels, or at all, and we may need to borrow or rely on other third-party capital in order to make such distributions, as to which no assurance can be given, which could cause the market price of our common stock to decline significantly.

We intend to continue to pay regular quarterly distributions to our stockholders. However, no assurance can be given that our estimated cash available for distribution to our stockholders will be accurate or that our actual cash available for distribution to our stockholders will be sufficient to pay distributions to them at any expected or REIT-required level or at any particular yield, or at all. Accordingly, we may need to borrow or rely on other third-party capital to make distributions to our stockholders, and such third-party capital may not be available to us on favorable terms or at all. As a result, we may not be able to pay distributions to our stockholders in the future. Our failure to pay any such distributions or to pay distributions that fail to meet our stockholders’ expectations from time to time or the distribution requirements for a REIT could cause the market price of our common stock to decline significantly. All distributions will be made at the discretion of our board of directors and will depend on our historical and projected results of operations, liquidity and financial condition, our REIT qualification, our debt service requirements, operating expenses and capital expenditures, prohibitions and other restrictions under financing arrangements and applicable law and other factors as our board of directors may deem relevant from time to time. In addition, we may pay distributions some or all of which may constitute a return of capital. To the extent that we decide to make distributions in excess of our current and accumulated earnings and profits, such distributions would generally be considered a return of capital for U.S. federal income tax purposes to the extent of the holder’s adjusted tax basis in its shares. A return of capital is not taxable, but it has the effect of reducing the holder’s adjusted tax basis in its investment. To the extent that distributions exceed the adjusted tax basis of a holder’s shares, they will be treated as gain from the sale or exchange of such shares. If we borrow to fund distributions, our future interest costs would increase, thereby reducing our earnings and cash available for distribution from what they otherwise would have been.

Future issuances or sales of our common stock, or the perception of the possibility of such issuances or sales, may depress the market price of our common stock.

We cannot predict the effect, if any, of our future issuances or sales of our common stock or OP units, or future resales of our common stock or OP units by existing holders, or the perception of such issuances, sales or resales, on the market price of our common stock. Any such future issuances, sales or resales, or the perception that such issuances, sales or resales might occur,

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could depress the market price of our common stock and also may make it more difficult and costly for us to sell equity or equity-related securities in the future at a time and upon terms that we deem desirable.

As of December 31, 2020, we had 64,453,752 shares of our Class A common stock outstanding and 9,961,497 shares of our Class A common stock sold on a forward basis which are not yet outstanding. In addition, as of December 31, 2020, we had 126,366 shares of our Class B common stock and 6,557,699 OP units outstanding (each of which may, and in certain cases must, exchange into shares of Class A common stock on a one-for-one basis). In addition, as of December 31, 2020, we had 3,162,500 shares of Series B Preferred Stock, which are convertible into shares of Class A common stock at any time at the option of the holder. Subject to applicable law, our board of directors has the authority, without further stockholder approval, to issue additional shares of common stock and preferred stock on the terms and for the consideration it deems appropriate.

In addition to the restricted stock that we previously have granted to our directors, executive officers and other employees under our equity incentive plan, we may also issue additional shares of our common stock and securities convertible into, or exchangeable or exercisable for, our common stock under our equity incentive plan. We have filed with the SEC a registration statement on Form S-8 covering the common stock issuable under our equity incentive plan. Shares of our common stock covered by such registration statement are eligible for transfer or resale without restriction under the Securities Act, unless held by affiliates. We also may issue from time to time additional shares of our common stock or OP units in connection with acquisitions and may grant registration rights in connection with such issuances pursuant to which we would agree to register the resale of such securities under the Securities Act. In addition, we have granted registration rights to Chad L. Williams, our Chairman and Chief Executive Officer, and others with respect to shares of common stock owned by them or upon redemption of OP units held by them. The market price of our common stock may decline significantly upon the registration of additional shares of our common stock pursuant to these registration rights or future issuances of equity in connection with acquisitions or our equity incentive plan.

Future issuances of debt securities, which would rank senior to our common stock upon our liquidation, and future issuances of equity securities (including OP units), which would dilute the holdings of our existing common stockholders and may be senior to our common stock for the purposes of making distributions, periodically or upon liquidation, may negatively affect the market price of our common stock.

In the future, we may issue debt or equity securities or incur other borrowings. Upon our liquidation, holders of our debt securities and other loans and preferred stock will receive a distribution of our available assets before common stockholders. If we incur debt in the future, our future interest costs could increase and adversely affect our results of operations and liquidity.

We are not required to offer any additional equity securities to existing common stockholders on a preemptive basis. Therefore, additional common stock issuances, directly or through convertible or exchangeable securities (including OP units), warrants or options, will dilute the holdings of our existing common stockholders and such issuances, or the perception of such issuances, may reduce the market price of our common stock. Our Series A Preferred Stock and our Series B Preferred Stock has a preference on distribution payments, periodically or upon liquidation, which could eliminate or otherwise limit our ability to make distributions to common stockholders. In addition, our Series B Preferred Stock is convertible, at any time, at the option of the holder thereof, into shares of our Class A common stock per share of Series B Preferred Stock, subject to certain adjustments including adjustments on a fundamental change transaction. As a result, the issuance of additional shares of our Class A common stock upon conversion of the Series B Preferred Stock will dilute the ownership interest of our Class A common stockholders and could have a dilutive effect on earnings per share of our Class A common stock and funds from operations per share of our Class A common stock. Because our decision to issue debt or equity securities or incur other borrowings in the future will depend on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing, nature or success of our future capital-raising efforts. Thus, common stockholders bear the risk that our future issuances of debt or equity securities or our incurrence of other borrowings will negatively affect the market price of our common stock.

The trading volume and market price of our common stock may be volatile and could decline significantly in the future.

The market price of our common stock may be volatile. The stock markets, including the NYSE, on which our common stock is listed, have experienced significant price and volume fluctuations. As a result, the market price of our common stock is likely to be similarly volatile, and could decline significantly, unrelated to our operating performance or prospects. The market price of our common stock could be subject to wide fluctuations in response to a number of factors, including those listed in this “Risk Factors” section of this Form 10-K and others such as:

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•our operating performance and prospects and those of other similar companies;

•actual or anticipated variations in our financial condition, liquidity, results of operations, FFO, Operating FFO, Adjusted Operating FFO, NOI, EBITDAre or MRR in the amount of distributions, if any, paid to our stockholders;

•changes in our estimates or those of securities analysts relating to our earnings or other operating metrics;

•publication of research reports about us, our significant customers, our competition, data center companies generally, the real estate industry or the technology industry;

•additions or departures of key personnel;

•the passage of legislation or other regulatory developments that adversely affect us or our industry;

•changes in market valuations of similar companies;

•adverse market reaction to leverage we may incur or equity we may issue in the future;

•actions by institutional stockholders;

•actual or perceived accounting issues, including changes in accounting principles;

•compliance with NYSE requirements;

•our qualification as a REIT;

•terrorist acts;

•speculation in the press or investment community;

•the realization of any of the other risk factors presented in this Form 10-K;

•adverse developments in the creditworthiness, business or prospects of one or more of our significant customers; and

•general market, economic and political conditions.

In the past, securities class action litigation has often been instituted against companies following periods of volatility in the market price of their common stock. This type of litigation, if brought against us, could result in substantial costs and divert our management’s attention and resources, which could have a material adverse effect on us.

Increases in market interest rates may cause prospective purchasers to seek higher distribution yields and therefore reduce demand for our common stock and result in a decline in the market price of our common stock.

The price of our common stock may be influenced by our distribution yield (i.e., the amount of our annual or annualized distributions, if any, as a percentage of the market price of our common stock) relative to market interest rates. An increase in market interest rates, which are currently low relative to historical levels, may lead prospective purchasers and holders of our common stock to expect a higher distribution yield, which we may not be able, or may choose not, to satisfy. As a result, prospective purchasers may decide to purchase other securities rather than our common stock, which would reduce the demand for our common stock, and existing holders of our common stock may decide to sell their shares, either of which could result in a decline in the market price of our common stock.

Risks Related to QTS’ Status as a REIT

If QTS does not qualify as a REIT, or fails to remain qualified as a REIT, we will be subject to U.S. federal income tax as a regular corporation and could face significant tax liability, which could reduce the amount of cash available for distribution to our stockholders, could have a material adverse effect on QTS, and could adversely affect the Operating Partnership’s ability to service its indebtedness.

QTS elected to be taxed as a REIT, commencing with our taxable year ended December 31, 2013, when we filed our U.S federal income tax return for that year. We believe that we have been organized and have operated and will continue to operate in conformity with the requirements for qualification and taxation as a REIT. QTS’ qualification as a REIT, and maintenance of such qualification, depends upon our ability to meet, on a continuing basis, various complex requirements under the Code relating to, among other things, the sources of its gross income, the composition and values of its assets, its distributions to its stockholders of at least 90% of its annual “REIT taxable income” (determined without regard to the dividends-paid deduction and excluding net capital gain) and the concentration of ownership of its equity shares. The complexity of these provisions and of the applicable U.S. Department of Treasury regulations (“Treasury Regulations”) that have been promulgated under the Code is greater in the case of a REIT that, like QTS, holds its assets through a partnership and conducts significant business operations through one or more taxable REIT subsidiaries (each a “TRS”). Even a technical or inadvertent mistake could jeopardize QTS’ REIT status. Accordingly, we cannot be certain that our organization and operation will enable QTS to qualify as a REIT for U.S. federal income tax purposes.

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If QTS loses its REIT status, we will face serious tax consequences that could adversely affect our ability to raise capital and the Operating Partnership’s ability to service its indebtedness for each of the years involved because:

•we would not be allowed a deduction for distributions to stockholders in computing our taxable income and would be subject to U.S. federal income tax at regular corporate rates and, therefore, would have to pay significant income taxes; and

•unless we are entitled to relief under applicable statutory provisions, we could not elect to be taxed as a REIT for four taxable years following the year during which it was disqualified.

In addition, if QTS fails to qualify as a REIT, we will not be required to make distributions to stockholders.

Even if QTS qualifies as a REIT, we will be subject to some taxes that will reduce our cash flow.

Even if QTS qualifies for taxation as a REIT, we may be subject to certain U.S. federal, state, local and foreign taxes on our income and assets, including taxes on any undistributed income, tax on income from some activities conducted as a result of a foreclosure, and state or local income, property and transfer taxes. For example, our TRSs and certain of our subsidiaries are subject to U.S. federal, state, local, and foreign corporate-level income taxes on their net taxable income, if any, which primarily consists of the revenues from the managed service business. In addition, QTS may incur a 100% excise tax on transactions with our TRSs if they are not conducted on an arm’s-length basis. See “The ownership limitation on TRS stock could limit the growth of the managed services business, and our transactions with our TRSs will cause us to be subject to a 100% penalty tax on certain income or deductions if those transactions are not conducted on arm’s-length terms” below.

Moreover, if we have net income from the sale of properties that are "dealer" properties (a “prohibited transaction,” under the Code) that income will be subject to a 100% penalty tax. In addition, we could, in certain circumstances, be required to pay an excise or penalty tax (which could be significant in amount) in order to utilize one or more relief provisions under the Code to maintain our qualification as a REIT. Any of these taxes would reduce our cash flow and could decrease cash available for distribution to stockholders and decrease cash available to service the Operating Partnership’s indebtedness.

If the structural components of our properties were not treated as real property for purposes of the REIT qualification requirements, QTS could fail to qualify as a REIT, which could have a material adverse effect on us.

A significant portion of the value of our properties is attributable to structural components related to the provision of electricity, heating ventilation and air conditioning, humidification regulation, security and fire protection, and telecommunication services. If rent attributable to personal property leased in connection with a lease of real property is greater than 15% of the total rent attributable to that lease, the portion of total rent that is attributable to the personal property will not be qualifying income for purposes of the REIT income tests. Therefore, if the Operating Partnership’s structural components of the properties are determined not to constitute real property for purposes of the REIT qualification requirements, we could fail to qualify as a REIT, which could have a material adverse impact on us, depress the market price of our common stock, and adversely affect our ability to raise capital as well as the Operating Partnership’s ability to service its indebtedness.

The REIT distribution requirements could adversely affect our ability to grow our business and may force us to seek third-party capital during unfavorable market conditions.

To qualify as a REIT, we generally must distribute to our stockholders at least 90% of its “REIT taxable income” (determined without regard to the dividends paid deduction and excluding net capital gain) each year, and we will be subject to regular corporate income taxes to the extent that we distribute less than 100% of our “REIT taxable income” each year. In addition, we will be subject to a 4% nondeductible excise tax on the amount, if any, by which distributions paid by us in any calendar year are less than the sum of 85% of our ordinary income, 95% of our capital gain net income and 100% of our undistributed income from prior years. In order to maintain our REIT status and avoid the payment of income and excise taxes, we may be forced to seek third-party capital to meet the distribution requirements even if the then-prevailing market conditions are not favorable. These capital needs could result from differences in timing between the recognition of taxable income and the actual receipt of cash or the effect of non-deductible capital expenditures, the creation of reserves or required debt or amortization payments. If we do not have other funds available in these situations, the Operating Partnership could be required to borrow funds on unfavorable terms, or sell assets at disadvantageous prices. In addition, we may be forced to distribute amounts that would otherwise have been invested in future acquisitions to make distributions sufficient to enable us

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to pay out enough of our taxable income to satisfy the REIT distribution requirement and to avoid corporate income tax and the 4% excise tax in a particular year.

Dividends payable by REITs do not qualify for the reduced tax rates available for some dividends, which could depress the market price of our common stock if it is perceived as a less attractive investment.

The maximum tax rate applicable to income from "qualified dividends" payable by non-REIT “C” corporations to U.S. stockholders that are individuals, trusts and estates generally is 20% (excluding the 3.8% net investment income tax). Dividends payable by REITs, however, generally are not eligible for the current reduced rate, except to the extent that certain holding requirements have been met and a REIT's dividends are attributable to dividends received by a REIT from taxable corporations (such as a TRS), to income that was subject to tax at the REIT/corporate level, or to dividends properly designated by the REIT as "capital gains dividends." For taxable years beginning before January 1, 2026, U.S. stockholders may deduct 20% of their dividends from REITs (excluding qualified dividend income and capital gains dividends). For those U.S. stockholders in the top marginal tax bracket of 37%, the deduction for REIT dividends yields an effective income tax rate of 29.6% on REIT dividends, which is higher than the 20% tax rate on qualified dividend income paid by non-REIT “C” corporations. Although the reduced rates applicable to dividend income from non-REIT “C” corporations do not adversely affect the taxation of REITs or dividends payable by REITs, it could cause investors who are non-corporate taxpayers to perceive investments in REITs to be relatively less attractive than investments in the stock of non-REIT “C” corporations that pay dividends, which could depress the market price of the stock of REITs, including our common stock.

QTS may in the future choose to make distributions in the form of shares of common stock, in which case stockholders may be required to pay income taxes in excess of the cash dividends they receive.

To make required REIT distributions and preserve cash, we might elect to make taxable distributions that are payable partly in cash and partly in shares of our common stock. If we made a taxable dividend payable in cash and shares of our common stock, taxable stockholders receiving such distributions will be taxed on the full amount of the distribution that otherwise would be a dividend for tax purposes, even though part is paid in stock. If we made a taxable dividend payable in cash and our common stock and a significant number of stockholders determine to sell shares of our common stock in order to pay taxes owed on dividends, it may put downward pressure on the trading price of our common stock.

Complying with REIT requirements may cause the Operating Partnership to liquidate or forgo otherwise attractive investment opportunities.

To qualify as a REIT, we must ensure that, at the end of each calendar quarter, at least 75% of the value of our assets consists of cash, cash items, government securities and “real estate assets” (as defined in the Code), including certain mortgage loans and securities (the “75% asset test”). The remainder of our investments (other than securities includable in the 75% asset test, and securities issued by our TRSs) generally cannot include more than 10% of the outstanding voting securities of any one issuer or more than 10% of the total value of the outstanding securities of any one issuer. In addition, in general, no more than 5% of the value of our total assets (other than securities includable in the 75% asset test, and securities issued by our TRSs) can consist of the securities of any one issuer no more than 20% of the value of our total assets can be represented by securities of one or more TRS, and debt instruments issued by publicly offered REITs, to the extent not secured by real property or interests in real property, cannot exceed 25% of the value of our total assets. If we fail to comply with these requirements at the end of any calendar quarter, we must correct the failure within 30 days after the end of the calendar quarter or qualify for certain statutory relief provisions to avoid losing our REIT qualification and suffering adverse tax consequences. As a result, the Operating Partnership may be required to liquidate or forgo otherwise attractive investment opportunities. These actions could have the effect of reducing our income and amounts available for distribution to our stockholders and the Operating Partnership’s income and amounts available to service its indebtedness.

In addition to the asset tests set forth above, to qualify as a REIT, we must continually satisfy tests concerning, among other things, the sources of our income, the amounts we distribute to our stockholders and the ownership of our stock. The Operating Partnership may be unable to pursue investment opportunities that would be otherwise advantageous to it in order to satisfy the source-of-income or asset-diversification requirements for us to qualify as a REIT. Thus, compliance with the REIT requirements may hinder the Operating Partnership’s ability to make certain attractive investments and, thus, reduce the Operating Partnership’s income and amounts available to service its indebtedness.

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Our ability to own stock and securities of TRSs is limited and our transactions with our TRSs will cause us to be subject to a 100% penalty tax on certain income or deductions if those transactions are not conducted on arm's-length terms.

A REIT may own up to 100% of the stock of one or more TRSs. A TRS may hold assets and earn income that would not be qualifying assets or income if held or earned directly by a REIT. Both the subsidiary and the REIT must jointly elect to treat the subsidiary as a TRS. A corporation of which a TRS directly or indirectly owns more than 35% of the voting power or value of the stock will automatically be treated as a TRS. Overall, no more than 20% of the value of a REIT's assets may consist of stock or securities of one or more TRSs. In addition, the rules applicable to TRSs limit the deductibility of interest paid or accrued by a TRS to its parent REIT to assure that the TRS is subject to an appropriate level of corporate taxation. The rules also impose a 100% excise tax on “redetermined rent,” “redetermined deductions” or “excess interest” to the extent rent paid by a TRS exceeds an arm’s-length amount, and a 100% excise tax on “redetermined TRS service income” (generally, gross income (less deductions allocable thereto) of a TRS attributable to services provided to, or on behalf of, the parent REIT that is less than the amounts that would have been paid by a REIT to the TRSs if based on arm’s-length negotiations).

Our TRSs will pay U.S. federal, state and local income tax on its taxable income. The after-tax net income of our TRSs will be available for distribution to us but generally is not required to be distributed. We believe that the aggregate value of the stock and securities of our TRSs is less than 20% of the value of our total assets (including the stock and securities of our TRSs). Furthermore, we monitor the value of our respective investments in our TRSs for the purpose of ensuring compliance with the ownership limitations applicable to TRSs. We scrutinize all of our transactions involving our TRSs to ensure that they are entered into on arm's-length terms to avoid incurring the 100% excise tax described above. There can be no assurance, however, that we will be able to comply with the 20% limitation discussed above or avoid application of the 100% excise tax discussed above.

If the Operating Partnership fails to qualify as a partnership for U.S. federal income tax purposes, QTS would fail to qualify as a REIT and suffer other adverse consequences.

The Operating Partnership believes that it has been organized and operated in a manner so as to be treated as a partnership, and not an association or publicly traded partnership taxable as a corporation for U.S. federal income tax purposes. As a partnership, it is not subject to U.S. federal income tax on its income. Instead, each of its partners, including QTS, is allocated that partner’s share of the Operating Partnership’s income. No assurance can be provided, however, that the IRS will not challenge its status as a partnership for U.S. federal income tax purposes, or that a court would not sustain such a challenge. If the IRS were successful in treating the Operating Partnership as an association or publicly traded partnership taxable as a corporation for U.S. federal income tax purposes, QTS would fail to meet the gross income tests and certain of the asset tests applicable to REITs and, accordingly, would cease to qualify as a REIT, which could adversely affect our ability to raise capital and the Operating Partnership’s ability to service its indebtedness. Also, the failure of the Operating Partnership to qualify as a partnership would cause it to become subject to U.S. federal corporate income tax, which would reduce significantly the amount of its cash available for debt service and for distribution to its partners, including QTS.

QTS has a carryover tax basis in respect of certain of its assets acquired in connection with the IPO, and the amount that QTS must distribute to its stockholders therefore may be higher.

As a result of the tax-free merger of General Atlantic REIT, Inc. (“GA REIT”) with and into QTS in connection with the IPO, certain of the operating properties, including Atlanta-Metro, Atlanta-Suwanee, Richmond, Santa Clara and Miami, have carryover tax bases that are lower than the fair market values of these properties at the time QTS acquired them in connection with the IPO. As a result of this lower aggregate tax basis, QTS will recognize higher taxable gain upon the sale of these assets, and QTS will be entitled to lower depreciation deductions on these assets than if it had purchased these properties in taxable transactions at the time of the IPO. Lower depreciation deductions and increased gains on sales generally will increase the amount of QTS’ required distribution under the REIT rules.

The new tax law imposed further limits on the deductibility of certain executive compensation expense, which could result in greater taxes for our TRS or the need to increase distributions to our stockholders.

Under Section 162(m) of the Internal Revenue Code, a publicly held corporation is generally limited to a $1 million annual tax deduction for compensation paid to each of its “covered employees.”

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Pursuant to the final Section 162(m) regulations released on December 18, 2020, Section 162(m) applies to a publicly held corporation’s distributive share of a partnership’s deduction for compensation expense if the deduction is attributable to compensation paid by the partnership after December 18, 2020 (unless paid pursuant to a written binding contract in effect on December 20, 2019); therefore, deductions for compensation paid to our executive officers may be limited. If compensation deductions are limited, our required REIT distributions will be higher.

Legislative or other actions affecting REITs could materially and adversely affect us and our investors as well as the Operating Partnership.

The rules dealing with U.S. federal income taxation are constantly under review by persons involved in the legislative process and by the IRS and the U.S. Department of the Treasury. Changes to the tax laws, with or without retroactive application, could materially and adversely affect us and our stockholders as well as the Operating Partnership. We cannot predict when or if any new U.S. federal income tax law, regulation, or administrative interpretation, or any amendment to any existing U.S. federal income tax law, regulation or administrative interpretation will be adopted, promulgated or become effective and any such law, regulation, or interpretation may take effect retroactively. New legislation, Treasury Regulations, administrative interpretations or court decisions could significantly and negatively affect our ability to qualify as a REIT or the U.S. federal income tax consequences of such qualification. We urge you to consult with your tax advisor with respect to the status of legislative, regulatory or administrative developments and proposals and their potential effect on an investment in our stock. Although REITs generally receive certain tax advantages compared to entities taxed as C corporations, it is possible that future legislation would result in a REIT having fewer tax advantages, and it could become more advantageous for a company that invests in real estate to elect to be treated for U.S. federal income tax purposes as a C corporation.

General Risk Factors

Our business could be negatively affected as a result of actions by activist stockholders.

Stockholder campaigns to effect changes in publicly-traded companies are sometimes led by activist investors through various corporate actions, including proxy contests. Responding to these actions can disrupt our operations by diverting the attention of management and our employees as well as our financial resources. Stockholder activism could create perceived uncertainties as to our future direction, which could result in the loss of potential business opportunities and make it more difficult to attract and retain qualified personnel and business partners. Furthermore, the election of individuals to our board of directors with a specific agenda could adversely affect our ability to effectively and timely implement our strategic plans.

If we fail to maintain an effective system of integrated internal controls, we may not be able to accurately and timely report our financial results.

An inability to maintain effective disclosure controls and procedures and internal control over financial reporting could adversely affect our results of operation, could cause us to fail to meet our reporting obligations under the Exchange Act on a timely basis or could result in material misstatements or omissions in our Exchange Act reports (including our financial statements), any of which, as well as the perception thereof, could cause investors to lose confidence in the company and could have a material adverse effect on us and cause the market price of our common stock to decline significantly.

We are exposed to ongoing litigation and other legal and regulatory actions, which may divert management’s time and attention, require us to pay damages and expenses or restrict the operation of our business.

We are subject to the risk of legal claims and proceedings and regulatory enforcement actions in the ordinary course of our business and otherwise, and we could incur significant liabilities and substantial legal fees as a result of these actions. Our management may devote significant time and attention to the resolution (through litigation, settlement or otherwise) of these actions, which would detract from our management’s ability to focus on our business. Any such resolution could involve payment of damages or expenses by us, which may be significant. In addition, any such resolution could involve our agreement to terms that restrict the operation of our business. The results of legal proceedings cannot be predicted with certainty. We cannot guarantee losses incurred in connection with any current or future legal or regulatory proceedings or actions will not exceed any provisions we may have set aside in respect of such proceedings or actions or will not exceed any available insurance coverage. The occurrence of any of these events could have a material adverse effect on us.

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ITEM 1B.    UNRESOLVED STAFF COMMENTS

None.

ITEM 2.    PROPERTIES

Our Portfolio

We operate a portfolio of 28 data center properties located throughout the United States, Canada and Europe. Within the U.S., we are located in some of the top U.S. data center markets and other high-growth markets. Our data centers are highly specialized, full-service, mission-critical facilities used by our customers to house, power and cool the networking equipment and computer systems that support their most critical business processes.

Operating Properties

The following table presents an overview of the portfolio of operating properties that we own or lease, referred to herein as our operating properties, based on information as of December 31, 2020. The table excludes data center development associated with available land we own that is not being actively developed. On February 22, 2019, the Company entered into an agreement whereby it contributed a data center in Manassas, Virginia to a 50% owned unconsolidated entity. Balances in the following table represent the unconsolidated entity at its 100% share. QTS’s pro rata share of the unconsolidated entity is 50%.

			Operating Net Rentable Square Feet (Operating NRSF) (1)
Property	Year Acquired (2)	Gross Square Feet (3)	Raised Floor (4)	Office & Other (5)	Supporting Infrastructure (6)	Total	% Occupied (7)		Annualized Rent (8)		Available Utility Power (MW) (9)	Basis of Design (BOD) NRSF	Current Raised Floor as a % of BOD
Richmond, VA	2010	1,318,353	140,398	51,093	153,450	344,941	94.2	%	$	37,187,047	110	557,309	25.2	%
Atlanta, GA (DC - 1)	2006	968,695	527,186	36,953	364,815	928,954	98.1	%	121,463,895		72	527,186	100.0	%
Irving, TX	2013	698,000	208,114	15,300	228,656	452,070	95.6	%	55,202,607		140	275,701	75.5	%
Princeton, NJ	2014	553,930	58,157	2,229	111,405	171,791	100.0	%	10,514,807		22	158,157	36.8	%
Atlanta, GA (DC - 2)	2020	495,000	55,896	9,250	51,250	116,396	100.0	%	13,665,431		100	240,000	23.3	%
Chicago, IL	2014	474,979	98,500	4,931	98,022	201,453	92.0	%	24,693,311		56	215,855	45.6	%
Ashburn, VA (DC - 1) (10)	2018	445,000	148,824	13,199	152,444	314,467	96.7	%	12,979,980		50	178,000	83.6	%
Suwanee, GA	2005	369,822	212,975	8,697	107,128	328,800	88.7	%	60,024,479		36	212,975	100.0	%
Piscataway, NJ	2016	360,000	118,263	19,243	116,289	253,795	90.7	%	23,105,473		111	176,000	67.2	%
Netherlands facilities (11)	2019	312,114	38,632	—	47,367	85,999	84.7	%	5,830,309		92	158,000	24.5	%
Fort Worth, TX	2016	261,836	71,147	17,232	125,794	214,173	67.4	%	5,713,534		50	80,000	88.9	%
Hillsboro, OR	2020	158,000	23,563	1,000	20,240	44,803	81.3	%	1,936,164		30	85,000	27.7	%
Santa Clara, CA (12)	2007	135,322	59,905	1,238	45,094	106,237	89.1	%	23,553,172		11	80,940	74.0	%
Sacramento, CA	2012	92,644	54,595	2,794	23,916	81,305	45.5	%	10,970,678		8	54,595	100.0	%
Dulles, VA (13)	2017	66,751	26,625	—	22,206	48,831	97.5	%	17,995,391		11	44,545	59.8	%
Leased facilities (14)	2006 & 2015	187,706	59,065	18,650	41,901	119,616	88.4	%	23,634,711		11	79,717	74.1	%
Other (15)	Misc.	147,435	22,380	98,674	30,074	151,128	75.8	%	9,063,116		5	22,380	100.0	%
		7,045,587	1,924,225	300,483	1,740,051	3,964,759	92.5	%	$	457,534,105	915	3,146,360	61.2	%
New Property Development
Ashburn, VA (DC - 2) (16)	2021	310,000	—	—	—	—	—	%	—		—	169,664	—	%
Manassas, VA (DC - 2) (17)	2021	340,000	—	—	—	—	—	%	—		—	160,000	—	%
Unconsolidated Properties - at the Entity's 100% Share (18)
Manassas, VA (DC - 1)	2018	118,031	33,600	12,663	39,044	85,307	100.0	%	9,856,599		135	66,324	50.7	%
Total Properties		7,813,618	1,957,825	313,146	1,779,095	4,050,066	92.6	%	$	467,390,704	1,050	3,542,348	55.3	%

(1)Represents the total square feet of a building that is currently leased or available for lease plus developed supporting infrastructure, based on engineering drawings and estimates, but does not include space held for redevelopment or space used for our own office space.

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(2)With respect to acquisitions, represents the year a property was acquired. With respect to properties under lease, represents the year our initial lease commenced for the property. With respect to new data center construction, represents the year the facility was opened or expected to be opened.

(3)With respect to our owned properties, gross square feet represents the entire building area. With respect to leased properties, gross square feet represents that portion of the gross square feet subject to our lease. Gross square feet includes 424,246 square feet of our office and support space, which is not included in operating NRSF.

(4)Represents management’s estimate of the portion of NRSF of the facility with available power and cooling capacity that is currently leased or readily available to be leased to customers as data center space based on engineering drawings.

(5)Represents the operating NRSF of the facility other than data center space (typically office and storage space) that is currently leased or available to be leased.

(6)Represents required data center support space, including mechanical, telecommunications and utility rooms, as well as building common areas.

(7)Calculated as data center raised floor that is subject to a signed lease for which billing has commenced divided by leasable raised floor based on the current configuration of the properties, expressed as a percentage.

(8)We define annualized rent as MRR multiplied by 12. We calculate MRR as monthly contractual revenue under executed contracts as of a particular date, which includes revenue from our rental and managed services activities, but excludes customer recoveries, deferred set-up fees, variable related revenues, non-cash revenues and other one-time revenues. MRR does not include the impact from booked-not-billed contracts (as defined below) as of a particular date, unless otherwise specifically noted, nor does it reflect the accounting associated with any free rent, rent abatements or future scheduled rent increases.

(9)Represents installed utility power and transformation capacity that is available for use by the facility as of December 31, 2020.

(10)This property was formerly known as “Ashburn, VA” but has been renamed “Ashburn, VA (DC-1)” to distinguish between the existing data center and the new property development shown as “Ashburn, VA (DC-2)” within the New Property Development section.

(11)Consists of two data centers located in Eemshaven, Netherlands and Groningen, Netherlands.

(12)Subject to long-term ground lease.

(13)Consists of one data center in Dulles, Virginia. The Dulles campus previously consisted of two data center buildings, however as of December 31, 2020, the Company had relocated customers from the smaller and older facility to the new facility in order to optimize its operating cost structure.

(14)Includes 7 facilities. All facilities are leased, including one subject to a finance lease.

(15)Consists of Miami, FL; Lenexa, KS; and Overland Park, KS facilities.

(16)Represents the development of a new data center building at our Ashburn, VA campus.

(17)Represents the development of a new data center building at our Manassas, VA campus. The Manassas, VA (DC - 2) data center is 100% owned and consolidated by QTS and is separate from the Manassas, VA (DC-1) data center that is owned by the unconsolidated entity.

(18)Represents our unconsolidated entity at 100% share. Our equity ownership of the unconsolidated entity is 50%.

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Development Pipeline

The following table presents an overview of our development pipeline, based on information as of December 31, 2020.

	Raised Floor NRSF Overview as of December 31, 2020
Property	Current NRSF in Service	Under Construction (1)	Future Available (2)	Basis of Design NRSF	Approximate Acreage of Available Land (3)
Richmond, VA	140,398	27,000	389,911	557,309	182.2
Atlanta, GA (DC - 1)	527,186	—	—	527,186	—
Irving, TX	208,114	34,000	33,587	275,701	29.4
Princeton, NJ	58,157	—	100,000	158,157	65.0
Atlanta, GA (DC - 2)	55,896	61,500	122,604	240,000	50.3
Chicago, IL	98,500	28,000	89,355	215,855	23.0
Ashburn, VA (DC - 1) (4)	148,824	14,000	15,176	178,000	7.3
Suwanee, GA	212,975	—	—	212,975	15.4
Piscataway, NJ	118,263	20,000	37,737	176,000	—
Netherlands facilities (5)	38,632	—	119,368	158,000	—
Fort Worth, TX	71,147	—	8,853	80,000	26.5
Hillsboro, OR	23,563	—	61,437	85,000	34.7
Santa Clara, CA	59,905	4,000	17,035	80,940	—
Sacramento, CA	54,595	—	—	54,595	—
Dulles, VA	26,625	—	17,920	44,545	—
Leased facilities (6)	59,065	—	20,652	79,717	—
Phoenix, AZ	—	—	—	—	84.2
Other (7)	22,380	—	—	22,380	113.0
	1,924,225	188,500	1,033,635	3,146,360	631.0
New Property Development
Ashburn, VA (DC - 2) (8)	—	73,000	96,664	169,664	55.6
Manassas, VA (DC - 2) (9)	—	30,000	130,000	160,000	98.2
Unconsolidated Properties - at the Entity's 100% Share (10)
Manassas, VA (DC-1)	33,600	11,000	21,724	66,324	—
	1,957,825	302,500	1,282,023	3,542,348	784.8

(1)Reflects NRSF at a facility for which the initiation of substantial activities has begun to prepare the property for its intended use on or before December 31, 2021.

(2)Reflects NRSF at a facility for which the initiation of substantial activities has begun to prepare the property for its intended use after December 31, 2021.

(3)The total cost basis of available land, which is land available for future development, is approximately $253.0 million, of which approximately $214.6 million is included in Construction in Progress on the consolidated balance sheet. The Basis of Design NRSF does not include any build-out on the available land.

(4)This property was formerly known as “Ashburn, VA” but has been renamed “Ashburn, VA (DC-1)” to distinguish between the existing data center and the new property development shown as “Ashburn, VA (DC-2)” within the new property development section.

(5)Consists of two data centers located in Eemshaven, Netherlands and Groningen, Netherlands.

(6)Includes 7 facilities. All facilities are leased, including one subject to a finance lease.

(7)Consists of Miami, FL; Lenexa, KS; and Overland Park, KS facilities as well as land holdings in Texas.

(8)Represents the development of a new data center building at our Ashburn, VA campus.

(9)Represents the development of a new data center building at our Manassas, VA campus. The Manassas, VA (DC - 2) data center is 100% owned and consolidated by QTS and is separate from the Manassas, VA (DC-1) data center owned by the unconsolidated entity.

(10)Represents our unconsolidated entity at 100% share. Our equity ownership of the unconsolidated entity is 50%.

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The table below sets forth our estimated costs for completion of our major development projects currently under construction and expected to be operational by December 31, 2021 (dollars in millions):

	Under Construction Costs (1)
Property	Actual (2)		Estimated Cost to Completion (3)		Total		Expected Completion date
Atlanta, GA (DC - 2)	$	63	$	93	$	156	Q1, Q2 & Q4 2021
Richmond, VA	30		7		37		Q3 2021
Piscataway, NJ	7		27		34		Q2 & Q4 2021
Irving, TX	24		10		34		Q1 & Q2 2021
Ashburn, VA (DC - 1) (4)	10		21		31		Q1 2021
Hillsboro, OR	12		15		27		Q1 & Q2 2021
Chicago, IL	7		19		26		Q2 2021
Santa Clara, CA	7		11		18		Q2 2021
Totals	160		203		363
New Property Development
Ashburn, VA (DC - 2) (5)	45		109		154		Q2, Q3 & Q4 2021
Manassas, VA (DC - 2) (6)	5		90		95		Q4 2021
Unconsolidated Properties - at the Company's 50% Share (7)
Manassas, VA (DC - 1)	2		11		13		Q3 2021
Totals	$	212	$	413	$	625

(1)In addition to projects currently under construction, our near-term development projects are expected to be delivered in a modular manner, and we currently expect to invest additional capital to complete these near term projects. The ultimate timing and completion of, and the commitment of capital to, our future development projects are within our discretion and will depend upon a variety of factors, including the actual contracts executed, availability of financing and our estimation of the future market for data center space in each particular market.

(2)Represents actual costs under construction through December 31, 2020. In addition to the $212 million of construction costs incurred through December 31, 2020 for development expected to be completed by December 31, 2021, as of December 31, 2020 we had incurred $817 million of additional costs (including acquisition costs and other capitalized costs) for other development projects that are expected to be completed after December 31, 2021.

(3)Represents management’s estimate of the additional costs required to complete the current NRSF under development. There may be an increase in costs if customers’ requirements exceed our current basis of design.

(4)This property was formerly known as “Ashburn, VA” but has been renamed “Ashburn, VA (DC-1)” to distinguish between the existing data center and the new property development labeled “Ashburn, VA (DC – 2)” within the new property development section.

(5)Represents the development of a new data center building in our Ashburn, VA market.

(6)Represents the development of a new data center building at our Manassas, VA campus. The Manassas, VA (DC - 2) data center is 100% owned and consolidated by QTS and is separate from the Manassas, VA (DC-1) data center owned by the unconsolidated entity.

(7)Represents our unconsolidated entity at 100% share. Our equity ownership of the unconsolidated entity is 50%.

We also own an aggregate of approximately 785 acres of additional available land at certain of our data center properties which can support the development of approximately 16.4 million additional square feet of raised floor.

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Customer Diversification

Our portfolio is currently leased to more than 1,200 customers comprised of companies of all sizes representing an array of industries, each with unique and varied business models and needs. The following table sets forth information regarding the 10 largest customers in our portfolio based on annualized rent as of December 31, 2020:

Principal Customer Industry	Number of Locations	Annualized Rent (1)		% of Portfolio Annualized Rent		Weighted Average Remaining Lease Term (Months) (2)
Content & Digital Media	2	$	60,453,011	13.1	%	37
Cloud & IT Services	4	24,916,488		5.4	%	52
Cloud & IT Services	1	19,259,485		4.2	%	15
Content & Digital Media	4	15,889,964		3.4	%	19
Cloud & IT Services	8	14,451,843		3.1	%	38
Cloud & IT Services	5	11,544,146		2.5	%	46
Cloud & IT Services	3	10,878,813		2.4	%	44
Network	14	7,056,432		1.5	%	56
Government & Security	1	6,977,837		1.5	%	27
Retail	1	6,640,712		1.4	%	18
Total / Weighted Average		$	178,068,731	38.5	%	36

(1)Annualized rent is presented for leases commenced as of December 31, 2020. We define annualized rent as MRR multiplied by 12. We calculate MRR as monthly contractual revenue under signed leases as of a particular date, which includes revenue from our rental and managed services activities, but excludes customer recoveries, deferred set-up fees, variable related revenues, non-cash revenues and other one-time revenues. MRR does not include the impact from booked-not-billed leases (which represent customer leases that have been executed but for which lease payments have not commenced) as of a particular date unless otherwise specifically noted. This amount reflects the annualized cash rental payments. It does not reflect any accounting associated with any free rent, rent abatements or future scheduled rent increases and also excludes operating expense and power reimbursements.

(2)Weighted average based on customer’s percentage of total annualized rent expiring as of December 31, 2020.

The following chart shows the breakdown of all our customers by industry based on annualized rent as of December 31, 2020:

Industry	% of Total Annualized Rent as of December 31, 2020
Cloud & IT Services	31.8	%
Content & Digital Media	20.7	%
Financial Services	13.8	%
Network	7.5	%
Health Care	6.8	%
Government & Security	5.7	%
Retail	4.8	%
Other	8.9	%
Total	100.0	%

Lease Distribution by Product Type

Product Type (1)	Total Leased Raised Floor (2)	% of Portfolio Leased Raised Floor		Annualized Rent (3)		% of Portfolio Annualized Rent
Hyperscale	866,084	60	%	$	170,692,207	37	%
Hybrid Colocation	582,877	40	%	291,770,198		63	%
Portfolio Total	1,448,961	100	%	$	462,462,405	100	%

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(1)Represents all leases in our portfolio for which billing has commenced as of December 31, 2020.

(2)Represents the square footage of raised floor at a property under lease as specified in the lease and that has commenced billing as of December 31, 2020.

(3)Annualized rent is presented for leases commenced as of December 31, 2020. We define annualized rent as MRR multiplied by 12. We calculate MRR as monthly contractual revenue under signed leases as of a particular date, which includes revenue from our rental and managed services activities, but excludes customer recoveries, deferred set-up fees, variable related revenues, non-cash revenues and other one-time revenues. MRR does not include the impact from booked-not-billed leases as of a particular date, unless otherwise specifically noted. This amount reflects the annualized cash rental payments. It does not reflect any accounting associated with any free rent, rent abatements or future scheduled rent increases and also excludes operating expense and power reimbursements.

Lease Expirations

The following table sets forth a summary schedule of the lease expirations as of December 31, 2020 at the properties in our portfolio, excluding leases that have been booked but not billed. Unless otherwise stated in the footnotes, the information set forth in the table assumes that customers exercise no renewal options and all early termination rights are exercised:

Year of Lease Expiration	Number of Leases Expiring (1)	Total Raised Floor of Expiring Leases	% of Portfolio Leased Raised Floor		Annualized Rent (2)		% of Portfolio Annualized Rent
Month-to-Month (3)	761	31,512	2	%	$	23,997,743	5	%
2021	1,952	315,377	22	%	130,196,869		28	%
2022	1,278	356,411	25	%	124,564,587		27	%
2023	836	140,732	10	%	67,924,294		15	%
2024	340	179,773	12	%	48,856,740		11	%
2025	220	204,874	14	%	30,630,101		7	%
2026	41	38,563	3	%	5,049,819		1	%
2027	72	57,673	4	%	5,908,672		1	%
2028	26	10,009	1	%	1,079,479		—	%
2029	20	45,504	2	%	10,250,101		2	%
2030	4	68,525	5	%	14,004,000		3	%
After 2030	1	8	—	%	—		—	%
Portfolio Total	5,551	1,448,961	100	%	$	462,462,405	100	%

(1)Represents each agreement with a customer signed as of December 31, 2020 for which billing has commenced; a lease agreement could include multiple spaces and a customer could have multiple leases.

(2)Annualized rent is presented for leases commenced as of December 31, 2020. We define annualized rent as MRR multiplied by 12. We calculate MRR as monthly contractual revenue under signed leases as of a particular date, which includes revenue from our rental and managed services activities, but excludes customer recoveries, deferred set-up fees, variable related revenues, non-cash revenues and other one-time revenues. MRR does not include the impact from booked-not-billed leases as of a particular date, unless otherwise specifically noted. This amount reflects the annualized cash rental payments. It does not reflect any accounting associated with any free rent, rent abatements or future scheduled rent increases and also excludes operating expense and power reimbursements.

(3)Consists of annualized rent associated with customer leases whose original contract terms ended on December 31, 2020 and have signed a renewal or are eligible for renewal, as well as customers whose leases expired prior to December 31, 2020 and have continued on a month-to-month basis. We do not typically enter into month-to-month leases.

Description of Our Properties

Below is a description of our properties. More detail is provided for the properties that represent more than ten percent of our total assets or accounted for more than ten percent of our aggregate gross revenues or both as of and for the year ended December 31, 2020.

Atlanta, Georgia Campus

Our Atlanta (DC-1) facility, formerly known as Atlanta-Metro, is currently our largest data center based on total operating NRSF. As of December 31, 2020, the property consisted of approximately 969,000 gross square feet with approximately 929,000 total operating NRSF, including approximately 527,000 raised floor operating NRSF. An on-site Georgia Power substation supplies 72 MW of utility power to the facility, which is backed up by diesel generators, and the facility has 120

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MW of transformer capacity. The facility also includes a small amount of private “Class A” office space. As of December 31, 2020, the facility was approximately 98% occupied by 239 customers across our product offerings.

Portions of the Atlanta (DC-1) facility are included in our development pipeline, as we plan to continue to expand the facility in multiple phases. During the year ended December 31, 2020, we placed approximately 49,000 NRSF of raised floor into service. Upon completion of the build-out of the facility, we anticipate that the facility would contain approximately 929,000 total operating NRSF, including approximately 527,000 NRSF of raised floor.

We are the owner of our Atlanta (DC-1) facility. We were previously the owner of the facility through a bond-financed sale-leaseback structure. The structure was necessary in the State of Georgia to receive property tax abatement. In 2006, the Development Authority of Fulton County (“DAFC”) issued a taxable industrial development revenue bond to us with a face amount of $300 million in exchange for legal title to the facility. The acquisition of the bond by us was “cashless” as the bond was issued to us in exchange for title to the facility. The bond matured on December 1, 2019, at which time we exercised our option to purchase the facility for $10.

In October 2018, we completed the acquisition of approximately 55 acres of land in Atlanta, Georgia adjacent to our existing Atlanta (DC-1) data center. In addition, this facility is adjacent to approximately 72 acres of undeveloped land, inclusive of the land purchase in October 2018, owned by us that we estimate could be developed to provide, at a minimum, approximately 2.5 million additional NRSF of raised floor. Additionally, during the fourth quarter of 2019, the Company sold certain land improvements near its Atlanta (DC-1) facility and entered into an underlying ground lease and services agreement with the buyer.

During the year ended December 31, 2020, we completed the first phase of construction of a second megascale data center Atlanta (DC-2) on our land adjacent to the existing Atlanta (DC-1) facility. During the year ended December 31, 2020, we opened the facility and placed approximately 56,000 NRSF of raised floor into service. The Atlanta (DC-2) facility is included within our development pipeline, as we plan to develop additional phases of the facility. Upon completion of the build out of the facility, we anticipate that the facility would contain approximately 495,000 gross square feet and 240,000 raised floor NRSF. We anticipate that this phase of development will cost (in addition to the $63 million already incurred as of December 31, 2020) approximately $93 million in the aggregate based on current estimates.

Lease Expirations. The following table sets forth a summary schedule of lease expirations for leases in place as of December 31, 2020 at the Atlanta, Georgia campus (inclusive of DC-1 and DC-2). Unless otherwise stated in the footnotes, the information set forth in the table assumes that customers exercise no renewal options and all early termination rights.

Year of Lease Expiration	Number of Leases Expiring (1)	Total Raised Floor of Expiring Leases	% of Facility Leased Raised Floor		Annualized Rent (2)		% of Facility Annualized Rent
Month-to-Month (3)	195	13,663	3	%	$	7,118,136	5	%
2021	304	150,879	30	%	39,667,038		29	%
2022	213	194,225	39	%	46,565,589		35	%
2023	117	34,532	7	%	13,115,497		10	%
2024	66	32,249	7	%	9,202,880		7	%
2025	29	27,189	5	%	5,856,974		4	%
2026	6	—	—	%	138,226		—	%
2027	23	1,216	—	%	604,769		—	%
2028	—	—	—	%	—		—	%
2029	10	3,445	1	%	692,217		1	%
2030	1	38,404	8	%	12,168,000		9	%
After 2030	—	—	—	%	—		—	%
Portfolio Total	964	495,802	100	%	$	135,129,326	100	%

(1)Represents each lease with a customer signed as of December 31, 2020 for which billing has commenced; a lease agreement could include multiple spaces and/or service orders and a customer could have multiple leases.

(2)Annualized rent is presented for leases commenced as of December 31, 2020. We define annualized rent as MRR multiplied by 12. We calculate MRR as monthly contractual revenue under signed leases as of a particular date, which includes revenue from our rental and managed services activities, but

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excludes customer recoveries, deferred set-up fees, variable related revenues, non-cash revenues and other one-time revenues. MRR does not include the impact from booked-not-billed leases as of a particular date, unless otherwise specifically noted. This amount reflects the annualized cash rental payments. It does not reflect any accounting associated with any free rent, rent abatements or future scheduled rent increases and also excludes operating expense and power reimbursements.

(3)Consists of annualized rent associated with customer leases whose original contract terms ended on December 31, 2020 and have signed a renewal or are eligible for renewal, as well as customers whose leases expired prior to December 31, 2020 and have continued on a month-to-month basis. We do not typically enter into month-to-month leases.

Primary Customers. The following table summarizes information regarding primary customers, which are customers occupying 10% or more of the leased raised floor of the Atlanta, Georgia campus (inclusive of DC-1 and DC-2), as of December 31, 2020:

Principal Customer Industry	Weighted Average Remaining Lease Term (Months) (1)	Renewal Option	Annualized Rent (2)		% of Facility Annualized Rent
Content & Digital Media	37	2x3 years & 1x5 years	$	60,453,011	45	%
Content & Digital Media	15	2x5 years	11,755,448		9	%
Cloud & IT Services	42	2x3 years	9,162,813		7	%

(1)Weighted average based on customer’s percentage of total annualized rent expiring as of December 31, 2020.

(2)Annualized rent is presented for leases commenced as of December 31, 2020. We define annualized rent as MRR multiplied by 12. We calculate MRR as monthly contractual revenue under signed leases as of a particular date, which includes revenue from our rental and managed services activities, but excludes customer recoveries, deferred set-up fees, variable related revenues, non-cash revenues and other one-time revenues. MRR does not include the impact from booked-not-billed leases as of a particular date, unless otherwise specifically noted. This amount reflects the annualized cash rental payments. It does not reflect any accounting associated with any free rent, rent abatements or future scheduled rent increases and also excludes operating expense and power reimbursements.

Historical Percentage Leased and Annualized Rental Rates. The following table sets forth the leasable raised floor, percentage leased, annualized rent and annualized rent per leased raised square foot for the Atlanta, Georgia campus (inclusive of DC-1 and DC-2):

Date	Facility Leasable Raised Floor	% Occupied and Billing (1)		Annualized Rent (2)		Annualized Rent per Leased Square Foot
December 31, 2020	504,420	98	%	$	135,129,326	$	273
December 31, 2019	449,712	96	%	114,298,127		266
December 31, 2018	408,986	99	%	101,394,293		250
December 31, 2017	392,114	96	%	96,559,779		256
December 31, 2016	388,227	94	%	92,848,008		254

(1)Calculated as data center raised floor that is subject to a signed lease for which billing has commenced as of the applicable date, divided by leasable raised floor based on the then current configuration of the property, expressed as a percentage.

(2)Annualized rent is presented for leases commenced as of the applicable date. We define annualized rent as MRR multiplied by 12. We calculate MRR as monthly contractual revenue under signed leases as of a particular date, which includes revenue from our rental and managed services activities, but excludes customer recoveries, deferred set-up fees, variable related revenues, non-cash revenues and other one-time revenues. MRR does not include the impact from booked-not-billed leases as of a particular date, unless otherwise specifically noted. This amount reflects the annualized cash rental payments. It does not reflect any accounting associated with any free rent, rent abatements or future scheduled rent increases and also excludes operating expense and power reimbursements.

Atlanta-Suwanee

Our Suwanee, Georgia, or Atlanta-Suwanee, facility consists of approximately 370,000 gross square feet, and as of December 31, 2020 it had approximately 329,000 total operating NRSF, including approximately 213,000 raised floor operating NRSF. Georgia Power supplies 36 MW of utility power to the facility, which is backed up by diesel generators. The facility also contains a small amount of “Class A” private office space and our operating service center, which provides 24x7 support to all of our customers and data centers. As of December 31, 2020, the facility was approximately 89% occupied by 303 customers. We are the fee simple owner of the Atlanta-Suwanee facility.

We are not currently redeveloping significant portions of the Atlanta-Suwanee facility.

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The facility is adjacent to 15 acres of undeveloped land owned by us that we believe could be developed to provide, at a minimum, an additional approximately 310,000 total operating NRSF, including approximately 210,000 NRSF of raised floor. These 15 acres of undeveloped land are not included in our current development plans.

Lease Expirations. The following table sets forth a summary schedule of the lease expirations for leases in place as of December 31, 2020 at the Atlanta-Suwanee facility. Unless otherwise stated in the footnotes, the information set forth in the table assumes that customers exercise no renewal options and all early termination rights.

Year of Lease Expiration	Number of Leases Expiring (1)	Total Raised Floor of Expiring Leases	% of Facility Leased Raised Floor		Annualized Rent (2)		% of Facility Annualized Rent
Month-to-Month (3)	104	3,573	3	%	$	3,172,727	5	%
2021	436	32,445	27	%	21,753,256		36	%
2022	226	21,326	17	%	13,310,534		22	%
2023	161	23,457	19	%	13,286,162		22	%
2024	19	2,791	2	%	1,247,209		2	%
2025	18	19,534	16	%	5,055,366		9	%
2026	1	—	—	%	1,500		—	%
2027	34	20,194	16	%	2,197,725		4	%
After 2027	—	—	—	%	—		—	%
Total	999	123,320	100	%	$	60,024,479	100	%

(1)Represents each lease with a customer signed as of December 31, 2020 for which billing has commenced; a lease agreement could include multiple spaces and/or service orders and a customer could have multiple leases.

(2)Annualized rent is presented for leases commenced as of December 31, 2020. We define annualized rent as MRR multiplied by 12. We calculate MRR as monthly contractual revenue under signed leases as of a particular date, which includes revenue from our rental and managed services activities, but excludes customer recoveries, deferred set-up fees, variable related revenues, non-cash revenues and other one-time revenues. MRR does not include the impact from booked-not-billed leases as of a particular date, unless otherwise specifically noted. This amount reflects the annualized cash rental payments. It does not reflect any accounting associated with any free rent, rent abatements or future scheduled rent increases and also excludes operating expense and power reimbursements.

(3)Consists of annualized rent associated with customer leases whose original contract terms ended on December 31, 2020 and have signed a renewal or are eligible for renewal, as well as customers whose leases expired prior to December 31, 2020 and have continued on a month-to-month basis. We do not typically enter into month-to-month leases.

Primary Customers. The following table summarizes information regarding primary customers, which are customers occupying 10% or more of the leased raised floor of the Atlanta-Suwanee facility, as of December 31, 2020:

Principal Customer Industry	Weighted Average Remaining Lease Term (Months) (1)	Renewal Option	Annualized Rent (2)		% of Facility Annualized Rent
Cloud & IT Services	25	2x5 years	$	5,456,940	9	%
Financial Services	59	2x5 years	2,432,200		4	%
Network	79	2x5 years	2,291,925		4	%

(1)Weighted average based on customer’s percentage of total annualized rent expiring as of December 31, 2020.

(2)Annualized rent is presented for leases commenced as of December 31, 2020. We define annualized rent as MRR multiplied by 12. We calculate MRR as monthly contractual revenue under signed leases as of a particular date, which includes revenue from our rental and managed services activities, but excludes customer recoveries, deferred set-up fees, variable related revenues, non-cash revenues and other one-time revenues. MRR does not include the impact from booked-not-billed leases as of a particular date, unless otherwise specifically noted. This amount reflects the annualized cash rental payments. It does not reflect any accounting associated with any free rent, rent abatements or future scheduled rent increases and also excludes operating expense and power reimbursements.

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Historical Percentage Leased and Annualized Rental Rates. The following table sets forth the leasable raised floor, percentage leased, annualized rent and annualized rent per leased raised square foot for the Atlanta-Suwanee facility:

Date	Facility Leasable Raised Floor	% Occupied and Billing (1)		Annualized Rent (2)		Annualized Rent per Leased Square Foot
December 31, 2020	138,993	89	%	$	60,024,479	$	487
December 31, 2019	135,050	93	%	60,550,226		480
December 31, 2018	134,684	92	%	55,080,296		445
December 31, 2017	135,544	92	%	56,998,497		459
December 31, 2016	138,722	80	%	59,206,902		537

(1)Calculated as data center raised floor that is subject to a signed lease for which billing has commenced as of the applicable date, divided by leasable raised floor based on the then current configuration of the property, expressed as a percentage.

(2)Annualized rent is presented for leases commenced as of the applicable date. We define annualized rent as MRR multiplied by 12. We calculate MRR as monthly contractual revenue under signed leases as of a particular date, which includes revenue from our rental and managed services activities, but excludes customer recoveries, deferred set-up fees, variable related revenues, non-cash revenues and other one-time revenues. MRR does not include the impact from booked-not-billed leases as of a particular date, unless otherwise specifically noted. This amount reflects the annualized cash rental payments. It does not reflect any free rent, rent abatements or future scheduled rent increases and also excludes operating expense and power reimbursements.

Irving

We purchased our Irving facility in February 2013. Prior to our purchase, the facility was operated as a semiconductor fabrication facility. Similar to our Richmond facility, the Irving facility has significant pre-existing infrastructure. Specifically, the Irving facility has diverse feeds of 140 MW of utility power and approximately 698,000 gross square feet on 39 acres. We are the fee simple owner of the Irving facility.

We acquired our Irving facility because we believe that we will be able to execute a redevelopment strategy similar to our Richmond facility. Given the infrastructure that was already in place due to its former use as a semiconductor fabrication facility, we believe that the incremental costs to redevelop data center raised floor space in this facility will be lower compared to typical costs for ground-up development or redevelopments of other building types. In addition, the access to a significant amount of utility power provides the necessary power capacity to support our growth strategy for our Irving data center. Furthermore, we believe that the Dallas market is an important data center market primarily due to its strong business environment and relatively affordable power costs.

The Irving facility is included in our development pipeline, as we continue to convert the entire facility into an operating data center in multiple phases. During the year ended December 31, 2020, we placed approximately 20,000 raised floor NRSF into service. Our current under construction redevelopment plans call for the addition of up to approximately 84,000 total operating NRSF, including approximately 34,000 NRSF of raised floor. We own sufficient undeveloped land on the site, approximately 29 acres, that we believe could also be developed to provide an additional 1.3 million total operating NRSF, of which approximately 680,000 NRSF would be raised floor. These 29 acres of undeveloped land are not included in our current development plans.

As of December 31, 2020, the facility was approximately 96% occupied by 175 customers.

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Lease Expirations. The following table sets forth a summary schedule of the lease expirations for leases in place as of December 31, 2020 at the Irving facility. Unless otherwise stated in the footnotes, the information set forth in the table assumes that customers exercise no renewal options and all early termination rights.

Year of Lease Expiration	Number of Leases Expiring (1)	Total Raised Floor of Expiring Leases	% of Facility Leased Raised Floor		Annualized Rent (2)		% of Facility Annualized Rent
Month-to-Month (3)	132	1,109	1	%	$	1,068,857	2	%
2021	218	7,653	5	%	5,722,573		11	%
2022	154	75,346	46	%	22,826,722		41	%
2023	124	15,524	9	%	6,361,439		12	%
2024	53	50,505	30	%	15,531,516		28	%
2025	51	10,519	6	%	3,463,631		6	%
2026	—	—	—	%	—		—	%
2027	2	2,013	1	%	191,761		—	%
2028	4	3,151	2	%	36,108		—	%
After 2028	—	—	—	%	—		—	%
Portfolio Total	738	165,820	100	%	$	55,202,607	100	%

(1)Represents each lease with a customer signed as of December 31, 2020 for which billing has commenced; a lease agreement could include multiple spaces and/or service orders and a customer could have multiple leases.

(2)Annualized rent is presented for leases commenced as of December 31, 2020. We define annualized rent as MRR multiplied by 12. We calculate MRR as monthly contractual revenue under signed leases as of a particular date, which includes revenue from our rental and managed services activities, but excludes customer recoveries, deferred set-up fees, variable related revenues, non-cash revenues and other one-time revenues. MRR does not include the impact from booked-not-billed leases as of a particular date, unless otherwise specifically noted. This amount reflects the annualized cash rental payments. It does not reflect any accounting associated with any free rent, rent abatements or future scheduled rent increases and also excludes operating expense and power reimbursements.

(3)Consists of annualized rent associated with customer leases whose original contract terms ended on December 31, 2020 and have signed a renewal or are eligible for renewal, as well as customers whose leases expired prior to December 31, 2020 and have continued on a month-to-month basis. We do not typically enter into month-to-month leases.

Primary Customers. The following table summarizes information regarding primary customers, which are customers occupying 10% or more of the leased raised floor of the Irving facility, as of December 31, 2020:

Principal Customer Industry	Weighted Average Remaining Lease Term (Months) (1)	Renewal Option	Annualized Rent (2)		% of Facility Annualized Rent
Cloud & IT Services	15	2x5 years	$	19,259,485	35	%
Cloud & IT Services	45	2x5 years	13,944,738		25	%

(1)Weighted average based on customer’s percentage of total annualized rent expiring as of December 31, 2020.

(2)Annualized rent is presented for leases commenced as of December 31, 2020. We define annualized rent as MRR multiplied by 12. We calculate MRR as monthly contractual revenue under signed leases as of a particular date, which includes revenue from our rental and managed services activities, but excludes customer recoveries, deferred set-up fees, variable related revenues, non-cash revenues and other one-time revenues. MRR does not include the impact from booked-not-billed leases as of a particular date, unless otherwise specifically noted. This amount reflects the annualized cash rental payments. It does not reflect any accounting associated with any free rent, rent abatements or future scheduled rent increases and also excludes operating expense and power reimbursements.

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Historical Percentage Leased and Annualized Rental Rates. The following table sets forth the leasable raised floor, percentage leased, annualized rent and annualized rent per leased raised square foot for the Irving facility:

Date	Facility Leasable Raised Floor	% Occupied and Billing (1)		Annualized Rent (2)		Annualized Rent per Leased Square Foot
December 31, 2020	173,392	96	%	$	55,202,607	$	333
December 31, 2019	165,838	95	%	51,259,686		326
December 31, 2018	165,518	95	%	50,666,209		323
December 31, 2017	138,307	96	%	43,876,400		331
December 31, 2016	120,776	97	%	29,318,582		251

(1)Calculated as data center raised floor that is subject to a signed lease for which billing has commenced as of the applicable date, divided by leasable raised floor based on the then current configuration of the property, expressed as a percentage.

(2)Annualized rent is presented for leases commenced as of the applicable date. We define annualized rent as MRR multiplied by 12. We calculate MRR as monthly contractual revenue under signed leases as of a particular date, which includes revenue from our rental and managed services activities, but excludes customer recoveries, deferred set-up fees, variable related revenues, non-cash revenues and other one-time revenues. MRR does not include the impact from booked-not-billed leases as of a particular date, unless otherwise specifically noted. This amount reflects the annualized cash rental payments. It does not reflect any accounting associated with any free rent, rent abatements or future scheduled rent increases and also excludes operating expense and power reimbursements.

Ashburn

In August 2017, we completed the acquisition of approximately 24 acres of land in Ashburn, Virginia and constructed a mega data center facility (DC-1) on the acquired land parcel. As of December 31, 2020, the property consisted of approximately 445,000 gross square feet with approximately 314,000 total operating NRSF, including approximately 149,000 raised floor operating NRSF. Multiple utility feeders supply 50 MW of utility power to the facility, which is backed up by diesel generators. As of December 31, 2020, the facility was approximately 97% occupied by 14 customers across our product offerings.

The Ashburn facility is included in our development pipeline, as we plan to expand the mega data center in multiple phases. During the year ended December 31, 2020, we placed approximately 80,000 raised floor NRSF into service. Our current under construction development plans call for up to approximately 25,000 total operating NRSF, including approximately 14,000 NRSF of raised floor. We anticipate that this expansion will cost (in addition to $10 million already incurred as of December 31, 2020) approximately $21 million in the aggregate based on current estimates. Longer term, we can further expand the facility by approximately 39,000 total operating NRSF, of which approximately 15,000 would be raised floor. Upon completion of the build-out of the facility, we anticipate that the facility would contain approximately 445,000 gross square feet, including approximately 178,000 NRSF of raised floor.

In July 2019, we completed the acquisition of approximately 28 acres of land in Ashburn, Virginia and started constructing a mega data center facility (DC-2) on the acquired land parcel. As of December 31, 2020, the property was under development and consisted of approximately 310,000 gross square feet with approximately 170,000 raised floor operating NRSF. Ashburn (DC-2) is expected to be open in 2021.

In addition, in October 2017, we completed the acquisition of approximately 28 acres of land in Ashburn, Virginia, that we believe could also be developed to provide an additional 2 million total operating NRSF, of which approximately 1 million NRSF would be raised floor. These 28 acres of undeveloped land are not included in our current development plans or property table.

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Lease Expirations. The following table sets forth a summary schedule of lease expirations for leases in place as of December 31, 2020 at the Ashburn (DC-1) facility. Unless otherwise stated in the footnotes, the information set forth in the table assumes that customers exercise no renewal options and all early termination rights.

Year of Lease Expiration	Number of Leases Expiring (1)	Total Raised Floor of Expiring Leases	% of Facility Leased Raised Floor		Annualized Rent (2)		% of Facility Annualized Rent
Month-to-Month (3)	5	16	0	%	$	50,400	—	%
2021	5	48	0	%	87,036		1	%
2022	15	3,380	2	%	789,060		6	%
2023	20	15,420	11	%	4,840,176		37	%
2024	3	40	0	%	8,940		0	%
2025	5	85,290	62	%	3,723,600		29	%
2026	13	3,978	3	%	1,323,768		10	%
2027	4	14,405	11	%	1,239,000		10	%
2028	—	—	—	%	—		—	%
2029	—	—	—	%	—		—	%
2030	1	14,405	11	%	918,000		7	%
After 2030	1	8	—	%	—		—	%
Portfolio Total	72	136,990	100	%	$	12,979,980	100	%

(1)Represents each lease with a customer signed as of December 31, 2020 for which billing has commenced; a lease agreement could include multiple spaces and/or service orders and a customer could have multiple leases.

(2)Annualized rent is presented for leases commenced as of December 31, 2020. We define annualized rent as MRR multiplied by 12. We calculate MRR as monthly contractual revenue under signed leases as of a particular date, which includes revenue from our rental and managed services activities, but excludes customer recoveries, deferred set-up fees, variable related revenues, non-cash revenues and other one-time revenues. MRR does not include the impact from booked-not-billed leases as of a particular date, unless otherwise specifically noted. This amount reflects the annualized cash rental payments. It does not reflect any accounting associated with any free rent, rent abatements or future scheduled rent increases and also excludes operating expense and power reimbursements.

(3)Consists of annualized rent associated with customer leases whose original contract terms ended on December 31, 2020 and have signed a renewal or are eligible for renewal, as well as customers whose leases expired prior to December 31, 2020 and have continued on a month-to-month basis. We do not typically enter into month-to-month leases.

Primary Customers. The following table summarizes information regarding primary customers, which are customers occupying 10% or more of the leased raised floor of the Ashburn (DC-1) facility, as of December 31, 2020:

Principal Customer Industry	Weighted Average Remaining Lease Term (Months) (1)	Renewal Option	Annualized Rent (2)		% of Facility Annualized Rent
Health Care	28	2x3 year or 2x5 years	$	3,844,218	30	%
Cloud & IT Services	52	2x5 years	3,318,000		26	%
Cloud & IT Services	98	1x5 years	2,157,000		17	%

(1)Weighted average based on customer’s percentage of total annualized rent expiring as of December 31, 2020.

(2)Annualized rent is presented for leases commenced as of December 31, 2020. We define annualized rent as MRR multiplied by 12. We calculate MRR as monthly contractual revenue under signed leases as of a particular date, which includes revenue from our rental and managed services activities, but excludes customer recoveries, deferred set-up fees, variable related revenues, non-cash revenues and other one-time revenues. MRR does not include the impact from booked-not-billed leases as of a particular date, unless otherwise specifically noted. This amount reflects the annualized cash rental payments. It does not reflect any accounting associated with any free rent, rent abatements or future scheduled rent increases and also excludes operating expense and power reimbursements.

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Historical Percentage Leased and Annualized Rental Rates. The following table sets forth the leasable raised floor, percentage leased, annualized rent and annualized rent per leased raised square foot for the Ashburn (DC-1) facility:

Date	Facility Leasable Raised Floor	% Occupied and Billing (1)		Annualized Rent (2)		Annualized Rent per Leased Square Foot
December 31, 2020	141,669	97	%	$	12,979,980	$	95
December 31, 2019	68,487	95	%	6,474,751		99
December 31, 2018	14,230	100	%	2,157,036		152

(1)Calculated as data center raised floor that is subject to a signed lease for which billing has commenced as of the applicable date, divided by leasable raised floor based on the then current configuration of the property, expressed as a percentage.

(2)Annualized rent is presented for leases commenced as of the applicable date. We define annualized rent as MRR multiplied by 12. We calculate MRR as monthly contractual revenue under signed leases as of a particular date, which includes revenue from our rental and managed services activities, but excludes customer recoveries, deferred set-up fees, variable related revenues, non-cash revenues and other one-time revenues. MRR does not include the impact from booked-not-billed leases as of a particular date, unless otherwise specifically noted. This amount reflects the annualized cash rental payments. It does not reflect any accounting associated with any free rent, rent abatements or future scheduled rent increases and also excludes operating expense and power reimbursements.

Below is a description of our other properties.

Richmond

Our Richmond, Virginia data center is situated on an approximately 292-acre site comprised of three large buildings available for data center redevelopment, each with two to three floors, and an administrative building that also has space available for data center redevelopment. As of December 31, 2020, the data center had approximately 1.3 million gross square feet with approximately 345,000 total operating NRSF, including approximately 140,000 of raised floor operating NRSF. The Richmond facility contains approximately 110 MW of utility power, which is backed up by diesel generators. As of December 31, 2020, one of these primary buildings was fully operational as a data center and another was partially operational. We believe that our Richmond facility is situated in an ideal location due to its proximity to Washington, DC, which offers numerous sources of demand for our products including the federal government, and provides geographical diversification from the Northern Virginia data center market. There are three core segments that we believe represent the most significant opportunity for our Richmond data center: entities associated with the federal government, given the highly secured nature of this facility and its proximity to Washington, DC; regulated industries, such as financial institutions, given our investments in security and regulatory compliance; and large enterprise customers, given the large scale of this facility. Our Richmond mega data center can accommodate large and growing customers, while also accommodating colocation and managed services customers, at attractive energy costs.

We acquired our Richmond facility in 2010 through a bankruptcy process. We estimate that the former owner, a semiconductor manufacturer, had invested over $1 billion to develop the facility prior to the bankruptcy. Because the facility operated as a semiconductor fabrication facility prior to our acquisition, it had significant pre-existing infrastructure, including 110 MW of utility power, approximately 25,000 tons of chiller capacity, “Class A” private office space and other related supporting infrastructure. As a result, to date the incremental cost to redevelop the facility into a data center has been lower than the typical cost of ground-up data center development or redevelopment of other types of buildings into data centers. As of December 31, 2020, the facility was approximately 94% occupied by 153 customers across our product offerings.

We are the fee simple owner of the Richmond facility.

The Richmond facility is included in our development pipeline. During the year ended December 31, 2020, we placed approximately 23,000 NRSF of raised floor into service. Our current under construction redevelopment plans call for the addition of up to 52,000 total operating NRSF, including 27,000 NRSF of raised floor. We anticipate that this expansion will cost approximately $7 million in the aggregate based on current estimates (in addition to costs already incurred as of December 31, 2020). Longer term, we can further expand the facility by approximately 888,000 total operating NRSF, of which approximately 390,000 NRSF would be raised floor. Upon completion of the build-out of the facility, we anticipate that the facility would contain approximately 1.3 million total operating NRSF, including approximately 557,000 NRSF of raised floor.

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In addition, we own approximately 182 acres of undeveloped land on the site that we estimate could be developed to provide, at a minimum, an additional approximately 6.3 million total operating NRSF, of which approximately 3.5 million NRSF would be raised floor. These 182 acres of undeveloped land are not included in our current development plans.

Chicago

Our Chicago facility, which we acquired in July 2014, is the former Sun Times Press facility near downtown Chicago, Illinois. We are the fee simple owner of the Chicago facility. The facility consists of approximately 475,000 gross square feet, including approximately 99,000 raised floor operating NRSF.

The Chicago facility is included in our development pipeline, as we plan to convert the facility into an operating data center in multiple phases. During the year ended December 31, 2020, we placed approximately 29,000 raised floor NRSF into service. Our current under construction redevelopment plans call for the addition of up to approximately 177,000 total operating NRSF, including approximately 89,000 NRSF of raised floor. We own sufficient undeveloped land on the site, approximately 23 acres, that we believe could also be developed to provide an additional 350,000 total operating NRSF, of which approximately 200,000 NRSF would be raised floor. These 23 acres of undeveloped land are not included in our current development plans.

As of December 31, 2020, the facility was approximately 92% occupied by 87 customers.

Leased Facilities Acquired in 2015

We acquired leased facilities as part of our acquisition of Carpathia Hosting, Inc. (“Carpathia”) on June 16, 2015. As of December 31, 2020, these leased facilities, including those subject to finance leases, consisted of domestic data centers located in Phoenix, Arizona; San Jose, California and Ashburn, Virginia; and two international data centers located in Toronto, Canada and Amsterdam, Netherlands. As of December 31, 2020, QTS is no longer leasing space at the Secaucus, New Jersey; London, United Kingdom, and Hong Kong facilities. In addition, we significantly reduced our square footage of leased facilities in Ashburn during 2020.

These leased facilities consist of approximately 187,706 gross square feet with approximately 119,616 total operating NRSF, including approximately 59,065 raised floor operating NRSF. We are not currently redeveloping the leased facilities, we have no current plans to further build out or expand any of these leased facilities.

As of December 31, 2020, the facilities were approximately 88.4% occupied by 50 customers. The majority of the customers at these facilities are colocation and managed services customers which lease small amounts of space.

Santa Clara

Our Santa Clara, California facility was acquired in November 2007. The facility, which is owned subject to a long-term ground sublease as described below, consists of two buildings containing approximately 135,000 gross square feet with approximately 106,000 total operating NRSF, including approximately 60,000 raised floor operating NRSF. The facility is situated on a 6.5-acre site in Silicon Valley. Several Silicon Valley Power substations supply 11 MW of utility power to the facility, which is backed up by diesel generators. We believe that Silicon Valley is an ideal data center location due to the large concentration of technology companies and the high local demand for data centers and managed services.

As of December 31, 2020, the facility was approximately 89% occupied by 90 customers.

Our current under construction redevelopment plans call for the addition of approximately 4,000 raised floor operating NRSF. Longer term, we can further expand the facility by approximately 20,000 total operating NRSF, of which approximately 17,000 NRSF would be raised floor. Upon completion of the build-out of the facility, we anticipate that the facility would contain approximately 131,000 total operating NRSF, including approximately 81,000 NRSF of raised floor.

The Santa Clara facility is subject to a ground lease. We acquired a ground sublease interest in the land on which the Santa Clara facility is located in November 2007. The ground sublease expires in 2052, subject to two 10-year extension options. The annual rent payable under the ground sublease increases annually by the lesser of 6% or the increase in the Consumer Price Index for the San Francisco Bay area. The rent was recently adjusted effective October 1, 2018, and will also be adjusted in 2038, to equal one-twelfth of an amount equal to 8.5% of the product of (i) the then fair market value of the

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demised premises (without taking into account the value of the improvements existing on the land) calculated on a per square foot basis, and (ii) the net square footage of the demised premises. During the term of the ground lease, we have certain obligations to facilitate the provision of job training, seminars and research opportunities for students of a community college that is adjacent to the property. We are the indirect holder of this ground sublease.

Sacramento

Our Sacramento, California facility, which we acquired in December 2012, is located 120 miles from our Santa Clara facility on a 6.8-acre site. The facility currently consists of approximately 93,000 gross square feet with approximately 81,000 total operating NRSF, including approximately 55,000 raised floor operating NRSF. The Sacramento Municipal Utility District supplies 8 MW of utility power to the facility, which is backed up by diesel generators. This facility will provide our regional customer base with business continuity services. We believe the property’s location is a valuable complement to our Santa Clara facility for our customers, as it will allow them to diversify their footprint in the California market with a single provider.

We are not currently redeveloping significant portions of the Sacramento facility.

As of December 31, 2020, the facility was approximately 46% occupied by 123 customers. The majority of the customers at this facility are colocation customers which lease small amounts of space. We are the fee simple owner of the Sacramento facility.

Miami

Our Miami, Florida facility currently consists of approximately 30,000 gross square feet with approximately 26,000 total operating NRSF, including 20,000 raised floor operating NRSF. The property sits on a 1.6-acre site located at Dolphin Center with 4 MW of utility power supplied by Florida Power & Light and backed up by diesel generators. With a wind rating of 185 miles-per-hour, the facility is built to withstand a Category 5 hurricane. Miami is a strategic location for us because it is a gateway to the South American financial markets and a transcontinental Internet hub. Other than normally recurring capital expenditures, we have no current plans to further build-out or expand the Miami facility.

As of December 31, 2020, the facility was approximately 77.6% occupied by 107 customers. We intend to continue to lease-up this property. We are the fee simple owner of the Miami facility.

Jersey City

Our Jersey City, New Jersey facility is a leased facility that consists of approximately 122,000 gross square feet with approximately 88,000 total operating NRSF, including approximately 32,000 raised floor operating NRSF. The Jersey City facility was originally leased by another party in March 2004 and we acquired the lease in October 2006 when we acquired the lessee. The lease expires in September 2026 and is subject to one five-year extension option. The facility was redeveloped in November 2006, and we subsequently leased it to service customers in New Jersey and New York. The facility is comprised of four floors of a 19 story building located on one city block in the metropolitan New York City area, six miles from Manhattan. PSE&G supplies 7 MW of utility power to the facility, which is backed up by diesel generators. The facility also contains a small amount of “Class A” office space. We believe that the location in Jersey City provides us with a valuable presence in the tri-state area, where space is highly coveted given the strong demand from financial services firms.

We are not currently redeveloping significant portions of the Jersey City facility. Longer term, we can further expand the facility by approximately 21,000 NRSF of raised floor. Upon completion of the build-out of the facility, we anticipate that the facility would contain approximately 109,000 total operating NRSF, including approximately 53,000 NRSF of raised floor.

As of December 31, 2020, the facility was approximately 76% occupied by 53 customers.

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Princeton

Our Princeton, New Jersey facility, which we acquired in June 2014, is located on approximately 194 acres and consists of approximately 554,000 gross square feet, including approximately 58,000 square feet of raised floor, and 22 MW of available utility power. Concurrently with acquiring this data center we entered into a 10 year lease for the facility’s 58,000 square feet of raised floor with Atos, an international information technology services company headquartered in Bezos, France. The lease includes a 15 year renewal at the option of Atos.

We are not currently redeveloping significant portions of the Princeton facility. Longer term, we can expand the facility by approximately 372,000 total operating NRSF, of which approximately 100,000 NRSF would be raised floor. Upon completion of the build-out of the facility, we anticipate that the facility would contain approximately 544,000 total operating NRSF, including approximately 158,000 NRSF of raised floor.

As of December 31, 2020, the facility was approximately 100% occupied by 1 customer.

Piscataway

Our Piscataway, New Jersey facility, which we acquired in June 2016, currently consists of approximately 360,000 gross square feet with approximately 254,000 total operating NRSF, including approximately 118,000 raised floor operating NRSF. The property is located on a 38-acre campus and includes an on-site 111 MW substation as well as solar panels that produce approximately 2 MW of power.

The Piscataway facility is included in our development pipeline. During the year ended December 31, 2020, we placed approximately 14,000 NRSF of raised floor into service. Our current under construction redevelopment plans call for the addition of up to 36,000 total operating NRSF, including 20,000 NRSF of raised floor. We anticipate that this expansion will cost approximately $27 million in the aggregate based on current estimates (in addition to costs already incurred as of December 31, 2020). Longer term, we can further expand the facility by approximately 64,000 total operating NRSF, of which approximately 38,000 would be raised floor. Upon completion of the build-out of the facility, we anticipate that the facility would contain approximately 354,000 total operating NRSF, including approximately 176,000 NRSF of raised floor.

As of December 31, 2020, the facility was approximately 91% occupied by 85 customers.

Fort Worth

Our Fort Worth, Texas facility, which we acquired in December 2016, is located on approximately 53 acres and consists of approximately 262,000 gross square feet, including approximately 71,000 square feet of raised floor and 50 MW of available utility power. The facility is located approximately 20 miles from our Irving, Texas data center.

The Fort Worth facility is included in our development pipeline, as we plan to convert the facility into an operating data center in multiple phases. During the year ended December 31, 2020, we placed approximately 33,000 raised floor NRSF into service. Longer term, we can further expand the facility by approximately 36,000 total operating NRSF, of which approximately 9,000 would be raised floor. Upon completion of the build-out of the facility, we anticipate that the facility would contain approximately 251,000 total operating NRSF, including approximately 80,000 NRSF of raised floor.

As of December 31, 2020, the facility was approximately 67% occupied by 17 customers.

Dulles

Our Vault facility in Dulles, Virginia consists of approximately 67,000 gross square feet, including approximately 27,000 square feet of raised floor NRSF and approximately 11 MW of available utility power. The data center buildings were built from the ground up to stringent Sensitive Compartmented Information Facility standards set by the Department of Defense and National Security Agency. The Dulles campus has two data center buildings. As of December 31, 2020, we had abandoned one of the buildings and relocated customers from the smaller and older facility to the newer facility in an effort to better optimize our operating cost structure. In addition, the Dulles data center is located a quarter of a mile from our Ashburn data center.

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We acquired the Dulles, Virginia campus as part of our acquisition of Carpathia on June 16, 2015. From the Carpathia acquisition date through October 5, 2017, the facility was subject to a lease financing obligation. On October 6, 2017, the Company completed the buyout of the Dulles facility. At the time of the Dulles facility purchase the lease financing obligation was approximately $17.8 million and the Company purchased the property for approximately $34.1 million cash, for a net purchase price of $16.3 million.

The Dulles facility is included in our development pipeline. Longer term, we can further expand the existing facility by approximately 18,000 NRSF of raised floor. Upon completion of the build-out of the facility, we anticipate that the facility would contain approximately 87,000 total operating NRSF, including approximately 48,000 NRSF of raised floor.

As of December 31, 2020, the facility was approximately 98% occupied by 111 customers.

Groningen, Netherlands and Eemshaven, Netherlands

In April 2019 we completed the acquisition of two data centers in the Netherlands for approximately $44 million in cash consideration, including closing costs. The two facilities, in Groningen and Eemshaven, have approximately 38,632 square feet of raised floor capacity and over 92 megawatts of built out available utility power.

The Eemshaven facility is strategically located adjacent to multiple hyperscale customer-owned data center deployments, including a 500+ megawatt data center campus operated by one of the largest hyperscale cloud providers in the world. In addition, the facility is located in close proximity to multiple transatlantic fiber cable landings providing access to multiple markets within Europe and North America.

During the year ended December 31, 2020, we completed the first phase of construction. During the year ended December 31, 2020, we opened the facility and placed approximately 16,000 NRSF of raised floor into service. Longer term, we can further expand the facility by approximately 187,000 total operating NRSF, of which approximately 104,000 would be raised floor. Upon completion of the build-out of the facility, we anticipate that the facility would contain approximately 204,000 gross square feet, including approximately 113,000 NRSF of raised floor.

As of December 31, 2020, the Eemshaven data center was operational with 6 colocation tenants and had built-out capacity representing approximately 2 gross megawatts of power and 9,000 square feet of raised floor data center space.

The Groningen facility currently has built-out capacity representing approximately 10 gross megawatts of power and 45,000 square feet of raised floor data center space. The facility represents one of the most interconnected data centers in the Netherlands market with more than 10 network providers and internet exchanges on site including NL-IX and Eurofiber. Longer term, we can further expand the facility by approximately 38,000 total operating NRSF, of which approximately 16,000 would be raised floor. Upon completion of the build-out of the facility, we anticipate that the facility would contain approximately 108,000 gross square feet, including approximately 45,000 NRSF of raised floor.

As of December 31, 2020, the Groningen data center was largely stabilized with over 30 colocation tenants and had built-out capacity representing approximately 6 gross megawatts of power and 29,000 square feet of raised floor data center space.

Phoenix

In July 2017, we completed the acquisition of approximately 84 acres of land in Phoenix, Arizona to be used for future development.

Hillsboro

In October 2017, we completed the acquisition of approximately 92 acres of land in Hillsboro, Oregon. Ultimately, we believe the 92 acre parcel of land can support approximately 250 megawatts of available utility power, 1.5 million gross square feet and 1.0 million square feet of raised floor capacity upon completion.

During the year ended December 31, 2020, we completed the first phase of construction of a mega data center. During the year ended December 31, 2020, we opened the facility and placed approximately 24,000 NRSF of raised floor into service. Our current under construction development plans call for up to approximately 3.0 gross MW of power infrastructure. We

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anticipate that this expansion will cost (in addition to $12 million already incurred as of December 31, 2020) approximately $15 million in the aggregate based on current estimates.

Longer term, we can further expand the facility by approximately 111,000 total operating NRSF, of which approximately 61,000 would be raised floor. Upon completion of the build-out of the facility, we anticipate that the facility would contain approximately 158,000 gross square feet, including approximately 85,000 NRSF of raised floor.

Manassas

In March 2018, we completed the acquisition of approximately 28 acres of land in Manassas, Virginia. As of December 31, 2020, the property was under development to construct a new data center facility in Manassas (DC-2) and consisted of approximately 340,000 gross square feet with approximately 160,000 raised floor operating NRSF. The Manassas (DC-2) data center property, which is 100% owned by QTS and is separate from the aforementioned unconsolidated entity, is expected to be completed in 2021.

In August 2018, we completed the acquisition of approximately 61 acres of land in Manassas, Virginia. The land is currently being used to support the construction of a data center, which the Company completed and delivered the first three phases of six phases and has begun active construction of the fourth phase. Additionally, separate from the unconsolidated entity, during the three months ended September 30, 2018, the Company completed the acquisition of approximately 57 acres of additional land in Manassas, Virginia to be used for future development which is adjacent to the aforementioned 61 acres of land in Manassas.

On February 22, 2019, we entered into an agreement with Alinda, an infrastructure investment firm, with respect to our Manassas data center. At closing, we contributed the Manassas data center, and Alinda contributed cash, in each case, in exchange for a 50% interest in the unconsolidated entity (which includes a 50% interest in future income). The Company received approximately $53 million in cash plus a 50% equity interest in the unconsolidated entity at closing in exchange for contributing the data center to the unconsolidated entity. Under the agreement, we serve as the entity’s operating member, subject to authority and oversight of a board appointed by us and Alinda, and separately we serve as manager and developer of the facility in exchange for management and development fees. The agreement includes various transfer restrictions and rights of first offer that will allow us to repurchase Alinda’s interest should Alinda wish to exit in the future. In addition, we have agreed to provide Alinda an opportunity to invest in future similar agreements based on similar terms and a comparable capitalization rate. This agreement has been reflected as an unconsolidated entity on our reported financial statements beginning in the first quarter of 2019. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Factors That May Influence Future Results of Operations and Cash Flows—Unconsolidated Entity.”

Overland Park

The Overland Park, Kansas facility, known as the J. Williams Technology Center, is a leased facility consisting of approximately 33,000 gross square feet, with approximately 8,000 total operating NRSF, including approximately 2,500 raised floor operating NRSF. Kansas City Power & Light supplies approximately 1 MW of utility power, which is backed up by a diesel generator. The J. Williams Technology Center has housed the corporate headquarters of the Quality Group of Companies, LLC. (“QGC”) since September 2003. We lease the facility under a lease with an entity controlled by our Chairman and Chief Executive Officer, which was entered into in January 2009 and expires in December 2023. This building, while containing a small data center, is primarily utilized as our corporate headquarters. Other than normally recurring capital expenditures and expansion of our own office space at our headquarters, we have no current plans to further build-out or expand the raised floor at our Overland Park data center.

As of December 31, 2020, the facility was approximately 53% occupied by 10 customers.

Lenexa

Our Lenexa, Kansas property, which was acquired in 2004, contains approximately 35,000 gross square feet. The Lenexa property does not currently operate as a data center, nor do we intend to operate it as a data center. We have historically used this property primarily as a warehouse, but currently lease approximately 22,000 square feet to a tenant for general office use, and 12,205 square feet to a tenant as general office and warehouse space. Other than minimal normally recurring capital expenditures, we have no current plans to further build out or expand the Lenexa property.

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ITEM 3.    LEGAL PROCEEDINGS

In the ordinary course of our business, we are subject to claims for negligence and other claims and administrative proceedings, none of which we believe are material or would be expected to have, individually or in the aggregate, a material adverse effect on us. For additional information with respect to current legal proceedings, refer to Item 8 – Note 11 – Commitments and Contingencies in “Financial Statements and Supplementary Data” included in this Annual Report.

ITEM 4.    MINE SAFETY DISCLOSURES

Not applicable.

PART II

ITEM 5.    MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

QTS’s common stock is listed on the New York Stock Exchange (“NYSE”) and trade under the symbol “QTS.” As of February 22, 2021, we had 35 holders of record of our common stock. This figure does not reflect the beneficial ownership of shares held in nominee name.

QTS also has 124,995 shares of Class B common stock outstanding, which are not listed on any exchange. The Class B common stock is held by one registered holder, a family limited liability company of which Chad L. Williams, our Chairman and Chief Executive Officer, is the manager.

Performance Graph

The following line graph sets forth, for the period from December 31, 2015, through December 31, 2020, a comparison of the percentage change in the cumulative total stockholder return on our common stock compared to the cumulative total return of the S&P 500 Market Index and the MSCI US REIT Index (“RMZ”). The graph assumes that $100 was invested on December 31, 2015, in shares of our common stock and each of the aforementioned indices and that all dividends were reinvested without the payment of any commissions. There can be no assurance that the performance of our shares will continue in line with the same or similar trends depicted in the graph below.

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Pricing Date	QTS		S&P 500		MSCI US REIT
Dec 31, 2015	$	100.00	$	100.00	$	100.00
Dec 31, 2016	110.06		109.54		104.22
Dec 31, 2017	120.06		130.81		105.12
Dec 31, 2018	82.13		122.65		96.03
Dec 31, 2019	119.71		158.07		116.14
Dec 31, 2020	$	137.18	$	182.59	$	103.24

This performance graph shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or incorporated by reference into any filing by us under the Securities Act of 1933, as amended, or the Securities Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Unregistered Sales of Equity Securities

QTS did not sell any equity securities during the fiscal year ended December 31, 2020 that were not registered under the Securities Act of 1933, as amended.

Repurchases of Equity Securities

During the year ended December 31, 2020, certain of our employees surrendered Class A common stock owned by them to satisfy their statutory minimum federal and state tax obligations in connection with the vesting of restricted common stock under the 2013 Equity Incentive Plan.

The following table summarizes all of these repurchases during the year ended December 31, 2020.

Period	Total number of shares purchased (1)		Average price paid per share		Total number of shares purchased as part of publicly announced plans or programs	Maximum number of shares that may yet be purchased under the plans or programs
January 1, 2020 through January 31, 2020	$	—	$	—	N/A	N/A
February 1, 2020 through February 29, 2020	—		—		N/A	N/A
March 1, 2020 through March 31, 2020	39,589		57.92		N/A	N/A
April 1, 2020 through April 30, 2020	1,674		54.90		N/A	N/A
May 1, 2020 through May 31, 2020	—		—		N/A	N/A
June 1, 2020 through June 30, 2020	14,705		64.09		N/A	N/A
July 1, 2020 through July 31, 2020	—		—		N/A	N/A
August 1, 2020 through August 31, 2020	—		—		N/A	N/A
September 1, 2020 through September 30, 2020	14,520		63.02		N/A	N/A
October 1, 2020 through October 31, 2020	390		63.37		N/A	N/A
November 1, 2020 through November 30, 2020	—		—		N/A	N/A
December 1, 2020 through December 31, 2020	17,387		61.88		N/A	N/A
Total	$	88,265	$	60.53

(1)The number of shares purchased represents shares of Class A common stock surrendered by certain of our employees to satisfy federal and state tax obligations associated with the vesting of restricted common stock. With respect to these shares, the price paid per share is based on the closing price of our Class A common stock as of the date of the determination of the statutory minimum U.S. federal income tax.

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ITEM 6.    SELECTED FINANCIAL DATA

The information set forth below should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and the notes thereto which are included elsewhere in this Form 10-K.

	Year Ended December 31,
($ in thousands, except share and per share data)	2020		2019		2018		2017		2016
Statement of Operations Data
Revenues:
Rental	$	519,858	$	465,123	$	413,620	$	379,787	$	333,383
Other	19,510		15,695		36,904		66,723		68,980
Total revenues	539,368		480,818		450,524		446,510		402,363
Operating expenses:
Property operating costs	168,497		156,048		148,236		153,209		136,488
Real estate taxes and insurance	16,020		14,503		12,193		11,959		8,840
Depreciation and amortization	199,889		168,305		149,891		140,924		124,786
General and administrative	84,965		80,385		80,857		87,231		83,286
Transaction, integration and impairment costs	4,340		15,190		2,743		11,060		10,906
Restructuring	—		—		37,943		—		—
Total operating expenses	473,711		434,431		431,863		404,383		364,306
Gain on sale of real estate, net	—		14,769		—		—		—
Operating income	65,657		61,156		18,661		42,127		38,057
Other income and expense:
Interest income	2		111		150		67		3
Interest expense	(30,724)		(26,593)		(28,749)		(30,523)		(23,159)
Debt restructuring costs	(18,036)		(1,523)		(605)		(19,992)		(192)
Other income (expense)	159		(50)		—		—		—
Equity in net loss of unconsolidated entity	(2,044)		(1,473)		—		—		—
Income (loss) before taxes	15,014		31,628		(10,543)		(8,321)		14,709
Tax benefit (expense)	(438)		37		3,368		9,778		9,976
Net income (loss)	14,576		31,665		(7,175)		1,457		24,685
Net (income) loss attributable to noncontrolling interests	1,330		(374)		2,715		(175)		(3,160)
Net income (loss) attributable to QTS Realty Trust, Inc.	$	15,906	$	31,291	$	(4,460)	$	1,282	$	21,525
Preferred stock dividends	(28,180)		(28,180)		(16,666)		—		—
Net income (loss) attributable to common stockholders	$	(12,274)	$	3,111	$	(21,126)	$	1,282	$	21,525
Net income (loss) per share attributable to common shares:
Basic	$	(0.47)	$	(0.09)	$	(0.44)	$	0.01	$	0.47
Diluted	(0.47)		(0.09)		(0.44)		0.01		0.46
Weighted average common shares outstanding:
Basic	60,717,301		54,836,801		50,432,590		48,380,964		46,205,937
Diluted	60,717,301		54,836,801		50,432,590		55,855,683		53,962,234
Dividends declared per common share	$	1.88	$	1.76	$	1.64	$	1.56	$	1.44

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	Year Ended December 31,
Other Data (unaudited)	2020		2019		2018		2017		2016
FFO available to common stockholders & OP unit holders (1)	$	176,663	$	160,476	$	112,278	$	125,012	$	133,159
Operating FFO available to common stockholders & OP unit holders (1)	199,039		165,728		151,161		156,064		140,666
Recognized MRR in the period	427,957		390,267		375,515		375,086		347,331
MRR at period end (2)	38,539		34,034		31,141		31,708		30,890
NOI (3)	358,973		313,056		290,095		281,342		257,036
EBITDAre (4)	251,757		228,716		183,783		167,278		162,651
Adjusted EBITDA (4)	299,287		250,380		224,210		207,974		184,334

	Year Ended December 31,
($ in thousands)	2020		2019		2018		2017		2016
Balance Sheet Data
Real estate at cost (a)	$	4,033,136	$	3,230,428	$	2,812,856	$	2,357,322	$	1,964,857
Net investment in real estate (b)	3,330,191		2,671,868		2,345,212		1,962,499		1,647,023
Total assets	3,898,572		3,223,533		2,861,969		2,415,056		2,086,470
Total debt	1,869,493		1,453,065		1,345,117		1,229,929		965,826

(a)    Reflects undepreciated cost of real estate assets, and does not include real estate intangible assets acquired in connection with acquisitions.

(b)    Net investment in real estate includes building and improvements (net of accumulated depreciation), land, and construction in progress.

	Year Ended December 31,
($ in thousands)	2020		2019		2018		2017		2016
Cash Flow Data
Cash flow provided by (used for):
Operating activities	$	299,715	$	199,490	$	191,273	$	170,323	$	153,794
Investing activities	(817,745)		(387,260)		(598,553)		(434,352)		(452,972)
Financing activities	521,168		191,396		410,796		262,692		299,954

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(1)We calculate FFO in accordance with the standards established by the National Association of Real Estate Investment Trusts, or NAREIT. FFO represents net income (loss) (computed in accordance with GAAP), adjusted to exclude gains (or losses) from sales of depreciable real estate related to our primary business, impairment write-downs of depreciable real estate related to our primary business, real estate-related depreciation and amortization and similar adjustments for unconsolidated entities. To the extent we incur gains or losses from the sale of assets that are incidental to our primary business, or we incur impairment write-downs associated with assets that are incidental to our primary business, we include such amounts in our calculation of FFO. Our management uses FFO as a supplemental performance measure because, in excluding real estate-related depreciation and amortization and gains and losses from property dispositions, it provides a performance measure that, when compared year over year, captures trends in occupancy rates, rental rates and operating costs. We generally calculate Operating FFO as FFO excluding certain non-routine charges and gains and losses that management believes are not indicative of the results of our operating real estate portfolio. We believe that Operating FFO provides investors with another financial measure that may facilitate comparisons of operating performance between periods and, to the extent other REITs calculate Operating FFO on a comparable basis, between REITs.

A reconciliation of net income (loss) to FFO and Operating FFO is presented below:

	Year Ended December 31,
(unaudited $ in thousands)	2020		2019		2018		2017		2016
FFO
Net income (loss)	$	14,576	$	31,665	$	(7,175)	$	1,457	$	24,685
Equity in net loss of unconsolidated entity	2,044		1,473		—		—		—
Real estate depreciation and amortization	186,539		156,387		136,119		123,555		108,474
Gain on sale of real estate, net	—		(13,408)		—		—		—
Impairments of depreciated property	—		11,461		—		—		—
Pro rata share of FFO from unconsolidated entity	1,684		1,078		—		—		—
FFO (a)	204,843		188,656		128,944		125,012		133,159
Preferred stock dividends	(28,180)		(28,180)		(16,666)		—		—
FFO available to common stockholders & OP unit holders	176,663		160,476		112,278		125,012		133,159
Debt restructuring costs	18,036		1,523		605		19,992		193
Restructuring costs	—		—		37,943		—		—
Transaction, integration and impairment costs	4,340		3,729		2,743		11,060		10,906
Tax benefit associated with restructuring, transaction and integration costs	—		—		(2,408)		—		(3,592)
Operating FFO available to common stockholders & OP unit holders (b)	$	199,039	$	165,728	$	151,161	$	156,064	$	140,666

(a)    FFO for the year ended December 31, 2019 includes a $1.4 million gain on sale of real estate related to certain assets considered incidental to our primary business and were included in the “Gain on sale of real estate, net” line item of the consolidated statements of operations. FFO for the year ended December 31, 2018 includes $15.8 million of impairment losses related to certain non-real estate product related assets that were considered incidental to our primary business and were included in the “Restructuring” line item of the consolidated statement of operations.

(b)    The Company’s calculation of Operating FFO may not be comparable to Operating FFO as calculated by other REITs that do not use the same definition.

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(2)We calculate MRR as monthly contractual revenue under signed leases as of a particular date, which includes revenue from our rental and managed services activities, but excludes customer recoveries, deferred set-up fees, variable related revenues, non-cash revenues and other one-time revenues. MRR is also calculated to include the Company’s pro rata share of monthly contractual revenue under signed leases as of a particular date associated with unconsolidated entities, which includes revenue from the unconsolidated entity’s rental and managed services activities, but excludes the unconsolidated entity’s customer recoveries, deferred set-up fees, variable related revenues, non-cash revenues and other one-time revenues. MRR reflects the annualized cash rental payments. MRR does not include the impact from booked-not-billed leases as of a particular date, unless otherwise specifically noted. This amount reflects the annualized cash rental payments. It does not reflect any accounting associated with any free rent, rent abatements or future scheduled rent increases and also excludes operating expense and power reimbursements. Management uses MRR and recognized MRR as supplemental performance measures because they provide useful measures of increases in contractual revenue from our customer leases.

A reconciliation of total GAAP revenues to recognized MRR in the period and MRR at period-end is presented below:

	Year Ended December 31,
(unaudited $ in thousands)	2020		2019		2018		2017		2016
Recognized MRR in the period
Total period revenues (GAAP basis)	$	539,368	$	480,818	$	450,524	$	446,510	$	402,363
Less: Total period variable lease revenue from recoveries	(54,337)		(55,046)		(45,386)		(37,886)		(29,271)
Total period deferred setup fees	(20,330)		(15,156)		(12,475)		(10,690)		(9,172)
Total period straight line rent and other	(36,744)		(20,349)		(17,148)		(22,848)		(16,589)
Recognized MRR in the period	$	427,957	$	390,267	$	375,515	$	375,086	$	347,331
MRR at period end (a)
Total period revenues (GAAP basis)	$	539,368	$	480,818	$	450,524	$	446,510	$	402,363
Less: Total revenues excluding last month	(491,731)		(438,810)		(412,041)		(406,345)		(366,385)
Total revenues for last month of period	47,637		42,008		38,483		40,165		35,978
Less: Last month variable lease revenue from recoveries	(4,953)		(4,578)		(3,822)		(3,175)		(3,247)
Last month deferred setup fees	(2,207)		(1,333)		(1,015)		(1,123)		(968)
Last month straight line rent and other	(2,349)		(2,413)		(2,505)		(4,159)		(873)
Add: Pro rata share of MRR at period end of unconsolidated entity	411		350		—		—		—
MRR at period end	$	38,539	$	34,034	$	31,141	$	31,708	$	30,890

(a)    Does not include our booked-not-billed MRR balance, which was $12.9 million, $7.8 million, $5.2 million, $3.9 million and $3.6 million as of years ended December 31, 2020, 2019, 2018, 2017 and 2016, respectively.

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(3)We calculate net operating income, or NOI, as net income (loss) (computed in accordance with GAAP), excluding: interest expense, interest income, tax expense (benefit) of taxable REIT subsidiaries, depreciation and amortization, write off of unamortized deferred financing, debt restructuring costs, gain (loss) on extinguishment of debt, transaction, integration and impairment costs, gain (loss) on sale of real estate, restructuring costs, general and administrative expenses and similar adjustments for unconsolidated entities. We allocate a management fee charge of 4% of cash revenues for all facilities (with the exception of the leased facilities acquired in 2015, which were allocated a charge of 10% of cash revenues through 2018) as a property operating cost and a corresponding reduction to general and administrative expense to cover the day-to-day administrative costs to operate our data centers. The management fee charge is reflected as a reduction to net operating income. Management uses NOI as a supplemental performance measure because it provides a useful measure of the operating results from our customer leases. In addition, we believe it is useful to investors in evaluating and comparing the operating performance of our properties and to compute the fair value of our properties.

A reconciliation of net income (loss) to NOI is presented below:

	Year Ended December 31,
(unaudited $ in thousands)	2020		2019		2018		2017		2016
Net Operating Income (NOI)
Net income (loss)	$	14,576	$	31,665	$	(7,175)	$	1,457	$	24,685
Equity in net loss of unconsolidated entity	2,044		1,473		—		—		—
Interest income	(2)		(111)		(150)		(67)		(3)
Interest expense	30,724		26,593		28,749		30,523		23,159
Depreciation and amortization	199,889		168,305		149,891		140,924		124,786
Debt restructuring costs	18,036		1,523		605		19,992		193
Other (income) expense	(159)		50		—		—		—
Tax expense (benefit)	438		(37)		(3,368)		(9,778)		(9,976)
Transaction, integration and impairment costs	4,340		15,190		2,743		11,060		10,906
General and administrative expenses	84,965		80,385		80,857		87,231		83,286
Gain on sale of real estate, net	—		(14,769)		—		—		—
Restructuring	—		—		37,943		—		—
NOI from consolidated operations (a)	$	354,851	$	310,267	$	290,095	$	281,342	$	257,036
Pro rata share of NOI from unconsolidated entity (b)	4,122		2,789		—		—		—
Total NOI	$	358,973	$	313,056	$	290,095	$	281,342	$	257,036
Breakdown of NOI by facility:
Atlanta (DC - 1) data center (c)	$	106,199	$	96,196	$	87,060	$	80,648	$	81,074
Atlanta-Suwanee data center	48,829		48,704		48,165		48,365		45,760
Irving data center	45,318		45,484		42,621		32,870		16,608
Richmond data center	26,434		32,979		33,445		40,919		30,752
Chicago data center	18,444		13,104		8,878		4,652		167
Piscataway data center	17,944		13,584		12,266		9,395		5,627
Ashburn data center	17,704		4,698		1,250		—		—
Dulles data center	12,926		11,730		16,944		21,672		19,384
Princeton data center	10,149		9,977		9,729		9,598		9,544
Fort Worth data center	9,799		4,021		902		268		3
Santa Clara data center	9,352		7,549		8,344		11,378		13,703
Leased data centers (d)	7,322		8,793		9,695		12,006		24,131
Sacramento data center	5,879		6,204		7,448		6,804		7,734
Atlanta (DC - 2) data center (e)	5,216		—		—		—		—
Netherlands data centers (f)	4,341		2,041		—		—		—
Hillsboro data center	270		—		—		—		—
Other facilities (g)	8,725		5,203		3,348		2,767		2,549
NOI from consolidated operations (a)	$	354,851	$	310,267	$	290,095	$	281,342	$	257,036
Pro rata share of NOI from unconsolidated entity (b)	4,122		2789		—		—		—
Total NOI	$	358,973	$	313,056	$	290,095	$	281,342	$	257,036

(a)    Includes facility level general and administrative allocation charges of 4% of cash revenue for all facilities (with the exception of the leased facilities acquired in 2015, which were allocated a charge of 10% of cash revenues through 2018). These allocated charges aggregated to $19.8 million, $18.6 million, $20.8 million, $21.6 million and $20.6 million for the years ended December 31, 2020, 2019, 2018, 2017 and 2016, respectively.

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(b)    QTS’ pro rata share of the unconsolidated entity is 50%.

(c)     This property was formerly known as “Atlanta-Metro data center” but has been renamed “Atlanta (DC-1)” to distinguish between the existing             data center and the new property development.

(d)    At December 31, 2020 includes 7 facilities. All facilities are leased, including one subject to a finance lease.

(e)     Represents the newly developed data center building at our Atlanta, GA campus.

(f)    Consists of two data centers located in Eemshaven, Netherlands and Groningen, Netherlands.

(g)    Consists of Miami, FL; Lenexa, KS; and Overland Park, KS facilities.

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(4)We calculate earnings before interest, taxes, depreciation and amortization for real estate (“EBITDAre”) in accordance with the standards established by the National Association of Real Estate Investment Trusts (“NAREIT”). EBITDAre represents net income (loss) (computed in accordance with GAAP) adjusted to exclude gains (or losses) from sales of depreciated property related to our primary business, income tax expense (or benefit), interest expense, depreciation and amortization, impairments of depreciated property related to our primary business, and similar adjustments for unconsolidated entities. Management uses EBITDAre as a supplemental performance measure because it provides a measure that, when compared year over year, captures the performance of our operations by removing the impact of our capital structure (primarily interest expense) and asset base charges (primarily depreciation and amortization) from our operating results.

In addition to EBITDAre, we calculate an adjusted measure of EBITDA, which we refer to as Adjusted EBITDA, as EBITDAre excluding certain non-routine charges, write off of unamortized deferred financing costs, gains (losses) on extinguishment of debt, restructuring costs, and transaction and integration costs, as well as our pro-rata share of each of those respective adjustments associated with the unconsolidated entity aggregated into one line item categorized as “Pro rata share of EBITDAre from the unconsolidated entity”. In addition, we calculate Adjusted EBITDA excluding certain non-cash recurring costs such as equity-based compensation. We believe that Adjusted EBITDA provides investors with another financial measure that may facilitate comparisons of operating performance between periods and, to the extent other REITs calculated Adjusted EBITDA on a comparable basis, between REITs.

We use EBITDAre and Adjusted EBITDA as supplemental performance measures as they provide useful measures of assessing our operating results. Other companies may not calculate EBITDAre or Adjusted EBITDA in the same manner. Accordingly, our EBITDAre and Adjusted EBITDA may not be comparable to others. EBITDAre and Adjusted EBITDA should be considered only as supplements to net income (loss) as measures of our performance and should not be used as substitutes for net income (loss), as measures of our results of operations or liquidity or as an indication of funds available to meet our cash needs, including our ability to make distributions to our stockholders.

A reconciliation of net income (loss) to EBITDAre and Adjusted EBITDA is presented below:

	Year Ended December 31,
(unaudited $ in thousands)	2020		2019		2018		2017		2016
EBITDAre
Net income (loss)	$	14,576	$	31,665	$	(7,175)	$	1,457	$	24,685
Equity in net loss of unconsolidated entity	2,044		1,473		—		—		—
Interest income	(2)		(111)		(150)		(67)		(3)
Interest expense	30,724		26,593		28,749		30,523		23,159
Tax expense (benefit)	438		(37)		(3,368)		(9,778)		(9,976)
Depreciation and amortization	199,889		168,305		149,891		140,924		124,786
(Gain) Loss on disposition of depreciated property	—		(13,408)		6,994		—		—
Impairments of depreciated property	—		11,461		8,842		4,219		—
Pro rata share of EBITDAre from unconsolidated entity	4,088		2,775		—		—		—
EBITDAre (a)	251,757		228,716		183,783		167,278		162,651
Adjusted EBITDA
Debt restructuring costs	18,036		1,523		605		19,992		193
Equity-based compensation expense	25,133		16,412		14,972		13,863		10,584
Restructuring costs	—		—		22,107		—		—
Transaction, integration and implementation costs	4,361		3,729		2,743		6,841		10,906
Adjusted EBITDA	$	299,287	$	250,380	$	224,210	$	207,974	$	184,334

(a)    EBITDAre for the year ended December 31, 2019 includes a $1.4 million gain on sale of real estate related to certain assets considered incidental to our primary business and were included in the “Gain on sale of real estate, net” line item of the consolidated statement of operations.

For more information on our use of Non-GAAP Financial Measures see “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Non-GAAP Financial Measures.”

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ITEM 7.    MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis covers the financial condition and results of operations of QTS Realty Trust, Inc. You should read the following discussion and analysis in conjunction with QTS’s accompanying consolidated financial statements and related notes and “Risk Factors” contained elsewhere in this Form 10-K. Some of the information contained in this discussion and analysis or set forth elsewhere in this Form 10-K, including information with respect to our business and growth strategies, our expectations regarding the future performance of our business and the other non-historical statements contained herein are forward-looking statements. See “Special Note Regarding Forward-Looking Statements.”

Overview

QTS is a leading provider of data center solutions to the world’s largest and most sophisticated hyperscale technology companies, enterprises and government agencies. Through our technology-enabled platform, delivered across mega scale data center infrastructure, we offer a comprehensive portfolio of secure and compliant IT solutions. Our data centers are facilities that power and support our customers’ IT infrastructure equipment and provide seamless access and connectivity to a range of communications and IT services providers. Across our broad footprint of strategically-located data centers, we provide flexible scalable, and secure IT solutions including data center space, power and cooling, connectivity and value-add managed services for more than 1,200 customers in the financial services, healthcare, retail, government, technology and various other industries. We build out our data center facilities depending on the needs of our customers to accommodate both multi-tenant environments (hybrid colocation) and customers that require significant amounts of space and power (hyperscale), including federal customers. We believe that we own and operate one of the largest portfolios of multi-tenant data centers in the United States, as measured by gross square footage, and have the capacity to significantly expand our sellable data center raised floor space without constructing or acquiring any new buildings. In addition, we own approximately 785 acres of land that is available at our data center properties that provides us with the opportunity to significantly expand our capacity to further support future demand from current and new potential customers.

As of December 31, 2020, we operated a portfolio of 28 data center properties located throughout the United States, Canada and Europe. Within the United States, our data centers are concentrated in the markets which we believe offer the highest growth opportunities. Our data centers are highly specialized, mission-critical facilities utilized by our customers to store, power and cool the server, storage, and networking equipment that support their most critical business systems and processes. We believe that our data centers are best-in-class and engineered to adhere to the highest specifications commercially available to customers, providing fully redundant, high-density power and cooling sufficient to meet the needs of the largest companies and organizations in the world. We have demonstrated a strong operating track record of “five-nines” (99.999%) reliability since QTS’ inception.

QTS is a Maryland corporation formed on May 17, 2013 and is the sole general partner and majority owner of QualityTech, LP, our operating partnership (the “Operating Partnership”). Substantially all of our assets are held by, and all of our operations are conducted through, the Operating Partnership. QTS’ Class A common stock trades on the New York Stock Exchange under the ticker symbol “QTS.”

We believe that QTS has operated and has been organized in conformity with the requirements for qualification and taxation as a REIT commencing with its taxable year ended December 31, 2013. Our qualification as a REIT, and maintenance of such qualification, depends upon our ability to meet, on a continuing basis, various complex requirements under the Internal Revenue Code of 1986, as amended (the “Code”) relating to, among other things, the sources of our gross income, the composition and values of our assets, our distributions to our stockholders and the concentration of ownership of our equity shares.

The COVID-19 Pandemic

We continue to actively monitor developments with respect to COVID-19 and have taken numerous actions based on corporate policies specifically focusing on the safety and wellness of our customers, partners, and employees, as well as providing continuous and resilient services. Although the COVID-19 pandemic has caused significant disruptions to the United States and global economy and has contributed to significant volatility in financial markets, as of December 31, 2020, these developments have not had a known material adverse effect on our business. As of December 31, 2020, each of our data centers in North America and Europe are fully operational and operating in accordance with our business continuity plans. Across each of the respective jurisdictions in which we operate, our business has been deemed an essential operation, which

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has allowed us to remain fully staffed with critical personnel in place to continue to provide service and support for our customers.

In the first half of 2020, we experienced a modest increase in customer requests for extended payment terms, primarily concentrated in the retail, oil and gas, hospitality and transportation customer verticals, with these customers representing approximately 5% of our revenue. During the remainder of 2020, the level of customers requesting such terms decreased to a de minimis amount and the majority of customers who had previously asked for extended payment terms have since resumed payments in accordance with original contract terms. Overall, we continue to see cash collections and receivables trending toward a level that is closer to our historical levels.

In addition, in the first half of 2020, we experienced modest delays in construction activity in a few of our markets primarily as a result of availability of contractors and slower permitting. Those delays have been remediated and through the date of this report, our commitments to customers remain on track and we do not currently anticipate any meaningful delays in our development activity associated with our booked-not-billed backlog assuming current trends continue.

The extent to which COVID-19 impacts our and our customers’ operations will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration of the pandemic, new information that may emerge concerning the severity, variants or mutations of COVID-19, vaccine efficacy and rollout and other actions taken to contain COVID-19 or treat its impact, among others. The COVID-19 pandemic presents material uncertainty and risk with respect to our business, financial performance, and results of operations and also may exacerbate many of the risks identified under the section entitled “Risk Factors”. For a further discussion of the risks related to the COVID-19 pandemic, see “Item 1A Risk Factors.”

Our Customer Base

Our data center facilities are designed with the flexibility to support a diverse set of solutions and customers. Our customer base is comprised of more than 1,200 different companies of all sizes representing an array of industries, each with unique and varied business models and needs. We serve Fortune 1000 companies as well as small and medium-sized businesses, or SMBs, including financial institutions, healthcare companies, retail companies, government agencies, communications service providers, software companies and global Internet companies.

We have customers that range from large enterprise and technology companies with significant IT expertise and data center requirements, including financial institutions, “Big Four” accounting firms and the world’s largest global Internet and cloud companies, to major healthcare, telecommunications and software and web-based companies.

As a result of our diverse customer base, customer concentration in our portfolio is limited. As of December 31, 2020, only five of our more than 1,200 customers individually accounted for more than 3% of our monthly recurring revenue (“MRR”) (as defined below), with the largest customer accounting for approximately 13.1% of our MRR and the next largest customer accounting for only 5.4% of our MRR.

Our Portfolio

As of December 31, 2020, including 100% of the unconsolidated entity with which we are affiliated, we operated 28 data center properties located throughout the United States, Canada and Europe, containing an aggregate of approximately 7.8 million gross square feet of space, including approximately 3.5 million “basis-of-design” raised floor square feet (approximately 96.9% of which is wholly owned by us including our data center in Santa Clara which is subject to a long-term ground lease), which represents the total sellable data center raised floor potential of our existing data center facilities. This reflects the maximum amount of space in our existing buildings that could be leased following full build-out, depending on the space and power configuration that we deploy. As of December 31, 2020, this space included approximately 2.0 million raised floor operating net rentable square feet, or NRSF, plus approximately 1.6 million square feet of additional raised floor available for development, of which approximately 0.3 million raised floor square feet is expected to become operational by December 31, 2021. Of the total 1.6 million raised floor square feet available for development, approximately 0.2 million square feet was related to customer leases which had been executed as of December 31, 2020 but not yet commenced. Our facilities collectively have access to approximately 1,050 megawatts (“MW”) of available utility power. Access to power typically is the most limiting and expensive component in developing a data center and, as such, we believe our significant access to power represents an important competitive advantage.

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Key Operating Metrics

The following sets forth definitions for our key operating metrics. These metrics may differ from similar definitions used by other companies.

Monthly Recurring Revenue (“MRR”). We calculate MRR as monthly contractual revenue under signed leases as of a particular date, which includes revenue from our rental and managed services activities, but excludes customer recoveries, deferred set-up fees, variable related revenues, non-cash revenues and other one-time revenues. MRR does not include the impact from booked-not-billed leases as of a particular date, unless otherwise specifically noted. MRR does not reflect any accounting associated with any free rent, rent abatements or future scheduled rent increases and also excludes operating expense and power reimbursements.

Annualized Rent. We define annualized rent as MRR multiplied by 12.

Rental Churn. We define rental churn as the MRR lost in the period from a customer intending to fully exit our platform in the near term compared to the total MRR at the beginning of the period.

Leasable Raised Floor. We define leasable raised floor as the amount of raised floor square footage that we have leased plus the available capacity of raised floor square footage that is in a leasable format as of a particular date and according to a particular product configuration. The amount of our leasable raised floor may change even without completion of new development projects due to changes in our configuration of space.

Percentage (%) Occupied and Billing Raised Floor. We define percentage occupied and billing raised floor as the square footage that is subject to a signed lease for which billing has commenced as of a particular date compared to leasable raised floor based on the current configuration of the properties as of that date, expressed as a percentage.

Booked-not-Billed. We define booked-not-billed as our customer leases that have been signed, but for which lease payments have not yet commenced.

Factors That May Influence Future Results of Operations and Cash Flows

Revenue. Our revenue growth will depend on our ability to maintain the historical occupancy rates of leasable raised floor, lease currently available space, lease new capacity that becomes available as a result of our development and redevelopment activities, attract new customers and continue to meet the ongoing technological requirements of our customers. As of December 31, 2020, we had in place customer leases generating revenue for approximately 93% of our leasable raised floor. Our ability to grow revenue also will be affected by our ability to maintain or increase rental and managed services rates at our properties. The impact of the COVID-19 pandemic, including, but not limited to, the risk of business and/or operational disruptions, disruption of our customers’ businesses that could affect their ability to make rental payments to us, supply chain disruptions and delays in the construction or development of our data centers, future economic downturns, regional downturns or downturns in the technology industry, new technological developments, evolving industry demands and other similar factors could impair our ability to attract new customers or renew existing customers’ leases on favorable terms, or at all, and could adversely affect our customers’ ability to meet their obligations to us. For example, in the first half of 2020 in connection with the COVID-19 pandemic, we experienced a modest increase in customer requests for payment relief. In response to these customer requests, although we have not reduced aggregate future payments, we have in certain circumstances provided additional flexibility in the form of extended payment terms. During the remainder of 2020 and through the date of this report, the quantity of additional customer requests for extended payment terms decreased to a de minimus amount and the majority of customers who had previously asked for extended payment terms have since resumed payments in accordance with original contract terms. Although, as of the date of this report, these requests have not had an adverse effect on our business, these or other negative trends in one or more of these or other factors described above could adversely affect our revenue in future periods, which would impact our results of operations and cash flows. We also at times may elect to reclaim space from customers in a negotiated transaction where we believe that we can redevelop and/or re-lease that space at higher rates, which may cause a decrease in revenue until the space is re-leased.

Leasing Arrangements. As of December 31, 2020, approximately 51% of our MRR was attributable to the metered power model. Under the metered power model, the customer pays us a fixed monthly rent amount, plus reimbursement of certain other operating costs, including actual costs of sub-metered electricity used to power its data center equipment and an estimate of costs for electricity used to power supporting infrastructure for the data center, expressed as a factor of the

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customer’s actual electricity usage. Fluctuations in our customers’ utilization of power and the supplier pricing of power do not significantly impact our results of operations or cash flows under the metered power model. These leases generally have a minimum term of five years. As of December 31, 2020, the remaining approximately 49% of our MRR was attributable to the gross lease or managed service model. Under this model, the customer pays us a fixed amount on a monthly basis, and does not separately reimburse us for operating costs, including utilities, maintenance, repair, property taxes and insurance, as reimbursement for these costs is factored into MRR. However, if customers incur more utility costs than their leases permit, we are able to charge these customers for overages. For leases under the gross lease or managed service model, fluctuations in our customers’ utilization of power and the prices our utility providers charge us will impact our results of operations and cash flows. Our gross leases and managed services contracts generally have a term of three years or less.

Scheduled Lease Expirations. Our ability to minimize rental churn and customer downgrades at renewal, combined with our ability to renew, lease and re-lease expiring space, will impact our results of operations and cash flows. Leases which have commenced billing representing approximately 24% and 25% of our total leased raised floor are scheduled to expire during the years ending December 31, 2021 (including all month-to-month leases) and 2022, respectively. These leases also represented approximately 33% and 27%, respectively, of our annualized rent as of December 31, 2020. Given that our average rent for larger contracts tend to be at or below market rent at expiration, as a general matter, based on current market conditions, we expect that expiring rents will generally be at or below the then-current market rents.

Acquisitions, Development, and Financing. Our revenue growth also will depend on our ability to acquire and redevelop and/or construct and subsequently lease data center space at favorable rates. We generally fund the cost of data center acquisition, construction and/or redevelopment from our net cash provided by operations, revolving credit facility, other unsecured and secured borrowings, joint ventures and/or the issuance of additional equity. We believe that we have sufficient access to capital from our current cash and cash equivalents, borrowings under our revolving credit facility and forward equity transactions to fund our development that is under construction. In the first half of 2020 in connection with the COVID-19 pandemic, we experienced modest delays in construction activity in a few of our markets, primarily as a result of availability of contractors and slower permitting as more fully described under the caption “The COVID-19 Pandemic.” During the remainder of 2020 and through the date of this report, we are pleased to report that our commitments to customers remain on track and we do not currently anticipate any meaningful delays in our development activity associated with our booked-not-billed backlog assuming current trends continue.

Unconsolidated Entity. On February 22, 2019, we entered into an agreement with Alinda, an infrastructure investment firm, with respect to a recently constructed data center in Manassas. At closing, we contributed cash and our Manassas data center (a hyperscale data center under development in Manassas, Virginia), and Alinda contributed cash, in each case in exchange for a 50% interest in the unconsolidated entity. The Manassas data center, which is currently leased to a global cloud-based software company pursuant to a 10-year lease agreement, was contributed at an expected stabilized value upon completion of approximately $240 million. At the closing, we received approximately $53 million in net proceeds, which was funded from the cash contributed by Alinda and also borrowings under a $164.5 million secured credit facility entered into by the unconsolidated entity at closing that carries a rate of LIBOR plus 2.00% to 2.25% depending on the existing leverage ratio. We used these distributions to pay down our revolving credit facility and for general corporate purposes. Under the agreement, we will receive additional distributions in the future as and when we complete development of each phase of the Manassas data center and place it into service, which allows us to receive distributions for Alinda’s share of the unconsolidated entity based on the expected full stabilization of the asset. These distributions will be based on a 6.75% capitalization rate for each phase delivered during the first three years of the agreement. Under the agreement, we serve as the unconsolidated entity’s operating member, subject to authority and oversight of a board appointed by Alinda and us, and separately we serve as manager and developer of the facility in exchange for management and development fees. The agreement includes various transfer restrictions and rights of first offer that will allow us to repurchase Alinda’s interest should Alinda wish to exit in the future. In addition, we have agreed to provide Alinda an opportunity to invest in future similar entities based on similar terms and at a comparable capitalization rate. This agreement has been reflected as an unconsolidated entity on our reported financial statements beginning in the first quarter of 2019.

Operating Expenses. Our operating expenses generally consist of direct personnel costs, utilities, property and ad valorem taxes, insurance and site maintenance costs and rental expenses on our ground and building leases. In particular, our buildings require significant power to support the data center operations conducted in them. Although a significant portion of our long-term leases – leases with a term greater than three years – contain reimbursements for certain operating expenses, we will not in all instances be reimbursed for all of the property operating expenses we incur. Increases or decreases in our operating expenses will impact our results of operations and cash flows and we expect to incur additional operating expenses as we continue to expand. Although, as of the date of this report, expense impacts related to the COVID-19 pandemic have not had

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an adverse effect on our business, these or other negative trends in one or more of these or other factors described above could adversely affect our operating expenses in future periods, which would impact our results of operations and cash flows. In addition, in February 2021, the State of Texas was subject to an extensive winter storm which caused significant disruptions in the Texas power grid. Our Irving and Fort Worth data centers operated uninterrupted throughout the impacted period. We are evaluating the impact of the disruptions to the Texas power grid but do not believe the events will have a material adverse impact on our financial statements because we have utilized power purchase agreements to hedge our utility costs in Texas.

General Leasing Activity

Information is provided in the tables below for both our leasing activity as well as booked-not-billed balances.

For new/modified leases signed, “Incremental Annualized Rent, Net of Downgrades” reflect net incremental MRR signed during the period for purposes of tracking incremental revenue contribution. The amounts include renewals when there was a change in square footage rented, but exclude renewals where square footage remained consistent before and after renewal. (See “Renewed Leases” table below for such renewals.) Annualized rent per leased square foot is computed using the total MRR associated with all new and modified leases for the respective periods.

In regard to renewed leases signed, consistent with our strategy and business model, the renewal rates below reflect total MRR per square foot including all subscribed services. For comparability, we include only those leases where the square footage remained consistent before and after renewal. All customers with space changes are incorporated into new/modified leasing statistics and rates.

We define booked-not-billed as our customer leases that have been signed, but for which lease payments have not yet commenced.

The following leasing and booked-not-billed statistics include results of the consolidated business as well as QTS’ 50% share of revenue from the unconsolidated entity, if any.

	Period	Number of Leases	Annualized rent (1)  per leased sq ft		Incremental Annualized Rent (1), Net  of Downgrades
New/modified leases signed	Three Months Ended December 31, 2020	519	$	452	$	40,272,870
	Year Ended December 31, 2020	2,044	$	436	$	109,152,943

	Period	Number of Renewed Leases	Annualized rent (1) per leased sq ft		Annualized Rent (2)		Rent Change
Renewed Leases (2)	Three Months Ended December 31, 2020	99	$	553	$	22,462,764	(1.5)	%
	Year Ended December 31, 2020	380	$	586	$	67,827,762	1.4	%

(1)We define annualized rent as MRR as of December 31, 2020, multiplied by 12.

(2)We define renewals as leases where the customer retains the same amount of space before and after renewals, which facilitates rate comparability.

The following table outlines the booked-not-billed balance as of December 31, 2020 and how that is expected to affect revenue in 2021 and subsequent years:

Booked-not-billed ("BNB") (1)	2021		2022		Thereafter		Total
MRR	$	7,111,970	$	1,959,370	$	3,794,106	$	12,865,446
Incremental revenue (2)	$	45,917,789	$	17,166,937	$	45,529,272
Annualized revenue (3) (4)	$	85,343,640	$	23,512,440	$	45,529,272	$	154,385,352

(1)Includes our consolidated booked-not-billed balance in addition to booked-not-billed revenue associated with the unconsolidated entity at QTS’ pro rata share of the booked-not-billed revenue. Of the $154.4 million annualized booked-not-billed revenue, approximately $2.8 million related to QTS’ pro rata share of booked-not-billed revenue associated with the unconsolidated entity.

(2)Incremental revenue represents the expected amount of recognized MRR for the business in the period based on when the booked-not-billed leases commence throughout the period.

(3)Annualized revenue represents the booked-not-billed MRR multiplied by 12, demonstrating how much recognized MRR might have been recognized if the booked-not-billed leases commencing in the period were in place for an entire year.

(4)As of December 31, 2020, adjusting booked-not-billed revenue for the effects of revenue which had begun recognition via straight line rent, our annualized booked-not-billed balance was $87.1 million, of which $49.0 million was attributable to 2021, $14.3 million was attributable to 2022, and $23.8 million was attributable to years thereafter.

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We estimate the remaining cost to provide the space, power, connectivity and other services to the customer contracts which had not billed as of December 31, 2020 to be approximately $520.3 million. This estimate generally includes customers with newly contracted space of more than 3,300 square feet of raised floor space. The space, power, connectivity and other services provided to customers that contract for smaller amounts of space is generally provided by utilizing existing space which was previously developed.

Results of Operations

Year Ended December 31, 2020 Compared to Year Ended December 31, 2019

Changes in revenues and expenses for the year ended December 31, 2020 compared to the year ended December 31, 2019 are summarized below (in thousands):

	Year Ended December 31,
	2020		2019		$ Change		% Change
Revenues:
Rental	$	519,858	$	465,123	$	54,735	12	%
Other	19,510		15,695		3,815		24	%
Total revenues	539,368		480,818		58,550		12	%
Operating expenses:
Property operating costs	168,497		156,048		12,449		8	%
Real estate taxes and insurance	16,020		14,503		1,517		10	%
Depreciation and amortization	199,889		168,305		31,584		19	%
General and administrative	84,965		80,385		4,580		6	%
Transaction, integration, and impairment costs	4,340		15,190		(10,850)		(71)	%
Total operating expenses	473,711		434,431		39,280		9	%
Gain on sale of real estate, net	—		14,769		(14,769)		(100)	%
Operating income	65,657		61,156		4,501		7	%
Other income and expense:
Interest income	2		111		(109)		(98)	%
Interest expense	(30,724)		(26,593)		4,131		16	%
Debt restructuring costs	(18,036)		(1,523)		16,513		1084	%
Other income (expense)	159		(50)		209		(418)	%
Equity in net loss of unconsolidated entity	(2,044)		(1,473)		571		39	%
Income before taxes	15,014		31,628		(16,614)		(53)	%
Tax benefit (expense)	(438)		37		(475)		1283	%
Net income	$	14,576	$	31,665	$	(17,089)	(54)	%

Revenues. Total revenues for the year ended December 31, 2020 were $539.4 million compared to $480.8 million for the year ended December 31, 2019. The increase of $58.5 million, or 12%, was largely attributable to growth in our hyperscale and hybrid colocation offerings, primarily through increases in revenues at our Ashburn (DC-1), Fort Worth, Chicago, Atlanta (DC-1) and Atlanta (DC-2) data centers, partially offset by revenue reductions in Richmond and various leased facilities which were generally associated with our exit from those leased facilities.

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Property Operating Costs. Property operating costs for the year ended December 31, 2020 were $168.5 million compared to property operating costs of $156.0 million for the year ended December 31, 2019, an increase of $12.4 million, or 8%. The breakdown of our property operating costs is summarized in the table below (in thousands):

	Year Ended December 31,
	2020		2019		$ Change		% Change
Property operating costs:
Direct payroll	$	27,446	$	23,618	$	3,828	16	%
Rent	10,833		12,882		(2,049)		(16)	%
Repairs and maintenance	14,271		12,125		2,146		18	%
Utilities	69,792		68,292		1,500		2	%
Management fee allocation	19,796		18,571		1,225		7	%
Other	26,359		20,560		5,799		28	%
Total property operating costs	$	168,497	$	156,048	$	12,449	8	%

The increase in total property operating costs was primarily due to increased direct payroll costs, utilities expense and repairs and maintenance expense resulting from ongoing company growth, an increase in bad debt expense which was partially attributable to the risk of a loss across our portfolio of lease receivables primarily related to customers experiencing business disruptions due to COVID-19 (which is included in the “Other” line item of the property operating costs table above) as well as an increase in miscellaneous expenses primarily attributable to an adjustment to prior years' personal property taxes at our Atlanta-Suwanee facility. Offsetting these increases was a reduction in rent expense primarily related to our exit of portions of leased facilities.

Real Estate Taxes and Insurance. Real estate taxes and insurance for the year ended December 31, 2020 were $16.0 million compared to $14.5 million for the year ended December 31, 2019. The increase of $1.5 million, or 10%, was primarily attributable to an increase in real estate taxes at our Ashburn (DC - 1), Fort Worth and Chicago facilities.

Depreciation and Amortization. Depreciation and amortization for the year ended December 31, 2020 was $199.9 million compared to $168.3 million for the year ended December 31, 2019. The increase of $31.6 million, or 19%, was primarily due to additional depreciation expense relating to an increase in assets placed in service at our Ashburn (DC - 1), Chicago, Fort Worth, Atlanta (DC - 1) and Atlanta (DC - 2) facilities, partially offset by a decrease in depreciation expense at our Richmond facility, as we took a portion of the facility out of service to repurpose the space for re-lease, and Dulles facilities due to exiting one of our Dulles facilities.

General and Administrative Expenses. General and administrative expenses were $85.0 million for the year ended December 31, 2020 compared to general and administrative expenses of $80.4 million for the year ended December 31, 2019, an increase of $4.6 million, or 6%. The increase was primarily attributable to an increase in total compensation expense, the majority of which related to increased equity-based compensation expense associated with the growth of the Company and anticipated achievement of certain performance metrics, partially offset by a reduction in employee travel-related expenses primarily associated with reduced travel as a result of the COVID-19 pandemic.

Transaction, Integration & Impairment Costs. Transaction, integration and impairment costs were $4.3 million for the year ended December 31, 2020, compared to $15.2 million for the year ended December 31, 2019, a decrease of $10.9 million or 71%. The decrease was primarily associated with a $11.5 million impairment loss recognized in 2019 related to the write-down of certain data center assets and equipment in one of our Dulles, Virginia data centers. The remaining costs for the years ended December 31, 2020 and December 31, 2019 are primarily attributable to costs related to the examination of potential acquisitions.

Gain on sale of real estate, net. The gain on sale of real estate net incurred during the year ended December 31, 2019 primarily relates to a $13.4 million net gain realized upon sale of the Manassas facility to the unconsolidated entity which represents the fair value of cash and noncash consideration received in the sale transaction, net of costs directly related to the sale in excess of the carrying amounts of the assets. In addition, during the year ended December 31, 2019, we recognized a $1.4 million gain on sale of certain ancillary land improvements near our Atlanta (DC-1) facility.

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Interest Expense. Interest expense for the year ended December 31, 2020 was $30.7 million compared to $26.6 million for the year ended December 31, 2019. The increase of $4.1 million, or 16%, was primarily attributable to an increase in our average total debt balance compared to the prior period as well as a lower level of capitalized interest during the current period, partially offset by a reduction in interest rates.

Debt Restructuring Costs. Debt restructuring costs for the year ended December 31, 2020 were $18.0 million compared to debt restructuring costs of $1.5 million for the year ended December 31, 2019. The increase in debt restructuring costs of $16.5 million was primarily attributable to the replacement of the 4.750% Senior Notes due 2025 with the 3.875% Senior Notes due 2028 during the year ended December 31, 2020 (which included $14.3 million related to an early repayment penalty and $3.7 million related to the write-off of unamortized deferred financing costs), compared to debt restructuring expenses of $1.5 million recognized in the fourth quarter of 2019 associated with the extension and expansion of our unsecured credit facility.

Other Income (Expense). Other income (expense) represents the impact of foreign currency exchange rate fluctuations on the value of investments in foreign subsidiaries whose functional currencies are other than the U.S. Dollar. We recognized $0.2 million of foreign currency gain related to our investment in the Netherlands facilities during the year ended December 31, 2020. Prior to February 2020, gains or losses from foreign currency transactions were included in determining net income (loss). In February 2020, we entered into a net investment hedge which resulted in gains or losses subsequently being recognized in Other Comprehensive Income (Loss).

Equity in net income (loss) of unconsolidated entity. This represents equity in earnings (loss) of our unconsolidated entity formed during the first quarter of 2019 that owns our Manassas (DC-1) data center. Equity in net loss was $2.0 million for the year ended December 31, 2020, which remained consistent with net loss of $1.5 million for the year ended December 31, 2019.

Tax Benefit (Expense) of Taxable REIT Subsidiaries. Tax expense of taxable REIT subsidiaries for the year ended December 31, 2020 was $0.4 million which remained consistent compared to less than $0.1 million of tax benefit for the year ended December 31, 2019.

Year Ended December 31, 2019 Compared to Year Ended December 31, 2018

For a discussion comparing the Company’s financial condition and results of operations for the year ended December 31, 2019 compared to the year ended December 31, 2018 refer to subsection “Results of Operations - Year Ended December 31, 2019 Compared to Year Ended December 31, 2018” of Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2019, which is incorporated by reference herein. This discussion should be read in conjunction with Item 8. Financial Statements and Supplementary Data.

Non-GAAP Financial Measures

We consider the following non-GAAP financial measures to be useful to investors as key supplemental measures of our performance: (1) FFO; (2) Operating FFO; (3) Adjusted Operating FFO; (4) MRR; (5) NOI; (6) EBITDAre; and (7) Adjusted EBITDA. These non-GAAP financial measures should be considered along with, but not as alternatives to, net income or loss and cash flows from operating activities as a measure of our operating performance. FFO, Operating FFO, Adjusted Operating FFO, MRR, NOI, EBITDAre and Adjusted EBITDA, as calculated by us, may not be comparable to similarly titled measures as reported by other companies that do not use the same definition or implementation guidelines or interpret the standards differently from us.

We do not, nor do we suggest investors should, consider such non-GAAP financial measures in isolation from, or as a substitute for, GAAP financial information. We believe the presentation of non-GAAP financial measures provide meaningful supplemental information to both management and investors that is indicative of our operations. We have included a reconciliation of this additional information to the most comparable GAAP measure below.

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FFO, Operating FFO and Adjusted Operating FFO

We consider funds from operations (“FFO”) to be a supplemental measure of our performance which should be considered along with, but not as an alternative to, net income (loss) and cash provided by operating activities as a measure of operating performance. We calculate FFO in accordance with the standards established by the National Association of Real Estate Investment Trusts (“NAREIT”). FFO represents net income (loss) (computed in accordance with GAAP), adjusted to exclude gains (or losses) from sales of depreciable real estate related to our primary business, impairment write-downs of depreciable real estate related to our primary business, real estate-related depreciation and amortization, and similar adjustments for unconsolidated entities. To the extent we incur gains or losses from the sale of assets that are incidental to our primary business, or incur impairment write-downs associated with assets that are incidental to our primary business, we include such amounts in our calculation of FFO. Our management uses FFO as a supplemental operating performance measure because, in excluding real estate-related depreciation and amortization, impairment write-downs of depreciable real estate and gains and losses from property dispositions related to our primary business, it provides a performance measure that, when compared year over year, captures trends in occupancy rates, rental rates and operating costs.

Due to the volatility and nature of certain significant charges and gains recorded in our operating results that management believes are not reflective of our operating performance, management computes an adjusted measure of FFO, which we refer to as Operating funds from operations (“Operating FFO”). Operating FFO is a non-GAAP measure that is used as a supplemental operating measure and to provide additional information to users of the financial statements. We generally calculate Operating FFO as FFO excluding certain non-routine charges and gains and losses that management believes are not indicative of the results of our operating real estate portfolio. We believe that Operating FFO provides investors with another financial measure that may facilitate comparisons of operating performance between periods and, to the extent they calculate Operating FFO on a comparable basis, between REITs.

Adjusted Operating Funds From Operations (“Adjusted Operating FFO”) is a non-GAAP measure that is used as a supplemental operating measure and to provide additional information to users of the financial statements. We calculate Adjusted Operating FFO by adding or subtracting from Operating FFO items such as: maintenance capital investment, paid leasing commissions, amortization of deferred financing costs, non-real estate depreciation and amortization, straight line rent adjustments, income taxes, equity-based compensation and similar adjustments for unconsolidated entities.

We offer these measures because we recognize that FFO, Operating FFO and Adjusted Operating FFO will be used by investors as a basis to compare our operating performance with that of other REITs. However, because FFO, Operating FFO and Adjusted Operating FFO exclude real estate depreciation and amortization and capture neither the changes in the value of our properties that result from use or market conditions, nor the level of capital expenditures and capitalized leasing commissions necessary to maintain the operating performance of our properties, all of which have real economic effect and could materially impact our financial condition, cash flows and results of operations, the utility of FFO, Operating FFO and Adjusted Operating FFO as measures of our operating performance is limited. Our calculation of FFO may not be comparable to measures calculated by other companies who do not use the NAREIT definition of FFO or do not calculate FFO in accordance with NAREIT guidance. In addition, our calculations of FFO, Operating FFO and Adjusted Operating FFO are not necessarily comparable to similarly titled measures as calculated by other REITs that do not use the same definition or implementation guidelines or interpret the standards differently from us. FFO, Operating FFO and Adjusted Operating FFO are non-GAAP measures and should not be considered a measure of our results of operations or liquidity or as a substitute for, or an alternative to, net income (loss), cash provided by operating activities or any other performance measure determined in accordance with GAAP, nor is it indicative of funds available to fund our cash needs, including our ability to make distributions to our stockholders.

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A reconciliation of net income (loss) to FFO, Operating FFO and Adjusted Operating FFO is presented below:

	Year Ended December 31,
(unaudited $ in thousands)	2020		2019		2018
FFO
Net income (loss)	$	14,576	$	31,665	$	(7,175)
Equity in net loss of unconsolidated entity	2,044		1,473		—
Real estate depreciation and amortization	186,539		156,387		136,119
Gain on sale of real estate, net	—		(13,408)		—
Impairments of depreciated property	—		11,461		—
Pro rata share of FFO from unconsolidated entity	1,684		1,078		—
FFO (1)	204,843		188,656		128,944
Preferred stock dividends	(28,180)		(28,180)		(16,666)
FFO available to common stockholders & OP unit holders	176,663		160,476		112,278
Debt restructuring costs	18,036		1,523		605
Restructuring costs	—		—		37,943
Transaction and integration costs	4,340		3,729		2,743
Tax benefit associated with restructuring, transaction and integration costs	—		—		(2,408)
Operating FFO available to common stockholders & OP unit holders (2)	199,039		165,728		151,161
Maintenance capital expenditures	(10,150)		(4,233)		(6,662)
Leasing commissions paid	(36,744)		(31,102)		(24,246)
Amortization of deferred financing costs	4,148		3,917		3,856
Non real estate depreciation and amortization	13,350		11,918		13,772
Straight line rent revenue and expense and other	(25,401)		(7,922)		(6,770)
Tax expense (benefit) from operating results	438		(37)		(960)
Equity-based compensation expense	25,133		16,412		14,972
Adjustments for unconsolidated entity	(304)		118		—
Adjusted Operating FFO available to common stockholders & OP unit holders (2)	$	169,509	$	154,799	$	145,123

(1)FFO for the year ended December 31, 2019 includes a $1.4 million gain on sale of real estate related to certain assets considered incidental to our primary business and were included in the “Gain on sale of real estate, net” line item of the consolidated statements of operations. FFO for the year ended December 31, 2018 includes $15.8 million of impairment losses related to certain non-real estate product related assets that were considered incidental to our primary business and were included in the “Restructuring” line item of the consolidated statement of operations. No gains, losses or impairment write-downs associated with assets incidental to our primary business were included in FFO for the year ended December 31, 2020.

(2)Our calculations of Operating FFO and Adjusted Operating FFO may not be comparable to Operating FFO and Adjusted Operating FFO as calculated by other REITs that do not use the same definition.

Monthly Recurring Revenue (MRR) and Recognized MRR

We calculate MRR as monthly contractual revenue under signed leases as of a particular date, which includes revenue from our rental and managed services activities, but excludes customer recoveries, deferred set-up fees, variable related revenues, non-cash revenues and other one-time revenues. MRR is also calculated to include our pro rata share of monthly contractual revenue under signed leases as of a particular date associated with unconsolidated entities, which includes revenue from the unconsolidated entity’s rental and managed services activities, but excludes the unconsolidated entity’s customer recoveries, deferred set-up fees, variable related revenues, non-cash revenues and other one-time revenues. MRR reflects the annualized cash rental payments. It does not include the impact from booked-not-billed leases as of a particular date, unless otherwise specifically noted.

Separately, we calculate recognized MRR as the recurring revenue recognized during a given period, which includes revenue from our rental and managed services activities, but excludes customer recoveries, deferred set-up fees, variable related revenues, non-cash revenues and other one-time revenues.

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Management uses MRR and recognized MRR as supplemental performance measures because they provide useful measures of increases in contractual revenue from our customer leases and customer leases attributable to our business. MRR and recognized MRR should not be viewed by investors as alternatives to actual monthly revenue, as determined in accordance with GAAP. Other companies may not calculate MRR or recognized MRR in the same manner. Accordingly, our MRR and recognized MRR may not be comparable to other companies’ MRR and recognized MRR. MRR and recognized MRR should be considered only as supplements to total revenues as a measure of our performance. MRR and recognized MRR should not be used as measures of our results of operations or liquidity, nor is it indicative of funds available to meet our cash needs, including our ability to make distributions to our stockholders.

A reconciliation of total GAAP revenues to recognized MRR in the period and MRR at period end is presented below:

	Year Ended December 31,
(unaudited $ in thousands)	2020		2019		2018
Recognized MRR in the period
Total period revenues (GAAP basis)	$	539,368	$	480,818	$	450,524
Less: Total period variable lease revenue from recoveries	(54,337)		(55,046)		(45,386)
Total period deferred setup fees	(20,330)		(15,156)		(12,475)
Total period straight line rent and other	(36,744)		(20,349)		(17,148)
Recognized MRR in the period	427,957		390,267		375,515
MRR at period end
Total period revenues (GAAP basis)	$	539,368	$	480,818	$	450,524
Less: Total revenues excluding last month	(491,731)		(438,810)		(412,041)
Total revenues for last month of period	47,637		42,008		38,483
Less: Last month variable lease revenue from recoveries	(4,953)		(4,578)		(3,822)
Last month deferred setup fees	(2,207)		(1,333)		(1,015)
Last month straight line rent and other	(2,349)		(2,413)		(2,505)
Add: Pro rata share of MRR at period end of unconsolidated entity	411		350		—
MRR at period end (1)	$	38,539	$	34,034	$	31,141

(1)Does not include our booked-not-billed MRR balance, which was $12.9 million, $7.8 million and $5.2 million as of December 31, 2020, 2019 and 2018, respectively.

Net Operating Income (NOI)

We calculate net operating income (“NOI”), as net income (loss) (computed in accordance with GAAP), excluding: interest expense, interest income, tax expense (benefit), depreciation and amortization, write off of unamortized deferred financing costs, other (income) expense, debt restructuring costs, transaction, integration and impairment costs, gain (loss) on sale of real estate, restructuring costs, general and administrative expenses and similar adjustments for unconsolidated entities. We allocate a management fee charge of 4% of cash revenues for all facilities (with the exception of the leased facilities acquired in 2015, which were allocated a charge of 10% of cash revenues through 2018) as a property operating cost and a corresponding reduction to general and administrative expense to cover the day-to-day administrative costs to operate our data centers. The management fee charge is reflected as a reduction to net operating income.

Management uses NOI as a supplemental performance measure because it provides a useful measure of the operating results from our customer leases. In addition, we believe it is useful to investors in evaluating and comparing the operating performance of our properties and to compute the fair value of our properties. Our NOI may not be comparable to other REITs’ NOI as other REITs may not calculate NOI in the same manner. NOI should be considered only as a supplement to net income (loss) as a measure of our performance and should not be used as a measure of our results of operations or liquidity or as an indication of funds available to meet our cash needs, including our ability to make distributions to our stockholders. NOI is a measure of the operating performance of our properties and not of our performance as a whole. NOI is therefore not a substitute for net income (loss) as computed in accordance with GAAP.

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A reconciliation of net income (loss) to NOI is presented below:

	Year Ended December 31,
(unaudited $ in thousands)	2020		2019		2018
Net Operating Income (NOI)
Net income (loss)	$	14,576	$	31,665	$	(7,175)
Equity in net loss of unconsolidated entity	2,044		1,473		—
Interest income	(2)		(111)		(150)
Interest expense	30,724		26,593		28,749
Depreciation and amortization	199,889		168,305		149,891
Debt restructuring costs	18,036		1,523		605
Other (income) expense	(159)		50		—
Tax expense (benefit)	438		(37)		(3,368)
Transaction, integration and impairment costs	4,340		15,190		2,743
General and administrative expenses	84,965		80,385		80,857
Gain on sale of real estate, net	—		(14,769)		—
Restructuring	—		—		37,943
NOI from consolidated operations (1)	354,851		310,267		290,095
Pro rata share of NOI from unconsolidated entity (2)	4,122		2,789		—
Total NOI	$	358,973	$	313,056	$	290,095
Breakdown of NOI by facility:
Atlanta (DC - 1) data center (3)	$	106,199	$	96,196	$	87,060
Atlanta-Suwanee data center	48,829		48,704		48,165
Irving data center	45,318		45,484		42,621
Richmond data center	26,434		32,979		33,445
Chicago data center	18,444		13,104		8,878
Piscataway data center	17,944		13,584		12,266
Ashburn data center	17,704		4,698		1,250
Dulles data center	12,926		11,730		16,944
Princeton data center	10,149		9,977		9,729
Fort Worth data center	9,799		4,021		902
Santa Clara data center	9,352		7,549		8,344
Leased data centers (4)	7,322		8,793		9,695
Sacramento data center	5,879		6,204		7,448
Atlanta (DC - 2) data center (5)	5,216		—		—
Netherlands data centers (6)	4,341		2,041		—
Hillsboro data center	270		—		—
Other facilities	8,725		5,203		3,348
NOI from consolidated operations (1)	354,851		310,267		290,095
Pro rata share of NOI from unconsolidated entity (2)	4,122		2,789		—
Total NOI	$	358,973	$	313,056	$	290,095

(1)Includes facility level general and administrative allocation charges of 4% of cash revenue for all facilities (with the exception of the leased facilities acquired in 2015, which were allocated a charge of 10% of cash revenues through 2018). These allocated charges aggregated to $19.8 million, $18.6 million and $20.8 million for the years ended December 31, 2020, 2019 and 2018, respectively.

(2)QTS’ pro rata share of the unconsolidated entity is 50%.

(3)This property was formerly known as “Atlanta-Metro data center” but has been renamed “Atlanta (DC-1)” to distinguish between the existing data center and the new property development.

(4)At December 31, 2020 includes 7 facilities. All facilities are leased, including one subject to a finance lease.

(5)Represents the newly developed data center building at our Atlanta, GA campus.

(6)Consists of two data centers located in Eemshaven, Netherlands and Groningen, Netherlands.

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Earnings Before Interest, Taxes, Depreciation and Amortization for Real Estate (EBITDAre) and Adjusted EBITDA

We calculate EBITDAre in accordance with the standards established by NAREIT. EBITDAre represents net income (loss) (computed in accordance with GAAP) adjusted to exclude gains (or losses) from sales of depreciated property related to our primary business, income tax expense (or benefit), interest expense, depreciation and amortization, impairments of depreciated property related to our primary business, and similar adjustments for unconsolidated entities. Management uses EBITDAre as a supplemental performance measure because it provides performance measures that, when compared year over year, captures the performance of our operations by removing the impact of our capital structure (primarily interest expense) and asset base charges (primarily depreciation and amortization) from our operating results.

Due to the volatility and nature of certain significant charges and gains recorded in our operating results that management believes are not reflective of operating performance, we compute an adjusted measure of EBITDAre, which we refer to as Adjusted EBITDA. We calculate Adjusted EBITDA as EBITDAre excluding certain non-routine charges, write off of unamortized deferred financing costs, gains (losses) on extinguishment of debt, restructuring costs, and transaction and integration costs, as well as our pro-rata share of each of those respective adjustments associated with the unconsolidated entity aggregated into one line item categorized as “Adjustments for the unconsolidated entity.” In addition, we calculate Adjusted EBITDA excluding certain non-cash recurring costs such as equity-based compensation. We believe that Adjusted EBITDA provides investors with another financial measure that may facilitate comparisons of operating performance between periods and, to the extent other REITs calculate Adjusted EBITDA on a comparable basis, between REITs.

Management uses EBITDAre and Adjusted EBITDA as supplemental performance measures as they provide useful measures of assessing our operating results. Other companies may not calculate EBITDAre or Adjusted EBITDA in the same manner. Accordingly, our EBITDAre and Adjusted EBITDA may not be comparable to others. EBITDAre and Adjusted EBITDA should be considered only as supplements to net income (loss) as measures of our performance and should not be used as substitutes for net income (loss), as measures of our results of operations or liquidity or as indications of funds available to meet our cash needs, including our ability to make distributions to our stockholders.

A reconciliation of net income (loss) to EBITDAre and Adjusted EBITDA is presented below:

	Year Ended December 31,
(unaudited $ in thousands)	2020		2019		2018
EBITDAre and Adjusted EBITDA
Net income (loss)	$	14,576	$	31,665	$	(7,175)
Equity in net loss of unconsolidated entity	2,044		1,473		—
Interest income	(2)		(111)		(150)
Interest expense	30,724		26,593		28,749
Tax expense (benefit)	438		(37)		(3,368)
Depreciation and amortization	199,889		168,305		149,891
(Gain) Loss on disposition of depreciated property	—		(13,408)		6,994
Impairments of depreciated property	—		11,461		8,842
Pro rata share of EBITDAre from unconsolidated entity	4,088		2,775		—
EBITDAre (1)	$	251,757	$	228,716	$	183,783
Debt restructuring costs	18,036		1,523		605
Equity-based compensation expense	25,133		16,412		14,972
Restructuring costs	—		—		22,107
Transaction, integration and implementation costs	4,361		3,729		2,743
Adjusted EBITDA	$	299,287	$	250,380	$	224,210

(1)EBITDAre for the year ended December 31, 2019 includes a $1.4 million gain on sale of real estate related to certain assets considered incidental to our primary business and were included in the “Gain on sale of real estate, net” line item of the consolidated statement of operations. No gains, losses or impairment write-downs associated with assets incidental to our primary business were included in EBITDAre for the years ended December 31, 2020 and December 31, 2018.

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Liquidity and Capital Resources

Short-Term Liquidity

Our short-term liquidity needs include funding capital expenditures for the development of data center space (a significant portion of which is discretionary), meeting debt service and debt maturity obligations, funding payments for finance leases, funding distributions to our common and preferred stockholders and unit holders, utility costs, site maintenance costs, real estate and personal property taxes, insurance, rental expenses, general and administrative expenses and certain recurring and non-recurring capital expenditures.

We expect that we will incur approximately $800 million to $900 million in capital expenditures in the year ended December 31, 2021, in connection with the development of our data center facilities, which excludes acquisitions and includes our 50% proportionate share of capital expenditures at the Manassas facility that was contributed to an unconsolidated entity. We expect to spend approximately $675 million to $775 million of capital expenditures with vendors on development, and the remainder on other capital expenditures and capitalized internal project costs (including capitalized interest, commissions, payroll and other similar costs), personal property and other less material capital projects. A significant portion of these expenditures are discretionary in nature and we may ultimately determine not to make these expenditures or the timing of expenditures may vary.

We expect to meet these costs and our other short-term liquidity needs through operating cash flow, cash and cash equivalents, borrowings under our credit facilities, proceeds from the forward equity transactions discussed below, additional equity issuances through our Current ATM program or other capital markets activity including debt issuances. We may also sell an interest in certain projects into unconsolidated entities as another source of capital.

Our cash paid for capital expenditures for the years ended December 31, 2020, 2019 and 2018 are summarized in the table below (in thousands):

	Year Ended December 31,
	2020		2019		2018
Development	$	657,461	$	256,012	$	386,592
Acquisitions	43,933		76,383		117,029
Maintenance capital expenditures	10,150		4,233		6,662
Other capital expenditures (1)	106,201		105,059		91,049
Total capital expenditures	$	817,745	$	441,687	$	601,332

(1)Represents capital expenditures for capitalized interest, commissions, personal property, overhead costs and corporate fixed assets. Corporate fixed assets primarily relate to construction of corporate offices, leasehold improvements and product related assets.

Long-Term Liquidity

Our long-term liquidity needs primarily consist of funds for property acquisitions, scheduled debt maturities, funding payments for finance leases, recurring and non-recurring capital expenditures, and dividend payments on our common stock, Series A Preferred Stock and Series B Preferred Stock. We may also pursue new developments and additional redevelopment of our data centers and future redevelopment of other space in our portfolio. We may also pursue development on land we own that is available at multiple data center properties in our portfolio. The development and/or redevelopment of this space, including timing, is at our discretion and will depend on a number of factors, including availability of capital and our estimate of the demand for data center space in the applicable market. We expect to meet our long-term liquidity needs with net cash provided by operations, incurrence of additional long-term indebtedness, borrowings under our credit facility, distributions from our unconsolidated entity and issuance of additional equity (including forward equity transactions) or debt securities, subject to prevailing market conditions, as discussed below. We may also sell an interest in certain projects into unconsolidated entities as another source of capital.

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Equity

In February 2019, we conducted an underwritten offering of 7,762,500 shares of our Class A common stock, $0.01 par value per share (the “Class A common stock”) consisting of 4,000,000 shares issued during the first quarter of 2019 and 3,762,500 shares which were issued on a forward basis. During the year ended December 31, 2019 we settled a portion of the 3,762,500 shares subject to the forward sales agreements, and during the year ended December 31, 2020 we settled the remaining shares subject to the forward sale agreements as shown in the table below.

In June 2019, we established an “at-the-market” equity offering program (the “Prior ATM Program”) pursuant to which we could issue, from time to time, up to $400 million of our Class A common stock, $0.01 par value per share (the “Class A common stock”), which could include shares to be sold on a forward basis. The use of forward sales under the Prior ATM Program generally allowed us to lock in a price on the sale of shares of our Class A common stock when sold by the forward sellers, but defer receiving the net proceeds from such sales until the shares of our Class A common stock are issued at settlement on a later date.

In May 2020, we established a new “at-the-market” equity offering program (the “Current ATM Program”) pursuant to which we may issue, from time to time, up to $500 million of our Class A common stock, which may include shares to be sold on a forward basis. As under the Prior ATM Program, the use of forward sales under the Current ATM Program generally allows us to lock in a price on the sale of shares of our Class A common stock when sold by the forward sellers, but defer receiving the net proceeds from such sales until the shares of our Class A common stock are issued at settlement on a later date.

At any time during the term of any forward sale under the Prior ATM Program or the Current ATM Program we may settle the forward sale by physical delivery of shares of Class A common stock to the forward purchasers or, at our election, cash settle or net share settle. The initial forward sale price per share under each forward sale equals the product of (x) an amount equal to 100% of proceeds of the sale of such shares minus the applicable forward selling commission and (y) the volume weighted average price per share at which the borrowed shares of our common stock were sold pursuant to the equity distribution agreement by the relevant forward seller during the applicable forward hedge selling period for such shares to hedge the relevant forward purchaser’s exposure under such forward sale. Thereafter, the forward sale price is subject to adjustment on a daily basis based on a floating interest rate factor equal to the specified daily rate less a spread, and is decreased based on specified amounts related to dividends on shares of our common stock during the term of the applicable forward sale. If the specified daily rate is less than the spread on any day, the interest rate factor will result in a daily reduction of the applicable forward sale price.

During the year ended December 31, 2020, we received $286.3 million of net proceeds from the settlement of forward shares as noted in the table below. We expect to physically settle (by delivering shares of Class A common stock) the remaining forward sales under the Prior ATM Program and Current ATM Program prior to the first anniversary date of each respective transaction. In addition, during the year ended December 31, 2020, we utilized the forward provisions under the Prior ATM Program and the Current ATM Program to allow for the sale of additional shares of our common stock as noted in the table below.

In June 2020, we conducted an underwritten offering of 4,400,000 shares of common stock offered on a forward basis at a price of $64.90 per share representing available net proceeds upon physical settlement of approximately $266.9 million as of December 31, 2020. We expect to physically settle the forward sale agreements (by the delivery of shares of common stock) and receive proceeds, subject to certain adjustments, from the sale of those shares of common stock by June 30, 2021, although we have the right to elect settlement prior to that time.

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The following table represents a summary of our equity issuances during the year ended December 31, 2020 (in thousands):

Offering Program	Forward Shares Sold/(Settled)		Net Proceeds Available/(Received) (1)
Shares and net proceeds available as of December 31, 2019	3,795		$	173,776	(2)
February 2019 Offering - Settlement	(931)	(3)	(35,841)
June 2019 Prior ATM Program - Sales	4,550		243,577
June 2019 Prior ATM Program - Settlements	(4,981)	(3)	(250,496)
May 2020 Current ATM Program - Sales	3,128		189,640
June 2020 Offering - Sales	4,400		266,894
Shares and net proceeds available as of December 31, 2020	9,961		$	587,550

(1)Net Proceeds Available remain subject to certain adjustments until settled.

(2)Proceeds available reported in the Form 10-K for the period ended December 31, 2019 were $177.8 million. The $4 million decrease is due primarily to QTS’ declared dividends, which reduces cash expected to be received upon full physical settlement of the forward shares.

(3)Represents the number of forward shares we elected to physically settle during the period.

As shown in the table above, as of December 31, 2020, we had access to approximately $587.6 million of net proceeds through forward stock sales (subject to further adjustment as described above). We view forward equity sales as an important capital raising tool that we expect to continue to strategically and selectively use, subject to market conditions and overall availability under the Current ATM Program.

Manassas Unconsolidated Entity.

On February 22, 2019, we entered into an agreement with Alinda, an infrastructure investment firm, with respect to our Manassas (DC-1) data center, as described above under “Factors That May Influence Future Results of Operations and Cash Flows.” At the closing, we received approximately $53 million in proceeds, which was comprised of the cash contributed by Alinda and also borrowings under a $164.5 million secured credit facility entered into by the unconsolidated entity at closing that carries a rate of LIBOR plus 2.00% to 2.25% depending on the existing leverage ratio. We used these proceeds to pay down our revolving credit facility and for general corporate purposes. Under the agreement, we will receive additional proceeds in the future as and when we complete development of each phase of the Manassas data center and place it into service, which allows us to receive proceeds for Alinda’s share of the unconsolidated entity based on the expected full stabilization of the asset. These proceeds will be based on a 6.75% capitalization rate for each phase delivered during the first three years of the agreement.

Cash

As of December 31, 2020, our cash and cash equivalents balance was $22.8 million.

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Dividends and Distributions

The following tables present quarterly cash dividends and distributions paid to our common and preferred stockholders for the years ended December 31, 2020 and 2019:

Year Ended December 31, 2020
Record Date	Payment Date	Per Share Rate		Aggregate Dividend/Distribution Amount (in millions)
Common Stock
September 18, 2020	October 6, 2020	$	0.47	$	32.0
June 19, 2020	July 7, 2020	0.47		31.5
March 20, 2020	April 7, 2020	0.47		31.5
December 20, 2019	January 7, 2020	0.44		28.6
				$	123.6
Series A Preferred Stock
September 30, 2020	October 15, 2020	$	0.45	$	1.9
June 30, 2020	July 15, 2020	0.45		1.9
March 31, 2020	April 15, 2020	0.45		1.9
December 31, 2019	January 15, 2020	0.45		1.9
				$	7.6
Series B Preferred Stock
September 30, 2020	October 15, 2020	$	1.63	$	5.1
June 30, 2020	July 15, 2020	1.63		5.1
March 31, 2020	April 15, 2020	1.63		5.1
December 31, 2019	January 15, 2020	1.63		5.1
				$	20.4

Year Ended December 31, 2019
Record Date	Payment Date	Per Share Rate		Aggregate Dividend/Distribution Amount (in millions)
Common Stock
September 19, 2019	October 4, 2019	$	0.44	$	27.3
June 25, 2019	July 9, 2019	0.44		27.3
March 20, 2019	April 4, 2019	0.44		27.3
December 21, 2018	January 8, 2019	0.41		23.7
				$	105.6
Series A Preferred Stock
September 30, 2019	October 15, 2019	$	0.45	$	1.9
June 30, 2019	July 15, 2019	0.45		1.9
March 31, 2019	April 15, 2019	0.45		1.9
December 31, 2018	January 15, 2019	0.45		1.9
				$	7.6
Series B Preferred Stock
September 30, 2019	October 15, 2019	$	1.63	$	5.1
June 30, 2019	July 15, 2019	1.63		5.1
March 31, 2019	April 15, 2019	1.63		5.1
December 31, 2018	January 15, 2019	1.63		5.1
				$	20.4

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Additionally, subsequent to December 31, 2020, we paid the following dividends:

•On January 7, 2021, we paid our regular quarterly cash dividend of $0.47 per common share to stockholders of record as of the close of business on December 22, 2020.

•On January 15, 2021, we paid a quarterly cash dividend of approximately $0.45 per share on our Series A Preferred Stock to holders of Series A Preferred Stock of record as of the close of business on December 31, 2020.

•On January 15, 2021, we paid a quarterly cash dividend of approximately $1.63 per share on our Series B Preferred Stock to holders of Series B Preferred Stock of record as of the close of business on December 31, 2020.

Indebtedness

As of December 31, 2020, we had approximately $1.9 billion of indebtedness, including finance lease obligations.

Unsecured Credit Facility. In October 2019, we amended and restated our unsecured credit facility (the “unsecured credit facility”), which among other things increased the total potential borrowings, extended maturity dates, lowered interest rates, and provided for an additional term loan under the agreement. The unsecured credit facility includes a $225 million term loan which matures on December 17, 2024 (“Term Loan A”), a $225 million term loan which matures on April 27, 2025 (“Term Loan B”), an additional term loan of $250 million, which matures on October 18, 2026 (“Term Loan C”), and a $1.0 billion revolving credit facility which matures on December 17, 2023. The revolving portion of the unsecured credit facility has a one-year extension option available to the Company, subject to certain conditions. Amounts outstanding under the unsecured credit facility bear interest at a variable rate equal to, at our election, LIBOR or a base rate, plus a spread that will vary depending upon our leverage ratio. For revolving credit loans, the spread ranges from 1.25% to 1.85% for LIBOR loans and 0.25% to 0.85% for base rate loans. For Term Loan A and Term Loan B, the spread ranges from 1.20% to 1.80% for LIBOR loans and 0.20% to 0.80% for base rate loans. For Term Loan C, the spread ranges from 1.50% to 1.85% for LIBOR loans and 0.50% to 0.85% for base rate loans. The unsecured credit facility also provides for borrowing capacity of up to $300 million in various foreign currencies.

Under the unsecured credit facility, the capacity may be increased from the current capacity of $1.7 billion to $2.2 billion subject to certain conditions set forth in the credit agreement, including the consent of the administrative agent and obtaining necessary commitments. We are also required to pay a commitment fee to the lenders assessed on the unused portion of the unsecured revolving credit facility. At our election, we can prepay amounts outstanding under the unsecured credit facility, in whole or in part, without penalty or premium.

Our ability to borrow under the unsecured credit facility is subject to ongoing compliance with a number of customary affirmative and negative covenants, including limitations on liens, mergers, consolidations, investments, distributions, asset sales and affiliate transactions, as well as the following financial covenants: (i) the Operating Partnership's and its subsidiaries' consolidated total unsecured debt plus any capitalized lease obligations with respect to the unencumbered asset pool properties may not exceed 60% of the unencumbered asset pool value (or 65% of the unencumbered asset pool value for up to four consecutive fiscal quarters immediately following a material acquisition for which the Operating Partnership has provided written notice to the Agent, provided the four fiscal quarter period includes the quarter in which the material acquisition was consummated); (ii) the unencumbered asset pool debt yield cannot be less than 10.5%; (iii) QTS must maintain a minimum fixed charge coverage ratio (defined as the ratio of consolidated EBITDA, subject to certain adjustments, to consolidated fixed charges) for the prior two most recently-ended calendar quarters of 1.50 to 1.00; (iv) QTS must maintain a maximum debt to gross asset value (as defined in the amended and restated credit agreement) ratio of 60% (or 65% for the four consecutive fiscal quarters immediately following a material acquisition for which the Operating Partnership has provided written notice to the Agent, provided the four fiscal quarter period includes the quarter in which the material acquisition was consummated); and (v) QTS must maintain tangible net worth (as defined in the amended and restated credit agreement) which cannot be less than the sum of $1.7 billion plus 75% of the net proceeds from any equity offerings subsequent to June 30, 2019.

The availability under the revolving credit facility is the lesser of (i) $1.0 billion, (ii) 60% of the unencumbered asset pool capitalized value (or 65% of the unencumbered asset pool capitalized value for the four consecutive fiscal quarters immediately following a material acquisition for which the Operating Partnership has provided written notice to the Agent, provided the four fiscal quarter period includes the quarter in which the material acquisition was consummated) and (iii) the amount resulting in an unencumbered asset pool debt yield of 10.5%. In the case of clauses (ii) and (iii) of the preceding

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sentence, the amount available under the unsecured revolving credit facility is adjusted to take into account any other unsecured debt and certain capitalized leases. A material acquisition is an acquisition of properties or assets with a gross purchase price equal to or in excess of 15% of the Operating Partnership’s gross asset value (as defined in the amended and restated credit agreement) as of the end of the most recently ended quarter for which financial statements are publicly available. The availability of funds under our unsecured credit facility depends on compliance with our covenants. The current availability under the unsecured revolving credit facility was $607.7 million as of December 31, 2020.

As of December 31, 2020, we had outstanding $1.1 billion of indebtedness under the unsecured credit facility, consisting of $392.3 million of outstanding borrowings under the unsecured revolving credit facility and $700.0 million aggregate outstanding under Term Loans A, B and C, exclusive of net debt issuance costs of $7.1 million. In connection with the unsecured credit facility, as of December 31, 2020, we had letters of credit outstanding aggregating to $3.5 million. As of December 31, 2020, the weighted average interest rate for amounts outstanding under the unsecured credit facility, including the effects of interest rate swaps, was 2.65%.

As of December 31, 2020, we had interest rate swap agreements in place with an aggregate notional amount of $700 million. The forward swap agreements effectively fix the interest rate on $700 million of term loan borrowings, $225 million of swaps allocated to Term Loan A, $225 million allocated to Term Loan B and $250 million allocated to Term Loan C, through the current maturity dates of the respective term loans.

Term Loan D. In October 2020, through our Operating Partnership, we entered into a $250 million term loan (“Term Loan D”) that matures on January 15, 2026. Consistent with our existing term loans, amounts outstanding under Term Loan D bear interest at a variable rate equal to, at our election, LIBOR or a base rate, plus a spread that will vary depending upon our leverage ratio. The spread ranges from 1.20% to 1.80% for LIBOR loans and 0.20% to 0.80% for base rate loans. In addition, Term Loan D contains a LIBOR floor of 0.25%. When combined with our current $1.7 billion unsecured credit facility, Term Loan D increases QTS' aggregate unsecured credit facility capacity to $1.95 billion. Term Loan D also provides for a $250 million accordion feature to increase borrowing capacity up to $500 million, subject to obtaining necessary commitments. Term Loan D contains various debt covenants with which we are subject to, and these debt covenants are substantially the same as the debt covenants associated with the unsecured credit facility.

4.750% Senior Notes. In November 2017, the Operating Partnership and QTS Finance Corporation, a subsidiary of the Operating Partnership formed solely for the purpose of facilitating the offering of the previously outstanding 5.875% Senior Notes due 2022 (collectively, the “Issuers”), issued $400 million aggregate principal amount of 4.750% Senior Notes due 2025 (the “4.750% Senior Notes”) in a private offering. The 4.750% Senior Notes had an interest rate of 4.750% per annum, were issued at a price equal to 100% of their face value and were scheduled to mature on November 15, 2025. During the fourth quarter of 2020 we used availability on our unsecured revolving credit facility, which increased due to revolver repayments following the issuance of the 3.875% Senior Notes and closing of Term Loan D, to fund the redemption of, and satisfy and discharge the indenture pursuant to which the Issuers issued, all of their outstanding 4.750% Senior Notes. We incurred expenses in the fourth quarter of 2020 associated with the redemption of the 4.750% Senior Notes of $18.0 million, including early redemption fees of $-14.3 million as well as noncash charges of $-3.7 million related to the write off of existing deferred financing costs.

3.875% Senior Notes. In October 2020, the Issuers issued $500 million aggregate principal amount of senior notes due October 1, 2028 (the “3.875% Senior Notes”) in a private offering. The 3.875% Senior Notes have an interest rate of 3.875% per annum and were issued at a price equal to 100% of their face value. The net proceeds from the offering were used to repay a portion of the amount outstanding under our unsecured revolving credit facility, and subsequently with availability under the unsecured revolving credit facility we funded the redemption of, and satisfied and discharged the indenture pursuant to which the Issuers issued, all of their outstanding 4.750% Senior Notes described above. As of December 31, 2020, the net debt issuance costs associated with the 3.875% Senior Notes were $7.5 million.

The Issuers may redeem the 3.875% Senior Notes prior to maturity at their option at the prices set forth in the indenture dated as of October 7, 2020, among QTS, the Issuers, the guarantors named therein, and Deutsche Bank Trust Company Americas, as trustee (the “Indenture”). The Indenture also includes customary negative covenants, including limitations on asset sales, investments, distributions, incurrence of additional debt and affiliate transactions.

The 3.875% Senior Notes are unconditionally guaranteed, jointly and severally, on a senior unsecured basis by all of the Operating Partnership’s existing subsidiaries (other than certain foreign subsidiaries and receivables entities) and future subsidiaries that guarantee any indebtedness of QTS Realty Trust, Inc., the Issuers or any other subsidiary guarantor, other

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than QTS Finance Corporation, the co-issuer of the 3.875% Senior Notes. QTS Realty Trust, Inc. does not guarantee the 3.875% Senior Notes and will not be required to guarantee the 3.875% Senior Notes except under certain circumstances.

Lenexa Mortgage. On March 8, 2017, we entered into a $1.9 million mortgage loan secured by our Lenexa facility. This mortgage had a fixed rate of 4.1%, with periodic principal payments due monthly and a balloon payment of $1.6 million scheduled for May 2022. During the fourth quarter of 2020, we paid off the outstanding loan balance of $1.7 million associated with the Lenexa mortgage.

Contingencies

We are subject to various routine legal proceedings and other matters in the ordinary course of business. While resolution of these matters cannot be predicted with certainty, management believes, based upon information currently available, that the final outcome of these proceedings will not have a material adverse effect on our financial condition, liquidity or results of operations.

Contractual Obligations

The following table summarizes our contractual obligations as of December 31, 2020, including the future non-cancellable minimum rental payments required under operating leases and the maturities and scheduled principal repayments of indebtedness and other agreements (in thousands):

Obligations (1)	2021		2022		2023		2024		2025		Thereafter		Total
Operating Leases	$	9,818	$	10,266	$	10,393	$	8,317	$	8,036	$	40,872	$	87,702
Finance Leases	2,693		2,937		3,205		3,489		3,790		25,604		41,718
Future Principal Payments of Indebtedness (2)	—		—		392,337		225,000		225,000		1,000,000		1,842,337
Total (3)	$	12,511	$	13,203	$	405,935	$	236,806	$	236,826	$	1,066,476	$	1,971,757

(1)Contractual obligations do not include our energy power purchase agreements as QTS has the ability to sell unused capacity back to the utility provider.

(2)Does not include the related debt issuance costs on the 3.875% Senior Notes nor the related debt issuance costs on the term loans reflected at December 31, 2020. Also does not include letters of credit outstanding aggregating to $3.5 million as of December 31, 2020 under our unsecured credit facility.

(3)Total obligations amount does not include contractual interest that we are required to pay on our long-term debt obligations. Contractual interest payments on our credit facilities, mortgages, finance leases and other financing arrangements through the scheduled maturity date, assuming no prepayment of debt and inclusive of the effects of interest rate swaps, are shown below. Interest payments were estimated based on the principal amount of debt outstanding and the applicable interest rate as of December 31, 2020 (in thousands):

2021		2022		2023		2024		2025		Thereafter		Total
$	55,196	$	57,193	$	57,022	$	42,142	$	32,156	$	61,871	$	305,580

Off-Balance Sheet Arrangements

On February 22, 2019, we entered into an agreement with Alinda, an infrastructure investment firm, with respect to our Manassas (DC-1) data center, as described above under “Factors That May Influence Future Results of Operations and Cash Flows.” As of December 31, 2020, our pro rata share of mortgage debt of the unconsolidated entity, excluding deferred financing costs, was approximately $45.7 million, all of which is subject to forward interest rate swap agreements. See Item 7A, Quantitative and Qualitative Disclosures About Market Risk, for information on the Company’s interest rate swaps.

The Company has various forward equity contracts, described above, that provide for the ability to raise capital and issue common stock at varying prices and future dates. As of December 31, 2020, the Company had access to approximately $587.6 million of net proceeds through forward stock sales (subject to further adjustment as described above under the heading “Equity Capital”). The Company views forward equity sales as an important capital raising tool that it expects to continue to strategically and selectively use, subject to market conditions and overall availability under the Current ATM Program. See the section above titled “Equity Capital” for additional information related to our forward stock sales.

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Cash Flows

	Year Ended December 31,
(in thousands)	2020		2019		2018
Cash flow provided by (used for):
Operating activities	$	299,715	$	199,490	$	191,273
Investing activities	(817,745)		(387,260)		(598,553)
Financing activities	521,168		191,396		410,796

Year Ended December 31, 2020 Compared to Year Ended December 31, 2019

Cash flow provided by operating activities was $299.7 million for the year ended December 31, 2020, compared to $199.5 million for the year ended December 31, 2019. The increase in cash flow provided by operating activities of $100.2 million was primarily due to an increase in cash operating income of $50.4 million as well as an increase in cash flow associated with net changes in working capital of $49.9 million primarily relating to an increase in deferred income.

Cash flow used for investing activities increased by $430.5 million to $817.7 million for the year ended December 31, 2020, compared to $387.3 million for the year ended December 31, 2019. The increase was due primarily to an increase in additions to property and equipment of $412.7 million related to the expansion and build out of our portfolio. Also contributing to the increase in cash used for investing activities was proceeds of $52.7 million received from our contribution of assets to an unconsolidated entity during 2019. Partially offsetting these increases was a decrease in cash paid for acquisitions of $32.5 million primarily related to our acquisition of the Netherlands facilities during 2019.

Cash flow provided by financing activities was $521.2 million for the year ended December 31, 2020, compared to $191.4 million for the year ended December 31, 2019. The increase was primarily due to our issuance of Term Loan D during the year ended December 31, 2020 which contributed $250.0 million, the replacement of our 4.75% Senior Notes with our 3.875% Senior Notes contributing a net increase of $100.0 million, higher net equity proceeds received of $17.1 million, partially offset by higher payments of cash dividends to common stockholders of $17.2 million and $14.3 million of early extinguishment fees associated with our payoff of the 4.75% Senior Notes during the year ended December 31, 2020.

Year Ended December 31, 2019 Compared to Year Ended December 31, 2018

For a discussion comparing the Company’s liquidity and capital resources for the year ended December 31, 2019 compared to the year ended December 31, 2018 refer to subsection “Liquidity and Capital Resources - Year Ended December 31, 2019 Compared to Year Ended December 31, 2018” of Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2019, which is incorporated by reference herein. This discussion should be read in conjunction with Item 8. Financial Statements and Supplementary Data.

Critical Accounting Policies and Estimates

Our discussion and analysis of our financial condition and results of operations is based upon our financial statements which have been prepared in accordance with GAAP. The preparation of these financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results may differ from these estimates. We have provided a summary of our significant accounting policies in Note 2 of our audited financial statements included elsewhere in this Form 10-K. We describe below accounting policies that require material subjective or complex judgments and that have the most significant impact on our financial condition and results of operations.

Acquisitions and Sales of Real Estate. When accounting for business combinations, asset acquisitions and real estate sales, we are required to make subjective assessments which involve significant judgment to allocate the purchase price paid to the acquired tangible assets and intangible assets and liabilities for asset acquisitions and business combinations and to determine the amount of non-monetary consideration received for sales of real estate.

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In order to determine fair values associated with assets we acquire or non-monetary consideration received in sales of real estate assets, we utilize estimation models to derive the fair value of identifiable assets and any equity consideration received. These estimation models consist of common real estate valuation models that include Level 3 inputs such as market rents, discount rates, expected occupancy and estimates of additional capital expenditures, and capitalization rates derived from market data.

Unconsolidated Entities. We account for our 50% equity investment in our unconsolidated entity arrangement using the equity method of accounting. We determined that while the entity is a variable interest entity (“VIE”), we were not the primary beneficiary, thus the equity method of accounting was appropriate for transactions between QTS and the entity.

We determine whether an entity is a VIE and, if so, whether it should be consolidated by utilizing judgments and estimates that are inherently subjective. The determination of whether an entity in which we hold a direct or indirect variable interest is a VIE is based on several factors, including whether the entity’s total equity investment at risk upon inception is sufficient to finance the entity’s activities without additional subordinated financial support. We make judgments regarding the sufficiency of the equity at risk based first on a qualitative analysis, and then a quantitative analysis, if necessary.

We analyze any investments in VIEs to determine if we are the primary beneficiary. In evaluating whether we are the primary beneficiary, we evaluate our direct and indirect economic interests in the entity. Determining which reporting entity, if any, is the primary beneficiary of a VIE is primarily a qualitative approach focused on identifying which reporting entity has both (1) the power to direct the activities of a VIE that most significantly impact such entity’s economic performance and (2) the obligation to absorb losses or the right to receive benefits from such entity that could potentially be significant to such entity. Performance of that analysis requires the exercise of judgment.

We consider a variety of factors in identifying the entity that holds the power to direct matters that most significantly impact the VIE’s economic performance including, but not limited to, the ability to direct financing, leasing, construction and other operating decisions and activities. In addition, we consider the rights of other investors to participate in those decisions, to replace the manager and to sell or liquidate the entity.

Capitalization of Costs. We capitalize certain development costs, including internal costs, incurred in connection with development of real estate assets. The capitalization of costs during the construction period (including interest and related loan fees, property taxes, internal payroll costs, and other direct and indirect project costs) begins when redevelopment efforts commence and ends when the asset is ready for its intended use.

Impairment of Long-Lived Assets and Goodwill. Whenever events or changes in circumstances indicate that the carrying amount of the asset group(s) may not be recoverable, we assess whether there has been impairment in the value of long-lived assets used in operations or in development and intangible assets subject to amortization. Recoverability of assets to be held and used is generally measured by comparison of the carrying amount of the asset group to the future net cash flows, undiscounted and without interest, expected to be generated by the asset group over its remaining useful life. If the net carrying value of the asset group exceeds the value of the undiscounted cash flows, the fair value of the asset is assessed and may be considered impaired. An impairment loss is recognized based on the excess of the carrying amount of the impaired asset over its fair value.

The fair value of goodwill is the consideration transferred which is not allocable to identifiable intangible and tangible assets. Goodwill is subject to at least an annual assessment for impairment. In connection with the goodwill impairment evaluation that the Company performed on October 1, 2020, the Company determined qualitatively that it is not more likely than not that the fair value of the Company’s one reporting unit was less than the carrying amount, thus it did not perform a quantitative analysis.

Rental Revenue. We, as a lessor, have retained substantially all the risks and benefits of ownership and have concluded our leases qualify as operating leases. ASC Topic 842 allows lessors to combine nonlease components with the related lease components if both the timing and pattern of transfer are the same for the nonlease component(s) and related lease component, and the lease component would be classified as an operating lease. The single combined component is accounted for under ASC Topic 842 if the lease component is the predominant component and is accounted for under ASC Topic 606 if the nonlease components are the predominant components. We combine our lease and nonlease components that meet the defined criteria and account for the combined lease component under ASC Topic 842. For lease agreements that provide for scheduled rent increases, rental income is recognized on a straight-line basis over the non-cancellable term of the leases,

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which commences when control of the space has been provided to the customer. Rental revenue also includes amortization of set-up fees which are paid in advance by the lessee and amortized over the term of the respective lease, as discussed above.

Inflation

A significant portion of our long-term leases—leases with a term greater than three years—contain rent increases and reimbursement for certain operating costs. As a result, we believe that we are largely insulated from the effects of inflation over periods greater than three years. Leases with terms of three years or less will be replaced or renegotiated within three years and should adjust to reflect changed conditions, also mitigating the effects of inflation. Moreover, to the extent that there are material increases in utility costs, we generally reserve the right to renegotiate the rate. However, any increases in the costs of redevelopment of our properties will generally result in a higher cost of the property, which will result in increased cash requirements to redevelop our properties and increased depreciation and amortization expense in future periods, and, in some circumstances, we may not be able to directly pass along the increase in these redevelopment costs to our customers in the form of higher rental rates.

Distribution Policy

To satisfy the requirements to qualify as a REIT, and to avoid paying tax on our income, QTS intends to continue to make regular quarterly distributions of all, or substantially all, of its REIT taxable income (excluding net capital gains) to its stockholders.

All distributions will be made at the discretion of our board of directors and will depend on our historical and projected results of operations, liquidity and financial condition, QTS’ REIT qualification, our debt service requirements, operating expenses and capital expenditures, prohibitions and other restrictions under financing arrangements and applicable law and other factors as our board of directors may deem relevant from time to time. We anticipate that our estimated cash available for distribution will exceed the annual distribution requirements applicable to REITs and the amount necessary to avoid the payment of tax on undistributed income. However, under some circumstances, we may be required to make distributions in excess of cash available for distribution in order to meet these distribution requirements and we may need to borrow funds to make certain distributions. If we borrow to fund distributions, our future interest costs would increase, thereby reducing our earnings and cash available for distribution from what they otherwise would have been.

The Operating Partnership also includes certain partners that are subject to a taxable income allocation, however, not entitled to receive recurring distributions. The partnership agreement does stipulate however, to the extent that taxable income is allocated to these partners that the partnership will make a distribution to these partners equal to the lesser of the actual per unit distributions made to Class A partners or an estimated amount to cover federal, state and local taxes on the allocated taxable income.

ITEM 7A.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our future income, cash flows and fair values relevant to financial instruments are dependent upon prevailing market interest rates. Market risk refers to the risk of loss from adverse changes in market prices and interest rates. The primary market risk to which we believe we are exposed is interest rate risk. Many factors, including governmental monetary and tax policies, domestic and international economic and political considerations and other factors that are beyond our control, contribute to interest rate risk.

As of December 31, 2020, we had interest rate swap agreements in place with an aggregate notional amount of $700 million. The forward swap agreements effectively fix the interest rate on $700 million of term loan borrowings, $225 million of swaps allocated to Term Loan A, $225 million allocated to Term Loan B and $250 million allocated to Term Loan C, through the current maturity dates of the respective term loans.

As of December 31, 2020, after consideration of interest rates swaps in effect, we had outstanding $642.3 million of consolidated indebtedness that bore interest at variable rates, which was comprised of the revolving portion of the unsecured credit facility as well as Term Loan D.

We monitor our market risk exposures using a sensitivity analysis. Our sensitivity analysis estimates the exposure to market risk sensitive instruments assuming a hypothetical 1% change in year-end interest rates. A 1% increase in interest rates would increase the interest expense on the $642.3 million of variable indebtedness outstanding as of December 31, 2020 by

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approximately $6.2 million annually. Conversely, a decrease in the LIBOR rate to 0.00% would decrease the interest expense on this $642.3 million of variable indebtedness outstanding by approximately $0.6 million annually based on the one-month LIBOR rate of approximately 0.14% as of December 31, 2020.

In July 2017, the Financial Conduct Authority (“FCA”) that regulates LIBOR announced it intends to stop compelling banks to submit rates for the calculation of LIBOR after 2021. As a result, the Federal Reserve Board and the Federal Reserve Bank of New York organized the Alternative Reference Rates Committee (“ARRC”) which identified the Secured Overnight Financing Rate (“SOFR”) as its preferred alternative to USD-LIBOR in derivatives and other financial contracts. The Company has contracts consisting of the unsecured credit facility, Term Loan D and the forward interest rate swap agreements, documented above, that are indexed to LIBOR and is monitoring and evaluating the related risks, which may include higher interest on loans and amounts received and paid on derivative instruments. These risks arise in connection with transitioning contracts to a new alternative rate, including any resulting value transfer that may occur. While we expect LIBOR to be available in substantially its current form until the end of 2021, it is possible that LIBOR will become unavailable prior to that point. This could result, for example, if sufficient banks decline to make submissions to the LIBOR administrator. In that case, the risks associated with the transition to an alternative reference rate will be accelerated and magnified.

The above analyses do not consider the effect of any change in overall economic activity that could impact interest rates or expected changes associated with future indebtedness. Further, in the event of a change of that magnitude, we may take actions to further mitigate our exposure to the change. However, due to the uncertainty of the specific actions that would be taken and their possible effects, these analyses assume no changes in our financial structure.

ITEM 8.    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

See Index to the Financial Statements on page F-1.

ITEM 9.    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A.    CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

Based on an evaluation of disclosure controls and procedures for the period ended December 31, 2020, conducted by the Company’s management, with the participation of the Chief Executive Officer and Chief Financial Officer, the Chief Executive Officer and Chief Financial Officer concluded that QTS’ disclosure controls and procedures are effective to ensure that information required to be disclosed by QTS in reports that it files or submits under the Securities Exchange Act of 1934 is accumulated and communicated to the Company’s management (including the Chief Executive Officer and Chief Financial Officer) to allow timely decisions regarding required disclosure, and is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms.

Management’s Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) of the Exchange Act). Our internal control system was designed to provide reasonable assurance to management and our board of directors regarding the preparation and fair presentation of published financial statements in accordance with generally accepted accounting principles.

As of December 31, 2020, management assessed the effectiveness of QTS Realty Trust, Inc.'s internal control over financial reporting based on the criteria for effective internal control over financial reporting established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

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Based on this assessment, management has concluded that, as of December 31, 2020, QTS Realty Trust, Inc.’s internal control over financial reporting was effective to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Ernst & Young LLP, an independent registered public accounting firm, has audited QTS Realty Trust, Inc.’s consolidated financial statements included in this Annual Report on Form 10-K and, as part of its audit, has issued its report, included herein on page F-3, on the effectiveness of QTS Realty Trust, Inc.’s internal control over financial reporting.

Changes in Internal Control over Financial Reporting

There were no changes in QTS’ internal control over financial reporting during the three-month period ended December 31, 2020 that have materially affected, or are reasonably likely to materially affect, QTS’ internal control over financial reporting.

ITEM 9B.    OTHER INFORMATION

None.

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PART III

ITEM 10.    DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The information regarding directors is incorporated herein by reference from the section entitled “Proposal One: Election of Directors—Nominees for Election as Directors” in the Company’s definitive Proxy Statement (“2021 Proxy Statement”) to be filed pursuant to Regulation 14A of the Securities Exchange Act of 1934, as amended, for the Company’s Annual Meeting of Stockholders to be held on May 4, 2021. The 2021 Proxy Statement will be filed within 120 days after the end of the Company’s fiscal year ended December 31, 2020.

The information regarding executive officers is incorporated herein by reference from the section entitled “Executive Officers” in the Company’s 2021 Proxy Statement.

The information regarding the Company’s code of business conduct and ethics is incorporated herein by reference from the sections entitled “Corporate Governance and Board Matters—Code of Business Conduct and Ethics” in the Company’s 2021 Proxy Statement.

The information regarding the Company’s audit committee, its members and the audit committee financial experts is incorporated by reference herein from the section entitled “Corporate Governance and Board Matters—Committees of the Board—Audit Committee” in the Company’s 2021 Proxy Statement.

ITEM 11.    EXECUTIVE COMPENSATION

The information included under the following captions in the Company’s 2021 Proxy Statement is incorporated herein by reference: “Compensation Discussion and Analysis,” “Compensation Committee Report,” “Compensation of Executive Officers,” “Corporate Governance and Board Matters—Compensation of Directors” and “Corporate Governance and Board Matters—Compensation Committee Interlocks and Insider Participation.”

ITEM 12.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Information regarding security ownership of certain beneficial owners and management is incorporated herein by reference from the section entitled “Security Ownership of Certain Beneficial Owners and Management” and “Compensation of Executive Officers—Equity Compensation Plan Information” in the Company’s 2021 Proxy Statement.

ITEM 13.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The information regarding transactions with related persons and director independence is incorporated herein by reference from the sections entitled “Certain Relationships and Related Party Transactions” and “Corporate Governance and Board Matters—Corporate Governance Profile” in the Company’s 2021 Proxy Statement.

ITEM 14.    PRINCIPAL ACCOUNTING FEES AND SERVICES

The information regarding principal auditor fees and services and the audit committee’s pre-approval policies are incorporated herein by reference from the sections entitled “Proposal Four: Ratification of the Appointment of Independent Registered Public Accounting Firm—Principal Accountant Fees and Services” and “Proposal Four: Ratification of the Appointment of Independent Registered Public Accounting Firm—Pre-Approval Policies and Procedures” in the Company’s 2021 Proxy Statement.

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PART IV

ITEM 15.    EXHIBITS, FINANCIAL STATEMENT SCHEDULES

The following is a list of documents filed as a part of this report:

(1)Financial Statements

Included herein at pages F-1 through F-45.

(2)Financial Statement Schedules

The following financial statement schedules are included herein at pages F-46 through F-48:

Schedule II—Valuation and Qualifying Accounts

Schedule III—Real Estate Investments

All other schedules for which provision is made in Regulation S-X are either not required to be included herein under the related instructions, are inapplicable or the related information is included in the footnotes to the applicable financial statement and, therefore, have been omitted.

(3)Exhibits

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INDEX TO EXHIBITS

Exhibit Number	Exhibit Description
3.1	Articles of Amendment and Restatement of QTS Realty Trust, Inc., incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed with the SEC on October 17, 2013 (Commission File No. 001-36109)
3.2	Second Amended and Restated Bylaws of QTS Realty Trust, Inc., as amended, incorporated by reference to Exhibit 3.2 to the Quarterly Report on Form 10-Q filed with the SEC on August 3, 2020 (Commission File No. 001-36109)
3.3	Articles Supplementary designating QTS Realty Trust, Inc.’s 7.125% Series A Cumulative Redeemable Perpetual Preferred Stock, liquidation preference $25.00 per share, $0.01 par value per share, incorporated by reference to Exhibit 3.2 to the Company’s Form 8-A filed on March 15, 2018 (Commission File No. 001-36109)
3.4	Articles Supplementary designating QTS Realty Trust, Inc.’s 6.50% Series B Cumulative Convertible Perpetual Preferred Stock, liquidation preference $100.00 per share, $0.01 par value per share, incorporated by reference to Exhibit 3.3 to the Company’s Form 8-A filed on June 25, 2018 (Commission File No. 001-36109)
3.5	Articles Supplementary opting out of the Maryland Unsolicited Takeovers Act, incorporated by reference to Exhibit 3.1 to the Company’s Form 8-K filed on September 25, 2018 (Commission File No. 001-36109)
3.6	Articles of Amendment to the Articles of Amendment and Restatement of QTS Realty Trust, Inc., incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed with the SEC on May 10, 2019 (Commission File No. 002-36109)
4.1	Form of Specimen Class A Common Stock Certificate, incorporated by reference to Exhibit 4.1 to the Registration Statement on Form S-11/A filed with the SEC on September 26, 2013 (Commission File No. 333-190675)
4.2	Indenture, dated October 7, 2020, by and among QualityTech, LP, QTS Finance Corporation, QTS Realty Trust, Inc., certain subsidiaries of QualityTech, LP and Deutsche Bank Trust Company Americas, incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed with the SEC on October 7, 2020 (Commission File No.001-36109)
4.3	Form of Global Note representing the Notes (included as Exhibit A to Exhibit 4.2 hereof).
4.4	Form of stock certificate evidencing the 7.125% Series A Cumulative Redeemable Perpetual Preferred Stock, liquidation preference $25.00 per share, $0.01 par value per share, incorporated by reference to Exhibit 4.1 to the Company’s Form 8-A filed on March 15, 2018 (Commission File No. 001-36109)
4.5	Form of stock certificate evidencing the 6.50% Series B Cumulative Convertible Perpetual Preferred Stock, liquidation preference $100.00 per share, $0.01 par value per share, incorporated by reference to Exhibit 4.1 to the Company’s Form 8-A filed on June 25, 2018 (Commission File No. 001-36109)
4.6	Description of Securities Registered Under Section 12 of the Securities Exchange Act of 1934 +
10.1	Amended and Restated Certificate of Limited Partnership of QualityTech, LP, incorporated by reference to Exhibit 3.7 to the Company’s Annual Report on Form 10-K filed on February 28, 2020 (Commission File No. 001-36109)

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10.2	Fifth Amended and Restated Agreement of Limited Partnership of QualityTech, LP dated October 15, 2013 incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on October 17, 2013 (Commission File No. 001-36109)
10.3	Amendment No. 1 to the Fifth Amended and Restated Agreement of Limited Partnership of QualityTech, LP incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on March 20, 2018 (Commission File No.001-36109)
10.4	Amendment No. 2 to Fifth Amended and Restated Agreement of Limited Partnership of QualityTech, LP, dated as of June 25 2018, by QTS Realty Trust, Inc., incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed on June 27, 2018 (Commission File No. 001-36109)
10.5	Amendment No. 3 to the Fifth Amended and Restated Agreement of Limited Partnership of QualityTech, LP, incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on October 16, 2018 (Commission File No.001-36109)
10.6	Indemnification Agreement dated as of September 25, 2013 by and between QTS Realty Trust, Inc. and Chad L. Williams, incorporated by reference to Exhibit 10.13 to the Registration Statement on Form S-11/A filed with the SEC on September 26, 2013 (Commission File No. 001-36109) †
10.7	Indemnification Agreement dated as of September 25, 2013 by and between QTS Realty Trust, Inc. and Jeffrey H. Berson, incorporated by reference to Exhibit 10.17 to the Registration Statement on Form S-11/A filed with the SEC on September 26, 2013 (Commission File No. 333-190675) †
10.8	Indemnification Agreement dated as of September 25, 2013 by and between QTS Realty Trust, Inc. and Shirley E. Goza, incorporated by reference to Exhibit 10.18 to the Registration Statement on Form S-11/A filed with the SEC on September 26, 2013 (Commission File No. 333-190675) †
10.9	Indemnification Agreement dated as of September 25, 2013 by and between QTS Realty Trust, Inc. and John W. Barter, incorporated by reference to Exhibit 10.19 to the Registration Statement on Form S-11/A filed with the SEC on September 26, 2013 (Commission File No. 333-190675) †
10.10	Indemnification Agreement dated as of September 25, 2013 by and between QTS Realty Trust, Inc. and William O. Grabe, incorporated by reference to Exhibit 10.20 to the Registration Statement on Form S-11/A filed with the SEC on September 26, 2013 (Commission File No. 333-190675) †
10.11	Indemnification Agreement dated as of September 25, 2013 by and between QTS Realty Trust, Inc. and Catherine R. Kinney, incorporated by reference to Exhibit 10.21 to the Registration Statement on Form S-11/A filed with the SEC on September 26, 2013 (Commission File No. 333-190675) †
10.12	Indemnification Agreement dated as of September 25, 2013 by and between QTS Realty Trust, Inc. and Peter A. Marino, incorporated by reference to Exhibit 10.22 to the Registration Statement on Form S-11/A filed with the SEC on September 26, 2013 (Commission File No. 333-190675) †
10.13	Indemnification Agreement dated as of September 25, 2013 by and between QTS Realty Trust, Inc. and Scott D. Miller, incorporated by reference to Exhibit 10.23 to the Registration Statement on Form S-11/A filed with the SEC on September 26, 2013 (Commission File No. 333-190675) †
10.14	Indemnification Agreement dated as of September 25, 2013 by and between QTS Realty Trust, Inc. and Philip P. Trahanas, incorporated by reference to Exhibit 10.24 to the Registration Statement on Form S-11/A filed with the SEC on September 26, 2013 (Commission File No. 333-190675) †
10.15	Indemnification Agreement dated as of September 25, 2013 by and between QTS Realty Trust, Inc. and Stephen E. Westhead, incorporated by reference to Exhibit 10.25 to the Registration Statement on Form S-11/A filed with the SEC on September 26, 2013 (Commission File No. 333-190675) †

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10.16	Indemnification Agreement dated as of March 21, 2016 by and between QTS Realty Trust, Inc. and Jon Greaves, incorporated by reference to Exhibit 10.30 to the Form 10-K for the year ended December 31, 2016 filed with the SEC on March 1, 2017 (Commission File No. 001-36109) †
10.17	Indemnification Agreement dated as of August 31, 2016 by and between QTS Realty Trust, Inc. and Steven Bloom, incorporated by reference to Exhibit 10.31 to the Form 10-K for the year ended December 31, 2016 filed with the SEC on March 1, 2017 (Commission File No. 001-36109) †
10.18	Indemnification Agreement, dated as of February 20, 2018, by and between QTS Realty Trust, Inc. and David Robey, incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on February 20, 2018 (Commission File No. 001-36109)†
10.19	Indemnification Agreement, dated as of September 24, 2018, by and among QTS Realty Trust, Inc. and Mazen Al-Rawashdeh, incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed on September 25, 2018 (Commission File No. 001-36109)†
10.20	Indemnification Agreement, dated as of March 13, 2019, by and between QTS Realty Trust, Inc. and Wayne Rehberger, incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on March 13, 2019 (Commission File No. 001-36109)†
10.21	Indemnification Agreement, dated as of December 17, 2020, by and between QTS Realty Trust, Inc. and Joan A. Dempsey, incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on December 17, 2020 (Commission File No. 001-36109)†
10.22	Indemnification Agreement, dated as of October 1, 2020, by and between QTS Realty Trust, Inc. and Matt N. Thomson†+
10.23	Registration Rights Agreement dated October 15, 2013 by and among QTS Realty Trust, Inc. and the parties listed on Schedule I thereto, incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed with the SEC on October 17, 2013 (Commission File No. 001-36109)
10.24	Amended and Restated Registration Rights Agreement dated October 15, 2013 by and among QTS Realty Trust, Inc., QualityTech GP, LLC, Chad L. Williams and certain entities owned or controlled by Chad L. Williams, incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K filed with the SEC on October 17, 2013 (Commission File No. 001-36109)
10.25	Tax Protection Agreement dated as of October 15, 2013 by and among QTS Realty Trust, Inc., QualityTech, LP and the signatories party thereto, incorporated by reference to Exhibit 10.5 to the Current Report on Form 8-K filed with the SEC on October 17, 2013 (Commission File No. 001-36109)
10.26	QualityTech, LP 2010 Equity Incentive Plan, incorporated by reference to Exhibit 10.20 to the Registration Statement on Form S-11/A filed with the SEC on August 16, 2013 (Commission File No. 333-190675) †
10.27	Amendment No. 1 to QualityTech, LP 2010 Equity Incentive Plan, incorporated by reference to Exhibit 10.21 to the Registration Statement on Form S-11/A filed with the SEC on August 16, 2013 (Commission File No. 333-190675) †
10.28	Form of Class O Unit Award Agreement (Time-Based Vesting) under QualityTech, LP 2010 Equity Incentive Plan, incorporated by reference to Exhibit 10.22 to the Registration Statement on Form S-11/A filed with the SEC on August 16, 2013 (Commission File No. 333-190675) †
10.29	Form of Class O Unit Award Agreement (Performance-Based Vesting) under QualityTech, LP 2010 Equity Incentive Plan, incorporated by reference to Exhibit 10.23 to the Registration Statement on Form S-11/A filed with the SEC on August 16, 2013 (Commission File No. 333-190675) †

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10.30	Form of Class O Unit Award Agreement under QualityTech, LP 2010 Equity Incentive Plan, incorporated by reference to Exhibit 10.24 to the Registration Statement on Form S-11/A filed with the SEC on August 16, 2013 (Commission File No. 333-190675) †
10.31	QTS Realty Trust, Inc. 2013 Equity Incentive Plan, incorporated by reference to Exhibit 10.39 to the Registration Statement on Form S-11/A filed with the SEC on September 26, 2013 (Commission File No. 333-190675) †
10.32	Amendment No. 1 to QTS Realty Trust, Inc. 2013 Equity Incentive Plan, incorporated by reference to Exhibit 10.40 to the Annual Report on Form 10-K for the year ended December 31, 2014 filed with the SEC on February 23, 2015 (Commission File No. 001-36109) †
10.33	Amendment No. 2 to QTS Realty Trust, Inc. 2013 Equity Incentive Plan, incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on May 6, 2015 (Commission File No. 001-36109) †
10.34	Amendment No. 3 to QTS Realty Trust, Inc. 2013 Equity Incentive Plan, incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on May 9, 2019 (Commission File No. 001-36109)†
10.35	Form of Restricted Shares Agreement under QTS Realty Trust, Inc. 2013 Equity Incentive Plan, incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on November 6, 2013 (Commission File No. 001-36109) †
10.36	Form of Non-Qualified Option Agreement under QTS Realty Trust, Inc. 2013 Equity Incentive Plan, incorporated by reference to Exhibit 10.29 to the Registration Statement on Form S-11/A filed with the SEC on August 16, 2013 (Commission File No. 333-190675) †
10.37	Form of Performance Share Unit Agreement (Performance-Based [Non-Shareholder Return] Units) under QTS Realty Trust, Inc. 2013 Equity Incentive Plan. †
10.38	Form of Performance Share Unit Agreement (Performance-Based [Non-Shareholder Return] Units) for Grants to Chief Executive Officer under QTS Realty Trust, Inc. 2013 Equity Incentive Plan. †
10.39	Form of Performance Share Unit Agreement (Performance-Based [Shareholder Return] Units) under QTS Realty Trust, Inc. 2013 Equity Incentive Plan. )†
10.40	Form of Performance Share Unit Agreement (Performance-Based [Shareholder Return] Units) for Grants to Chief Executive Officer under QTS Realty Trust, Inc. 2013 Equity Incentive Plan. †
10.41	Ground Lease, dated October 2, 1997, by and between Mission-West Valley Land Corporation, as landlord, and Nexus Properties, Inc., Kinetic Systems, Inc., Digital Square, Inc., R. Darrell Gary, Michael J. Reidy and Michael J. Reidy as trustee of the Ronald Bonaguidi irrevocable trust, together as tenants, incorporated by reference to Exhibit 10.33 to the Registration Statement on Form S-11/A filed with the SEC on August 16, 2013 (Commission File No. 333-190675)
10.42	First Amendment to Ground Lease, dated April 29, 1998, by and between Mission-West Valley Land Corporation, as landlord, and Nexus Properties, Inc., Kinetic Systems, Inc., R. Darrell Gary, Michael J. Reidy and Michael J. Reidy as trustee of the Ronald Bonaguidi irrevocable trust, together as tenants, incorporated by reference to Exhibit 10.34 to the Registration Statement on Form S-11/A filed with the SEC on August 16, 2013 (Commission File No. 333-190675)
10.43	Second Amendment to Ground Lease, dated September 24, 2009, by and between Mission-West Valley Land Corporation, as landlord, and Quality Investment Properties Santa Clara, LLC, Chad L. Williams, incorporated by reference to Exhibit 10.35 to the Registration Statement on Form S-11/A filed with the SEC on August 16, 2013 (Commission File No. 333-190675)

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10.44	Third Amendment to Ground Lease, dated November 17, 2011, by and between Mission-West Valley Land Corporation, as landlord, and Quality Investment Properties Santa Clara, LLC, Chad L. Williams, incorporated by reference to Exhibit 10.36 to the Registration Statement on Form S-11/A filed with the SEC on August 16, 2013 (Commission File No. 333-190675)
10.45	Lease Agreement, dated January 1, 2009, by and between Quality Investment Properties-Williams Center, L.L.C. and Quality Technology Services Lenexa, LLC, incorporated by reference to Exhibit 10.38 to the Registration Statement on Form S-11/A filed with the SEC on August 16, 2013 (Commission File No. 333-190675)
10.46	First Amendment to Lease, dated March 1, 2013, by and between Quality Investment Properties-Williams Center, L.L.C. and Quality Technology Services Lenexa, LLC, incorporated by reference to Exhibit 10.39 to the Registration Statement on Form S-11/A filed with the SEC on August 16, 2013 (Commission File No. 333-190675)
10.47	Second Amendment to Lease, dated December 1, 2013, by and between Quality Investment Properties-Williams Center, L.L.C. and Quality Technology Services Lenexa, LLC, incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q filed with the SEC on May 7, 2014 (Commission File No. 001-36109)
10.48	Third Amendment to Lease, dated May 1, 2014, by and between Quality Investment Properties-Williams Center, L.L.C. and Quality Technology Services Lenexa, LLC, incorporated by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q filed with the SEC on May 7, 2014 (Commission File No. 001-36109)
10.49	2020 Amended and Restated QTS Realty Trust, Inc. Employee Stock Purchase Plan, incorporated by reference to Exhibit 10.45 to the Company’s Annual Report on Form 10-K filed on February 28, 2020 (Commission File No. 001-36109)†
10.50	Employment Agreement, dated April 11, 2017, by and among QTS Realty Trust, Inc., QualityTech, LP, Quality Technology Services, LLC and Chad L. Williams, incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on April 14, 2017 (Commission File No. 001-36109) †
10.51	Employment Agreement, dated April 11, 2017, by and among QTS Realty Trust, Inc., QualityTech, LP, Quality Technology Services, LLC and Jeffrey H. Berson, incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed with the SEC on April 14, 2017 (Commission File No. 001-36109) †
10.52	Employment Agreement, dated April 11, 2017, by and among QTS Realty Trust, Inc., QualityTech, LP, Quality Technology Services, LLC and Shirley E. Goza, incorporated by reference to Exhibit 10.7 to the Quarterly Report on Form 10-Q filed with the SEC on May 8, 2017 (Commission File No. 001-36109) †
10.53	Employment Agreement, dated April 11, 2017, by and among QTS Realty Trust, Inc., QualityTech, LP, Quality Technology Services, LLC and Jon D. Greaves, incorporated by reference to Exhibit 10.8 to the Quarterly Report on Form 10-Q filed with the SEC on May 8, 2017 (Commission File No. 001-36109) †
10.54	Employment Agreement, dated April 11, 2017, by and among QTS Realty Trust, Inc., QualityTech, LP, Quality Technology Services, LLC and Steven C. Bloom, incorporated by reference to Exhibit 10.9 to the Quarterly Report on Form 10-Q filed with the SEC on May 8, 2017 (Commission File No. 001-36109) †
10.55	Amendment to Employment Agreement dated June 23, 2017 by and among QTS Realty Trust, Inc., QualityTech, LP, Quality Technology Services, LLC, and Chad L. Williams, incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q filed with the SEC on August 3, 2017 (Commission File No. 001-36109) †

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10.56	Amendment to Employment Agreement dated June 23, 2017 by and among QTS Realty Trust, Inc., QualityTech, LP, Quality Technology Services, LLC, and Jeffrey H. Berson, incorporated by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q filed with the SEC on August 3, 2017 (Commission File No. 001-36109) †
10.57	Amendment to Employment Agreement dated June 23, 2017 by and among QTS Realty Trust, Inc., QualityTech, LP, Quality Technology Services, LLC, and Shirley E. Goza, incorporated by reference to Exhibit 10.6 to the Quarterly Report on Form 10-Q filed with the SEC on August 3, 2017 (Commission File No. 001-36109) †
10.58	Amendment to Employment Agreement dated June 23, 2017 by and among QTS Realty Trust, Inc., QualityTech, LP, Quality Technology Services, LLC, and Steven C. Bloom, incorporated by reference to Exhibit 10.7 to the Quarterly Report on Form 10-Q filed with the SEC on August 3, 2017 (Commission File No. 001-36109) †
10.59	Amendment to Employment Agreement dated June 23, 2017 by and among QTS Realty Trust, Inc., QualityTech, LP, Quality Technology Services, LLC, and Jon D. Greaves, incorporated by reference to Exhibit 10.8 to the Quarterly Report on Form 10-Q filed with the SEC on August 3, 2017 (Commission File No. 001-36109) †
10.60	Employment Agreement, dated March 15, 2018, by and among QTS Realty Trust, Inc., QualityTech, LP, Quality Technology Services Holding, LLC, Quality Technology Services, LLC, and David Robey, incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on March 20, 2018 (Commission File No. 001-36109) †
10.61	Employment Agreement, dated October 1, 2020, by and among QTS Realty Trust, Inc., QualityTech, LP, Quality Technology Services, LLC, and Matt N. Thomson †+
10.62	Retirement and Transition Agreement and Release of all Claims, dated June 30, 2020, among Shirley E. Goza and QTS Realty Trust, Inc., QualityTech, LP and Quality Technology Services, LLC, incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on June 30, 2020 (Commission File No. 001-36109) †
10.63	Stock Purchase Agreement dated May 6, 2015 by and among Quality Technology Services Holding, LLC, Carpathia Holdings, LLC and Carpathia Acquisition, Inc., incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K filed with the SEC on May 12, 2015 (Commission File No. 002-36109)
10.64	First Amendment to Stock Purchase Agreement dated May 6, 2015 by and among Quality Technology Services Holding, LLC, Carpathia Holdings, LLC and Carpathia Acquisition, Inc., incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K filed with the SEC on June 19, 2015 (Commission File No. 001-36109)
10.65	Transaction Agreement, dated as of April 24, 2018, by and between QTS Technology Services Holding, LLC, QualityTech, LP, and General Datatech, L.P., incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed on August 6, 2018 (Commission File No. 001-36109)
10.66	Channel Agreement, dated as of April 24, 2018, by and between QTS Technology Services Holding, LLC and General Datatech, L.P., incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q filed on August 6, 2018 (Commission File No. 001-36109)

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10.67	Seventh Amended and Restated Credit Agreement dated as of October 18, 2019 by and among QualityTech, LP, KeyBank National Association, as agent, the lenders party thereto, KeyBanc Capital Markets, Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Regions Capital Markets and TD Securities (USA) LLC, as joint lead arrangers and joint bookrunners with respect to the Revolving Credit Loans, Term Loans A and Term Loans B, KeyBanc Capital Markets, Inc., Regions Capital Markets, SunTrust Robinson Humphrey, Inc. and TD Securities (USA) LLC as joint lead arrangers and joint bookrunners with respect to the Term Loans C, and Bank of America, N.A., Regions Bank and TD Securities (USA) LLC, as co-syndication agents, incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on October 22, 2019 (Commission File No.001-36109)
10.68	Fifth Amended and Restated Unconditional Guaranty of Payment and Performance dated as of October 18, 2019 by QTS Realty Trust, Inc. (to KeyBank National Association), incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed with the SEC on October 22, 2019 (Commission File No.001-36109)
10.69	Term Loan Agreement dated as of October 16, 2020 by and among QualityTech, LP, KeyBank National Association, as agent, the lenders party thereto, KeyBanc Capital Markets, Inc., BMO Capital Markets, Inc. and PNC Capital Markets LLC, as joint lead arrangers and joint book runners, and TD Securities (USA) LLC and Truist Bank, as co-documentation agents, incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed with the SEC on October 16, 2020 (Commission File No.001-36109)
10.70	Unconditional Guaranty of Payment and Performance dated as of October 16, 2020 by QTS Realty Trust, Inc. (to KeyBank National Association), incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed with the SEC on October 16, 2020 (Commission File No.001-36109)
10.71	QTS Realty Trust, Inc. Director Deferred Compensation Plan, effective January 1, 2018 , incorporated by reference to Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q filed with the SEC on May 10, 2018 (Commission File No. 001-36109). †
21.1	List of Subsidiaries of QTS Realty Trust, Inc.+
23.1	Consent of Ernst & Young LLP+
31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002+
31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002+
32.1	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002+
101	The following materials from QTS Realty Trust, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2020, formatted in iXBRL (inline eXtensible Business Reporting Language): (i) consolidated balance sheets, (ii) consolidated statements of operations and statements of comprehensive income, (iii) consolidated statements of equity and partners’ capital, (iv) consolidated statements of cash flows, and (v) the notes to the consolidated financial statements
104	Cover Page Interactive Date File (formatted in iXBRL (inline eXtensible Business Reporting Language) and contained in Exhibit 101)

+ Filed herewith.

†Denotes a management contract or compensatory plan, contract or arrangement.

ITEM 16.    FORM 10-K SUMMARY

The Company has chosen not to include a Form 10-K Summary.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

DATE: February 26, 2021	/s/ Chad L. Williams
	Chad L. Williams
	Chairman and Chief Executive Officer
DATE: February 26, 2021	/s/ William H. Schafer
	William H. Schafer
	Executive Vice President – Finance and Accounting
	(Principal Accounting Officer)
DATE: February 26, 2021	/s/ Jeffrey H. Berson
	Jeffrey H. Berson
	Chief Financial Officer
	(Principal Financial Officer)

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Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons on behalf of the registrant and in the capacities on the dates indicated.

DATE: February 26, 2021	/s/ Chad L. Williams
	Chad L. Williams
	Chairman and Chief Executive Officer
DATE: February 26, 2021	/s/ Philip P. Trahanas
	Philip P. Trahanas
	Director
DATE: February 26, 2021	/s/ John W. Barter
	John W. Barter
	Director
DATE: February 26, 2021	/s/ Joan A. Dempsey
	Joan A. Dempsey
	Director
DATE: February 26, 2021	/s/ William O. Grabe
	William O. Grabe
	Director
DATE: February 26, 2021	/s/ Catherine R. Kinney
	Catherine R. Kinney
	Director
DATE: February 26, 2021	/s/ Peter A. Marino
	Peter A. Marino
	Director
DATE: February 26, 2021	/s/ Scott D. Miller
	Scott D. Miller
	Director
DATE: February 26, 2021	/s/ Mazen Rawashdeh
	Mazen Rawashdeh
	Director
DATE: February 26, 2021	/s/ Wayne Rehberger
	Wayne Rehberger
	Director
DATE: February 26, 2021	/s/ Stephen E. Westhead
	Stephen E. Westhead
	Director

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

INDEX TO THE CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Financial Statements of QTS Realty Trust, Inc.

	Page
Reports of Independent Registered Public Accounting Firm	F-2
Consolidated Financial Statements of QTS Realty Trust, Inc.:
Consolidated Balance Sheets as of December 31, 2020 and 2019	F-5
Consolidated Statements of Operations for the years ended December 31, 2020, 2019 and 2018	F-6
Consolidated Statements of Comprehensive Income (loss) for the years ended December 31, 2020, 2019 and 2018	F-7
Consolidated Statements of Equity for the years ended December 31, 2020, 2019 and 2018	F-10
Consolidated Statements of Cash Flows for the years ended December 31, 2020, 2019 and 2018	F-11
Notes to QTS Realty Trust, Inc. Financial Statements	F-11
Supplemental Schedule—Schedule II—Valuation and Qualifying Accounts	F-46
Supplemental Schedule—Schedule III—Real Estate and Accumulated Depreciation	F-47

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Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of QTS Realty Trust, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of QTS Realty Trust, Inc. (the Company) as of December 31, 2020 and 2019, the related consolidated statements of operations, comprehensive income (loss), equity and cash flows for each of the three years in the period ended December 31, 2020, and the related notes and financial statement schedules listed in the Index at Item 15(2) (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2020, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 26, 2021 expressed an unqualified opinion thereon.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Capitalization of Internal Development Real Estate Costs

Description of the Matter

During the year ended December 31, 2020, the Company capitalized $18.4 million of internal development real estate costs and $30.2 million of capitalized interest. As disclosed in Note 2 to the consolidated financial statements, the Company capitalizes certain internal development real estate costs incurred in connection with development of its properties. The capitalization of these costs during the construction period (including interest and related loan fees, internal payroll costs, property taxes and other direct and indirect project costs) begins when development efforts commence and ends when the asset is ready for its intended use. The capitalization of internal costs increases construction in progress recognized during development of the related property and the cost of the real estate asset when placed into service and depreciated over its estimated useful life.

F-2

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Auditing the capitalization of internal development real estate costs was complex due to the volume of development activities and the judgments involved in determining the appropriateness of capitalizing certain costs based on the nature of the costs and status of each project, including determining when development commences for each project and when projects are no longer under active development.

How We Addressed the Matter in Our Audit

We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s capitalization of internal development real estate costs process. For example, we tested controls over management’s review of the inputs into the computation of internal cost capitalization amounts, including the timing of the commencement of development activities and timeliness of placing assets into service. To test internal real estate costs capitalized during the construction period, we performed audit procedures that included, among others, examining capitalization records, observing asset development activity at locations with significant internal development real estate costs capitalized and performing inquiries of site and operations personnel at those locations to corroborate the status of the projects. We also tested construction in progress additions and assets placed into service during the period and inspected source documentation to evaluate the completeness and accuracy of management’s assertions related to the ongoing development status and capitalization of internal development real estate costs related to its capital projects. Additionally, we performed procedures to test the accuracy and completeness of the information included in the Company’s calculation of internal development real estate costs, including comparison of inputs such as interest rates and payroll information to underlying records.

/s/ Ernst & Young LLP

We have served as the Company’s auditor since 2010

Kansas City, Missouri

February 26, 2021

F-3

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Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of QTS Realty Trust, Inc.

Opinion on Internal Control Over Financial Reporting

We have audited QTS Realty Trust, Inc.’s internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, QTS Realty Trust, Inc. (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2020, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2020 and 2019, the related consolidated statements of operations, comprehensive income (loss), equity and cash flows for each of the three years in the period ended December 31, 2020, and the related notes and financial statement schedules listed in the Index at Item 15(2) (collectively referred to as the “consolidated financial statements”) and our report dated February 26, 2021 expressed an unqualified opinion thereon.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Ernst & Young LLP

Kansas City, Missouri

February 26, 2021

F-4

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QTS REALTY TRUST, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands except share and per share data)

ASSETS	December 31, 2020		December 31, 2019
Real Estate Assets
Land	$	165,109	$	130,605
Buildings, improvements and equipment	2,839,261		2,178,901
Less: Accumulated depreciation	(702,944)		(558,560)
	2,301,426		1,750,946
Construction in progress	1,028,765		920,922
Real Estate Assets, net	3,330,191		2,671,868
Investments in unconsolidated entity	22,608		30,218
Operating lease right-of-use assets, net	51,342		57,141
Cash and cash equivalents	22,775		15,653
Rents and other receivables, net	107,563		81,181
Acquired intangibles, net	68,090		81,679
Deferred costs, net	63,689		52,363
Prepaid expenses	10,253		10,586
Goodwill	173,843		173,843
Other assets, net	48,218		49,001
TOTAL ASSETS	$	3,898,572	$	3,223,533
LIABILITIES
Unsecured term loans and revolver, net	$	1,335,241	$	1,010,640
Senior notes, net of debt issuance costs	492,534		395,549
Finance leases and mortgage notes payable	41,718		46,876
Operating lease liabilities	58,005		64,416
Accounts payable and accrued liabilities	187,270		142,547
Dividends and distributions payable	39,373		34,500
Advance rents, security deposits and other liabilities	19,850		18,027
Derivative liabilities	53,722		26,609
Deferred income taxes	810		749
Deferred income	85,351		39,169
TOTAL LIABILITIES	2,313,874		1,779,082
EQUITY
7.125% Series A cumulative redeemable perpetual preferred stock: $0.01 par value (liquidation preference $25.00 per share), 4,600,000 shares authorized, 4,280,000 shares issued and outstanding as of December 31, 2020 and December 31, 2019, respectively	103,212		103,212
6.50% Series B cumulative convertible perpetual preferred stock: $0.01 par value (liquidation preference $100.00 per share), 3,162,500 shares authorized, issued and outstanding as of December 31, 2020 and December 31, 2019, respectively	304,223		304,223
Common stock: $0.01 par value, 450,133,000 shares authorized, 64,580,118 and 58,227,523 shares issued and outstanding as of December 31, 2020 and December 31, 2019, respectively	646		582
Additional paid-in capital	1,622,857		1,330,444
Accumulated other comprehensive loss	(50,451)		(24,642)
Accumulated dividends in excess of earnings	(504,313)		(376,002)
Total stockholders’ equity	1,476,174		1,337,817
Noncontrolling interests	108,524		106,634
TOTAL EQUITY	1,584,698		1,444,451
TOTAL LIABILITIES AND EQUITY	$	3,898,572	$	3,223,533

See accompanying notes to financial statements.

F-5

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QTS REALTY TRUST, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands except share and per share data)

	Year Ended December 31,
	2020		2019		2018
Revenues:
Rental	$	519,858	$	465,123	$	413,620
Other	19,510		15,695		36,904
Total revenues	539,368		480,818		450,524
Operating expenses:
Property operating costs	168,497		156,048		148,236
Real estate taxes and insurance	16,020		14,503		12,193
Depreciation and amortization	199,889		168,305		149,891
General and administrative	84,965		80,385		80,857
Transaction, integration, and impairment costs	4,340		15,190		2,743
Restructuring	—		—		37,943
Total operating expenses	473,711		434,431		431,863
Gain on sale of real estate, net	—		14,769		—
Operating income	65,657		61,156		18,661
Other income and expense:
Interest income	2		111		150
Interest expense	(30,724)		(26,593)		(28,749)
Debt restructuring costs	(18,036)		(1,523)		(605)
Other income (expense)	159		(50)		—
Equity in net loss of unconsolidated entity	(2,044)		(1,473)		—
Income (loss) before taxes	15,014		31,628		(10,543)
Tax benefit (expense)	(438)		37		3,368
Net income (loss)	14,576		31,665		(7,175)
Net (income) loss attributable to noncontrolling interests	1,330		(374)		2,715
Net income (loss) attributable to QTS Realty Trust, Inc.	$	15,906	$	31,291	$	(4,460)
Preferred stock dividends	(28,180)		(28,180)		(16,666)
Net income (loss) attributable to common stockholders	$	(12,274)	$	3,111	$	(21,126)
Net loss per share attributable to common shares:
Basic	$	(0.47)	$	(0.09)	$	(0.44)
Diluted	$	(0.47)	$	(0.09)	$	(0.44)
Weighted average Class A common shares outstanding:
Basic	60,717,301		54,836,801		50,432,590
Diluted	60,717,301		54,836,801		50,432,590

See accompanying notes to financial statements.

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QTS REALTY TRUST, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(in thousands)

	Year Ended December 31,
	2020		2019		2018
Net income (loss)	$	14,576	$	31,665	$	(7,175)
Other comprehensive income (loss):
Foreign currency translation adjustment gain	187		34		—
Increase (decrease) in fair value of derivative contracts	(28,295)		(29,843)		895
Reclassification of other comprehensive income to utilities expense	1,204		749		—
Reclassification of other comprehensive income to interest expense	10,148		(1,031)		110
Comprehensive income (loss)	(2,180)		1,574		(6,170)
Comprehensive (income) loss attributable to noncontrolling interests	213		(169)		711
Comprehensive income (loss) attributable to QTS Realty Trust, Inc.	$	(1,967)	$	1,405	$	(5,459)

See accompanying notes to financial statements.

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QTS REALTY TRUST, INC.

CONSOLIDATED STATEMENTS OF EQUITY

(in thousands)

	Preferred Stock			Common stock			Additional paid-in capital		Accumulated other comprehensive income (loss)		Accumulated dividends in excess of earnings		Total stockholders' equity		Noncontrolling interest		Total
	Shares	Amount		Shares	Amount
Balance January 1, 2018	—	$	—	50,702	$	507	$	1,049,176	$	1,283	$	(173,552)	$	877,414	$	113,242	$	990,656
Net share activity through equity award plan	—	—		421	4		(2,717)		—		—		(2,713)		925		(1,788)
Increase in fair value of derivative contracts	—	—		—	—		—		790		—		790		105		895
Equity-based compensation expense	—	—		—	—		16,014		—		—		16,014		2,086		18,100
Net proceeds from Series A Preferred Stock offering	4,280	103,212		—	—		—		—		—		103,212		—		103,212
Net proceeds from Series B Convertible Preferred Stock offering	3,163	304,265		—	—		—		—		—		304,265		—		304,265
Dividends declared on Series A Preferred Stock	—	—		—	—		—		—		(6,046)		(6,046)		—		(6,046)
Dividends declared on Series B Convertible Preferred Stock	—	—		—	—		—		—		(10,621)		(10,621)		—		(10,621)
Dividends declared to common stockholders	—	—		—	—		—		—		(83,869)		(83,869)		—		(83,869)
Dividends declared to noncontrolling interests	—	—		—	—		—		—		—		—		(10,942)		(10,942)
Net loss	—	—		—	—		—		—		(4,460)		(4,460)		(2,715)		(7,175)
Balance December 31, 2018	7443	$	407,477	51,123	$	511	$	1,062,473	$	2,073	$	(278,548)	$	1,193,986	$	102,701	$	1,296,687
Net cumulative effect upon ASC Topic 842 adoption	—	—		—	—		—		—		(1,813)		(1,813)		—		(1,813)
Net share activity through equity award plan	—	—		273	3		1,816		—		—		1,819		6		1,825
Decrease in fair value of derivative contracts	—	—		—	—		—		(26,745)		—		(26,745)		(3,098)		(29,843)
Foreign currency translation adjustments	—	—		—	—		—		30		—		30		4		34
Equity-based compensation expense	—	—		—	—		14,651		—		—		14,651		1,762		16,413
Adjustment to expenses net from Series B Convertible Preferred stock offering	—	(42)		—	—		—		—		—		(42)		—		(42)
Proceeds net of fees from common equity offering	—	—		4,000	40		148,650		—		—		148,690		9,973		158,663
Proceeds net of fees from settlement of forward shares	—	—		2,832	28		102,854		—		—		102,882		6,645		109,527
Dividends declared on Series A Preferred Stock	—	—		—	—		—		—		(7,624)		(7,624)		—		(7,624)
Dividends declared on Series B Convertible Preferred Stock	—	—		—	—		—		—		(20,556)		(20,556)		—		(20,556)
Dividends declared to common stockholders	—	—		—	—		—		—		(98,752)		(98,752)		—		(98,752)
Dividends declared to noncontrolling interests	—	—		—	—		—		—		—		—		(11,733)		(11,733)
Net income	—	—		—	—		—		—		31,291		31,291		374		31,665
Balance December 31, 2019	7,443	$	407,435	58,228	$	582	$	1,330,444	$	(24,642)	$	(376,002)	$	1,337,817	$	106,634	$	1,444,451
Net share activity through equity award plan	—	—		341	4		(1,675)		—		—		(1,671)		(189)		(1,860)
Conversion of Class A Partnership units to Class A common stock	—	—		100	1		2,289		—		—		2,290		(2,290)		—
Decrease in fair value of derivative contracts	—	—		—	—		—		(25,980)		—		(25,980)		(2,315)		(28,295)
Foreign currency translation adjustments	—	—		—	—		—		171		—		171		16		187
Equity-based compensation expense	—	—		—	—		24,353		—		—		24,353		2,627		26,980
Proceeds net of fees from settlement of forward shares	—	—		5,911	59		267,446		—		—		267,505		17,848		285,353
Dividends declared on Series A Preferred Stock	—	—		—	—		—		—		(7,624)		(7,624)		—		(7,624)
Dividends declared on Series B Convertible Preferred Stock	—	—		—	—		—		—		(20,556)		(20,556)		—		(20,556)
Dividends declared to common stockholders	—	—		—	—		—		—		(116,037)		(116,037)		—		(116,037)
Dividends declared to noncontrolling interests	—	—		—	—		—		—		—		—		(12,477)		(12,477)
Net income	—	—		—	—		—		—		15,906		15,906		(1,330)		14,576
Balance December 31, 2020	7,443	$	407,435	64,580	$	646	$	1,622,857	$	(50,451)	$	(504,313)	$	1,476,174	$	108,524	$	1,584,698

See accompanying notes to financial statements.

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QTS REALTY TRUST, INC.

CONSOLIDATED STATEMENTS OF CASH FLOW

(in thousands)

	Year Ended December 31,
	2020		2019		2018
Cash flow from operating activities:
Net income (loss)	$	14,576	$	31,665	$	(7,175)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	193,242		160,528		143,354
Amortization of above and below market leases	429		187		465
Amortization of deferred loan costs	4,053		3,877		3,856
Distributions from unconsolidated entity	2,345		3,280		—
Equity in net loss of unconsolidated entity	2,044		1,473		—
Equity-based compensation expense	26,980		16,412		14,972
Bad debt expense (recoveries)	5,036		2,406		(2,275)
(Gain) loss on sale of real estate, net	—		(14,769)		6,994
Loss on extinguishment of debt	14,252		—		—
Write off of deferred loan costs	3,784		1,532		605
Deferred tax expense (benefit)	58		(348)		(2,970)
Integration, impairment & restructuring costs	1,484		11,462		19,575
Foreign currency remeasurement (income) loss	(159)		50		—
Changes in operating assets and liabilities
Rents and other receivables, net	(31,108)		(27,234)		(6,495)
Prepaid expenses	358		(3,406)		(3,063)
Due to/from affiliates, net	2,039		9,284		—
Other assets	(371)		35		4,518
Accounts payable and accrued liabilities	12,324		2,973		8,573
Advance rents, security deposits and other liabilities	2,267		(5,845)		2,069
Deferred income	46,082		5,928		8,270
Net cash provided by operating activities	299,715		199,490		191,273
Cash flow from investing activities:
Proceeds from sale of property, net	—		54,427		2,779
Acquisitions, net of cash acquired	(43,933)		(76,383)		(117,029)
Investments in unconsolidated entity	—		(4,144)		—
Additions to property and equipment	(773,812)		(361,160)		(484,303)
Net cash used in investing activities	(817,745)		(387,260)		(598,553)
Cash flow from financing activities:
Credit facility proceeds	827,582		399,028		483,000
Credit facility repayments	(759,000)		(334,000)		(362,000)
4.75% Senior Notes repayment	(400,000)		—		—
3.875% Senior Notes issuance	500,000		—		—
Term Loan D issuance	250,000		—		—
Payment of debt extinguishment costs	(14,252)		—		—
Payment of deferred financing costs	(9,559)		(5,130)		(3,964)
Payment of preferred stock dividends	(28,180)		(28,180)		(10,728)
Payment of common stock dividends	(111,311)		(94,085)		(82,579)
Distribution to noncontrolling interests	(12,330)		(11,533)		(10,759)
Proceeds from exercise of stock options	2,524		3,857		246
Payment of tax withholdings related to equity-based awards	(5,343)		(3,900)		(2,205)
Principal payments on finance lease obligations	(2,579)		(2,855)		(7,626)
Mortgage principal debt repayments	(1,736)		(65)		(66)
Preferred stock issuance proceeds, net of costs	—		—		407,477
Common stock issuance proceeds, net of costs	285,352		268,259		—
Net cash provided by financing activities	521,168		191,396		410,796
Effect of foreign currency exchange rates on cash and cash equivalents	3,984		268		—
Net change in cash and cash equivalents	7,122		3,894		3,516
Cash and cash equivalents, beginning of period	15,653		11,759		8,243
Cash and cash equivalents, end of period	$	22,775	$	15,653	$	11,759

See accompanying notes to financial statements.

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QTS REALTY TRUST, INC.

CONSOLIDATED STATEMENTS OF CASH FLOW (continued)

(in thousands)

	Year Ended December 31,
	2020		2019		2018
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid for interest	$	54,596	$	56,023	$	51,380
Noncash investing and financing activities:
Accrued capital additions	121,194		92,206		76,890
Net increase (decrease) in other assets/liabilities related to change in fair value of derivative contracts	(27,113)		(28,952)		895
Equity received in unconsolidated entity in exchange for real estate assets	—		25,280		—
Increase in assets in exchange for finance lease obligation	—		45,024		—
Accrued equity issuance costs	—		30		115
Accrued preferred stock dividend	5,938		5,938		5,938
Accrued deferred financing costs	—		—		76
Acquisitions, net of cash acquired:
Land	—		1,743		—
Buildings, improvements and equipment	—		8,640		445
Construction in progress	43,933		61,514		114,283
Rents and other receivables, net	—		1,239		—
Acquired intangibles, net	—		2,628		2,301
Deferred costs	—		906		—
Prepaid expenses	—		359		—
Other assets	—		128		—
Accounts payable and accrued liabilities	—		(52)		—
Advance rents, security deposits and other liabilities	—		(722)		—
Total acquisitions, net of cash acquired	$	43,933	$	76,383	$	117,029

See accompanying notes to financial statements.

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QTS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Description of Business

QTS Realty Trust, Inc. (“QTS”) through its controlling interest in QualityTech, LP (the “Operating Partnership” and collectively with QTS and its subsidiaries, the “Company,” “we,” “us,” or “our”) and the subsidiaries of the Operating Partnership, is engaged in the business of owning, acquiring, constructing, redeveloping and managing multi-tenant data centers. As of December 31, 2020 our portfolio consisted of 28 owned and leased properties, including a property owned by an unconsolidated entity, with data centers located throughout the United States, Canada and Europe.

QTS elected to be taxed as a real estate investment trust (“REIT”) for U.S. federal income tax purposes, commencing with its taxable year ended December 31, 2013. As a REIT, QTS generally is not required to pay federal corporate income taxes on its taxable income to the extent it is currently distributed to its stockholders.

The Operating Partnership is a Delaware limited partnership formed on August 5, 2009 and is QTS’ historical predecessor. As of December 31, 2020, QTS owned approximately 90.8% of the interests in the Operating Partnership. Substantially all of QTS’ assets are held by, and all of QTS’ operations are conducted through, the Operating Partnership. QTS’ interest in the Operating Partnership entitles QTS to share in cash distributions from, and in the profits and losses of, the Operating Partnership in proportion to QTS’ percentage ownership. As the sole general partner of the Operating Partnership, QTS generally has the exclusive power under the partnership agreement of the Operating Partnership to manage and conduct the Operating Partnership’s business and QTS’ board of directors manages the Operating Partnership and the Company’s business and affairs.

2. Summary of Significant Accounting Policies

Basis of Presentation – The accompanying financial statements have been prepared by management in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included.

References to “QTS” mean QTS Realty Trust, Inc. and its controlled subsidiaries and references to the “Operating Partnership” mean QualityTech, LP and its controlled subsidiaries.

The Operating Partnership meets the definition and criteria of a variable interest entity (“VIE”) in accordance with Accounting Standards Codification ("ASC") Topic 810 Consolidation, and the Company is the primary beneficiary of the VIE. As discussed below, the Company’s only material asset is its ownership interest in the Operating Partnership, and consequently, all of its assets and liabilities represent those assets and liabilities of the Operating Partnership. The Company’s debt is an obligation of the Operating Partnership where the creditors may have recourse, under certain circumstances, against the credit of the Company.

QTS is the sole general partner of the Operating Partnership, and its only material asset consists of its ownership interest in the Operating Partnership. Management operates QTS and the Operating Partnership as one business. The management of QTS consists of the same employees as the management of the Operating Partnership. QTS does not conduct business itself, other than acting as the sole general partner of the Operating Partnership and issuing public equity from time to time. QTS has not issued or guaranteed any indebtedness. Except for net proceeds from public equity issuances by QTS, which are contributed to the Operating Partnership in exchange for units of limited partnership interest of the Operating Partnership, the Operating Partnership generates all remaining capital required by the business through its operations, the direct or indirect incurrence of indebtedness, and the issuance of partnership units. Therefore, as general partner with control of the Operating Partnership, QTS consolidates the Operating Partnership for financial reporting purposes.

Obligations under the 3.875% Senior Notes due 2028 and the unsecured credit facility, both discussed in Note 8, are fully, unconditionally, and jointly and severally guaranteed by the Operating Partnership’s existing subsidiaries (other than certain foreign subsidiaries and receivables entities) and future subsidiaries that guarantee any indebtedness of QTS Realty Trust, Inc., the Operating Partnership, QTS Finance Corporation (the co-issuer of the 3.875% Senior Notes due 2028) or any subsidiary guarantor. The indenture governing the 3.875% Senior Notes due 2028 restricts the ability of the Operating Partnership to make distributions to QTS, subject to certain exceptions, including distributions required in order for QTS to maintain its status as a real estate investment trust under the Internal Revenue Code of 1986, as amended (the “Code”).

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The consolidated financial statements of QTS Realty Trust, Inc. include the accounts of QTS Realty Trust, Inc. and its majority owned controlled subsidiaries including the Operating Partnership as well as unconsolidated entities accounted for using equity method accounting. This includes the operating results of the Operating Partnership for all periods presented.

Use of Estimates – The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include the useful lives of fixed assets, allowances for doubtful accounts and deferred tax assets and the valuation of derivatives, real estate assets, acquired intangible assets and certain accruals. The impacts of the COVID-19 pandemic increases uncertainty, which has reduced our ability to use past results to estimate future performance. Accordingly, our estimates and judgments may be subject to greater volatility than has been the case in the past.

Principles of Consolidation – The consolidated financial statements of QTS Realty Trust, Inc. include the accounts of QTS Realty Trust, Inc. and its controlled subsidiaries. All significant intercompany accounts and transactions have been eliminated in the financial statements.

We evaluate our investments in less than wholly owned entities to determine whether they should be recorded on a consolidated basis. The percentage of ownership interest in the entity, an evaluation of control and whether a VIE exists are all considered in our consolidation assessment. Investments in real estate entities which we have the ability to exercise significant influence, but do not have financial or operating control, are accounted for using the equity method of accounting. Accordingly, our share of the earnings or losses of these entities is included in consolidated net income (loss).

Variable Interest Entities (VIEs) – We determine whether an entity is a VIE and, if so, whether it should be consolidated by utilizing judgments and estimates that are inherently subjective. The determination of whether an entity in which we hold a direct or indirect variable interest is a VIE is based on several factors, including whether the entity’s total equity investment at risk upon inception is sufficient to finance the entity’s activities without additional subordinated financial support. We make judgments regarding the sufficiency of the equity at risk based first on a qualitative analysis, and then a quantitative analysis, if necessary.

We analyze any investments in VIEs to determine if we are the primary beneficiary. In evaluating whether we are the primary beneficiary, we evaluate our direct and indirect economic interests in the entity. Determining which reporting entity, if any, is the primary beneficiary of a VIE is primarily a qualitative approach focused on identifying which reporting entity has both (1) the power to direct the activities of a VIE that most significantly impact such entity’s economic performance and (2) the obligation to absorb losses or the right to receive benefits from such entity that could potentially be significant to such entity. Performance of that analysis requires the exercise of judgment.

We consider a variety of factors in identifying the entity that holds the power to direct matters that most significantly impact the VIE’s economic performance including, but not limited to, the ability to direct financing, leasing, construction and other operating decisions and activities. In addition, we consider the rights of other investors to participate in those decisions, to replace the manager and to sell or liquidate the entity. We determine whether we are the primary beneficiary of a VIE at the time we become involved with a variable interest entity and reconsider that conclusion upon a reconsideration event. As of December 31, 2020, we had one unconsolidated entity that was considered a VIE for which we are not the primary beneficiary. Our maximum exposure to losses associated with this VIE is limited to our net investment, which was approximately $22.6 million as of December 31, 2020.

Real Estate Assets – Real estate assets are reported at cost. All capital improvements for the income-producing properties that extend their useful lives are capitalized to individual property improvements and depreciated over their estimated useful lives. Depreciation for real estate assets is generally provided on a straight-line basis over 40 years from the date the property was placed in service. Property improvements are depreciated on a straight-line basis over the life of the respective improvement ranging from 20 to 40 years from the date the components were placed in service. Leasehold improvements are depreciated over the lesser of 20 years or through the end of the respective life of the lease. Repairs and maintenance costs are expensed as incurred. For the year ended December 31, 2020, depreciation expense related to real estate assets and non-real estate assets was $147.8 million and $13.4 million, respectively, for a total of $161.2 million. For the year ended December 31, 2019, depreciation expense related to real estate assets and non-real estate assets was $118.9 million and $11.9

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million, respectively, for a total of $130.8 million. For the year ended December 31, 2018, depreciation expense related to real estate assets and non-real estate assets was $101.2 million and $12.3 million, respectively, for a total of $113.5 million. We capitalize certain real estate development costs, including internal costs incurred in connection with development. The capitalization of costs during the construction period (including interest and related loan fees, property taxes and other direct and indirect project costs) begins when development efforts commence and ends when the asset is ready for its intended use. The capitalization of internal costs increases construction in progress recognized during development of the related property and the cost of the real estate asset when placed into service and such costs are depreciated over its estimated useful life. Capitalization of such costs, excluding interest, aggregated to $18.4 million, $17.8 million and $17.4 million for the years ended December 31, 2020, 2019 and 2018 respectively. Interest is capitalized during the period of development by applying our weighted average effective borrowing rate to the actual development and other capitalized costs paid during the construction period. Interest is capitalized until the property is ready for its intended use. Interest costs capitalized totaled $30.2 million, $33.2 million and $26.8 million for the years ended December 31, 2020, 2019 and 2018, respectively.

Acquisitions and Sales – Acquisitions of real estate and other entities are either accounted for as asset acquisitions or business combinations depending on facts and circumstances. When substantially all of the fair value of gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets, the transaction is accounted for as an asset acquisition. In an asset acquisition, the purchase price paid for assets acquired is allocated between identified tangible and intangible assets acquired based on relative fair value. Transaction costs associated with asset acquisitions are capitalized. When substantially all of the fair value of assets acquired is not concentrated in a group of similar identifiable assets, the set of assets will generally be considered a business. When accounting for business combinations, purchase accounting is applied to the assets and liabilities related to all real estate investments acquired in accordance with the accounting requirements of ASC Topic 805, Business Combinations, which requires the recording of net assets of acquired businesses at fair value. The fair value of the consideration transferred is assigned to the acquired tangible assets, consisting primarily of land, construction in progress, building and improvements, and identified intangible assets and liabilities, consisting of the value of above-market and below-market leases, value of in-place leases, value of customer relationships, and finance leases. The excess of the fair value of liabilities assumed, common stock issued and cash paid over the fair value of identifiable assets acquired is allocated to goodwill, which is not amortized. Transaction costs associated with business combinations are expensed as incurred.

In developing estimates of fair value of acquired assets and assumed liabilities, management analyzes a variety of factors including market data, estimated future cash flows of the acquired operations, industry growth rates, current replacement cost for fixed assets and market rate assumptions for contractual obligations. Such a valuation requires management to make significant estimates and assumptions, particularly with respect to the intangible assets.

Acquired in-place leases are amortized as amortization expense on a straight-line basis over the remaining life of the underlying leases. Acquired customer relationships are amortized as amortization expense on a straight-line basis over the expected life of the customer relationship. These amortization expenses are accounted for as real estate amortization expense. Above or below market leases are amortized on a straight-line basis over their expected lives and are recorded as a reduction to or increase in rental revenue when we are the lessor as well as a reduction to or increase in rent expense over the remaining lease terms when we are the lessee.

We account for the sale of assets to non-customers under Financial Accounting Standards Board (“FASB”) ASU No. 2017-5, Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20), which provides for recognition or derecognition based on transfer of ownership. During the year ended December 31, 2019, we sold our Manassas facility to an unconsolidated entity in exchange for cash consideration and noncash consideration in the form of an equity interest in the unconsolidated entity. After measuring the consideration received at fair value, we recognized a $13.4 million gain on sale of real estate, net of approximately $5.8 million of transaction costs, associated with our contribution of certain assets in our Manassas facility to the unconsolidated entity. Substantially all of the fair value of the assets contributed to the entity was concentrated in a group of similar identifiable assets and the sale of the assets were not to a customer, therefore the transaction was accounted for as an asset sale. The gain on sale of real estate is included within the “Gain on sale of real estate, net” line item of the consolidated statements of operations. In addition, during the year ended December 31, 2019, we recognized a $1.4 million gain on sale of certain land and improvements near our Atlanta (DC-1) (formerly known as Atlanta-Metro) facility which is included within the “Gain on sale of real estate, net” line item of the consolidated statements of operations. During the year ended December 31, 2018, we recognized a $7.0 million net loss on sale of equipment associated with our strategic growth plan which was included within the “Restructuring” line item of the consolidated statements of operations.

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Impairment of Long-Lived Assets, Intangible Assets and Goodwill – We review our long-lived assets, intangible assets and equity method investments for impairment when events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. Recoverability of assets to be held and used is measured by comparison of the carrying amount to the future net cash flows, undiscounted and without interest, expected to be generated by the asset group. If the net carrying value of the asset group exceeds the value of the undiscounted cash flows, the fair value of the asset group is assessed and may be considered impaired. An impairment loss is recognized based on the excess of the carrying amount of the impaired asset over its fair value. No impairment losses were recorded for the year ended December 31, 2020. For the year ended December 31, 2019, we recognized an $11.5 million impairment loss related to the write-down of certain data center assets and equipment in one of our Dulles, Virginia data centers. The Dulles campus has two data center buildings and we initiated a plan in the fourth quarter of 2019 to abandon one of the buildings and relocate customers from the smaller and older facility being abandoned to the newer facility in an effort to better optimize our operating cost structure. The impairment loss was included within the “Transaction, integration and impairment costs” line item of the consolidated statements of operations. For the year ended December 31, 2018, we recognized $8.8 million of impairment losses related to certain product-related assets, which was included in the “Restructuring” line item of the consolidated statements of operations.

The fair value of goodwill is the consideration transferred in a business combination which is not allocable to identifiable intangible and tangible assets. Goodwill is subject to at least an annual assessment for impairment. In connection with the goodwill impairment evaluation that we performed as of October 1, 2020, we determined qualitatively that it is not more likely than not that the fair value of our one reporting unit was less than the carrying amount, thus we did not perform a quantitative analysis. As we continue to operate and assess our goodwill at the consolidated level for our single reporting unit and our market capitalization significantly exceeds our net asset value, further analysis was not deemed necessary as of December 31, 2020.

Cash and Cash Equivalents – We consider all demand deposits and money market accounts purchased with a maturity date of three months or less at the date of purchase to be cash equivalents. Our account balances at one or more institutions periodically exceed the Federal Deposit Insurance Corporation (“FDIC”) insurance coverage and, as a result, there is concentration of credit risk related to amounts on deposit in excess of FDIC coverage. We mitigate this risk by depositing a majority of our funds with several major financial institutions. We also have not experienced any losses and do not believe that the risk is significant.

Deferred Costs – Deferred costs, net, on our balance sheets include both deferred financing costs and deferred leasing costs.

Deferred financing costs represent fees and other costs incurred in connection with obtaining debt and are amortized over the term of the loan and are included in interest expense. Debt issuance costs related to revolving debt arrangements are deferred and presented as assets on the balance sheet; however, all other debt issuance costs are recorded as a direct offset to the associated liability. Amortization of debt issuance costs, including those costs presented as offsets to the associated liability in the consolidated balance sheets, were $4.1 million, $3.9 million and $3.9 million for the years ended December 31, 2020, 2019 and 2018, respectively. During the year ended December 31, 2020, we wrote off unamortized financing costs of $3.7 million primarily in connection with the early extinguishment of the $400 million 4.750% senior notes due 2025. During the year ended December 31, 2019, we wrote off unamortized financing costs of $1.5 million in connection with the modification of our unsecured credit facility in October 2019 whereby we added a seven year additional term loan, increased capacity of the revolving facility, extended maturity dates as well as decreased the interest rates. During the year ended December 31, 2018, we wrote off unamortized financing costs of $0.6 million in connection with the modification of our unsecured credit facility in November 2018 whereby we decreased the interest rates, modified and/or eliminated certain covenants and extended the term for an additional year.

Deferred financing costs presented as assets on the balance sheets related to revolving debt arrangements, net of accumulated amortization are as follows:

(dollars in thousands)	December 31, 2020		December 31, 2019
Deferred financing costs	$	13,786	$	13,776
Accumulated amortization	(7,752)		(5,743)
Deferred financing costs, net	$	6,034	$	8,033

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Deferred financing costs presented as offsets to the associated liabilities on the balance sheets related to fixed debt arrangements, net of accumulated amortization, are as follows:

(dollars in thousands)	December 31, 2020		December 31, 2019
Deferred financing costs	$	19,327	$	15,777
Accumulated amortization	(4,765)		(4,937)
Deferred financing costs, net	$	14,562	$	10,840

Initial direct costs, or deferred leasing costs, include commissions paid to third parties, including brokers, leasing and referral agents, and internal sales commissions paid to employees for successful execution of lease agreements and are accounted for pursuant to ASC Topic 842, Leases. These costs are incurred when we execute lease agreements and represent only incremental costs that would not have been incurred if the lease agreement had not been executed. To a lesser extent, we incur the same incremental costs to obtain managed services contracts with customers that are accounted for pursuant to ASC Topic 606, Revenue from Contracts with Customers. Because the framework of accounting for these costs and the underlying nature of the costs are the same for our revenue and lease contracts, the costs are presented on a combined basis within our financial statements and within the below table. Both revenue and leasing commissions are capitalized and generally amortized over the term of the related leases or the expected term of the contract using the straight-line method. If a customer lease terminates prior to the expiration of its initial term, any unamortized initial direct costs related to the lease are written off to amortization expense. Amortization of deferred leasing costs totaled $26.1 million, $24.2 million and $21.3 million for the years ended December 31, 2020, 2019 and 2018, respectively. Deferred leasing costs, net of accumulated amortization are as follows:

(dollars in thousands)	December 31, 2020		December 31, 2019
Deferred leasing costs	$	101,480	$	77,178
Accumulated amortization	(43,825)		(32,848)
Deferred leasing costs, net	$	57,655	$	44,330

Revenue Recognition – We derive our revenues from leases with customers for data center space which include lease components and nonlease revenue components, such as power, tenant recoveries, and managed services. We adopted ASC Topic 842, Leases, the new accounting standard for leases, effective January 1, 2019 using the modified retrospective approach. We have elected the available practical expedient under ASC Topic 842, Leases, to combine our nonlease revenue components that have the same pattern of transfer as the related operating lease component into a single combined lease component. The single combined component is accounted for under ASC Topic 842 if the lease component is the predominant component and is accounted for under ASC Topic 606 if the nonlease components are the predominant components. In our contracts, the single combined component is accounted for under ASC Topic 842 as the lease component is the predominant component.

A description of each of our disaggregated revenue streams is as follows:

Rental Revenue

Our leases with customers are classified as operating leases and rental revenue is recognized on a straight-line basis over the customer lease term. Occasionally, customer leases include options to extend or terminate the lease agreements. We do not include any of these extension or termination options in a customer’s lease term for lease classification purposes or recognizing rental revenue unless it is reasonably certain the customer will exercise these extension or termination options.

Rental revenue also includes revenue from power delivery on fixed power arrangements, whereby customers are billed and pay a fixed monthly fee per committed available amount of connected power. These fixed power arrangements require us to provide a series of distinct services and to stand ready to deliver the power over the contracted term which is co-terminus with the lease. Customer fixed power arrangements have the same pattern of transfer over the lease term as the lease component and are therefore combined with the lease component to form a single lease component that is recognized over the term of the lease on a straight-line basis.

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In addition, rental revenue includes straight line rent. Straight line rent represents the difference in rents recognized during the period versus amounts contractually due pursuant to the underlying leases and is recorded as deferred rent receivable/payable in the consolidated balance sheets. For lease agreements that provide for scheduled rent increases, rental income is recognized on a straight-line basis over the non-cancellable term of the leases, which commences when control of the space has been provided to the customer. The amount of the straight-line rent receivable on the balance sheets included in rents and other receivables, net was $63.6 million and $38.7 million as of December 31, 2020 and December 31, 2019, respectively.

Rental revenue also includes amortization of set-up fees which are amortized over the term of the respective lease as discussed below in the "Deferred Income" section.

Variable Lease Revenue from Recoveries

Certain customer leases contain provisions under which customers reimburse us for power and cooling-related charges as well as a portion of the property’s real estate taxes, insurance and other operating expenses. Recoveries of power and cooling-related expenses relate specifically to our variable power arrangements, whereby customers pay variable monthly fees for the specific amount of power utilized at the current utility rates. Our performance obligation is to stand ready to deliver power over the life of the customer contract up to a contracted power capacity. Customers have the flexibility to increase or decrease the amount of power consumed, and therefore sub-metered power revenue is constrained at contract inception. The reimbursements are included in revenue as recoveries from customers and are recognized each month as the uncertainty related to the consideration is resolved (i.e. we provide power to our customers) and customers utilize the power. Reimbursement of real estate taxes, insurance, common area maintenance, or other operating expenses are accounted for as variable payments under lease guidance pursuant to the practical expedient and are recognized as revenue in the period that the expenses are recognized. Variable lease revenue from recoveries discussed above, including power, common area maintenance or other operating costs, have the same pattern of transfer over the lease term as the lease component and are therefore combined with the lease component to form a single lease component. Variable lease revenue from recoveries is included within the “rental” line item on the statements of operations.

Other Revenue

Other revenue primarily consists of revenue from our managed service offerings as well as revenue earned from partner channel, management and development fees. We, through our TRS, may provide use of our managed services to our customers on an individual or combined basis. In our managed services offering the TRS’s performance obligation is to provide services (e.g. cloud hosting, data backup, data storage or data center personnel labor hours) to facilitate a fully integrated information technology (“IT”) outsourcing environment over a contracted term. Although underlying services may vary, over the contracted term monthly service offerings are substantially the same and we account for the services as a series of distinct services in accordance with ASC Topic 606. Service fee revenue is recognized as the revenue is earned, which generally coincides with the services being provided. As we have the right to consideration from customers in an amount that corresponds directly with the value to the customer of the TRS’s performance of providing continuous services, we recognize monthly revenue for the amount invoiced.

With respect to the transaction price allocated to remaining performance obligations within our managed service contracts, we have elected to use the optional exemption provided by ASC Topic 606 whereby we are not required to estimate the total transaction price allocated to remaining performance obligations as we apply the “right-to-invoice” practical expedient. As described above, the nature of our performance obligation in these contracts is to provide monthly services that are substantially the same and accounted for as a series of distinct services. These contracts generally have a remaining term ranging from month-to-month to three years.

Management fees and other revenues are generally received from our unconsolidated entity properties as well as third parties. Management fee revenue is earned based on a contractual percentage of unconsolidated entity property revenue. Development fee revenue is earned on a contractual percentage of hard costs to develop a property. We recognize revenue for these services provided when earned based on the performance criteria in ASC Topic 606, with such revenue recorded in “Other” revenue on the consolidated statements of operations.

Allowance for Uncollectible Accounts Receivable – We record a provision for uncollectible accounts if a receivable balance relating to lease components from an individual contract is considered by management not to be probable of collection, and this provision is recorded as a reduction to leasing revenues. We also record a general provision of estimated uncollectible tenant receivables based on general probability of collection in accordance with ASC 450-20 Loss

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Contingencies. This provision is recorded as bad debt expense and recorded within the “Property Operating Costs” line item of the consolidated statements of operations. The aggregate allowance for doubtful accounts on the consolidated balance sheets was $5.4 million and $2.3 million as of December 31, 2020 and December 31, 2019, respectively.

Advance Rents and Security Deposits – Advance rents, typically prepayment of the following month’s rent, consist of payments received from customers prior to the time they are earned and are recognized as revenue in subsequent periods when earned. Security deposits are collected from customers at the lease origination and are generally refunded to customers upon lease expiration.

Deferred Income – Deferred income generally results from non-refundable charges paid by the customer at lease inception to prepare their space for occupancy. We record this initial payment, commonly referred to as set-up fees, as a deferred income liability which amortizes into rental revenue over the term of the related lease on a straight-line basis. Deferred income was $85.4 million, $39.2 million and $33.2 million as of December 31, 2020, 2019 and 2018, respectively. Additionally, $20.3 million, $15.2 million and $12.5 million of deferred income was amortized into revenue for the years ended December 31, 2020, 2019 and 2018, respectively.

Foreign Currency - The financial position of foreign subsidiaries whose functional currency is not the U.S. dollar is translated at the exchange rates in effect at the end of the period, while revenues and expenses are translated at average exchange rates during the period. Gains or losses from translation of foreign operations where the local currency is the functional currency are included as components of other comprehensive income (loss). Prior to February 2020, gains or losses from foreign currency transactions were included in determining net income (loss). In February 2020, we entered into a net investment hedge which resulted in gains or losses subsequently being recognized in Other Comprehensive Income (Loss).

Equity-based Compensation – Equity-based compensation costs are measured based upon their estimated fair value on the date of grant or modification and amortized ratably over their respective service periods. We have elected to account for forfeitures as they occur. Equity-based compensation expense was $27.0 million, $16.4 million, and $18.1 million for the years ended December 31, 2020, 2019 and 2018, respectively. Equity based compensation expense for the year ended December 31, 2020 includes $1.8 million of equity-based compensation expense associated with the revaluation and acceleration of equity awards related to an executive officer's retirement which is included within the "Transaction, integration, and impairment costs" line item of the consolidated statements of operations. Equity-based compensation expense for the year ended December 31, 2018 includes $3.1 million of equity-based compensation associated with the acceleration of equity awards related to certain employees impacted by the Company’s strategic growth plan which was included in the “Restructuring” expense line item on the consolidated statements of operations.

Segment Information – We manage our business as one operating segment and thus one reportable segment consisting of a portfolio of investments in multiple data centers.

Customer Concentrations – During the year ended December 31, 2020, one of our customers exceeded 10% of total revenues, representing approximately 11.8% of total revenues for the year ended December 31, 2020.

As of December 31, 2020, two of our customers exceeded 5% of trade accounts receivable. In aggregate, these two customers accounted for approximately 45.0% of trade accounts receivable. One of these customers individually exceeded 10% of total trade accounts receivable representing 39.2% of total trade accounts receivable.

Distribution Policy

To satisfy the requirements to qualify for taxation as a REIT, and to avoid paying tax on our income, we intend to continue to make regular quarterly distributions of all, or substantially all, of our REIT taxable income (excluding net capital gains) to our stockholders.

All distributions will be made at the discretion of our board of directors and will depend on our historical and projected results of operations, liquidity and financial condition, our REIT qualification, our debt service requirements, operating expenses and capital expenditures, prohibitions and other restrictions under financing arrangements and applicable law and other factors as our board of directors may deem relevant from time to time. We anticipate that our estimated cash available for distribution will exceed the annual distribution requirements applicable to REITs and the amount necessary to avoid the payment of tax on undistributed income. However, under some circumstances, we may be required to make distributions in

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excess of cash available for distribution in order to meet these distribution requirements and we may need to borrow funds to make certain distributions. If we borrow to fund distributions, our future interest costs would increase, thereby reducing our earnings and cash available for distribution from what they otherwise would have been.

The partnership agreement of the Operating Partnership requires the Operating Partnership to distribute at least quarterly 100% of our “available cash” (as defined in the partnership agreement) to the partners of the Operating Partnership, in accordance with the terms established for the class of partnership interests held by such partner. Furthermore, because QTS intends to continue to qualify as a REIT for tax purposes, QTS is required to make reasonable efforts to distribute available cash (a) to limited partners of the Operating Partnership so as to preclude any such distribution or portion thereof from being treated as part of a sale of property to the Operating Partnership by a limited partner under Section 707 of the Code or the regulations thereunder; provided, however, that neither of QTS nor the Operating Partnership shall have liability to a limited partner under any circumstances as a result of any distribution to a limited partner being so treated, and (b) to QTS, its general partner, in an amount sufficient to enable QTS to make distributions to its stockholders that will enable QTS to (1) satisfy the requirements for qualification as a REIT under the Code and the regulations thereunder, and (2) avoid any U.S. federal income or excise tax liability. Consistent with the partnership agreement, we intend to continue to distribute quarterly an amount of our available cash sufficient to enable QTS to pay quarterly dividends to its stockholders in an amount necessary to satisfy the requirements applicable to REITs under the Code and to eliminate U.S. federal income and excise tax liability.

Fair Value Measurements – ASC Topic 820, Fair Value Measurement, emphasizes that fair-value is a market-based measurement, not an entity-specific measurement. Therefore, a fair-value measurement should be determined based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair-value measurements, a fair-value hierarchy is established that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy).

Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to access. Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability (other than quoted prices), such as interest rates, foreign exchange rates, and yield curves that are observable at commonly quoted intervals. Level 3 inputs are unobservable inputs for the asset or liability, which are typically based on an entity’s own assumptions, as there is little, if any, related market activity. In instances where the determination of the fair-value measurement is based on inputs from different levels of the fair-value hierarchy, the level in the fair-value hierarchy within which the entire fair-value measurement falls is based on the lowest level input that is significant to the fair-value measurement in its entirety. Our assessment of the significance of a particular input to the fair-value measurement in its entirety requires judgment, and considers factors specific to the asset or liability.

As of December 31, 2020, we valued our derivative instruments primarily utilizing Level 2 inputs. See Note 18 – ‘Fair Value of Financial Instruments’ for additional details.

COVID-19 – We continue to actively monitor developments with respect to COVID-19 and have taken numerous actions based on corporate policies specifically focusing on the safety and wellness of our customers, partners, and employees, as well as providing continuous and resilient services. Although the COVID-19 pandemic has caused significant disruptions to the United States and global economy and has contributed to significant volatility in financial markets, as of December 31, 2020, these developments have not had a known material adverse effect on our business. As of December 31, 2020, each of our data centers in North America and Europe are fully operational and operating in accordance with our business continuity plans. Across each of the respective jurisdictions in which we operate, our business has been deemed essential operations, which has allowed us to remain fully staffed with critical personnel in place to continue to provide service and support for our customers.

The extent to which the COVID-19 pandemic impacts our and our customers' business and operations will depend on future developments that are highly uncertain and cannot be predicted with confidence, including the duration of the pandemic, new information that may emerge concerning the severity, variants or mutations of COVID-19, vaccine efficacy and rollout, the response of the overall economy and financial markets and the actions taken to contain COVID-19 or treat its impact, such as government actions, laws or orders or any changes or amendments thereto and the success of any lifting or easing of, or the risk of any premature lifting or easing of, any such restrictions, among others. Due to uncertainties regarding COVID-19, any

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estimates of the effects of COVID-19 as reflected and/or discussed in these financial statements are based upon our best estimates using information known to us at this time, and such estimates may change in the near term, the effects of which could be material.

New Accounting Pronouncements

In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, and subsequent amendments to the guidance: ASU 2018-19 in November 2018, ASU 2019-4 in April 2019, ASU 2019-5 in May 2019, ASUs 2019-10 & 2019-11 in November 2019, and ASU 2020-2 in February 2020. The standard, as amended, requires entities to use a new impairment model based on current expected credit losses (“CECL”) rather than incurred losses. The CECL model is designed to capture expected credit losses through the establishment of an allowance account, which will be presented as an offset to the amortized cost basis of the related financial asset. The guidance is effective for interim and annual periods beginning after December 15, 2019. We adopted this ASU effective January 1, 2020. As the majority of our revenue is generated from operating leases which are governed under ASC Topic 842, the provisions of this standard did not have a material impact on our consolidated financial statements.

In January 2020, the FASB issued ASU 2020-1, Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815): Clarifying the Interactions between Topic 321, Topic 323, and Topic 815, which clarifies the interaction between the accounting for equity securities under Topic 321, the accounting for equity method investments in Topic 323, and the accounting for certain forward contracts and purchased options in Topic 815. ASU 2020-1 is effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. Early adoption is permitted. The amendments in this Update should be applied prospectively. We do not expect the provisions of the standard will have a material impact on our consolidated financial statements when adopted.

In March 2020, the FASB issued ASU 2020-4, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. ASU 2020-4 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in ASU 2020-4 is optional and may be elected over time as reference rate reform activities occur. The standard is effective for all entities as of March 12, 2020 through December 31, 2022. An entity can elect to apply the amendments as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020, or prospectively from a date within an interim period that includes or is subsequent to March 12, 2020, up to that date that the financial statements are available to be issued. Beginning in the first quarter of 2020, we have elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients preserves the presentation of derivatives consistent with past presentation. We continue to evaluate the impact of the guidance but we do not expect the provisions of the standard will have a material impact on our consolidated financial statements.

We determined all other recently issued accounting pronouncements will not have a material impact on our consolidated financial statements or do not materially apply to our operations.

3. Acquisitions and Sales

(All references to square footage, acres and megawatts are unaudited)

Land Acquisitions

During the year ended December 31, 2020, we completed multiple acquisitions of land totaling 126 acres for an aggregate purchase price of approximately $43.9 million to be used for future development. These acquisitions were accounted for as asset acquisitions and were included within the “Construction in Progress” line item of the consolidated balance sheets at the time of acquisition.

During the year ended December 31, 2019, we completed multiple acquisitions of land totaling 107 acres for an aggregate purchase price of approximately $31.6 million to be used for future development. These acquisitions were accounted for as asset acquisitions and were included within the “Construction in Progress” line item of the consolidated balance sheets at the time of acquisition.

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Atlanta Land Improvement Sale

In November 2019, we sold to a third-party certain land improvements which we had previously acquired as part of a larger acquisition of land to expand our Atlanta, Georgia campus. This sale of incidental real estate resulted in a gain of $1.4 million. Additionally, we entered into a ground lease with the Company as lessor and the acquirer of the building as lessee which has an initial term of 20 years.

Netherlands Acquisition

On April 23, 2019, we completed the acquisition of two data centers in the Netherlands (the “Netherlands facilities”) for approximately $44.5 million in cash consideration, including closing costs. At the time of acquisition, the two facilities, in Groningen and Eemshaven, had approximately 160,000 square feet of raised floor capacity and 30 megawatts of combined gross power available. This acquisition was funded with a draw on our unsecured revolving credit facility.

The acquisition was accounted for as an asset acquisition. The purchase price allocation of the Netherlands facilities was a fair value estimate that utilized Level 2 and Level 3 inputs, including discounted future cash flows and observable market data on replacement costs, leasing rates, and discount rates that were used to measure the acquired assets and liabilities on a non-recurring basis.

The following table summarizes the consideration for the Netherlands facilities and the allocation of the fair value of assets acquired and liabilities assumed at the acquisition date (in thousands):

	Purchase Price Allocation		Weighted Avg Remaining Useful Life (in years)
Land	$	1,743	N/A
Buildings and improvements	8,640		24
Construction in progress	29,902		N/A
Acquired intangibles (In-place lease & above market lease)	2,911		3
Deferred costs	906		3
Other assets	128		3
Net Working Capital	554		N/A
Total identifiable assets acquired	44,784
Acquired below market lease	284		3
Total liabilities assumed	284
Net identifiable assets acquired	$	44,500

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4. Acquired Intangible Assets and Liabilities

Summarized below are the carrying values for the major classes of intangible assets and liabilities (in thousands):

		December 31, 2020						December 31, 2019
	Useful Lives	Gross Carrying Value		Accumulated Amortization		Net Carrying Value		Gross Carrying Value		Accumulated Amortization		Net Carrying Value
Customer Relationships	12 years	$	95,705	$	(44,361)	$	51,344	$	95,705	$	(36,411)	$	59,294
In-Place Leases	0.5 to 10 years	34,813		(26,812)		8,001		34,588		(22,522)		12,066
Solar Power Agreement (1)	17 years	13,747		(5,256)		8,491		13,747		(4,448)		9,299
Acquired Favorable Leases
Acquired above market leases - as Lessor	0.5 to 8 years	5,070		(4,816)		254		5,035		(4,015)		1,020
Total Intangible Assets		$	149,335	$	(81,245)	$	68,090	$	149,075	$	(67,396)	$	81,679
Solar Power Agreement (1)	17 years	13,747		(5,256)		8,491		13,747		(4,448)		9,299
Acquired Unfavorable Leases
Acquired below market leases - as Lessor	2 to 4 years	1,117		(1,113)		4		1,092		(967)		125
Acquired above market leases - as Lessee	11 to 12 years	2,453		(1,199)		1,254		2,453		(983)		1,470
Total Intangible Liabilities (2)		$	17,317	$	(7,568)	$	9,749	$	17,292	$	(6,398)	$	10,894

(1)Amortization related to the Solar Power Agreement asset and liability is recorded at the same rate and therefore has no net impact on the statements of operations.

(2)Intangible liabilities are included within the “Advance rents, security deposits and other liabilities” line item of the consolidated balance sheets.

Above or below market leases are amortized as a reduction to or increase in rental revenue in the case of the Company as lessor as well as a reduction to or increase in rent expense in the case of the Company as lessee over the remaining lease terms. The net effect of amortization of acquired above-market and below-market leases resulted in a net decrease in rental revenue of $0.4 million, $0.2 million, and $0.5 million for the years ended December 31, 2020, 2019 and 2018, respectively. The estimated amortization of acquired favorable and unfavorable leases for each of the five succeeding fiscal years ending December 31 is as follows (in thousands):

	Net Rental Revenue Decrease		Net Rental Expense Decrease
2021	$	164	$	(216)
2022	55		(216)
2023	25		(216)
2024	6		(216)
2025	—		(216)
Thereafter	—		(174)
Total	$	250	$	(1,254)

Net amortization of all other identified intangible assets and liabilities was $12.6 million, $13.2 million and $15.0 million for the years ended December 31, 2020, 2019 and 2018, respectively. The estimated net amortization of all other identified intangible assets and liabilities for each of the five succeeding fiscal years ending December 31 is as follows (in thousands):

Year Ending December 31,
2021	$	10,634
2022	10,088
2023	10,084
2024	8,967
2025	7,978
Thereafter	11,594
Total	$	59,345

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5. Real Estate Assets and Construction in Progress

The following is a summary of our cost of owned or leased properties as of December 31, 2020 and 2019 (in thousands):

As of December 31, 2020:

Property Location	Land		Buildings, Improvements and Equipment		Construction in Progress		Total Cost
Atlanta, Georgia Campus (1)	$	55,157	$	700,142	$	191,072	$	946,371
Ashburn, Virginia Campus (2)	16,476		371,725		185,903		574,104
Irving, Texas	8,606		392,275		99,591		500,472
Chicago, Illinois	9,400		250,336		104,117		363,853
Richmond, Virginia	2,180		233,927		120,577		356,684
Suwanee, Georgia (Atlanta-Suwanee)	3,521		184,467		6,718		194,706
Piscataway, New Jersey	7,466		122,176		30,401		160,043
Fort Worth, Texas	9,079		124,054		1,064		134,197
Hillsboro, Oregon	18,414		34,594		78,390		131,398
Santa Clara, California (3)	—		117,343		9,385		126,728
Leased Facilities (4)	—		82,759		225		82,984
Eemshaven, Netherlands	5,366		21,712		47,531		74,609
Sacramento, California	1,481		66,300		12		67,793
Manassas, Virginia (5)	—		25		67,073		67,098
Dulles, Virginia	3,154		54,323		4,148		61,625
Princeton, New Jersey	20,700		35,261		5		55,966
Phoenix, Arizona (5)	—		—		37,729		37,729
Groningen, Netherlands	1,896		11,206		3,730		16,832
Other (6)	2,213		36,636		41,094		79,943
	$	165,109	$	2,839,261	$	1,028,765	$	4,033,135

(1)The “Atlanta, Georgia Campus” includes both the existing data center Atlanta (DC-1) as well as the recently developed data center Atlanta, GA (DC-2) on land adjacent to the existing Atlanta, GA (DC-1) facility.

(2)The “Ashburn, Virginia Campus” includes both the existing data center Ashburn, VA (DC-1) as well as new property development associated with the construction of a second data center Ashburn, VA (DC-2).

(3)Owned facility subject to long-term ground sublease.

(4)Includes 7 facilities. All facilities are leased, including one subject to a finance lease.

(5)Represent land purchases. Land acquisition costs, as well as subsequent development costs, are included within construction in progress until development on the land has ended and the asset is ready for its intended use.

(6)Consists of Miami, FL; Lenexa, KS; Overland Park, KS and additional land.

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As of December 31, 2019:

Property Location	Land		Buildings, Improvements and Equipment		Construction in Progress		Total Cost
Atlanta, Georgia Campus (1)	$	44,588	$	525,300	$	128,930	$	698,818
Irving, Texas	8,606		369,727		98,170		476,503
Ashburn, Virginia (2)	16,476		156,396		189,375		362,247
Richmond, Virginia	2,180		195,684		139,948		337,812
Chicago, Illinois	9,400		205,026		86,878		301,304
Suwanee, Georgia (Atlanta-Suwanee)	3,521		174,124		5,559		183,204
Piscataway, New Jersey	7,466		103,553		36,056		147,075
Santa Clara, California (3)	—		114,499		1,238		115,737
Fort Worth, Texas	9,079		55,018		35,722		99,819
Leased Facilities (4)	—		85,225		1,241		86,466
Sacramento, California	1,481		65,258		163		66,902
Hillsboro, Oregon (2)	—		—		63,573		63,573
Manassas, Virginia (2)	—		—		57,662		57,662
Princeton, New Jersey	20,700		35,192		39		55,931
Dulles, Virginia	3,154		48,651		4,688		56,493
Eemshaven, Netherlands	—		—		37,267		37,267
Phoenix, Arizona (2)	—		—		31,265		31,265
Groningen, Netherlands	1,741		9,085		3,028		13,854
Other (5)	2,213		36,163		120		38,496
	$	130,605	$	2,178,901	$	920,922	$	3,230,428

(1)The “Atlanta, Georgia Campus” includes both the existing data center Atlanta (DC-1) as well as new property development associated with construction of a second data center Atlanta (DC-2) on land adjacent to the existing Atlanta (DC-1) facility.

(2)Represent land purchases. Land acquisition costs, as well as subsequent development costs, are included within construction in progress until development on the land has ended and the asset is ready for its intended use.

(3)Owned facility subject to long-term ground sublease.

(4)Includes 7 facilities. All facilities are leased, including one subject to a finance lease.

(5)Consists of Miami, FL; Lenexa, KS; and Overland Park, KS facilities.

6. Leases

Leases as Lessee

We determine if an arrangement is a lease at inception. If the contract is considered a lease, we evaluate leased property to determine whether the lease should be classified as a finance or operating lease in accordance with U.S. GAAP. We periodically enter into finance leases for certain data center facilities, equipment, and fiber optic transmission cabling. In addition, we lease certain real estate (primarily land or real estate space) under operating lease agreements with such assets included within the “Operating lease right of use assets, net” line item of the consolidated balance sheets and the associated lease liabilities included within the “Operating lease liabilities” line item on the consolidated balance sheets pursuant to ASC Topic 842.

ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. Variable lease payments consist of nonlease services related to the lease. Variable lease payments are excluded from the ROU assets and lease liabilities and are recognized in the period in which the obligation for those payments is incurred. As our leases as lessee typically do not provide an implicit rate, we use our incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. We assess multiple variables when determining the incremental borrowing rate, such as lease term, payment terms, collateral, economic conditions, and creditworthiness. ROU assets also include any lease payments made and

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exclude lease incentives. Many of our lease agreements include options to extend the lease, which we do not include in our expected lease terms unless they are reasonably certain to be exercised. Rental expense for lease payments related to operating leases is recognized on a straight-line basis over the lease term.

We use leasing as a source of financing for certain data center facilities and related equipment. We currently operate one data center facility, along with various equipment and fiber optic transmission cabling, that are subject to finance leases. The remaining terms of our finance leases range from less than one year to seventeen years. Our finance lease associated with the data center includes multiple extension option periods, some of which were included in the lease term as we are reasonably certain to exercise those extension options. Our other finance leases typically do not have options to extend the initial lease term. Finance lease assets are included within the “Buildings, improvements and equipment” line item of the consolidated balance sheets and finance lease liabilities are included within “Finance leases and mortgage notes payable” line item of the consolidated balance sheets.

We currently lease six other facilities under operating lease agreements for various data centers, our corporate headquarters and additional office space. Our leases have remaining lease terms ranging from three to six years. We have options to extend the initial lease term on nearly all of these leases. Additionally, we have one ground lease for our Santa Clara property that is an operating lease which is scheduled to expire in 2052.

Components of lease expense were as follows (in thousands):

	Year Ended December 31,
	2020		2019
Finance lease cost:
Amortization of assets	$	4,150	$	3,535
Interest on lease liabilities	1,915		1,693
Operating lease expense:
Operating lease cost	9,012		9,102
Variable lease cost	1,072		1,109
Sublease income	(193)		(187)
Total lease costs	$	15,956	$	15,252

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Supplemental balance sheet information related to leases was as follows (in thousands, except lease term and discount rate):

	As of December 31,
	2020			2019
Operating leases:
Operating lease right-of-use assets	$	51,342		$	57,141
Operating lease liabilities	58,005			64,416
Finance leases:
Property and equipment, at cost	49,554			50,437
Accumulated amortization	(8,864)			(4,830)
Property and equipment, net	$	40,690		$	45,607
Finance lease liabilities	$	41,718		$	45,141
Weighted average remaining lease term (in years):
Operating leases	13.4			13.7
Finance leases	10.3			11.4
Weighted average discount rate:
Operating leases	5.2		%	5.1		%
Finance leases	4.3		%	4.3		%

Supplemental cash flow and other information related to leases was as follows (in thousands):

	Year Ended December 31,
	2020		2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$	12,048	$	9,834
Operating cash flows for finance leases	$	1,914	$	1,704
Financing cash flows for finance leases	$	2,579	$	2,855

Maturities of lease liabilities, which exclude variable rent payments, are as follows (in thousands):

	December 31, 2020
	Operating Leases		Finance Leases
2021	$	9,818	$	4,446
2022	10,266		4,570
2023	10,393		4,707
2024	8,317		4,847
2025	8,036		4,992
Thereafter	40,872		28,902
Total Lease Payments	$	87,702	$	52,464
Less: Imputed Interest	29,697		10,746
Total Lease Obligations	$	58,005	$	41,718

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Leases as lessor

Our lease revenue contains both minimum lease payments as well as variable lease payments. See Note 2 - ‘Summary of Significant Accounting Policies’ for further details of our revenue streams and associated accounting treatment. The components of our lease revenue were as follows (in thousands):

	Year Ended December 31,
	2020		2019		2018
Lease revenue:
Minimum lease revenue	$	464,005	$	409,157	$	367,388
Variable lease revenue (primarily recoveries from customers)	55,853		55,966		46,232
Total lease revenue	$	519,858	$	465,123	$	413,620

7. Investments in Unconsolidated Entity

During the three months ended March 31, 2019, we formed an unconsolidated entity with Alinda Capital Partners (“Alinda”), an infrastructure investment firm. We contributed a hyperscale data center under development in Manassas, Virginia to the entity. The facility, and the previously executed 10-year operating lease agreement with a global cloud-based software company, was contributed to the unconsolidated entity in exchange for cash and noncash consideration in the form of equity interest in the entity that was measured at fair value pursuant to Topic 820. The equity interest received and any amounts due from the unconsolidated entity are recorded within our consolidated balance sheets and totaled $22.6 million and $30.2 million as of December 31, 2020 and 2019, respectively. Alinda and us each own a 50% interest in the entity. As we are not the primary beneficiary of the arrangement but have the ability to exercise significant influence, we concluded that the investment should be accounted for as an unconsolidated entity using equity method investment accounting. As of December 31, 2020 and 2019, the total assets of the entity were $141.5 million and $127.8 million, respectively. As of December 31, 2020 and 2019, the total debt outstanding, net of deferred financing costs, was $90.1 million and $68.2 million, respectively.

Under the equity method, our cost of investment is adjusted for additional contributions to and distributions from the unconsolidated entity, as well as our share of equity in the earnings and losses of the unconsolidated entity. Generally, distributions of cash flows from operations and capital events are made to members of the unconsolidated entity in accordance with each member’s ownership percentages and the terms of the agreement, but also provides us with rights to preferential cash distributions as certain phases are completed and leased to the underlying tenant. Our policy is to account for distributions from the unconsolidated entity on the basis of the nature of the activities that generated the distribution. Distributions from the operations of the unconsolidated entity are a return on our investment and we classify these distributions as operating cash flows. Any differences between the cost of our investment in an unconsolidated entity and its underlying equity as reflected in the unconsolidated entity’s financial statements generally result from costs of our investment that are not reflected on the unconsolidated entity’s financial statements.

Under the unconsolidated entity agreement, we serve as the entity’s operating member, subject to authority and oversight of a board appointed by us and Alinda, and separately we serve as manager and developer of the facility in exchange for management and development fees. The entity agreement includes various transfer restrictions and rights of first offer that will allow us to repurchase Alinda’s interest should Alinda wish to exit in the future.

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8. Debt

Below is a listing of our outstanding debt, including finance leases, as of December 31, 2020 and 2019 (in thousands):

	Weighted Average Effective Interest Rate at December 31, 2020 (1)		Maturity Date	December 31, 2020		December 31, 2019
Unsecured Credit Facility
Revolving Credit Facility	1.41	%	December 17, 2023	$	392,337	$	317,028
Term Loan A	3.26	%	December 17, 2024	225,000		225,000
Term Loan B	3.30	%	April 27, 2025	225,000		225,000
Term Loan C	3.46	%	October 18, 2026	250,000		250,000
Term Loan D	1.45	%	January 15, 2026	250,000		—
4.750% Senior Notes	4.75	%	November 15, 2025	—		400,000
3.875% Senior Notes	3.88	%	October 1, 2028	500,000		—
Lenexa Mortgage	4.10	%	May 1, 2022	—		1,736
Finance Leases	4.33	%	2021 - 2038	41,718		45,140
	2.85	%		1,884,055		1,463,904
Less net debt issuance costs				(14,562)		(10,839)
Total outstanding debt, net				$	1,869,493	$	1,453,065

(1)The coupon interest rates associated with Term Loan A, Term Loan B, and Term Loan C incorporate the effects of our interest rate swaps in effect as of December 31, 2020.

Credit Facilities, Senior Notes and Mortgage Notes Payable

(a) Unsecured Credit Facility – In October 2019, we amended and restated our unsecured credit facility (the “unsecured credit facility”), which among other things increased the total potential borrowings, extended maturity dates, lowered interest rates, and provided for an additional term loan under the agreement. The unsecured credit facility includes a $225 million term loan which matures on December 17, 2024 (“Term Loan A”), a $225 million term loan which matures on April 27, 2025 (“Term Loan B”), an additional term loan of $250 million, which matures on October 18, 2026 (“Term Loan C”) and a $1.0 billion revolving credit facility which matures on December 17, 2023. The revolving portion of the unsecured credit facility has a one-year extension option available to the Company, subject to certain conditions. Amounts outstanding under the unsecured credit facility bear interest at a variable rate equal to, at our election, LIBOR or a base rate, plus a spread that will vary depending upon our leverage ratio. For revolving credit loans, the spread ranges from 1.25% to 1.85% for LIBOR loans and 0.25% to 0.85% for base rate loans. For Term Loan A and Term Loan B, the spread ranges from 1.20% to 1.80% for LIBOR loans and 0.20% to 0.80% for base rate loans. For Term Loan C, the spread ranges from 1.50% to 1.85% for LIBOR loans and 0.50% to 0.85% for base rate loans. The unsecured credit facility also provides for borrowing capacity of up to $300 million in various foreign currencies.

Under the unsecured credit facility, the capacity may be increased from the current capacity of $1.7 billion to $2.2 billion subject to certain conditions set forth in the credit agreement, including the consent of the administrative agent and obtaining necessary commitments. We are also required to pay a commitment fee to the lenders assessed on the unused portion of the unsecured revolving credit facility. At our election, we can prepay amounts outstanding under the unsecured credit facility, in whole or in part, without penalty or premium.

Our ability to borrow under the unsecured credit facility is subject to ongoing compliance with a number of customary affirmative and negative covenants. As of December 31, 2020, we were in compliance with all of our covenants.

As of December 31, 2020, we had outstanding $1.1 billion of indebtedness under the unsecured credit facility, consisting of $392.3 million of outstanding borrowings under the unsecured revolving credit facility and $700.0 million aggregate outstanding under Term Loans A, B and C, exclusive of net debt issuance costs of $7.1 million. In connection with the unsecured credit facility, as of December 31, 2020, we had letters of credit outstanding aggregating to $3.5 million. As of

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December 31, 2020, the weighted average interest rate for amounts outstanding under the unsecured credit facility, including the effects of interest rate swaps, was 2.65%.

We have also entered into certain interest rate swap agreements. See Note 10 – ‘Derivative Instruments’ for additional details.

(b) Term Loan D – In October 2020, through our Operating Partnership, we entered into a $250 million term loan (“Term Loan D”) that matures on January 15, 2026. Consistent with our existing term loans, amounts outstanding under Term Loan D bear interest at a variable rate equal to, at our election, LIBOR or a base rate, plus a spread that will vary depending upon our leverage ratio. The spread ranges from 1.20% to 1.80% for LIBOR loans and 0.20% to 0.80% for base rate loans. In addition, Term Loan D contains a LIBOR floor of 0.25%. When combined with our current $1.7 billion unsecured credit facility, Term Loan D increases QTS' aggregate unsecured credit facility capacity to $1.95 billion. Term Loan D also provides for a $250 million accordion feature to increase borrowing capacity up to $500 million, subject to obtaining necessary commitments. Term Loan D contains various debt covenants with which we are subject to, and these debt covenants are substantially the same as the debt covenants associated with the unsecured credit facility.

(c) 4.750% Senior Notes – In November 2017, the Operating Partnership and QTS Finance Corporation, a subsidiary of the Operating Partnership formed solely for the purpose of facilitating the offering of the previously outstanding 5.875% Senior Notes due 2022 (collectively, the “Issuers”), issued $400 million aggregate principal amount of 4.750% Senior Notes due 2025 (the “4.750% Senior Notes”) in a private offering. The 4.750% Senior Notes had an interest rate of 4.750% per annum, were issued at a price equal to 100% of their face value and were scheduled to mature on November 15, 2025. During the fourth quarter of 2020 we used availability on our unsecured revolving credit facility, which increased due to revolver repayments following the issuance of the 3.875% Senior Notes and closing of Term Loan D, to fund the redemption of, and satisfy and discharge the indenture pursuant to which the Issuers issued, all of their outstanding 4.750% Senior Notes. We incurred expenses in the fourth quarter of 2020 associated with the redemption of the 4.750% Senior Notes of $18.0 million, including early redemption fees of $14.3 million as well as noncash charges of $3.7 million related to the write off of existing deferred financing costs.

(d) 3.875% Senior Notes – In October 2020, the Issuers issued $500 million aggregate principal amount of senior notes due October 1, 2028 (the “3.875% Senior Notes”) in a private offering. The 3.875% Senior Notes have an interest rate of 3.875% per annum and were issued at a price equal to 100% of their face value. The net proceeds from the offering were used to repay a portion of the amount outstanding under our unsecured revolving credit facility, and subsequently with availability under the unsecured revolving credit facility we funded the redemption of, and satisfied and discharged the indenture pursuant to which the Issuers issued, all of their outstanding 4.750% Senior Notes described above. As of December 31, 2020, the net debt issuance costs associated with the 3.875% Senior Notes were $7.5 million.

The Issuers may redeem the 3.875% Senior Notes prior to maturity at their option at the prices set forth in the indenture dated as of October 7, 2020, among QTS, the Issuers, the guarantors named therein, and Deutsche Bank Trust Company Americas, as trustee (the “Indenture”). The Indenture also includes customary negative covenants, including limitations on asset sales, investments, distributions, incurrence of additional debt and affiliate transactions.

The 3.875% Senior Notes are unconditionally guaranteed, jointly and severally, on a senior unsecured basis by all of the Operating Partnership’s existing subsidiaries (other than certain foreign subsidiaries and receivables entities) and future subsidiaries that guarantee any indebtedness of QTS Realty Trust, Inc., the Issuers or any other subsidiary guarantor, other than QTS Finance Corporation, the co-issuer of the 3.875% Senior Notes. QTS Realty Trust, Inc. does not guarantee the 3.875% Senior Notes and will not be required to guarantee the 3.875% Senior Notes except under certain circumstances.

(e) Lenexa Mortgage – On March 8, 2017, we entered into a $1.9 million mortgage loan secured by our Lenexa facility. This mortgage had a fixed rate of 4.1%, with periodic principal payments due monthly and a balloon payment of $1.6 million scheduled for May 2022. In November of 2020 we paid off the outstanding loan balance of $1.7 million associated with the Lenexa mortgage.

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The annual remaining principal payment requirements of our debt securities as of December 31, 2020 per the contractual maturities, excluding extension options and excluding operating and finance leases, are as follows (in thousands):

Year ending December 31,
2021	$	—
2022	—
2023	392,337
2024	225,000
2025	225,000
Thereafter	1,000,000
Total	$	1,842,337

As of December 31, 2020, we were in compliance with all of our covenants.

9. Income Taxes

We have elected for two of our existing subsidiaries to be taxed as TRS's pursuant to the REIT rules of the U.S. Internal Revenue Code. We also have subsidiaries subject to tax in non-US jurisdictions.

For our TRS's, income taxes are accounted for under the asset and liability method in accordance with ASC 740. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. We consider whether it is more likely than not that some portion or all of the deferred tax assets will be realized. It is possible that some or all of our deferred tax assets could ultimately expire unused. The Company establishes valuation allowances against deferred tax assets when the ability to fully utilize these benefits is determined to be uncertain.

The components of income tax provision from continuing operations are:

	For the Year Ended December 31,
	2020		2019		2018
Current:
U.S. federal	$	—	$	—	$	(50)
U.S. State	368		298		395
Outside United States	7		13		78
Total Current	375		311		423
Deferred:
U.S. federal	71		(276)		(3,727)
U.S. State	(66)		(71)		(64)
Outside United States	58		(1)		—
Total Deferred	63		(348)		(3,791)
Total	$	438	$	(37)	$	(3,368)

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Temporary differences and carry forwards which give rise to the deferred tax assets and liabilities are as follows:

	For the Year Ended December 31,
	2020		2019		2018
Deferred tax assets
Net operating loss carryforwards	$	22,950	$	20,218	$	17,610
Deferred revenue and setup charges	1,062		1,299		3,171
Operating lease liabilities	1,904		2,266		—
Property and equipment	—		512		—
Leases	400		—		1
Credits	300		300		287
Bad debt reserve	191		18		409
Intangibles	1,038		804		—
Interest expense carryforward IRC Sec. 163(j)	1,164		2,782		2,253
Equity compensation	1,654		1,119		952
Other	857		257		582
Gross deferred tax assets	31,520		29,575		25,265
Deferred tax liabilities
Property and equipment	(616)		—		(3,089)
Goodwill	(3,042)		(2,494)		(1,953)
Intangibles	—		(591)		(11,910)
Operating lease right-of-use assets	(1,056)		(1,261)		—
Prepaid commissions	(774)		(1,007)		(956)
Other	(218)		(224)		(93)
Gross deferred tax liabilities	(5,706)		(5,577)		(18,001)
Net deferred tax asset	25,814		23,998		7,264
Valuation allowance	(26,624)		(24,747)		(8,361)
Net deferred tax liability	$	(810)	$	(749)	$	(1,097)

The taxable REIT subsidiaries currently have net operating loss carryforwards related to U.S. federal income taxes of $33.4 million that expire in 11-16 years and $42.3 million which have no expiration. The taxable REIT subsidiaries also have $86.0 million of net operating loss carryforwards relating to state income taxes that expire in 1-20 years. The Company’s interest expense carryforward of $4.5 million has no expiration.

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The effective tax rate is subject to change in the future due to various factors such as the operating performance of the taxable REIT subsidiaries, tax law changes and future business acquisitions. The differences between total income tax expense or benefit and the amount computed by applying the statutory income tax rate to income before provision for income taxes with respect to the TRS activity were as follows:

	For the Year Ended December 31,
	2020			2019			2018
TRS
Statutory rate applied to pre-tax loss	$	(1,380)		$	(12,991)		$	(9,656)
Permanent differences, net	248			16			97
State income tax, net of federal benefit	(421)			(2,868)			(1,430)
Foreign income tax	7			13			78
Federal and State rate change	(1)			(20)			(146)
Other	109			(110)			41
Valuation allowance increase	1,876			15,923			7,648
Total tax expense (benefit)	$	438		$	(37)		$	(3,368)
Effective tax rate	(6.7)		%	0.1		%	7.3		%

On March 27, 2020, the United States enacted the Coronavirus Aid, Relief and Economic Security Act (CARES Act). The CARES Act is an emergency economic stimulus package that includes measures and tax provisions to strengthen the United States economy and fund a nationwide effort to curtail the effect of COVID-19. The CARES Act provides tax changes in response to the COVID-19 pandemic. Some of the provisions which impact our financial statements include the removal of certain limitations on utilization of net operating losses, increasing the ability to deduct interest expense, and amending certain provisions of the previously enacted Tax Cuts and Jobs Act. We have evaluated the impact of the CARES Act and determined that the impact of the CARES Act is immaterial to our consolidated financial statements.

On December 27, 2020, the United States enacted the Consolidated Appropriations Act, 2021, a spending bill containing additional stimulus relief for the COVID-19 pandemic. Because the bill was enacted in close proximity to the end of the year, we continue to evaluate the Consolidated Appropriations Act, 2021 and have not yet identified any material impacts to the financial statements that may result from the bill.

As of December 31, 2020, 2019 and 2018, we had no uncertain tax positions. If we accrue any interest or penalties on tax liabilities from significant uncertain tax positions, those items will be classified as interest expense and general and administrative expense, respectively, in the Statements of Operations and Statements of Comprehensive Income. For the years ended December 31, 2020, 2019, and 2018, we had accrued no such interest or penalties.

We are currently not under examination by the Internal Revenue Service or any state or foreign jurisdictions. Tax years ending after December 31, 2016 remain subject to examination and assessment, state limitation periods included. Tax years ending December 31, 2009 through December 31, 2016 remain open solely for purposes of examination of our loss and credit carryforwards.

We provide a valuation allowance against deferred tax assets if, based on management’s assessment of operating results and other available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The evidence contemplated by management at December 31, 2020, 2019, and 2018 consists of current and prior operating results, available tax planning strategies, and the scheduled reversal of existing taxable temporary differences. Evidence from the scheduled reversal of taxable temporary differences relies on management judgments based on the accumulation of available evidence. Those judgments may be subject to change in the future as evidence available to management changes. Management’s assessment of the Company’s valuation allowance may further change based on our generation or ability to project of future operating income, and changes in tax policy or tax planning strategies.

As of December 31, 2020, 2019, and 2018 valuation allowances of $26.6 million, $24.7 million and $8.4 million, respectively, were recognized against certain net federal and state deferred tax assets since it is more likely than not that the deferred tax assets will not be realized. The $1.9 million year-over-year change is primarily caused by the federal and state valuation allowances recorded due to ongoing operating losses of the taxable REIT subsidiaries. Additionally, some portion of the change to the valuation allowances relates to changes in the evidence available related to the scheduled reversal of

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taxable temporary differences; and some portion of the change to the state valuation allowance is attributable to state net operating losses generated where the Company has discontinued its operations or reduced its presence in certain state jurisdictions.

10. Derivative Instruments

From time to time, we enter into derivative financial instruments to manage certain cash flow risks.

Derivatives designated and qualifying as a hedge of the exposure to variability in the cash flows of a specific asset or liability that is attributable to a particular risk, such as interest rate risk, are considered cash flow hedges.

Interest Rate Swaps

Our objectives in using interest rate swaps are to reduce variability in interest expense and to manage exposure to adverse interest rate movements. To accomplish this objective, we primarily use interest rate swaps as part of our interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for us making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.

As of December 31, 2020, we had interest rate swap agreements in place with an aggregate notional amount of $700 million. The forward swap agreements effectively fix the interest rate on $700 million of term loan borrowings, $225 million of swaps allocated to Term Loan A, $225 million allocated to Term Loan B and $250 million allocated to Term Loan C, through the current maturity dates of the respective term loans.

We reflect our interest rate swap agreements, which are designated as cash flow hedges, at fair value as either assets or liabilities on the consolidated balance sheets within the “Other assets, net” or “Derivative liabilities” line items, as applicable. As of December 31, 2020, and 2019 the fair value of interest rate swaps represented an aggregate liability of $49.8 million and $19.9 million, respectively.

The forward interest rate swap agreements are derivatives that currently qualify for hedge accounting whereby we record the effective portion of changes in fair value of the interest rate swaps in accumulated other comprehensive income or loss on the consolidated balance sheets and statements of comprehensive income which is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. Any ineffective portion of a derivative's change in fair value is immediately recognized within net income (loss). The amount reclassified from other comprehensive income to interest expense on the consolidated statements of operations was an increase to interest expense of $10.1 million, a reduction in interest expense of $1.0 million, and an increase to interest expense of $0.1 million for the years ended December 31, 2020, 2019,and 2018 respectively. There was no ineffectiveness recognized for the years ended December 31, 2020, 2019 and 2018. During the subsequent twelve months, beginning January 1, 2021, we estimate that $13.5 million will be reclassified from other comprehensive income as an increase to interest expense.

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Interest rate derivatives and their fair values as of December 31, 2020 and 2019 were as follows (in thousands):

Notional Amount				Fixed One Month LIBOR rate per annum				Fair Value
December 31, 2020		December 31, 2019				Effective Date	Expiration Date	December 31, 2020		December 31, 2019
$	25,000	$	25,000	1.989	%	January 2, 2018	December 17, 2021	$	(447)	$	(209)
100,000		100,000		1.989	%	January 2, 2018	December 17, 2021	(1,788)		(837)
75,000		75,000		1.989	%	January 2, 2018	December 17, 2021	(1,342)		(627)
50,000		50,000		2.033	%	January 2, 2018	April 27, 2022	(1,248)		(545)
100,000		100,000		2.029	%	January 2, 2018	April 27, 2022	(2,490)		(1,081)
50,000		50,000		2.033	%	January 2, 2018	April 27, 2022	(1,248)		(545)
100,000		100,000		2.617	%	January 2, 2020	December 17, 2023	(7,191)		(4,007)
100,000		100,000		2.621	%	January 2, 2020	April 27, 2024	(8,000)		(4,324)
70,000		—		0.968	%	March 2, 2020	October 18, 2026	(2,174)		—
30,000		—		0.973	%	March 2, 2020	October 18, 2026	(938)		—
200,000		200,000		2.636	%	December 17, 2021	December 17, 2023	(9,648)		(3,939)
200,000		200,000		2.642	%	April 27, 2022	April 27, 2024	(9,500)		(3,802)
125,000		—		1.014	%	December 17, 2023	December 17, 2024	(704)		—
100,000		—		1.035	%	December 17, 2023	December 17, 2024	(584)		—
75,000		—		1.110	%	December 17, 2023	October 18, 2026	(866)		—
100,000		—		1.088	%	April 27, 2024	April 27, 2025	(540)		—
125,000		—		1.082	%	April 27, 2024	April 27, 2025	(666)		—
75,000		—		0.977	%	April 27, 2024	October 18, 2026	(422)		—
								$	(49,796)	$	(19,916)

Power Purchase Agreements

In March 2019, we entered into two 10 year agreements to purchase renewable energy equal to the expected electricity needs of our data centers in Chicago, Illinois and Piscataway, New Jersey. These arrangements currently qualify for hedge accounting whereby we record the changes in fair value of the instruments in “Accumulated other comprehensive income” or loss on the consolidated balance sheets and statements of comprehensive income which is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. The amount reclassified from other comprehensive income to utility expense on the consolidated statements of operations was an increase to utilities expense of $1.2 million and an increase to utilities expense of $0.7 million for the years ended December 31, 2020 and 2019, respectively. There was no amount reclassified from other comprehensive income to utilities expense for the year ended December 31, 2018. We currently reflect these agreements, which are designated as cash flow hedges, at fair value as liabilities on the consolidated balance sheets within the “Derivative liabilities” line item.

Power purchase agreement derivatives and their fair values as of December 31, 2020 and 2019 were as follows (in thousands):

				Fair Value
Counterparty	Facility	Effective Date	Expiration Date	December 31, 2020		December 31, 2019
Calpine Energy Solutions, LLC	Piscataway	3/8/2019	2/28/2029	$	(2,162)	$	(2,919)
Calpine Energy Solutions, LLC	Chicago	3/8/2019	2/28/2029	(1,764)		(3,774)
				$	(3,926)	$	(6,693)

11. Commitments and Contingencies

We are subject to various routine legal proceedings and other matters in the ordinary course of business. We currently do not have any litigation that would have a material adverse impact on our financial statements. Additionally, we do not currently have any material contingencies related to the impact of COVID-19 reflected in our financial statements aside from certain increases to our general bad debt reserve provided for under ASC 450-20.

12. Partners’ Capital, Equity and Incentive Compensation Plans

QualityTech, LP

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QTS has the full power and authority to do all the things necessary to conduct the business of the Operating Partnership.

As of December 31, 2020, the Operating Partnership had four classes of limited partnership units outstanding: Series A Preferred Units, Series B Convertible Preferred Units, Class A units of limited partnership interest (“Class A units”) and Class O LTIP units of limited partnership units (“Class O units”). The Class A units currently outstanding are now redeemable on a one-for-one exchange rate at any time for cash or shares of Class A common stock of QTS. The Company may in its sole discretion elect to assume and satisfy the redemption amount with cash or its shares. Class O units were issued upon grants made under the QualityTech, LP 2010 Equity Incentive Plan (the “2010 Equity Incentive Plan”). Class O units are pari passu with Class A units. Each Class O unit is convertible into Class A units by the Operating Partnership at any time or by the holder at any time based on formulas contained in the partnership agreement.

QTS Realty Trust, Inc.

In connection with its IPO, QTS issued Class A common stock and Class B common stock. Class B common stock entitles the holder to 50 votes per share and was issued to enable our Chief Executive Officer to exchange 2% of his Operating Partnership units so he may have a vote proportionate to his economic interest in the Company. Also in connection with its IPO, QTS adopted the QTS Realty Trust, Inc. 2013 Equity Incentive Plan (the “2013 Equity Incentive Plan”), which authorized 1.75 million shares of Class A common stock to be issued under the 2013 Equity Incentive Plan, including options to purchase Class A common stock if exercised. On May 4, 2015, following approval by our stockholders at our 2015 Annual Meeting of Stockholders, the total number of shares available for issuance under the 2013 Equity Incentive Plan was increased by an additional 3.0 million shares. On May 9, 2019, following approval by our stockholders at our 2019 Annual Meeting of Stockholders, the total number of shares available for issuance under the 2013 Equity Incentive Plan was increased by an additional 1.1 million to 5.9 million.

In March 2019, the Compensation Committee completed a redesign of the long-term incentive program for executive officers to include the following types of awards:

a.Performance-Based FFO Unit Awards — performance-based restricted share unit awards, which may be earned based on Operating Funds From Operations (“OFFO”) per diluted share measured over a two-year performance period (performance-based FFO units or “FFO Units”), with two-thirds of the earned FFO Units vesting and settling in shares of Class A common stock on the date that performance is certified following the end of the performance period and the remaining one-third of the FFO Units vesting and settling at the end of three years from the award grant date. The number of shares of Class A common stock subject to the awards that can be earned ranges from 0% to 200% of the target award based on actual performance over the performance period, with the number of shares to be determined based on a linear interpolation basis between threshold and target and target and maximum performance.

b.Performance-Based Relative TSR Unit Awards — performance-based restricted share unit awards, which may be earned based on total stockholder return (“TSR”) as compared to the MSCI U.S. REIT Index (the “Index”) over a three-year performance period (the performance-based relative TSR units or “TSR Units”). The number of shares of Class A common stock subject to the awards that can be earned ranges from 0% to 200% of the target award based on our TSR compared to the Index. In addition, award payouts will be determined on a linear interpolation basis between threshold and target and target and maximum performance; and will be capped at the target performance level if our TSR is negative.

c.Restricted Stock Awards — the restricted stock awards vest as to one-third of the shares subject to awards on the first anniversary of the date of grant and as to 8.375% of the shares subject to the awards each quarter-end thereafter, subject to the named executive officer’s continued service as an employee as of each vesting date.

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The following is a summary of award activity under the 2010 Equity Incentive Plan and 2013 Equity Incentive Plan and related information for the years ended December 31, 2020, 2019 and 2018:

	2010 Equity Incentive Plan					2013 Equity Incentive Plan
	Numbers of Class O  units	Weighted average exercise  price		Weighted average fair value		Options	Weighted average exercise  price		Weighted average fair value		Restricted Stock / Deferred Stock	Weighted average fair value at grant date		TSR Units	Weighted average fair value at grant date		FFO Units	Weighted average fair value at grant date
Outstanding at January 1, 2018	568,040	$	23.52	$	5.00	1,369,270	$	38.18	$	7.80	381,864	$	46.37	—	$	—	—	$	—
Granted	—	—		—		674,081	34.05		5.63		348,152	35.27		—	—		—	—
Exercised/Vested (1)	(465,761)	23.40		4.76		(6,188)	21.50		3.68		(224,660)	46.23		—	—		—	—
Cancelled/Expired	—	—		—		—	—		—		(85,047)	43.50		—	—		—	—
Outstanding at December 31, 2018	102,279	$	24.05	$	5.67	2,037,163	$	36.86	$	7.10	420,309	$	37.83	—	$	—	—	$	—
Granted	—	—		—		135,594	42.27		7.62		274,564	42.25		86,089	54.64		86,089	42.01
Exercised/Vested (1)	(19,969)	20.25		4.42		(125,213)	30.80		6.21		(279,429)	39.20		—	—		—	—
Cancelled/Expired	—	—		—		(112,706)	45.86		9.43		(25,694)	42.17		(1,739)	54.64		(1,739)	42.01
Outstanding at December 31, 2019	82,310	$	24.97	$	5.97	1,934,838	$	37.11	$	7.05	389,750	$	39.67	84,350	$	54.64	84,350	$	42.01
Granted	—	—		—		99,872	56.84		9.35		302,591	57.47		84,202	79.18		84,202	56.84
Performance Adjustment (2)	—	—		—		—	—		—		—	—		—	—		59,844	42.01
Exercised/Vested (1)	(6,875)	25.00		4.49		(98,303)	28.84		5.18		(264,466)	39.89		—	—		(96,129)	42.01
Cancelled/Expired	—	—		—		—	—		—		(11,379)	49.38		—	—		—	—
Outstanding at December 31, 2020	75,435	$	25.00	$	6.11	1,936,407	$	38.55	$	7.26	416,496	$	52.20	168,552	$	66.90	132,267	$	51.45

(1)Represents (i) Class O units which were converted to Class A units, (ii) options to purchase Class A common stock which were exercised, and (iii) the Class A common stock that has been released from restriction and which was not surrendered by the holder to satisfy their statutory minimum federal and state tax obligations associated with the vesting of restricted common stock, with respect to the applicable column.

(2)Represents the remeasurement of FFO units issued during the year ended December 31, 2019 based on achievement of certain performance metrics over the performance period.

The assumptions and fair values for restricted stock and options to purchase shares of Class A common stock granted for the years ended December 31, 2020, 2019 and 2018 are included in the following table on a per unit basis. Options to purchase shares of Class A common stock were valued using the Black-Scholes model and TSR Units were valued using a Monte-Carlo simulation that leveraged similar assumptions to those used to value the Class A common stock and FFO Units.

	2020			2019			2018
Fair value of FFO units and restricted stock granted	$56.84	-	$65.96	$42.01	-	$51.25	$34.03	-	$54.01
Fair value of TSR units granted			$79.18			$54.64			N/A
Fair value of options granted			$9.35	$7.56	-	$8.28	$5.55	-	$5.64
Expected term (years)			5.5			5.5	5.5	-	6.0
Expected volatility			27%			28%			28%
Expected dividend yield			3.31 %	3.89%	-	4.19%			4.82%
Expected risk-free interest rates			0.61 %	2.33 %	-	2.56 %	2.69 %	-	2.73 %

The following tables summarize information about awards outstanding as of December 31, 2020.

	Operating Partnership Awards Outstanding
	Exercise prices		Awards outstanding	Weight average remaining vesting period  (years)
Class O Units	$	25.00	75,435	—
Total Operating Partnership awards outstanding			75,435

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	QTS Realty Trust, Inc. Awards Outstanding
	Exercise prices				Awards outstanding	Weight average remaining vesting period  (years)
Restricted stock	$	—			416,496	1.0
TSR units	—				168,552	0.9
FFO units	—				132,267	0.7
Options to purchase Class A common stock	$	21.00	-	$56.84	1,936,407	0.9
Total QTS Realty Trust, Inc. awards outstanding					2,653,722

Any awards outstanding as of the end of the period have been valued as of the grant date and generally vest ratably over a defined service period. As of December 31, 2020 all restricted Class A common stock, TSR units, and FFO units outstanding were unvested and approximately 0.1 million options to purchase Class A common stock were outstanding and unvested. As of December 31, 2020 we had $26.5 million of unrecognized equity-based compensation expense which will be recognized over a remaining weighted-average vesting period of approximately 0.9 years. The total intrinsic value of Class O units and options to purchase Class A common stock outstanding at December 31, 2020 was $48.3 million.

Dividends and Distributions

The following tables present quarterly cash dividends and distributions paid to our common and preferred stockholders for the years ended December 31, 2020 and 2019:

Year Ended December 31, 2020
Record Date	Payment Date	Per Share Rate		Aggregate Dividend/Distribution Amount (in millions)
Common Stock
September 18, 2020	October 6, 2020	$	0.47	$	32.0
June 19, 2020	July 7, 2020	0.47		31.5
March 20, 2020	April 7, 2020	0.47		31.5
December 20, 2019	January 7, 2020	0.44		28.6
				$	123.6
Series A Preferred Stock
September 30, 2020	October 15, 2020	$	0.45	$	1.9
June 30, 2020	July 15, 2020	0.45		1.9
March 31, 2020	April 15, 2020	0.45		1.9
December 31, 2019	January 15, 2020	0.45		1.9
				$	7.6
Series B Preferred Stock
September 30, 2020	October 15, 2020	$	1.63	$	5.1
June 30, 2020	July 15, 2020	1.63		5.1
March 31, 2020	April 15, 2020	1.63		5.1
December 31, 2019	January 15, 2020	1.63		5.1
				$	20.4

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Year Ended December 31, 2019
Record Date	Payment Date	Per Share Rate		Aggregate Dividend/Distribution Amount (in millions)
Common Stock
September 19, 2019	October 4, 2019	$	0.44	$	27.3
June 25, 2019	July 9, 2019	0.44		27.3
March 20, 2019	April 4, 2019	0.44		27.3
December 21, 2018	January 8, 2019	0.41		23.7
				$	105.6
Series A Preferred Stock
September 30, 2019	October 15, 2019	$	0.45	$	1.9
June 30, 2019	July 15, 2019	0.45		1.9
March 31, 2019	April 15, 2019	0.45		1.9
December 31, 2018	January 15, 2019	0.45		1.9
				$	7.6
Series B Preferred Stock
September 30, 2019	October 15, 2019	$	1.63	$	5.1
June 30, 2019	July 15, 2019	1.63		5.1
March 31, 2019	April 15, 2019	1.63		5.1
December 31, 2018	January 15, 2019	1.63		5.1
				$	20.4

Additionally, subsequent to December 31, 2020, we paid the following dividends:

•On January 7, 2021, we paid our regular quarterly cash dividend of $0.47 per common share to stockholders of record as of the close of business on December 22, 2020.

•On January 15, 2021, we paid a quarterly cash dividend of approximately $0.45 per share on our Series A Preferred Stock to holders of Series A Preferred Stock of record as of the close of business on December 31, 2020.

•On January 15, 2021, we paid a quarterly cash dividend of approximately $1.63 per share on our Series B Preferred Stock to holders of Series B Preferred Stock of record as of the close of business on December 31, 2020.

Equity Issuances

Class A Common Stock

In February 2019, we conducted an underwritten offering of 7,762,500 shares of our Class A common stock, $0.01 par value per share (the “Class A common stock”) consisting of 4,000,000 shares issued during the first quarter of 2019 and 3,762,500 shares which were issued on a forward basis. During the year ended December 31, 2019 we settled a portion of the 3,762,500 shares subject to the forward sales agreements, and during the year ended December 31, 2020 we settled the remaining shares subject to the forward sale agreements as shown in the table below.

In June 2019, we established an “at-the-market” equity offering program (the “Prior ATM Program”) pursuant to which we could issue, from time to time, up to $400 million of our Class A common stock, $0.01 par value per share (the “Class A common stock”), which could include shares to be sold on a forward basis. The use of forward sales under the Prior ATM Program generally allowed us to lock in a price on the sale of shares of our Class A common stock when sold by the forward sellers, but defer receiving the net proceeds from such sales until the shares of our Class A common stock are issued at settlement on a later date. We have concluded that the forward sale agreements meet the derivative scope exception for certain contracts involving an entity’s own equity. The initial forward sale price is subject to daily adjustment based on a floating interest rate factor equal to the specified daily rate less a spread, and will decrease based on specified amounts related to dividends on shares of our common stock during the term of the applicable forward sale. Our earnings per share dilution resulting from the forward sale agreements, if any, is determined using the two-class method.

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In May 2020, we established a new “at-the-market” equity offering program (the “Current ATM Program”) pursuant to which we may issue, from time to time, up to $500 million of our Class A common stock, which may include shares to be sold on a forward basis. As under the Prior ATM Program, the use of forward sales under the Current ATM Program generally allows us to lock in a price on the sale of shares of our Class A common stock when sold by the forward sellers, but defer receiving the net proceeds from such sales until the shares of our Class A common stock are issued at settlement on a later date. We have concluded that the forward sale agreements meet the derivative scope exception for certain contracts involving an entity’s own equity. Our earnings per share dilution resulting from the forward sale agreements, if any, is determined using the two-class method.

At any time during the term of any forward sale under the Prior ATM Program or the Current ATM Program we may settle the forward sale by physical delivery of shares of Class A common stock to the forward purchasers or, at our election, cash settle or net share settle. The initial forward sale price per share under each forward sale equals the product of (x) an amount equal to 100% minus the applicable forward selling commission and (y) the volume weighted average price per share at which the borrowed shares of our common stock were sold pursuant to the equity distribution agreement by the relevant forward seller during the applicable forward hedge selling period for such shares to hedge the relevant forward purchaser’s exposure under such forward sale. Thereafter, the forward sale price is subject to adjustment on a daily basis based on a floating interest rate factor equal to the specified daily rate less a spread, and is decreased based on specified amounts related to dividends on shares of our common stock during the term of the applicable forward sale. If the specified daily rate is less than the spread on any day, the interest rate factor will result in a daily reduction of the applicable forward sale price.

During the year ended December 31, 2020, we received $286.3 million of net proceeds from the settlement of forward shares as noted in the table below. We expect to physically settle (by delivering shares of Class A common stock) the remaining forward sales under the Prior ATM Program and Current ATM Program prior to the first anniversary date of each respective transaction. In addition, during the year ended December 31, 2020, we utilized the forward provisions under the Prior ATM Program and the Current ATM Program to allow for the sale of additional shares of our common stock as noted in the table below.

In June 2020, we conducted an underwritten offering of 4,400,000 shares of common stock offered on a forward basis at a price of $64.90 per share representing available net proceeds upon physical settlement of approximately $266.9 million as of December 31, 2020. We expect to physically settle the forward sale agreements (by the delivery of shares of common stock) and receive proceeds, subject to certain adjustments, from the sale of those shares of common stock by June 30, 2021, although we have the right to elect settlement prior to that time. We have concluded that the forward sale agreements meet the derivative scope exception for certain contracts involving an entity’s own equity. The initial forward sale price is subject to daily adjustment based on a floating interest rate factor equal to the specified daily rate less a spread, and will decrease based on specified amounts related to dividends on shares of our common stock during the term of the applicable forward sale. Our earnings per share dilution resulting from the forward sale agreements, if any, is determined using the two-class method.

The following table represents a summary of our equity issuances of our Class A common stock during the year ended December 31, 2020 (in thousands):

Offering Program	Forward Shares Sold/(Settled)		Net Proceeds Available/(Received) (1)
Shares and net proceeds available as of December 31, 2019	3,795		$	173,776	(2)
February 2019 Offering - Settlement	(931)	(3)	(35,841)
June 2019 Prior ATM Program - Sales	4,550		243,577
June 2019 Prior ATM Program - Settlements	(4,981)	(3)	(250,496)
May 2020 Current ATM Program - Sales	3,128		189,640
June 2020 Offering - Sales	4,400		266,894
Shares and net proceeds available as of December 31, 2020	9,961		$	587,550

(1)Net Proceeds Available remain subject to certain adjustments until settled.

(2)Net Proceeds available reported in the Form 10-K for the period ended December 31, 2019 were $177.8 million. The $4 million decrease is primarily due to QTS’ declared dividends, which reduces cash expected to be received upon full physical settlement of the forward shares.

(3)Represents the number of forward shares we elected to physically settle during the year ended December 31, 2020.

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Preferred Stock

On March 15, 2018, QTS issued 4,280,000 shares of 7.125% Series A Cumulative Redeemable Perpetual Preferred Stock (“Series A Preferred Stock”) with a liquidation preference of $25.00 per share, which included 280,000 shares of the underwriters’ partial exercise of their option to purchase additional shares. In connection with the issuance of the Series A Preferred Stock, on March 15, 2018 the Operating Partnership issued to the Company 4,280,000 Series A Preferred Units, which have economic terms that are substantially similar to the Company’s Series A Preferred Stock. The Series A Preferred Units were issued in exchange for the Company’s contribution of the net offering proceeds of the offering of the Series A Preferred Stock to the Operating Partnership.

Dividends on the Series A Preferred Stock are payable quarterly in arrears on or about the 15th day of each January, April, July and October. The Series A Preferred Stock does not have a stated maturity date and is not subject to any sinking fund or mandatory redemption provisions. Upon liquidation, dissolution or winding up, the Series A Preferred Stock will rank senior to common stock and pari passu with the Series B Preferred Stock with respect to the payment of distributions and other amounts. Except in instances relating to preservation of QTS’ qualification as a REIT or pursuant to the Company’s special optional redemption right, the Series A Preferred Stock is not redeemable prior to March 15, 2023. On and after March 15, 2023, the Company may, at its option, redeem the Series A Preferred Stock, in whole, at any time, or in part, from time to time, for cash at a redemption price of $25.00 per share, plus any accrued and unpaid dividends (whether or not declared) to, but not including, the date of redemption.

Upon the occurrence of a change of control, the Company has a special optional redemption right that enables it to redeem the Series A Preferred Stock, in whole, at any time, or in part, from time to time, within 120 days after the first date on which a change of control has occurred resulting in neither QTS nor the surviving entity having a class of common shares listed on the NYSE, NYSE Amex, or NASDAQ or the acquisition of beneficial ownership of its stock entitling a person to exercise more than 50% of the total voting power of all our stock entitled to vote generally in election of directors. The special optional redemption price is $25.00 per share, plus any accrued and unpaid dividends (whether or not declared) to, but not including, the date of redemption.

Upon the occurrence of a change of control, holders will have the right (unless the Company has elected to exercise its special optional redemption right to redeem their Series A Preferred Stock) to convert some or all of such holder’s Series A Preferred Stock into a number of shares of Class A common stock, par value $0.01 per share, equal to the lesser of:

•the quotient obtained by dividing (i) the sum of the $25.00 liquidation preference plus the amount of any accrued and unpaid dividends (whether or not declared) to, but not including, the change of control conversion date (unless the change of control conversion date is after a record date for a Series A Preferred Stock dividend payment and prior to the corresponding Series A Preferred Stock dividend payment date, in which case no additional amount for such accrued and unpaid dividend will be included in this sum) by (ii) the Common Stock Price; and

• 1.46929 (i.e., the Share Cap);

subject, in each case, to certain adjustments and provisions for the receipt of alternative consideration of equivalent value as described in the prospectus supplement for the Series A Preferred Stock.

On June 25, 2018, QTS issued 3,162,500 shares of 6.50% Series B Cumulative Convertible Perpetual Preferred Stock (“Series B Preferred Stock”) with a liquidation preference of $100.00 per share, which included 412,500 shares the underwriters purchased pursuant to the exercise of their overallotment option in full. In connection with the issuance of the Series B Preferred Stock, on June 25, 2018 the Operating Partnership issued to the Company 3,162,500 Series B Preferred Units, which have economic terms that are substantially similar to the Company’s Series B Preferred Stock. The Series B Preferred Units were issued in exchange for the Company’s contribution of the net offering proceeds of the offering of the Series B Preferred Stock to the Operating Partnership.

Dividends on the Series B Preferred Stock are payable quarterly in arrears on or about the 15th day of each January, April, July and October. The Series B Preferred Stock is convertible by holders into shares of Class A common stock at any time at the then-prevailing conversion rate. The conversion rate as of December 31, 2020 is 2.1404 shares of the Company’s Class A common stock per share of Series B Preferred Stock. The Series B Preferred Stock does not have a stated maturity date. Upon liquidation, dissolution or winding up, the Series B Preferred Stock will rank senior to common stock and pari passu with the Series A Preferred Stock with respect to the payment of distributions and other amounts. The Series B Preferred Stock is not

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redeemable by the Company. At any time on or after July 20, 2023, the Company may at its option cause all (but not less than all) outstanding shares of the Series B Preferred Stock to be automatically converted into the Company’s Class A common stock at the then-prevailing conversion rate if the closing sale price of the Company’s Class A common stock is equal to or exceeds 150% of the then-prevailing conversion price for at least 20 trading days in a period of 30 consecutive trading days, including the last trading day of such 30-day period, ending on the trading day prior to the issuance of a press release announcing the mandatory conversion.

If a holder converts its shares of Series B Preferred Stock at any time beginning at the opening of business on the trading day immediately following the effective date of a fundamental change (as described in the prospectus supplement) and ending at the close of business on the 30th trading day immediately following such effective date, the holder will automatically receive a number of shares of the Company’s Class A common stock equal to the greater of:

•the sum of (i) a number of shares of the Company’s Class A common stock, as may be adjusted, as described in the Articles Supplementary for the 6.50% Series B Cumulative Convertible Perpetual Preferred Stock filed with the State Department of Assessments and Taxation of Maryland on June 22, 2018 (the “Articles Supplementary”) and (ii) the make-whole premium described in the Articles Supplementary; and

•a number of shares of the Company's Class A common stock equal to the lesser of (i) the liquidation preference divided by the average of the daily volume weighted average prices of the Company's Class A common stock for ten days preceding the effective date of a fundamental change and (ii) 5.1020 (subject to adjustment).

QTS Realty Trust, Inc. Employee Stock Purchase Plan

In June 2015, we established the QTS Realty Trust, Inc. Employee Stock Purchase Plan (the “2015 Plan”) to give eligible employees the opportunity to purchase, through payroll deductions, shares of our Class A common stock in the open market by an independent broker with the Company paying brokerage commissions and fees associated with such share purchases. The 2015 Plan became effective July 1, 2015. We reserved 250,000 shares of our Class A common stock for purchase under the 2015 Plan, which were registered pursuant to a registration statement on Form S-8 filed on June 17, 2015.

On May 4, 2017, our stockholders approved the 2017 Amended and Restated QTS Realty Trust, Inc. Employee Stock Purchase Plan (the “2017 Plan”). The 2017 Plan became effective July 1, 2017 and is administered by the compensation committee (the “Compensation Committee”) of the board of directors (or by a committee of one or more persons appointed by it or the board of directors). The 2017 Plan permits participants to purchase our Class A common stock at a discount of up to 10% (as determined by the Compensation Committee). Employees of our Company and our majority-owned subsidiaries who have been employed for at least thirty days and who perform at least thirty hours of service per week for our Company are eligible to participate in the 2017 Plan, excluding any employee who, at any time during which the payroll deductions are made on behalf of the participating employees to purchase stock, owns shares representing five percent or more of the total combined voting power or value of all classes of shares of our Company, or who is a Section 16 officer. Under the 2017 Plan, there are four purchase periods per year, and participants may deduct a minimum of $20 per paycheck and a maximum of $1,000 per paycheck towards the purchase of shares. Shares purchased under the 2017 Plan are subject to a one-year holding period following the purchase date, during which they may not be sold or transferred. We reserved 239,989 shares of our Class A common stock, subject to certain adjustments, for purchase under the 2017 Plan, which were registered pursuant to a registration statement on Form S-8 originally filed on June 17, 2015 and amended on June 30, 2017.

Effective February 1, 2020, the 2017 Plan was further amended and restated to, among other things, provide that employees of our Company and our majority-owned subsidiaries who have been employed for at least thirty days and who are regular full-time employees are eligible to participate in the 2017 Plan, excluding temporary or part-time employees and interns, any employee who, at any time during which the payroll deductions are made on behalf of the participating employees to purchase stock, owns shares representing five percent or more of the total combined voting power or value of all classes of shares of our Company, or any employee who is a Section 16 officer. In addition, such amendment and restatement provides that the $1,000 per paycheck limit on each participant’s purchase of shares assumes 24 pay periods per year and will be adjusted to the extent a participant is paid on a more frequent or infrequent basis.

13. Related Party Transactions

As described further in Note 7 'Investments in Unconsolidated Entity', during the three months ended March 31, 2019, we formed an unconsolidated entity with Alinda, an infrastructure investment firm. We contributed a hyperscale data center

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under development in Manassas, Virginia to the entity. The facility, and the previously executed operating lease to a global cloud-based software company pursuant to a 10-year lease agreement, was contributed in exchange for cash and noncash consideration in the form of equity interest in the entity that was measured at fair value pursuant to ASC Topic 820. Alinda and us each own a 50% interest in the entity.

Under the unconsolidated entity operating agreement, we serve as the entity’s operating member, subject to authority and oversight of a board appointed by us and Alinda, and separately we serve as manager and developer of the facility in exchange for management and development fees. During the years ended December 31, 2020 and 2019, we received $0.9 million and $0.6 million in development fees from the unconsolidated entity, respectively, as well as $0.8 million and $0.6 million in management fees from the unconsolidated entity, respectively.

In addition, we periodically execute transactions with entities affiliated with our Chairman and Chief Executive Officer. Such transactions include automobile, furniture and equipment purchases as well as building operating lease payments and receipts, and reimbursement for the use of a private aircraft service by our officers and directors.

The transactions which occurred during the years ended December 31, 2020, 2019 and 2018 are outlined below (in thousands):

	For the Year Ended December 31,
	2020		2019		2018
Tax, utility, insurance and other reimbursement	$	694	$	967	$	724
Rent expense	1,027		1,014		1,014
Capital assets acquired	—		704		464
Total	$	1,721	$	2,685	$	2,202

14. Employee Benefit Plan

We sponsor a defined contribution 401(k) retirement plan covering all eligible employees.

Qualified employees may elect to contribute to the 401(k) Plan on a pre-tax or post-tax basis. The maximum amount of employee contribution is subject only to statutory limitations. Starting on January 1, 2015, the Company matched 50% of the first 6% of contributions made by employees. Since January 1, 2016, we have matched 100% of the first 1% of contributions and 50% of the next 5% of contributions made by employees. We contributed $2.6 million, $2.5 million and $2.5 million to the 401(k) Plan for the years ended December 31, 2020, 2019 and 2018, respectively.

15. Noncontrolling Interest

Concurrently with the completion of the IPO, we consummated a series of transactions pursuant to which QTS became the sole general partner and majority owner of QualityTech, LP, which then became its operating partnership. The previous owners of QualityTech, LP retained 21.2% ownership of the Operating Partnership as of the date of the IPO.

Commencing at any time beginning November 1, 2014, at the election of the holders of the noncontrolling interest, the currently outstanding Class A units of the Operating Partnership are redeemable for cash or, at the election of the Company, Class A common stock of the Company on a one-for-one basis. As of December 31, 2020, the noncontrolling ownership interest percentage of QualityTech, LP was 9.2%.

16. Earnings per share

Basic income (loss) per share is calculated by dividing the net income (loss) attributable to common shares by the weighted average number of common shares outstanding during the period. Diluted income (loss) per share adjusts basic income per share for the effects of potentially dilutive common shares. Unvested restricted stock awards and our forward sale contracts described in Note 12 contain non-forfeitable rights to dividends and thus are participating securities and are included in the computation of basic earnings per share pursuant to the two-class method for all periods presented. The two-class method is an earnings allocation formula that treats a participating security as having rights to undistributed earnings that would otherwise have been available to common stockholders. Accordingly, service-based restricted stock awards and the forward sale contracts were included in the calculation of basic earnings per share using the two-class method for all periods presented to the extent outstanding during the period.

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The computation of basic and diluted net income (loss) per share is as follows (in thousands, except per share data):

	Year Ended December 31,
	2020		2019		2018
Numerator:
Net income (loss)	$	14,576	$	31,665	$	(7,175)
(Income) loss attributable to noncontrolling interests	1,330		(374)		2,715
Preferred stock dividends	(28,180)		(28,180)		(16,666)
Earnings attributable to participating securities	(16,360)		(7,828)		(947)
Net loss available to common stockholders after allocation to participating securities	$	(28,634)	$	(4,717)	$	(22,073)
Denominator:
Weighted average shares outstanding - basic	60,717		54,837		50,433
Effect of Class O units, TSR units, FFO units and options to purchase Class A common stock on an "as if" converted basis	—		—		—
Weighted average shares outstanding - diluted	60,717		54,837		50,433
Basic net loss per share *	$	(0.47)	$	(0.09)	$	(0.44)
Diluted net loss per share *	$	(0.47)	$	(0.09)	$	(0.44)

*    Note: The calculations of basic and diluted net income (loss) per share above do not include the following number of Class A partnership units, Class O units, TSR units, FFO units and options to purchase common stock on an "as if" converted basis, and the effects of Series B Convertible preferred stock on an “as if” converted basis as their respective inclusions would have been antidilutive:

	Year Ended December 31,
	2020	2019	2018
Class A Partnership units	6,648	6,671	6,653
Class O units, TSR units, FFO units and options to purchase common stock on an "as if" converted basis	1,118	518	350
Series B Convertible preferred stock on an "as if" converted basis	6,778	6,729	3,484

17. Contracts with Customers

Future minimum payments to be received under non-cancelable customer contracts including both lease rental revenue components and non-lease revenue components that are accounted for as a combined lease component in accordance with ASC Topic 842 which is discussed in Note 2 above (inclusive of payments for contracts which have not yet commenced, and exclusive of variable lease revenue such as recoveries of operating costs from customers) are as follows for the years ending December 31 (in thousands):

Year Ended December 31,
2021	$	435,906
2022	359,860
2023	263,413
2024	214,215
2025	165,002
Thereafter	493,839
Total	$	1,932,235

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18. Fair Value of Financial Instruments

ASC Topic 825, Financial Instruments, requires disclosure of fair value information about financial instruments, whether or not recognized in the consolidated balance sheets, for which it is practicable to estimate that value. In cases where quoted market prices are not available, fair values are based upon the application of discount rates to estimated future cash flows based upon market yields or by using other valuation methodologies. Considerable judgment is necessary to interpret market data and develop estimated fair value. Accordingly, fair values are not necessarily indicative of the amounts we could realize on disposition of the financial instruments. The use of different market assumptions and/or estimation methodologies may have a material effect on estimated fair value amounts.

Short-term instruments: The carrying amounts of cash and cash equivalents and restricted cash approximate fair value.

Derivative Contracts:

Interest rate swaps

Currently, we use interest rate swaps to manage our interest rate risk. The valuation of these instruments is determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves. The fair values of interest rate swaps are determined using the market standard methodology of netting the discounted future fixed cash receipts (or payments) and the discounted expected variable cash payments (or receipts). The variable cash payments (or receipts) are based on an expectation of future interest rates (forward curves) derived from observable market interest rate curves. To comply with the provisions of fair value accounting guidance, we incorporate credit valuation adjustments to appropriately reflect both our own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of our derivative contracts for the effect of nonperformance risk, we have considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts, and guarantees.

Although we have determined that the majority of the inputs used to value our derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with our derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by us and our counterparties. However, as of December 31, 2020, we assessed the significance of the impact of the credit valuation adjustments on the overall valuation of our derivative positions and determined that the credit valuation adjustments are not significant to the overall valuation of our derivatives. As a result, we have determined that our derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy. We do not have any fair value measurements on a recurring basis using significant unobservable inputs (Level 3) as of December 31, 2020 or December 31, 2019.

Power Purchase Agreements

In March 2019, we began using energy hedges to manage risk related to energy prices. The inputs used to value the derivatives primarily fall within Level 2 of the fair value hierarchy, and valuation of these instruments is determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each contract. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including futures curves. The fair values of the energy hedges are determined using the market standard methodology of netting the discounted future fixed cash receipts (or payments) and the discounted expected variable cash payments (or receipts). The variable cash payments (or receipts) are based on an expectation of future energy rates (forward curves) derived from observable market futures curves. To comply with the provisions of fair value accounting guidance, we incorporate credit valuation adjustments to appropriately reflect both our own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of our derivative contracts for the effect of nonperformance risk, we have considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts, and guarantees.

Sale of assets: During the year ended December 31, 2019, we recognized a gain on the sale of real estate assets that is discussed in detail in Note 7. In order to determine fair value of the noncash equity consideration received for the sale of the assets, we utilized estimation models to derive the fair value of the equity interest received in the transaction. These estimation models consisted of generally acceptable real estate valuation models as well as discounted cash flow analysis that

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included Level 3 inputs including market rents, discount rates, expected occupancy and estimates of additional capital expenditures, and capitalization rates derived from market data.

Unsecured Credit facility, Term Loan D and 3.875% Senior Notes: As market interest rates have fluctuated compared to contracted interest rates, the fair value of our unsecured credit facility approximated the carrying value of the credit facility less the fair value of the interest rate swap liability. Our Term Loan D did not have interest rates which were materially different than current market conditions and therefore, the fair value approximated the carrying value. The fair value of our 3.875% Senior Notes was estimated using Level 2 “significant other observable inputs,” primarily based on quoted market prices for the same or similar issuances. At December 31, 2020, the fair value of the 3.875% Senior Notes was approximately $508.8 million.

Other debt instruments: The fair value of our other debt instruments (including finance leases and mortgage notes payable) were estimated in the same manner as the unsecured credit facility above. Similarly, each of these instruments did not have interest rates which were materially different than current market conditions and therefore, the fair value of each instrument approximated the respective carrying values.

19. Quarterly Financial Information (unaudited)

The tables below reflect the selected quarterly information for the years ended December 31, 2020 and 2019 (in thousands except share data):

	Three Months Ended
	December 31,		September 30,		June 30,		March 31,
2020
Revenues	$	143,897	$	137,538	$	131,640	$	126,292
Operating income	17,151		15,016		17,859		15,631
Net income (loss)	(10,660)		6,907		10,209		8,120
Net income (loss) attributable to QTS Realty Trust, Inc.	(8,922)		6,925		9,892		8,010
Net income (loss) attributable to common stockholders	(15,967)		(120)		2,847		965
Net loss per share attributable to common shares - basic	(0.33)		(0.07)		(0.05)		(0.01)
Net loss per share attributable to common shares - diluted	(0.33)		(0.07)		(0.05)		(0.01)
2019
Revenues	$	123,707	$	125,255	$	119,167	$	112,689
Operating income	4,218		13,606		14,598		28,734
Net income (loss)	(3,606)		6,588		7,535		21,148
Net income (loss) attributable to QTS Realty Trust, Inc.	(2,511)		6,637		7,483		19,558
Net income (loss) attributable to common stockholders	(9,556)		(408)		438		12,513
Net income (loss) per share attributable to common shares - basic	(0.20)		(0.05)		(0.03)		0.20
Net income (loss) per share attributable to common shares - diluted	(0.20)		(0.05)		(0.03)		0.20

20. Subsequent Events

In January 2021, we paid our regular quarterly cash dividends on our common stock, Series A Preferred Stock and Series B Preferred Stock. See the ‘Dividends and Distributions’ section of Note 12 for additional details.

Subsequent to December 31, 2020, the Company authorized the following dividends:

•On February 3, 2021, the Company announced that its board of directors authorized payment of a regular quarterly cash dividend of $0.50 per common share, payable on April 6, 2021, to stockholders of record as of the close of business on March 19, 2021.

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•On February 3, 2021, the Company announced that its board of directors authorized payment of a regular quarterly cash dividend of approximately $0.45 per share on its Series A Preferred Stock, payable on April 15, 2021, to holders of Series A Preferred Stock of record as of the close of business on March 31, 2021.

•On February 3, 2021, the Company announced that its board of directors authorized payment of a regular quarterly cash dividend of approximately $1.63 per share on its Series B Preferred Stock, payable on April 15, 2021, to holders of Series B Preferred Stock of record as of the close of business on March 31, 2021.

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QTS REALTY TRUST, INC.

SCHEDULE II – VALUATION AND QUALIFYING ACCOUNTS

December 31, 2020

Year Ended December 31, (dollars in thousands)	Balance at beginning of period		Charge to expenses		Additions/ (Deductions)		Balance at end of period
Allowance for uncollectible receivables
2020	$	2,279	$	5,051	$	(1,891)	$	5,439
2019	3,764		2,859		(4,344)		2,279
2018	11,453		(2,275)		(5,414)		3,764
Valuation allowance for deferred tax assets
2020	$	24,747	$	1,877	$	—	$	26,624
2019	8,361		16,386		—		24,747
2018	713		7,648		—		8,361

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QTS REALTY TRUST, INC.

SCHEDULE III – REAL ESTATE INVESTMENTS

December 31, 2020

	Initial Costs						Costs Capitalized Subsequent to Acquisition							Gross Carrying Amount
As of 12/31/2020 (dollars in thousands)	Land		Buildings and Improvements		Construction in Progress		Land		Buildings and Improvements			Construction in Progress		Land		Buildings and Improvements		Construction in Progress		Accumulated Depreciation and Amortization (1)		Year of Acquisition
Property Location
Owned Properties
Ashburn, Virginia (DC-1)	$	16,476	$	—	$	—	$	—	$	371,725		$	13,653	$	16,476	$	371,725	$	13,653	$	(23,423)	2017
Ashburn, Virginia (DC-2)	—		—		20,603		—		—			109,254		—		—		129,857		—		2019
Ashburn, Virginia (DC-3) (2)	—		—		35,198		—		—			7,194		—		—		42,392		—		2017
Atlanta, Georgia (DC-1)	2,078		35,473		2,209		11,212		538,751			991		13,289		574,224		3,200		(221,800)		2006
Atlanta, Georgia (DC-2)	10,569		—		—		—		124,864			124,252		10,569		124,864		124,252		(2,737)		2017
Atlanta, Georgia Land (2)	23,572		—		52,754		7,726		1,054			10,866		31,298		1,054		63,619		(449)		2017, 2019, 2020
Chicago, Illinois	—		—		17,764		9,400		250,335			86,353		9,400		250,335		104,117		(34,134)		2014
Dulles, Virginia	3,154		29,583		—		—		24,740		(3)	4,148		3,154		54,323		4,148		(17,191)		2017
Eemshaven, Netherlands	—		—		29,915		5,366		21,712			17,616		5,366		21,712		47,531		(1,017)		2019
Fort Worth, Texas	136		610		48,984		8,943		123,444			(47,920)		9,079		124,054		1,064		(8,967)		2016
Groningen, Netherlands	1,743		8,640		—		153		2,566			3,730		1,896		11,206		3,730		(1,456)		2019
Hillsboro, Oregon	—		—		25,657		18,414		34,594			52,733		18,414		34,594		78,390		(880)		2017
Irving, Texas	—		5,808		—		8,606		386,467			99,591		8,606		392,275		99,591		(81,213)		2013
Lenexa, Kansas	400		3,100		—		37		781			—		437		3,881		—		(703)		2011
Manassas, Virginia (DC-1) (2)	—		—		27,484		—		25			33,586		—		25		61,070		(2)		2018
Manassas, Virginia (DC-2)	—		—		5,911		—		—			92		—		—		6,003		—		2018
Miami, Florida	1,777		6,955		—		—		24,934			577		1,777		31,889		577		(13,796)		2008
Phoenix, Arizona (2)	—		—		24,668		—		—			13,061		—		—		37,729		—		2017
Piscataway, New Jersey	7,466		80,366		13,900		—		41,810			16,501		7,466		122,176		30,401		(16,600)		2016
Princeton, New Jersey	20,700		32,126		—		—		3,135			5		20,700		35,261		5		(6,319)		2014
Richmond, Virginia	2,000		11,200		7,029		180		222,727			113,548		2,180		233,927		120,577		(84,389)		2010 & 2019
Sacramento, California	1,481		52,753		—		—		13,546			12		1,481		66,299		12		(16,325)		2012
San Antonio, Texas (2)	—		—		37,167		—		—			3,213		—		—		40,380		—		2020
Santa Clara, California	—		15,838		—		—		101,505			9,385		—		117,343		9,385		(52,742)		2007
Suwanee, Georgia (Atlanta-Suwanee)	1,395		29,802		—		2,126		154,665			6,701		3,521		184,467		6,701		(90,323)		2005
	$	92,947	$	312,254	$	349,243	$	72,162	$	2,443,381		$	679,142	$	165,109	$	2,755,635	$	1,028,385	$	(674,468)
Leased Properties
Jersey City, New Jersey	—		1,985		—		—		28,178			223		—		30,163		223		(15,455)		2006
Leased Facilities acquired in 2015	—		59,087		—		—		(6,491)			2		—		52,596		2		(12,513)		2015
Overland Park, Kansas	—		—		—		—		866			154		—		866		154		(508)
	$	—	$	61,072	$	—	$	—	$	22,553		$	379	$	—	$	83,625	$	379	$	(28,476)
	$	92,947	$	373,326	$	349,243	$	72,162	$	2,465,934		$	679,521	$	165,109	$	2,839,260	$	1,028,764	$	(702,944)

(1)See Note 2 - ‘Summary of Significant Accounting Policies’ for information regarding asset lives on which depreciation and amortization are calculated.

(2)Represent land purchases. Land acquisition costs, as well as subsequent development costs, are included within construction in progress until development on the land has ended and the asset is ready for its intended use.

(3)Includes the effects of an impairment recognized during the year ended December 31, 2019 of certain data center assets and equipment in one of our Dulles, Virginia data centers. The impairment resulted in a reduction of costs capitalized of $24.9 million as well as a reduction of accumulated depreciation of $13.5 million during the year ended December 31, 2019. See the Impairment of Long-Lived Assets, Intangible Assets and Goodwill section of Note 2 ‘Summary of Significant Accounting Policies’ for additional information.

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The aggregate gross cost of the Company’s properties for U.S. federal income tax purposes was $4.22 billion (unaudited) as of December 31, 2020.

The following table reconciles the historical cost and accumulated depreciation for the years ended December 31, 2020, 2019 and 2018 (in thousands):

	Year Ended December 31,
	2020		2019		2018
Property
Balance, beginning of period	$	3,230,428	$	2,812,856	$	2,357,322
Disposals	(7,821)		(41,363)		(43,616)
Additions (acquisitions and improvements)	810,527		458,935		499,150
Balance, end of period	$	4,033,134	$	3,230,428	$	2,812,856
Accumulated depreciation
Balance, beginning of period	$	(558,560)	$	(467,644)	$	(394,823)
Disposals	6,577		28,172		30,139
Additions (depreciation and amortization expense)	(150,961)		(119,088)		(102,960)
Balance, end of period	$	(702,944)	$	(558,560)	$	(467,644)

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EX-4.6

Exhibit 4.6

DESCRIPTION OF REGISTRANT'S SECURITIES REGISTERED PURSUANT TO

SECTION 12 OF THE SECURITIES EXCHANGE ACT OF 1934

The following description sets forth certain material terms and provisions of the securities of QTS Realty Trust Inc. ("we," "us" or the "Company") that is registered under Section 12 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). This description also summarizes relevant provisions of the Maryland General Corporation Law (the "MGCL") and certain provisions of our Articles of Amendment and Restatement, as amended (our "charter"), and our Second Amended and Restated Bylaws (our "bylaws"). We encourage you to read our charter, our bylaws and the applicable provisions of the MGCL for additional information.

DESCRIPTION OF CAPITAL STOCK

Our charter provides that we may issue up to 450,000,000 shares of Class A common stock, $0.01 par value per share ("Class A common stock"), up to 133,000 shares of Class B common stock, $0.01 par value per share ("Class B common stock," and together with our Class A common stock, the "common stock"), and 49,867,000 shares of preferred stock, $0.01 par value per share. Our charter authorizes our board of directors to amend our charter to increase or decrease the 500,000,000 aggregate number of authorized shares of common stock or preferred stock or the number of shares of stock of any class or series without stockholder approval; except that our board of directors may not increase the number of shares of Class B common stock that we have authority to issue or reclassify any shares of our capital stock as Class B common stock without stockholder approval.

Under Maryland law, stockholders generally are not personally liable for our debts or obligations solely as a result of their status as stockholders.

DESCRIPTION OF COMMON STOCK

Voting Rights

Subject to the provisions of our charter regarding the restrictions on transfer and ownership of shares of our common stock and except as may otherwise be specified in the terms of any class or series of common stock, each outstanding share of Class A common stock entitles the holder to one vote and each outstanding share of Class B common stock entitles the holder to 50 votes on all matters submitted to a vote of stockholders, including the election of directors, and, except as provided with respect to any other class or series of capital stock, the holders of shares of Class A common stock and Class B common stock vote together as a single class and possess exclusive voting power. Directors are elected by a plurality of the votes cast by stockholders and there is no cumulative voting in the election of our directors. A majority of the votes cast by stockholders is sufficient to approve any other matter, unless a different vote is required by our bylaws, rule, regulation or statute, or by our charter.

Under the MGCL a Maryland corporation generally cannot dissolve, amend its charter, merge, sell all or substantially all of its assets, engage in a statutory share exchange or engage in similar transactions outside the ordinary course of business unless declared advisable by a majority of its board of directors and approved by the affirmative vote of stockholders holding at least two-thirds of the shares entitled to vote on the matter unless a lesser percentage (but not less than a majority of all the votes entitled to be cast on the matter) is set forth in the corporation's charter. Our charter provides that these

actions may be taken if declared advisable by a majority of our board of directors and approved by the vote of stockholders holding at least a majority of the votes entitled to be cast on the matter (other than certain amendments to the provisions of our charter related to the removal of directors and the restrictions on ownership and transfer of our shares of stock, which require a vote of at least two-thirds of the votes entitled to be cast on the matter). However, Maryland law permits a corporation to transfer all or substantially all of its assets without the approval of the stockholders of the corporation to one or more persons if all of the equity interests of the person or persons are owned, directly or indirectly, by the corporation. In addition, because operating assets may be held by a corporation's subsidiaries, as in our situation, these subsidiaries may be able to transfer all or substantially all of such assets without a vote of our stockholders.

Dividends, Distributions, Liquidation and Other Rights

Subject to the preferential rights of any other class or series of our stock and to the provisions of our charter regarding the restrictions on transfer of shares of stock, holders of shares of common stock are entitled to receive dividends on such shares of common stock if, as and when authorized by our board of directors and declared by us out of assets legally available therefor. Such holders also are entitled to share ratably in the assets of our company legally available for distribution to our stockholders in the event of our liquidation, dissolution or winding up after payment or establishment of reserves for all of our debts and liabilities and any shares with preferential rights thereto.

Holders of shares of common stock have no preference, conversion (other than as described below with respect to the Class B common stock), exchange, sinking fund or redemption rights, have no preemptive rights to subscribe for any securities of our company and have no appraisal rights. Subject to the preferential rights of any other class or series of our stock and to the provisions of our charter regarding the restrictions on transfer of shares of stock, shares of common stock have equal dividend, liquidation and other rights.

Power to Reclassify Our Unissued Shares of Stock

Our charter authorizes our board of directors to classify and reclassify any unissued shares of common or preferred stock into other classes or series of shares of stock and to establish the number of shares in each class or series and to set the preferences, conversion and other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications or terms or conditions of redemption for each such class or series; provided that our board of directors may not increase the number of shares of Class B common stock that we have authority to issue or reclassify any shares of our capital stock as Class B common stock without stockholder approval. Pursuant to this authority, our board of directors has classified 4,600,000 shares of Series A Preferred Stock and 3,162,500 shares of Series B Convertible Preferred Stock. In the future, our board of directors could authorize the issuance of one or more additional classes of preferred stock that have priority over the shares of common stock with respect to dividends, distributions and rights upon liquidation and with other terms and conditions that could have the effect of delaying, deterring or preventing a transaction or a change in control that might involve a premium price for holders of shares of our common stock or otherwise might be in their best interest.

Power to Increase or Decrease Authorized Shares of Common Stock and Issue Additional Shares of Common and Preferred Stock

We believe that the power of our board of directors, without prior stockholder approval (subject to certain exceptions), to amend our charter to increase or decrease the number of authorized shares of

stock, to issue additional authorized but unissued shares of common stock or preferred stock and to classify or reclassify unissued shares of common stock or preferred stock and thereafter to cause us to issue such classified or reclassified shares of stock will provide us with increased flexibility in structuring possible future financings and acquisitions and in meeting other needs that might arise. The additional classes or series will be available for issuance without further action by our stockholders, unless such action is required by applicable law or the rules of any stock exchange or automated quotation system on which our securities may be listed or traded. Although our board of directors does not currently intend to do so, it could authorize us to issue a class or series that could, depending upon the terms of the particular class or series, delay, defer or prevent a transaction or a change in control of our company that might involve a premium price for holders of our shares of stock or otherwise be in the best interest of our stockholders.

Class B Common Stock

In connection with our initial public offering, we issued 133,000 shares of Class B common stock. Our Class B common stock is not registered under the Exchange Act or listed on a securities exchange. Subject to the provisions of our charter regarding the restrictions on transfer and ownership of shares of our common stock and except as may otherwise be specified in the terms of any class or series of common stock, each outstanding share of Class B common stock entitles the holder to 50 votes on all matters submitted to a vote of stockholders, including the election of directors, and, except as provided with respect to any other class or series of capital stock, the holders of shares of Class B common stock vote together as a single class with the holders of Class A common stock. Each share of Class B common stock may be converted into one share of Class A common stock by the holder at any time and is subject to automatic conversion to shares of Class A common stock upon a direct or indirect transfer of beneficial ownership of a share of Class B common stock or of common units of limited partnership of the Operating Partnership ("OP units") held by the beneficial owner of such Class B common stock. Our charter prohibits our board of directors from increasing the number of shares of Class B common stock that we have authority to issue or reclassifying any shares of our capital stock as Class B common stock without stockholder approval.

In order to exercise the optional conversion right, the holder of Class B common stock shall deliver a written conversion notice stating the number of shares to be converted, the date on which the conversion shall occur (which date shall be a business day no less than five business days nor more than twenty business days from the date of such conversion notice) to the transfer agent for the Class B common stock, together with the certificates, if any, representing the shares of Class B common stock to be converted, duly endorsed for transfer.

Exchange Listing

Our Class A common stock is listed on the NYSE under the symbol "QTS."

Transfer Agent and Registrar

The transfer agent and registrar for our shares of common stock is Computershare Trust Company, N.A.

DESCRIPTION OF PREFERRED STOCK

We are authorized to issue up to 49,867,000 shares of preferred stock, $0.01 par value per share, of which 4,600,000 shares have been designated as Series A Preferred Stock and 3,162,500 shares have

been designated as Series B Convertible Preferred Stock. Our charter authorizes our board of directors to amend our charter to increase or decrease the number of authorized shares of preferred stock without prior stockholder approval. In addition, our charter permits us to reopen each respective series, without the consent of the holders of the Series A Preferred Stock or Series B Convertible Preferred Stock, as applicable, in order to issue additional shares of Series A Preferred Stock or Series B Convertible Preferred Stock, as applicable, from time to time. Terms defined under "-Series A Preferred Stock" and "-Series B Convertible Preferred Stock" below shall have the meanings ascribed to such terms in the applicable sections.

Series A Preferred Stock

Ranking

Our Series A Preferred Stock ranks senior to the Junior Stock (as defined under "-Dividends" below), including shares of our common stock, and on parity with any parity shares that we may issue in the future, with respect to payment of dividends and amounts upon liquidation, dissolution or winding up. While any shares of Series A Preferred Stock are outstanding, we may not authorize or create any class or series of capital stock that ranks senior to our Series A Preferred Stock with respect to the payment of dividends or amounts upon liquidation, dissolution or winding up without the consent of the holders of two-thirds of the outstanding Series A Preferred Stock voting as a single class. However, we may create additional classes or series of stock, amend our charter to increase the authorized number of shares of preferred stock or issue series of preferred stock ranking on parity with our Series A Preferred Stock, including the Series B Convertible Preferred Stock, with respect, in each case, to the payment of dividends and amounts upon liquidation, dissolution or winding up ("Parity Stock"), without the consent of any holder of Series A Preferred Stock. See "-Voting Rights" below for a discussion of the voting rights applicable if we seek to create any class or series of preferred stock senior to our Series A Preferred Stock.

Dividends

Holders of Series A Preferred Stock are entitled to receive, when, as and if authorized by our board of directors, out of funds legally available for payment, and declared by us, cumulative cash dividends at the rate of 7.125% per annum per share of its liquidation preference (equivalent to $1.78125 per annum per share of Series A Preferred Stock).

Dividends on each share of Series A Preferred Stock are cumulative from the date of original issue and are payable quarterly in arrears on or about the 15th day of each January, April, July and October, commencing as of April 15, 2018, at the then applicable annual rate; provided, however, that if any dividend payment date falls on any day other than a business day, as defined in the articles supplementary establishing our Series A Preferred Stock ("Series A Articles Supplementary"), the dividend due on such dividend payment date shall be paid on the first business day immediately following such dividend payment date. Each dividend is payable to holders of record as they appear on our stock records at the close of business on the record date, not exceeding 30 days preceding the payment dates thereof as fixed by our board of directors. Dividends are cumulative from the date of original issue or the most recent dividend payment date to which dividends have been paid, whether or not in any dividend period or periods there shall be funds of ours legally available for the payment of such dividends. Accumulations of dividends on our Series A Preferred Stock will not bear interest and holders of our Series A Preferred Stock will not be entitled to any dividends in excess of full cumulative dividends. Dividends payable on our Series A Preferred Stock for any period greater or less than a full dividend

period will be computed on the basis of a 360-day year consisting of twelve 30-day months. Dividends payable on our Series A Preferred Stock for each full dividend period will be computed by dividing the annual dividend rate by four.

No dividend will be declared or paid on any Parity Stock unless full cumulative dividends have been declared and paid or are contemporaneously declared and funds sufficient for payment set aside on our Series A Preferred Stock for all prior dividend periods; provided, however, that if accrued dividends on our Series A Preferred Stock for all prior dividend periods have not been paid in full or a sum sufficient for such payment is not set apart, then any dividend declared on our Series A Preferred Stock for any dividend period and on any Parity Stock will be declared ratably in proportion to accrued and unpaid dividends on our Series A Preferred Stock and such Parity Stock. All of our dividends on our Series A Preferred Stock, including any capital gain dividends, will be credited first to the earliest accrued and unpaid dividend.

Our board of directors will not authorize and we will not (i) declare, pay or set apart funds for the payment of any dividend or other distribution with respect to any Junior Stock (other than in shares of Junior Stock) or (ii) redeem, purchase or otherwise acquire for consideration any Junior Stock through a sinking fund or otherwise (other than a redemption or purchase or other acquisition of shares of our common stock made for purposes of an employee incentive or benefit plan of our company or any subsidiary, or a conversion into or exchange for Junior Stock or redemptions for the purpose of preserving our qualification as a real estate investment trust ("REIT")), unless all cumulative dividends with respect to our Series A Preferred Stock and any Parity Stock at the time such dividends are payable have been paid or funds have been set apart for payment of such dividends.

As used herein, (i) the term "dividend" does not include dividends payable solely in shares of Junior Stock on Junior Stock, or in options, warrants or rights to holders of Junior Stock to subscribe for or purchase any Junior Stock and (ii) the term "Junior Stock" means our Class A common stock, Class B common stock and any other class of our capital stock now or hereafter issued and outstanding that ranks junior as to the payment of dividends or amounts upon liquidation, dissolution and winding up to our Series A Preferred Stock.

Optional Redemption

We may not redeem our Series A Preferred Stock prior to March 15, 2023, except in certain limited circumstances relating to the ownership limitation necessary to preserve our qualification as a REIT or in connection with our special optional redemption right to redeem Series A Preferred Stock upon a Change of Control (as defined under "-Conversion Rights-Definitions" below). For further information regarding these exceptions, see "-Special Optional Redemption" below and "Restrictions on Ownership and Transfer." On or after March 15, 2023, we, at our option upon not less than 30 nor more than 60 days written notice, may redeem our Series A Preferred Stock, in whole, at any time, or in part, from time to time, for cash at a redemption price of $25.00 per share, plus all accrued and unpaid dividends thereon (whether or not declared) to, but not including, the date fixed for redemption.

A notice of optional redemption (which may be contingent on the occurrence of a future event) will be mailed, postage prepaid, not less than 30 nor more than 60 days prior to the redemption date, addressed to the holders of record of our Series A Preferred Stock at their addresses as they appear on our stock transfer records. A failure to give such notice or any defect in the notice or in its mailing will not affect the validity of the proceedings for the redemption of any shares of Series A Preferred Stock except as to the holder to whom notice was defective or not given.

If fewer than all the shares of Series A Preferred Stock held by any holder are to be redeemed, the notice mailed to such holder will also specify the number of shares of Series A Preferred Stock to be redeemed from such holder. If fewer than all of the outstanding shares of Series A Preferred Stock are to be redeemed, the shares to be redeemed shall be selected by lot or pro rata.

Special Optional Redemption

Upon the occurrence of a Change of Control (as defined under "-Conversion Rights" below), we will have the option to redeem our Series A Preferred Stock, in whole, at any time, or in part, from time to time, within 120 days after the date on which such Change of Control has occurred for cash at a redemption price of $25.00 per share, plus any accrued and unpaid dividends (whether or not declared) to, but not including, the redemption date. If we exercise our special optional redemption right in connection with a Change of Control following the occurrence of a Change of Control, the holder will not have the Change of Control Conversion Right described below.

A notice of special optional redemption will be mailed, postage prepaid, not less than 30 nor more than 60 days prior to the redemption date, addressed to the holders of record of our Series A Preferred Stock at their addresses as they appear on our stock transfer records. A failure to give such notice or any defect in the notice or in its mailing will not affect the validity of the proceedings for the special optional redemption of the shares of Series A Preferred Stock except as to the holder to whom notice was defective or not given.

If fewer than all the shares of Series A Preferred Stock held by any holder are to be redeemed, the notice mailed to such holder will also specify the number of shares of Series A Preferred Stock to be redeemed from such holder. If fewer than all of the outstanding shares of Series A Preferred Stock are to be redeemed, the shares to be redeemed shall be selected by lot or pro rata.

If we have given a notice of redemption and have paid or set aside sufficient funds for the redemption in trust for the benefit of the holders of shares of Series A Preferred Stock called for redemption, then from and after the redemption date, those shares of Series A Preferred Stock will be treated as no longer being outstanding, no further dividends will accrue and all other rights of the holders of those shares of Series A Preferred Stock will terminate. The holders of those shares of Series A Preferred Stock will retain their right to receive the redemption price for their shares and any accrued and unpaid dividends to (but not including) the redemption date.

General Provisions Applicable to Redemptions

On the redemption date, we must pay on each share of Series A Preferred Stock to be redeemed any accrued and unpaid dividends, in arrears, for any dividend period ending on or prior to the redemption date. In the case of a redemption date falling after a dividend payment record date and prior to the related payment date, the holders of Series A Preferred Stock at the close of business on such record date will be entitled to receive the dividend payable on such shares on the corresponding dividend payment date, notwithstanding the redemption of such shares prior to such dividend payment date. Except as provided for in the two preceding sentences, no payment or allowance will be made for unpaid dividends, whether or not in arrears, on any Series A Preferred Stock called for redemption.

If full cumulative dividends on our Series A Preferred Stock and any Parity Stock have not been paid or declared and set apart for payment, we may not purchase, redeem or otherwise acquire Series A Preferred Stock in part or any Parity Stock other than in exchange for Junior Stock; provided, however, that the foregoing shall not prevent the purchase by us of shares held in excess of the limits in our charter

in order to ensure that we continue to meet the requirements for qualification as a REIT. See "Restrictions on Ownership and Transfer."

On and after the date fixed for redemption, provided that we have made available at the office of the registrar and transfer agent a sufficient amount of cash to effect the redemption, dividends will cease to accrue on the shares of Series A Preferred Stock called for redemption (except that, in the case of a redemption date after a dividend payment record date and prior to the related payment date, holders of Series A Preferred Stock on the dividend payment record date will be entitled on such dividend payment date to receive the dividend payable on such shares on the corresponding dividend payment date), such shares shall no longer be deemed to be outstanding and all rights of the holders of such shares as holders of Series A Preferred Stock shall cease except the right to receive the cash payable upon such redemption, without interest from the date of such redemption.

Liquidation Preference

The holders of Series A Preferred Stock are entitled to receive in the event of any liquidation, dissolution or winding up of our company, whether voluntary or involuntary, $25.00 per share of Series A Preferred Stock, which we refer to as the "Liquidation Preference," plus an amount per share of Series A Preferred Stock equal to all dividends (whether or not earned or declared) accrued and unpaid thereon to, but not including, the date of final distribution to such holders.

Until the holders of Series A Preferred Stock have been paid the Liquidation Preference and all accrued and unpaid dividends in full, no payment will be made to any holder of Junior Stock upon the liquidation, dissolution or winding up of our company. If, upon any liquidation, dissolution or winding up of our company, our assets, or proceeds thereof, distributable among the holders of our Series A Preferred Stock are insufficient to pay in full the Liquidation Preference and all accrued and unpaid dividends and the liquidation preference and all accrued and unpaid dividends with respect to our Series A Preferred Stock and any other Parity Stock, then such assets, or the proceeds thereof, will be distributed among the holders of Series A Preferred Stock and any such other Parity Stock ratably in accordance with the respective amounts which would be payable on such Series A Preferred Stock and any such other Parity Stock if all amounts payable thereon were paid in full. None of (i) a consolidation or merger of our company with one or more entities, (ii) a statutory stock exchange by our company or (iii) a sale or transfer of all or substantially all of our assets will be considered a liquidation, dissolution or winding up, voluntary or involuntary, of our company.

Voting Rights

Except as indicated below, the holders of Series A Preferred Stock have no voting rights. If and whenever six quarterly dividends (whether or not consecutive) payable on our Series A Preferred Stock are in arrears, whether or not earned or declared, the number of members then constituting our board of directors will be increased by two and the holders of Series A Preferred Stock, voting together as a class with the holders of any other series of Parity Stock upon which like voting rights have been conferred and are exercisable (any such other series, the "Voting Preferred Stock"), will have the right to elect two additional directors of the Company (the "Preferred Stock Directors"), at an annual meeting of stockholders or a properly called special meeting of the holders of our Series A Preferred Stock and such Voting Preferred Stock and at each subsequent annual meeting of stockholders until all such dividends have been paid and dividends for the then current quarterly period on our Series A Preferred Stock and such other Voting Preferred Stock have been paid or declared and set aside for payment. Whenever all arrears in dividends on our Series A Preferred Stock and the Voting Preferred Stock then outstanding

have been paid and full dividends on our Series A Preferred Stock and the Voting Preferred Stock for the then current quarterly dividend period have been paid in full or declared and set apart for payment in full, then the right of the holders of our Series A Preferred Stock and the Voting Preferred Stock to elect the Preferred Stock Directors will cease, the terms of office of the Preferred Stock Directors will forthwith terminate and the number of members of our board of directors will be reduced accordingly. However, the right of the holders of our Series A Preferred Stock and the Voting Preferred Stock to elect the Preferred Stock Directors will again vest if and whenever six quarterly dividends are then in arrears, as described above. In no event shall the holders of Series A Preferred Stock be entitled pursuant to these voting rights to elect a director that would cause us to fail to satisfy a requirement relating to director independence of any national securities exchange on which any class or series of our stock is listed. In class votes with other Voting Preferred Stock, preferred stock of different series shall vote in proportion to the liquidation preference of the preferred stock.

In addition, the approval of two-thirds of the votes entitled to be cast by the holders of outstanding Series A Preferred Stock, voting separately as a class, either at a meeting of stockholders or by written consent, is required (i) to amend, alter or repeal any provisions of our charter or the Series A Articles Supplementary, whether by merger, consolidation or otherwise, to affect materially and adversely the voting powers, rights or preferences of the holders of our Series A Preferred Stock, unless in connection with any such amendment, alteration or repeal, our Series A Preferred Stock remains outstanding without the terms thereof being materially changed in any respect adverse to the holders thereof or is converted into or exchanged for preferred stock of the surviving entity having preferences, conversion and other rights, voting powers, restrictions, limitations as to dividends, qualifications and terms and conditions of redemption thereof that are substantially similar to those of our Series A Preferred Stock, or (ii) to authorize, create, or increase the authorized amount of any class or series of capital stock having rights senior to our Series A Preferred Stock with respect to the payment of dividends or amounts upon liquidation, dissolution or winding up (provided that if such amendment affects materially and adversely the rights, preferences, privileges or voting powers of one or more but not all of the other series of Voting Preferred Stock, the consent of the holders of at least two-thirds of the outstanding shares of each such series so affected is required). However, we may create additional classes of Parity Stock and Junior Stock, amend our charter to increase the authorized number of shares of Parity Stock (including our Series A Preferred Stock) and Junior Stock and issue additional series of Parity Stock and Junior Stock without the consent of any holder of Series A Preferred Stock.

In all cases in which the holders of Series A Preferred Stock shall be entitled to vote, each share of Series A Preferred Stock shall be entitled to one vote for each share of Series A Preferred Stock held by such holder.

Information Rights

During any period in which we are not subject to Section 13 or 15(d) of the Exchange Act and any shares of Series A Preferred Stock are outstanding, we will (i) transmit by mail (or other permissible means under the Exchange Act) to all holders of Series A Preferred Stock, as their names and addresses appear in our record books and without cost to such holders, copies of the annual reports on Form 10-K and quarterly reports on Form 10-Q that we would have been required to file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act if we were subject thereto (other than any exhibits that would have been required) and (ii) promptly, upon request, supply copies of such reports to any prospective holder of Series A Preferred Stock. We will mail (or otherwise provide) the information to the holders of Series A Preferred Stock within 15 days after the respective dates by which a periodic report on Form 10-K or Form 10-Q, as the case may be, in respect of such information would have been required to be filed

with the SEC, if we were subject to Section 13 or 15(d) of the Exchange Act, in each case, based on the dates on which we would be required to file such periodic reports if we were a "non-accelerated filer" within the meaning of the Exchange Act.

Conversion Rights

Definitions

In this section, the following terms shall have the following meanings:

A "Change of Control" will be deemed to have occurred when the following has occurred:

(i) the acquisition by any person, including any syndicate or group deemed to be a "person" under Section 13(d)(3) of the Exchange Act, of beneficial ownership, directly or indirectly, through a purchase, merger or other acquisition transaction or series of purchases, mergers or other acquisition transactions of shares of our company entitling that person to exercise more than 50% of the total voting power of all shares of our company entitled to vote generally in elections of directors (except that such person will be deemed to have beneficial ownership of all securities that such person has the right to acquire, whether such right is currently exercisable or is exercisable only upon the occurrence of a subsequent condition); and

(ii) following the closing of any transaction referred to in clause (i) above, neither we nor the acquiring or surviving entity has a class of common securities (or ADRs representing such securities) listed on the NYSE, the NYSE Amex, or NASDAQ, or listed on an exchange that is a successor to the NYSE, NYSE Amex or NASDAQ.

The "Common Stock Price" will be (i) if the consideration to be received in the Change of Control by holders of our Class A common stock is solely cash, the amount of cash consideration per share of Class A common stock, (ii) if the consideration to be received in the Change of Control by holders of Class A common stock is other than solely cash, the average of the closing price per share of Class A common stock on the ten consecutive trading days immediately preceding, but not including, the effective date of the Change of Control, and (iii) if there is not a readily determinable closing price for the Class A common stock or Alternative Form Consideration (as defined below), the fair market value of Class A common stock or such Alternative Form Consideration (as determined by our board of directors or a committee thereof).

Conversion

Upon the occurrence of a Change of Control, each holder of Series A Preferred Stock will have the right, subject to our special optional redemption right, to convert some or all of the shares of Series A Preferred Stock held by such holder (the "Change of Control Conversion Right"), on the relevant Change of Control Conversion Date (as defined below) into a number of shares of our Class A common stock per share of Series A Preferred Stock (the "Common Stock Conversion Consideration"), equal to the lesser of (A) the quotient obtained by dividing (i) the sum of (x) $25.00, plus (y) an amount equal to any accrued and unpaid dividends (whether or not declared) to, but not including, the Change of Control Conversion Date (as defined below), except if such Change of Control Conversion Date is after a record date for a Series A Preferred Stock dividend payment and prior to the corresponding Series A Preferred Stock dividend payment date, in which case the amount pursuant to this clause (i)(y) shall equal $0.00 in respect of such dividend, by (ii) the Common Stock Price (such quotient, the "Conversion Rate"), and (B) 1.46929 (the "Share Cap").

The Share Cap is subject to pro rata adjustments for any share splits (including those effected pursuant to a common stock dividend), subdivisions or combinations (in each case, a "Share Split") with respect to our Class A common stock as follows: the adjusted Share Cap as the result of a Share Split will be the number of shares of our Class A common stock that is equivalent to the product of (i) the Share Cap in effect immediately prior to such Share Split multiplied by (ii) a fraction, the numerator of which is the number of shares of our Class A common stock outstanding after giving effect to such Share Split and the denominator of which is the number of shares of our Class A common stock outstanding immediately prior to such Share Split.

For the avoidance of doubt, subject to the immediately succeeding sentence, the aggregate number of shares of our Class A common stock (or equivalent Alternative Conversion Consideration (as defined below), as applicable) issuable in connection with the exercise of the Change of Control Conversion Right will not exceed 6,288,561 shares of Class A common stock, taking into account the underwriters' partial exercise of the option to purchase additional Series A Preferred Stock (or equivalent Alternative Conversion Consideration, as applicable), or the Exchange Cap. The Exchange Cap is subject to pro rata adjustments for any Share Splits with respect to our Class A common stock as follows: the adjusted Exchange Cap as the result of a Share Split will be the number of shares of our Class A common stock that is equivalent to the product of (i) the Exchange Cap in effect immediately prior to such Share Split multiplied by (ii) a fraction, the numerator of which is the number of shares of our Class A common stock outstanding after giving effect to such Share Split and the denominator of which is the number of shares of our Class A common stock outstanding immediately prior to such Share Split.

In the case of a Change of Control as a result of which holders of our Class A common stock are entitled to receive consideration other than solely shares of our Class A common stock, including other securities, other property or assets (including cash or any combination thereof) with respect to or in exchange for shares of our Class A common stock (the "Alternative Form Consideration"), a holder of Series A Preferred Stock will be entitled thereafter to convert (subject to our special optional redemption right) such Series A Preferred Stock not into our Class A common stock but solely into the kind and amount of Alternative Form Consideration which the holder of Series A Preferred Stock would have owned or been entitled to receive upon such Change of Control as if such holder of Series A Preferred Stock then held the Common Stock Conversion Consideration immediately prior to the effective time of the Change of Control (the "Alternative Conversion Consideration," and the Common Stock Conversion Consideration or the Alternative Conversion Consideration, as may be applicable to a Change of Control, is referred to as the "Conversion Consideration").

If the holders of our Class A common stock have the opportunity to elect the form of consideration to be received in such Change of Control, the Conversion Consideration will be deemed to be the kind and amount of consideration actually received by holders of a majority of our Class A common stock that voted for such an election (if electing between two types of consideration) or holders of a plurality of our Class A common stock that voted for such an election (if electing between more than two types of consideration), as the case may be.

Within 15 days following the occurrence of a Change of Control, we will provide to holders of Series A Preferred Stock a notice of occurrence of the Change of Control that describes the resulting Change of Control Conversion Right.

We will issue a press release for publication on the Dow Jones & Company, Inc., Business Wire, PR Newswire or Bloomberg Business News (or, if such organizations are not in existence at the time of issuance of such press release, such other news or press organization as is reasonably calculated to

broadly disseminate the relevant information to the public), or post notice on our website, in any event prior to the opening of business on the first business day following any date on which we provide the notice described above to the holders of Series A Preferred Stock.

In order to exercise the Change of Control Conversion Right, a holder of Series A Preferred Stock will be required to deliver, on or before the close of business on the Change of Control Conversion Date, the certificates (if any) evidencing shares of Series A Preferred Stock to be converted, duly endorsed for transfer, together with a written conversion notice completed, to our transfer agent.

The "Change of Control Conversion Date" will be a business day that is no less than 20 days nor more than 35 days after the date on which we provide the notice described above to the holders of Series A Preferred Stock.

Holders of Series A Preferred Stock may withdraw any notice of exercise of a Change of Control Conversion Right (in whole or in part) by a written notice of withdrawal delivered to our transfer agent prior to the close of business on the business day prior to the Change of Control Conversion Date.

Notwithstanding the foregoing, if the shares of Series A Preferred Stock are held in global form, the conversion notice and/or the notice of withdrawal, as applicable, must comply with applicable procedures of The Depository Trust Company ("DTC").

Series A Preferred Stock as to which the Change of Control Conversion Right has been properly exercised and for which the conversion notice has not been properly withdrawn will be converted into the applicable Conversion Consideration in accordance with the Change of Control Conversion Right on the Change of Control Conversion Date.

In connection with the exercise of any Change of Control Conversion Right, we will comply with all U.S. federal and state securities laws and stock exchange rules in connection with any conversion of Series A Preferred Stock into Class A common stock. Notwithstanding any other provision of our Series A Preferred Stock, no holder of our Series A Preferred Stock will be entitled to convert such Series A Preferred Stock for our Class A common stock to the extent that receipt of such Class A common stock would cause such holder (or any other person) to exceed the share ownership limits contained in our charter and the Series A Articles Supplementary. See "Restrictions on Ownership and Transfer."

Fractional Shares

We will not issue fractional shares of Class A common stock upon the conversion of our Series A Preferred Stock. Instead, we will pay the cash value of such fractional shares (based on the closing sale price of the Class A common stock on the conversion date).

Restrictions on Ownership and Transfer

Holders of Series A Preferred Stock are subject to the ownership and transfer restrictions of our charter and the Series A Articles Supplementary. See "Restrictions on Ownership and Transfer."

Listing

Our Series A Preferred Stock is listed on the NYSE under the symbol "QTS.PRA."

Transfer Agent and Registrar

The transfer agent, registrar, dividend disbursing agent and redemption agent for our Series A Preferred Stock is Computershare Trust Company, N.A.

Series B Convertible Preferred Stock

Ranking

Our Series B Convertible Preferred Stock ranks, with respect to dividend rights or rights upon our liquidation, winding-up or dissolution:

senior to all classes of our common stock and each other class of capital stock or series of preferred stock established after the original issue date of the Series B Convertible Preferred Stock (the "Issue Date"), the terms of which do not expressly provide that such class or series ranks senior to or on a parity with the Series B Convertible Preferred Stock as to dividend rights or rights upon our liquidation, winding-up or dissolution (collectively, "Junior Stock");

on a parity, in all respects, with our outstanding Series A Preferred Stock and any class of capital stock or series of preferred stock established after the Issue Date, the terms of which expressly provide that such class or series will rank on a parity with the Series B Convertible Preferred Stock as to dividend rights or rights upon our liquidation, winding-up or dissolution (collectively the "Parity Stock"); and

junior to each class of capital stock or series of preferred stock established after the Issue Date, the terms of which expressly provide that such class or series will rank senior to the Series B Convertible Preferred Stock as to dividend rights or rights upon our liquidation, winding-up or dissolution (collectively the "Senior Stock").

See "-Voting Rights" below for a discussion of the voting rights applicable to the Series B Convertible Preferred Stock if we seek to create any class or series of preferred stock ranking senior to our Series B Convertible Preferred Stock.

Dividends

The terms of payment of dividends on our Series B Convertible Preferred Stock are substantially the same as those of our Series A Preferred Stock as described in "-Series A Preferred Stock-Dividends" above, except that, among other things: (i) the dividend rate for our Series B Convertible Preferred Stock is 6.50% per annum on the liquidation preference of $100.00 per share of Series B Convertible Preferred Stock (equivalent to $6.50 per annum per share); (ii) dividends on the Series B Convertible Preferred Stock are payable in cash quarterly on January 15, April 15, July 15 and October 15 of each year, commencing as of October 15, 2018 (each, a "Dividend Payment Date") at such annual rate; and (iii) dividends are payable to holders of record as they appear in our share records at the close of business on the March 31, June 30, September 30 and December 31 immediately preceding each Dividend Payment Date (each, a "Record Date").

Redemption

The Series B Convertible Preferred Stock is not redeemable by us and has no fixed maturity. However, under certain circumstances, we may at our option cause all outstanding shares of the Series B Convertible Preferred Stock to be automatically converted into shares of Class A common stock as described below under "-Mandatory Conversion."

Subject to applicable law, we may purchase Series B Convertible Preferred Stock, at any time, in the open market, by tender or by private agreement. Any Series B Convertible Preferred Stock that we reacquire will be retired and reclassified as authorized but unissued shares of preferred stock, without designation as to class or series, and may thereafter be reissued as any class or series of preferred stock.

Liquidation Preference

The terms of the liquidation preference of our Series B Convertible Preferred Stock is substantially the same as that of our Series A Preferred Stock as described in "-Series A Preferred Stock-Liquidation Preference" above, except that, among other things, the liquidation preference of our Series B Convertible Preferred Stock is $100.00 per share. In addition, holders of the Series B Convertible Preferred Stock are entitled to notice of any event triggering the right to receive a distribution in connection with any voluntary or involuntary liquidation, dissolution or winding up of our affairs not less than 30 calendar days and not more than 60 calendar days prior to the distribution payment date.

Voting Rights

Except as indicated below, the holders of our Series B Convertible Preferred Stock have no voting rights. The voting rights of our Series B Convertible Preferred Stock are substantially the same as those of our Series A Preferred Stock as described in "-Series A Preferred Stock-Voting Rights" above, except that, among other things, holders of Series B Convertible Preferred Stock shall not have any voting rights in the event of a merger or consolidation involving us, a sale of all or substantially all of the assets of us or of us and our subsidiaries on a consolidated basis or a statutory share exchange (any such transaction, an "Extraordinary Transaction"), so long as (a) the Series B Convertible Preferred Stock remains outstanding following consummation of such Extraordinary Transaction with the terms thereof materially unchanged, taking into account that, upon the occurrence of such an Extraordinary Transaction, we may not be the surviving entity (in which case, the Series B Convertible Preferred Stock may be converted into or exchanged for preferred stock of the surviving entity having terms materially the same as the Series B Convertible Preferred Stock) and, if applicable, with any changes to the terms of the Series B Convertible Preferred Stock required pursuant to and made in compliance with the provisions described under "-Recapitalizations, Reclassifications and Changes of our Class A Common Stock" in connection with such Extraordinary Transaction and (b) if such transaction also constitutes a fundamental change, the provisions under "-Special Rights Upon a Fundamental Change" are complied with, then the occurrence of such Extraordinary Transaction shall not be deemed to adversely affect the powers, preferences, or other special rights or privileges of the Series B Convertible Preferred Stock or its holders.

In addition, in the event that any outstanding series of preferred stock ranking on parity with the Series B Convertible Preferred Stock as to dividends or upon liquidation upon which like voting rights have been conferred and are exercisable (collectively, the "Parity Voting Preferred") has similar vested and continuing voting rights as the Series B Convertible Preferred Stock, the number of votes that each share of Series B Convertible Preferred Stock and any Parity Voting Preferred participating in the votes described above shall have shall be one vote for each $25.00 of liquidation preference.

Information Rights

The information rights of our Series B Convertible Preferred Stock are substantially the same as those of our Series A Preferred Stock as described in "-Series A Preferred Stock-Information Rights" above.

Conversion Rights

Each share of Series B Convertible Preferred Stock is convertible, at any time, at the option of the holder thereof at an initial conversion rate as of the date of original issue of 2.1264 shares of our Class A common stock per share of Series B Convertible Preferred Stock (the "Conversion Rate") (which represents an initial conversion price of approximately $47.03 per share of Class A common stock), which has been subsequently adjusted as described below. The Conversion Rate, and thus the conversion price, is subject to adjustment as described below under "-Conversion Rate Adjustment."

The holders of shares of Series B Convertible Preferred Stock at the close of business on any Record Date will be entitled to receive the dividend payment on those shares on the corresponding Dividend Payment Date notwithstanding the conversion of such shares following that Record Date or our default in payment of the dividend due on that Dividend Payment Date. However, shares of Series B Convertible Preferred Stock surrendered for conversion at the option of the holder during the period between the close of business on any Record Date and the close of business on the business day immediately preceding the applicable Dividend Payment Date must be accompanied by payment of an amount equal to the dividend payable on such shares on that Dividend Payment Date. A holder of shares of Series B Convertible Preferred Stock on a Record Date who (or whose transferee) surrenders any shares for conversion on the corresponding Dividend Payment Date will receive the dividend payable by us on the Series B Convertible Preferred Stock on that date, and the converting holder need not include payment in the amount of such dividend upon surrender of shares of Series B Convertible Preferred Stock for conversion. Except with respect to a voluntary conversion and as provided under "-Mandatory Conversion" and "-Special Rights upon a Fundamental Change," we will make no payment or allowance for unpaid dividends, whether or not in arrears, on converted shares or for dividends on the shares of Class A common stock issued upon conversion.

The articles supplementary establishing our Series B Convertible Preferred Stock ("Series B Articles Supplementary") require that we at all times reserve and keep available for issuance upon conversion of the Series B Convertible Preferred Stock a sufficient number of authorized and unissued shares of our Class A common stock to permit the conversion of all outstanding shares of Series B Convertible Preferred Stock and that we take all action required to increase the authorized number of shares of Class A common stock if at any time there are insufficient unissued shares of Class A common stock to permit such reservation or to permit the conversion of all outstanding shares of Series B Convertible Preferred Stock.

In addition, the Series B Articles Supplementary provides that any Class A common stock issued upon conversion of the Series B Convertible Preferred Stock will be validly issued, fully paid and non-assessable and that we will use our reasonable best efforts to list the Class A common stock required to be delivered upon conversion of the Series B Convertible Preferred Stock, prior to such delivery, upon each national securities exchange, if any, upon which the outstanding Class A common stock is listed at the time of delivery.

Mandatory Conversion

At any time on or after July 20, 2023, we may at our option cause all (but not less than all) outstanding shares of the Series B Convertible Preferred Stock to be automatically converted into a number of shares of Class A common stock for each share of Series B Convertible Preferred Stock equal to the then-prevailing Conversion Rate, if the closing sale price (as defined in the Series B Articles Supplementary) of our Class A common stock equals or exceeds 150% of the then-prevailing conversion price for at least 20 Trading Days (as defined in the Series B Articles Supplementary) in a period of 30

consecutive Trading Day, including the last Trading Day of such 30-day period, ending on the Trading Day prior to our issuance of a press release announcing the mandatory conversion as described below.

To exercise the mandatory conversion right described above, we must issue a press release for publication on the Dow Jones News Service or Bloomberg Business News (or if either such service is not available, another broadly disseminated news or press release service selected by us) prior to the opening of business on the first Trading Day following any date on which the conditions described in the first paragraph of this "-Mandatory Conversion" section are met, announcing such a mandatory conversion. We also will give notice by mail or by publication (with subsequent prompt notice by mail) to the holders of the Series B Convertible Preferred Stock (not more than four business days after the date of the press release) of the mandatory conversion announcing our intention to convert the Series B Convertible Preferred Stock. The conversion date will be the date (which we refer to as the "Mandatory Conversion Date") that is five Trading Days after the date on which we issue such press release. We will deliver the shares of Class A common stock due to holders of the Series B Convertible Preferred Stock upon mandatory conversion on the second Trading Day following the Mandatory Conversion Date.

On and after the Mandatory Conversion Date, dividends will cease to accrue on the shares of Series B Convertible Preferred Stock called for a mandatory conversion and all rights of holders of such shares of Series B Convertible Preferred Stock will terminate except for the right to receive the shares of Class A common stock issuable upon conversion thereof. The dividend payment with respect to any shares of Series B Convertible Preferred Stock called for a mandatory conversion on a date during the period between the close of business on any Record Date for the payment of dividends to the close of business on the corresponding Dividend Payment Date will be payable on such Dividend Payment Date to the record holders of such shares on such Record Date if such shares have been converted after such Record Date and prior to such Dividend Payment Date. Except as provided in the immediately preceding sentence, no payment or adjustment will be made upon mandatory conversion of any shares of Series B Convertible Preferred Stock for unpaid accrued and accumulated dividends or for dividends with respect to the Class A common stock issued upon such conversion.

We may not authorize or give notice of any mandatory conversion unless, prior to giving the conversion notice, all accumulated and unpaid dividends on the Series B Convertible Preferred Stock for all quarterly dividend periods ending on or prior to the date on which we give such notice shall have been paid.

Conversion Rate Adjustment

The applicable Conversion Rate will be subject to adjustment, without duplication, upon the occurrence of certain events, including:

(1) If we issue shares of our Class A common stock as a dividend or distribution on shares of our Class A common stock, or if we effect a share split or share combination;

(2) If we distribute to all or substantially all holders of our Class A common stock any rights, options or warrants entitling them, for a period expiring not more than 45 days immediately following the record date of such distribution, to purchase or subscribe for shares of our Class A common stock at a price per share less than the average of closing sale prices of our Class A common stock over the 10 consecutive Trading-Day period ending on the Trading Day immediately preceding the Ex-Date (as defined below) for such distribution;

(3) If we distribute shares of our capital stock, evidences of our indebtedness or other assets, securities or property, to all or substantially all holders of our Class A common stock, excluding:

dividends or distributions referred to in clauses (1) and (2) above;

spin-offs to which the provisions set forth in the latter portion of this clause (3) shall apply; and

dividends or distributions paid exclusively in cash referred to in clause (4) below;

(4) If any cash dividend or distribution is made to all or substantially all holders of our Class A common stock (excluding any dividend or distribution in connection with our liquidation, dissolution or winding up), other than a quarterly cash dividend that does not exceed $0.41 per share (the "dividend threshold," subject to adjustment as described below); and

(5) If we or any of our subsidiaries makes a payment in respect of a tender offer or exchange offer for our Class A common stock, if the cash and value of any other consideration included in the payment per share of our Class A common stock exceeds the average of the closing sale prices of our Class A common stock over the 10 consecutive Trading-Day period commencing on, and including, the Trading Day next succeeding the last date on which tenders or exchanges may be made pursuant to such tender or exchange offer.

The "Ex-Date" as used herein is the first date on which our Class A common stock trades on the applicable exchange or in the applicable market, regular way, without the right to receive the issuance, dividend or distribution in question from us or, if applicable, from the seller of our Class A common stock on such exchange or market (in the form of due bills or otherwise) as determined by such exchange or market.

If we issue rights, options or warrants that are only exercisable upon the occurrence of certain triggering events, then the Conversion Rate will not be adjusted pursuant to +clause (2) or (3) above, as applicable, until the earliest of these triggering events occurs and the Conversion Rate shall be readjusted to the extent any of these rights, options or warrants are not exercised before they expire.

If we have in effect a shareholder rights plan while any of the Series B Convertible Preferred Stock remains outstanding, holders of the Series B Convertible Preferred Stock will receive, upon a conversion of such shares, in addition to such Class A common stock, rights under our shareholder rights agreement unless, prior to conversion, the rights have expired, terminated or been redeemed or unless the rights have separated from shares of our Class A common stock. If the rights provided for in any rights plan that our board of directors may adopt have separated from shares of our Class A common stock in accordance with the provisions of the applicable shareholder rights agreement so that holders of the Series B Convertible Preferred Stock would not be entitled to receive any rights in respect of shares of our common shares that we deliver upon conversion of the Series B Convertible Preferred Stock, we will adjust the Conversion Rate at the time of separation as if we had distributed to all holders of our Class A common stock, evidences of indebtedness or other assets or property pursuant to clause (3) above, subject to readjustment upon the subsequent expiration, termination or redemption of the rights.

To the extent permitted by law and the continued listing requirements of NYSE (or any stock exchange on which our Class A common stock may then be listed), we may, from time to time, increase the Conversion Rate by any amount for a period of at least 20 business days or any longer period permitted or required by law, so long as the increase is irrevocable during that period and our board of directors determines that the increase is in our best interests. We will mail a notice of the increase to registered holders at least 15 calendar days before the day the increase commences. In addition, we may,

but are not obligated to, increase the Conversion Rate as we determine to be advisable in order to avoid or diminish taxes to recipients of certain distributions.

If certain of the possible adjustments to the Conversion Rate of the Series B Convertible Preferred Stock are made (or if failures to make certain adjustments occur), a holder of such shares may be deemed to have received a taxable distribution from us even though such holder has not received any cash or property as a result of such adjustments. In the case of a non-United States holder, we may, at our option, withhold U.S. federal income tax with respect to any such deemed distribution from cash payments of dividends and any other payments in respect of the Series B Convertible Preferred Stock.

The Conversion Rate will not be adjusted:

upon the issuance of any shares of our Class A common stock pursuant to any present or future plan providing for the reinvestment of dividends or interest payable on our securities;

upon the issuance of any shares of our Class A common stock, restricted stock or restricted stock units, nonqualified stock options, incentive stock options or any other options or rights (including stock appreciation rights) to purchase shares of our Class A common stock pursuant to any present or future employee, director or consultant benefit plan or program of, or assumed by, us or any of our subsidiaries;

upon the issuance of any shares of our Class A common stock pursuant to any option, warrant, right or exercisable, exchangeable or convertible security not described in the preceding bullet point and outstanding as of the date the Series B convertible preferred stock was first issued;

for unpaid accrued and accumulated dividends, if any;

upon the repurchase of any shares of our Class A common stock pursuant to an open-market share repurchase program or other buy-back transaction that is not a tender offer or exchange offer; or

for a change in the par value of shares of our Class A common stock.

We shall not take any action that would require an adjustment to the Conversion Rate such that the Conversion Price, as adjusted to give effect to such action, would be less than the then-applicable par value per share of our Class A common stock, except we may undertake a share split or similar event if such share split results in a corresponding reduction in the par value per share of our Class A common stock such that the as-adjusted new effective conversion price per share would not be below the new as-adjusted par value per share of our Class A common stock following such share split or similar transaction and the Conversion Rate is adjusted as provided under clause (1) above (and/or any such other of the clauses set forth above as may be applicable) under "-Conversion Rate Adjustment" above. In addition, the Series B Articles Supplementary provides that we may not take any action that would result in an adjustment to the Conversion Rate without complying with any applicable stockholder approval rules of the NYSE or any other stock exchange on which our Class A common stock may be listed at the relevant time.

Except as described herein and as provided for in the Series B Articles Supplementary, we will not adjust the Conversion Rate for any issuance of shares of our Class A common stock or any securities convertible into or exchangeable or exercisable for shares of our Class A common stock or rights to purchase shares of our Class A common stock or such convertible, exchangeable or exercisable securities. The Conversion Rate has been, and may be further, adjusted in accordance with the terms hereof.

Recapitalizations, Reclassifications and Changes of our Class A Common Stock

In the case of any recapitalization, reclassification or change of our Class A common stock (other than changes resulting from a subdivision or combination), a consolidation, merger or combination involving us, a sale, lease or other transfer to a third party of all or substantially all of the assets of us (or us and our subsidiaries on a consolidated basis), or any statutory share exchange, in each case as a result of which our Class A common stock would be converted into, or exchanged for, stock, other securities, other property or assets (including cash or any combination thereof), then, at the effective time of the transaction, the right to convert each share of Series B Convertible Preferred Stock will be changed into a right to convert such Series B Convertible Preferred Stock into the kind and amount of shares of stock, other securities or other property or assets (including cash or any combination thereof) (the "reference property") that a holder would have received in respect of Class A common stock issuable upon conversion of such shares immediately prior to such transaction. If such transaction also constitutes a fundamental change, a holder of shares of our Series B Convertible Preferred Stock who converts its shares of our Series B Convertible Preferred Stock in connection with such fundamental change will, if applicable, also be entitled to receive additional shares of our Class A common stock in connection with such conversion as described below under "-Special Rights Upon a Fundamental Change," in which case the converting holder would also receive reference property in lieu of such additional shares of Class A common stock. In the event that our Class A common stockholders have the opportunity to elect the form of consideration to be received in such transaction, the reference property per share into which the Series B Convertible Preferred Stock will be convertible following such transaction will be deemed to be the weighted average of the types and amounts of consideration received by holders of the Class A common stock that affirmatively make such an election (or of all holders of the Class A common stock if none make an election). The Series B Articles Supplementary provides that we may not become a party to any such transaction unless its terms are consistent with the Series B Articles Supplementary foregoing.

A change in the conversion right described in this section could substantially lessen or eliminate the value of the conversion right. For example, if a third party acquires us in a cash merger, each share of Series B Convertible Preferred Stock would be convertible solely into cash and would no longer be potentially convertible into securities whose value could increase depending on our future financial performance, prospects and other factors. There is no precise, established definition of the phrase "all or substantially all" under applicable law. Accordingly, there may be uncertainty as to whether the provisions above would apply to a sale, transfer, lease, conveyance or other disposition of less than all of the consolidated property or assets of us or us and our subsidiaries.

Special Rights Upon a Fundamental Change

We must give notice of each fundamental change (as defined below) to all record holders of the Series B Convertible Preferred Stock, by the later of 20 Business Days prior to the anticipated effective date of the fundamental change (the "fundamental change effective date") and the first public disclosure by us of the anticipated fundamental change. In addition, we must give notice announcing the effective date of such fundamental change and certain other matters as set forth under "-Determination of Make-Whole Premium." If a holder converts its Series B Convertible Preferred Stock at any time beginning at the opening of business on the Trading Day immediately following the effective date of such fundamental change and ending at the close of business on the 30th Trading Day immediately following such effective date, such conversion will be deemed to be in connection with the fundamental change and the holder will automatically receive for each share of Series B Convertible Preferred Stock converted, the greater of:

the sum of (i) a number of shares of our Class A common stock, as described under "-Conversion Rights" and subject to adjustment as described under "-Conversion Rate Adjustment" (with such adjustment or cash payment for fractional shares as we may elect, as described under "-No Fractional Shares") plus (ii) the make-whole premium, if any, described under "-Determination of Make-Whole Premium"; and

a number of shares of our Class A common stock equal to the lesser of (i) the liquidation preference divided by the Market Value of the Common Stock on the fundamental change effective date and (ii) 5.1020 (subject to adjustment in the same manner as the

conversion rate is adjusted in accordance with the provisions of the articles supplementary described under "-Conversion Rate Adjustments" above).

In addition to the number of shares of Class A common stock issuable upon conversion of each share of Series B Convertible Preferred Stock at the option of the holder on any conversion date during the fundamental change conversion period, each converting holder will have the right to receive an amount equal to all unpaid accrued and accumulated dividends on such converted shares of Series B Convertible Preferred Stock, whether or not declared prior to that date, for all prior dividend periods ending on or prior to the Dividend Payment date immediately preceding (or, if applicable, ending on) the conversion date (other than previously declared dividends on our Series B Convertible Preferred Stock payable to holders of record as of a prior date), provided that we are then legally permitted to pay such dividends. The amount payable in respect of such dividends will be paid in cash.

The foregoing provisions shall only be applicable with respect to conversions effected at any time beginning at the opening of business on the Trading Day immediately following the fundamental change effective date and ending at the close of business on the 30th Trading Day immediately following such fundamental change effective date.

In lieu of issuing the number of shares of Class A common stock issuable upon conversion pursuant to the foregoing provisions, we may, at our option, make a cash payment equal to the Market Value of the Class A common stock otherwise issuable upon conversion. Our notice of fundamental change will indicate if we will pay cash in lieu of delivering such shares of Class A common stock. The term "Market Value" means the average of the Daily VWAPs of our common stock for each Trading Day during a 10 consecutive Trading Day period commencing on, and including, the second Trading Day following the related Conversion Date.

A "fundamental change" will be deemed to have occurred upon the occurrence of any of the following:

(1) any "person" is or becomes the "beneficial owner," directly or indirectly, through a purchase, merger or other transaction, of 50% or more of the total voting power of all classes of our voting stock;

(2) we consolidate with, or merge with or into, another "person" or any "person" consolidates with or merges with or into us, in each case in a transaction pursuant to which our Class A common stock will be converted into cash, securities or other property or assets or we convey, transfer, lease or otherwise dispose of all or substantially all of our assets or all or substantially all of the assets of us and our subsidiaries on a consolidated basis to any "person" (whether in one transaction or a series of related transactions), other than:

a. any transaction pursuant to which the holders of our voting stock immediately prior to the transaction collectively have the entitlement to exercise, directly or indirectly, 50% or

more of the total voting power of all classes of voting stock of the continuing or surviving person immediately after the transaction; or

b. any merger solely for the purpose of changing our jurisdiction of incorporation and resulting in a reclassification, conversion or exchange of outstanding shares of Class A common stock solely into shares of common stock of the surviving entity;

(3) we approve a plan of liquidation or dissolution; or

(4) our Class A common stock ceases to be listed on the New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or any of their respective successors).

Notwithstanding the foregoing, a fundamental change will be deemed not to have occurred in the case of a merger or consolidation if (i) at least 90% of the consideration for our Class A common stock (excluding cash payments for fractional shares and cash payments pursuant to dissenters' appraisal rights) in the merger or consolidation consists of Class A common stock of a corporation or other entity organized and existing under the laws of the United States or any state thereof and traded on any of the New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or any of their respective successors) (or which will be so traded when issued or exchanged in connection with such transaction) ("publicly traded common stock") and (ii) as a result of such transaction or transactions the shares of Series B Convertible Preferred Stock become convertible into such publicly traded common stock.

"Daily VWAP" means the per share volume-weighted average price of our Class A common stock for each day, as displayed under the heading "Bloomberg VWAP" on Bloomberg page "QTS <Equity> AQR" (or its equivalent successor if such page is not available) in respect of the period from scheduled open of trading until the scheduled close of trading of the primary trading session on each such Trading Day (or if such volume-weighted average price is unavailable on any such day, the closing sale price shall be used for such day). The per share volume-weighted average price on each such day will be determined without regard to after hours trading or any other trading outside of the regular trading session trading hours.

This fundamental change conversion feature may make more difficult or discourage a takeover of us and the removal of incumbent management. We are not, however, aware of any specific effort to accumulate shares of our Class A common stock or to obtain control of us by means of a merger, tender offer, solicitation or otherwise. In addition, the fundamental change conversion feature is not part of a plan by management to adopt a series of anti-takeover provisions. Instead, the fundamental change conversion feature is a result of negotiations between us and the underwriters.

Determination of Make-Whole Premium

If a holder elects to convert its shares of Series B Convertible Preferred Stock upon the occurrence of a fundamental change, in certain circumstances, we will increase the Conversion Rate (such increase, the "make-whole premium").

Holders may surrender their shares of Series B Convertible Preferred Stock for conversion at the increased Conversion Rate only with respect to shares surrendered for conversion from and after the opening of business on the Trading Day immediately following the fundamental change effective date until the close of business on the 30th Trading Day following such fundamental change effective date.

The increase in the Conversion Rate will be determined by reference to a table of make-whole premiums set forth in the Series B Articles Supplementary based on the fundamental change effective date and the stock price, as described in the Series B Articles Supplementary.

No later than the third Business Day after the occurrence of a fundamental change, we will provide to the holders of our Series B Convertible Preferred Stock and the transfer agent of the Series B Convertible Preferred Stock a notice of the occurrence of the fundamental change containing certain information regarding conversion, including any applicable make-whole premium to be paid.

We will also issue a press release for publication on the Dow Jones News Service or Bloomberg Business News (or if either such service is not available, another broadly disseminated news or press release service selected by us), or post notice on our website containing the information specified above, in any event prior to the opening of business on the first Trading Day following any date on which we provide such notice to the holders of our Series B Convertible Preferred Stock.

Fractional Shares

No fractional shares of Class A common stock or securities representing fractional shares of Class A common stock will be issued upon conversion of the Series B Convertible Preferred Stock, whether voluntary or mandatory. Instead, we may elect to either make a cash payment to each holder that would otherwise be entitled to a fractional share (based on the closing sale price of the Class A common stock on the conversion date) or, in lieu of such cash payment, the number of shares of Class A common stock to be issued to any particular holder upon conversion will be rounded up to the nearest whole share.

Restrictions on Ownership and Transfer

Holders of Series B Convertible Preferred Stock are subject to the ownership and transfer restrictions of our charter and the Series B Articles Supplementary. See "Restrictions on Ownership and Transfer."

Listing

Our Series B Convertible Preferred Stock is listed on the NYSE under the symbol "QTS.PRB."

Certificated Series B Convertible Preferred Stock

Subject to certain conditions, the Series B Convertible Preferred Stock represented by the global securities is exchangeable for certificated Series B Convertible Preferred Stock in definitive form of like tenor as such Series B Convertible Preferred Stock if (1) DTC notifies us that it is unwilling or unable to continue as depository for the global securities or if at any time DTC ceases to be a clearing agency registered under the Exchange Act and, in either case, a successor is not appointed within 90 days or (2) we, in our discretion, at any time determine not to have all of the Series B Convertible Preferred Stock represented by the global securities. Any Series B Convertible Preferred Stock that is exchangeable pursuant to the preceding sentence is exchangeable for certificated Series B Convertible Preferred Stock issuable for such number of shares and registered in such names as DTC shall direct. Subject to the foregoing, the global securities are not exchangeable, except for global securities representing the same aggregate number of shares and registered in the name of DTC or its nominee.

Transfer Agent and Registrar

The transfer agent, registrar, dividend disbursing agent and redemption agent for our Series B Convertible Preferred Stock is Computershare Trust Company, N.A.

CERTAIN PROVISIONS OF MARYLAND LAW AND OUR CHARTER AND BYLAWS

The following is a summary of certain provisions of Maryland law and our charter and bylaws.

Our Board of Directors

Our charter and bylaws provide that the number of directors of our company may be established by our board of directors, but may not be fewer than the minimum number required under Maryland law nor more than 15 directors. Our charter and bylaws currently provide that any vacancy, including a vacancy created by an increase in the number of directors, may be filled by a majority of the remaining directors, even if the remaining directors do not constitute a quorum. Any individual elected to fill such vacancy will serve for the remainder of the full term and until a successor is duly elected and qualified.

Pursuant to our bylaws, each of our directors is elected by our stockholders to serve until the next annual meeting of stockholders and until his or her successor is duly elected and qualifies under Maryland law. Holders of shares of our common stock will have no right to cumulative voting in the election of directors. Directors are elected by a plurality of the votes cast.

Our bylaws provide that at least a majority of our directors will be "independent," with independence being defined in the manner established by our board of directors and in a manner consistent with listing standards established by the NYSE.

Removal of Directors

Our charter provides that, subject to the rights of holders of one or more classes or series of preferred stock to elect or remove one or more directors, a director may be removed only for cause (as defined in our charter) and only by the affirmative vote of at least two-thirds of the votes entitled to be cast generally in the election of directors. This provision may preclude stockholders from removing incumbent directors.

Business Combinations

Under the MGCL, certain "business combinations" (including a merger, consolidation, share exchange or, in certain circumstances specified under the statute, an asset transfer or issuance or reclassification of equity securities) between a Maryland corporation and any interested stockholder, or an affiliate of such an interested stockholder, are prohibited for five years after the most recent date on which the interested stockholder becomes an interested stockholder. Maryland law defines an interested stockholder as:

any person who beneficially owns, directly or indirectly, 10% or more of the voting power of the corporation's voting stock; or

an affiliate or associate of the corporation who, at any time within the two-year period prior to the date in question, was the beneficial owner of 10% or more of the voting power of the then outstanding voting stock of the corporation.

A person is not an interested stockholder under the statute if the board of directors approves in advance the transaction by which the person otherwise would have become an interested stockholder. In approving a transaction, however, the board of directors may provide that its approval is subject to compliance at or after the time of the approval, with any terms and conditions determined by the board of directors.

After the five-year prohibition, any business combination between us and an interested stockholder generally must be recommended by the board of directors and approved by the affirmative vote of at least:

80% of the votes entitled to be cast by holders of outstanding voting shares of stock of the corporation; and

two-thirds of the votes entitled to be cast by holders of voting shares of stock of the corporation other than shares held by the interested stockholder with whom (or with whose affiliate) the business combination is to be effected or shares held by an affiliate or associate of the interested stockholder, unless, among other conditions, the corporation's common stockholders receive a minimum price (as described under Maryland law) for their shares and the consideration is received in cash or in the same form as previously paid by the interested stockholder for its shares.

These provisions of the MGCL do not apply, however, to business combinations that are approved or exempted by a corporation's board of directors prior to the time that the interested stockholder becomes an interested stockholder. Pursuant to the statute, our board of directors has by resolution opted out of the business combination provisions of the MGCL and, consequently, the five-year prohibition and the supermajority vote requirements will not apply to business combinations between us and an interested stockholder, unless our board of directors in the future alters or repeals this resolution.

We cannot assure you that our board of directors will not determine to become subject to such business combination provisions in the future. However, an alteration or repeal of this resolution will not have any effect on any business combinations that have been consummated or upon any agreements existing at the time of such modification or repeal.

Control Share Acquisitions

The MGCL provides that "control shares" of a Maryland corporation acquired in a "control share acquisition" have no voting rights except to the extent approved at a special meeting of stockholders by the affirmative vote of two-thirds of the votes entitled to be cast on the matter, excluding shares of stock in a corporation in respect of which any of the following persons are entitled to exercise or direct the exercise of the voting power of such shares in the election of directors: (1) a person who makes or proposes to make a control share acquisition, (2) an officer of the corporation or (3) an employee of the corporation who is also a director of the corporation. "Control shares" are voting shares of stock that, if aggregated with all other such shares of stock previously acquired by the acquirer or in respect of which the acquirer is able to exercise or direct the exercise of voting power (except solely by virtue of a revocable proxy), would entitle the acquirer to exercise voting power in electing directors within one of the following ranges of voting power:

one-tenth or more but less than one-third;

one-third or more but less than a majority; or

a majority or more of all voting power.

Control shares do not include shares the acquiring person is then entitled to vote as a result of having previously obtained stockholder approval. A "control share acquisition" means the acquisition, directly or indirectly, of ownership of, or the power to direct the exercise of voting power with respect to, issued and outstanding control shares, subject to certain exceptions.

A person who has made or proposes to make a control share acquisition, upon satisfaction of certain conditions (including an undertaking to pay expenses and making an "acquiring person statement" as described in the MGCL), may compel our board of directors to call a special meeting of stockholders to be held within 50 days of demand to consider the voting rights of the control shares. If no request for a special meeting is made, we may present the question at any stockholders meeting.

If voting rights of control shares are not approved at the meeting or if the acquiring person does not deliver an "acquiring person statement" as required by Maryland law, then, subject to certain conditions and limitations, the corporation may redeem any or all of the control shares (except those for which voting rights have previously been approved) for fair value. Fair value is determined, without regard to the absence of voting rights for the control shares, as of the date of the last control share acquisition by the acquirer or of any meeting of stockholders at which the voting rights of such shares are considered and not approved. If voting rights for control shares are approved at a stockholders meeting and the acquirer becomes entitled to vote a majority of the shares entitled to vote, all other stockholders may exercise appraisal rights. The fair value of the shares as determined for purposes of such appraisal rights may not be less than the highest price per share paid by the acquirer in the control share acquisition. The control share acquisition statute does not apply (1) to shares acquired in a merger, consolidation or share exchange if we are a party to the transaction or (2) to acquisitions approved or exempted by the charter or bylaws of the corporation.

Our bylaws contain a provision exempting from the control share acquisition statute any and all acquisitions by any person of our common stock. There is no assurance, however, that our board of directors will not amend or eliminate this provision at any time in the future.

Maryland Unsolicited Takeover Act

Subtitle 8 of Title 3 of the MGCL, also referred to as the Maryland Unsolicited Takeover Act ("MUTA"), permits a Maryland corporation with a class of equity securities registered under the Exchange Act and at least three independent directors to elect to be subject, by provision in its charter or bylaws or a resolution of its board of directors and notwithstanding any contrary provision in the charter or bylaws, to any or all of the following five provisions:

a classified board;

a two-thirds stockholder vote requirement for removing a director;

a requirement that the number of directors be fixed only by vote of the directors;

a requirement that requires the request of the holders of at least a majority of all votes entitled to be cast to call a special meeting of stockholders; and

a requirement that a vacancy on the board be filled only by the remaining directors and for the remainder of the full term of the class of directors in which the vacancy occurred.

On September 24, 2018, our board of directors adopted resolutions opting out of Sections 3-803, 3-804(a), 3-804(b) and 3-805 of the MGCL (which provide for the items in the first four bullets above, respectively), and we subsequently filed Articles Supplementary with the State Department of

Assessments and Taxation of Maryland to effectuate this opt-out. In addition, on September 24, 2018, our board of directors adopted resolutions opting out of Section 3-804(c) of the MGCL, subject to and conditioned upon the approval of our stockholders of an amendment to our charter. Previously, our charter expressly provided that we had elected to be governed by Section 3-804(c) of the MGCL, which provides for the item described in the fifth bullet above, i.e., vacancies on our board may be filled only by remaining directors. On May 9, 2019 at the annual meeting of stockholders, stockholders approved a proposal to amend our charter to remove this election and permit us to fully effectuate our complete opt-out of all five prongs of MUTA. With the stockholders' approval of the opt-out of Section 3-804(c) and the filing of the Articles of Amendment, the Company fully opted out of MUTA and may not opt into any of the provisions of MUTA without approval by the affirmative vote of stockholders holding a majority of the votes cast on the matter.

Notwithstanding our opt-out of MUTA described above, through provisions in our charter and bylaws unrelated to MUTA, we already (1) require the affirmative vote of the holders of not less than two-thirds of all of the votes entitled to be cast on the matter for the removal of any director from the board, which removal is allowed only for cause, (2) vest in the board the exclusive power to fix the number of directorships, subject to limitations set forth in our charter and bylaws and (3) require, unless called by the chairman of our board of directors, our president or chief executive officer or our board of directors, the written request of stockholders entitled to cast not less than a majority of all votes entitled to be cast at such meeting to call a special meeting.

Amendment of Our Charter and Bylaws and Approval of Extraordinary Transactions

Under the MGCL, a Maryland corporation generally cannot dissolve, amend its charter, merge, sell all or substantially all of its assets, engage in a statutory share exchange or engage in similar transactions outside the ordinary course of business unless declared advisable by a majority of the board of directors and approved by the affirmative vote of stockholders entitled to cast at least two-thirds of the votes entitled to be cast on the matter unless a lesser percentage, but not less than a majority of all of the votes entitled to be cast on the matter, is set forth in the corporation's charter. Our charter provides that these actions may be taken if declared advisable by a majority of our board of directors and approved by the vote of stockholders holding at least a majority of the votes entitled to be cast on the matter (other than certain amendments to the provisions of our charter related to the removal of directors and the restrictions on ownership and transfer of our shares of stock, which require a vote of at least two-thirds of the votes entitled to be cast on the matter).

Our bylaws may be amended, altered or repealed, or new bylaws may be adopted, by our board of directors or by the affirmative vote of stockholders representing not less than majority of all the votes entitled to be cast on the matter.

Meetings of Stockholders

Under our bylaws, annual meetings of stockholders are to be held each year at a date and time as determined by our board of directors. Special meetings of stockholders may be called only by a majority of the directors then in office, by the chairman of our board of directors, our president or our chief executive officer. Additionally, subject to the provisions of our bylaws, special meetings of the stockholders shall be called by our secretary upon the written request of stockholders entitled to cast at least a majority of the votes entitled to be cast at such meeting. Only matters set forth in the notice of the special meeting may be considered and acted upon at such a meeting. Maryland law and our bylaws provide that any action required or permitted to be taken at a meeting of stockholders may be taken

without a meeting by unanimous written consent, if that consent sets forth that action and is signed by each stockholder entitled to vote on the matter.

Advance Notice of Director Nominations and New Business

Our bylaws provide that, with respect to an annual meeting of stockholders, nominations of persons for election to our board of directors and the proposal of business to be considered by stockholders at the annual meeting may be made only:

pursuant to our notice of the meeting;

by or at the direction of our board of directors; or

by a stockholder who was a stockholder of record both at the time of giving of the notice of the meeting and at the time of the annual meeting, who is entitled to vote at the

meeting and who has complied with the advance notice procedures set forth in our bylaws.

With respect to special meetings of stockholders, only the business specified in our notice of meeting may be brought before the meeting of stockholders. Nominations of persons for election to our board of directors may be made only:

pursuant to our notice of the meeting;

by or at the direction of our board of directors; or

provided that our board of directors has determined that directors shall be elected at such meeting, by a stockholder who is a stockholder of record both at the time of giving of the notice required by our bylaws and at the time of the meeting, who is entitled to vote at the meeting and who has complied with the advance notice provisions set forth in our bylaws.

The purpose of requiring stockholders to give advance notice of nominations and other proposals is to afford our board of directors the opportunity to consider the qualifications of the proposed nominees or the advisability of the other proposals and, to the extent considered necessary by our board of directors, to inform stockholders and make recommendations regarding the nominations or other proposals. The advance notice procedures also permit a more orderly procedure for conducting our stockholder meetings. Although our bylaws do not give our board of directors the power to disapprove timely stockholder nominations and proposals, our bylaws may have the effect of precluding a contest for the election of directors or proposals for other action if the proper procedures are not followed, and of discouraging or deterring a third party from conducting a solicitation of proxies to elect its own slate of directors to our board of directors or to approve its own proposal.

Anti-takeover Effect of Certain Provisions of Maryland Law and Our Charter and Bylaws

The provisions of our charter on removal of directors and the advance notice provisions of the bylaws could delay, defer or prevent a transaction or a change in control of our company that might involve a premium price for holders of our common stock or otherwise be in the best interests of our stockholders. Likewise, if our board of directors were to opt in to the business combination provisions of the MGCL or if the provision in the bylaws opting out of the control share acquisition provisions of the MGCL were amended or rescinded, these provisions of the MGCL could have similar anti-takeover effects.

Indemnification and Limitation of Directors' and Officers' Liability

The MGCL permits a Maryland corporation to include in its charter a provision limiting the liability of its directors and officers to the corporation and its stockholders for money damages except for liability resulting from actual receipt of an improper benefit or profit in money, property or services or active and deliberate dishonesty established by a final judgment as being material to the cause of action. Our charter contains such a provision that eliminates such liability to the maximum extent permitted by Maryland law.

The MGCL requires a corporation (unless its charter provides otherwise, which our charter does not) to indemnify a director or officer who has been successful, on the merits or otherwise, in the defense of any proceeding to which he or she is made or threatened to be made a party by reason of his or her service in that capacity. The MGCL permits a corporation to indemnify its present and former directors and officers, among others, against judgments, penalties, fines, settlements and reasonable expenses actually incurred by them in connection with any proceeding to which they may be made or are threatened to be made a party by reason of their service in those or other capacities unless it is established that:

the act or omission of the director or officer was material to the matter giving rise to the proceeding and (1) was committed in bad faith or (2) was the result of active and deliberate dishonesty;

the director or officer actually received an improper personal benefit in money, property or services; or

in the case of any criminal proceeding, the director or officer had reasonable cause to believe that the act or omission was unlawful.

However, under the MGCL, a Maryland corporation may not indemnify a director or officer for an adverse judgment in a suit by or in the right of the corporation or if the director or officer was adjudged liable on the basis that personal benefit was improperly received, unless in either case a court orders indemnification and then only for expenses.

In addition, the MGCL permits a corporation to advance reasonable expenses to a director or officer upon the corporation's receipt of:

a written affirmation by the director or officer of his or her good faith belief that he or she has met the standard of conduct necessary for indemnification by the corporation; and

a written undertaking by the director or on the director's behalf to repay the amount paid or reimbursed by the corporation if it is ultimately determined that the director did not meet the standard of conduct.

Our charter and bylaws obligate us, to the maximum extent permitted by Maryland law in effect from time to time, to indemnify and to pay or reimburse reasonable expenses in advance of final disposition of a proceeding to:

any present or former director or officer who is made or threatened to be made a party to the proceeding by reason of his or her service in that capacity; or

any individual who, while serving as a director or officer of our company and at our request, serves or has served another corporation, REIT, partnership, joint venture, trust, employee benefit plan or any other enterprise as a director, officer, partner or trustee of such corporation, REIT, partnership, joint venture, trust, employee benefit plan or other

enterprise and who is made or threatened to be made a party to the proceeding by reason of his or her service in that capacity.

Our charter and bylaws also permit us, with the approval of our board of directors, to indemnify and advance expenses to any person who served a predecessor of ours in any of the capacities described above and to any employee or agent of our company or a predecessor of our company.

We have also entered into an indemnification agreement with each of our directors and officers. While Maryland law permits a corporation to indemnify its directors and officers, as described above, it also authorizes other arrangements for indemnification of directors and officers, including insurance. The indemnification agreements are intended to provide indemnification to the maximum extent permitted by Maryland law.

Insofar as the foregoing provisions permit indemnification of directors, officers or persons controlling us for liability arising under the Securities Act, we have been informed that, in the opinion of the SEC, this indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

REIT Qualification

Our charter provides that our board of directors may revoke or otherwise terminate our REIT election, without approval of our stockholders, if it determines that it is no longer in our best interests to attempt to qualify, or to continue to qualify, as a REIT.

RESTRICTIONS ON OWNERSHIP AND TRANSFER

In order for us to qualify as a REIT under the Code, shares of our capital stock must be beneficially owned by 100 or more persons during at least 335 days of a taxable year of 12 months (other than the first year for which an election to be a REIT has been made) or during a proportionate part of a shorter taxable year. Also, not more than 50% of the value of the outstanding shares of capital stock (after taking into account options to acquire shares of capital stock) may be owned, directly, indirectly or through attribution, by five or fewer individuals (as defined in the Code to include certain entities) at any time during the last half of a taxable year (other than the first year for which an election to be a REIT has been made).

In order to assist us in complying with the limitations on the concentration of ownership of REIT stock imposed by the Code, and for strategic reasons, our charter generally prohibits:

any person (other than a person who has been granted an exemption) from beneficially or constructively owning more than 7.5% of the aggregate of the outstanding shares of our common stock by value or by number of shares, whichever is more restrictive;

separately with respect to each class or series of preferred stock, any person (other than a person who has been granted an exemption) from beneficially or constructively owning more than 7.5% of the aggregate of the outstanding shares of such class or series of our preferred stock by value or by number of shares, whichever is more restrictive; and

as excepted holders, any of Chad L. Williams, his family members and certain entities controlled by them, and any person who is or would be a beneficial owner or constructive owner of shares of our common stock as a result of the beneficial ownership or constructive ownership of shares of our common stock by Chad L. Williams, his family members and certain entities controlled by them, from beneficially or constructively

owning more than 19.8% of the aggregate of the outstanding shares of our common stock by value or by number of shares, whichever is more restrictive, after application of the relevant attribution rules (see the additional discussion below regarding the Williams excepted holders).

However, certain entities that are defined as designated investment entities in our charter, which generally includes pension funds, mutual funds, and certain investment management companies, are permitted to own up to 9.8% of the aggregate of our outstanding shares of common stock or preferred stock, so long as each beneficial owner of the shares owned by such designated investment entity would satisfy the 7.5% ownership limit if those beneficial owners owned directly their proportionate share of the common stock or preferred stock, as applicable, owned by the designated investment entity.

Our board of directors may, in its sole discretion, grant an exemption to the stock ownership limits, subject to certain conditions and the receipt by our board of directors of certain representations and undertakings. Our charter permits exemptions to be made for stockholders if our board of directors determines such exemptions will not jeopardize our qualification as a REIT.

Our charter provides an excepted holder limit that allows Chad L. Williams, his family members and entities owned by or for the benefit of them, and any person who is or would be a beneficial owner or constructive owner of shares of our common stock as a result of the beneficial ownership or constructive ownership of shares of our common stock by Chad L. Williams, his family members and certain entities controlled by them, as a group, to own more than 7.5% of the aggregate of the outstanding shares of our common stock, so long as, under the applicable tax attribution rules, no one such excepted holder treated as an individual would hold more than 19.8% of the aggregate of the outstanding shares of our common stock, no two such excepted holders treated as individuals would own more than 27.3% of the aggregate of the outstanding shares of our common stock, no three such excepted holders treated as individuals would own more than 34.8% of the aggregate of the outstanding shares of our common stock, no four such excepted holders treated as individuals would own more than 42.3% of the aggregate of the outstanding shares of our common stock, and no five such excepted holders treated as individuals would own more than 49.8% of the aggregate of the outstanding shares of our common stock. Currently, Chad L. Williams would be attributed all of the shares of common stock owned by each such other excepted holder and, accordingly, the Williams excepted holders as a group would not be allowed to own in excess of 19.8% of the aggregate of the outstanding shares of our common stock. If at a later time, there was not one excepted holder that would be attributed all of the shares owned by such excepted holders as a group, the excepted holder limit as applied to the Williams group would not permit each such excepted holder to own 19.8% of the aggregate of the outstanding shares of our common stock. Rather, the excepted holder limit as applied to the Williams group would prevent two or more such excepted holders who are treated as individuals under the applicable tax attribution rules from owning a higher percentage of our common stock than the maximum amount of shares that could be owned by any one such excepted holder (19.8%), plus the maximum amount of shares that could be owned by any one or more other individual stockholders who are not excepted holders (7.5%).

Our charter also prohibits any person from (1) beneficially or constructively owning shares of our capital stock that would result in our being "closely held" under Section 856(h) of the Code, (2) transferring shares of our capital stock if such transfer would result in our being beneficially owned by fewer than 100 persons (determined without reference to any rules of attribution), (3) beneficially or constructively owning shares of our capital stock that would result in us owning (directly or indirectly) an interest in a tenant if the income derived by us from that tenant for our taxable year during which such determination is being made would reasonably be expected to equal or exceed the lesser of one percent of

our gross income or an amount that would cause us to fail to satisfy any of the REIT gross income requirements and (4) beneficially or constructively owning shares of our capital stock that would cause us otherwise to fail to qualify as a REIT. Any person who acquires or attempts or intends to acquire beneficial ownership of shares of our capital stock that will or may violate any of the foregoing restrictions on transferability and ownership is required to give notice immediately to us and provide us with such other information as we may request in order to determine the effect of such transfers on our qualification as a REIT. The foregoing restrictions on transferability and ownership will not apply if our board of directors determines that it is no longer in our best interest to attempt to qualify, or to qualify, or to continue to qualify, as a REIT. In addition, our board of directors may determine that compliance with the foregoing restrictions is no longer required for our qualification as a REIT.

Our board of directors, in its sole discretion, may exempt a person from the above ownership limits and any of the restrictions described above. However, our board of directors may not grant an exemption to any person unless our board of directors obtains such representations and undertakings as our board of directors may deem appropriate in order to determine that granting the exemption would not result in our losing our qualification as a REIT. As a condition of granting the exemption, our board of directors, in its sole and absolute discretion, may require a ruling from the Internal Revenue Service (the "IRS") or an opinion of counsel in either case in form and substance satisfactory to our board of directors, in its sole and absolute discretion in order to determine or ensure our qualification as a REIT.

In addition, our board of directors, in its sole and absolute discretion, may from time to time increase the ownership limits. However, the ownership limits may not be increased if, after giving effect to such increase, five or fewer individuals could own or constructively own in the aggregate, more than 49.9% in value of the capital stock then outstanding. Our board of directors, in its sole and absolute discretion, may from time to time decrease the ownership limits, provided that no decreased limit will apply to any person whose ownership percentage exceeds such decreased limit until that person's ownership percentage equals or falls below such decreased ownership limit.

If any transfer of our shares of stock occurs which, if effective, would result in any person beneficially or constructively owning shares of stock in excess, or in violation, of the above transfer or ownership limitations, such person known as a prohibited owner, then that number of shares of stock, the beneficial or constructive ownership of which otherwise would cause such person to violate the transfer or ownership limitations (rounded up to the nearest whole share), will be automatically transferred to a charitable trust for the exclusive benefit of a charitable beneficiary, and the prohibited owner will not acquire any rights in such shares. This automatic transfer will be considered effective as of the close of business on the business day before the violative transfer. If the transfer to the charitable trust would not be effective for any reason to prevent the violation of the above transfer or ownership limitations, then the transfer of that number of shares of stock that otherwise would cause any person to violate the above limitations will be void. Shares of stock held in the charitable trust will continue to constitute issued and outstanding shares of our stock. The prohibited owner will not benefit economically from ownership of any shares of stock held in the charitable trust, will have no rights to dividends or other distributions and will not possess any rights to vote or other rights attributable to the shares of stock held in the charitable trust. The trustee of the charitable trust will be designated by us and must be unaffiliated with us or any prohibited owner and will have all voting rights and rights to dividends or other distributions with respect to shares of stock held in the charitable trust, and these rights will be exercised for the exclusive benefit of the trust's charitable beneficiary. Any dividend or other distribution paid before our discovery that shares of stock have been transferred to the trustee will be paid by the recipient of such dividend or distribution to the trustee upon demand, and any dividend or other distribution authorized but unpaid will be paid when due to the trustee. Any dividend or distribution so paid to the trustee will be held in trust for the

trust's charitable beneficiary. Subject to Maryland law, effective as of the date that such shares of stock have been transferred to the charitable trust, the trustee, in its sole discretion, will have the authority to:

rescind as void any vote cast by a prohibited owner prior to our discovery that such shares have been transferred to the charitable trust; and

recast such vote in accordance with the desires of the trustee acting for the benefit of the trust's charitable beneficiary.

However, if we have already taken irreversible corporate action, then the trustee will not have the authority to rescind and recast such vote.

Within 20 days of receiving notice from us that shares of stock have been transferred to the charitable trust, and unless we buy the shares first as described below, the trustee will sell the shares of stock held in the charitable trust to a person, designated by the trustee, whose ownership of the shares will not violate the ownership limitations in our charter. Upon the sale, the interest of the charitable beneficiary in the shares sold will terminate and the trustee will distribute the net proceeds of the sale to the prohibited owner and to the charitable beneficiary. The prohibited owner will receive the lesser of:

the price paid by the prohibited owner for the shares or, if the prohibited owner did not give value for the shares in connection with the event causing the shares to be held in the charitable trust (for example, in the case of a gift or devise), the market price of the shares on the day of the event causing the shares to be held in the charitable trust; an

the price per share received by the trustee from the sale or other disposition of the shares held in the charitable trust (less any commission and other expenses of a sale).

The trustee may reduce the amount payable to the prohibited owner by the amount of dividends and distributions paid to the prohibited owner and owed by the prohibited owner to the trustee. Any net sale proceeds in excess of the amount payable to the prohibited owner will be paid immediately to the charitable beneficiary. If, before our discovery that shares of stock have been transferred to the charitable trust, such shares are sold by a prohibited owner, then:

such shares will be deemed to have been sold on behalf of the charitable trust; and

to the extent that the prohibited owner received an amount for such shares that exceeds the amount that the prohibited owner was entitled to receive as described above, the excess must be paid to the trustee upon demand.

In addition, shares of stock held in the charitable trust will be deemed to have been offered for sale to us, or our designee, at a price per share equal to the lesser of:

the price per share in the transaction that resulted in such transfer to the charitable trust (or, in the case of a gift or devise, the market price at the time of the gift or devise); and

the market price on the date we, or our designee, accept such offer.

We may reduce the amount payable to the prohibited owner by the amount of dividends and distributions paid to the prohibited owner and owed by the prohibited owner to the trustee. We may pay the amount of such reduction to the trustee for the benefit of the charitable beneficiary. We will have the right to accept the offer until the trustee has sold the shares of stock held in the charitable trust. Upon such a sale to us, the interest of the charitable beneficiary in the shares sold will terminate and the trustee will distribute the net proceeds of the sale to the prohibited owner and any dividends or other distributions held by the trustee will be paid to the charitable beneficiary.

All certificates representing shares of our capital stock bear a legend referring to the restrictions described above.

Every owner of more than 5% (or such lower percentage as required by the Code or the regulations promulgated thereunder) in value of the outstanding shares of our capital stock within 30 days after the end of each taxable year, will be required to give written notice to us stating the name and address of such owner, the number of shares of each class and series of shares of our stock that the owner beneficially owns and a description of the manner in which the shares are held. Each such owner shall provide to us such additional information as we may request in order to determine the effect, if any, of the owner's beneficial ownership on our qualification as a REIT and to ensure compliance with our ownership limitations. In addition, each stockholder shall upon demand be required to provide to us such information as we may request, in good faith, in order to determine our qualification as a REIT and to comply with the requirements of any taxing authority or governmental authority or to determine such compliance.

Our ownership limitations could delay, defer or prevent a transaction or a change in control of us that might involve a premium price for holders of our common stock or might otherwise be in the best interest of our stockholders.

EX-10.22

Exhibit 10.22

INDEMNIFICATION AGREEMENT

THIS INDEMNIFICATION AGREEMENT (this “Agreement”) is entered into as of October 1, 2020, by and among QTS Realty Trust, Inc., a Maryland corporation (the “Company” or the “Indemnitor”) and Matt N. Thomson, Jr. (the “Indemnitee”).

WHEREAS, the Indemnitee is an officer of the Company and in such capacity is performing a valuable service for the Company;

WHEREAS, Maryland law permits the Company to enter into contracts with its officers or members of its Board of Directors with respect to indemnification of, and advancement of expenses to, such persons;

WHEREAS, the Articles of Amendment and Restatement of the Company (the “Charter”) provide that the Company shall indemnify and advance expenses to its directors and officers to the maximum extent permitted by Maryland law in effect from time to time;

WHEREAS, the Second Amended and Restated Bylaws of the Company (the “Bylaws”) provide that each director and officer of the Company shall be indemnified by the Company to the maximum extent permitted by Maryland law in effect from time to time and shall be entitled to advancement of expenses consistent with Maryland law; and

WHEREAS, to induce the Indemnitee to provide services to the Company as an officer, and to provide the Indemnitee with specific contractual assurance that indemnification will be available to the Indemnitee regardless of, among other things, any amendment to or revocation of the Charter or the Bylaws, or any acquisition transaction relating to the Company, the Indemnitor desires to provide the Indemnitee with protection against personal liability as set forth herein.

NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Indemnitor and the Indemnitee hereby agree as follows:

1.    DEFINITIONS

    For purposes of this Agreement:

(A)    “Change in Control” shall have the definition set forth in the QTS Realty Trust, Inc. 2013 Equity Incentive Plan.

(B)    “Corporate Status” describes the status of a person who is or was a director or officer of the Company or is or was serving at the request of the Company as a director, officer, partner (limited or general), member, employee or agent of any other foreign or domestic corporation, partnership, joint venture, limited liability

company, trust, other enterprise (whether conducted for profit or not for profit) or employee benefit plan. The Company shall be deemed to have requested the Indemnitee to serve an employee benefit plan where the performance of the Indemnitee’s duties to the Company also imposes or imposed duties on, or otherwise involves or involved services by, the Indemnitee to the plan or participants or beneficiaries of the plan.

(C)    “Determination” means a determination that either (x) there is a reasonable basis for the conclusion that indemnification of the Indemnitee is proper in the circumstances because the Indemnitee had met the applicable standard of conduct (a “Favorable Determination”) or (y) there is no reasonable basis for the conclusion that indemnification of the Indemnitee is proper in the circumstances (an “Adverse Determination”).

(D) “Disinterested Director” means a director who is not and was not a party to the Proceeding in respect of which indemnification is sought by the Indemnitee and does not otherwise have an interest materially adverse to any interest of the Indemnitee.

(E)    “Expenses” shall include all attorneys’ and paralegals’ fees, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, or being or preparing to be a witness in a Proceeding.

(F)    “Proceeding” includes any action, suit, arbitration, alternate dispute resolution mechanism, investigation (including any formal or informal internal investigation to which the Indemnitee is made a party by reason of the Corporate Status of the Indemnitee), administrative hearing, or any other proceeding, including appeals therefrom, whether civil, criminal, administrative, or investigative, except one initiated by the Indemnitee pursuant to paragraph 8 of this Agreement to enforce such Indemnitee’s rights under this Agreement.

(G)    “Special Legal Counsel” means a law firm, or a member of a law firm, that is experienced in matters of corporate law and neither presently is, or in the past two years has been, retained to represent (i) the Indemnitor or the Indemnitee in any matter material to either such party, or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder.

2.    INDEMNIFICATION

The Indemnitee shall be entitled to the rights of indemnification provided in this paragraph 2 and under applicable law, the Charter, the Bylaws, any other agreement, a vote of stockholders or resolution of the Board of Directors or otherwise if, by reason of such

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Indemnitee’s Corporate Status, such Indemnitee is, or is threatened to be made, a party to any threatened, pending, or contemplated Proceeding, including a Proceeding by or in the right of the Company. Unless prohibited by paragraph 13 hereof and subject to the other provisions of this Agreement, the Indemnitee shall be indemnified hereunder, to the maximum extent permitted by Maryland law in effect from time to time, against judgments, penalties, fines and settlements and reasonable Expenses actually incurred by or on behalf of such Indemnitee in connection with such Proceeding or any claim, issue or matter therein; provided, however, that if such Proceeding was initiated by or in the right of the Company, indemnification may not be made in respect of such Proceeding if the Indemnitee shall have been finally adjudged to be liable to the Company. For purposes of this paragraph 2, excise taxes assessed on the Indemnitee with respect to an employee benefit plan pursuant to applicable law shall be deemed fines.

3.INDEMNIFICATION FOR EXPENSES IN CERTAIN CIRCUMSTANCES

(A)    Without limiting the effect of any other provision of this Agreement (including the Indemnitee’s rights to indemnification under paragraph 2 and advancement of expenses under paragraph 4), without regard to whether the Indemnitee is entitled to indemnification under paragraph 2 and without regard to the provisions of paragraph 6 hereof, to the extent that the Indemnitee is successful, on the merits or otherwise, in any Proceeding to which the Indemnitee is a party by reason of such Indemnitee’s Corporate Status, such Indemnitee shall be indemnified against all reasonable Expenses actually incurred by or on behalf of such Indemnitee in connection therewith.

(B)    If the Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues, or matters in such Proceeding, the Indemnitor shall indemnify the Indemnitee against all reasonable Expenses actually incurred by or on behalf of such Indemnitee in connection with each successfully resolved claim, issue or matter.

(C)    For purposes of this paragraph 3 and without limitation, the termination of any claim, issue or matter in such Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.

4.    ADVANCEMENT OF EXPENSES

Notwithstanding anything in this Agreement to the contrary, but subject to paragraph 13 hereof, if the Indemnitee is or was or becomes a party to or is otherwise involved in any Proceeding (including as a witness), or is or was threatened to be made a party to or a participant (including as a witness) in any such Proceeding, by reason of the Indemnitee’s Corporate Status, or by reason of (or arising in part out of) any actual or alleged event or occurrence related to the Indemnitee’s Corporate Status, or by reason of any actual or alleged act or omission on the part of the Indemnitee taken or omitted in or relating to the Indemnitee’s Corporate Status, then the Indemnitor shall advance all reasonable Expenses incurred by the Indemnitee in connection with any such Proceeding within twenty (20) days after the receipt by the Indemnitor of a statement

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from the Indemnitee requesting such advance from time to time, whether prior to or after final disposition of such Proceeding; provided that, such statement shall reasonably evidence the Expenses incurred or to be incurred by the Indemnitee and shall include or be preceded or accompanied by (i) a written affirmation by the Indemnitee of the Indemnitee’s good faith belief that the standard of conduct necessary for indemnification by the Indemnitor as authorized by this Agreement has been met and (ii) a written undertaking by or on behalf of the Indemnitee to repay the amounts advanced if it should ultimately be determined that the standard of conduct has not been met. The undertaking required by clause (ii) of the immediately preceding sentence shall be an unlimited general obligation of the Indemnitee but need not be secured and may be accepted without reference to financial ability to make the repayment.

5.    WITNESS EXPENSES

Notwithstanding any other provision of this Agreement, to the extent that the Indemnitee is, by reason of such Indemnitee’s Corporate Status, a witness (or is forced or asked to respond to discovery requests) for any reason in any Proceeding to which such Indemnitee is not a named defendant or respondent, the Indemnitor shall advance all Expenses actually incurred by or on behalf of such Indemnitee, on an as-incurred basis in accordance with paragraph 4 of this Agreement, in connection therewith and indemnify the Indemnitee therefor.

6.    DETERMINATION OF ENTITLEMENT TO AND AUTHORIZATION OF INDEMNIFICATION

(A)To obtain indemnification under this Agreement, the Indemnitee shall submit to the Indemnitor a written request, including therewith such documentation and information reasonably necessary to determine whether and to what extent the Indemnitee is entitled to indemnification.

(B)The Indemnitor agrees that the Indemnitee shall be indemnified to the fullest extent permitted by law. Indemnification under this Agreement may not be made unless authorized for a specific Proceeding after a Determination has been made in accordance with this paragraph 6(B) that indemnification of the Indemnitee is permissible in the circumstances because the Indemnitee has met the following standard of conduct: the Indemnitor shall indemnify the Indemnitee in accordance with the provisions of paragraph 2 hereof, unless it is established that: (a) the act or omission of the Indemnitee was material to the matter giving rise to the Proceeding and (x) was committed in bad faith or (y) was the result of active and deliberate dishonesty; (b) the Indemnitee actually received an improper personal benefit in money, property or services; or (c) in the case of any criminal proceeding, the Indemnitee had reasonable cause to believe that the act or omission was unlawful. Any Determination shall be made within thirty (30) days after receipt of the Indemnitee’s written request for indemnification pursuant to Section 6(A) and such Determination shall be made either (i) by the Disinterested Directors, even though less than a quorum, so long as the Indemnitee does not request that such Determination be made by Special Legal Counsel, or (ii) if so

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requested by the Indemnitee, in the Indemnitee’s sole discretion, by Special Legal Counsel in a written opinion to the Indemnitor and the Indemnitee. If a Determination is made that the Indemnitee is entitled to indemnification, payment to the Indemnitee shall be made within fifteen (15) business days after such Determination. The Indemnitee shall reasonably cooperate with the person, persons or entity making such Determination with respect to the Indemnitee’s entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to the Indemnitee and reasonably necessary to such Determination. Any Expenses incurred by the Indemnitee in so cooperating with the Disinterested Directors or Special Legal Counsel, as the case may be, making such determination shall be advanced and borne by the Indemnitor in accordance with paragraph 4 of this Agreement (irrespective of the Determination as to Indemnitee’s entitlement to indemnification). If the person, persons or entity empowered or selected under Section 6(B) of this Agreement to determine whether the Indemnitee is entitled to indemnification shall not have made a Favorable Determination within thirty (30) days after receipt by the Indemnitor of the request therefor, the requisite determination of entitlement to indemnification shall, to the fullest extent permitted by law, be deemed to have been made and the Indemnitee shall be entitled to such indemnification, absent (i) a misstatement by the Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law; provided, however, that such thirty (30) day period may be extended for a reasonable time, not to exceed an additional thirty (30) days, if the person, persons or entity making the determination with respect to entitlement to indemnification in good faith requires such additional time for the obtaining or evaluating of documentation and/or information relating thereto; and provided, further, that the foregoing provisions of this Section 6(B) shall not apply if the determination of entitlement to indemnification is to be made by Special Legal Counsel pursuant to Section 6(E).

(C)The Indemnitor shall be bound by and shall have no right to challenge a Favorable Determination. If an Adverse Determination is made, or if for any other reason the Indemnitor does not make timely indemnification payments or advancement of Expenses required by this Agreement, the Indemnitee shall have the right to commence a Proceeding before a court of competent jurisdiction to challenge such Adverse Determination and/or to require the Indemnitor to make such payments or advancement of expenses (and the Indemnitor shall have the right to defend their position in such Proceeding and to appeal any adverse judgment in such Proceeding). The Indemnitee shall be entitled to have such Expenses advanced by the Indemnitor in accordance with paragraph 4 of this Agreement and applicable law. If the Indemnitee fails to challenge an Adverse Determination within ninety (90) business days, or if Indemnitee challenges an Adverse

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Determination and such Adverse Determination has been upheld by a final judgment of a court of competent jurisdiction from which no appeal can be made, then, to the extent and only to the extent required by such Adverse Determination or final judgment, the Indemnitor shall not be obligated to indemnify the Indemnitee under this Agreement.

(D)    The Indemnitee shall cooperate with the person or entity making such Determination with respect to the Indemnitee’s entitlement to indemnification, including providing upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to the Indemnitee and reasonably necessary to such determination. Any reasonable costs or expenses (including reasonable attorneys’ fees and disbursements) incurred by the Indemnitee in so cooperating shall be borne by the Indemnitor (irrespective of the determination as to the Indemnitee’s entitlement to indemnification) and the Indemnitor hereby indemnifies and agrees to hold the Indemnitee harmless therefrom.

(E)    In the event the determination of entitlement to indemnification is to be made by Special Legal Counsel pursuant to Section 6(B) hereof, the Indemnitee, or the Indemnitor, as the case may be, may, within seven days after such written notice of selection shall have been given, deliver to the Indemnitor or to the Indemnitee, as the case may be, a written objection to such selection. Such objection may be asserted only on the grounds that the Special Legal Counsel so selected does not meet the requirements of “Special Legal Counsel” as defined in paragraph 1 of this Agreement. If such written objection is made, the Special Legal Counsel so selected may not serve as Special Legal Counsel until a court has determined that such objection is without merit. If, within twenty (20) days after submission by the Indemnitee of a written request for indemnification pursuant to

Section 6(A) hereof, no Special Legal Counsel shall have been selected or, if selected, shall have been objected to, either the Indemnitor or the Indemnitee may petition a court for resolution of any objection which shall have been made by the Indemnitor or the Indemnitee to the other’s selection of Special Legal Counsel and/or for the appointment as Special Legal Counsel of a person selected by the court or by such other person as the court shall designate, and the person with respect to whom an objection is so resolved or the person so appointed shall act as Special Legal Counsel under Section 6(B) hereof. The Indemnitor shall pay all reasonable fees and expenses of Special Legal Counsel incurred in connection with acting pursuant to Section 6(B) hereof, and all reasonable fees and expenses incident to the selection of such Special Legal Counsel pursuant to this Section 6(D). In the event that a determination of entitlement to indemnification is to be made by Special Legal Counsel and such determination shall not have been made and delivered in a written opinion within ninety (90) days after the receipt by the Indemnitor of the Indemnitee’s request in accordance with Section 6(A), upon the due commencement of any judicial proceeding in accordance with Section 8(A) of this Agreement, Special Legal Counsel shall be discharged and relieved of any further responsibility in such capacity.

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(F)    If the person or entity making the determination whether the Indemnitee is entitled to indemnification shall not have made a determination within thirty (30) days after receipt by the Indemnitor of the request therefor, the requisite Determination of entitlement to indemnification shall be deemed to have been made and the Indemnitee shall be entitled to such indemnification, absent: (i) a misstatement by the Indemnitee of a material fact, or an omission of a material fact necessary to make the Indemnitee’s statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law. Such 30-day period may be extended for a reasonable time, not to exceed an additional fifteen (15) days, if the person or entity making said determination in good faith requires additional time for the obtaining or evaluating of documentation and/or information relating thereto. The foregoing provisions of this Section 6(E) shall not apply if the determination of entitlement to indemnification is to be made by Special Legal Counsel pursuant to Section 6(B) of this Agreement.

7.PRESUMPTIONS

(A)    It shall be presumed that the Indemnitee is entitled to indemnification under this Agreement (notwithstanding any Adverse Determination), and the Indemnitor or any other person or entity challenging such right shall have the burden of proof to overcome that presumption in connection with the making by any person, persons or entity of any determination contrary to that presumption.

(B)The termination of any Proceeding by conviction, or upon a plea of nolo contendere or its equivalent, or an entry of an order of probation prior to judgment, creates a rebuttable presumption that the Indemnitee did not meet the requisite standard of conduct described herein for indemnification.

8.    REMEDIES

(A)    In the event that: (i) an Adverse Determination is made, or (ii) advancement of reasonable Expenses is not timely made pursuant to this Agreement, or (iii) payment of indemnification due the Indemnitee under this Agreement is not timely made, the Indemnitee shall be entitled to an adjudication in an appropriate court of competent jurisdiction of such Indemnitee’s entitlement to such indemnification or advancement of Expenses.

(B)    In the event that an Adverse Determination shall have been made pursuant to Section 6(B) of this Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding or arbitration commenced pursuant to this paragraph 8 shall be conducted in all respects as a de novo trial, or arbitration, on the merits. The fact that an Adverse Determination has been made earlier pursuant to paragraph 6 of this Agreement that the Indemnitee was not entitled to indemnification shall not be taken into account in any judicial proceeding

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commenced pursuant to this paragraph 8 and (i) the Indemnitee shall not be prejudiced in any way by reason of that Adverse Determination and (ii) the Indemnitor shall have the burden of proving that the Indemnitee is not entitled to indemnification or advancement of Expenses, as the case may be.

(C)    If a Favorable Determination shall have been made or deemed to have been made pursuant to Section 6(B) of this Agreement that the Indemnitee is entitled to indemnification, the Indemnitor shall be bound by such Determination in any judicial proceeding or arbitration commenced pursuant to this paragraph 8, absent: (i) a misstatement by the Indemnitee of a material fact, or an omission of a material fact necessary to make the Indemnitee’s statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law.

(D)    The Indemnitor shall be precluded from asserting in any judicial proceeding commenced pursuant to this paragraph 8 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court that the Indemnitor is bound by all the provisions of this Agreement.

(E)    In the event that the Indemnitee, pursuant to this paragraph 8, seeks a judicial adjudication of such Indemnitee’s rights under, or to recover damages for breach of, this Agreement, if successful on the merits or otherwise as to all or less than all claims, issues or matters in such judicial adjudication, the Indemnitee shall be entitled to recover from the Indemnitor, and shall be indemnified by the Indemnitor against, any and all reasonable Expenses actually incurred by such Indemnitee in connection with each successfully resolved claim, issue or matter.

(F)    Notwithstanding anything in this Agreement to the contrary, no Determination as to entitlement of the Indemnitee to indemnification under this Agreement shall be required to be made prior to the final disposition of the Proceeding.

9.    NOTIFICATION AND DEFENSE OF CLAIMS

The Indemnitee agrees promptly to notify the Indemnitor in writing upon being served with any summons, citation, subpoena, complaint, indictment, information, or other document relating to any Proceeding or matter which may be subject to indemnification or advancement of Expenses covered hereunder, but the failure so to notify the Indemnitor will not relieve the Indemnitor from any liability that the Indemnitor may have to Indemnitee under this Agreement unless the Indemnitor can establish that such omission to notify resulted in actual and material prejudice to which it cannot be reversed or otherwise eliminated without any material adverse effect on the Indemnitor. With respect to any such Proceeding as to which Indemnitee notifies the Indemnitor of the commencement thereof:

(A)    The Indemnitor will be entitled to participate therein at its own expense.

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(B)    Except as otherwise provided below, the Indemnitor will be entitled to assume the defense thereof, with counsel reasonably satisfactory to Indemnitee. After notice from the Indemnitor to Indemnitee of the Indemnitor’s election to assume the defense thereof, the Indemnitor will not be liable to Indemnitee under this Agreement for any legal or other expenses subsequently incurred by Indemnitee in connection with the defense thereof other than reasonable costs of investigation or as otherwise provided below. The Indemnitee shall have the right to employ Indemnitee’s own counsel in such Proceeding, but the fees and disbursements of such counsel incurred after notice from the Indemnitor of the Indemnitor’s assumption of the defense thereof shall be at the expense of Indemnitee unless (a) the employment of counsel by the Indemnitee has been authorized by the Indemnitor, (b) the Indemnitee shall have reasonably concluded that there may be a conflict of interest between the Indemnitor and the Indemnitee in the conduct of the defense of such action, (c) such Proceeding seeks penalties or other relief against the Indemnitee with respect to which the Indemnitor could not provide monetary indemnification to the Indemnitee (such as injunctive relief or incarceration) or (d) the Indemnitor shall not in fact have employed counsel to assume the defense of such action, in each of which cases the fees and disbursements of counsel shall be at the expense of the Indemnitor. The Indemnitor shall not be entitled to assume the defense of any Proceeding brought by or on behalf of the Indemnitor, or as to which the Indemnitee shall have reached the conclusion specified in clause (b) above, or which involves penalties or other relief against the Indemnitee of the type referred to in clause (c) above.

(C)    The Indemnitor shall not be liable to indemnify the Indemnitee under this Agreement for any amounts paid in settlement of any action or claim effected without the Indemnitor’s written consent. The Indemnitor shall not settle any action or claim in any manner that would impose any penalty or limitation on the Indemnitee without the Indemnitee’s written consent. Neither the Indemnitor nor Indemnitee will unreasonably withhold or delay consent to any proposed settlement.

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10.    NON-EXCLUSIVITY; SURVIVAL OF RIGHTS; INSURANCE SUBROGATION

(A)    The rights of indemnification and to receive advancement of reasonable Expenses as provided by this Agreement shall not be deemed exclusive of any other rights to which the Indemnitee may at any time be entitled under applicable law, the Charter, the Bylaws, any other agreement, a vote of stockholders, a resolution of the Board of Directors or otherwise, except that any payments otherwise required to be made by the Indemnitor hereunder shall be offset by any and all amounts received by the Indemnitee from any other indemnitor or under one or more liability insurance policies maintained by an indemnitor or otherwise and shall not be duplicative of any other payments received by an Indemnitee from the Indemnitor in respect of the matter giving rise to the indemnity hereunder; provided, however, that if indemnification rights are provided by an Additional Indemnitor as defined in Section 18(B) hereof, such Section shall govern. No amendment, alteration or repeal of this Agreement or any provision hereof shall be effective as to the Indemnitee with respect to any action taken or omitted by the Indemnitee prior to such amendment, alteration or repeal.

(B)    To the extent that the Company maintains an insurance policy or policies providing liability insurance for directors and officers of the Company, the Indemnitee shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available and upon any Change in Control the Company shall use commercially reasonable efforts to obtain or arrange for continuation and/or “tail” coverage for the Indemnitee to the maximum extent obtainable at such time.

(C)    Except as otherwise provided in Section 18(B) hereof, in the event of any payment under this Agreement, the Indemnitor shall be subrogated to the extent of such payment to all of the rights of recovery of the Indemnitee, who shall execute all papers required and take all actions necessary to secure such rights, including execution of such documents as are necessary to enable the Indemnitor to bring suit to enforce such rights.

(C)Except as otherwise provided in Section 18(B) hereof, the Indemnitor shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable hereunder if and to the extent that the Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement, or otherwise.

11.    CONTINUATION OF INDEMNITY

(A)    All agreements and obligations of the Indemnitor contained herein shall continue during the period the Indemnitee is an officer or a member of the Board of Directors of the Company and shall continue thereafter so long as the Indemnitee

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shall be subject to any threatened, pending or completed Proceeding by reason of such Indemnitee’s Corporate Status and during the period of statute of limitations for any act or omission occurring during the Indemnitee’s term of Corporate Status. This Agreement shall be binding upon the Indemnitor and its respective successors and assigns and shall inure to the benefit of the Indemnitee and such Indemnitee’s heirs, executors and administrators.

(B)    The Company shall require and cause any successor (whether direct or indirect by purchase, merger, consolidation or otherwise) to all, substantially all or a substantial part, of the business and/or assets of the Company, by written agreement in form and substance reasonably satisfactory to the Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place.

12.    SEVERABILITY

    If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever, (i) the validity, legality, and enforceability of the remaining provisions of this Agreement (including, without limitation, each portion of any paragraph of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby, and (ii) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any paragraph of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested by the provisions held invalid, illegal or unenforceable.

13.    EXCEPTIONS TO RIGHT OF INDEMNIFICATION OR ADVANCEMENT OF EXPENSES

    Notwithstanding any other provisions of this Agreement, the Indemnitee shall not be entitled to indemnification or advancement of reasonable Expenses under this Agreement with respect to (i) any Proceeding initiated by such Indemnitee against the Indemnitor other than a proceeding commenced pursuant to paragraph 8 hereof, or (ii) any Proceeding for an accounting of profits arising from the purchase and sale by Indemnitee of securities of the Company in violation of Section 16(b) of the Exchange Act, rules and regulations promulgated thereunder, or any similar provisions of any federal, state or local statute.

14.    NOTICE TO THE COMPANY STOCKHOLDERS

    Any indemnification of, or advancement of reasonable Expenses, to an Indemnitee in accordance with this Agreement, if arising out of a Proceeding by or in the right of the Company, shall be reported in writing to the stockholders of the Company with the notice of the next Company stockholders’ meeting or prior to the meeting.

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15.    HEADINGS

    The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.

16.    MODIFICATION AND WAIVER

    No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by each of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.

17.    NOTICES

    All notices, requests, demands, and other communications hereunder shall be in writing and shall be deemed to have been duly given if (i) delivered by hand or by a nationally recognized overnight delivery service and received by the party to whom said notice or other communication shall have been directed, or (ii) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed, if so delivered or mailed, as the case may be, to the following addresses:

    If to the Indemnitee, to the address set forth in the records of the Company.

    If to the Indemnitor, to:

QTS Realty Trust, Inc.

12851 Foster Street

Overland Park, KS 66213

Attention: Chief Executive Officer

or to such other address as may have been furnished to the Indemnitee by the Indemnitor or to the Indemnitor by the Indemnitee, as the case may be.

18.    CONTRIBUTION

(A)    To the fullest extent permissible under applicable law, if the indemnification provided for in this Agreement is unavailable to Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee, whether for judgments, penalties, fines and settlements and reasonable expenses actually incurred by or on behalf of an Indemnitee, in connection with any claim relating to an indemnifiable event under this Agreement, in such proportion as is deemed fair and reasonable in light of all of the circumstances of such Proceeding in order to reflect (i) the relative benefits received by the Company and Indemnitee as a result of the event(s) and/or transaction(s) giving cause to such Proceeding; and/or

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(ii) the relative fault of the Company (and its directors, officers, employees and agents) and Indemnitee in connection with such event(s) and/or transaction(s).

(B)    The Company acknowledges and agrees that as between the Company and any other entity that has provided indemnification rights in respect of Indemnitee’s service as a director of the Company at the request of such entity (an “Additional Indemnitor”), the Company shall be primarily liable to Indemnitee as set forth in this Agreement for any indemnification claim (including, without limitation, any claim for advancement of Expenses) by Indemnitee in respect of any Proceeding for which Indemnitee is entitled to indemnification hereunder. In the event the Additional Indemnitor is liable to any extent to Indemnitee by virtue of indemnification rights provided by the Additional Indemnitor to Indemnitee in respect of Indemnitee’s service on the Board of Directors at the request of the Additional Indemnitor and Indemnitee is also entitled to indemnification under this Agreement (including, without limitation, for advancement of Expenses) as a result of any Proceeding, the Company shall pay, in the first instance, the entire amount of any indemnification claim (including, without limitation, any claim for advancement of Expenses) brought by the Indemnitee against the Company under this Agreement (including, without limitation, any claim for advancement of Expenses) without requiring the Additional Indemnitor to contribute to such payment and the Company hereby waives and relinquishes any right of contribution, subrogation or any other right of recovery of any kind it may have against the Additional Indemnitor in respect thereof. The Company further agrees that no advancement or payment by the Additional Indemnitor on behalf of Indemnitee with respect to any claim for which Indemnitee has sought indemnification from the Company shall affect the foregoing and the Additional Indemnitor shall be subrogated to the extent of such advancement or payment to all of the rights of recovery of the Indemnitee against the Company. Without limiting the generality of the foregoing, the Company hereby acknowledges that certain of its Directors, including the Directors affiliated with GA QTS Interholdco, LLC (the “Specified Directors”), may have certain rights to indemnification and advancement of expenses provided by GA QTS Interholdco, LLC and certain of its Affiliates (collectively, the “General Atlantic Indemnitors”), which shall constitute Additional Indemnitors for purposes of this paragraph. To the extent the Indemnitee is a Specified Director, the Company hereby agrees and acknowledges that with respect to matters for which it is required to provide indemnity pursuant to the terms of this Agreement, (i) it shall be the indemnitor of first resort with respect to the Indemnitee (i.e., its obligations to the Indemnitee are primary and any obligation of the General Atlantic Indemnitors to advance expenses or to provide indemnification for expenses or liabilities incurred by the Indemnitee are secondary), (ii) it shall advance the full amount of expenses incurred and shall be liable for the full amount of all expenses, judgments, penalties, fines and amounts paid in settlement by the Indemnitee to the extent required by the terms of this Agreement (or any other agreement between the Company and the Indemnitee), without regard to any

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rights the Specified Directors may have against the General Atlantic Indemnitors and (iii) it irrevocably waives, relinquishes and releases the General Atlantic Indemnitors from any and all claims against the General Atlantic Indemnitors for contribution, subrogation or any other recovery of any kind in respect thereof related to the Company’s obligations set forth in clauses (i) and (ii) in this sentence. The Company further agrees that no advancement or payment by the General Atlantic Indemnitors on behalf of the Indemnitee with respect to any claim for which the Indemnitee has sought indemnification from the Company shall affect the foregoing and the General Atlantic Indemnitors shall have a right of contribution and/or be subrogated to the extent of such advancement or payment to all of the rights of recovery of the Indemnitee against the Company.

19.    GOVERNING LAW

    The parties agree that this Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Maryland, without application of the conflict of laws principles thereof.

20.    NO ASSIGNMENTS

    The Indemnitee may not assign its rights or delegate obligations under this Agreement without the prior written consent of the Indemnitor. Any assignment or delegation in violation of this paragraph 20 shall be null and void.

21.    NO THIRD PARTY RIGHTS

    Nothing expressed or referred to in this Agreement will be construed to give any person other than the parties to this Agreement any legal or equitable right, remedy or claim under or with respect to this Agreement or any provision of this Agreement; and (b) this Agreement and all of its provisions are for the sole and exclusive benefit of the parties to this Agreement and their successors and permitted assigns.

22.    COUNTERPARTS

    This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together constitute an agreement binding on all of the parties hereto.

[Signature page follows]

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.

QTS REALTY TRUST, INC.

    By:    /s/ Shirley E. Goza        

    Name:    Shirley E. Goza

    Title:    General Counsel, VP and Secretary

INDEMNITEE:

    By:    /s/ Matt N. Thomson, Jr.        

    Name:    Matt N. Thomson, Jr.

    Title: General Counsel, VP and Secretary

[Signature Page to Indemnification Agreement]

EX-10.61

Exhibit 10.61

EMPLOYMENT AGREEMENT

(MATT N. THOMSON, JR.)

THIS EMPLOYMENT AGREEMENT (“Agreement”) is made as of October 1, 2020 (the “Effective Date”), by and among QTS Realty Trust, Inc., a Maryland corporation (together with any successor general partner of the Operating Partnership (the “Company”), QualityTech, LP, a Delaware limited partnership (the “Operating Partnership”), Quality Technology Services, LLC, a Delaware limited liability company and an affiliate of the Company (the “Employer”) and Matt N. Thomson, Jr. an individual (“Executive”), with respect to the following facts and circumstances:

RECITALS

WHEREAS, the Employer and Executive desire to engage in an employment relationship, with the Employer employing Executive to serve as the Company’s, the Operating Partnership’s and the Employer’s General Counsel (“GC”) and Executive accepting such employment and appointments, on the terms set forth below; and

NOW, THEREFORE, in consideration of the mutual promises, covenants and agreements set forth herein, the parties hereto agree as follows:

ARTICLE 1

EMPLOYMENT, TERM AND DUTIES

1.1.Employment. During the Term (defined below), the Employer shall employ Executive to serve as, and the Company shall appoint or cause to be appointed the Executive to the position of, the GC of the Company, upon the terms and conditions set forth in this Agreement, and Executive shall report directly to the Chief Executive Officer of the Company (the “CEO”), unless otherwise determined by the Board of Directors of the Company (the “Board”). In addition, during the Term, Executive shall serve as the GC of the Operating Partnership and the Employer and shall report to the CEO, unless determined otherwise by the Board. For the avoidance of doubt, Executive shall be an employee of the Employer.

1.2.Term. The Employer shall employ Executive, and Executive shall serve as the GC of the Company, commencing upon the Effective Date and continuing thereafter for a two (2)-year term (the “Term”), unless earlier terminated under Article 4; provided that the Term shall automatically renew for additional two (2)-year periods unless the Employer or Executive gives notice of non-renewal at least thirty (30) days prior to expiration of the Term (as it may have been extended by any renewal period).

1.3.Duties. Executive shall perform all the duties and obligations reasonably associated with the position of GC and consistent with the Bylaws or other governing documents

MNThomson 2020

of the Company or the Operating Partnership as in effect from time to time, subject to the supervision of the CEO, and shall perform such other duties of an executive, managerial or administrative nature as shall be specified and designated from time to time by the CEO (including the performance of services for any subsidiary or affiliate of the Company (each, including the Company, a “QTS Company”) without any additional compensation). Executive shall perform the duties contemplated herein faithfully and diligently.

Executive shall devote substantially all of his business time and effort to the performance of Executive’s duties hereunder and to the business affairs of the QTS Companies; provided that in no event shall this provision prohibit Executive from (i) performing social, civic, charitable and religious activities, (ii) managing personal investments and affairs, (iii) participating in educational or professional associations, or (iv) any other activities approved by the CEO, so long as the activities set forth in clauses (i) through (iv) above do not materially and adversely interfere with Executive’s duties and obligations hereunder or to the business affairs of the Company.

ARTICLE 2

COMPENSATION

2.1.Salary and Bonus. In consideration for Executive’s services hereunder, the Employer shall pay Executive as follows:

(a)Employer shall pay Executive an annual salary at the rate of $300,000 (“Base Pay”), payable in accordance with the Employer’s regular payroll schedule from time to time (less any deductions required for Social Security, state, federal and local withholding taxes, and any other authorized or mandated similar withholdings). The Base Pay shall be reviewed by the Compensation Committee of the Board (the “Compensation Committee”), no less frequently than annually.

(b)Executive will have the opportunity to earn a bonus to be paid in accordance with the Employer’s regular bonus payment schedule beginning in 2020 (to be paid in 2021) (to be prorated for 2020 performance). Executive is eligible for a target bonus (a “Target Bonus”) equal to 50% of his Base Pay for threshold performance and additional amounts paid for exceptional performance as determined by the Compensation Committee. Executive’s Target Bonus will be earned based upon Executive’s performance and the performance of the Company or such other factors and criteria that may be established from time to time for the calculation of bonus awards by the Compensation Committee, or, if there is none, the Board. The Employer may award discretionary bonuses in addition to performance bonuses.

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2.2    Equity Awards. Equity awards may be made pursuant to the QTS Realty Trust, Inc. 2013 Equity Incentive Plan, or any successor equity incentive plan adopted by the Company or the other QTS Companies, in accordance with the Company’s policies and as deemed appropriate by the Compensation Committee (the “Equity Awards”). The Equity Awards will be comprised of a target grant valued at $600,000.00 beginning in calendar year 2020 (to be paid in 2021) (to be prorated for 2020 performance), to be awarded based upon Executive’s performance and the performance of the Company or such other factors and criteria that may be established from time to time by the Compensation Committee, or, if there is none, the Board. These Equity Awards typically will be subject to a three (3)-year vesting schedule (33% one-year vesting following grant and 8.375% vesting per quarter following the first year), however, a performance-based component may be included with a different vesting schedule. Additional equity awards may be made in accordance with the Company’s policies and as deemed appropriate by the Compensation Committee.

ARTICLE 3

EXECUTIVE BENEFITS

3.1.Vacation. Executive shall be entitled to four (4) weeks paid vacation each calendar year in accordance with the general policies of the Company and the Employer applicable generally to other senior executives of the Company.

3.2.Employee Benefits. Executive shall receive all group insurance and retirement plan benefits and any other benefits on the same basis as are available to other senior executives of the Company under the personnel policies in effect from time-to-time. Executive shall receive all other such fringe benefits as the Company and the Employer may offer to other senior executives under personnel policies in effect from time-to-time, such as health and disability insurance coverage, paid sick leave and financial planning/tax services.

3.3.Reimbursement for Expenses. Executive shall be reimbursed for all documented reasonable expenses incurred by Executive in the performance of his duties or otherwise in furtherance of the business of the Company, the Operating Partnership or the Employer in accordance with the reimbursement policies in effect from time-to-time. Any reimbursement under this Section 3.3 that is taxable to Executive shall be made by December 31 of the calendar year following the calendar year in which Executive incurred the expense.

ARTICLE 4

TERMINATION

4.1.Grounds for Termination.

4.1.Death or Disability. Executive’s employment shall terminate immediately in the event of Executive’s death or Disability. “Disability” means any: (i) physical disability or impairment, (ii) mental disability or impairment, (iii) illness, or (iv) injury, that, in the good-faith judgment of the Board, substantially prevents or would prevent Executive from performing his duties and obligations under this Agreement or participating effectively and actively in the

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management of the Company for more than three consecutive months or for more than 90 days in any 180-day period.

4.2.Cause. The Employer shall have the right to terminate Executive’s employment by giving written notice of such termination to Executive upon the occurrence of any one or more of the following events (which, for purposes of this Agreement, shall constitute “Cause”):

(a)Executive’s conviction of, or pleading guilty or nolo contendere to, a crime that constitutes a felony or any lesser criminal offense involving dishonesty or moral turpitude;

(b)any commission by Executive of an act of dishonesty, theft, fraud, or embezzlement; or

(c)any willful act by Executive that has a significant adverse effect on the reputation of the Company or any of the QTS Companies;

4.3.Good Reason. Executive may terminate his employment under this Agreement by giving written notice to the Employer upon the occurrence of any one or more of the following events (which, for purposes of this Agreement, shall constitute “Good Reason”):

(a)A material diminution in Executive’s authority, duties or responsibilities (including reporting responsibilities), or any significant adverse change in Executive’s title as GC of the Company;

(b)A material diminution in Executive’s Base Pay, as in effect from time to time;

(c)The Executive’s place of employment is moved more than fifty (50) miles from his/her assigned location; or

(d)The failure of a successor to the assets or business of the Company and the Operating Partnership to assume the obligations of the Company and the Operating Partnership under this Agreement.

It shall be a condition precedent to Executive’s right to terminate his employment for Good Reason that (a) he shall have first given the Employer written notice stating with reasonable specificity the act(s) on which such termination is premised within forty-five (45) days after Executive becomes aware of such act(s), (b) if such act(s) is susceptible of cure or remedy, it has not been cured or remedied within thirty (30) days after receipt of such notice, and (c) Executive has terminated his employment within twelve (12) months after so notifying the Employer.

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4.4.Any Other Reason. Notwithstanding anything to the contrary herein, the Employer shall have the right to terminate Executive’s employment under this Agreement at any time without Cause by giving written notice of such termination to Executive, and Executive shall have the right to terminate Executive’s employment under this Agreement at any time without Good Reason by giving written notice of such termination to the Employer. Any notice by Executive hereunder shall be given at least sixty (60) days in advance of such termination.

4.5.Termination Date. Any termination under Section 4.1 shall be effective (i) in the case of a termination pursuant to 4.1.1, immediately upon death or such Disability, and (ii) in the case of any other termination, upon receipt of notice by Executive or the Employer, as the case may be, of such termination or upon such other later date as may be provided herein or specified by the Employer or Executive in the notice (the “Termination Date”).

4.6.Effect of Termination.

4.3.1.Termination with Cause or without Good Reason. In the event that Executive’s employment is terminated by the Employer with Cause or by Executive without Good Reason, the Employer shall pay all Accrued Obligations to Executive in a lump sum in cash within twenty (20) days after the Termination Date or on such earlier date required by applicable law. “Accrued Obligations” means the sum of (a) Executive’s Base Pay hereunder through the Termination Date to the extent not theretofore paid, (b) the amount of any accrued but unused vacation pay, (c) any business expense reimbursements incurred by Executive as of the Termination Date and submitted for reimbursement, and (d) any performance bonus or discretionary bonus under Section 2.1 that has been earned or declared for a bonus period ending before the Termination Date but not paid before the Termination Date, in each case, consistent with the policy for such reimbursements, within ten (10) days following the Termination Date.

4.3.2.Termination without Cause, with Good Reason or Due to Company Non-Renewal. In the event that Executive’s employment is terminated by the Employer without Cause, by Executive for Good Reason or due to the Employer’s non-renewal of any Term:

(a)the Employer shall pay all Accrued Obligations to Executive in a lump sum in cash within twenty (20) days after the Termination Date or on such earlier date required by law;     

(b)the Employer shall pay to Executive, in a lump sum in cash on the first payroll date following sixty (60) days after the Termination Date, an amount equal to one (1) year of Executive’s Base Pay plus the Target Bonus as in effect on the Termination Date;

(c)Employer shall pay to Executive, in a lump sum in cash on the first payroll date following sixty (60) days after the Termination Date all bonus amounts earned but not yet paid for the year prior to the year in which the Termination Date occurs;

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(d)If not previously vested in full, the Equity Awards and any other equity awards granted to Executive that otherwise would vest during the then-current term of this Agreement (whether the initial term or any renewal term) shall fully vest as of the Termination Date;

(e)If Executive elects COBRA coverage, the Employer shall reimburse Executive for his premiums for such coverage for a period of eighteen (18) months following the Termination Date; and

(f)the Employer shall provide to Executive, at the Employer’s expense, outplacement services and support, the scope and provider of which will be selected by Executive, for a period of one (1) year follow the Termination Date.

The Employer’s delivery of any notice under Section 1.2 of this Agreement that the Agreement will not be renewed and any subsequent termination of Executive’s employment at the expiration of such Term of the Agreement shall be considered a termination without Cause, and Executive shall be entitled to any payments and benefits under this Section 4.3.2 under such circumstance.

iii.Termination due to Death or Disability. In the event that Executive’s employment is terminated due to Executive’s death or Disability, the Employer shall pay all Accrued Obligations to Executive or his estate in a lump sum in cash within thirty (30) business days after the Termination Date. If not previously vested in full, all equity awards granted to Executive shall fully vest as of the Termination Date.

iv.Termination upon Change in Control. In the event that Executive’s employment is terminated following a Change in Control, the following provisions shall apply:

(a)Upon the occurrence of a Triggering Event:

(1)the Employer shall pay all Accrued Obligations to Executive in a lump sum in cash within twenty (20) days after the Termination Date or on such earlier date required by law;

(2)the Employer shall pay to Executive a lump sum severance benefit in cash on the first payroll date following sixty (60) days after the Termination Date, which will be in addition to any other compensation or remuneration to which Executive is or becomes entitled to receive from the Employer, in an amount equal to the sum of (i) two (2) times Executive’s Annual Bonus (as defined below) plus (ii) two (2) times Executive’s Base Pay as in effect on the date of the Triggering Event or on the date on which the Change of Control occurs, whichever is higher;

(3)the Employer shall pay or reimburse the cost of health, disability and accidental death, and dismemberment insurance in an amount not less than that provided at the time of the Triggering Event or, if

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greater, on the date on which the Change in Control occurred, until the earlier of (x) in the event that Executive shall become employed by another employer after a Triggering Event, the date on which Executive shall be eligible to receive benefits from such employer which are substantially equivalent to or greater than the benefits Executive and Executive’s family received from Company or (y) the second anniversary of the date of the Triggering Event. Any reimbursement under this Section 4.3.4(a)(3) that is taxable to Executive or any of his Family Members shall be made (subject to the provisions of such health care plans that may require earlier payment) by December 31 of the calendar year following the calendar year in which Executive or such Family Member incurred the expense; and

(4)the Employer shall provide Executive, at Employer’s expense, with outplacement services and support, the scope and provider of which will be selected by Executive, for a period of one (1) year following the date of the Triggering Event.

(b)“Change in Control” means:

(1)any transaction (including without limitation a merger or reorganization in which the Company is the surviving entity) that results in any “person” (as such term is used in Section 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (other than persons who are stockholders of the Company or their affiliates immediately prior to the transaction), becoming the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the then- combined voting power of the Company’s then outstanding voting securities;

(2)during any period of twelve (12) consecutive months, individuals who at the beginning of such period constitute the Board and any new director (other than a director designated by a person who has entered into an agreement with the Company to effect a transaction described in clause (a), (b) or (c) hereof) whose election by the Board or nomination for election by the Company’s stockholders was approved by a vote of at least a majority of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or actual threatened solicitation of proxies or consents by or on behalf of a person other than the Board, cease for any reason to constitute at least a majority of the Board;

(3)the merger or consolidation of the Company with one or more other entities, other than (A) a merger or consolidation which would result in the voting securities of the Company

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outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving or parent entity) more than 75% of the combined voting power of the voting securities of the Company or such surviving or parent entity outstanding immediately after such merger or consolidation or (B) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no “person” (as defined above) is or becomes the beneficial owner, directly or indirectly, of securities of the Company representing 25% or more of the then combined voting power of the Company’s then outstanding voting securities; or

(4)the consummation of the sale or disposition by the Company or the Operating Partnership of all or substantially all of its respective assets (or any transaction or series of transactions within a period of twelve months ending on the date of the last sale or disposition having a similar effect).

(c)“Code” means the Internal Revenue Code of 1986, as amended.

(d)“Triggering Event” will be deemed to have occurred if: within two (2) years from the date on which the Change in Control occurred, Employer terminates the employment of Executive other than in the case of a Termination for Cause or (ii) within two (2) years from the date on which the Change in Control occurred, the Executive terminates his employment for Good Reason.   ;

(e)“Executive’s Annual Bonus” means Executive’s Target Bonus at the time of a Triggering Event or on the date on which the Change in Control occurred, whichever is higher, calculated on the basis of the maximum bonus available to Executive and the assumption that all performance goals are satisfied at a 100% achievement level by Company and Executive in the year in which such Triggering Event or such Change in Control, as the case may be, occurred.

(f)“Executive’s Annual Salary” means Executive’s annual Base Pay at the time of a Triggering Event or on the date on which the Change in Control occurred, whichever is higher.

For the avoidance of doubt, in the event of a change of Control and a Triggering Event under circumstances entitling Executive to payments and benefits under this Section 4.3.4, such payments and benefits shall be in lieu of payments and benefits under Section 4.3.2, and Executive shall not be entitled to any compensation or benefits under Section 4.3.2.

4.3.5    Waiver and Release Agreement. In consideration of the severance payments and other benefits described in Section 4.3.2 and Section 4.3.4, to which severance payments and benefits Executive would not otherwise be entitled, and as a precondition to Executive becoming entitled to such severance payments and other benefits under this Agreement, Executive agrees to execute and deliver to the Employer on or before the sixtieth (60th) day after the applicable Termination Date a waiver and general release of claims in favor of the Company and each of the

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QTS Companies, their respective predecessors and successors, and all of the respective current or former directors, officers, employees, shareholders, partners, members, agents or representatives of any of the foregoing, in a form reasonably satisfactory to the Employer, that has become effective in accordance with its terms, and for which any revocation periods applicable to such release shall have expired on or prior to the sixtieth (60th) day following Executive’s Termination Date. If Executive fails to execute and deliver such release agreement on or before the sixtieth (60th) day following the applicable Termination Date, if any revocation period applicable to such release has not expired on or before the sixtieth (60th) day following Executive’s Termination Date or if Executive revokes such release as provided therein, the Employer shall have no obligation to provide any of the severance payments and other benefits described in Section 4.3.2 or Section 4.3.4 other than any Accrued Obligations.

e.Required Delay For Certain Deferred Compensation and Section 409A. In the event that any compensation with respect to Executive’s termination is “deferred compensation” within the meaning of Section 409A of the Code and the regulations promulgated thereunder (“Section 409A”), and Executive is determined to be a “specified employee,” as defined in Section 409A (a)(2)(B)(i) of the Code, payment of such compensation shall be delayed as required by Section 409A. Such delay shall last six (6) months from the date of Executive’s termination, except in the event of Executive’s death. Within twenty (20) business days following the end of such six (6)-month period, or, if earlier, Executive’s death, the Employer shall make a catch-up payment to Executive equal to the total amount of such payments that would have been made during the six (6)-month period but for this Section 4.4. Such catch-up payment shall bear simple interest at the prime rate of interest as published by the Wall Street Journal’s bank survey as of the first day of the six (6)-month period, which such interest shall be paid with the catch-up payment. Wherever payments under this Agreement are to be made in installments, each such installment shall be deemed to be a separate payment for purposes of Section 409A. The Executive will be deemed to have a Termination Date for purposes of determining the timing of any payments or benefits hereunder that are classified as deferred compensation only upon a “separation from service” within the meaning of Section 409A. Any amount that the Executive is entitled to be reimbursed under this Agreement will be reimbursed to the Executive as promptly as practical and in any event not later than the last day of the calendar year after the calendar year in which the expenses are incurred and any right to reimbursement or in-kind benefits will not be subject to liquidation or exchange for another benefit. Whenever a payment under this Agreement specifies a payment period with reference to a number of days (e.g., “payment shall be made within thirty (30) days following the date of termination”), the actual date of payment within the specified period shall be within the sole discretion of the Employer.

f.Non-Exclusivity of Rights. Nothing in this Agreement shall prevent or limit Executive’s continuing or future participation in any plan, program, policy or practice provided by the Employer, the Company or any of the QTS Companies and for which Executive may qualify, nor shall anything herein limit or otherwise affect such rights as Executive may have under any other contract or agreement with the Employer, the Company any of the QTS Companies at or subsequent to the Termination Date, which shall be payable in accordance with

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such plan, policy, practice or program or contract or agreement, except as explicitly modified by this Agreement.

g.No Set-Off or Mitigation. The Employer’s obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any setoff, counterclaim, recoupment, defense, or other claim, right or action that the Employer may have against Executive or others, except to the extent of the mitigation and setoff provisions provided for in this Agreement. In no event shall Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to Executive under any of the provisions of this Agreement, and such amounts shall not be reduced whether or not Executive obtains other employment.

h.Excise Tax-Related Provisions. The payments and benefits that Executive may be entitled to receive under this Agreement and other payments and benefits that Executive is or may be entitled to receive under other plans, agreements and arrangements (which, together with the benefits provided under this Agreement, are referred to as “Payments”), may constitute Parachute Payments (as defined below) that are subject to Sections 280G and 4999 of the Code. As provided in this Section 4.8, the Parachute Payments will be reduced if, and only to the extent that, a reduction will allow Executive to receive a greater Net After Tax Amount (as defined below) than Executive would receive absent a reduction.

4.8.1    The Accounting Firm (as defined below) will first determine the amount of any Parachute Payments that are payable to the Executive. The Accounting Firm also will determine the Net After Tax Amount attributable to the Executive’s total Parachute Payments.

4.8.2    The Accounting Firm will next determine the largest amount of Payments that may be made to the Executive without subjecting Executive to tax under Section 4999 of the Code (the “Capped Payments”). Thereafter, the Accounting Firm will determine the Net After Tax Amount attributable to the Capped Payments.

4.8.3 Executive will receive the total Parachute Payments or the Capped Payments, whichever provides Executive with the higher Net After Tax Amount. If Executive will receive the Capped Payments, the total Parachute Payments will be adjusted by first reducing the amount of any cash benefits under this Agreement or any other plan, agreement or arrangement (with the source of the reduction to be directed by the Company) and then by reducing the amount of any noncash benefits under this Agreement or any other plan, agreement or arrangement (with the source of the reduction to be directed by the Company).  The Accounting Firm will notify Executive and the Company if it determines that the Parachute Payments must be reduced to the Capped Payments and will send Executive and the Company a copy of its detailed calculations supporting that determination.

4.8.4 As a result of the uncertainty in the application of Sections 280G and 4999 of the Code at the time that the Accounting Firm makes its determinations under this Section 4.8, it is possible that amounts will have been paid or distributed to Executive that should not have been paid or distributed under this Section 4.8 (“Overpayments”), or that additional amounts should

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be paid or distributed to the Executive under this Section 4.8 (“Underpayments”). If the Accounting Firm determines, based on either the assertion of a deficiency by the Internal Revenue Service against the Company or the Executive, which assertion the Accounting Firm believes has a high probability of success or controlling precedent or substantial authority, that an Overpayment has been made, the Executive must repay to the Company, without interest, the amount of the Overpayment; provided, however, that no amount will be payable by the Executive to the Company unless, and then only to the extent that, the payment would either reduce the amount on which the Executive is subject to tax under Section 4999 of the Code or generate a refund of tax imposed under Section 4999 of the Code. If the Accounting Firm determines, based upon controlling precedent or substantial authority, that an Underpayment has occurred, the Accounting Firm will notify the Executive and the Company of that determination and the amount of that Underpayment will be paid to the Executive promptly by the Company.

For purposes of this Section 4.8, the term “Accounting Firm” means the independent accounting firm engaged by the Company immediately before a Change in Control. For purposes of this Section 4.8, the term “Net After Tax Amount” means the amount of any Parachute Payments or Capped Payments, as applicable, net of taxes imposed under Sections 1, 3101(b) and 4999 of the Code and any State or local income taxes applicable to Executive on the date of payment. The determination of the Net After Tax Amount shall be made using the highest combined effective rate imposed by the foregoing taxes on income of the same character as the Parachute Payments or Capped Payments, as applicable, in effect on the date of payment. For purposes of this Section 4.8, the term “Parachute Payment” means a payment that is described in Section 280G(b)(2) of the Code, determined in accordance with Section 280G of the Code and the regulations promulgated or proposed thereunder.

ARTICLE 5

RESTRICTIVE COVENANTS

5.1.Confidential Information.

5.1.Obligation to Maintain Confidentiality. Executive acknowledges that, by reason of Executive’s employment by the Employer, the Executive will have access to confidential information (collectively, “Confidential Information”) of the Company and the other QTS Companies. Executive acknowledges that such Confidential Information is a valuable and unique asset of the QTS Companies and covenants that, both during and after the Term, Executive shall not disclose any Confidential Information to any individual, firm, corporation, partnership, company, limited liability company, trust, joint venture, association or other entity (“Person”) (except as Executive’s duties as a manager, officer or employee of the Company, the Operating Partnership, the Employer or any related entity require) without the prior written authorization of the CEO of the Company. The obligation of confidentiality imposed by this Section 5.1 shall not apply to Confidential Information that otherwise becomes known to the public through no act of Executive in breach of this Agreement or which is required to be disclosed by court order, applicable law or regulatory requirements, nor shall it apply to Executive’s disclosure of Confidential Information to his attorneys and advisors in connection with a dispute between Executive and a QTS Company.

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5.2.Company Property. All records, designs, business plans, financial statements, customer lists, manuals, memoranda, lists, research and development plans, Intellectual Property and other property delivered to or compiled by Executive by or on behalf of any QTS Company or its providers, clients or customers that pertain to the business of any QTS Company shall be and remain the property of such QTS Company and be subject at all times to its discretion and control. Likewise, all correspondence, reports, records, charts, advertising materials and other similar data pertaining to the business, activities, research and development, Intellectual Property or future plans of a QTS Company that is collected by the Executive shall be delivered promptly to such QTS Company without request by it upon termination of Executive’s employment for any reason. For purposes of this Section “Intellectual Property” shall mean patents, copyrights, trademarks, trade dress, trade secrets, other such rights, and any applications therefor.

5.3.Inventions. Executive is hereby retained in a capacity such that Executive’s responsibilities may include the making of technical and managerial contributions of value to the QTS Companies. Executive hereby assigns to the applicable QTS Company all rights, title and interest in such contributions and inventions made or conceived by Executive alone or jointly with others during the Term that relate to the business of such company. This assignment shall include (a) the right to file and prosecute patent applications on such inventions in any and all countries, (b) the patent applications filed and patents issuing thereon, and (c) the right to obtain copyright, trademark or trade name protection for any such work product. Executive shall promptly and fully disclose all such contributions and inventions to the Company, the Operating Partnership and the Employer and assist the Company, the Operating Partnership and the Employer or any other related entity, as the case may be, in obtaining and protecting the rights therein (including patents thereon), in any and all countries; provided, however, that said contributions and inventions shall be the property of the applicable QTS Company, whether or not patented or registered for copyright, trademark or trade name protection, as the case may be. Notwithstanding the foregoing, no QTS Company shall have any right, title or interest in any work product or copyrightable work developed outside of work hours and without the use of any QTS Company’s resources that does not relate to the business of any QTS Company and does not result from any work performed by Executive for any QTS Company.

5.4.Non-Disparagement.

(a)Executive agrees that he will not talk about or otherwise communicate to any third parties in a malicious, disparaging, or defamatory manner regarding the Company, the Operating Partnership, the Employer or any related entity, their respective owners or their past or present employees, directors, officers or other representatives and will not make or authorize to be made any written or oral statement that may disparage or damage the reputation of the Company, the Operating Partnership, the Employer or any related entity, their respective owners or their past or present employees, directors, officers or other representatives or their past or present employees, officers or other representatives.

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(b)The Company, the Operating Partnership and the Employer agree that they will not talk about or otherwise communicate to any third parties in a malicious, disparaging, or defamatory manner regarding Executive and will not make or authorize to be made any written or oral statement that may disparage or damage the reputation of Executive. For purposes of this non-disparagement provision, the Company, the Operating Partnership and the Employer are defined to mean the Company’s executive team and the Board.

5.5.Non-Compete. The Executive agrees that for the period during which the Executive is employed by, or serving as an officer or manager or director of, the Company, the Operating Partnership, the Employer or any related entity and for one (1) year thereafter (the “Restricted Period”), the Executive will not, (a) directly or indirectly, engage in any business involving the development, construction, acquisition, ownership or operation of data center properties, colocation facilities and/or the provision of managed or cloud services, whether such business is conducted by the Executive individually or as a principal, partner, member, stockholder, joint venturer, director, trustee, officer, employee, consultant, advisor or independent contractor of any Person or (b) own any interests in any data center facilities, colocation facilities or managed or cloud service providers, in each case in the United States of America as of the Termination Date; provided, however, that this Section 5.4 shall not be deemed to prohibit the direct or indirect ownership by the Executive of up to five (5) percent of the outstanding equity interests of any public company.  

5.6.Non-Solicitation. The Executive agrees that during the Term or otherwise for the period during which the Executive is employed by, or serving as an officer or manager or director of, the Company, the Operating Partnership, the Employer or any related entity and for one (1) year thereafter, such Executive will not directly or indirectly (a) solicit, induce or encourage any employee (other than clerical employees) or independent contractor to terminate their employment or engagement with the Company, the Operating Partnership, the Employer or any other QTS Company or to cease rendering services to the Company, the Operating Partnership, the Employer or any other QTS Company, and the Executive shall not initiate discussions with any such Person for any such purpose or authorize or knowingly cooperate with the taking of any such actions by any other Person, or (b) solicit, recruit, induce for employment or hire (on behalf of the Executive or any other person or entity) any employee (other than clerical employees) or independent contractor who has left the employment or other service of the Company, the Operating Partnership, the Employer or any QTS Company within one (1) year of the termination of such employee’s or independent contractor’s employment or other service with the Company, the Operating Partnership, the Employer or any other QTS Company, or (c) solicit any tenants of the Company, the Operating Partnership, the Employer or any other QTS Company to lease, purchase or otherwise occupy data center space in the United States of America or encourage any of the tenants of the Company, the Operating Partnership, the Employer or any other QTS Company to reduce its patronage of the Company, the Operating Partnership, the Employer or any other QTS Company.

5.7.Reasonable and Necessary Restrictions. Executive acknowledges that the restrictions, prohibitions and other provisions hereof, including, without limitation, the Restricted

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Period set forth in Section 5.4, are reasonable, fair and equitable in terms of duration, scope and geographic area, as are necessary to protect the legitimate business interests of the Company, the Operating Partnership and the Employer, and are a material inducement to the Company, the Operating Partnership and the Employer to enter into this Agreement.

5.8.Breach of Restrictive Covenants. The parties agree that a breach or violation of any provision of this Article 5 will result in immediate and irreparable injury and harm to the business of the Company, the Operating Partnership, the Employer and each other related entity shall have, in addition to any and all remedies of law and other consequences under this Agreement, the right to seek an injunction, specific performance or other equitable relief to prevent the violation of the obligations hereunder, including without limitation, to address any threatened breach or violation, and to enjoin and restrain Executive and each and every person, firm, company or corporation concerned therewith, from the violation or continuance of such violation or breach. In addition thereto, Executive shall be responsible for all damages, including reasonable attorneys’ fees, sustained by the Company, the Operating Partnership, the Employer and any other related entity by reason of said violation. In addition to any other remedy which may be available at law or in equity, or pursuant to any other provision of this Agreement, the payments by the Employer of any severance to which Executive may otherwise be entitled under this Agreement will cease as of the date on which such violation first occurs.

5.9.Cooperation. At all times during Executive’s employment and after the date of Executive’s termination of employment, Executive agrees to reasonably cooperate (if occurring after termination of employment, to the extent not interfering with Executive’s other full-time business endeavors) (i) with the Company, the Operating Partnership and the Employer in the defense of any legal matter involving any matter that arose during Executive’s employment in the business of the Company, the Operating Partnership and the Employer, and (ii) with all government authorities on matters pertaining to any investigation, litigation or administrative proceeding pertaining to the business of the Company, the Operating Partnership or the Employer. The Company, the Operating Partnership or the Employer, as applicable, will reimburse Executive for reasonable travel and out-of-pocket expenses incurred by Executive in providing such cooperation.

5.10.Permitted Disclosure.  Nothing in this Agreement, in any other agreement between Executive and the Company, the Operating Partnership or the Employer, or in any policy of the Company, Operating Partnership or the Employer, restricts or prohibits Executive from reporting possible violations of law or regulation to, or from filing a claim or assisting with an investigation directly with, a self-regulatory authority or a government agency or entity, including without limitation the U.S. Equal Employment Opportunity Commission, the Department of Labor, the National Labor Relations Board, the Department of Justice, the Securities and Exchange Commission, the Congress, and any agency Inspector General, or from making other disclosures that are protected under the whistleblower provisions of state or federal law or regulation, whether Executive does so as a result of Executive initiating communications directly with or responding to any inquiries from such government agency or entity.  Executive does not need the prior authorization of the Company, the Operating Partnership or the Employer to engage in such conduct, and Executive does not need to notify the Company, the Operating

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Partnership or the Employer that Executive has engaged in such conduct.  For additional clarity, such conduct shall not be deemed a breach of any provision of this Agreement or any other agreement with or policy of the Company, the Operating Partnership or the Employer.

ARTICLE 6

GOVERNING LAW

6.1.Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF KANSAS APPLICABLE TO AGREEMENTS MADE AND TO BE WHOLLY PERFORMED WITHIN THAT STATE, WITHOUT REGARD TO ITS CONFLICT OF LAWS PROVISIONS OR THE CONFLICT OF LAWS PROVISIONS OF ANY OTHER JURISDICTION WHICH WOULD CAUSE THE APPLICATION OF ANY LAW OTHER THAN THAT OF THE STATE OF KANSAS.

6.2.Waiver of Jury Trial. Each party hereby waives, to the fullest extent permitted by applicable law, any right it may have to a trial by jury in respect to any litigation, directly or indirectly, arising out of or relating to this Agreement or any transaction contemplated hereby. Each party (a) certifies that no representative, agent or attorney of any other party has represented, expressly or otherwise, that such other party would not, in the event of litigation, seek to enforce the foregoing waiver and (b) acknowledges that it and the other parties have been induced to enter into this Agreement by, among other things, the mutual waivers and certifications in this Section 6.2.

ARTICLE 7

MISCELLANEOUS

7.1.Amendments. The provisions of this Agreement may not be waived, altered, amended or repealed in whole or in part except by the signed written consent of the parties sought to be bound by such waiver, alteration, amendment or repeal.

7.2.Entire Agreement. This Agreement constitutes the total and complete agreement of the parties with respect to the subject matter hereof and thereof and supersedes all prior and contemporaneous understandings and agreements heretofore made, and there are no other representations, understandings or agreements.

7.3.Counterparts. This Agreement may be executed in one of more counterparts, each of which shall be deemed and original, but all of which shall together constitute one and the same instrument.

7.4.Severability. Each term, covenant, condition or provision of this Agreement shall be viewed as separate and distinct, and in the event that any such term, covenant, condition or provision shall be deemed by an arbitrator or a court of competent jurisdiction to be invalid or unenforceable, the court or arbitrator finding such invalidity or unenforceability shall modify or reform this Agreement to give as much effect as possible to the terms and provisions of this

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Agreement. Any term or provision which cannot be so modified or reformed shall be deleted and the remaining terms and provisions shall continue in full force and effect.

7.5.Waiver or Delay. The failure or delay on the part of the Company, the Operating Partnership, the Employer or Executive to exercise any right or remedy, power or privilege hereunder shall not operate as a waiver thereof. A waiver, to be effective, must be in writing and signed by the party making the waiver. A written waiver of default shall not operate as a waiver of any other default or of the same type of default on a future occasion.

7.6.Successors and Assigns. This Agreement shall be binding on and shall inure to the benefit of the parties to it and their respective heirs, legal representatives, successors and assigns, except as otherwise provided herein. Neither this Agreement nor any of the rights, benefits, obligations or duties hereunder may be assigned or transferred by Executive except by operation of law. The Company, the Operating Partnership and the Employer may assign this Agreement to any affiliate or successor. The Company, the Operating Partnership and the Employer shall require any successor (whether direct or indirect by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company, the Operating Partnership or the Employer to assume expressly and agree to perform this Agreement in the same manner and to the same extent that the Company, the Operating Partnership and the Employer would be required to perform if no such succession had taken place.

7.7.Necessary Acts. Each party to this Agreement shall perform any further acts and execute and deliver any additional agreements, assignments or documents that may be reasonably necessary to carry out the provisions or to effectuate the purpose of this Agreement.

7.8.Notices. All notices, requests, demands and other communications to be given under this Agreement shall be in writing and shall be deemed to have been duly given on the date of service, if personally served on the party to whom notice is to be given, or 48 hours after mailing, if mailed to the party to whom notice is to be given by certified or registered mail, return receipt requested, postage prepaid, and properly addressed to the party at his address set forth as follows or any other address that any party may designate by written notice to the other parties:

To Executive:	Matt N. Thomson, Jr. Address on File With the Company
To the Company, the Employer or the Operating Partnership:	Quality Technology Services, LLC 12851 Foster Street, Suite 205 Overland Park, Kansas 66213 Attention: CEO Facsimile: (913) 814-7766

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7.9.Headings and Captions. The headings and captions used herein are solely for the purpose of reference only and are not to be considered as construing or interpreting the provisions of this Agreement.

7.10.Construction. All terms and definitions contained herein shall be construed in such a manner that shall give effect to the fullest extent possible to the express or implied intent of the parties hereby.

7.11.Counsel. Executive has been advised by the Company, the Operating Partnership and the Employer that he should consider seeking the advice of counsel in connection with the execution of this Agreement and the other agreements contemplated hereby and Executive has had an opportunity to do so. Executive has read and understands this Agreement, and has sought the advice of counsel to the extent he has determined appropriate.

7.12.Withholding of Compensation. Executive hereby agrees that the Employer may deduct and withhold from the compensation or other amounts payable to Executive hereunder or otherwise in connection with Executive’s employment any amounts required to be deducted and withheld by the Employer under the provisions of any applicable Federal, state and local statute, law, regulation, ordinance or order.

7.13.Executive Representation. Executive acknowledges that by entering into or complying with any provision of this Agreement he is not breaching or acting in contravention of any other agreement or commitment he has to any other firm, corporation, partnership, organization, person or any other individual or entity.

7.14.D & O Insurance. The Company, the Operating Partner and/or the Employer will maintain directors’ and officers’ liability insurance during the Term and for a period of not less than six (6) years thereafter, covering acts and omissions of Executive during the Term, on terms substantially no less favorable than those in effect on the date of this Agreement. During the Term and for a period of not less than six (6) years thereafter, Executive shall receive the same benefits provided to any of the Company’s or the Employer’s officers and directors under any additional D&O insurance or similar policy, any indemnification agreement, Company or Employer policies or the articles of organization or bylaws of the Company, the Operating Partnership or the Employer as in effect as of the date hereof, provided, however, that in the event that the benefits provided to any of the Company’s or Employer’s officers and directors under any of the foregoing documents or policies are enlarged after the date hereof, Executive shall receive such enlarged benefits.

7.15.Arbitration. Any dispute or controversy arising under or in connection with this Agreement other than a dispute pursuant to Section 5.4 and Section 5.5, shall be settled exclusively by arbitration in the State of Kansas by three arbitrators in accordance with the Employment Arbitration Rules and Mediation Procedures of the American Arbitration Association in effect at the time of submission to arbitration. Judgment may be entered on the arbitrators’ award in any court having jurisdiction. For purposes of entering any judgment upon

17

an award rendered by the arbitrators, Employer and Executive each hereby consent to the jurisdiction of any or all of the following courts: (i) the United States District Court for the State of Kansas, (ii) any of the courts of the State of Kansas, or (iii) any other court having jurisdiction. Employer and Executive further agree that any service of process or notice requirements in any such proceeding shall be satisfied if the rules of such court relating thereto have been substantially satisfied. Employer and Executive hereby waive, to the fullest extent permitted by applicable law, any objection which it or he may now or hereafter have to such jurisdiction and any defense of inconvenient forum. Employer and Executive hereby agree that a judgment upon an award rendered by the arbitrators may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Each party shall bear its or his costs and expenses arising in connection with any arbitration proceeding pursuant to this Section 7.16; provided, however, that the party that substantially prevails in an arbitration shall be reimbursed by the other party for all reasonable costs, including reasonable attorneys’ fees and costs, incurred by such prevailing party in connection with the arbitration. Notwithstanding any provision in this Section 7.16, Executive shall be paid all compensation due and owing under this Agreement during the pendency of any dispute or controversy arising under or in connection with this Agreement.

[SIGNATURES APPEAR ON FOLLOWING PAGE]

18

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered as of the date first above written.

COMPANY

QTS Realty Trust, Inc.

By:    /s/ Chad L. Williams    

Name:    Chad L. Williams

Title:    Chief Executive Officer

OPERATING PARTNERSHIP

QUALITYTECH, LP

By:     QTS Realty Trust, Inc.,

    General Partner

By:    /s/ Chad L. Williams    

Name: Chad L. Williams

Title: Chief Executive Officer

EMPLOYER

QUALITY TECHNOLOGY SERVICES, LLC

By:    /s/ Chad L. Williams    

Name:    Chad L. Williams

Title:    Chief Executive Officer

EXECUTIVE

/s/ Matt N. Thomson, Jr.    

Matt N. Thomson, Jr.

19

EX-21.1

Exhibit 21.1

List of Subsidiaries of QTS Realty Trust, Inc.

Subsidiary Name	State of Incorporation or Formation
2470 Satellite Boulevard, LLC	Delaware
Ashburn Acquisition Co, LLC	Delaware
Bondurant Acquisition Co., LLC	Delaware
Carpathia Acquisition, LLC	Delaware
Carpathia Hosting, LLC	Delaware
ENH Investments, LLC	Delaware
Los Lunas Acquisition Co., LLC	Delaware
Manassas Acquisition Co., LLC	Delaware
NAC II, LLC	Delaware
National Acquisition Company, LLC	Delaware
New Albany Acquisition Co., LLC	Delaware
Papillion Acquisition Co., LLC	Delaware
QTS Aurora, LLC	Delaware
QTS Critical Facilities Management, LLC	Delaware
QTS Federal, LLC	Delaware
QTS Finance Corporation	Delaware
QTS Investment Properties Ashburn II, LLC	Delaware
QTS Investment Properties Ashburn, LLC	Delaware
QTS Investment Properties Carpathia, LLC	Delaware
QTS Investment Properties Chicago, LLC	Delaware
QTS Investment Properties Fort Worth, LLC	Delaware
QTS Investment Properties Hillsboro, LLC	Delaware
QTS Investment Properties Manassas II, LLC	Delaware
QTS Investment Properties Manassas, LLC	Delaware
QTS Investment Properties Phoenix, LLC	Delaware
QTS Investment Properties Piscataway, LLC	Delaware
QTS Investment Properties Princeton, LLC	Delaware
QTS JV I Holding II, LLC	Delaware
QTS JV I Holding, LLC	Delaware
QTS JV I TRS, LLC	Delaware
QTS JV I, LLC	Delaware
QTS Metro II, LLC	Delaware
QTS San Antonio II, LLC	Delaware
QTS San Antonio III, LLC	Delaware
QTS San Antonio IV, LLC	Delaware
QTS San Antonio, LLC	Delaware
Quality Investment Properties Gateway, LLC	Delaware
Quality Investment Properties Irving II, LLC	Delaware
Quality Investment Properties Irving, LLC	Delaware
Quality Investment Properties Lenexa, LLC	Delaware

Subsidiary Name	State of Incorporation or Formation
Quality Investment Properties Metro, LLC	Delaware
Quality Investment Properties Miami, LLC	Delaware
Quality Investment Properties Richmond, LLC	Delaware
Quality Investment Properties Sacramento, LLC	Delaware
Quality Investment Properties Santa Clara, LLC	Delaware
Quality Investment Properties, Suwanee, LLC	Delaware
Quality Technology Services - Manassas Facilities Management, LLC	Delaware
Quality Technology Services Ashburn II, LLC	Delaware
Quality Technology Services B.V.	Netherlands
Quality Technology Services Chicago II, LLC	Delaware
Quality Technology Services Federal Holding, LLC	Delaware
Quality Technology Services Fort Worth II, LLC	Delaware
Quality Technology Services Holding, LLC	Delaware
Quality Technology Services Irving II, LLC	Delaware
Quality Technology Services Jersey City, LLC	Delaware
Quality Technology Services Lenexa II, LLC	Delaware
Quality Technology Services Lenexa, LLC	Delaware
Quality Technology Services Metro II, LLC	Delaware
Quality Technology Services Miami II, LLC	Delaware
Quality Technology Services Northeast, LLC	Delaware
Quality Technology Services Phoenix II, LLC	Delaware
Quality Technology Services Piscataway II, LLC	Delaware
Quality Technology Services Princeton II, LLC	Delaware
Quality Technology Services Richmond II, LLC	Delaware
Quality Technology Services Sacramento II, LLC	Delaware
Quality Technology Services Santa Clara II, LLC	Delaware
Quality Technology Services, LLC	Delaware
Quality Technology Services, N.J. II, LLC	Delaware
Quality Technology Services, N.J., LLC	Delaware
Quality Technology Services, Suwanee II, LLC	Delaware
QualityTech, LP	Delaware
SA16 Acquisition Company, LLC	Delaware
San Antonio Logistics, LLC	Delaware
SAT Potranco Acquisition Co., LLC	Delaware
ServerVault, LLC	Delaware
SWO Logistics, LLC	Delaware
West Midtown Acquistion Company, LLC	Delaware
Whale Ventures, LLC	Delaware

EX-23.1

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in the following Registration Statements:         

(1)Registration Statement (Form S-8 No. 333-191674) pertaining to the QTS Realty Trust, Inc. 2013 Equity Incentive Plan

(2)Registration Statement (Form S-3 No. 333-199844) of QTS Realty Trust, Inc.

(3)Registration Statement (Form S-8 No. 333-204020) pertaining to the QTS Realty Trust, Inc. 2013 Equity Incentive Plan

(4)Registration Statement (Form S-8 No. 333-205040) pertaining to the 2017 Amended and Restated QTS Realty Trust, Inc. Employee Stock Purchase Plan

(5)Registration Statement (Form S-3 No. 333-230923) of QTS Realty Trust, Inc.

(6)Registration Statement (Form S-8 No. 333-231424) pertaining to the QTS Realty Trust, Inc. 2013 Equity Incentive Plan

of our reports dated February 26, 2021, with respect to the consolidated financial statements and schedules of QTS Realty Trust, Inc. and the effectiveness of internal control over financial reporting of QTS Realty Trust, Inc. included in this Annual Report (Form 10-K) of QTS Realty Trust, Inc. for the year ended December 31, 2020.

/s/ Ernst & Young LLP

Kansas City, Missouri

February 26, 2021

EX-31.1

Exhibit 31.1

Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Chad L. Williams, certify that:

1.    I have reviewed this Annual Report on Form 10-K of QTS Realty Trust, Inc.;

2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.    The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)    Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)    Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)    Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)    Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.    The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)    All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)    Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 26, 2021

/s/ Chad L. Williams

Chad L. Williams

Chairman and Chief Executive Officer

EX-31.2

Exhibit 31.2

Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Jeffrey H. Berson, certify that:

1.    I have reviewed this Annual Report on Form 10-K of QTS Realty Trust, Inc.;

2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.    The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)    Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)    Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)    Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)    Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.    The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)    All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)    Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 26, 2021

/s/ Jeffrey H. Berson

Jeffrey H. Berson

Chief Financial Officer

EX-32.1

Exhibit 32.1

Certification Pursuant To

18 U.S.C. Section 1350,

as Adopted Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Annual Report of QTS Realty Trust, Inc. (the “Company”) on Form 10-K for the year ended December 31, 2020 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Chad L. Williams, Chairman and Chief Executive Officer of the Company, and I, Jeffrey H. Berson, Chief Financial Officer of the Company, certify, to our knowledge, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)   the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2)   the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: February 26, 2021

/s/ Chad L. Williams

Chad L. Williams

Chairman and Chief Executive Officer

/s/ Jeffrey H. Berson

Jeffrey H. Berson

Chief Financial Officer

XML

Cover - USD ($) $ in Billions	12 Months Ended
	Dec. 31, 2020	Feb. 22, 2021	Jun. 30, 2020
Document Information [Line Items]
Document Type	10-K
Document Annual Report	true
Document Period End Date	Dec. 31, 2020
Current Fiscal Year End Date	--12-31
Document Transition Report	false
Entity File Number	001-36109
Entity Registrant Name	QTS Realty Trust, Inc.
Entity Incorporation, State or Country Code	MD
Entity Tax Identification Number	46-2809094
Entity Address, Address Line One	12851 Foster Street
Entity Address, City or Town	Overland Park
Entity Address, State or Province	KS
Entity Address, Postal Zip Code	66213
City Area Code	913
Local Phone Number	312-5503
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
ICFR Auditor Attestation Flag	true
Entity Shell Company	false
Entity Public Float			$ 3.9
Documents Incorporated by Reference	Portions of the Definitive Proxy Statement for our 2021 Annual Meeting of Stockholders are incorporated by reference into Part III of this report. We expect to file our proxy statement within 120 days after December 31, 2020.
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	FY
Entity Central Index Key	0001577368
Amendment Flag	false
Class A Common Stock
Document Information [Line Items]
Title of 12(b) Security	Class A common stock, $.01 par value
Trading Symbol	QTS
Security Exchange Name	NYSE
Entity Common Stock, Shares Outstanding		64,520,050
Class B Common Stock
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		124,995
Series A Redeemable Perpetual Preferred
Document Information [Line Items]
Title of 12(b) Security	Preferred Stock, 7.125% Series A Cumulative Redeemable Perpetual, $0.01 par value
Trading Symbol	QTS.PRA
Security Exchange Name	NYSE
Series B Convertible preferred stock
Document Information [Line Items]
Title of 12(b) Security	Preferred Stock, 6.50% Series B Cumulative Convertible Perpetual, $0.01 par value
Trading Symbol	QTS.PRB
Security Exchange Name	NYSE

XML

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Real Estate Assets
Land	$ 165,109	$ 130,605
Buildings, improvements and equipment	2,839,261	2,178,901
Less: Accumulated depreciation	(702,944)	(558,560)
Total real estate assets	2,301,426	1,750,946
Construction in progress	1,028,765	920,922
Real Estate Assets, net	3,330,191	2,671,868
Investments in unconsolidated entity	22,608	30,218
Operating lease right-of-use assets, net	51,342	57,141
Cash and cash equivalents	22,775	15,653
Rents and other receivables, net	107,563	81,181
Acquired intangibles, net	68,090	81,679
Deferred costs, net	63,689	52,363
Prepaid expenses	10,253	10,586
Goodwill	173,843	173,843
Other assets, net	48,218	49,001
TOTAL ASSETS	3,898,572	3,223,533
LIABILITIES
Unsecured term loans and revolver, net	1,335,241	1,010,640
Senior notes, net of debt issuance costs	492,534	395,549
Finance leases and mortgage notes payable	41,718	46,876
Operating lease liabilities	58,005	64,416
Accounts payable and accrued liabilities	187,270	142,547
Dividends and distributions payable	39,373	34,500
Advance rents, security deposits and other liabilities	19,850	18,027
Derivative liabilities	53,722	26,609
Deferred income taxes	810	749
Deferred income	85,351	39,169
TOTAL LIABILITIES	2,313,874	1,779,082
EQUITY
Additional paid-in capital	1,622,857	1,330,444
Accumulated other comprehensive loss	(50,451)	(24,642)
Accumulated dividends in excess of earnings	(504,313)	(376,002)
Total stockholders’ equity	1,476,174	1,337,817
Noncontrolling interests	108,524	106,634
TOTAL EQUITY	1,584,698	1,444,451
TOTAL LIABILITIES AND EQUITY	3,898,572	3,223,533
Series A Redeemable Perpetual Preferred
EQUITY
Cumulative redeemable perpetual preferred stock	103,212	103,212
Series B Convertible Preferred Units
EQUITY
Cumulative redeemable perpetual preferred stock	304,223	304,223
Common stock
EQUITY
Common stock	$ 646	$ 582

XML

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Series A Redeemable Perpetual Preferred
Dividend rate (as a percent)	7.125%	7.125%
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, liquidation preference (in dollars per share)	$ 25.00	$ 25.00
Preferred stock, shares authorized (in shares)	4,600,000	4,600,000
Preferred stock, shares issued (in shares)	4,280,000	4,280,000
Preferred stock, shares outstanding (in shares)	4,280,000	4,280,000
Series B Convertible Preferred Units
Dividend rate (as a percent)	6.50%	6.50%
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, liquidation preference (in dollars per share)	$ 100.00	$ 100.00
Preferred stock, shares authorized (in shares)	3,162,500	3,162,500
Preferred stock, shares issued (in shares)	3,162,500	3,162,500
Preferred stock, shares outstanding (in shares)	3,162,500	3,162,500
Common stock
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	450,133,000	450,133,000
Common stock, shares issued (in shares)	64,580,118	58,227,523
Common stock, shares outstanding (in shares)	64,580,118	58,227,523

XML

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Revenues:
Rental	$ 519,858	$ 465,123	$ 413,620
Other	19,510	15,695	36,904
Total revenues	539,368	480,818	450,524
Operating expenses:
Property operating costs	168,497	156,048	148,236
Real estate taxes and insurance	16,020	14,503	12,193
Depreciation and amortization	199,889	168,305	149,891
General and administrative	84,965	80,385	80,857
Transaction, integration, and impairment costs	4,340	15,190	2,743
Restructuring	0	0	37,943
Total operating expenses	473,711	434,431	431,863
(Gain) loss on sale of real estate, net	0	14,769	0
Operating income	65,657	61,156	18,661
Other income and expense:
Interest income	2	111	150
Interest expense	(30,724)	(26,593)	(28,749)
Debt restructuring costs	(18,036)	(1,523)	(605)
Other income (expense)	159	(50)	0
Equity in net loss of unconsolidated entity	(2,044)	(1,473)	0
Income (loss) before taxes	15,014	31,628	(10,543)
Tax benefit (expense)	(438)	37	3,368
Net income (loss)	14,576	31,665	(7,175)
Net (income) loss attributable to noncontrolling interests	1,330	(374)	2,715
Net income (loss) attributable to QTS Realty Trust, Inc.	15,906	31,291	(4,460)
Preferred stock dividends	(28,180)	(28,180)	(16,666)
Net income (loss) attributable to common stockholders	$ (12,274)	$ 3,111	$ (21,126)
Net loss per share attributable to common shares:
Basic (in dollars per share)	$ (0.47)	$ (0.09)	$ (0.44)
Diluted (in dollars per share)	$ (0.47)	$ (0.09)	$ (0.44)
Weighted average Class A common shares outstanding:
Basic (in shares)	60,717,301	54,836,801	50,432,590
Diluted (in shares)	60,717,301	54,836,801	50,432,590

XML

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Net income (loss)	$ 14,576	$ 31,665	$ (7,175)
Other comprehensive income (loss):
Foreign currency translation adjustment gain	187	34	0
Increase (decrease) in fair value of derivative contracts	(28,295)	(29,843)	895
Reclassification of other comprehensive income to utilities expense	1,204	749	0
Reclassification of other comprehensive income to interest expense	10,148	(1,031)	110
Comprehensive income (loss)	(2,180)	1,574	(6,170)
Comprehensive (income) loss attributable to noncontrolling interests	213	(169)	711
Comprehensive income (loss) attributable to QTS Realty Trust, Inc.	$ (1,967)	$ 1,405	$ (5,459)

XML

CONSOLIDATED STATEMENTS OF EQUITY - USD ($) shares in Thousands, $ in Thousands	Total	Cumulative Effect, Period of Adoption, Adjustment	Series A Preferred Stock	Series B Preferred Stock	Total stockholders' Equity	Total stockholders' Equity Cumulative Effect, Period of Adoption, Adjustment	Total stockholders' Equity Series A Preferred Stock	Total stockholders' Equity Series B Preferred Stock	Preferred stock	Preferred stock Series A Preferred Stock	Preferred stock Series B Preferred Stock	Common stock	Additional paid-in capital	Accumulated other comprehensive income (loss)	Accumulated dividends in excess of earnings	Accumulated dividends in excess of earnings Cumulative Effect, Period of Adoption, Adjustment	Accumulated dividends in excess of earnings Series A Preferred Stock	Accumulated dividends in excess of earnings Series B Preferred Stock	Noncontrolling interests
Beginning balance (in shares) at Dec. 31, 2017									0			50,702
Beginning balance at Dec. 31, 2017	$ 990,656				$ 877,414				$ 0			$ 507	$ 1,049,176	$ 1,283	$ (173,552)				$ 113,242
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net share activity through equity award plan (in shares)												421
Net share activity through equity award plan	(1,788)				(2,713)							$ 4	(2,717)						925
Increase (decrease) in fair value of derivative contracts	895				790									790					105
Foreign currency translation adjustments	0
Equity-based compensation expense	18,100				16,014								16,014						2,086
Proceeds net of fees from common equity offering (in shares)										4,280	3,163
Proceeds net of fees from common equity offering			$ 103,212	$ 304,265			$ 103,212	$ 304,265		$ 103,212	$ 304,265
Dividends declared on preferred stock			(6,046)	(10,621)			(6,046)	(10,621)									$ (6,046)	$ (10,621)
Dividends declared to common stockholders	(83,869)				(83,869)										(83,869)
Dividends declared to noncontrolling interests	(10,942)				0														(10,942)
Net income (loss)	(7,175)				(4,460)										(4,460)				(2,715)
Ending balance at Dec. 31, 2018	$ 1,296,687	$ (1,813)			1,193,986	$ (1,813)			$ 407,477			$ 511	1,062,473	2,073	(278,548)	$ (1,813)			102,701
Ending balance (in shares) at Dec. 31, 2018									7,443			51,123
Accounting Standards Update [Extensible List]	us-gaap:AccountingStandardsUpdate201602Member
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net share activity through equity award plan (in shares)												273
Net share activity through equity award plan	$ 1,825				1,819							$ 3	1,816						6
Increase (decrease) in fair value of derivative contracts	(29,843)				(26,745)									(26,745)					(3,098)
Foreign currency translation adjustments	34				30									30					4
Equity-based compensation expense	16,413				14,651								14,651						1,762
Proceeds net of fees from settlement of forward shares (in shares)												2,832
Proceeds net of fees from settlement of forward shares	109,527				102,882							$ 28	102,854						6,645
Adjustment to expenses net from Series B Convertible Preferred stock offering			(42)				(42)			$ (42)
Proceeds net of fees from common equity offering (in shares)												4,000
Proceeds net of fees from common equity offering	158,663				148,690							$ 40	148,650						9,973
Dividends declared on preferred stock			(7,624)	(20,556)			(7,624)	(20,556)									(7,624)	(20,556)
Dividends declared to common stockholders	(98,752)				(98,752)										(98,752)
Dividends declared to noncontrolling interests	(11,733)				0														(11,733)
Net income (loss)	31,665				31,291										31,291				374
Ending balance at Dec. 31, 2019	1,444,451				1,337,817				$ 407,435			$ 582	1,330,444	(24,642)	(376,002)				106,634
Ending balance (in shares) at Dec. 31, 2019									7,443			58,228
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net share activity through equity award plan (in shares)												341
Net share activity through equity award plan	(1,860)				(1,671)							$ 4	(1,675)						(189)
Conversion of Class A Partnership units to Class A common stock (in shares)												100
Conversion of Class A Partnership units to Class A common stock	0				2,290							$ 1	2,289						(2,290)
Increase (decrease) in fair value of derivative contracts	(28,295)				(25,980)									(25,980)					(2,315)
Foreign currency translation adjustments	187				171									171					16
Equity-based compensation expense	26,980				24,353								24,353						2,627
Proceeds net of fees from settlement of forward shares (in shares)												5,911
Proceeds net of fees from settlement of forward shares	285,353				267,505							$ 59	267,446						17,848
Dividends declared on preferred stock			$ (7,624)	$ (20,556)			$ (7,624)	$ (20,556)									$ (7,624)	$ (20,556)
Dividends declared to common stockholders	(116,037)				(116,037)										(116,037)
Dividends declared to noncontrolling interests	(12,477)				0														(12,477)
Net income (loss)	14,576				15,906										15,906				(1,330)
Ending balance at Dec. 31, 2020	$ 1,584,698				$ 1,476,174				$ 407,435			$ 646	$ 1,622,857	$ (50,451)	$ (504,313)				$ 108,524
Ending balance (in shares) at Dec. 31, 2020									7,443			64,580

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CONSOLIDATED STATEMENTS OF CASH FLOW $ in Thousands	12 Months Ended
	Dec. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)
Cash flow from operating activities:
Net income (loss)	$ 14,576	$ 31,665	$ (7,175)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	193,242	160,528	143,354
Amortization of above and below market leases	429	187	465
Amortization of deferred loan costs	4,053	3,877	3,856
Distributions from unconsolidated entity	2,345	3,280	0
Equity in net loss of unconsolidated entity	2,044	1,473	0
Equity-based compensation expense	26,980	16,412	14,972
Bad debt expense (recoveries)	5,036	2,406	(2,275)
(Gain) loss on sale of real estate, net	0	(14,769)	6,994
Loss on extinguishment of debt	14,252	0	0
Write off of deferred loan costs	3,784	1,532	605
Deferred tax expense (benefit)	58	(348)	(2,970)
Integration, impairment & restructuring costs	1,484	11,462	19,575
Foreign currency remeasurement (income) loss	(159)	50	0
Changes in operating assets and liabilities
Rents and other receivables, net	(31,108)	(27,234)	(6,495)
Prepaid expenses	358	(3,406)	(3,063)
Due to/from affiliates, net	2,039	9,284	0
Other assets	(371)	35	4,518
Accounts payable and accrued liabilities	12,324	2,973	8,573
Advance rents, security deposits and other liabilities	2,267	(5,845)	2,069
Deferred income	46,082	5,928	8,270
Net cash provided by operating activities	299,715	199,490	191,273
Cash flow from investing activities:
Proceeds from sale of property, net	0	54,427	2,779
Acquisitions, net of cash acquired	(43,933)	(76,383)	(117,029)
Investments in unconsolidated entity	0	(4,144)	0
Additions to property and equipment	(773,812)	(361,160)	(484,303)
Net cash used in investing activities	(817,745)	(387,260)	(598,553)
Cash flow from financing activities:
Credit facility proceeds	827,582	399,028	483,000
Credit facility repayments	(759,000)	(334,000)	(362,000)
4.75% Senior Notes repayment	(400,000)	0	0
3.875% Senior Notes issuance	500,000	0	0
Term Loan D issuance	250,000	0	0
Payment of debt extinguishment costs	(14,252)	0	0
Payment of deferred financing costs	(9,559)	(5,130)	(3,964)
Payment of preferred stock dividends	(28,180)	(28,180)	(10,728)
Payment of common stock dividends	(111,311)	(94,085)	(82,579)
Distribution to noncontrolling interests	(12,330)	(11,533)	(10,759)
Proceeds from exercise of stock options	2,524	3,857	246
Payment of tax withholdings related to equity-based awards	(5,343)	(3,900)	(2,205)
Principal payments on finance lease obligations	(2,579)	(2,855)	(7,626)
Mortgage principal debt repayments	(1,736)	(65)	(66)
Preferred stock issuance proceeds, net of costs	0	0	407,477
Common stock issuance proceeds, net of costs	285,352	268,259	0
Net cash provided by financing activities	521,168	191,396	410,796
Effect of foreign currency exchange rates on cash and cash equivalents	3,984	268	0
Net change in cash and cash equivalents	7,122	3,894	3,516
Cash and cash equivalents, beginning of period	15,653	11,759	8,243
Cash and cash equivalents, end of period	22,775	15,653	11,759
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid for interest	54,596	56,023	51,380
Noncash investing and financing activities:
Accrued capital additions	121,194	92,206	76,890
Net increase (decrease) in other assets/liabilities related to change in fair value of derivative contracts	(27,113)	(28,952)	895
Equity received in unconsolidated entity in exchange for real estate assets	0	25,280	0
Increase in assets in exchange for finance lease obligation	0	45,024	0
Accrued equity issuance costs	0	30	115
Accrued preferred stock dividend	5,938	5,938	5,938
Accrued deferred financing costs	0	0	76
Acquisitions, net of cash acquired:
Land	0	1,743	0
Buildings, improvements and equipment	0	8,640	445
Construction in progress	43,933	61,514	114,283
Rents and other receivables, net	0	1,239	0
Acquired intangibles, net	0	2,628	2,301
Deferred costs	0	906	0
Prepaid expenses	0	359	0
Other assets	0	128	0
Accounts payable and accrued liabilities	0	(52)	0
Advance rents, security deposits and other liabilities	0	(722)	0
Total acquisitions, net of cash acquired	$ (43,933)	$ (76,383)	$ (117,029)

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CONSOLIDATED STATEMENTS OF CASH FLOW (Parenthetical)	Dec. 31, 2020	Oct. 07, 2020	Nov. 08, 2017
3.875% Senior Notes
Interest rate	3.875%	3.875%
Senior Notes | 4.75% Senior Notes
Interest rate	4.75%		4.75%

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Commitments and Contingencies	12 Months Ended
	Dec. 31, 2020
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and ContingenciesWe are subject to various routine legal proceedings and other matters in the ordinary course of business. We currently do not have any litigation that would have a material adverse impact on our financial statements. Additionally, we do not currently have any material contingencies related to the impact of COVID-19 reflected in our financial statements aside from certain increases to our general bad debt reserve provided for under ASC 450-20.

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Description of Business

12 Months Ended

Dec. 31, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Description of Business

Description of Business

QTS Realty Trust, Inc. (“QTS”) through its controlling interest in QualityTech, LP (the “Operating Partnership” and collectively with QTS and its subsidiaries, the “Company,” “we,” “us,” or “our”) and the subsidiaries of the Operating Partnership, is engaged in the business of owning, acquiring, constructing, redeveloping and managing multi-tenant data centers. As of December 31, 2020 our portfolio consisted of 28 owned and leased properties, including a property owned by an unconsolidated entity, with data centers located throughout the United States, Canada and Europe.

QTS elected to be taxed as a real estate investment trust (“REIT”) for U.S. federal income tax purposes, commencing with its taxable year ended December 31, 2013. As a REIT, QTS generally is not required to pay federal corporate income taxes on its taxable income to the extent it is currently distributed to its stockholders.

The Operating Partnership is a Delaware limited partnership formed on August 5, 2009 and is QTS’ historical predecessor. As of December 31, 2020, QTS owned approximately 90.8% of the interests in the Operating Partnership. Substantially all of QTS’ assets are held by, and all of QTS’ operations are conducted through, the Operating Partnership. QTS’ interest in the Operating Partnership entitles QTS to share in cash distributions from, and in the profits and losses of, the Operating Partnership in proportion to QTS’ percentage ownership. As the sole general partner of the Operating Partnership, QTS generally has the exclusive power under the partnership agreement of the Operating Partnership to manage and conduct the Operating Partnership’s business and QTS’ board of directors manages the Operating Partnership and the Company’s business and affairs.

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Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2020

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

Basis of Presentation – The accompanying financial statements have been prepared by management in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included.

References to “QTS” mean QTS Realty Trust, Inc. and its controlled subsidiaries and references to the “Operating Partnership” mean QualityTech, LP and its controlled subsidiaries.

The Operating Partnership meets the definition and criteria of a variable interest entity (“VIE”) in accordance with Accounting Standards Codification ("ASC") Topic 810 Consolidation, and the Company is the primary beneficiary of the VIE. As discussed below, the Company’s only material asset is its ownership interest in the Operating Partnership, and consequently, all of its assets and liabilities represent those assets and liabilities of the Operating Partnership. The Company’s debt is an obligation of the Operating Partnership where the creditors may have recourse, under certain circumstances, against the credit of the Company.

QTS is the sole general partner of the Operating Partnership, and its only material asset consists of its ownership interest in the Operating Partnership. Management operates QTS and the Operating Partnership as one business. The management of QTS consists of the same employees as the management of the Operating Partnership. QTS does not conduct business itself, other than acting as the sole general partner of the Operating Partnership and issuing public equity from time to time. QTS has not issued or guaranteed any indebtedness. Except for net proceeds from public equity issuances by QTS, which are contributed to the Operating Partnership in exchange for units of limited partnership interest of the Operating Partnership, the Operating Partnership generates all remaining capital required by the business through its operations, the direct or indirect incurrence of indebtedness, and the issuance of partnership units. Therefore, as general partner with control of the Operating Partnership, QTS consolidates the Operating Partnership for financial reporting purposes.

Obligations under the 3.875% Senior Notes due 2028 and the unsecured credit facility, both discussed in Note 8, are fully, unconditionally, and jointly and severally guaranteed by the Operating Partnership’s existing subsidiaries (other than certain foreign subsidiaries and receivables entities) and future subsidiaries that guarantee any indebtedness of QTS Realty Trust, Inc., the Operating Partnership, QTS Finance Corporation (the co-issuer of the 3.875% Senior Notes due 2028) or any subsidiary guarantor. The indenture governing the 3.875% Senior Notes due 2028 restricts the ability of the Operating Partnership to make distributions to QTS, subject to certain exceptions, including distributions required in order for QTS to maintain its status as a real estate investment trust under the Internal Revenue Code of 1986, as amended (the “Code”).

The consolidated financial statements of QTS Realty Trust, Inc. include the accounts of QTS Realty Trust, Inc. and its majority owned controlled subsidiaries including the Operating Partnership as well as unconsolidated entities accounted for using equity method accounting. This includes the operating results of the Operating Partnership for all periods presented.

Use of Estimates – The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include the useful lives of fixed assets, allowances for doubtful accounts and deferred tax assets and the valuation of derivatives, real estate assets, acquired intangible assets and certain accruals. The impacts of the COVID-19 pandemic increases uncertainty, which has reduced our ability to use past results to estimate future performance. Accordingly, our estimates and judgments may be subject to greater volatility than has been the case in the past.

Principles of Consolidation – The consolidated financial statements of QTS Realty Trust, Inc. include the accounts of QTS Realty Trust, Inc. and its controlled subsidiaries. All significant intercompany accounts and transactions have been eliminated in the financial statements.

We evaluate our investments in less than wholly owned entities to determine whether they should be recorded on a consolidated basis. The percentage of ownership interest in the entity, an evaluation of control and whether a VIE exists are all considered in our consolidation assessment. Investments in real estate entities which we have the ability to exercise significant influence, but do not have financial or operating control, are accounted for using the equity method of accounting. Accordingly, our share of the earnings or losses of these entities is included in consolidated net income (loss).

Variable Interest Entities (VIEs) – We determine whether an entity is a VIE and, if so, whether it should be consolidated by utilizing judgments and estimates that are inherently subjective. The determination of whether an entity in which we hold a direct or indirect variable interest is a VIE is based on several factors, including whether the entity’s total equity investment at risk upon inception is sufficient to finance the entity’s activities without additional subordinated financial support. We make judgments regarding the sufficiency of the equity at risk based first on a qualitative analysis, and then a quantitative analysis, if necessary.

We analyze any investments in VIEs to determine if we are the primary beneficiary. In evaluating whether we are the primary beneficiary, we evaluate our direct and indirect economic interests in the entity. Determining which reporting entity, if any, is the primary beneficiary of a VIE is primarily a qualitative approach focused on identifying which reporting entity has both (1) the power to direct the activities of a VIE that most significantly impact such entity’s economic performance and (2) the obligation to absorb losses or the right to receive benefits from such entity that could potentially be significant to such entity. Performance of that analysis requires the exercise of judgment.

We consider a variety of factors in identifying the entity that holds the power to direct matters that most significantly impact the VIE’s economic performance including, but not limited to, the ability to direct financing, leasing, construction and other operating decisions and activities. In addition, we consider the rights of other investors to participate in those decisions, to replace the manager and to sell or liquidate the entity. We determine whether we are the primary beneficiary of a VIE at the time we become involved with a variable interest entity and reconsider that conclusion upon a reconsideration event. As of December 31, 2020, we had one unconsolidated entity that was considered a VIE for which we are not the primary beneficiary. Our maximum exposure to losses associated with this VIE is limited to our net investment, which was approximately $22.6 million as of December 31, 2020.

Real Estate Assets – Real estate assets are reported at cost. All capital improvements for the income-producing properties that extend their useful lives are capitalized to individual property improvements and depreciated over their estimated useful lives. Depreciation for real estate assets is generally provided on a straight-line basis over 40 years from the date the property was placed in service. Property improvements are depreciated on a straight-line basis over the life of the respective improvement ranging from 20 to 40 years from the date the components were placed in service. Leasehold improvements are depreciated over the lesser of 20 years or through the end of the respective life of the lease. Repairs and maintenance costs are expensed as incurred. For the year ended December 31, 2020, depreciation expense related to real estate assets and non-real estate assets was $147.8 million and $13.4 million, respectively, for a total of $161.2 million. For the year ended December 31, 2019, depreciation expense related to real estate assets and non-real estate assets was $118.9 million and $11.9

million, respectively, for a total of $130.8 million. For the year ended December 31, 2018, depreciation expense related to real estate assets and non-real estate assets was $101.2 million and $12.3 million, respectively, for a total of $113.5 million. We capitalize certain real estate development costs, including internal costs incurred in connection with development. The capitalization of costs during the construction period (including interest and related loan fees, property taxes and other direct and indirect project costs) begins when development efforts commence and ends when the asset is ready for its intended use. The capitalization of internal costs increases construction in progress recognized during development of the related property and the cost of the real estate asset when placed into service and such costs are depreciated over its estimated useful life. Capitalization of such costs, excluding interest, aggregated to $18.4 million, $17.8 million and $17.4 million for the years ended December 31, 2020, 2019 and 2018 respectively. Interest is capitalized during the period of development by applying our weighted average effective borrowing rate to the actual development and other capitalized costs paid during the construction period. Interest is capitalized until the property is ready for its intended use. Interest costs capitalized totaled $30.2 million, $33.2 million and $26.8 million for the years ended December 31, 2020, 2019 and 2018, respectively.

Acquisitions and Sales – Acquisitions of real estate and other entities are either accounted for as asset acquisitions or business combinations depending on facts and circumstances. When substantially all of the fair value of gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets, the transaction is accounted for as an asset acquisition. In an asset acquisition, the purchase price paid for assets acquired is allocated between identified tangible and intangible assets acquired based on relative fair value. Transaction costs associated with asset acquisitions are capitalized. When substantially all of the fair value of assets acquired is not concentrated in a group of similar identifiable assets, the set of assets will generally be considered a business. When accounting for business combinations, purchase accounting is applied to the assets and liabilities related to all real estate investments acquired in accordance with the accounting requirements of ASC Topic 805, Business Combinations, which requires the recording of net assets of acquired businesses at fair value. The fair value of the consideration transferred is assigned to the acquired tangible assets, consisting primarily of land, construction in progress, building and improvements, and identified intangible assets and liabilities, consisting of the value of above-market and below-market leases, value of in-place leases, value of customer relationships, and finance leases. The excess of the fair value of liabilities assumed, common stock issued and cash paid over the fair value of identifiable assets acquired is allocated to goodwill, which is not amortized. Transaction costs associated with business combinations are expensed as incurred.

In developing estimates of fair value of acquired assets and assumed liabilities, management analyzes a variety of factors including market data, estimated future cash flows of the acquired operations, industry growth rates, current replacement cost for fixed assets and market rate assumptions for contractual obligations. Such a valuation requires management to make significant estimates and assumptions, particularly with respect to the intangible assets.

Acquired in-place leases are amortized as amortization expense on a straight-line basis over the remaining life of the underlying leases. Acquired customer relationships are amortized as amortization expense on a straight-line basis over the expected life of the customer relationship. These amortization expenses are accounted for as real estate amortization expense. Above or below market leases are amortized on a straight-line basis over their expected lives and are recorded as a reduction to or increase in rental revenue when we are the lessor as well as a reduction to or increase in rent expense over the remaining lease terms when we are the lessee.

We account for the sale of assets to non-customers under Financial Accounting Standards Board (“FASB”) ASU No. 2017-5, Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20), which provides for recognition or derecognition based on transfer of ownership. During the year ended December 31, 2019, we sold our Manassas facility to an unconsolidated entity in exchange for cash consideration and noncash consideration in the form of an equity interest in the unconsolidated entity. After measuring the consideration received at fair value, we recognized a $13.4 million gain on sale of real estate, net of approximately $5.8 million of transaction costs, associated with our contribution of certain assets in our Manassas facility to the unconsolidated entity. Substantially all of the fair value of the assets contributed to the entity was concentrated in a group of similar identifiable assets and the sale of the assets were not to a customer, therefore the transaction was accounted for as an asset sale. The gain on sale of real estate is included within the “Gain on sale of real estate, net” line item of the consolidated statements of operations. In addition, during the year ended December 31, 2019, we recognized a $1.4 million gain on sale of certain land and improvements near our Atlanta (DC-1) (formerly known as Atlanta-Metro) facility which is included within the “Gain on sale of real estate, net” line item of the consolidated statements of operations. During the year ended December 31, 2018, we recognized a $7.0 million net loss on sale of equipment associated with our strategic growth plan which was included within the “Restructuring” line item of the consolidated statements of operations.

Impairment of Long-Lived Assets, Intangible Assets and Goodwill – We review our long-lived assets, intangible assets and equity method investments for impairment when events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. Recoverability of assets to be held and used is measured by comparison of the carrying amount to the future net cash flows, undiscounted and without interest, expected to be generated by the asset group. If the net carrying value of the asset group exceeds the value of the undiscounted cash flows, the fair value of the asset group is assessed and may be considered impaired. An impairment loss is recognized based on the excess of the carrying amount of the impaired asset over its fair value. No impairment losses were recorded for the year ended December 31, 2020. For the year ended December 31, 2019, we recognized an $11.5 million impairment loss related to the write-down of certain data center assets and equipment in one of our Dulles, Virginia data centers. The Dulles campus has two data center buildings and we initiated a plan in the fourth quarter of 2019 to abandon one of the buildings and relocate customers from the smaller and older facility being abandoned to the newer facility in an effort to better optimize our operating cost structure. The impairment loss was included within the “Transaction, integration and impairment costs” line item of the consolidated statements of operations. For the year ended December 31, 2018, we recognized $8.8 million of impairment losses related to certain product-related assets, which was included in the “Restructuring” line item of the consolidated statements of operations.

The fair value of goodwill is the consideration transferred in a business combination which is not allocable to identifiable intangible and tangible assets. Goodwill is subject to at least an annual assessment for impairment. In connection with the goodwill impairment evaluation that we performed as of October 1, 2020, we determined qualitatively that it is not more likely than not that the fair value of our one reporting unit was less than the carrying amount, thus we did not perform a quantitative analysis. As we continue to operate and assess our goodwill at the consolidated level for our single reporting unit and our market capitalization significantly exceeds our net asset value, further analysis was not deemed necessary as of December 31, 2020.

Cash and Cash Equivalents – We consider all demand deposits and money market accounts purchased with a maturity date of three months or less at the date of purchase to be cash equivalents. Our account balances at one or more institutions periodically exceed the Federal Deposit Insurance Corporation (“FDIC”) insurance coverage and, as a result, there is concentration of credit risk related to amounts on deposit in excess of FDIC coverage. We mitigate this risk by depositing a majority of our funds with several major financial institutions. We also have not experienced any losses and do not believe that the risk is significant.

Deferred Costs – Deferred costs, net, on our balance sheets include both deferred financing costs and deferred leasing costs.

Deferred financing costs represent fees and other costs incurred in connection with obtaining debt and are amortized over the term of the loan and are included in interest expense. Debt issuance costs related to revolving debt arrangements are deferred and presented as assets on the balance sheet; however, all other debt issuance costs are recorded as a direct offset to the associated liability. Amortization of debt issuance costs, including those costs presented as offsets to the associated liability in the consolidated balance sheets, were $4.1 million, $3.9 million and $3.9 million for the years ended December 31, 2020, 2019 and 2018, respectively. During the year ended December 31, 2020, we wrote off unamortized financing costs of $3.7 million primarily in connection with the early extinguishment of the $400 million 4.750% senior notes due 2025. During the year ended December 31, 2019, we wrote off unamortized financing costs of $1.5 million in connection with the modification of our unsecured credit facility in October 2019 whereby we added a seven year additional term loan, increased capacity of the revolving facility, extended maturity dates as well as decreased the interest rates. During the year ended December 31, 2018, we wrote off unamortized financing costs of $0.6 million in connection with the modification of our unsecured credit facility in November 2018 whereby we decreased the interest rates, modified and/or eliminated certain covenants and extended the term for an additional year.

Deferred financing costs presented as assets on the balance sheets related to revolving debt arrangements, net of accumulated amortization are as follows:

(dollars in thousands)	December 31, 2020		December 31, 2019
Deferred financing costs	$	13,786	$	13,776
Accumulated amortization	(7,752)		(5,743)
Deferred financing costs, net	$	6,034	$	8,033

Deferred financing costs presented as offsets to the associated liabilities on the balance sheets related to fixed debt arrangements, net of accumulated amortization, are as follows:

(dollars in thousands)	December 31, 2020		December 31, 2019
Deferred financing costs	$	19,327	$	15,777
Accumulated amortization	(4,765)		(4,937)
Deferred financing costs, net	$	14,562	$	10,840

Initial direct costs, or deferred leasing costs, include commissions paid to third parties, including brokers, leasing and referral agents, and internal sales commissions paid to employees for successful execution of lease agreements and are accounted for pursuant to ASC Topic 842, Leases. These costs are incurred when we execute lease agreements and represent only incremental costs that would not have been incurred if the lease agreement had not been executed. To a lesser extent, we incur the same incremental costs to obtain managed services contracts with customers that are accounted for pursuant to ASC Topic 606, Revenue from Contracts with Customers. Because the framework of accounting for these costs and the underlying nature of the costs are the same for our revenue and lease contracts, the costs are presented on a combined basis within our financial statements and within the below table. Both revenue and leasing commissions are capitalized and generally amortized over the term of the related leases or the expected term of the contract using the straight-line method. If a customer lease terminates prior to the expiration of its initial term, any unamortized initial direct costs related to the lease are written off to amortization expense. Amortization of deferred leasing costs totaled $26.1 million, $24.2 million and $21.3 million for the years ended December 31, 2020, 2019 and 2018, respectively. Deferred leasing costs, net of accumulated amortization are as follows:

(dollars in thousands)	December 31, 2020		December 31, 2019
Deferred leasing costs	$	101,480	$	77,178
Accumulated amortization	(43,825)		(32,848)
Deferred leasing costs, net	$	57,655	$	44,330

Revenue Recognition – We derive our revenues from leases with customers for data center space which include lease components and nonlease revenue components, such as power, tenant recoveries, and managed services. We adopted ASC Topic 842, Leases, the new accounting standard for leases, effective January 1, 2019 using the modified retrospective approach. We have elected the available practical expedient under ASC Topic 842, Leases, to combine our nonlease revenue components that have the same pattern of transfer as the related operating lease component into a single combined lease component. The single combined component is accounted for under ASC Topic 842 if the lease component is the predominant component and is accounted for under ASC Topic 606 if the nonlease components are the predominant components. In our contracts, the single combined component is accounted for under ASC Topic 842 as the lease component is the predominant component.

A description of each of our disaggregated revenue streams is as follows:

Rental Revenue

Our leases with customers are classified as operating leases and rental revenue is recognized on a straight-line basis over the customer lease term. Occasionally, customer leases include options to extend or terminate the lease agreements. We do not include any of these extension or termination options in a customer’s lease term for lease classification purposes or recognizing rental revenue unless it is reasonably certain the customer will exercise these extension or termination options.

Rental revenue also includes revenue from power delivery on fixed power arrangements, whereby customers are billed and pay a fixed monthly fee per committed available amount of connected power. These fixed power arrangements require us to provide a series of distinct services and to stand ready to deliver the power over the contracted term which is co-terminus with the lease. Customer fixed power arrangements have the same pattern of transfer over the lease term as the lease component and are therefore combined with the lease component to form a single lease component that is recognized over the term of the lease on a straight-line basis.

In addition, rental revenue includes straight line rent. Straight line rent represents the difference in rents recognized during the period versus amounts contractually due pursuant to the underlying leases and is recorded as deferred rent receivable/payable in the consolidated balance sheets. For lease agreements that provide for scheduled rent increases, rental income is recognized on a straight-line basis over the non-cancellable term of the leases, which commences when control of the space has been provided to the customer. The amount of the straight-line rent receivable on the balance sheets included in rents and other receivables, net was $63.6 million and $38.7 million as of December 31, 2020 and December 31, 2019, respectively.

Rental revenue also includes amortization of set-up fees which are amortized over the term of the respective lease as discussed below in the "Deferred Income" section.

Variable Lease Revenue from Recoveries

Certain customer leases contain provisions under which customers reimburse us for power and cooling-related charges as well as a portion of the property’s real estate taxes, insurance and other operating expenses. Recoveries of power and cooling-related expenses relate specifically to our variable power arrangements, whereby customers pay variable monthly fees for the specific amount of power utilized at the current utility rates. Our performance obligation is to stand ready to deliver power over the life of the customer contract up to a contracted power capacity. Customers have the flexibility to increase or decrease the amount of power consumed, and therefore sub-metered power revenue is constrained at contract inception. The reimbursements are included in revenue as recoveries from customers and are recognized each month as the uncertainty related to the consideration is resolved (i.e. we provide power to our customers) and customers utilize the power. Reimbursement of real estate taxes, insurance, common area maintenance, or other operating expenses are accounted for as variable payments under lease guidance pursuant to the practical expedient and are recognized as revenue in the period that the expenses are recognized. Variable lease revenue from recoveries discussed above, including power, common area maintenance or other operating costs, have the same pattern of transfer over the lease term as the lease component and are therefore combined with the lease component to form a single lease component. Variable lease revenue from recoveries is included within the “rental” line item on the statements of operations.

Other Revenue

Other revenue primarily consists of revenue from our managed service offerings as well as revenue earned from partner channel, management and development fees. We, through our TRS, may provide use of our managed services to our customers on an individual or combined basis. In our managed services offering the TRS’s performance obligation is to provide services (e.g. cloud hosting, data backup, data storage or data center personnel labor hours) to facilitate a fully integrated information technology (“IT”) outsourcing environment over a contracted term. Although underlying services may vary, over the contracted term monthly service offerings are substantially the same and we account for the services as a series of distinct services in accordance with ASC Topic 606. Service fee revenue is recognized as the revenue is earned, which generally coincides with the services being provided. As we have the right to consideration from customers in an amount that corresponds directly with the value to the customer of the TRS’s performance of providing continuous services, we recognize monthly revenue for the amount invoiced.

With respect to the transaction price allocated to remaining performance obligations within our managed service contracts, we have elected to use the optional exemption provided by ASC Topic 606 whereby we are not required to estimate the total transaction price allocated to remaining performance obligations as we apply the “right-to-invoice” practical expedient. As described above, the nature of our performance obligation in these contracts is to provide monthly services that are substantially the same and accounted for as a series of distinct services. These contracts generally have a remaining term ranging from month-to-month to three years.

Management fees and other revenues are generally received from our unconsolidated entity properties as well as third parties. Management fee revenue is earned based on a contractual percentage of unconsolidated entity property revenue. Development fee revenue is earned on a contractual percentage of hard costs to develop a property. We recognize revenue for these services provided when earned based on the performance criteria in ASC Topic 606, with such revenue recorded in “Other” revenue on the consolidated statements of operations.

Allowance for Uncollectible Accounts Receivable – We record a provision for uncollectible accounts if a receivable balance relating to lease components from an individual contract is considered by management not to be probable of collection, and this provision is recorded as a reduction to leasing revenues. We also record a general provision of estimated uncollectible tenant receivables based on general probability of collection in accordance with ASC 450-20 Loss

Contingencies. This provision is recorded as bad debt expense and recorded within the “Property Operating Costs” line item of the consolidated statements of operations. The aggregate allowance for doubtful accounts on the consolidated balance sheets was $5.4 million and $2.3 million as of December 31, 2020 and December 31, 2019, respectively.

Advance Rents and Security Deposits – Advance rents, typically prepayment of the following month’s rent, consist of payments received from customers prior to the time they are earned and are recognized as revenue in subsequent periods when earned. Security deposits are collected from customers at the lease origination and are generally refunded to customers upon lease expiration.

Deferred Income – Deferred income generally results from non-refundable charges paid by the customer at lease inception to prepare their space for occupancy. We record this initial payment, commonly referred to as set-up fees, as a deferred income liability which amortizes into rental revenue over the term of the related lease on a straight-line basis. Deferred income was $85.4 million, $39.2 million and $33.2 million as of December 31, 2020, 2019 and 2018, respectively. Additionally, $20.3 million, $15.2 million and $12.5 million of deferred income was amortized into revenue for the years ended December 31, 2020, 2019 and 2018, respectively.

Foreign Currency - The financial position of foreign subsidiaries whose functional currency is not the U.S. dollar is translated at the exchange rates in effect at the end of the period, while revenues and expenses are translated at average exchange rates during the period. Gains or losses from translation of foreign operations where the local currency is the functional currency are included as components of other comprehensive income (loss). Prior to February 2020, gains or losses from foreign currency transactions were included in determining net income (loss). In February 2020, we entered into a net investment hedge which resulted in gains or losses subsequently being recognized in Other Comprehensive Income (Loss).

Equity-based Compensation – Equity-based compensation costs are measured based upon their estimated fair value on the date of grant or modification and amortized ratably over their respective service periods. We have elected to account for forfeitures as they occur. Equity-based compensation expense was $27.0 million, $16.4 million, and $18.1 million for the years ended December 31, 2020, 2019 and 2018, respectively. Equity based compensation expense for the year ended December 31, 2020 includes $1.8 million of equity-based compensation expense associated with the revaluation and acceleration of equity awards related to an executive officer's retirement which is included within the "Transaction, integration, and impairment costs" line item of the consolidated statements of operations. Equity-based compensation expense for the year ended December 31, 2018 includes $3.1 million of equity-based compensation associated with the acceleration of equity awards related to certain employees impacted by the Company’s strategic growth plan which was included in the “Restructuring” expense line item on the consolidated statements of operations.

Segment Information – We manage our business as one operating segment and thus one reportable segment consisting of a portfolio of investments in multiple data centers.

Customer Concentrations – During the year ended December 31, 2020, one of our customers exceeded 10% of total revenues, representing approximately 11.8% of total revenues for the year ended December 31, 2020.

As of December 31, 2020, two of our customers exceeded 5% of trade accounts receivable. In aggregate, these two customers accounted for approximately 45.0% of trade accounts receivable. One of these customers individually exceeded 10% of total trade accounts receivable representing 39.2% of total trade accounts receivable.

Distribution Policy

To satisfy the requirements to qualify for taxation as a REIT, and to avoid paying tax on our income, we intend to continue to make regular quarterly distributions of all, or substantially all, of our REIT taxable income (excluding net capital gains) to our stockholders.

All distributions will be made at the discretion of our board of directors and will depend on our historical and projected results of operations, liquidity and financial condition, our REIT qualification, our debt service requirements, operating expenses and capital expenditures, prohibitions and other restrictions under financing arrangements and applicable law and other factors as our board of directors may deem relevant from time to time. We anticipate that our estimated cash available for distribution will exceed the annual distribution requirements applicable to REITs and the amount necessary to avoid the payment of tax on undistributed income. However, under some circumstances, we may be required to make distributions in

excess of cash available for distribution in order to meet these distribution requirements and we may need to borrow funds to make certain distributions. If we borrow to fund distributions, our future interest costs would increase, thereby reducing our earnings and cash available for distribution from what they otherwise would have been.

The partnership agreement of the Operating Partnership requires the Operating Partnership to distribute at least quarterly 100% of our “available cash” (as defined in the partnership agreement) to the partners of the Operating Partnership, in accordance with the terms established for the class of partnership interests held by such partner. Furthermore, because QTS intends to continue to qualify as a REIT for tax purposes, QTS is required to make reasonable efforts to distribute available cash (a) to limited partners of the Operating Partnership so as to preclude any such distribution or portion thereof from being treated as part of a sale of property to the Operating Partnership by a limited partner under Section 707 of the Code or the regulations thereunder; provided, however, that neither of QTS nor the Operating Partnership shall have liability to a limited partner under any circumstances as a result of any distribution to a limited partner being so treated, and (b) to QTS, its general partner, in an amount sufficient to enable QTS to make distributions to its stockholders that will enable QTS to (1) satisfy the requirements for qualification as a REIT under the Code and the regulations thereunder, and (2) avoid any U.S. federal income or excise tax liability. Consistent with the partnership agreement, we intend to continue to distribute quarterly an amount of our available cash sufficient to enable QTS to pay quarterly dividends to its stockholders in an amount necessary to satisfy the requirements applicable to REITs under the Code and to eliminate U.S. federal income and excise tax liability.

Fair Value Measurements – ASC Topic 820, Fair Value Measurement, emphasizes that fair-value is a market-based measurement, not an entity-specific measurement. Therefore, a fair-value measurement should be determined based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair-value measurements, a fair-value hierarchy is established that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy).

Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to access. Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability (other than quoted prices), such as interest rates, foreign exchange rates, and yield curves that are observable at commonly quoted intervals. Level 3 inputs are unobservable inputs for the asset or liability, which are typically based on an entity’s own assumptions, as there is little, if any, related market activity. In instances where the determination of the fair-value measurement is based on inputs from different levels of the fair-value hierarchy, the level in the fair-value hierarchy within which the entire fair-value measurement falls is based on the lowest level input that is significant to the fair-value measurement in its entirety. Our assessment of the significance of a particular input to the fair-value measurement in its entirety requires judgment, and considers factors specific to the asset or liability.

As of December 31, 2020, we valued our derivative instruments primarily utilizing Level 2 inputs. See Note 18 – ‘Fair Value of Financial Instruments’ for additional details.

COVID-19 – We continue to actively monitor developments with respect to COVID-19 and have taken numerous actions based on corporate policies specifically focusing on the safety and wellness of our customers, partners, and employees, as well as providing continuous and resilient services. Although the COVID-19 pandemic has caused significant disruptions to the United States and global economy and has contributed to significant volatility in financial markets, as of December 31, 2020, these developments have not had a known material adverse effect on our business. As of December 31, 2020, each of our data centers in North America and Europe are fully operational and operating in accordance with our business continuity plans. Across each of the respective jurisdictions in which we operate, our business has been deemed essential operations, which has allowed us to remain fully staffed with critical personnel in place to continue to provide service and support for our customers.

The extent to which the COVID-19 pandemic impacts our and our customers' business and operations will depend on future developments that are highly uncertain and cannot be predicted with confidence, including the duration of the pandemic, new information that may emerge concerning the severity, variants or mutations of COVID-19, vaccine efficacy and rollout, the response of the overall economy and financial markets and the actions taken to contain COVID-19 or treat its impact, such as government actions, laws or orders or any changes or amendments thereto and the success of any lifting or easing of, or the risk of any premature lifting or easing of, any such restrictions, among others. Due to uncertainties regarding COVID-19, any

estimates of the effects of COVID-19 as reflected and/or discussed in these financial statements are based upon our best estimates using information known to us at this time, and such estimates may change in the near term, the effects of which could be material.

New Accounting Pronouncements

In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, and subsequent amendments to the guidance: ASU 2018-19 in November 2018, ASU 2019-4 in April 2019, ASU 2019-5 in May 2019, ASUs 2019-10 & 2019-11 in November 2019, and ASU 2020-2 in February 2020. The standard, as amended, requires entities to use a new impairment model based on current expected credit losses (“CECL”) rather than incurred losses. The CECL model is designed to capture expected credit losses through the establishment of an allowance account, which will be presented as an offset to the amortized cost basis of the related financial asset. The guidance is effective for interim and annual periods beginning after December 15, 2019. We adopted this ASU effective January 1, 2020. As the majority of our revenue is generated from operating leases which are governed under ASC Topic 842, the provisions of this standard did not have a material impact on our consolidated financial statements.

In January 2020, the FASB issued ASU 2020-1, Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815): Clarifying the Interactions between Topic 321, Topic 323, and Topic 815, which clarifies the interaction between the accounting for equity securities under Topic 321, the accounting for equity method investments in Topic 323, and the accounting for certain forward contracts and purchased options in Topic 815. ASU 2020-1 is effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. Early adoption is permitted. The amendments in this Update should be applied prospectively. We do not expect the provisions of the standard will have a material impact on our consolidated financial statements when adopted.

In March 2020, the FASB issued ASU 2020-4, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. ASU 2020-4 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in ASU 2020-4 is optional and may be elected over time as reference rate reform activities occur. The standard is effective for all entities as of March 12, 2020 through December 31, 2022. An entity can elect to apply the amendments as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020, or prospectively from a date within an interim period that includes or is subsequent to March 12, 2020, up to that date that the financial statements are available to be issued. Beginning in the first quarter of 2020, we have elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients preserves the presentation of derivatives consistent with past presentation. We continue to evaluate the impact of the guidance but we do not expect the provisions of the standard will have a material impact on our consolidated financial statements.

We determined all other recently issued accounting pronouncements will not have a material impact on our consolidated financial statements or do not materially apply to our operations.

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Acquisitions and Sales

12 Months Ended

Dec. 31, 2020

Business Combinations [Abstract]

Acquisitions and Sales

Acquisitions and Sales

(All references to square footage, acres and megawatts are unaudited)

Land Acquisitions

During the year ended December 31, 2020, we completed multiple acquisitions of land totaling 126 acres for an aggregate purchase price of approximately $43.9 million to be used for future development. These acquisitions were accounted for as asset acquisitions and were included within the “Construction in Progress” line item of the consolidated balance sheets at the time of acquisition.

During the year ended December 31, 2019, we completed multiple acquisitions of land totaling 107 acres for an aggregate purchase price of approximately $31.6 million to be used for future development. These acquisitions were accounted for as asset acquisitions and were included within the “Construction in Progress” line item of the consolidated balance sheets at the time of acquisition.

Atlanta Land Improvement Sale

In November 2019, we sold to a third-party certain land improvements which we had previously acquired as part of a larger acquisition of land to expand our Atlanta, Georgia campus. This sale of incidental real estate resulted in a gain of $1.4 million. Additionally, we entered into a ground lease with the Company as lessor and the acquirer of the building as lessee which has an initial term of 20 years.

Netherlands Acquisition

On April 23, 2019, we completed the acquisition of two data centers in the Netherlands (the “Netherlands facilities”) for approximately $44.5 million in cash consideration, including closing costs. At the time of acquisition, the two facilities, in Groningen and Eemshaven, had approximately 160,000 square feet of raised floor capacity and 30 megawatts of combined gross power available. This acquisition was funded with a draw on our unsecured revolving credit facility.

The acquisition was accounted for as an asset acquisition. The purchase price allocation of the Netherlands facilities was a fair value estimate that utilized Level 2 and Level 3 inputs, including discounted future cash flows and observable market data on replacement costs, leasing rates, and discount rates that were used to measure the acquired assets and liabilities on a non-recurring basis.

The following table summarizes the consideration for the Netherlands facilities and the allocation of the fair value of assets acquired and liabilities assumed at the acquisition date (in thousands):

	Purchase Price Allocation		Weighted Avg Remaining Useful Life (in years)
Land	$	1,743	N/A
Buildings and improvements	8,640		24
Construction in progress	29,902		N/A
Acquired intangibles (In-place lease & above market lease)	2,911		3
Deferred costs	906		3
Other assets	128		3
Net Working Capital	554		N/A
Total identifiable assets acquired	44,784
Acquired below market lease	284		3
Total liabilities assumed	284
Net identifiable assets acquired	$	44,500

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Acquired Intangible Assets and Liabilities

12 Months Ended

Dec. 31, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Acquired Intangibles Assets and Liabilities

Acquired Intangible Assets and Liabilities

Summarized below are the carrying values for the major classes of intangible assets and liabilities (in thousands):

		December 31, 2020						December 31, 2019
	Useful Lives	Gross Carrying Value		Accumulated Amortization		Net Carrying Value		Gross Carrying Value		Accumulated Amortization		Net Carrying Value
Customer Relationships	12 years	$	95,705	$	(44,361)	$	51,344	$	95,705	$	(36,411)	$	59,294
In-Place Leases	0.5 to 10 years	34,813		(26,812)		8,001		34,588		(22,522)		12,066
Solar Power Agreement (1)	17 years	13,747		(5,256)		8,491		13,747		(4,448)		9,299
Acquired Favorable Leases
Acquired above market leases - as Lessor	0.5 to 8 years	5,070		(4,816)		254		5,035		(4,015)		1,020
Total Intangible Assets		$	149,335	$	(81,245)	$	68,090	$	149,075	$	(67,396)	$	81,679
Solar Power Agreement (1)	17 years	13,747		(5,256)		8,491		13,747		(4,448)		9,299
Acquired Unfavorable Leases
Acquired below market leases - as Lessor	2 to 4 years	1,117		(1,113)		4		1,092		(967)		125
Acquired above market leases - as Lessee	11 to 12 years	2,453		(1,199)		1,254		2,453		(983)		1,470
Total Intangible Liabilities (2)		$	17,317	$	(7,568)	$	9,749	$	17,292	$	(6,398)	$	10,894

(1)Amortization related to the Solar Power Agreement asset and liability is recorded at the same rate and therefore has no net impact on the statements of operations.

(2)Intangible liabilities are included within the “Advance rents, security deposits and other liabilities” line item of the consolidated balance sheets.

Above or below market leases are amortized as a reduction to or increase in rental revenue in the case of the Company as lessor as well as a reduction to or increase in rent expense in the case of the Company as lessee over the remaining lease terms. The net effect of amortization of acquired above-market and below-market leases resulted in a net decrease in rental revenue of $0.4 million, $0.2 million, and $0.5 million for the years ended December 31, 2020, 2019 and 2018, respectively. The estimated amortization of acquired favorable and unfavorable leases for each of the five succeeding fiscal years ending December 31 is as follows (in thousands):

	Net Rental Revenue Decrease		Net Rental Expense Decrease
2021	$	164	$	(216)
2022	55		(216)
2023	25		(216)
2024	6		(216)
2025	—		(216)
Thereafter	—		(174)
Total	$	250	$	(1,254)

Net amortization of all other identified intangible assets and liabilities was $12.6 million, $13.2 million and $15.0 million for the years ended December 31, 2020, 2019 and 2018, respectively. The estimated net amortization of all other identified intangible assets and liabilities for each of the five succeeding fiscal years ending December 31 is as follows (in thousands):

Year Ending December 31,
2021	$	10,634
2022	10,088
2023	10,084
2024	8,967
2025	7,978
Thereafter	11,594
Total	$	59,345

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Real Estate Assets and Construction in Progress

12 Months Ended

Dec. 31, 2020

Real Estate [Abstract]

Real Estate Assets and Construction in Progress

Real Estate Assets and Construction in Progress

The following is a summary of our cost of owned or leased properties as of December 31, 2020 and 2019 (in thousands):

As of December 31, 2020:

Property Location	Land		Buildings, Improvements and Equipment		Construction in Progress		Total Cost
Atlanta, Georgia Campus (1)	$	55,157	$	700,142	$	191,072	$	946,371
Ashburn, Virginia Campus (2)	16,476		371,725		185,903		574,104
Irving, Texas	8,606		392,275		99,591		500,472
Chicago, Illinois	9,400		250,336		104,117		363,853
Richmond, Virginia	2,180		233,927		120,577		356,684
Suwanee, Georgia (Atlanta-Suwanee)	3,521		184,467		6,718		194,706
Piscataway, New Jersey	7,466		122,176		30,401		160,043
Fort Worth, Texas	9,079		124,054		1,064		134,197
Hillsboro, Oregon	18,414		34,594		78,390		131,398
Santa Clara, California (3)	—		117,343		9,385		126,728
Leased Facilities (4)	—		82,759		225		82,984
Eemshaven, Netherlands	5,366		21,712		47,531		74,609
Sacramento, California	1,481		66,300		12		67,793
Manassas, Virginia (5)	—		25		67,073		67,098
Dulles, Virginia	3,154		54,323		4,148		61,625
Princeton, New Jersey	20,700		35,261		5		55,966
Phoenix, Arizona (5)	—		—		37,729		37,729
Groningen, Netherlands	1,896		11,206		3,730		16,832
Other (6)	2,213		36,636		41,094		79,943
	$	165,109	$	2,839,261	$	1,028,765	$	4,033,135

(1)The “Atlanta, Georgia Campus” includes both the existing data center Atlanta (DC-1) as well as the recently developed data center Atlanta, GA (DC-2) on land adjacent to the existing Atlanta, GA (DC-1) facility.

(2)The “Ashburn, Virginia Campus” includes both the existing data center Ashburn, VA (DC-1) as well as new property development associated with the construction of a second data center Ashburn, VA (DC-2).

(3)Owned facility subject to long-term ground sublease.

(4)Includes 7 facilities. All facilities are leased, including one subject to a finance lease.

(5)Represent land purchases. Land acquisition costs, as well as subsequent development costs, are included within construction in progress until development on the land has ended and the asset is ready for its intended use.

(6)Consists of Miami, FL; Lenexa, KS; Overland Park, KS and additional land.

As of December 31, 2019:

Property Location	Land		Buildings, Improvements and Equipment		Construction in Progress		Total Cost
Atlanta, Georgia Campus (1)	$	44,588	$	525,300	$	128,930	$	698,818
Irving, Texas	8,606		369,727		98,170		476,503
Ashburn, Virginia (2)	16,476		156,396		189,375		362,247
Richmond, Virginia	2,180		195,684		139,948		337,812
Chicago, Illinois	9,400		205,026		86,878		301,304
Suwanee, Georgia (Atlanta-Suwanee)	3,521		174,124		5,559		183,204
Piscataway, New Jersey	7,466		103,553		36,056		147,075
Santa Clara, California (3)	—		114,499		1,238		115,737
Fort Worth, Texas	9,079		55,018		35,722		99,819
Leased Facilities (4)	—		85,225		1,241		86,466
Sacramento, California	1,481		65,258		163		66,902
Hillsboro, Oregon (2)	—		—		63,573		63,573
Manassas, Virginia (2)	—		—		57,662		57,662
Princeton, New Jersey	20,700		35,192		39		55,931
Dulles, Virginia	3,154		48,651		4,688		56,493
Eemshaven, Netherlands	—		—		37,267		37,267
Phoenix, Arizona (2)	—		—		31,265		31,265
Groningen, Netherlands	1,741		9,085		3,028		13,854
Other (5)	2,213		36,163		120		38,496
	$	130,605	$	2,178,901	$	920,922	$	3,230,428

(1)The “Atlanta, Georgia Campus” includes both the existing data center Atlanta (DC-1) as well as new property development associated with construction of a second data center Atlanta (DC-2) on land adjacent to the existing Atlanta (DC-1) facility.

(2)Represent land purchases. Land acquisition costs, as well as subsequent development costs, are included within construction in progress until development on the land has ended and the asset is ready for its intended use.

(3)Owned facility subject to long-term ground sublease.

(4)Includes 7 facilities. All facilities are leased, including one subject to a finance lease.

(5)Consists of Miami, FL; Lenexa, KS; and Overland Park, KS facilities.

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Leases

12 Months Ended

Dec. 31, 2020

Leases [Abstract]

Leases

Leases

Leases as Lessee

We determine if an arrangement is a lease at inception. If the contract is considered a lease, we evaluate leased property to determine whether the lease should be classified as a finance or operating lease in accordance with U.S. GAAP. We periodically enter into finance leases for certain data center facilities, equipment, and fiber optic transmission cabling. In addition, we lease certain real estate (primarily land or real estate space) under operating lease agreements with such assets included within the “Operating lease right of use assets, net” line item of the consolidated balance sheets and the associated lease liabilities included within the “Operating lease liabilities” line item on the consolidated balance sheets pursuant to ASC Topic 842.

ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. Variable lease payments consist of nonlease services related to the lease. Variable lease payments are excluded from the ROU assets and lease liabilities and are recognized in the period in which the obligation for those payments is incurred. As our leases as lessee typically do not provide an implicit rate, we use our incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. We assess multiple variables when determining the incremental borrowing rate, such as lease term, payment terms, collateral, economic conditions, and creditworthiness. ROU assets also include any lease payments made and

exclude lease incentives. Many of our lease agreements include options to extend the lease, which we do not include in our expected lease terms unless they are reasonably certain to be exercised. Rental expense for lease payments related to operating leases is recognized on a straight-line basis over the lease term.

We use leasing as a source of financing for certain data center facilities and related equipment. We currently operate one data center facility, along with various equipment and fiber optic transmission cabling, that are subject to finance leases. The remaining terms of our finance leases range from less than one year to seventeen years. Our finance lease associated with the data center includes multiple extension option periods, some of which were included in the lease term as we are reasonably certain to exercise those extension options. Our other finance leases typically do not have options to extend the initial lease term. Finance lease assets are included within the “Buildings, improvements and equipment” line item of the consolidated balance sheets and finance lease liabilities are included within “Finance leases and mortgage notes payable” line item of the consolidated balance sheets.

We currently lease six other facilities under operating lease agreements for various data centers, our corporate headquarters and additional office space. Our leases have remaining lease terms ranging from three to six years. We have options to extend the initial lease term on nearly all of these leases. Additionally, we have one ground lease for our Santa Clara property that is an operating lease which is scheduled to expire in 2052.

Components of lease expense were as follows (in thousands):

	Year Ended December 31,
	2020		2019
Finance lease cost:
Amortization of assets	$	4,150	$	3,535
Interest on lease liabilities	1,915		1,693
Operating lease expense:
Operating lease cost	9,012		9,102
Variable lease cost	1,072		1,109
Sublease income	(193)		(187)
Total lease costs	$	15,956	$	15,252

Supplemental balance sheet information related to leases was as follows (in thousands, except lease term and discount rate):

	As of December 31,
	2020			2019
Operating leases:
Operating lease right-of-use assets	$	51,342		$	57,141
Operating lease liabilities	58,005			64,416
Finance leases:
Property and equipment, at cost	49,554			50,437
Accumulated amortization	(8,864)			(4,830)
Property and equipment, net	$	40,690		$	45,607
Finance lease liabilities	$	41,718		$	45,141
Weighted average remaining lease term (in years):
Operating leases	13.4			13.7
Finance leases	10.3			11.4
Weighted average discount rate:
Operating leases	5.2		%	5.1		%
Finance leases	4.3		%	4.3		%

Supplemental cash flow and other information related to leases was as follows (in thousands):

	Year Ended December 31,
	2020		2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$	12,048	$	9,834
Operating cash flows for finance leases	$	1,914	$	1,704
Financing cash flows for finance leases	$	2,579	$	2,855

Maturities of lease liabilities, which exclude variable rent payments, are as follows (in thousands):

	December 31, 2020
	Operating Leases		Finance Leases
2021	$	9,818	$	4,446
2022	10,266		4,570
2023	10,393		4,707
2024	8,317		4,847
2025	8,036		4,992
Thereafter	40,872		28,902
Total Lease Payments	$	87,702	$	52,464
Less: Imputed Interest	29,697		10,746
Total Lease Obligations	$	58,005	$	41,718

Leases as lessor

Our lease revenue contains both minimum lease payments as well as variable lease payments. See Note 2 - ‘Summary of Significant Accounting Policies’ for further details of our revenue streams and associated accounting treatment. The components of our lease revenue were as follows (in thousands):

	Year Ended December 31,
	2020		2019		2018
Lease revenue:
Minimum lease revenue	$	464,005	$	409,157	$	367,388
Variable lease revenue (primarily recoveries from customers)	55,853		55,966		46,232
Total lease revenue	$	519,858	$	465,123	$	413,620

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Investments in Unconsolidated Entity

12 Months Ended

Dec. 31, 2020

Equity Method Investments and Joint Ventures [Abstract]

Investments in Unconsolidated Entity

Investments in Unconsolidated Entity

During the three months ended March 31, 2019, we formed an unconsolidated entity with Alinda Capital Partners (“Alinda”), an infrastructure investment firm. We contributed a hyperscale data center under development in Manassas, Virginia to the entity. The facility, and the previously executed 10-year operating lease agreement with a global cloud-based software company, was contributed to the unconsolidated entity in exchange for cash and noncash consideration in the form of equity interest in the entity that was measured at fair value pursuant to Topic 820. The equity interest received and any amounts due from the unconsolidated entity are recorded within our consolidated balance sheets and totaled $22.6 million and $30.2 million as of December 31, 2020 and 2019, respectively. Alinda and us each own a 50% interest in the entity. As we are not the primary beneficiary of the arrangement but have the ability to exercise significant influence, we concluded that the investment should be accounted for as an unconsolidated entity using equity method investment accounting. As of December 31, 2020 and 2019, the total assets of the entity were $141.5 million and $127.8 million, respectively. As of December 31, 2020 and 2019, the total debt outstanding, net of deferred financing costs, was $90.1 million and $68.2 million, respectively.

Under the equity method, our cost of investment is adjusted for additional contributions to and distributions from the unconsolidated entity, as well as our share of equity in the earnings and losses of the unconsolidated entity. Generally, distributions of cash flows from operations and capital events are made to members of the unconsolidated entity in accordance with each member’s ownership percentages and the terms of the agreement, but also provides us with rights to preferential cash distributions as certain phases are completed and leased to the underlying tenant. Our policy is to account for distributions from the unconsolidated entity on the basis of the nature of the activities that generated the distribution. Distributions from the operations of the unconsolidated entity are a return on our investment and we classify these distributions as operating cash flows. Any differences between the cost of our investment in an unconsolidated entity and its underlying equity as reflected in the unconsolidated entity’s financial statements generally result from costs of our investment that are not reflected on the unconsolidated entity’s financial statements.

Under the unconsolidated entity agreement, we serve as the entity’s operating member, subject to authority and oversight of a board appointed by us and Alinda, and separately we serve as manager and developer of the facility in exchange for management and development fees. The entity agreement includes various transfer restrictions and rights of first offer that will allow us to repurchase Alinda’s interest should Alinda wish to exit in the future.

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Debt

12 Months Ended

Dec. 31, 2020

Debt Disclosure [Abstract]

Debt

Debt

Below is a listing of our outstanding debt, including finance leases, as of December 31, 2020 and 2019 (in thousands):

	Weighted Average Effective Interest Rate at December 31, 2020 (1)		Maturity Date	December 31, 2020		December 31, 2019
Unsecured Credit Facility
Revolving Credit Facility	1.41	%	December 17, 2023	$	392,337	$	317,028
Term Loan A	3.26	%	December 17, 2024	225,000		225,000
Term Loan B	3.30	%	April 27, 2025	225,000		225,000
Term Loan C	3.46	%	October 18, 2026	250,000		250,000
Term Loan D	1.45	%	January 15, 2026	250,000		—
4.750% Senior Notes	4.75	%	November 15, 2025	—		400,000
3.875% Senior Notes	3.88	%	October 1, 2028	500,000		—
Lenexa Mortgage	4.10	%	May 1, 2022	—		1,736
Finance Leases	4.33	%	2021 - 2038	41,718		45,140
	2.85	%		1,884,055		1,463,904
Less net debt issuance costs				(14,562)		(10,839)
Total outstanding debt, net				$	1,869,493	$	1,453,065

(1)The coupon interest rates associated with Term Loan A, Term Loan B, and Term Loan C incorporate the effects of our interest rate swaps in effect as of December 31, 2020.

Credit Facilities, Senior Notes and Mortgage Notes Payable

(a) Unsecured Credit Facility – In October 2019, we amended and restated our unsecured credit facility (the “unsecured credit facility”), which among other things increased the total potential borrowings, extended maturity dates, lowered interest rates, and provided for an additional term loan under the agreement. The unsecured credit facility includes a $225 million term loan which matures on December 17, 2024 (“Term Loan A”), a $225 million term loan which matures on April 27, 2025 (“Term Loan B”), an additional term loan of $250 million, which matures on October 18, 2026 (“Term Loan C”) and a $1.0 billion revolving credit facility which matures on December 17, 2023. The revolving portion of the unsecured credit facility has a one-year extension option available to the Company, subject to certain conditions. Amounts outstanding under the unsecured credit facility bear interest at a variable rate equal to, at our election, LIBOR or a base rate, plus a spread that will vary depending upon our leverage ratio. For revolving credit loans, the spread ranges from 1.25% to 1.85% for LIBOR loans and 0.25% to 0.85% for base rate loans. For Term Loan A and Term Loan B, the spread ranges from 1.20% to 1.80% for LIBOR loans and 0.20% to 0.80% for base rate loans. For Term Loan C, the spread ranges from 1.50% to 1.85% for LIBOR loans and 0.50% to 0.85% for base rate loans. The unsecured credit facility also provides for borrowing capacity of up to $300 million in various foreign currencies.

Under the unsecured credit facility, the capacity may be increased from the current capacity of $1.7 billion to $2.2 billion subject to certain conditions set forth in the credit agreement, including the consent of the administrative agent and obtaining necessary commitments. We are also required to pay a commitment fee to the lenders assessed on the unused portion of the unsecured revolving credit facility. At our election, we can prepay amounts outstanding under the unsecured credit facility, in whole or in part, without penalty or premium.

Our ability to borrow under the unsecured credit facility is subject to ongoing compliance with a number of customary affirmative and negative covenants. As of December 31, 2020, we were in compliance with all of our covenants.

As of December 31, 2020, we had outstanding $1.1 billion of indebtedness under the unsecured credit facility, consisting of $392.3 million of outstanding borrowings under the unsecured revolving credit facility and $700.0 million aggregate outstanding under Term Loans A, B and C, exclusive of net debt issuance costs of $7.1 million. In connection with the unsecured credit facility, as of December 31, 2020, we had letters of credit outstanding aggregating to $3.5 million. As of

December 31, 2020, the weighted average interest rate for amounts outstanding under the unsecured credit facility, including the effects of interest rate swaps, was 2.65%.

We have also entered into certain interest rate swap agreements. See Note 10 – ‘Derivative Instruments’ for additional details.

(b) Term Loan D – In October 2020, through our Operating Partnership, we entered into a $250 million term loan (“Term Loan D”) that matures on January 15, 2026. Consistent with our existing term loans, amounts outstanding under Term Loan D bear interest at a variable rate equal to, at our election, LIBOR or a base rate, plus a spread that will vary depending upon our leverage ratio. The spread ranges from 1.20% to 1.80% for LIBOR loans and 0.20% to 0.80% for base rate loans. In addition, Term Loan D contains a LIBOR floor of 0.25%. When combined with our current $1.7 billion unsecured credit facility, Term Loan D increases QTS' aggregate unsecured credit facility capacity to $1.95 billion. Term Loan D also provides for a $250 million accordion feature to increase borrowing capacity up to $500 million, subject to obtaining necessary commitments. Term Loan D contains various debt covenants with which we are subject to, and these debt covenants are substantially the same as the debt covenants associated with the unsecured credit facility.

(c) 4.750% Senior Notes – In November 2017, the Operating Partnership and QTS Finance Corporation, a subsidiary of the Operating Partnership formed solely for the purpose of facilitating the offering of the previously outstanding 5.875% Senior Notes due 2022 (collectively, the “Issuers”), issued $400 million aggregate principal amount of 4.750% Senior Notes due 2025 (the “4.750% Senior Notes”) in a private offering. The 4.750% Senior Notes had an interest rate of 4.750% per annum, were issued at a price equal to 100% of their face value and were scheduled to mature on November 15, 2025. During the fourth quarter of 2020 we used availability on our unsecured revolving credit facility, which increased due to revolver repayments following the issuance of the 3.875% Senior Notes and closing of Term Loan D, to fund the redemption of, and satisfy and discharge the indenture pursuant to which the Issuers issued, all of their outstanding 4.750% Senior Notes. We incurred expenses in the fourth quarter of 2020 associated with the redemption of the 4.750% Senior Notes of $18.0 million, including early redemption fees of $14.3 million as well as noncash charges of $3.7 million related to the write off of existing deferred financing costs.

(d) 3.875% Senior Notes – In October 2020, the Issuers issued $500 million aggregate principal amount of senior notes due October 1, 2028 (the “3.875% Senior Notes”) in a private offering. The 3.875% Senior Notes have an interest rate of 3.875% per annum and were issued at a price equal to 100% of their face value. The net proceeds from the offering were used to repay a portion of the amount outstanding under our unsecured revolving credit facility, and subsequently with availability under the unsecured revolving credit facility we funded the redemption of, and satisfied and discharged the indenture pursuant to which the Issuers issued, all of their outstanding 4.750% Senior Notes described above. As of December 31, 2020, the net debt issuance costs associated with the 3.875% Senior Notes were $7.5 million.

The Issuers may redeem the 3.875% Senior Notes prior to maturity at their option at the prices set forth in the indenture dated as of October 7, 2020, among QTS, the Issuers, the guarantors named therein, and Deutsche Bank Trust Company Americas, as trustee (the “Indenture”). The Indenture also includes customary negative covenants, including limitations on asset sales, investments, distributions, incurrence of additional debt and affiliate transactions.

The 3.875% Senior Notes are unconditionally guaranteed, jointly and severally, on a senior unsecured basis by all of the Operating Partnership’s existing subsidiaries (other than certain foreign subsidiaries and receivables entities) and future subsidiaries that guarantee any indebtedness of QTS Realty Trust, Inc., the Issuers or any other subsidiary guarantor, other than QTS Finance Corporation, the co-issuer of the 3.875% Senior Notes. QTS Realty Trust, Inc. does not guarantee the 3.875% Senior Notes and will not be required to guarantee the 3.875% Senior Notes except under certain circumstances.

(e) Lenexa Mortgage – On March 8, 2017, we entered into a $1.9 million mortgage loan secured by our Lenexa facility. This mortgage had a fixed rate of 4.1%, with periodic principal payments due monthly and a balloon payment of $1.6 million scheduled for May 2022. In November of 2020 we paid off the outstanding loan balance of $1.7 million associated with the Lenexa mortgage.

The annual remaining principal payment requirements of our debt securities as of December 31, 2020 per the contractual maturities, excluding extension options and excluding operating and finance leases, are as follows (in thousands):

Year ending December 31,
2021	$	—
2022	—
2023	392,337
2024	225,000
2025	225,000
Thereafter	1,000,000
Total	$	1,842,337

As of December 31, 2020, we were in compliance with all of our covenants.

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Income Taxes

12 Months Ended

Dec. 31, 2020

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

We have elected for two of our existing subsidiaries to be taxed as TRS's pursuant to the REIT rules of the U.S. Internal Revenue Code. We also have subsidiaries subject to tax in non-US jurisdictions.

For our TRS's, income taxes are accounted for under the asset and liability method in accordance with ASC 740. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. We consider whether it is more likely than not that some portion or all of the deferred tax assets will be realized. It is possible that some or all of our deferred tax assets could ultimately expire unused. The Company establishes valuation allowances against deferred tax assets when the ability to fully utilize these benefits is determined to be uncertain.

The components of income tax provision from continuing operations are:

	For the Year Ended December 31,
	2020		2019		2018
Current:
U.S. federal	$	—	$	—	$	(50)
U.S. State	368		298		395
Outside United States	7		13		78
Total Current	375		311		423
Deferred:
U.S. federal	71		(276)		(3,727)
U.S. State	(66)		(71)		(64)
Outside United States	58		(1)		—
Total Deferred	63		(348)		(3,791)
Total	$	438	$	(37)	$	(3,368)

Temporary differences and carry forwards which give rise to the deferred tax assets and liabilities are as follows:

	For the Year Ended December 31,
	2020		2019		2018
Deferred tax assets
Net operating loss carryforwards	$	22,950	$	20,218	$	17,610
Deferred revenue and setup charges	1,062		1,299		3,171
Operating lease liabilities	1,904		2,266		—
Property and equipment	—		512		—
Leases	400		—		1
Credits	300		300		287
Bad debt reserve	191		18		409
Intangibles	1,038		804		—
Interest expense carryforward IRC Sec. 163(j)	1,164		2,782		2,253
Equity compensation	1,654		1,119		952
Other	857		257		582
Gross deferred tax assets	31,520		29,575		25,265
Deferred tax liabilities
Property and equipment	(616)		—		(3,089)
Goodwill	(3,042)		(2,494)		(1,953)
Intangibles	—		(591)		(11,910)
Operating lease right-of-use assets	(1,056)		(1,261)		—
Prepaid commissions	(774)		(1,007)		(956)
Other	(218)		(224)		(93)
Gross deferred tax liabilities	(5,706)		(5,577)		(18,001)
Net deferred tax asset	25,814		23,998		7,264
Valuation allowance	(26,624)		(24,747)		(8,361)
Net deferred tax liability	$	(810)	$	(749)	$	(1,097)

The taxable REIT subsidiaries currently have net operating loss carryforwards related to U.S. federal income taxes of $33.4 million that expire in 11-16 years and $42.3 million which have no expiration. The taxable REIT subsidiaries also have $86.0 million of net operating loss carryforwards relating to state income taxes that expire in 1-20 years. The Company’s interest expense carryforward of $4.5 million has no expiration.

The effective tax rate is subject to change in the future due to various factors such as the operating performance of the taxable REIT subsidiaries, tax law changes and future business acquisitions. The differences between total income tax expense or benefit and the amount computed by applying the statutory income tax rate to income before provision for income taxes with respect to the TRS activity were as follows:

	For the Year Ended December 31,
	2020			2019			2018
TRS
Statutory rate applied to pre-tax loss	$	(1,380)		$	(12,991)		$	(9,656)
Permanent differences, net	248			16			97
State income tax, net of federal benefit	(421)			(2,868)			(1,430)
Foreign income tax	7			13			78
Federal and State rate change	(1)			(20)			(146)
Other	109			(110)			41
Valuation allowance increase	1,876			15,923			7,648
Total tax expense (benefit)	$	438		$	(37)		$	(3,368)
Effective tax rate	(6.7)		%	0.1		%	7.3		%

On March 27, 2020, the United States enacted the Coronavirus Aid, Relief and Economic Security Act (CARES Act). The CARES Act is an emergency economic stimulus package that includes measures and tax provisions to strengthen the United States economy and fund a nationwide effort to curtail the effect of COVID-19. The CARES Act provides tax changes in response to the COVID-19 pandemic. Some of the provisions which impact our financial statements include the removal of certain limitations on utilization of net operating losses, increasing the ability to deduct interest expense, and amending certain provisions of the previously enacted Tax Cuts and Jobs Act. We have evaluated the impact of the CARES Act and determined that the impact of the CARES Act is immaterial to our consolidated financial statements.

On December 27, 2020, the United States enacted the Consolidated Appropriations Act, 2021, a spending bill containing additional stimulus relief for the COVID-19 pandemic. Because the bill was enacted in close proximity to the end of the year, we continue to evaluate the Consolidated Appropriations Act, 2021 and have not yet identified any material impacts to the financial statements that may result from the bill.

As of December 31, 2020, 2019 and 2018, we had no uncertain tax positions. If we accrue any interest or penalties on tax liabilities from significant uncertain tax positions, those items will be classified as interest expense and general and administrative expense, respectively, in the Statements of Operations and Statements of Comprehensive Income. For the years ended December 31, 2020, 2019, and 2018, we had accrued no such interest or penalties.

We are currently not under examination by the Internal Revenue Service or any state or foreign jurisdictions. Tax years ending after December 31, 2016 remain subject to examination and assessment, state limitation periods included. Tax years ending December 31, 2009 through December 31, 2016 remain open solely for purposes of examination of our loss and credit carryforwards.

We provide a valuation allowance against deferred tax assets if, based on management’s assessment of operating results and other available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The evidence contemplated by management at December 31, 2020, 2019, and 2018 consists of current and prior operating results, available tax planning strategies, and the scheduled reversal of existing taxable temporary differences. Evidence from the scheduled reversal of taxable temporary differences relies on management judgments based on the accumulation of available evidence. Those judgments may be subject to change in the future as evidence available to management changes. Management’s assessment of the Company’s valuation allowance may further change based on our generation or ability to project of future operating income, and changes in tax policy or tax planning strategies.

As of December 31, 2020, 2019, and 2018 valuation allowances of $26.6 million, $24.7 million and $8.4 million, respectively, were recognized against certain net federal and state deferred tax assets since it is more likely than not that the deferred tax assets will not be realized. The $1.9 million year-over-year change is primarily caused by the federal and state valuation allowances recorded due to ongoing operating losses of the taxable REIT subsidiaries. Additionally, some portion of the change to the valuation allowances relates to changes in the evidence available related to the scheduled reversal of

taxable temporary differences; and some portion of the change to the state valuation allowance is attributable to state net operating losses generated where the Company has discontinued its operations or reduced its presence in certain state jurisdictions.

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Derivative Instruments

12 Months Ended

Dec. 31, 2020

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments

Derivative Instruments

From time to time, we enter into derivative financial instruments to manage certain cash flow risks.

Derivatives designated and qualifying as a hedge of the exposure to variability in the cash flows of a specific asset or liability that is attributable to a particular risk, such as interest rate risk, are considered cash flow hedges.

Interest Rate Swaps

Our objectives in using interest rate swaps are to reduce variability in interest expense and to manage exposure to adverse interest rate movements. To accomplish this objective, we primarily use interest rate swaps as part of our interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for us making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.

As of December 31, 2020, we had interest rate swap agreements in place with an aggregate notional amount of $700 million. The forward swap agreements effectively fix the interest rate on $700 million of term loan borrowings, $225 million of swaps allocated to Term Loan A, $225 million allocated to Term Loan B and $250 million allocated to Term Loan C, through the current maturity dates of the respective term loans.

We reflect our interest rate swap agreements, which are designated as cash flow hedges, at fair value as either assets or liabilities on the consolidated balance sheets within the “Other assets, net” or “Derivative liabilities” line items, as applicable. As of December 31, 2020, and 2019 the fair value of interest rate swaps represented an aggregate liability of $49.8 million and $19.9 million, respectively.

The forward interest rate swap agreements are derivatives that currently qualify for hedge accounting whereby we record the effective portion of changes in fair value of the interest rate swaps in accumulated other comprehensive income or loss on the consolidated balance sheets and statements of comprehensive income which is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. Any ineffective portion of a derivative's change in fair value is immediately recognized within net income (loss). The amount reclassified from other comprehensive income to interest expense on the consolidated statements of operations was an increase to interest expense of $10.1 million, a reduction in interest expense of $1.0 million, and an increase to interest expense of $0.1 million for the years ended December 31, 2020, 2019,and 2018 respectively. There was no ineffectiveness recognized for the years ended December 31, 2020, 2019 and 2018. During the subsequent twelve months, beginning January 1, 2021, we estimate that $13.5 million will be reclassified from other comprehensive income as an increase to interest expense.

Interest rate derivatives and their fair values as of December 31, 2020 and 2019 were as follows (in thousands):

Notional Amount				Fixed One Month LIBOR rate per annum				Fair Value
December 31, 2020		December 31, 2019				Effective Date	Expiration Date	December 31, 2020		December 31, 2019
$	25,000	$	25,000	1.989	%	January 2, 2018	December 17, 2021	$	(447)	$	(209)
100,000		100,000		1.989	%	January 2, 2018	December 17, 2021	(1,788)		(837)
75,000		75,000		1.989	%	January 2, 2018	December 17, 2021	(1,342)		(627)
50,000		50,000		2.033	%	January 2, 2018	April 27, 2022	(1,248)		(545)
100,000		100,000		2.029	%	January 2, 2018	April 27, 2022	(2,490)		(1,081)
50,000		50,000		2.033	%	January 2, 2018	April 27, 2022	(1,248)		(545)
100,000		100,000		2.617	%	January 2, 2020	December 17, 2023	(7,191)		(4,007)
100,000		100,000		2.621	%	January 2, 2020	April 27, 2024	(8,000)		(4,324)
70,000		—		0.968	%	March 2, 2020	October 18, 2026	(2,174)		—
30,000		—		0.973	%	March 2, 2020	October 18, 2026	(938)		—
200,000		200,000		2.636	%	December 17, 2021	December 17, 2023	(9,648)		(3,939)
200,000		200,000		2.642	%	April 27, 2022	April 27, 2024	(9,500)		(3,802)
125,000		—		1.014	%	December 17, 2023	December 17, 2024	(704)		—
100,000		—		1.035	%	December 17, 2023	December 17, 2024	(584)		—
75,000		—		1.110	%	December 17, 2023	October 18, 2026	(866)		—
100,000		—		1.088	%	April 27, 2024	April 27, 2025	(540)		—
125,000		—		1.082	%	April 27, 2024	April 27, 2025	(666)		—
75,000		—		0.977	%	April 27, 2024	October 18, 2026	(422)		—
								$	(49,796)	$	(19,916)

Power Purchase Agreements

In March 2019, we entered into two 10 year agreements to purchase renewable energy equal to the expected electricity needs of our data centers in Chicago, Illinois and Piscataway, New Jersey. These arrangements currently qualify for hedge accounting whereby we record the changes in fair value of the instruments in “Accumulated other comprehensive income” or loss on the consolidated balance sheets and statements of comprehensive income which is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. The amount reclassified from other comprehensive income to utility expense on the consolidated statements of operations was an increase to utilities expense of $1.2 million and an increase to utilities expense of $0.7 million for the years ended December 31, 2020 and 2019, respectively. There was no amount reclassified from other comprehensive income to utilities expense for the year ended December 31, 2018. We currently reflect these agreements, which are designated as cash flow hedges, at fair value as liabilities on the consolidated balance sheets within the “Derivative liabilities” line item.

Power purchase agreement derivatives and their fair values as of December 31, 2020 and 2019 were as follows (in thousands):

				Fair Value
Counterparty	Facility	Effective Date	Expiration Date	December 31, 2020		December 31, 2019
Calpine Energy Solutions, LLC	Piscataway	3/8/2019	2/28/2029	$	(2,162)	$	(2,919)
Calpine Energy Solutions, LLC	Chicago	3/8/2019	2/28/2029	(1,764)		(3,774)
				$	(3,926)	$	(6,693)

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Partners' Capital, Equity and Incentive Compensation Plans

12 Months Ended

Dec. 31, 2020

Equity [Abstract]

Partners' Capital, Equity and Incentive Compensation Plans

Partners’ Capital, Equity and Incentive Compensation PlansQualityTech, LP

QTS has the full power and authority to do all the things necessary to conduct the business of the Operating Partnership.

As of December 31, 2020, the Operating Partnership had four classes of limited partnership units outstanding: Series A Preferred Units, Series B Convertible Preferred Units, Class A units of limited partnership interest (“Class A units”) and Class O LTIP units of limited partnership units (“Class O units”). The Class A units currently outstanding are now redeemable on a one-for-one exchange rate at any time for cash or shares of Class A common stock of QTS. The Company may in its sole discretion elect to assume and satisfy the redemption amount with cash or its shares. Class O units were issued upon grants made under the QualityTech, LP 2010 Equity Incentive Plan (the “2010 Equity Incentive Plan”). Class O units are pari passu with Class A units. Each Class O unit is convertible into Class A units by the Operating Partnership at any time or by the holder at any time based on formulas contained in the partnership agreement.

QTS Realty Trust, Inc.

In connection with its IPO, QTS issued Class A common stock and Class B common stock. Class B common stock entitles the holder to 50 votes per share and was issued to enable our Chief Executive Officer to exchange 2% of his Operating Partnership units so he may have a vote proportionate to his economic interest in the Company. Also in connection with its IPO, QTS adopted the QTS Realty Trust, Inc. 2013 Equity Incentive Plan (the “2013 Equity Incentive Plan”), which authorized 1.75 million shares of Class A common stock to be issued under the 2013 Equity Incentive Plan, including options to purchase Class A common stock if exercised. On May 4, 2015, following approval by our stockholders at our 2015 Annual Meeting of Stockholders, the total number of shares available for issuance under the 2013 Equity Incentive Plan was increased by an additional 3.0 million shares. On May 9, 2019, following approval by our stockholders at our 2019 Annual Meeting of Stockholders, the total number of shares available for issuance under the 2013 Equity Incentive Plan was increased by an additional 1.1 million to 5.9 million.

In March 2019, the Compensation Committee completed a redesign of the long-term incentive program for executive officers to include the following types of awards:

a.Performance-Based FFO Unit Awards — performance-based restricted share unit awards, which may be earned based on Operating Funds From Operations (“OFFO”) per diluted share measured over a two-year performance period (performance-based FFO units or “FFO Units”), with two-thirds of the earned FFO Units vesting and settling in shares of Class A common stock on the date that performance is certified following the end of the performance period and the remaining one-third of the FFO Units vesting and settling at the end of three years from the award grant date. The number of shares of Class A common stock subject to the awards that can be earned ranges from 0% to 200% of the target award based on actual performance over the performance period, with the number of shares to be determined based on a linear interpolation basis between threshold and target and target and maximum performance.

b.Performance-Based Relative TSR Unit Awards — performance-based restricted share unit awards, which may be earned based on total stockholder return (“TSR”) as compared to the MSCI U.S. REIT Index (the “Index”) over a three-year performance period (the performance-based relative TSR units or “TSR Units”). The number of shares of Class A common stock subject to the awards that can be earned ranges from 0% to 200% of the target award based on our TSR compared to the Index. In addition, award payouts will be determined on a linear interpolation basis between threshold and target and target and maximum performance; and will be capped at the target performance level if our TSR is negative.

c.Restricted Stock Awards — the restricted stock awards vest as to one-third of the shares subject to awards on the first anniversary of the date of grant and as to 8.375% of the shares subject to the awards each quarter-end thereafter, subject to the named executive officer’s continued service as an employee as of each vesting date.

The following is a summary of award activity under the 2010 Equity Incentive Plan and 2013 Equity Incentive Plan and related information for the years ended December 31, 2020, 2019 and 2018:

	2010 Equity Incentive Plan					2013 Equity Incentive Plan
	Numbers of Class O  units	Weighted average exercise  price		Weighted average fair value		Options	Weighted average exercise  price		Weighted average fair value		Restricted Stock / Deferred Stock	Weighted average fair value at grant date		TSR Units	Weighted average fair value at grant date		FFO Units	Weighted average fair value at grant date
Outstanding at January 1, 2018	568,040	$	23.52	$	5.00	1,369,270	$	38.18	$	7.80	381,864	$	46.37	—	$	—	—	$	—
Granted	—	—		—		674,081	34.05		5.63		348,152	35.27		—	—		—	—
Exercised/Vested (1)	(465,761)	23.40		4.76		(6,188)	21.50		3.68		(224,660)	46.23		—	—		—	—
Cancelled/Expired	—	—		—		—	—		—		(85,047)	43.50		—	—		—	—
Outstanding at December 31, 2018	102,279	$	24.05	$	5.67	2,037,163	$	36.86	$	7.10	420,309	$	37.83	—	$	—	—	$	—
Granted	—	—		—		135,594	42.27		7.62		274,564	42.25		86,089	54.64		86,089	42.01
Exercised/Vested (1)	(19,969)	20.25		4.42		(125,213)	30.80		6.21		(279,429)	39.20		—	—		—	—
Cancelled/Expired	—	—		—		(112,706)	45.86		9.43		(25,694)	42.17		(1,739)	54.64		(1,739)	42.01
Outstanding at December 31, 2019	82,310	$	24.97	$	5.97	1,934,838	$	37.11	$	7.05	389,750	$	39.67	84,350	$	54.64	84,350	$	42.01
Granted	—	—		—		99,872	56.84		9.35		302,591	57.47		84,202	79.18		84,202	56.84
Performance Adjustment (2)	—	—		—		—	—		—		—	—		—	—		59,844	42.01
Exercised/Vested (1)	(6,875)	25.00		4.49		(98,303)	28.84		5.18		(264,466)	39.89		—	—		(96,129)	42.01
Cancelled/Expired	—	—		—		—	—		—		(11,379)	49.38		—	—		—	—
Outstanding at December 31, 2020	75,435	$	25.00	$	6.11	1,936,407	$	38.55	$	7.26	416,496	$	52.20	168,552	$	66.90	132,267	$	51.45

(1)Represents (i) Class O units which were converted to Class A units, (ii) options to purchase Class A common stock which were exercised, and (iii) the Class A common stock that has been released from restriction and which was not surrendered by the holder to satisfy their statutory minimum federal and state tax obligations associated with the vesting of restricted common stock, with respect to the applicable column.

(2)Represents the remeasurement of FFO units issued during the year ended December 31, 2019 based on achievement of certain performance metrics over the performance period.

The assumptions and fair values for restricted stock and options to purchase shares of Class A common stock granted for the years ended December 31, 2020, 2019 and 2018 are included in the following table on a per unit basis. Options to purchase shares of Class A common stock were valued using the Black-Scholes model and TSR Units were valued using a Monte-Carlo simulation that leveraged similar assumptions to those used to value the Class A common stock and FFO Units.

	2020			2019			2018
Fair value of FFO units and restricted stock granted	$56.84	-	$65.96	$42.01	-	$51.25	$34.03	-	$54.01
Fair value of TSR units granted			$79.18			$54.64			N/A
Fair value of options granted			$9.35	$7.56	-	$8.28	$5.55	-	$5.64
Expected term (years)			5.5			5.5	5.5	-	6.0
Expected volatility			27%			28%			28%
Expected dividend yield			3.31 %	3.89%	-	4.19%			4.82%
Expected risk-free interest rates			0.61 %	2.33 %	-	2.56 %	2.69 %	-	2.73 %

The following tables summarize information about awards outstanding as of December 31, 2020.

	Operating Partnership Awards Outstanding
	Exercise prices		Awards outstanding	Weight average remaining vesting period  (years)
Class O Units	$	25.00	75,435	—
Total Operating Partnership awards outstanding			75,435

	QTS Realty Trust, Inc. Awards Outstanding
	Exercise prices				Awards outstanding	Weight average remaining vesting period  (years)
Restricted stock	$	—			416,496	1.0
TSR units	—				168,552	0.9
FFO units	—				132,267	0.7
Options to purchase Class A common stock	$	21.00	-	$56.84	1,936,407	0.9
Total QTS Realty Trust, Inc. awards outstanding					2,653,722

Any awards outstanding as of the end of the period have been valued as of the grant date and generally vest ratably over a defined service period. As of December 31, 2020 all restricted Class A common stock, TSR units, and FFO units outstanding were unvested and approximately 0.1 million options to purchase Class A common stock were outstanding and unvested. As of December 31, 2020 we had $26.5 million of unrecognized equity-based compensation expense which will be recognized over a remaining weighted-average vesting period of approximately 0.9 years. The total intrinsic value of Class O units and options to purchase Class A common stock outstanding at December 31, 2020 was $48.3 million.

Dividends and Distributions

The following tables present quarterly cash dividends and distributions paid to our common and preferred stockholders for the years ended December 31, 2020 and 2019:

Year Ended December 31, 2020
Record Date	Payment Date	Per Share Rate		Aggregate Dividend/Distribution Amount (in millions)
Common Stock
September 18, 2020	October 6, 2020	$	0.47	$	32.0
June 19, 2020	July 7, 2020	0.47		31.5
March 20, 2020	April 7, 2020	0.47		31.5
December 20, 2019	January 7, 2020	0.44		28.6
				$	123.6
Series A Preferred Stock
September 30, 2020	October 15, 2020	$	0.45	$	1.9
June 30, 2020	July 15, 2020	0.45		1.9
March 31, 2020	April 15, 2020	0.45		1.9
December 31, 2019	January 15, 2020	0.45		1.9
				$	7.6
Series B Preferred Stock
September 30, 2020	October 15, 2020	$	1.63	$	5.1
June 30, 2020	July 15, 2020	1.63		5.1
March 31, 2020	April 15, 2020	1.63		5.1
December 31, 2019	January 15, 2020	1.63		5.1
				$	20.4

Year Ended December 31, 2019
Record Date	Payment Date	Per Share Rate		Aggregate Dividend/Distribution Amount (in millions)
Common Stock
September 19, 2019	October 4, 2019	$	0.44	$	27.3
June 25, 2019	July 9, 2019	0.44		27.3
March 20, 2019	April 4, 2019	0.44		27.3
December 21, 2018	January 8, 2019	0.41		23.7
				$	105.6
Series A Preferred Stock
September 30, 2019	October 15, 2019	$	0.45	$	1.9
June 30, 2019	July 15, 2019	0.45		1.9
March 31, 2019	April 15, 2019	0.45		1.9
December 31, 2018	January 15, 2019	0.45		1.9
				$	7.6
Series B Preferred Stock
September 30, 2019	October 15, 2019	$	1.63	$	5.1
June 30, 2019	July 15, 2019	1.63		5.1
March 31, 2019	April 15, 2019	1.63		5.1
December 31, 2018	January 15, 2019	1.63		5.1
				$	20.4

Additionally, subsequent to December 31, 2020, we paid the following dividends:

•On January 7, 2021, we paid our regular quarterly cash dividend of $0.47 per common share to stockholders of record as of the close of business on December 22, 2020.

•On January 15, 2021, we paid a quarterly cash dividend of approximately $0.45 per share on our Series A Preferred Stock to holders of Series A Preferred Stock of record as of the close of business on December 31, 2020.

•On January 15, 2021, we paid a quarterly cash dividend of approximately $1.63 per share on our Series B Preferred Stock to holders of Series B Preferred Stock of record as of the close of business on December 31, 2020.

Equity Issuances

Class A Common Stock

In February 2019, we conducted an underwritten offering of 7,762,500 shares of our Class A common stock, $0.01 par value per share (the “Class A common stock”) consisting of 4,000,000 shares issued during the first quarter of 2019 and 3,762,500 shares which were issued on a forward basis. During the year ended December 31, 2019 we settled a portion of the 3,762,500 shares subject to the forward sales agreements, and during the year ended December 31, 2020 we settled the remaining shares subject to the forward sale agreements as shown in the table below.

In June 2019, we established an “at-the-market” equity offering program (the “Prior ATM Program”) pursuant to which we could issue, from time to time, up to $400 million of our Class A common stock, $0.01 par value per share (the “Class A common stock”), which could include shares to be sold on a forward basis. The use of forward sales under the Prior ATM Program generally allowed us to lock in a price on the sale of shares of our Class A common stock when sold by the forward sellers, but defer receiving the net proceeds from such sales until the shares of our Class A common stock are issued at settlement on a later date. We have concluded that the forward sale agreements meet the derivative scope exception for certain contracts involving an entity’s own equity. The initial forward sale price is subject to daily adjustment based on a floating interest rate factor equal to the specified daily rate less a spread, and will decrease based on specified amounts related to dividends on shares of our common stock during the term of the applicable forward sale. Our earnings per share dilution resulting from the forward sale agreements, if any, is determined using the two-class method.

In May 2020, we established a new “at-the-market” equity offering program (the “Current ATM Program”) pursuant to which we may issue, from time to time, up to $500 million of our Class A common stock, which may include shares to be sold on a forward basis. As under the Prior ATM Program, the use of forward sales under the Current ATM Program generally allows us to lock in a price on the sale of shares of our Class A common stock when sold by the forward sellers, but defer receiving the net proceeds from such sales until the shares of our Class A common stock are issued at settlement on a later date. We have concluded that the forward sale agreements meet the derivative scope exception for certain contracts involving an entity’s own equity. Our earnings per share dilution resulting from the forward sale agreements, if any, is determined using the two-class method.

At any time during the term of any forward sale under the Prior ATM Program or the Current ATM Program we may settle the forward sale by physical delivery of shares of Class A common stock to the forward purchasers or, at our election, cash settle or net share settle. The initial forward sale price per share under each forward sale equals the product of (x) an amount equal to 100% minus the applicable forward selling commission and (y) the volume weighted average price per share at which the borrowed shares of our common stock were sold pursuant to the equity distribution agreement by the relevant forward seller during the applicable forward hedge selling period for such shares to hedge the relevant forward purchaser’s exposure under such forward sale. Thereafter, the forward sale price is subject to adjustment on a daily basis based on a floating interest rate factor equal to the specified daily rate less a spread, and is decreased based on specified amounts related to dividends on shares of our common stock during the term of the applicable forward sale. If the specified daily rate is less than the spread on any day, the interest rate factor will result in a daily reduction of the applicable forward sale price.

During the year ended December 31, 2020, we received $286.3 million of net proceeds from the settlement of forward shares as noted in the table below. We expect to physically settle (by delivering shares of Class A common stock) the remaining forward sales under the Prior ATM Program and Current ATM Program prior to the first anniversary date of each respective transaction. In addition, during the year ended December 31, 2020, we utilized the forward provisions under the Prior ATM Program and the Current ATM Program to allow for the sale of additional shares of our common stock as noted in the table below.

In June 2020, we conducted an underwritten offering of 4,400,000 shares of common stock offered on a forward basis at a price of $64.90 per share representing available net proceeds upon physical settlement of approximately $266.9 million as of December 31, 2020. We expect to physically settle the forward sale agreements (by the delivery of shares of common stock) and receive proceeds, subject to certain adjustments, from the sale of those shares of common stock by June 30, 2021, although we have the right to elect settlement prior to that time. We have concluded that the forward sale agreements meet the derivative scope exception for certain contracts involving an entity’s own equity. The initial forward sale price is subject to daily adjustment based on a floating interest rate factor equal to the specified daily rate less a spread, and will decrease based on specified amounts related to dividends on shares of our common stock during the term of the applicable forward sale. Our earnings per share dilution resulting from the forward sale agreements, if any, is determined using the two-class method.

The following table represents a summary of our equity issuances of our Class A common stock during the year ended December 31, 2020 (in thousands):

Offering Program	Forward Shares Sold/(Settled)		Net Proceeds Available/(Received) (1)
Shares and net proceeds available as of December 31, 2019	3,795		$	173,776	(2)
February 2019 Offering - Settlement	(931)	(3)	(35,841)
June 2019 Prior ATM Program - Sales	4,550		243,577
June 2019 Prior ATM Program - Settlements	(4,981)	(3)	(250,496)
May 2020 Current ATM Program - Sales	3,128		189,640
June 2020 Offering - Sales	4,400		266,894
Shares and net proceeds available as of December 31, 2020	9,961		$	587,550

(1)Net Proceeds Available remain subject to certain adjustments until settled.

(2)Net Proceeds available reported in the Form 10-K for the period ended December 31, 2019 were $177.8 million. The $4 million decrease is primarily due to QTS’ declared dividends, which reduces cash expected to be received upon full physical settlement of the forward shares.

(3)Represents the number of forward shares we elected to physically settle during the year ended December 31, 2020.

Preferred Stock

On March 15, 2018, QTS issued 4,280,000 shares of 7.125% Series A Cumulative Redeemable Perpetual Preferred Stock (“Series A Preferred Stock”) with a liquidation preference of $25.00 per share, which included 280,000 shares of the underwriters’ partial exercise of their option to purchase additional shares. In connection with the issuance of the Series A Preferred Stock, on March 15, 2018 the Operating Partnership issued to the Company 4,280,000 Series A Preferred Units, which have economic terms that are substantially similar to the Company’s Series A Preferred Stock. The Series A Preferred Units were issued in exchange for the Company’s contribution of the net offering proceeds of the offering of the Series A Preferred Stock to the Operating Partnership.

Dividends on the Series A Preferred Stock are payable quarterly in arrears on or about the 15th day of each January, April, July and October. The Series A Preferred Stock does not have a stated maturity date and is not subject to any sinking fund or mandatory redemption provisions. Upon liquidation, dissolution or winding up, the Series A Preferred Stock will rank senior to common stock and pari passu with the Series B Preferred Stock with respect to the payment of distributions and other amounts. Except in instances relating to preservation of QTS’ qualification as a REIT or pursuant to the Company’s special optional redemption right, the Series A Preferred Stock is not redeemable prior to March 15, 2023. On and after March 15, 2023, the Company may, at its option, redeem the Series A Preferred Stock, in whole, at any time, or in part, from time to time, for cash at a redemption price of $25.00 per share, plus any accrued and unpaid dividends (whether or not declared) to, but not including, the date of redemption.

Upon the occurrence of a change of control, the Company has a special optional redemption right that enables it to redeem the Series A Preferred Stock, in whole, at any time, or in part, from time to time, within 120 days after the first date on which a change of control has occurred resulting in neither QTS nor the surviving entity having a class of common shares listed on the NYSE, NYSE Amex, or NASDAQ or the acquisition of beneficial ownership of its stock entitling a person to exercise more than 50% of the total voting power of all our stock entitled to vote generally in election of directors. The special optional redemption price is $25.00 per share, plus any accrued and unpaid dividends (whether or not declared) to, but not including, the date of redemption.

Upon the occurrence of a change of control, holders will have the right (unless the Company has elected to exercise its special optional redemption right to redeem their Series A Preferred Stock) to convert some or all of such holder’s Series A Preferred Stock into a number of shares of Class A common stock, par value $0.01 per share, equal to the lesser of:

•the quotient obtained by dividing (i) the sum of the $25.00 liquidation preference plus the amount of any accrued and unpaid dividends (whether or not declared) to, but not including, the change of control conversion date (unless the change of control conversion date is after a record date for a Series A Preferred Stock dividend payment and prior to the corresponding Series A Preferred Stock dividend payment date, in which case no additional amount for such accrued and unpaid dividend will be included in this sum) by (ii) the Common Stock Price; and

• 1.46929 (i.e., the Share Cap);

subject, in each case, to certain adjustments and provisions for the receipt of alternative consideration of equivalent value as described in the prospectus supplement for the Series A Preferred Stock.

On June 25, 2018, QTS issued 3,162,500 shares of 6.50% Series B Cumulative Convertible Perpetual Preferred Stock (“Series B Preferred Stock”) with a liquidation preference of $100.00 per share, which included 412,500 shares the underwriters purchased pursuant to the exercise of their overallotment option in full. In connection with the issuance of the Series B Preferred Stock, on June 25, 2018 the Operating Partnership issued to the Company 3,162,500 Series B Preferred Units, which have economic terms that are substantially similar to the Company’s Series B Preferred Stock. The Series B Preferred Units were issued in exchange for the Company’s contribution of the net offering proceeds of the offering of the Series B Preferred Stock to the Operating Partnership.

Dividends on the Series B Preferred Stock are payable quarterly in arrears on or about the 15th day of each January, April, July and October. The Series B Preferred Stock is convertible by holders into shares of Class A common stock at any time at the then-prevailing conversion rate. The conversion rate as of December 31, 2020 is 2.1404 shares of the Company’s Class A common stock per share of Series B Preferred Stock. The Series B Preferred Stock does not have a stated maturity date. Upon liquidation, dissolution or winding up, the Series B Preferred Stock will rank senior to common stock and pari passu with the Series A Preferred Stock with respect to the payment of distributions and other amounts. The Series B Preferred Stock is not

redeemable by the Company. At any time on or after July 20, 2023, the Company may at its option cause all (but not less than all) outstanding shares of the Series B Preferred Stock to be automatically converted into the Company’s Class A common stock at the then-prevailing conversion rate if the closing sale price of the Company’s Class A common stock is equal to or exceeds 150% of the then-prevailing conversion price for at least 20 trading days in a period of 30 consecutive trading days, including the last trading day of such 30-day period, ending on the trading day prior to the issuance of a press release announcing the mandatory conversion.

If a holder converts its shares of Series B Preferred Stock at any time beginning at the opening of business on the trading day immediately following the effective date of a fundamental change (as described in the prospectus supplement) and ending at the close of business on the 30th trading day immediately following such effective date, the holder will automatically receive a number of shares of the Company’s Class A common stock equal to the greater of:

•the sum of (i) a number of shares of the Company’s Class A common stock, as may be adjusted, as described in the Articles Supplementary for the 6.50% Series B Cumulative Convertible Perpetual Preferred Stock filed with the State Department of Assessments and Taxation of Maryland on June 22, 2018 (the “Articles Supplementary”) and (ii) the make-whole premium described in the Articles Supplementary; and

•a number of shares of the Company's Class A common stock equal to the lesser of (i) the liquidation preference divided by the average of the daily volume weighted average prices of the Company's Class A common stock for ten days preceding the effective date of a fundamental change and (ii) 5.1020 (subject to adjustment).

QTS Realty Trust, Inc. Employee Stock Purchase Plan

In June 2015, we established the QTS Realty Trust, Inc. Employee Stock Purchase Plan (the “2015 Plan”) to give eligible employees the opportunity to purchase, through payroll deductions, shares of our Class A common stock in the open market by an independent broker with the Company paying brokerage commissions and fees associated with such share purchases. The 2015 Plan became effective July 1, 2015. We reserved 250,000 shares of our Class A common stock for purchase under the 2015 Plan, which were registered pursuant to a registration statement on Form S-8 filed on June 17, 2015.

On May 4, 2017, our stockholders approved the 2017 Amended and Restated QTS Realty Trust, Inc. Employee Stock Purchase Plan (the “2017 Plan”). The 2017 Plan became effective July 1, 2017 and is administered by the compensation committee (the “Compensation Committee”) of the board of directors (or by a committee of one or more persons appointed by it or the board of directors). The 2017 Plan permits participants to purchase our Class A common stock at a discount of up to 10% (as determined by the Compensation Committee). Employees of our Company and our majority-owned subsidiaries who have been employed for at least thirty days and who perform at least thirty hours of service per week for our Company are eligible to participate in the 2017 Plan, excluding any employee who, at any time during which the payroll deductions are made on behalf of the participating employees to purchase stock, owns shares representing five percent or more of the total combined voting power or value of all classes of shares of our Company, or who is a Section 16 officer. Under the 2017 Plan, there are four purchase periods per year, and participants may deduct a minimum of $20 per paycheck and a maximum of $1,000 per paycheck towards the purchase of shares. Shares purchased under the 2017 Plan are subject to a one-year holding period following the purchase date, during which they may not be sold or transferred. We reserved 239,989 shares of our Class A common stock, subject to certain adjustments, for purchase under the 2017 Plan, which were registered pursuant to a registration statement on Form S-8 originally filed on June 17, 2015 and amended on June 30, 2017.

Effective February 1, 2020, the 2017 Plan was further amended and restated to, among other things, provide that employees of our Company and our majority-owned subsidiaries who have been employed for at least thirty days and who are regular full-time employees are eligible to participate in the 2017 Plan, excluding temporary or part-time employees and interns, any employee who, at any time during which the payroll deductions are made on behalf of the participating employees to purchase stock, owns shares representing five percent or more of the total combined voting power or value of all classes of shares of our Company, or any employee who is a Section 16 officer. In addition, such amendment and restatement provides that the $1,000 per paycheck limit on each participant’s purchase of shares assumes 24 pay periods per year and will be adjusted to the extent a participant is paid on a more frequent or infrequent basis.

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Related Party Transactions

12 Months Ended

Dec. 31, 2020

Related Party Transactions [Abstract]

Related Party Transactions

Related Party TransactionsAs described further in Note 7 'Investments in Unconsolidated Entity', during the three months ended March 31, 2019, we formed an unconsolidated entity with Alinda, an infrastructure investment firm. We contributed a hyperscale data center

under development in Manassas, Virginia to the entity. The facility, and the previously executed operating lease to a global cloud-based software company pursuant to a 10-year lease agreement, was contributed in exchange for cash and noncash consideration in the form of equity interest in the entity that was measured at fair value pursuant to ASC Topic 820. Alinda and us each own a 50% interest in the entity.

Under the unconsolidated entity operating agreement, we serve as the entity’s operating member, subject to authority and oversight of a board appointed by us and Alinda, and separately we serve as manager and developer of the facility in exchange for management and development fees. During the years ended December 31, 2020 and 2019, we received $0.9 million and $0.6 million in development fees from the unconsolidated entity, respectively, as well as $0.8 million and $0.6 million in management fees from the unconsolidated entity, respectively.

In addition, we periodically execute transactions with entities affiliated with our Chairman and Chief Executive Officer. Such transactions include automobile, furniture and equipment purchases as well as building operating lease payments and receipts, and reimbursement for the use of a private aircraft service by our officers and directors.

The transactions which occurred during the years ended December 31, 2020, 2019 and 2018 are outlined below (in thousands):

	For the Year Ended December 31,
	2020		2019		2018
Tax, utility, insurance and other reimbursement	$	694	$	967	$	724
Rent expense	1,027		1,014		1,014
Capital assets acquired	—		704		464
Total	$	1,721	$	2,685	$	2,202

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Employee Benefit Plan

12 Months Ended

Dec. 31, 2020

Postemployment Benefits [Abstract]

Employee Benefit Plan

Employee Benefit Plan

We sponsor a defined contribution 401(k) retirement plan covering all eligible employees.

Qualified employees may elect to contribute to the 401(k) Plan on a pre-tax or post-tax basis. The maximum amount of employee contribution is subject only to statutory limitations. Starting on January 1, 2015, the Company matched 50% of the first 6% of contributions made by employees. Since January 1, 2016, we have matched 100% of the first 1% of contributions and 50% of the next 5% of contributions made by employees. We contributed $2.6 million, $2.5 million and $2.5 million to the 401(k) Plan for the years ended December 31, 2020, 2019 and 2018, respectively.

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Noncontrolling Interest

12 Months Ended

Dec. 31, 2020

Noncontrolling Interest [Abstract]

Noncontrolling Interest

Noncontrolling Interest

Concurrently with the completion of the IPO, we consummated a series of transactions pursuant to which QTS became the sole general partner and majority owner of QualityTech, LP, which then became its operating partnership. The previous owners of QualityTech, LP retained 21.2% ownership of the Operating Partnership as of the date of the IPO.

Commencing at any time beginning November 1, 2014, at the election of the holders of the noncontrolling interest, the currently outstanding Class A units of the Operating Partnership are redeemable for cash or, at the election of the Company, Class A common stock of the Company on a one-for-one basis. As of December 31, 2020, the noncontrolling ownership interest percentage of QualityTech, LP was 9.2%.

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Earnings per share

12 Months Ended

Dec. 31, 2020

Earnings Per Share [Abstract]

Earnings per Share

Earnings per shareBasic income (loss) per share is calculated by dividing the net income (loss) attributable to common shares by the weighted average number of common shares outstanding during the period. Diluted income (loss) per share adjusts basic income per share for the effects of potentially dilutive common shares. Unvested restricted stock awards and our forward sale contracts described in Note 12 contain non-forfeitable rights to dividends and thus are participating securities and are included in the computation of basic earnings per share pursuant to the two-class method for all periods presented. The two-class method is an earnings allocation formula that treats a participating security as having rights to undistributed earnings that would otherwise have been available to common stockholders. Accordingly, service-based restricted stock awards and the forward sale contracts were included in the calculation of basic earnings per share using the two-class method for all periods presented to the extent outstanding during the period.

The computation of basic and diluted net income (loss) per share is as follows (in thousands, except per share data):

	Year Ended December 31,
	2020		2019		2018
Numerator:
Net income (loss)	$	14,576	$	31,665	$	(7,175)
(Income) loss attributable to noncontrolling interests	1,330		(374)		2,715
Preferred stock dividends	(28,180)		(28,180)		(16,666)
Earnings attributable to participating securities	(16,360)		(7,828)		(947)
Net loss available to common stockholders after allocation to participating securities	$	(28,634)	$	(4,717)	$	(22,073)
Denominator:
Weighted average shares outstanding - basic	60,717		54,837		50,433
Effect of Class O units, TSR units, FFO units and options to purchase Class A common stock on an "as if" converted basis	—		—		—
Weighted average shares outstanding - diluted	60,717		54,837		50,433
Basic net loss per share *	$	(0.47)	$	(0.09)	$	(0.44)
Diluted net loss per share *	$	(0.47)	$	(0.09)	$	(0.44)

*    Note: The calculations of basic and diluted net income (loss) per share above do not include the following number of Class A partnership units, Class O units, TSR units, FFO units and options to purchase common stock on an "as if" converted basis, and the effects of Series B Convertible preferred stock on an “as if” converted basis as their respective inclusions would have been antidilutive:

	Year Ended December 31,
	2020	2019	2018
Class A Partnership units	6,648	6,671	6,653
Class O units, TSR units, FFO units and options to purchase common stock on an "as if" converted basis	1,118	518	350
Series B Convertible preferred stock on an "as if" converted basis	6,778	6,729	3,484

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Contracts with Customers

12 Months Ended

Dec. 31, 2020

Revenue from Contract with Customer [Abstract]

Contracts with Customers

Contracts with Customers

Future minimum payments to be received under non-cancelable customer contracts including both lease rental revenue components and non-lease revenue components that are accounted for as a combined lease component in accordance with ASC Topic 842 which is discussed in Note 2 above (inclusive of payments for contracts which have not yet commenced, and exclusive of variable lease revenue such as recoveries of operating costs from customers) are as follows for the years ending December 31 (in thousands):

Year Ended December 31,
2021	$	435,906
2022	359,860
2023	263,413
2024	214,215
2025	165,002
Thereafter	493,839
Total	$	1,932,235

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Fair Value of Financial Instruments

12 Months Ended

Dec. 31, 2020

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

Fair Value of Financial Instruments

ASC Topic 825, Financial Instruments, requires disclosure of fair value information about financial instruments, whether or not recognized in the consolidated balance sheets, for which it is practicable to estimate that value. In cases where quoted market prices are not available, fair values are based upon the application of discount rates to estimated future cash flows based upon market yields or by using other valuation methodologies. Considerable judgment is necessary to interpret market data and develop estimated fair value. Accordingly, fair values are not necessarily indicative of the amounts we could realize on disposition of the financial instruments. The use of different market assumptions and/or estimation methodologies may have a material effect on estimated fair value amounts.

Short-term instruments: The carrying amounts of cash and cash equivalents and restricted cash approximate fair value.

Derivative Contracts:

Interest rate swaps

Currently, we use interest rate swaps to manage our interest rate risk. The valuation of these instruments is determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves. The fair values of interest rate swaps are determined using the market standard methodology of netting the discounted future fixed cash receipts (or payments) and the discounted expected variable cash payments (or receipts). The variable cash payments (or receipts) are based on an expectation of future interest rates (forward curves) derived from observable market interest rate curves. To comply with the provisions of fair value accounting guidance, we incorporate credit valuation adjustments to appropriately reflect both our own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of our derivative contracts for the effect of nonperformance risk, we have considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts, and guarantees.

Although we have determined that the majority of the inputs used to value our derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with our derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by us and our counterparties. However, as of December 31, 2020, we assessed the significance of the impact of the credit valuation adjustments on the overall valuation of our derivative positions and determined that the credit valuation adjustments are not significant to the overall valuation of our derivatives. As a result, we have determined that our derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy. We do not have any fair value measurements on a recurring basis using significant unobservable inputs (Level 3) as of December 31, 2020 or December 31, 2019.

Power Purchase Agreements

In March 2019, we began using energy hedges to manage risk related to energy prices. The inputs used to value the derivatives primarily fall within Level 2 of the fair value hierarchy, and valuation of these instruments is determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each contract. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including futures curves. The fair values of the energy hedges are determined using the market standard methodology of netting the discounted future fixed cash receipts (or payments) and the discounted expected variable cash payments (or receipts). The variable cash payments (or receipts) are based on an expectation of future energy rates (forward curves) derived from observable market futures curves. To comply with the provisions of fair value accounting guidance, we incorporate credit valuation adjustments to appropriately reflect both our own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of our derivative contracts for the effect of nonperformance risk, we have considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts, and guarantees.

Sale of assets: During the year ended December 31, 2019, we recognized a gain on the sale of real estate assets that is discussed in detail in Note 7. In order to determine fair value of the noncash equity consideration received for the sale of the assets, we utilized estimation models to derive the fair value of the equity interest received in the transaction. These estimation models consisted of generally acceptable real estate valuation models as well as discounted cash flow analysis that

included Level 3 inputs including market rents, discount rates, expected occupancy and estimates of additional capital expenditures, and capitalization rates derived from market data.

Unsecured Credit facility, Term Loan D and 3.875% Senior Notes: As market interest rates have fluctuated compared to contracted interest rates, the fair value of our unsecured credit facility approximated the carrying value of the credit facility less the fair value of the interest rate swap liability. Our Term Loan D did not have interest rates which were materially different than current market conditions and therefore, the fair value approximated the carrying value. The fair value of our 3.875% Senior Notes was estimated using Level 2 “significant other observable inputs,” primarily based on quoted market prices for the same or similar issuances. At December 31, 2020, the fair value of the 3.875% Senior Notes was approximately $508.8 million.

Other debt instruments: The fair value of our other debt instruments (including finance leases and mortgage notes payable) were estimated in the same manner as the unsecured credit facility above. Similarly, each of these instruments did not have interest rates which were materially different than current market conditions and therefore, the fair value of each instrument approximated the respective carrying values.

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Quarterly Financial Information

12 Months Ended

Dec. 31, 2020

Quarterly Financial Information Disclosure [Abstract]

Quarterly Financial Information

Quarterly Financial Information (unaudited)

The tables below reflect the selected quarterly information for the years ended December 31, 2020 and 2019 (in thousands except share data):

	Three Months Ended
	December 31,		September 30,		June 30,		March 31,
2020
Revenues	$	143,897	$	137,538	$	131,640	$	126,292
Operating income	17,151		15,016		17,859		15,631
Net income (loss)	(10,660)		6,907		10,209		8,120
Net income (loss) attributable to QTS Realty Trust, Inc.	(8,922)		6,925		9,892		8,010
Net income (loss) attributable to common stockholders	(15,967)		(120)		2,847		965
Net loss per share attributable to common shares - basic	(0.33)		(0.07)		(0.05)		(0.01)
Net loss per share attributable to common shares - diluted	(0.33)		(0.07)		(0.05)		(0.01)
2019
Revenues	$	123,707	$	125,255	$	119,167	$	112,689
Operating income	4,218		13,606		14,598		28,734
Net income (loss)	(3,606)		6,588		7,535		21,148
Net income (loss) attributable to QTS Realty Trust, Inc.	(2,511)		6,637		7,483		19,558
Net income (loss) attributable to common stockholders	(9,556)		(408)		438		12,513
Net income (loss) per share attributable to common shares - basic	(0.20)		(0.05)		(0.03)		0.20
Net income (loss) per share attributable to common shares - diluted	(0.20)		(0.05)		(0.03)		0.20

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Subsequent Events

12 Months Ended

Dec. 31, 2020

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

In January 2021, we paid our regular quarterly cash dividends on our common stock, Series A Preferred Stock and Series B Preferred Stock. See the ‘Dividends and Distributions’ section of Note 12 for additional details.

Subsequent to December 31, 2020, the Company authorized the following dividends:

•On February 3, 2021, the Company announced that its board of directors authorized payment of a regular quarterly cash dividend of $0.50 per common share, payable on April 6, 2021, to stockholders of record as of the close of business on March 19, 2021.

•On February 3, 2021, the Company announced that its board of directors authorized payment of a regular quarterly cash dividend of approximately $0.45 per share on its Series A Preferred Stock, payable on April 15, 2021, to holders of Series A Preferred Stock of record as of the close of business on March 31, 2021.•On February 3, 2021, the Company announced that its board of directors authorized payment of a regular quarterly cash dividend of approximately $1.63 per share on its Series B Preferred Stock, payable on April 15, 2021, to holders of Series B Preferred Stock of record as of the close of business on March 31, 2021.

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Schedule II - Valuation and Qualifying Accounts

12 Months Ended

Dec. 31, 2020

SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract]

Schedule II - Valuation and Qualifying Accounts

QTS REALTY TRUST, INC.

SCHEDULE II – VALUATION AND QUALIFYING ACCOUNTS

December 31, 2020

Year Ended December 31, (dollars in thousands)	Balance at beginning of period		Charge to expenses		Additions/ (Deductions)		Balance at end of period
Allowance for uncollectible receivables
2020	$	2,279	$	5,051	$	(1,891)	$	5,439
2019	3,764		2,859		(4,344)		2,279
2018	11,453		(2,275)		(5,414)		3,764
Valuation allowance for deferred tax assets
2020	$	24,747	$	1,877	$	—	$	26,624
2019	8,361		16,386		—		24,747
2018	713		7,648		—		8,361

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Schedule III - Real Estate Investments

12 Months Ended

Dec. 31, 2020

SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation Disclosure [Abstract]

Schedule III - Real Estate Investments

QTS REALTY TRUST, INC.

SCHEDULE III – REAL ESTATE INVESTMENTS

December 31, 2020

	Initial Costs						Costs Capitalized Subsequent to Acquisition							Gross Carrying Amount
As of 12/31/2020 (dollars in thousands)	Land		Buildings and Improvements		Construction in Progress		Land		Buildings and Improvements			Construction in Progress		Land		Buildings and Improvements		Construction in Progress		Accumulated Depreciation and Amortization (1)		Year of Acquisition
Property Location
Owned Properties
Ashburn, Virginia (DC-1)	$	16,476	$	—	$	—	$	—	$	371,725		$	13,653	$	16,476	$	371,725	$	13,653	$	(23,423)	2017
Ashburn, Virginia (DC-2)	—		—		20,603		—		—			109,254		—		—		129,857		—		2019
Ashburn, Virginia (DC-3) (2)	—		—		35,198		—		—			7,194		—		—		42,392		—		2017
Atlanta, Georgia (DC-1)	2,078		35,473		2,209		11,212		538,751			991		13,289		574,224		3,200		(221,800)		2006
Atlanta, Georgia (DC-2)	10,569		—		—		—		124,864			124,252		10,569		124,864		124,252		(2,737)		2017
Atlanta, Georgia Land (2)	23,572		—		52,754		7,726		1,054			10,866		31,298		1,054		63,619		(449)		2017, 2019, 2020
Chicago, Illinois	—		—		17,764		9,400		250,335			86,353		9,400		250,335		104,117		(34,134)		2014
Dulles, Virginia	3,154		29,583		—		—		24,740		(3)	4,148		3,154		54,323		4,148		(17,191)		2017
Eemshaven, Netherlands	—		—		29,915		5,366		21,712			17,616		5,366		21,712		47,531		(1,017)		2019
Fort Worth, Texas	136		610		48,984		8,943		123,444			(47,920)		9,079		124,054		1,064		(8,967)		2016
Groningen, Netherlands	1,743		8,640		—		153		2,566			3,730		1,896		11,206		3,730		(1,456)		2019
Hillsboro, Oregon	—		—		25,657		18,414		34,594			52,733		18,414		34,594		78,390		(880)		2017
Irving, Texas	—		5,808		—		8,606		386,467			99,591		8,606		392,275		99,591		(81,213)		2013
Lenexa, Kansas	400		3,100		—		37		781			—		437		3,881		—		(703)		2011
Manassas, Virginia (DC-1) (2)	—		—		27,484		—		25			33,586		—		25		61,070		(2)		2018
Manassas, Virginia (DC-2)	—		—		5,911		—		—			92		—		—		6,003		—		2018
Miami, Florida	1,777		6,955		—		—		24,934			577		1,777		31,889		577		(13,796)		2008
Phoenix, Arizona (2)	—		—		24,668		—		—			13,061		—		—		37,729		—		2017
Piscataway, New Jersey	7,466		80,366		13,900		—		41,810			16,501		7,466		122,176		30,401		(16,600)		2016
Princeton, New Jersey	20,700		32,126		—		—		3,135			5		20,700		35,261		5		(6,319)		2014
Richmond, Virginia	2,000		11,200		7,029		180		222,727			113,548		2,180		233,927		120,577		(84,389)		2010 & 2019
Sacramento, California	1,481		52,753		—		—		13,546			12		1,481		66,299		12		(16,325)		2012
San Antonio, Texas (2)	—		—		37,167		—		—			3,213		—		—		40,380		—		2020
Santa Clara, California	—		15,838		—		—		101,505			9,385		—		117,343		9,385		(52,742)		2007
Suwanee, Georgia (Atlanta-Suwanee)	1,395		29,802		—		2,126		154,665			6,701		3,521		184,467		6,701		(90,323)		2005
	$	92,947	$	312,254	$	349,243	$	72,162	$	2,443,381		$	679,142	$	165,109	$	2,755,635	$	1,028,385	$	(674,468)
Leased Properties
Jersey City, New Jersey	—		1,985		—		—		28,178			223		—		30,163		223		(15,455)		2006
Leased Facilities acquired in 2015	—		59,087		—		—		(6,491)			2		—		52,596		2		(12,513)		2015
Overland Park, Kansas	—		—		—		—		866			154		—		866		154		(508)
	$	—	$	61,072	$	—	$	—	$	22,553		$	379	$	—	$	83,625	$	379	$	(28,476)
	$	92,947	$	373,326	$	349,243	$	72,162	$	2,465,934		$	679,521	$	165,109	$	2,839,260	$	1,028,764	$	(702,944)

(1)See Note 2 - ‘Summary of Significant Accounting Policies’ for information regarding asset lives on which depreciation and amortization are calculated.

(2)Represent land purchases. Land acquisition costs, as well as subsequent development costs, are included within construction in progress until development on the land has ended and the asset is ready for its intended use.

(3)Includes the effects of an impairment recognized during the year ended December 31, 2019 of certain data center assets and equipment in one of our Dulles, Virginia data centers. The impairment resulted in a reduction of costs capitalized of $24.9 million as well as a reduction of accumulated depreciation of $13.5 million during the year ended December 31, 2019. See the Impairment of Long-Lived Assets, Intangible Assets and Goodwill section of Note 2 ‘Summary of Significant Accounting Policies’ for additional information.

The aggregate gross cost of the Company’s properties for U.S. federal income tax purposes was $4.22 billion (unaudited) as of December 31, 2020.

The following table reconciles the historical cost and accumulated depreciation for the years ended December 31, 2020, 2019 and 2018 (in thousands):

	Year Ended December 31,
	2020		2019		2018
Property
Balance, beginning of period	$	3,230,428	$	2,812,856	$	2,357,322
Disposals	(7,821)		(41,363)		(43,616)
Additions (acquisitions and improvements)	810,527		458,935		499,150
Balance, end of period	$	4,033,134	$	3,230,428	$	2,812,856
Accumulated depreciation
Balance, beginning of period	$	(558,560)	$	(467,644)	$	(394,823)
Disposals	6,577		28,172		30,139
Additions (depreciation and amortization expense)	(150,961)		(119,088)		(102,960)
Balance, end of period	$	(702,944)	$	(558,560)	$	(467,644)

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Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2020

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation – The accompanying financial statements have been prepared by management in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included.

References to “QTS” mean QTS Realty Trust, Inc. and its controlled subsidiaries and references to the “Operating Partnership” mean QualityTech, LP and its controlled subsidiaries.

The Operating Partnership meets the definition and criteria of a variable interest entity (“VIE”) in accordance with Accounting Standards Codification ("ASC") Topic 810 Consolidation, and the Company is the primary beneficiary of the VIE. As discussed below, the Company’s only material asset is its ownership interest in the Operating Partnership, and consequently, all of its assets and liabilities represent those assets and liabilities of the Operating Partnership. The Company’s debt is an obligation of the Operating Partnership where the creditors may have recourse, under certain circumstances, against the credit of the Company.

QTS is the sole general partner of the Operating Partnership, and its only material asset consists of its ownership interest in the Operating Partnership. Management operates QTS and the Operating Partnership as one business. The management of QTS consists of the same employees as the management of the Operating Partnership. QTS does not conduct business itself, other than acting as the sole general partner of the Operating Partnership and issuing public equity from time to time. QTS has not issued or guaranteed any indebtedness. Except for net proceeds from public equity issuances by QTS, which are contributed to the Operating Partnership in exchange for units of limited partnership interest of the Operating Partnership, the Operating Partnership generates all remaining capital required by the business through its operations, the direct or indirect incurrence of indebtedness, and the issuance of partnership units. Therefore, as general partner with control of the Operating Partnership, QTS consolidates the Operating Partnership for financial reporting purposes.

Obligations under the 3.875% Senior Notes due 2028 and the unsecured credit facility, both discussed in Note 8, are fully, unconditionally, and jointly and severally guaranteed by the Operating Partnership’s existing subsidiaries (other than certain foreign subsidiaries and receivables entities) and future subsidiaries that guarantee any indebtedness of QTS Realty Trust, Inc., the Operating Partnership, QTS Finance Corporation (the co-issuer of the 3.875% Senior Notes due 2028) or any subsidiary guarantor. The indenture governing the 3.875% Senior Notes due 2028 restricts the ability of the Operating Partnership to make distributions to QTS, subject to certain exceptions, including distributions required in order for QTS to maintain its status as a real estate investment trust under the Internal Revenue Code of 1986, as amended (the “Code”).

The consolidated financial statements of QTS Realty Trust, Inc. include the accounts of QTS Realty Trust, Inc. and its majority owned controlled subsidiaries including the Operating Partnership as well as unconsolidated entities accounted for using equity method accounting. This includes the operating results of the Operating Partnership for all periods presented.

Use of Estimates

Use of Estimates – The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include the useful lives of fixed assets, allowances for doubtful accounts and deferred tax assets and the valuation of derivatives, real estate assets, acquired intangible assets and certain accruals. The impacts of the COVID-19 pandemic increases uncertainty, which has reduced our ability to use past results to estimate future performance. Accordingly, our estimates and judgments may be subject to greater volatility than has been the case in the past.

Principles of Consolidation

Principles of Consolidation – The consolidated financial statements of QTS Realty Trust, Inc. include the accounts of QTS Realty Trust, Inc. and its controlled subsidiaries. All significant intercompany accounts and transactions have been eliminated in the financial statements.

We evaluate our investments in less than wholly owned entities to determine whether they should be recorded on a consolidated basis. The percentage of ownership interest in the entity, an evaluation of control and whether a VIE exists are all considered in our consolidation assessment. Investments in real estate entities which we have the ability to exercise significant influence, but do not have financial or operating control, are accounted for using the equity method of accounting. Accordingly, our share of the earnings or losses of these entities is included in consolidated net income (loss).

Variable Interest Entities (VIEs)

Variable Interest Entities (VIEs) – We determine whether an entity is a VIE and, if so, whether it should be consolidated by utilizing judgments and estimates that are inherently subjective. The determination of whether an entity in which we hold a direct or indirect variable interest is a VIE is based on several factors, including whether the entity’s total equity investment at risk upon inception is sufficient to finance the entity’s activities without additional subordinated financial support. We make judgments regarding the sufficiency of the equity at risk based first on a qualitative analysis, and then a quantitative analysis, if necessary.

We analyze any investments in VIEs to determine if we are the primary beneficiary. In evaluating whether we are the primary beneficiary, we evaluate our direct and indirect economic interests in the entity. Determining which reporting entity, if any, is the primary beneficiary of a VIE is primarily a qualitative approach focused on identifying which reporting entity has both (1) the power to direct the activities of a VIE that most significantly impact such entity’s economic performance and (2) the obligation to absorb losses or the right to receive benefits from such entity that could potentially be significant to such entity. Performance of that analysis requires the exercise of judgment.

We consider a variety of factors in identifying the entity that holds the power to direct matters that most significantly impact the VIE’s economic performance including, but not limited to, the ability to direct financing, leasing, construction and other operating decisions and activities. In addition, we consider the rights of other investors to participate in those decisions, to replace the manager and to sell or liquidate the entity. We determine whether we are the primary beneficiary of a VIE at the time we become involved with a variable interest entity and reconsider that conclusion upon a reconsideration event. As of December 31, 2020, we had one unconsolidated entity that was considered a VIE for which we are not the primary beneficiary. Our maximum exposure to losses associated with this VIE is limited to our net investment, which was approximately $22.6 million as of December 31, 2020.

Real Estate Assets

Real Estate Assets – Real estate assets are reported at cost. All capital improvements for the income-producing properties that extend their useful lives are capitalized to individual property improvements and depreciated over their estimated useful lives. Depreciation for real estate assets is generally provided on a straight-line basis over 40 years from the date the property was placed in service. Property improvements are depreciated on a straight-line basis over the life of the respective improvement ranging from 20 to 40 years from the date the components were placed in service. Leasehold improvements are depreciated over the lesser of 20 years or through the end of the respective life of the lease. Repairs and maintenance costs are expensed as incurred. For the year ended December 31, 2020, depreciation expense related to real estate assets and non-real estate assets was $147.8 million and $13.4 million, respectively, for a total of $161.2 million. For the year ended December 31, 2019, depreciation expense related to real estate assets and non-real estate assets was $118.9 million and $11.9 million, respectively, for a total of $130.8 million. For the year ended December 31, 2018, depreciation expense related to real estate assets and non-real estate assets was $101.2 million and $12.3 million, respectively, for a total of $113.5 million. We capitalize certain real estate development costs, including internal costs incurred in connection with development. The capitalization of costs during the construction period (including interest and related loan fees, property taxes and other direct and indirect project costs) begins when development efforts commence and ends when the asset is ready for its intended use. The capitalization of internal costs increases construction in progress recognized during development of the related property and the cost of the real estate asset when placed into service and such costs are depreciated over its estimated useful life. Capitalization of such costs, excluding interest, aggregated to $18.4 million, $17.8 million and $17.4 million for the years ended December 31, 2020, 2019 and 2018 respectively. Interest is capitalized during the period of development by applying our weighted average effective borrowing rate to the actual development and other capitalized costs paid during the construction period. Interest is capitalized until the property is ready for its intended use. Interest costs capitalized totaled $30.2 million, $33.2 million and $26.8 million for the years ended December 31, 2020, 2019 and 2018, respectively.

Acquisitions and Sales

Acquisitions and Sales – Acquisitions of real estate and other entities are either accounted for as asset acquisitions or business combinations depending on facts and circumstances. When substantially all of the fair value of gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets, the transaction is accounted for as an asset acquisition. In an asset acquisition, the purchase price paid for assets acquired is allocated between identified tangible and intangible assets acquired based on relative fair value. Transaction costs associated with asset acquisitions are capitalized. When substantially all of the fair value of assets acquired is not concentrated in a group of similar identifiable assets, the set of assets will generally be considered a business. When accounting for business combinations, purchase accounting is applied to the assets and liabilities related to all real estate investments acquired in accordance with the accounting requirements of ASC Topic 805, Business Combinations, which requires the recording of net assets of acquired businesses at fair value. The fair value of the consideration transferred is assigned to the acquired tangible assets, consisting primarily of land, construction in progress, building and improvements, and identified intangible assets and liabilities, consisting of the value of above-market and below-market leases, value of in-place leases, value of customer relationships, and finance leases. The excess of the fair value of liabilities assumed, common stock issued and cash paid over the fair value of identifiable assets acquired is allocated to goodwill, which is not amortized. Transaction costs associated with business combinations are expensed as incurred.

In developing estimates of fair value of acquired assets and assumed liabilities, management analyzes a variety of factors including market data, estimated future cash flows of the acquired operations, industry growth rates, current replacement cost for fixed assets and market rate assumptions for contractual obligations. Such a valuation requires management to make significant estimates and assumptions, particularly with respect to the intangible assets.

Acquired in-place leases are amortized as amortization expense on a straight-line basis over the remaining life of the underlying leases. Acquired customer relationships are amortized as amortization expense on a straight-line basis over the expected life of the customer relationship. These amortization expenses are accounted for as real estate amortization expense. Above or below market leases are amortized on a straight-line basis over their expected lives and are recorded as a reduction to or increase in rental revenue when we are the lessor as well as a reduction to or increase in rent expense over the remaining lease terms when we are the lessee.

We account for the sale of assets to non-customers under Financial Accounting Standards Board (“FASB”) ASU No. 2017-5, Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20), which provides for recognition or derecognition based on transfer of ownership. During the year ended December 31, 2019, we sold our Manassas facility to an unconsolidated entity in exchange for cash consideration and noncash consideration in the form of an equity interest in the unconsolidated entity. After measuring the consideration received at fair value, we recognized a $13.4 million gain on sale of real estate, net of approximately $5.8 million of transaction costs, associated with our contribution of certain assets in our Manassas facility to the unconsolidated entity. Substantially all of the fair value of the assets contributed to the entity was concentrated in a group of similar identifiable assets and the sale of the assets were not to a customer, therefore the transaction was accounted for as an asset sale. The gain on sale of real estate is included within the “Gain on sale of real estate, net” line item of the consolidated statements of operations. In addition, during the year ended December 31, 2019, we recognized a $1.4 million gain on sale of certain land and improvements near our Atlanta (DC-1) (formerly known as Atlanta-Metro) facility which is included within the “Gain on sale of real estate, net” line item of the consolidated statements of operations. During the year ended December 31, 2018, we recognized a $7.0 million net loss on sale of equipment associated with our strategic growth plan which was included within the “Restructuring” line item of the consolidated statements of operations.

Impairment of Long-Lived Assets, Intangible Assets and Goodwill

Impairment of Long-Lived Assets, Intangible Assets and Goodwill – We review our long-lived assets, intangible assets and equity method investments for impairment when events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. Recoverability of assets to be held and used is measured by comparison of the carrying amount to the future net cash flows, undiscounted and without interest, expected to be generated by the asset group. If the net carrying value of the asset group exceeds the value of the undiscounted cash flows, the fair value of the asset group is assessed and may be considered impaired. An impairment loss is recognized based on the excess of the carrying amount of the impaired asset over its fair value. No impairment losses were recorded for the year ended December 31, 2020. For the year ended December 31, 2019, we recognized an $11.5 million impairment loss related to the write-down of certain data center assets and equipment in one of our Dulles, Virginia data centers. The Dulles campus has two data center buildings and we initiated a plan in the fourth quarter of 2019 to abandon one of the buildings and relocate customers from the smaller and older facility being abandoned to the newer facility in an effort to better optimize our operating cost structure. The impairment loss was included within the “Transaction, integration and impairment costs” line item of the consolidated statements of operations. For the year ended December 31, 2018, we recognized $8.8 million of impairment losses related to certain product-related assets, which was included in the “Restructuring” line item of the consolidated statements of operations.

The fair value of goodwill is the consideration transferred in a business combination which is not allocable to identifiable intangible and tangible assets. Goodwill is subject to at least an annual assessment for impairment. In connection with the goodwill impairment evaluation that we performed as of October 1, 2020, we determined qualitatively that it is not more likely than not that the fair value of our one reporting unit was less than the carrying amount, thus we did not perform a quantitative analysis. As we continue to operate and assess our goodwill at the consolidated level for our single reporting unit and our market capitalization significantly exceeds our net asset value, further analysis was not deemed necessary as of December 31, 2020.

Cash and Cash Equivalents

Cash and Cash Equivalents – We consider all demand deposits and money market accounts purchased with a maturity date of three months or less at the date of purchase to be cash equivalents. Our account balances at one or more institutions periodically exceed the Federal Deposit Insurance Corporation (“FDIC”) insurance coverage and, as a result, there is concentration of credit risk related to amounts on deposit in excess of FDIC coverage. We mitigate this risk by depositing a majority of our funds with several major financial institutions. We also have not experienced any losses and do not believe that the risk is significant.

Deferred Costs

Deferred Costs – Deferred costs, net, on our balance sheets include both deferred financing costs and deferred leasing costs.

Deferred financing costs represent fees and other costs incurred in connection with obtaining debt and are amortized over the term of the loan and are included in interest expense. Debt issuance costs related to revolving debt arrangements are deferred and presented as assets on the balance sheet; however, all other debt issuance costs are recorded as a direct offset to the associated liability. Amortization of debt issuance costs, including those costs presented as offsets to the associated liability in the consolidated balance sheets, were $4.1 million, $3.9 million and $3.9 million for the years ended December 31, 2020, 2019 and 2018, respectively. During the year ended December 31, 2020, we wrote off unamortized financing costs of $3.7 million primarily in connection with the early extinguishment of the $400 million 4.750% senior notes due 2025. During the year ended December 31, 2019, we wrote off unamortized financing costs of $1.5 million in connection with the modification of our unsecured credit facility in October 2019 whereby we added a seven year additional term loan, increased capacity of the revolving facility, extended maturity dates as well as decreased the interest rates. During the year ended December 31, 2018, we wrote off unamortized financing costs of $0.6 million in connection with the modification of our unsecured credit facility in November 2018 whereby we decreased the interest rates, modified and/or eliminated certain covenants and extended the term for an additional year.

Deferred financing costs presented as assets on the balance sheets related to revolving debt arrangements, net of accumulated amortization are as follows:

(dollars in thousands)	December 31, 2020		December 31, 2019
Deferred financing costs	$	13,786	$	13,776
Accumulated amortization	(7,752)		(5,743)
Deferred financing costs, net	$	6,034	$	8,033

Deferred financing costs presented as offsets to the associated liabilities on the balance sheets related to fixed debt arrangements, net of accumulated amortization, are as follows:

(dollars in thousands)	December 31, 2020		December 31, 2019
Deferred financing costs	$	19,327	$	15,777
Accumulated amortization	(4,765)		(4,937)
Deferred financing costs, net	$	14,562	$	10,840

Initial direct costs, or deferred leasing costs, include commissions paid to third parties, including brokers, leasing and referral agents, and internal sales commissions paid to employees for successful execution of lease agreements and are accounted for pursuant to ASC Topic 842, Leases. These costs are incurred when we execute lease agreements and represent only incremental costs that would not have been incurred if the lease agreement had not been executed. To a lesser extent, we incur the same incremental costs to obtain managed services contracts with customers that are accounted for pursuant to ASC Topic 606, Revenue from Contracts with Customers. Because the framework of accounting for these costs and the underlying nature of the costs are the same for our revenue and lease contracts, the costs are presented on a combined basis within our financial statements and within the below table. Both revenue and leasing commissions are capitalized and generally amortized over the term of the related leases or the expected term of the contract using the straight-line method. If a customer lease terminates prior to the expiration of its initial term, any unamortized initial direct costs related to the lease are written off to amortization expense. Amortization of deferred leasing costs totaled $26.1 million, $24.2 million and $21.3 million for the years ended December 31, 2020, 2019 and 2018, respectively. Deferred leasing costs, net of accumulated amortization are as follows:

(dollars in thousands)	December 31, 2020		December 31, 2019
Deferred leasing costs	$	101,480	$	77,178
Accumulated amortization	(43,825)		(32,848)
Deferred leasing costs, net	$	57,655	$	44,330

Revenue Recognition

Revenue Recognition – We derive our revenues from leases with customers for data center space which include lease components and nonlease revenue components, such as power, tenant recoveries, and managed services. We adopted ASC Topic 842, Leases, the new accounting standard for leases, effective January 1, 2019 using the modified retrospective approach. We have elected the available practical expedient under ASC Topic 842, Leases, to combine our nonlease revenue components that have the same pattern of transfer as the related operating lease component into a single combined lease component. The single combined component is accounted for under ASC Topic 842 if the lease component is the predominant component and is accounted for under ASC Topic 606 if the nonlease components are the predominant components. In our contracts, the single combined component is accounted for under ASC Topic 842 as the lease component is the predominant component.

A description of each of our disaggregated revenue streams is as follows:

Rental Revenue

Our leases with customers are classified as operating leases and rental revenue is recognized on a straight-line basis over the customer lease term. Occasionally, customer leases include options to extend or terminate the lease agreements. We do not include any of these extension or termination options in a customer’s lease term for lease classification purposes or recognizing rental revenue unless it is reasonably certain the customer will exercise these extension or termination options.

Rental revenue also includes revenue from power delivery on fixed power arrangements, whereby customers are billed and pay a fixed monthly fee per committed available amount of connected power. These fixed power arrangements require us to provide a series of distinct services and to stand ready to deliver the power over the contracted term which is co-terminus with the lease. Customer fixed power arrangements have the same pattern of transfer over the lease term as the lease component and are therefore combined with the lease component to form a single lease component that is recognized over the term of the lease on a straight-line basis.

In addition, rental revenue includes straight line rent. Straight line rent represents the difference in rents recognized during the period versus amounts contractually due pursuant to the underlying leases and is recorded as deferred rent receivable/payable in the consolidated balance sheets. For lease agreements that provide for scheduled rent increases, rental income is recognized on a straight-line basis over the non-cancellable term of the leases, which commences when control of the space has been provided to the customer. The amount of the straight-line rent receivable on the balance sheets included in rents and other receivables, net was $63.6 million and $38.7 million as of December 31, 2020 and December 31, 2019, respectively.

Rental revenue also includes amortization of set-up fees which are amortized over the term of the respective lease as discussed below in the "Deferred Income" section.

Variable Lease Revenue from Recoveries

Certain customer leases contain provisions under which customers reimburse us for power and cooling-related charges as well as a portion of the property’s real estate taxes, insurance and other operating expenses. Recoveries of power and cooling-related expenses relate specifically to our variable power arrangements, whereby customers pay variable monthly fees for the specific amount of power utilized at the current utility rates. Our performance obligation is to stand ready to deliver power over the life of the customer contract up to a contracted power capacity. Customers have the flexibility to increase or decrease the amount of power consumed, and therefore sub-metered power revenue is constrained at contract inception. The reimbursements are included in revenue as recoveries from customers and are recognized each month as the uncertainty related to the consideration is resolved (i.e. we provide power to our customers) and customers utilize the power. Reimbursement of real estate taxes, insurance, common area maintenance, or other operating expenses are accounted for as variable payments under lease guidance pursuant to the practical expedient and are recognized as revenue in the period that the expenses are recognized. Variable lease revenue from recoveries discussed above, including power, common area maintenance or other operating costs, have the same pattern of transfer over the lease term as the lease component and are therefore combined with the lease component to form a single lease component. Variable lease revenue from recoveries is included within the “rental” line item on the statements of operations.

Other Revenue

Other revenue primarily consists of revenue from our managed service offerings as well as revenue earned from partner channel, management and development fees. We, through our TRS, may provide use of our managed services to our customers on an individual or combined basis. In our managed services offering the TRS’s performance obligation is to provide services (e.g. cloud hosting, data backup, data storage or data center personnel labor hours) to facilitate a fully integrated information technology (“IT”) outsourcing environment over a contracted term. Although underlying services may vary, over the contracted term monthly service offerings are substantially the same and we account for the services as a series of distinct services in accordance with ASC Topic 606. Service fee revenue is recognized as the revenue is earned, which generally coincides with the services being provided. As we have the right to consideration from customers in an amount that corresponds directly with the value to the customer of the TRS’s performance of providing continuous services, we recognize monthly revenue for the amount invoiced.

With respect to the transaction price allocated to remaining performance obligations within our managed service contracts, we have elected to use the optional exemption provided by ASC Topic 606 whereby we are not required to estimate the total transaction price allocated to remaining performance obligations as we apply the “right-to-invoice” practical expedient. As described above, the nature of our performance obligation in these contracts is to provide monthly services that are substantially the same and accounted for as a series of distinct services. These contracts generally have a remaining term ranging from month-to-month to three years.

Management fees and other revenues are generally received from our unconsolidated entity properties as well as third parties. Management fee revenue is earned based on a contractual percentage of unconsolidated entity property revenue. Development fee revenue is earned on a contractual percentage of hard costs to develop a property. We recognize revenue for these services provided when earned based on the performance criteria in ASC Topic 606, with such revenue recorded in “Other” revenue on the consolidated statements of operations.

Allowance for Uncollectible Accounts Receivable

Allowance for Uncollectible Accounts Receivable – We record a provision for uncollectible accounts if a receivable balance relating to lease components from an individual contract is considered by management not to be probable of collection, and this provision is recorded as a reduction to leasing revenues. We also record a general provision of estimated uncollectible tenant receivables based on general probability of collection in accordance with ASC 450-20 Loss Contingencies. This provision is recorded as bad debt expense and recorded within the “Property Operating Costs” line item of the consolidated statements of operations. The aggregate allowance for doubtful accounts on the consolidated balance sheets was $5.4 million and $2.3 million as of December 31, 2020 and December 31, 2019, respectively.

Advance Rents and Security Deposits

Advance Rents and Security Deposits – Advance rents, typically prepayment of the following month’s rent, consist of payments received from customers prior to the time they are earned and are recognized as revenue in subsequent periods when earned. Security deposits are collected from customers at the lease origination and are generally refunded to customers upon lease expiration.

Deferred Income

Deferred Income – Deferred income generally results from non-refundable charges paid by the customer at lease inception to prepare their space for occupancy. We record this initial payment, commonly referred to as set-up fees, as a deferred income liability which amortizes into rental revenue over the term of the related lease on a straight-line basis.

Foreign Currency

Foreign Currency - The financial position of foreign subsidiaries whose functional currency is not the U.S. dollar is translated at the exchange rates in effect at the end of the period, while revenues and expenses are translated at average exchange rates during the period. Gains or losses from translation of foreign operations where the local currency is the functional currency are included as components of other comprehensive income (loss). Prior to February 2020, gains or losses from foreign currency transactions were included in determining net income (loss). In February 2020, we entered into a net investment hedge which resulted in gains or losses subsequently being recognized in Other Comprehensive Income (Loss).

Equity-based Compensation

Equity-based Compensation – Equity-based compensation costs are measured based upon their estimated fair value on the date of grant or modification and amortized ratably over their respective service periods. We have elected to account for forfeitures as they occur. Equity-based compensation expense was $27.0 million, $16.4 million, and $18.1 million for the years ended December 31, 2020, 2019 and 2018, respectively. Equity based compensation expense for the year ended December 31, 2020 includes $1.8 million of equity-based compensation expense associated with the revaluation and acceleration of equity awards related to an executive officer's retirement which is included within the "Transaction, integration, and impairment costs" line item of the consolidated statements of operations. Equity-based compensation expense for the year ended December 31, 2018 includes $3.1 million of equity-based compensation associated with the acceleration of equity awards related to certain employees impacted by the Company’s strategic growth plan which was included in the “Restructuring” expense line item on the consolidated statements of operations.

Segment Information

Segment Information – We manage our business as one operating segment and thus one reportable segment consisting of a portfolio of investments in multiple data centers.

Customer Concentrations

Customer Concentrations – During the year ended December 31, 2020, one of our customers exceeded 10% of total revenues, representing approximately 11.8% of total revenues for the year ended December 31, 2020.

As of December 31, 2020, two of our customers exceeded 5% of trade accounts receivable. In aggregate, these two customers accounted for approximately 45.0% of trade accounts receivable. One of these customers individually exceeded 10% of total trade accounts receivable representing 39.2% of total trade accounts receivable.

Distribution Policy

Distribution Policy

To satisfy the requirements to qualify for taxation as a REIT, and to avoid paying tax on our income, we intend to continue to make regular quarterly distributions of all, or substantially all, of our REIT taxable income (excluding net capital gains) to our stockholders.

All distributions will be made at the discretion of our board of directors and will depend on our historical and projected results of operations, liquidity and financial condition, our REIT qualification, our debt service requirements, operating expenses and capital expenditures, prohibitions and other restrictions under financing arrangements and applicable law and other factors as our board of directors may deem relevant from time to time. We anticipate that our estimated cash available for distribution will exceed the annual distribution requirements applicable to REITs and the amount necessary to avoid the payment of tax on undistributed income. However, under some circumstances, we may be required to make distributions in

excess of cash available for distribution in order to meet these distribution requirements and we may need to borrow funds to make certain distributions. If we borrow to fund distributions, our future interest costs would increase, thereby reducing our earnings and cash available for distribution from what they otherwise would have been.

The partnership agreement of the Operating Partnership requires the Operating Partnership to distribute at least quarterly 100% of our “available cash” (as defined in the partnership agreement) to the partners of the Operating Partnership, in accordance with the terms established for the class of partnership interests held by such partner. Furthermore, because QTS intends to continue to qualify as a REIT for tax purposes, QTS is required to make reasonable efforts to distribute available cash (a) to limited partners of the Operating Partnership so as to preclude any such distribution or portion thereof from being treated as part of a sale of property to the Operating Partnership by a limited partner under Section 707 of the Code or the regulations thereunder; provided, however, that neither of QTS nor the Operating Partnership shall have liability to a limited partner under any circumstances as a result of any distribution to a limited partner being so treated, and (b) to QTS, its general partner, in an amount sufficient to enable QTS to make distributions to its stockholders that will enable QTS to (1) satisfy the requirements for qualification as a REIT under the Code and the regulations thereunder, and (2) avoid any U.S. federal income or excise tax liability. Consistent with the partnership agreement, we intend to continue to distribute quarterly an amount of our available cash sufficient to enable QTS to pay quarterly dividends to its stockholders in an amount necessary to satisfy the requirements applicable to REITs under the Code and to eliminate U.S. federal income and excise tax liability.

Fair Value Measurements

Fair Value Measurements – ASC Topic 820, Fair Value Measurement, emphasizes that fair-value is a market-based measurement, not an entity-specific measurement. Therefore, a fair-value measurement should be determined based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair-value measurements, a fair-value hierarchy is established that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy).

Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to access. Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability (other than quoted prices), such as interest rates, foreign exchange rates, and yield curves that are observable at commonly quoted intervals. Level 3 inputs are unobservable inputs for the asset or liability, which are typically based on an entity’s own assumptions, as there is little, if any, related market activity. In instances where the determination of the fair-value measurement is based on inputs from different levels of the fair-value hierarchy, the level in the fair-value hierarchy within which the entire fair-value measurement falls is based on the lowest level input that is significant to the fair-value measurement in its entirety. Our assessment of the significance of a particular input to the fair-value measurement in its entirety requires judgment, and considers factors specific to the asset or liability.

As of December 31, 2020, we valued our derivative instruments primarily utilizing Level 2 inputs. See Note 18 – ‘Fair Value of Financial Instruments’ for additional details.

Recently Adopted Accounting Standards

New Accounting Pronouncements

In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, and subsequent amendments to the guidance: ASU 2018-19 in November 2018, ASU 2019-4 in April 2019, ASU 2019-5 in May 2019, ASUs 2019-10 & 2019-11 in November 2019, and ASU 2020-2 in February 2020. The standard, as amended, requires entities to use a new impairment model based on current expected credit losses (“CECL”) rather than incurred losses. The CECL model is designed to capture expected credit losses through the establishment of an allowance account, which will be presented as an offset to the amortized cost basis of the related financial asset. The guidance is effective for interim and annual periods beginning after December 15, 2019. We adopted this ASU effective January 1, 2020. As the majority of our revenue is generated from operating leases which are governed under ASC Topic 842, the provisions of this standard did not have a material impact on our consolidated financial statements.

In January 2020, the FASB issued ASU 2020-1, Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815): Clarifying the Interactions between Topic 321, Topic 323, and Topic 815, which clarifies the interaction between the accounting for equity securities under Topic 321, the accounting for equity method investments in Topic 323, and the accounting for certain forward contracts and purchased options in Topic 815. ASU 2020-1 is effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. Early adoption is permitted. The amendments in this Update should be applied prospectively. We do not expect the provisions of the standard will have a material impact on our consolidated financial statements when adopted.

In March 2020, the FASB issued ASU 2020-4, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. ASU 2020-4 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in ASU 2020-4 is optional and may be elected over time as reference rate reform activities occur. The standard is effective for all entities as of March 12, 2020 through December 31, 2022. An entity can elect to apply the amendments as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020, or prospectively from a date within an interim period that includes or is subsequent to March 12, 2020, up to that date that the financial statements are available to be issued. Beginning in the first quarter of 2020, we have elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients preserves the presentation of derivatives consistent with past presentation. We continue to evaluate the impact of the guidance but we do not expect the provisions of the standard will have a material impact on our consolidated financial statements.

We determined all other recently issued accounting pronouncements will not have a material impact on our consolidated financial statements or do not materially apply to our operations.

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Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2020

Deferred financing costs, net of accumulated amortization

(dollars in thousands)	December 31, 2020		December 31, 2019
Deferred financing costs	$	13,786	$	13,776
Accumulated amortization	(7,752)		(5,743)
Deferred financing costs, net	$	6,034	$	8,033

Deferred leasing costs, net of accumulated amortization

(dollars in thousands)	December 31, 2020		December 31, 2019
Deferred leasing costs	$	101,480	$	77,178
Accumulated amortization	(43,825)		(32,848)
Deferred leasing costs, net	$	57,655	$	44,330

Fixed debt arrangements

Deferred financing costs, net of accumulated amortization

(dollars in thousands)	December 31, 2020		December 31, 2019
Deferred financing costs	$	19,327	$	15,777
Accumulated amortization	(4,765)		(4,937)
Deferred financing costs, net	$	14,562	$	10,840

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Acquisitions and Sales (Tables)

12 Months Ended

Dec. 31, 2020

Business Combinations [Abstract]

Schedule of the original allocation of the fair value of assets acquired and liabilities assumed in acquisition

The following table summarizes the consideration for the Netherlands facilities and the allocation of the fair value of assets acquired and liabilities assumed at the acquisition date (in thousands):

	Purchase Price Allocation		Weighted Avg Remaining Useful Life (in years)
Land	$	1,743	N/A
Buildings and improvements	8,640		24
Construction in progress	29,902		N/A
Acquired intangibles (In-place lease & above market lease)	2,911		3
Deferred costs	906		3
Other assets	128		3
Net Working Capital	554		N/A
Total identifiable assets acquired	44,784
Acquired below market lease	284		3
Total liabilities assumed	284
Net identifiable assets acquired	$	44,500

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Acquired Intangibles Assets and Liabilities (Tables)

12 Months Ended

Dec. 31, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of carrying values for the major classes of intangible assets and liabilities

Summarized below are the carrying values for the major classes of intangible assets and liabilities (in thousands):

		December 31, 2020						December 31, 2019
	Useful Lives	Gross Carrying Value		Accumulated Amortization		Net Carrying Value		Gross Carrying Value		Accumulated Amortization		Net Carrying Value
Customer Relationships	12 years	$	95,705	$	(44,361)	$	51,344	$	95,705	$	(36,411)	$	59,294
In-Place Leases	0.5 to 10 years	34,813		(26,812)		8,001		34,588		(22,522)		12,066
Solar Power Agreement (1)	17 years	13,747		(5,256)		8,491		13,747		(4,448)		9,299
Acquired Favorable Leases
Acquired above market leases - as Lessor	0.5 to 8 years	5,070		(4,816)		254		5,035		(4,015)		1,020
Total Intangible Assets		$	149,335	$	(81,245)	$	68,090	$	149,075	$	(67,396)	$	81,679
Solar Power Agreement (1)	17 years	13,747		(5,256)		8,491		13,747		(4,448)		9,299
Acquired Unfavorable Leases
Acquired below market leases - as Lessor	2 to 4 years	1,117		(1,113)		4		1,092		(967)		125
Acquired above market leases - as Lessee	11 to 12 years	2,453		(1,199)		1,254		2,453		(983)		1,470
Total Intangible Liabilities (2)		$	17,317	$	(7,568)	$	9,749	$	17,292	$	(6,398)	$	10,894

(1)Amortization related to the Solar Power Agreement asset and liability is recorded at the same rate and therefore has no net impact on the statements of operations.

(2)Intangible liabilities are included within the “Advance rents, security deposits and other liabilities” line item of the consolidated balance sheets.

Schedule of estimated amortization of acquired favorable and unfavorable leases

	Net Rental Revenue Decrease		Net Rental Expense Decrease
2021	$	164	$	(216)
2022	55		(216)
2023	25		(216)
2024	6		(216)
2025	—		(216)
Thereafter	—		(174)
Total	$	250	$	(1,254)

Schedule of estimated amortization of all other identified intangible assets

Year Ending December 31,
2021	$	10,634
2022	10,088
2023	10,084
2024	8,967
2025	7,978
Thereafter	11,594
Total	$	59,345

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Real Estate Assets and Construction in Progress (Tables)

12 Months Ended

Dec. 31, 2020

Real Estate [Abstract]

Summary of cost of owned and leased properties by the company

The following is a summary of our cost of owned or leased properties as of December 31, 2020 and 2019 (in thousands):

As of December 31, 2020:

Property Location	Land		Buildings, Improvements and Equipment		Construction in Progress		Total Cost
Atlanta, Georgia Campus (1)	$	55,157	$	700,142	$	191,072	$	946,371
Ashburn, Virginia Campus (2)	16,476		371,725		185,903		574,104
Irving, Texas	8,606		392,275		99,591		500,472
Chicago, Illinois	9,400		250,336		104,117		363,853
Richmond, Virginia	2,180		233,927		120,577		356,684
Suwanee, Georgia (Atlanta-Suwanee)	3,521		184,467		6,718		194,706
Piscataway, New Jersey	7,466		122,176		30,401		160,043
Fort Worth, Texas	9,079		124,054		1,064		134,197
Hillsboro, Oregon	18,414		34,594		78,390		131,398
Santa Clara, California (3)	—		117,343		9,385		126,728
Leased Facilities (4)	—		82,759		225		82,984
Eemshaven, Netherlands	5,366		21,712		47,531		74,609
Sacramento, California	1,481		66,300		12		67,793
Manassas, Virginia (5)	—		25		67,073		67,098
Dulles, Virginia	3,154		54,323		4,148		61,625
Princeton, New Jersey	20,700		35,261		5		55,966
Phoenix, Arizona (5)	—		—		37,729		37,729
Groningen, Netherlands	1,896		11,206		3,730		16,832
Other (6)	2,213		36,636		41,094		79,943
	$	165,109	$	2,839,261	$	1,028,765	$	4,033,135

(1)The “Atlanta, Georgia Campus” includes both the existing data center Atlanta (DC-1) as well as the recently developed data center Atlanta, GA (DC-2) on land adjacent to the existing Atlanta, GA (DC-1) facility.

(2)The “Ashburn, Virginia Campus” includes both the existing data center Ashburn, VA (DC-1) as well as new property development associated with the construction of a second data center Ashburn, VA (DC-2).

(3)Owned facility subject to long-term ground sublease.

(4)Includes 7 facilities. All facilities are leased, including one subject to a finance lease.

(5)Represent land purchases. Land acquisition costs, as well as subsequent development costs, are included within construction in progress until development on the land has ended and the asset is ready for its intended use.

(6)Consists of Miami, FL; Lenexa, KS; Overland Park, KS and additional land.

As of December 31, 2019:

Property Location	Land		Buildings, Improvements and Equipment		Construction in Progress		Total Cost
Atlanta, Georgia Campus (1)	$	44,588	$	525,300	$	128,930	$	698,818
Irving, Texas	8,606		369,727		98,170		476,503
Ashburn, Virginia (2)	16,476		156,396		189,375		362,247
Richmond, Virginia	2,180		195,684		139,948		337,812
Chicago, Illinois	9,400		205,026		86,878		301,304
Suwanee, Georgia (Atlanta-Suwanee)	3,521		174,124		5,559		183,204
Piscataway, New Jersey	7,466		103,553		36,056		147,075
Santa Clara, California (3)	—		114,499		1,238		115,737
Fort Worth, Texas	9,079		55,018		35,722		99,819
Leased Facilities (4)	—		85,225		1,241		86,466
Sacramento, California	1,481		65,258		163		66,902
Hillsboro, Oregon (2)	—		—		63,573		63,573
Manassas, Virginia (2)	—		—		57,662		57,662
Princeton, New Jersey	20,700		35,192		39		55,931
Dulles, Virginia	3,154		48,651		4,688		56,493
Eemshaven, Netherlands	—		—		37,267		37,267
Phoenix, Arizona (2)	—		—		31,265		31,265
Groningen, Netherlands	1,741		9,085		3,028		13,854
Other (5)	2,213		36,163		120		38,496
	$	130,605	$	2,178,901	$	920,922	$	3,230,428

(1)The “Atlanta, Georgia Campus” includes both the existing data center Atlanta (DC-1) as well as new property development associated with construction of a second data center Atlanta (DC-2) on land adjacent to the existing Atlanta (DC-1) facility.

(2)Represent land purchases. Land acquisition costs, as well as subsequent development costs, are included within construction in progress until development on the land has ended and the asset is ready for its intended use.

(3)Owned facility subject to long-term ground sublease.

(4)Includes 7 facilities. All facilities are leased, including one subject to a finance lease.

(5)Consists of Miami, FL; Lenexa, KS; and Overland Park, KS facilities.

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Leases (Tables)

12 Months Ended

Dec. 31, 2020

Leases [Abstract]

Schedule of components of lease expenses

Components of lease expense were as follows (in thousands):

	Year Ended December 31,
	2020		2019
Finance lease cost:
Amortization of assets	$	4,150	$	3,535
Interest on lease liabilities	1,915		1,693
Operating lease expense:
Operating lease cost	9,012		9,102
Variable lease cost	1,072		1,109
Sublease income	(193)		(187)
Total lease costs	$	15,956	$	15,252

Schedule of supplemental balance sheet information

Supplemental balance sheet information related to leases was as follows (in thousands, except lease term and discount rate):

	As of December 31,
	2020			2019
Operating leases:
Operating lease right-of-use assets	$	51,342		$	57,141
Operating lease liabilities	58,005			64,416
Finance leases:
Property and equipment, at cost	49,554			50,437
Accumulated amortization	(8,864)			(4,830)
Property and equipment, net	$	40,690		$	45,607
Finance lease liabilities	$	41,718		$	45,141
Weighted average remaining lease term (in years):
Operating leases	13.4			13.7
Finance leases	10.3			11.4
Weighted average discount rate:
Operating leases	5.2		%	5.1		%
Finance leases	4.3		%	4.3		%

Schedule of cash flow information and other information

Supplemental cash flow and other information related to leases was as follows (in thousands):

	Year Ended December 31,
	2020		2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$	12,048	$	9,834
Operating cash flows for finance leases	$	1,914	$	1,704
Financing cash flows for finance leases	$	2,579	$	2,855

Schedule of maturities of operating lease liabilities

Maturities of lease liabilities, which exclude variable rent payments, are as follows (in thousands):

	December 31, 2020
	Operating Leases		Finance Leases
2021	$	9,818	$	4,446
2022	10,266		4,570
2023	10,393		4,707
2024	8,317		4,847
2025	8,036		4,992
Thereafter	40,872		28,902
Total Lease Payments	$	87,702	$	52,464
Less: Imputed Interest	29,697		10,746
Total Lease Obligations	$	58,005	$	41,718

Schedule of maturities of finance lease liabilities

Maturities of lease liabilities, which exclude variable rent payments, are as follows (in thousands):

	December 31, 2020
	Operating Leases		Finance Leases
2021	$	9,818	$	4,446
2022	10,266		4,570
2023	10,393		4,707
2024	8,317		4,847
2025	8,036		4,992
Thereafter	40,872		28,902
Total Lease Payments	$	87,702	$	52,464
Less: Imputed Interest	29,697		10,746
Total Lease Obligations	$	58,005	$	41,718

Schedule of components of lease revenue

The components of our lease revenue were as follows (in thousands):

	Year Ended December 31,
	2020		2019		2018
Lease revenue:
Minimum lease revenue	$	464,005	$	409,157	$	367,388
Variable lease revenue (primarily recoveries from customers)	55,853		55,966		46,232
Total lease revenue	$	519,858	$	465,123	$	413,620

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Debt (Tables)

12 Months Ended

Dec. 31, 2020

Debt Disclosure [Abstract]

Outstanding debt including operating leases and lease financing obligations

Below is a listing of our outstanding debt, including finance leases, as of December 31, 2020 and 2019 (in thousands):

	Weighted Average Effective Interest Rate at December 31, 2020 (1)		Maturity Date	December 31, 2020		December 31, 2019
Unsecured Credit Facility
Revolving Credit Facility	1.41	%	December 17, 2023	$	392,337	$	317,028
Term Loan A	3.26	%	December 17, 2024	225,000		225,000
Term Loan B	3.30	%	April 27, 2025	225,000		225,000
Term Loan C	3.46	%	October 18, 2026	250,000		250,000
Term Loan D	1.45	%	January 15, 2026	250,000		—
4.750% Senior Notes	4.75	%	November 15, 2025	—		400,000
3.875% Senior Notes	3.88	%	October 1, 2028	500,000		—
Lenexa Mortgage	4.10	%	May 1, 2022	—		1,736
Finance Leases	4.33	%	2021 - 2038	41,718		45,140
	2.85	%		1,884,055		1,463,904
Less net debt issuance costs				(14,562)		(10,839)
Total outstanding debt, net				$	1,869,493	$	1,453,065

(1)The coupon interest rates associated with Term Loan A, Term Loan B, and Term Loan C incorporate the effects of our interest rate swaps in effect as of December 31, 2020.

Annual remaining principal payment

The annual remaining principal payment requirements of our debt securities as of December 31, 2020 per the contractual maturities, excluding extension options and excluding operating and finance leases, are as follows (in thousands):

Year ending December 31,
2021	$	—
2022	—
2023	392,337
2024	225,000
2025	225,000
Thereafter	1,000,000
Total	$	1,842,337

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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2020

Income Tax Disclosure [Abstract]

Schedule of income tax provision from continuing operations

	For the Year Ended December 31,
	2020		2019		2018
Current:
U.S. federal	$	—	$	—	$	(50)
U.S. State	368		298		395
Outside United States	7		13		78
Total Current	375		311		423
Deferred:
U.S. federal	71		(276)		(3,727)
U.S. State	(66)		(71)		(64)
Outside United States	58		(1)		—
Total Deferred	63		(348)		(3,791)
Total	$	438	$	(37)	$	(3,368)

Summary of temporary differences and carry forwards which give rise to the deferred tax assets and liabilities

	For the Year Ended December 31,
	2020		2019		2018
Deferred tax assets
Net operating loss carryforwards	$	22,950	$	20,218	$	17,610
Deferred revenue and setup charges	1,062		1,299		3,171
Operating lease liabilities	1,904		2,266		—
Property and equipment	—		512		—
Leases	400		—		1
Credits	300		300		287
Bad debt reserve	191		18		409
Intangibles	1,038		804		—
Interest expense carryforward IRC Sec. 163(j)	1,164		2,782		2,253
Equity compensation	1,654		1,119		952
Other	857		257		582
Gross deferred tax assets	31,520		29,575		25,265
Deferred tax liabilities
Property and equipment	(616)		—		(3,089)
Goodwill	(3,042)		(2,494)		(1,953)
Intangibles	—		(591)		(11,910)
Operating lease right-of-use assets	(1,056)		(1,261)		—
Prepaid commissions	(774)		(1,007)		(956)
Other	(218)		(224)		(93)
Gross deferred tax liabilities	(5,706)		(5,577)		(18,001)
Net deferred tax asset	25,814		23,998		7,264
Valuation allowance	(26,624)		(24,747)		(8,361)
Net deferred tax liability	$	(810)	$	(749)	$	(1,097)

Schedule of differences between total Income tax or benefit and amount computed by applying the statutory income tax rate

	For the Year Ended December 31,
	2020			2019			2018
TRS
Statutory rate applied to pre-tax loss	$	(1,380)		$	(12,991)		$	(9,656)
Permanent differences, net	248			16			97
State income tax, net of federal benefit	(421)			(2,868)			(1,430)
Foreign income tax	7			13			78
Federal and State rate change	(1)			(20)			(146)
Other	109			(110)			41
Valuation allowance increase	1,876			15,923			7,648
Total tax expense (benefit)	$	438		$	(37)		$	(3,368)
Effective tax rate	(6.7)		%	0.1		%	7.3		%

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Derivative Instruments (Tables)

12 Months Ended

Dec. 31, 2020

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of interest rate derivatives and their fair values

Interest rate derivatives and their fair values as of December 31, 2020 and 2019 were as follows (in thousands):

Notional Amount				Fixed One Month LIBOR rate per annum				Fair Value
December 31, 2020		December 31, 2019				Effective Date	Expiration Date	December 31, 2020		December 31, 2019
$	25,000	$	25,000	1.989	%	January 2, 2018	December 17, 2021	$	(447)	$	(209)
100,000		100,000		1.989	%	January 2, 2018	December 17, 2021	(1,788)		(837)
75,000		75,000		1.989	%	January 2, 2018	December 17, 2021	(1,342)		(627)
50,000		50,000		2.033	%	January 2, 2018	April 27, 2022	(1,248)		(545)
100,000		100,000		2.029	%	January 2, 2018	April 27, 2022	(2,490)		(1,081)
50,000		50,000		2.033	%	January 2, 2018	April 27, 2022	(1,248)		(545)
100,000		100,000		2.617	%	January 2, 2020	December 17, 2023	(7,191)		(4,007)
100,000		100,000		2.621	%	January 2, 2020	April 27, 2024	(8,000)		(4,324)
70,000		—		0.968	%	March 2, 2020	October 18, 2026	(2,174)		—
30,000		—		0.973	%	March 2, 2020	October 18, 2026	(938)		—
200,000		200,000		2.636	%	December 17, 2021	December 17, 2023	(9,648)		(3,939)
200,000		200,000		2.642	%	April 27, 2022	April 27, 2024	(9,500)		(3,802)
125,000		—		1.014	%	December 17, 2023	December 17, 2024	(704)		—
100,000		—		1.035	%	December 17, 2023	December 17, 2024	(584)		—
75,000		—		1.110	%	December 17, 2023	October 18, 2026	(866)		—
100,000		—		1.088	%	April 27, 2024	April 27, 2025	(540)		—
125,000		—		1.082	%	April 27, 2024	April 27, 2025	(666)		—
75,000		—		0.977	%	April 27, 2024	October 18, 2026	(422)		—
								$	(49,796)	$	(19,916)

Schedule of power purchase agreement derivatives

Power purchase agreement derivatives and their fair values as of December 31, 2020 and 2019 were as follows (in thousands):

				Fair Value
Counterparty	Facility	Effective Date	Expiration Date	December 31, 2020		December 31, 2019
Calpine Energy Solutions, LLC	Piscataway	3/8/2019	2/28/2029	$	(2,162)	$	(2,919)
Calpine Energy Solutions, LLC	Chicago	3/8/2019	2/28/2029	(1,764)		(3,774)
				$	(3,926)	$	(6,693)

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Partners' Capital, Equity and Incentive Compensation Plans (Tables)

12 Months Ended

Dec. 31, 2020

Equity [Abstract]

Summary of award activity under equity incentive plans and related information

The following is a summary of award activity under the 2010 Equity Incentive Plan and 2013 Equity Incentive Plan and related information for the years ended December 31, 2020, 2019 and 2018:

	2010 Equity Incentive Plan					2013 Equity Incentive Plan
	Numbers of Class O  units	Weighted average exercise  price		Weighted average fair value		Options	Weighted average exercise  price		Weighted average fair value		Restricted Stock / Deferred Stock	Weighted average fair value at grant date		TSR Units	Weighted average fair value at grant date		FFO Units	Weighted average fair value at grant date
Outstanding at January 1, 2018	568,040	$	23.52	$	5.00	1,369,270	$	38.18	$	7.80	381,864	$	46.37	—	$	—	—	$	—
Granted	—	—		—		674,081	34.05		5.63		348,152	35.27		—	—		—	—
Exercised/Vested (1)	(465,761)	23.40		4.76		(6,188)	21.50		3.68		(224,660)	46.23		—	—		—	—
Cancelled/Expired	—	—		—		—	—		—		(85,047)	43.50		—	—		—	—
Outstanding at December 31, 2018	102,279	$	24.05	$	5.67	2,037,163	$	36.86	$	7.10	420,309	$	37.83	—	$	—	—	$	—
Granted	—	—		—		135,594	42.27		7.62		274,564	42.25		86,089	54.64		86,089	42.01
Exercised/Vested (1)	(19,969)	20.25		4.42		(125,213)	30.80		6.21		(279,429)	39.20		—	—		—	—
Cancelled/Expired	—	—		—		(112,706)	45.86		9.43		(25,694)	42.17		(1,739)	54.64		(1,739)	42.01
Outstanding at December 31, 2019	82,310	$	24.97	$	5.97	1,934,838	$	37.11	$	7.05	389,750	$	39.67	84,350	$	54.64	84,350	$	42.01
Granted	—	—		—		99,872	56.84		9.35		302,591	57.47		84,202	79.18		84,202	56.84
Performance Adjustment (2)	—	—		—		—	—		—		—	—		—	—		59,844	42.01
Exercised/Vested (1)	(6,875)	25.00		4.49		(98,303)	28.84		5.18		(264,466)	39.89		—	—		(96,129)	42.01
Cancelled/Expired	—	—		—		—	—		—		(11,379)	49.38		—	—		—	—
Outstanding at December 31, 2020	75,435	$	25.00	$	6.11	1,936,407	$	38.55	$	7.26	416,496	$	52.20	168,552	$	66.90	132,267	$	51.45

(1)Represents (i) Class O units which were converted to Class A units, (ii) options to purchase Class A common stock which were exercised, and (iii) the Class A common stock that has been released from restriction and which was not surrendered by the holder to satisfy their statutory minimum federal and state tax obligations associated with the vesting of restricted common stock, with respect to the applicable column.

(2)Represents the remeasurement of FFO units issued during the year ended December 31, 2019 based on achievement of certain performance metrics over the performance period.

Summary of assumptions and fair values for restricted stock and options to purchase shares of Class A common stock granted

	2020			2019			2018
Fair value of FFO units and restricted stock granted	$56.84	-	$65.96	$42.01	-	$51.25	$34.03	-	$54.01
Fair value of TSR units granted			$79.18			$54.64			N/A
Fair value of options granted			$9.35	$7.56	-	$8.28	$5.55	-	$5.64
Expected term (years)			5.5			5.5	5.5	-	6.0
Expected volatility			27%			28%			28%
Expected dividend yield			3.31 %	3.89%	-	4.19%			4.82%
Expected risk-free interest rates			0.61 %	2.33 %	-	2.56 %	2.69 %	-	2.73 %

Summary of information about awards outstanding

The following tables summarize information about awards outstanding as of December 31, 2020.

	Operating Partnership Awards Outstanding
	Exercise prices		Awards outstanding	Weight average remaining vesting period  (years)
Class O Units	$	25.00	75,435	—
Total Operating Partnership awards outstanding			75,435

	QTS Realty Trust, Inc. Awards Outstanding
	Exercise prices				Awards outstanding	Weight average remaining vesting period  (years)
Restricted stock	$	—			416,496	1.0
TSR units	—				168,552	0.9
FFO units	—				132,267	0.7
Options to purchase Class A common stock	$	21.00	-	$56.84	1,936,407	0.9
Total QTS Realty Trust, Inc. awards outstanding					2,653,722

Schedule of quarterly cash dividends

Year Ended December 31, 2020
Record Date	Payment Date	Per Share Rate		Aggregate Dividend/Distribution Amount (in millions)
Common Stock
September 18, 2020	October 6, 2020	$	0.47	$	32.0
June 19, 2020	July 7, 2020	0.47		31.5
March 20, 2020	April 7, 2020	0.47		31.5
December 20, 2019	January 7, 2020	0.44		28.6
				$	123.6
Series A Preferred Stock
September 30, 2020	October 15, 2020	$	0.45	$	1.9
June 30, 2020	July 15, 2020	0.45		1.9
March 31, 2020	April 15, 2020	0.45		1.9
December 31, 2019	January 15, 2020	0.45		1.9
				$	7.6
Series B Preferred Stock
September 30, 2020	October 15, 2020	$	1.63	$	5.1
June 30, 2020	July 15, 2020	1.63		5.1
March 31, 2020	April 15, 2020	1.63		5.1
December 31, 2019	January 15, 2020	1.63		5.1
				$	20.4

Year Ended December 31, 2019
Record Date	Payment Date	Per Share Rate		Aggregate Dividend/Distribution Amount (in millions)
Common Stock
September 19, 2019	October 4, 2019	$	0.44	$	27.3
June 25, 2019	July 9, 2019	0.44		27.3
March 20, 2019	April 4, 2019	0.44		27.3
December 21, 2018	January 8, 2019	0.41		23.7
				$	105.6
Series A Preferred Stock
September 30, 2019	October 15, 2019	$	0.45	$	1.9
June 30, 2019	July 15, 2019	0.45		1.9
March 31, 2019	April 15, 2019	0.45		1.9
December 31, 2018	January 15, 2019	0.45		1.9
				$	7.6
Series B Preferred Stock
September 30, 2019	October 15, 2019	$	1.63	$	5.1
June 30, 2019	July 15, 2019	1.63		5.1
March 31, 2019	April 15, 2019	1.63		5.1
December 31, 2018	January 15, 2019	1.63		5.1
				$	20.4

Summary of equity issued

The following table represents a summary of our equity issuances of our Class A common stock during the year ended December 31, 2020 (in thousands):

Offering Program	Forward Shares Sold/(Settled)		Net Proceeds Available/(Received) (1)
Shares and net proceeds available as of December 31, 2019	3,795		$	173,776	(2)
February 2019 Offering - Settlement	(931)	(3)	(35,841)
June 2019 Prior ATM Program - Sales	4,550		243,577
June 2019 Prior ATM Program - Settlements	(4,981)	(3)	(250,496)
May 2020 Current ATM Program - Sales	3,128		189,640
June 2020 Offering - Sales	4,400		266,894
Shares and net proceeds available as of December 31, 2020	9,961		$	587,550

(1)Net Proceeds Available remain subject to certain adjustments until settled.

(2)Net Proceeds available reported in the Form 10-K for the period ended December 31, 2019 were $177.8 million. The $4 million decrease is primarily due to QTS’ declared dividends, which reduces cash expected to be received upon full physical settlement of the forward shares.

(3)Represents the number of forward shares we elected to physically settle during the year ended December 31, 2020.

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Related Party Transactions (Tables)

12 Months Ended

Dec. 31, 2020

Related Party Transactions [Abstract]

Summary of related party transactions

The transactions which occurred during the years ended December 31, 2020, 2019 and 2018 are outlined below (in thousands):

	For the Year Ended December 31,
	2020		2019		2018
Tax, utility, insurance and other reimbursement	$	694	$	967	$	724
Rent expense	1,027		1,014		1,014
Capital assets acquired	—		704		464
Total	$	1,721	$	2,685	$	2,202

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Earnings per share (Tables)

12 Months Ended

Dec. 31, 2020

Earnings Per Share [Abstract]

Summary of basic and diluted earnings per share

The computation of basic and diluted net income (loss) per share is as follows (in thousands, except per share data):

	Year Ended December 31,
	2020		2019		2018
Numerator:
Net income (loss)	$	14,576	$	31,665	$	(7,175)
(Income) loss attributable to noncontrolling interests	1,330		(374)		2,715
Preferred stock dividends	(28,180)		(28,180)		(16,666)
Earnings attributable to participating securities	(16,360)		(7,828)		(947)
Net loss available to common stockholders after allocation to participating securities	$	(28,634)	$	(4,717)	$	(22,073)
Denominator:
Weighted average shares outstanding - basic	60,717		54,837		50,433
Effect of Class O units, TSR units, FFO units and options to purchase Class A common stock on an "as if" converted basis	—		—		—
Weighted average shares outstanding - diluted	60,717		54,837		50,433
Basic net loss per share *	$	(0.47)	$	(0.09)	$	(0.44)
Diluted net loss per share *	$	(0.47)	$	(0.09)	$	(0.44)

*    Note: The calculations of basic and diluted net income (loss) per share above do not include the following number of Class A partnership units, Class O units, TSR units, FFO units and options to purchase common stock on an "as if" converted basis, and the effects of Series B Convertible preferred stock on an “as if” converted basis as their respective inclusions would have been antidilutive:

	Year Ended December 31,
	2020	2019	2018
Class A Partnership units	6,648	6,671	6,653
Class O units, TSR units, FFO units and options to purchase common stock on an "as if" converted basis	1,118	518	350
Series B Convertible preferred stock on an "as if" converted basis	6,778	6,729	3,484

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Contracts with Customers (Table)

12 Months Ended

Dec. 31, 2020

Revenue from Contract with Customer [Abstract]

Schedule of future minimum payments to be received under non-cancelable customer contracts

Future minimum payments to be received under non-cancelable customer contracts including both lease rental revenue components and non-lease revenue components that are accounted for as a combined lease component in accordance with ASC Topic 842 which is discussed in Note 2 above (inclusive of payments for contracts which have not yet commenced, and exclusive of variable lease revenue such as recoveries of operating costs from customers) are as follows for the years ending December 31 (in thousands):

Year Ended December 31,
2021	$	435,906
2022	359,860
2023	263,413
2024	214,215
2025	165,002
Thereafter	493,839
Total	$	1,932,235

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Quarterly Financial Information (Tables)

12 Months Ended

Dec. 31, 2020

Quarterly Financial Information Disclosure [Abstract]

Summary of selected quarterly information

The tables below reflect the selected quarterly information for the years ended December 31, 2020 and 2019 (in thousands except share data):

	Three Months Ended
	December 31,		September 30,		June 30,		March 31,
2020
Revenues	$	143,897	$	137,538	$	131,640	$	126,292
Operating income	17,151		15,016		17,859		15,631
Net income (loss)	(10,660)		6,907		10,209		8,120
Net income (loss) attributable to QTS Realty Trust, Inc.	(8,922)		6,925		9,892		8,010
Net income (loss) attributable to common stockholders	(15,967)		(120)		2,847		965
Net loss per share attributable to common shares - basic	(0.33)		(0.07)		(0.05)		(0.01)
Net loss per share attributable to common shares - diluted	(0.33)		(0.07)		(0.05)		(0.01)
2019
Revenues	$	123,707	$	125,255	$	119,167	$	112,689
Operating income	4,218		13,606		14,598		28,734
Net income (loss)	(3,606)		6,588		7,535		21,148
Net income (loss) attributable to QTS Realty Trust, Inc.	(2,511)		6,637		7,483		19,558
Net income (loss) attributable to common stockholders	(9,556)		(408)		438		12,513
Net income (loss) per share attributable to common shares - basic	(0.20)		(0.05)		(0.03)		0.20
Net income (loss) per share attributable to common shares - diluted	(0.20)		(0.05)		(0.03)		0.20

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Description of Business (Details)	12 Months Ended
	Dec. 31, 2020 property
Organization And Description Of Business [Line Items]
Number of properties	28
QualityTech LP
Organization And Description Of Business [Line Items]
Ownership interest	90.80%

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Summary of Significant Accounting Policies (Narrative) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Summary Of Significant Accounting Policies [Line Items]
Maximum exposure to losses	$ 22,600
Useful life of property	40 years
Depreciation expense from operation	$ 161,200	$ 130,800	$ 113,500
Real estate cost capitalized excluding interest cost	18,400	17,800	17,400
Real estate interest cost capitalized incurred	30,200	33,200	26,800
(Gain) loss on sale of real estate, net	0	14,769	0
Gain (loss) on disposition of property	$ 0	14,769	(6,994)
Term Loan Maturing 2025
Summary Of Significant Accounting Policies [Line Items]
Interest rate	4.75%
Senior Notes 4.75 Due 2025
Summary Of Significant Accounting Policies [Line Items]
Interest rate	3.875%
Real Estate Assets
Summary Of Significant Accounting Policies [Line Items]
Depreciation expense from operation	$ 147,800	118,900	101,200
Non-Real Estate Assets
Summary Of Significant Accounting Policies [Line Items]
Depreciation expense from operation	$ 13,400	11,900	12,300
Minimum | Real Property
Summary Of Significant Accounting Policies [Line Items]
Useful life of property	20 years
Maximum | Real Property
Summary Of Significant Accounting Policies [Line Items]
Useful life of property	40 years
Maximum | Leasehold Improvements
Summary Of Significant Accounting Policies [Line Items]
Useful life of property	20 years
Restructuring Charges
Summary Of Significant Accounting Policies [Line Items]
Gain (loss) on disposition of property			$ 7,000
Atlanta Metro facility
Summary Of Significant Accounting Policies [Line Items]
(Gain) loss on sale of real estate, net		1,400
Owned Properties | Manassas, Virginia
Summary Of Significant Accounting Policies [Line Items]
(Gain) loss on sale of real estate, net		13,400
Transaction cost		$ 5,800

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Summary of Significant Accounting Policies (Additional Information 1) (Details)	1 Months Ended	12 Months Ended
	Oct. 31, 2019	Dec. 31, 2020 USD ($) item	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)
Summary Of Significant Accounting Policies [Line Items]
Impairment losses		$ 0
Number of reporting units | item		1
Amortization of the deferred financing costs		$ 4,053,000	$ 3,877,000	$ 3,856,000
Write off of deferred loan costs		3,784,000	1,532,000	605,000
Amortization of deferred leasing costs		26,100,000	24,200,000	21,300,000
Aggregate allowance for doubtful accounts		5,400,000	2,300,000
Deferred income		85,351,000	39,169,000	33,200,000
Amortization of deferred revenue		20,300,000	15,200,000	12,500,000
Equity based compensation associated with the acceleration of equity awards		1,800,000		3,100,000
Unsecured Revolving Credit Facility
Summary Of Significant Accounting Policies [Line Items]
Amortization of the deferred financing costs		4,100,000	3,900,000	3,900,000
Write off of deferred loan costs				600,000
Term Loan Maturing 2025
Summary Of Significant Accounting Policies [Line Items]
Aggregate principal amount		$ 400,000,000
Interest rate		4.75%
Write off of deferred loan costs		$ 3,700,000
Revolving Credit Facility Maturing December 17 2023 | Unsecured Credit Facility Two
Summary Of Significant Accounting Policies [Line Items]
Loan term	7 years
Transaction Integration and Impairment Costs
Summary Of Significant Accounting Policies [Line Items]
Impairment losses			11,500,000
Restructuring Charges
Summary Of Significant Accounting Policies [Line Items]
Impairment losses				8,800,000
Company recorded equity-based compensation expense net of repurchased awards and forfeits		27,000,000.0	16,400,000	$ 18,100,000
Rents and Other Receivables
Summary Of Significant Accounting Policies [Line Items]
Amount of the straight-line rent receivable on the balance sheets included in rents and other receivables, net		$ 63,600,000	$ 38,700,000

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Summary of Significant Accounting Policies (Deferred Financing Costs, Net of Accumulated Amortization) (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Deferred financing costs	$ 13,786	$ 13,776
Accumulated amortization	(7,752)	(5,743)
Deferred financing costs, net	6,034	8,033
Fixed debt arrangements
Deferred financing costs	19,327	15,777
Accumulated amortization	(4,765)	(4,937)
Deferred financing costs, net	$ 14,562	$ 10,840

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Summary of Significant Accounting Policies (Deferred Leasing Costs, Net of Accumulated Amortization) (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Accounting Policies [Abstract]
Deferred leasing costs	$ 101,480	$ 77,178
Accumulated amortization	(43,825)	(32,848)
Deferred leasing costs, net	$ 57,655	$ 44,330

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Summary of Significant Accounting Policies (Additional Information 2) (Details)	12 Months Ended
	Dec. 31, 2020 segment customer
Summary Of Significant Accounting Policies [Line Items]
Number of operating segments | segment	1
Number of reportable segments | segment	1
Minimum quarterly distribution of available cash	100.00%
Customer One | Rental Revenue
Summary Of Significant Accounting Policies [Line Items]
Number of customers	1
Percentage of total revenue	11.80%
Customer One | Accounts Receivable
Summary Of Significant Accounting Policies [Line Items]
Number of customers	1
Percentage of total revenue	39.20%
Percentage of trade accounts receivable	10.00%
Two Customers | Accounts Receivable
Summary Of Significant Accounting Policies [Line Items]
Number of customers	2
Percentage of trade accounts receivable	45.00%
Two Customers | Accounts Receivable | Minimum
Summary Of Significant Accounting Policies [Line Items]
Percentage of trade accounts receivable	5.00%

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Summary of Significant Accounting Policies (Recently Adopted Accounting Standards) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2020
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Operating lease right-of-use assets, net	$ 57,141	$ 51,342
Operating lease liabilities	$ 64,416	$ 58,005
Accounting Standards Update [Extensible List]	us-gaap:AccountingStandardsUpdate201602Member

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Summary of Significant Accounting Policies Summary of Significant Account Policies - Other Revenue (Details)	12 Months Ended
	Dec. 31, 2020
Cloud and managed services
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, performance obligation, description of timing	These contracts generally have a remaining term ranging from month-to-month to three years.

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Acquisitions and Sales (Land Parcels) (Details) $ in Millions	1 Months Ended	12 Months Ended
	Nov. 30, 2019 USD ($)	Dec. 31, 2020 USD ($) a	Dec. 31, 2019 USD ($) a
Construction in Progress
Property, Plant and Equipment [Line Items]
Acres of land | a		126	107
Payments to acquire land		$ 43.9	$ 31.6
Atlanta Building Sale
Property, Plant and Equipment [Line Items]
Gain on sale of property	$ 1.4
Lease term of facility with global cloud-based software company		20 years

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Acquisitions and Sales (Narrative) (Details) $ in Millions	Apr. 23, 2019 USD ($) ft² item MW
Business Combinations [Abstract]
Number of data centers acquired | item	2
Acquisition cash consideration | $	$ 44.5
Floor capacity (in square feet) | ft²	160,000
Gross power capacity (in megawatt) | MW	30

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Acquisitions and Sales (Allocation of the Fair Value of Assets Acquired and Liabilities Assumed as of the Acquisition Date) (Details) - USD ($) $ in Thousands	Apr. 23, 2019	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Business Combinations [Abstract]
Land	$ 1,743	$ 0	$ 1,743	$ 0
Buildings and improvements	8,640	0	8,640	445
Construction in progress	29,902	43,933	61,514	114,283
Acquired intangibles (In-place lease & above market lease)	2,911
Deferred costs	906
Other assets	128	$ 0	$ 128	$ 0
Net Working Capital	554
Total identifiable assets acquired	44,784
Acquired below market lease	284
Total liabilities assumed	284
Net identifiable assets acquired	$ 44,500
Buildings and improvements weighted avg remaining useful life (in years)	24 years
Acquired intangibles weighted avg remaining useful life (in years)	3 years
Deferred costs weighted avg remaining useful life (in years)	3 years
Other assets weighted avg remaining useful life (in years)	3 years
Acquired below market lease weighted avg remaining useful life (in years)	3 years

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Acquired Intangibles Assets and Liabilities (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Finite-lived intangible assets
Gross Carrying Value	$ 149,335	$ 149,075
Accumulated Amortization	(81,245)	(67,396)
Total	68,090	81,679
Acquired Intangible Liabilities
Acquired intangible liabilities	17,317	17,292
Accumulated Amortization	(7,568)	(6,398)
New Carrying Value	$ 9,749	10,894
Customer Relationships
Finite-lived intangible assets
Useful Lives	12 years
Gross Carrying Value	$ 95,705	95,705
Accumulated Amortization	(44,361)	(36,411)
Total	51,344	59,294
In Place Leases
Finite-lived intangible assets
Gross Carrying Value	34,813	34,588
Accumulated Amortization	(26,812)	(22,522)
Total	$ 8,001	12,066
In Place Leases | Minimum
Finite-lived intangible assets
Useful Lives	6 months
In Place Leases | Maximum
Finite-lived intangible assets
Useful Lives	10 years
Solar Power Agreement
Finite-lived intangible assets
Useful Lives	17 years
Gross Carrying Value	$ 13,747	13,747
Accumulated Amortization	(5,256)	(4,448)
Total	8,491	9,299
Above Market Leases As Lessor
Acquired above market leases - as Lessee
Gross Carrying Value	5,070	5,035
Accumulated Amortization	(4,816)	(4,015)
Net Carrying Value	$ 254	1,020
Above Market Leases As Lessor | Minimum
Finite-lived intangible assets
Useful Lives	6 months
Above Market Leases As Lessor | Maximum
Finite-lived intangible assets
Useful Lives	8 years
Below Market Leases As Lessor
Acquired below market leases - as Lessor
Gross Carrying Value	$ 1,117	1,092
Accumulated Amortization	(1,113)	(967)
Net Carrying Value	$ 4	125
Below Market Leases As Lessor | Minimum
Finite-lived intangible assets
Useful Lives	2 years
Below Market Leases As Lessor | Maximum
Finite-lived intangible assets
Useful Lives	4 years
Above Market Lease As Lessee
Acquired above market leases - as Lessee
Gross Carrying Value	$ 2,453	2,453
Accumulated Amortization	(1,199)	(983)
Net Carrying Value	$ 1,254	$ 1,470
Above Market Lease As Lessee | Minimum
Finite-lived intangible assets
Useful Lives	11 years
Above Market Lease As Lessee | Maximum
Finite-lived intangible assets
Useful Lives	12 years

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Acquired Intangibles Assets and Liabilities - Amortization (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Finite-Lived Intangible Assets [Line Items]
Amortization of acquired above and below-market leases, net	$ 429	$ 187	$ 465
Amortization of all other identified intangible assets	12,600	13,200	$ 15,000
Estimated amortization of all other identified intangible assets
Total	68,090	$ 81,679
Acquired favorable and unfavorable leases
Estimated amortization of acquired favorable and unfavorable leases Rental Revenue
2021	164
2022	55
2023	25
2024	6
2025	0
Total	250
Estimated amortization of acquired favorable and unfavorable leases Rental Expense
2021	(216)
2022	(216)
2023	(216)
2024	(216)
2025	(216)
Thereafter	(174)
Total	(1,254)
All other identified intangible assets
Estimated amortization of all other identified intangible assets
2021	10,634
2022	10,088
2023	10,084
2024	8,967
2025	7,978
Thereafter	11,594
Total	$ 59,345

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Real Estate Assets and Construction in Progress (Summary of Owned or Leased Properties by the Company) (Details) $ in Thousands	Dec. 31, 2020 USD ($) property	Dec. 31, 2019 USD ($) property
Real Estate Properties [Line Items]
Land	$ 165,109	$ 130,605
Buildings, Improvements and Equipment	2,839,261	2,178,901
Construction in progress	1,028,765	920,922
Total cost	4,033,135	3,230,428
Owned Properties | Atlanta, Georgia Campus
Real Estate Properties [Line Items]
Land	55,157	44,588
Buildings, Improvements and Equipment	700,142	525,300
Construction in progress	191,072	128,930
Total cost	946,371	698,818
Owned Properties | Ashburn, Virginia Campus
Real Estate Properties [Line Items]
Land	16,476	16,476
Buildings, Improvements and Equipment	371,725	156,396
Construction in progress	185,903	189,375
Total cost	574,104	362,247
Owned Properties | Irving, Texas
Real Estate Properties [Line Items]
Land	8,606	8,606
Buildings, Improvements and Equipment	392,275	369,727
Construction in progress	99,591	98,170
Total cost	500,472	476,503
Owned Properties | Chicago, Illinois
Real Estate Properties [Line Items]
Land	9,400	9,400
Buildings, Improvements and Equipment	250,336	205,026
Construction in progress	104,117	86,878
Total cost	363,853	301,304
Owned Properties | Richmond, Virginia
Real Estate Properties [Line Items]
Land	2,180	2,180
Buildings, Improvements and Equipment	233,927	195,684
Construction in progress	120,577	139,948
Total cost	356,684	337,812
Owned Properties | Suwanee, Georgia (Atlanta-Suwanee)
Real Estate Properties [Line Items]
Land	3,521	3,521
Buildings, Improvements and Equipment	184,467	174,124
Construction in progress	6,718	5,559
Total cost	194,706	183,204
Owned Properties | Piscataway, New Jersey
Real Estate Properties [Line Items]
Land	7,466	7,466
Buildings, Improvements and Equipment	122,176	103,553
Construction in progress	30,401	36,056
Total cost	160,043	147,075
Owned Properties | Fort Worth, Texas
Real Estate Properties [Line Items]
Land	9,079	9,079
Buildings, Improvements and Equipment	124,054	55,018
Construction in progress	1,064	35,722
Total cost	134,197	99,819
Owned Properties | Hillsboro, Oregon
Real Estate Properties [Line Items]
Land	18,414	0
Buildings, Improvements and Equipment	34,594	0
Construction in progress	78,390	63,573
Total cost	131,398	63,573
Owned Properties | Santa Clara, California
Real Estate Properties [Line Items]
Land	0	0
Buildings, Improvements and Equipment	117,343	114,499
Construction in progress	9,385	1,238
Total cost	126,728	115,737
Owned Properties | Eemshaven, Netherlands
Real Estate Properties [Line Items]
Land	5,366	0
Buildings, Improvements and Equipment	21,712	0
Construction in progress	47,531	37,267
Total cost	74,609	37,267
Owned Properties | Sacramento, California
Real Estate Properties [Line Items]
Land	1,481	1,481
Buildings, Improvements and Equipment	66,300	65,258
Construction in progress	12	163
Total cost	67,793	66,902
Owned Properties | Manassas, Virginia
Real Estate Properties [Line Items]
Land	0	0
Buildings, Improvements and Equipment	25	0
Construction in progress	67,073	57,662
Total cost	67,098	57,662
Owned Properties | Dulles, Virginia
Real Estate Properties [Line Items]
Land	3,154	3,154
Buildings, Improvements and Equipment	54,323	48,651
Construction in progress	4,148	4,688
Total cost	61,625	56,493
Owned Properties | Princeton, New Jersey
Real Estate Properties [Line Items]
Land	20,700	20,700
Buildings, Improvements and Equipment	35,261	35,192
Construction in progress	5	39
Total cost	55,966	55,931
Owned Properties | Phoenix, Arizona
Real Estate Properties [Line Items]
Land	0	0
Buildings, Improvements and Equipment	0	0
Construction in progress	37,729	31,265
Total cost	37,729	31,265
Owned Properties | Groningen, Netherlands
Real Estate Properties [Line Items]
Land	1,896	1,741
Buildings, Improvements and Equipment	11,206	9,085
Construction in progress	3,730	3,028
Total cost	16,832	13,854
Owned Properties | Other
Real Estate Properties [Line Items]
Land	2,213	2,213
Buildings, Improvements and Equipment	36,636	36,163
Construction in progress	41,094	120
Total cost	79,943	38,496
Leased Properties
Real Estate Properties [Line Items]
Land	0	0
Buildings, Improvements and Equipment	82,759	85,225
Construction in progress	225	1,241
Total cost	$ 82,984	$ 86,466
Number of facilities leased | property	7	7

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Leases - Finance leases (Details)	12 Months Ended
	Dec. 31, 2020 item
Operating leases:
Number of finance leases	1
Minimum
Operating leases:
Finance lease, remaining lease term	1 year
Maximum
Operating leases:
Finance lease, remaining lease term	17 years

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Leases - Operating leases (Details)	12 Months Ended
	Dec. 31, 2020 item property
Operating leases:
Number of operating leases | property	6
Number of ground leases under operating leases | item	1
Minimum
Operating leases:
Operating lease, remaining term	3 years
Maximum
Operating leases:
Operating lease, remaining term	6 years

XML

Leases - Components of lease expenses (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Finance lease cost:
Amortization of assets	$ 4,150	$ 3,535
Interest on lease liabilities	1,915	1,693
Operating lease expense:
Operating lease cost	9,012	9,102
Variable lease cost	1,072	1,109
Sublease income	(193)	(187)
Total lease costs	$ 15,956	$ 15,252

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Leases - Supplemental balance sheet information (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Operating leases:
Operating lease right-of-use assets	$ 51,342	$ 57,141
Operating lease liabilities	58,005	64,416
Finance leases:
Property and equipment, at cost	4,033,135	3,230,428
Accumulated amortization	(702,944)	(558,560)
Real Estate Assets, net	3,330,191	2,671,868
Finance lease liabilities	41,718	45,141
Finance leased assets
Operating leases:
Operating lease right-of-use assets	51,342	57,141
Operating lease liabilities	58,005	64,416
Finance leases:
Property and equipment, at cost	49,554	50,437
Accumulated amortization	(8,864)	(4,830)
Real Estate Assets, net	$ 40,690	$ 45,607

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Leases - Other information (Details)	Dec. 31, 2020	Dec. 31, 2019
Leases [Abstract]
Operating leases - Weighted average remaining lease term (in years)	13 years 4 months 24 days	13 years 8 months 12 days
Finance leases - Weighted average remaining lease term (in years)	10 years 3 months 18 days	11 years 4 months 24 days
Operating leases - Weighted average discount rate	5.20%	5.10%
Finance leases - Weighted average discount rate	4.30%	4.30%

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Leases - Supplemental cash flow and other information (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Leases [Abstract]
Operating cash flows for operating leases	$ 12,048	$ 9,834
Operating cash flows for finance leases	1,914	1,704
Financing cash flows for finance leases	$ 2,579	$ 2,855	$ 7,626

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Leases - Maturities of lease liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Operating Leases Maturities:
2021	$ 9,818
2022	10,266
2023	10,393
2024	8,317
2025	8,036
Thereafter	40,872
Total Lease Payments	87,702
Less: Imputed Interest	29,697
Total Lease Obligations	58,005	$ 64,416
Finance Leases Maturities:
2021	4,446
2022	4,570
2023	4,707
2024	4,847
2025	4,992
Thereafter	28,902
Total Lease Payments	52,464
Less: Imputed Interest	10,746
Total Lease Obligations	$ 41,718	$ 45,141

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Leases - Leases as lessor (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Lease revenue:
Minimum lease revenue	$ 464,005	$ 409,157	$ 367,388
Variable lease revenue (primarily recoveries from customers)	55,853	55,966	46,232
Total lease revenue	$ 519,858	$ 465,123	$ 413,620

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Investments in Unconsolidated Entity (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Investments in Unconsolidated Joint Ventures
Assets	$ 3,898,572	$ 3,223,533
Debt outstanding	1,842,337
Equity Method Investment, Nonconsolidated Investee or Group of Investees
Investments in Unconsolidated Joint Ventures
Assets	141,500	127,800
Debt outstanding	$ 90,100	68,200
Joint venture with Alinda
Investments in Unconsolidated Joint Ventures
Lease term of facility with global cloud-based software company	10 years
Equity method investments	$ 22,600	$ 30,200
Ownership interest (as a percent)	50.00%

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Debt (Outstanding Debt Including Capital Leases) (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Oct. 07, 2020	Dec. 31, 2019	Nov. 08, 2017	Mar. 08, 2017
Debt Instrument [Line Items]
Weighted average coupon interest rate	2.85%
Total debt and lease obligations	$ 1,884,055		$ 1,463,904
Less net debt issuance costs	(14,562)		(10,839)
Total outstanding debt, net	$ 1,869,493		1,453,065
Lenexa Mortgage
Debt Instrument [Line Items]
Interest rate					4.10%
Unsecured Revolving Credit Facility | Unsecured Revolving Credit Facility
Debt Instrument [Line Items]
Weighted average coupon interest rate	1.41%
Outstanding debt	$ 392,337		317,028
Term Loan A | Term Loan A
Debt Instrument [Line Items]
Weighted average coupon interest rate	3.26%
Outstanding debt	$ 225,000		225,000
Term Loan B | Term Loan B
Debt Instrument [Line Items]
Weighted average coupon interest rate	3.30%
Outstanding debt	$ 225,000		225,000
Term Loan C | Term Loan C
Debt Instrument [Line Items]
Weighted average coupon interest rate	3.46%
Outstanding debt	$ 250,000		250,000
Term Loan D
Debt Instrument [Line Items]
Weighted average coupon interest rate	1.45%
Outstanding debt	$ 250,000		0
4.750% Senior Notes
Debt Instrument [Line Items]
Weighted average coupon interest rate	4.75%
Outstanding debt	$ 0		400,000
4.750% Senior Notes | Senior Notes
Debt Instrument [Line Items]
Interest rate	4.75%			4.75%
3.875% Senior Notes
Debt Instrument [Line Items]
Weighted average coupon interest rate	3.88%
Outstanding debt	$ 500,000		0
Lenexa Mortgage | Lenexa Mortgage
Debt Instrument [Line Items]
Weighted average coupon interest rate	4.10%
Outstanding debt	$ 0		1,736
Finance Leases | Finance Leases
Debt Instrument [Line Items]
Weighted average coupon interest rate	4.33%
Outstanding debt	$ 41,718		$ 45,140
Senior Notes due 2028
Debt Instrument [Line Items]
Interest rate	3.875%	3.875%

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Debt (Unsecured Credit Facility Narrative) (Details) - USD ($)	1 Months Ended	12 Months Ended
	Oct. 31, 2019	Dec. 31, 2020	Oct. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Debt Instrument [Line Items]
Debt issuance costs, net		$ 6,034,000		$ 8,033,000
Weighted average interest rate		2.85%
Unsecured Credit Facility
Debt Instrument [Line Items]
Credit facility maximum borrowing capacity			$ 1,950,000,000
Outstanding debt		$ 1,100,000,000
Weighted average interest rate		2.65%
Term Loan
Debt Instrument [Line Items]
Outstanding debt		$ 700,000,000.0
Unsecured Credit Facility Two
Debt Instrument [Line Items]
Debt extension period	1 year
Unsecured Credit Facility Two | Term Loan
Debt Instrument [Line Items]
Debt issuance costs, net		7,100,000
Unsecured Credit Facility Two | Term Loan A Maturing December 17 2024
Debt Instrument [Line Items]
Credit facility maximum borrowing capacity	$ 225,000,000
Unsecured Credit Facility Two | Term Loan B Maturing April 27 2025
Debt Instrument [Line Items]
Credit facility maximum borrowing capacity	225,000,000
Unsecured Credit Facility Two | Term Loan C Maturing October 18 2026
Debt Instrument [Line Items]
Credit facility maximum borrowing capacity	250,000,000
Unsecured Credit Facility Two | Unsecured Revolving Credit Facility
Debt Instrument [Line Items]
Outstanding debt		392,300,000
Unsecured Credit Facility Two | Revolving Credit Facility Maturing December 17 2023
Debt Instrument [Line Items]
Credit facility maximum borrowing capacity	1,000,000,000.0				$ 1,700,000,000
Additional contingent borrowing capacity, maximum					$ 2,200,000,000
Unsecured Credit Facility Two | Various Foreign Currency
Debt Instrument [Line Items]
Credit facility maximum borrowing capacity	$ 300,000,000
Unsecured Credit Facility Two | Letter of Credit
Debt Instrument [Line Items]
Letter of credit outstanding		$ 3,500,000
Unsecured Credit Facility Two | Minimum | Term Loan C Maturing October 18 2026 | LIBOR
Debt Instrument [Line Items]
Debt instrument spread on variable interest rate	1.50%
Unsecured Credit Facility Two | Minimum | Term Loan C Maturing October 18 2026 | Base Rate
Debt Instrument [Line Items]
Debt instrument spread on variable interest rate	0.50%
Unsecured Credit Facility Two | Minimum | Term Loan A and Term Loan B | LIBOR
Debt Instrument [Line Items]
Debt instrument spread on variable interest rate		1.20%
Unsecured Credit Facility Two | Minimum | Term Loan A and Term Loan B | Base Rate
Debt Instrument [Line Items]
Debt instrument spread on variable interest rate		0.20%
Unsecured Credit Facility Two | Minimum | Revolving Credit Facility Maturing December 17 2023 | LIBOR
Debt Instrument [Line Items]
Debt instrument spread on variable interest rate		1.25%
Unsecured Credit Facility Two | Minimum | Revolving Credit Facility Maturing December 17 2023 | Base Rate
Debt Instrument [Line Items]
Debt instrument spread on variable interest rate		0.25%
Unsecured Credit Facility Two | Maximum | Term Loan C Maturing October 18 2026 | LIBOR
Debt Instrument [Line Items]
Debt instrument spread on variable interest rate	1.85%
Unsecured Credit Facility Two | Maximum | Term Loan C Maturing October 18 2026 | Base Rate
Debt Instrument [Line Items]
Debt instrument spread on variable interest rate	0.85%
Unsecured Credit Facility Two | Maximum | Term Loan A and Term Loan B | LIBOR
Debt Instrument [Line Items]
Debt instrument spread on variable interest rate		1.80%
Unsecured Credit Facility Two | Maximum | Term Loan A and Term Loan B | Base Rate
Debt Instrument [Line Items]
Debt instrument spread on variable interest rate		0.80%
Unsecured Credit Facility Two | Maximum | Revolving Credit Facility Maturing December 17 2023 | LIBOR
Debt Instrument [Line Items]
Debt instrument spread on variable interest rate		1.85%
Unsecured Credit Facility Two | Maximum | Revolving Credit Facility Maturing December 17 2023 | Base Rate
Debt Instrument [Line Items]
Debt instrument spread on variable interest rate		0.85%

XML

Debt (Senior Notes and Mortgage Notes Payable) (Details) - USD ($)		1 Months Ended		12 Months Ended
	Mar. 08, 2017	Nov. 30, 2020	Oct. 31, 2020	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Oct. 07, 2020	Nov. 08, 2017
Debt Instrument [Line Items]
Debt restructuring costs				$ 18,036,000	$ 1,523,000	$ 605,000
Deferred finance costs, net				$ 6,034,000	$ 8,033,000
Lenexa Mortgage
Debt Instrument [Line Items]
Aggregate principal amount	$ 1,900,000
Interest rate	4.10%
Periodic payment	$ 1,600,000
Extinguishment of debt		$ 1,700,000
Term Loan D
Debt Instrument [Line Items]
Current borrowing capacity			$ 250,000,000
Credit facility maximum borrowing capacity			500,000,000
Accordion feature			$ 250,000,000
Term Loan D | LIBOR
Debt Instrument [Line Items]
Floor over LIBOR			0.25%
Term Loan D | LIBOR | Minimum
Debt Instrument [Line Items]
Debt instrument spread on variable interest rate			1.20%
Term Loan D | LIBOR | Maximum
Debt Instrument [Line Items]
Debt instrument spread on variable interest rate			1.80%
Term Loan D | Base Rate | Minimum
Debt Instrument [Line Items]
Debt instrument spread on variable interest rate			0.20%
Term Loan D | Base Rate | Maximum
Debt Instrument [Line Items]
Debt instrument spread on variable interest rate			0.80%
Unsecured Credit Facility
Debt Instrument [Line Items]
Current borrowing capacity			$ 1,700,000,000
Credit facility maximum borrowing capacity			$ 1,950,000,000
Operating Partnership and QTS Finance Corporation | Senior Notes
Debt Instrument [Line Items]
Aggregate principal amount								$ 400,000,000
Interest rate				4.75%				4.75%
Percentage of issued price equal to face value								100.00%
Debt restructuring costs				$ 18,000,000.0
Operating Partnership and QTS Finance Corporation | Senior Notes | Early Redemption Fees
Debt Instrument [Line Items]
Debt restructuring costs				14,300,000
Operating Partnership and QTS Finance Corporation | Senior Notes | Non-cash Charge
Debt Instrument [Line Items]
Debt restructuring costs				$ 3,700,000
5.875% Senior Notes due 2022 | Senior Notes
Debt Instrument [Line Items]
Interest rate								5.875%
Senior Notes due 2028
Debt Instrument [Line Items]
Aggregate principal amount							$ 500,000,000
Interest rate				3.875%			3.875%
Percentage of issued price equal to face value							100.00%
Senior Notes due 2028 | Senior Notes
Debt Instrument [Line Items]
Deferred finance costs, net				$ 7,500,000

XML

Debt (Annual Remaining Principal Payment) (Details) $ in Thousands	Dec. 31, 2020 USD ($)
Debt Disclosure [Abstract]
2021	$ 0
2022	0
2023	392,337
2024	225,000
2025	225,000
Thereafter	1,000,000
Total	$ 1,842,337

XML

Income Taxes - Components of Income tax Expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Current:
U.S. federal	$ 0	$ 0	$ (50)
U.S. State	368	298	395
Outside United States	7	13	78
Total Current	375	311	423
Deferred:
U.S. federal	71	(276)	(3,727)
U.S. State	(66)	(71)	(64)
Outside United States	58	(1)	0
Total Deferred	63	(348)	(3,791)
Total	$ 438	$ (37)	$ (3,368)

XML

Income Taxes - Temporary Differences and Carry Forwards Which Give Rise to Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Deferred tax assets
Net operating loss carryforwards	$ 22,950	$ 20,218	$ 17,610
Deferred revenue and setup charges	1,062	1,299	3,171
Operating lease liabilities	1,904	2,266	0
Property and equipment	0	512	0
Leases	400	0	1
Credits	300	300	287
Equity compensation	1,654	1,119	952
Bad debt reserve	191	18	409
Intangibles	1,038	804	0
Interest expense carryforward IRC Sec. 163(j)	1,164	2,782	2,253
Other	857	257	582
Gross deferred tax assets	31,520	29,575	25,265
Deferred tax liabilities
Property and equipment	(616)	0	(3,089)
Goodwill	(3,042)	(2,494)	(1,953)
Intangibles	0	(591)	(11,910)
Operating lease right-of-use assets	(1,056)	(1,261)	0
Prepaid commissions	(774)	(1,007)	(956)
Other	(218)	(224)	(93)
Gross deferred tax liabilities	(5,706)	(5,577)	(18,001)
Net deferred tax asset	25,814	23,998	7,264
Valuation allowance	26,624	24,747	8,361
Net deferred tax liability	$ (810)	$ (749)	$ (1,097)

XML

Income Taxes - Schedule of Differences between Total Income Tax or Benefit and Amount Computed by Applying the Statutory Income Tax Rate (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Income Tax Disclosure [Abstract]
Statutory rate applied to pre-tax loss	$ (1,380)	$ (12,991)	$ (9,656)
Permanent differences, net	248	16	97
State income tax, net of federal benefit	(421)	(2,868)	(1,430)
Foreign income tax	7	13	78
Federal and State rate change	(1)	(20)	(146)
Other	109	(110)	41
Valuation allowance increase	1,876	15,923	7,648
Total tax expense (benefit)	$ 438	$ (37)	$ (3,368)
Effective tax rate	(6.70%)	0.10%	7.30%

XML

Income Taxes - Additional Information (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2020 USD ($) entity	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)
Number of subsidiaries taxed as taxable REIT | entity	2
Net operating loss carry forwards related to federal income taxes	$ 33,400
Net operating loss carryforwards no expiration period	42,300
Net operating loss carryforwards related to State income taxes	86,000
Interest expense carryforward with no expiration	4,500
Unrecognized tax benefits	0	$ 0	$ 0
Interest and penalties related to income taxes	0	0	0
Valuation allowance	26,624	$ 24,747	$ 8,361
Deferred tax assets valuation allowance change	$ 1,900
Federal | Maximum
Net operating loss carry forwards, expiration period	16 years
Federal | Minimum
Net operating loss carry forwards, expiration period	11 years
State | Maximum
Net operating loss carry forwards, expiration period	20 years
State | Minimum
Net operating loss carry forwards, expiration period	1 year

XML

Derivative Instruments - Narrative (Details) - USD ($)	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Derivative [Line Items]
Increase/decrease in interest expense	$ (10,100,000)	$ 1,000,000.0	$ (100,000)
Cash flow hedge gain (loss) to be reclassified within twelve months	13,500,000
Interest Rate Swap
Derivative [Line Items]
Derivative instruments, notional amount	700,000,000
Ineffectiveness recognized	0	0	$ 0
Interest Rate Swap | Term Loan
Derivative [Line Items]
Aggregate principal amount	700,000,000
Interest Rate Swap | Term Loan A Maturing December 17 2024
Derivative [Line Items]
Aggregate principal amount	225,000,000
Interest Rate Swap | Term Loan B Maturing April 27 2025
Derivative [Line Items]
Aggregate principal amount	225,000,000
Interest Rate Swap | Term Loan C Maturing October 18 2026
Derivative [Line Items]
Aggregate principal amount	250,000,000
Interest Rate Swap | Cash flow hedging
Derivative [Line Items]
Derivative liability, fair value	$ (49,800,000)	$ (19,900,000)

XML

Derivative Instruments - Interest rate derivatives and their fair values (Details) - USD ($)	Dec. 31, 2020	Dec. 31, 2019
Interest Rate Swap
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Notional amount of derivative	$ 700,000,000
Interest Rate Swap | Cash flow hedging
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Fair Value	(49,796,000)	$ (19,916,000)
Swap instrument one matures on December 17, 2021 | Cash flow hedging
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Notional amount of derivative	$ 25,000,000	25,000,000
Fixed Rate Per annum	1.989%
Fair Value	$ (447,000)	(209,000)
Swap instrument two matures on December 17, 2021 | Cash flow hedging
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Notional amount of derivative	$ 100,000,000	100,000,000
Fixed Rate Per annum	1.989%
Fair Value	$ (1,788,000)	(837,000)
Swap instrument three matures on December 17, 2021 | Cash flow hedging
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Notional amount of derivative	$ 75,000,000	75,000,000
Fixed Rate Per annum	1.989%
Fair Value	$ (1,342,000)	(627,000)
Swap instrument one matures on April 27, 2022 | Cash flow hedging
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Notional amount of derivative	$ 50,000,000	50,000,000
Fixed Rate Per annum	2.033%
Fair Value	$ (1,248,000)	(545,000)
Swap instrument two matures on April 27, 2022 | Cash flow hedging
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Notional amount of derivative	$ 100,000,000	100,000,000
Fixed Rate Per annum	2.029%
Fair Value	$ (2,490,000)	(1,081,000)
Swap instrument three matures on April 27, 2022 | Cash flow hedging
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Notional amount of derivative	$ 50,000,000	50,000,000
Fixed Rate Per annum	2.033%
Fair Value	$ (1,248,000)	(545,000)
Swap instrument one matures on December 17, 2023 | Cash flow hedging
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Notional amount of derivative	$ 100,000,000	100,000,000
Fixed Rate Per annum	2.617%
Fair Value	$ (7,191,000)	(4,007,000)
Swap instrument one matures on April 27, 2024 | Cash flow hedging
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Notional amount of derivative	$ 100,000,000	100,000,000
Fixed Rate Per annum	2.621%
Fair Value	$ (8,000,000)	(4,324,000)
Swap instrument one maturing October 18, 2026 | Cash flow hedging
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Notional amount of derivative	$ 70,000,000	0
Fixed Rate Per annum	0.968%
Fair Value	$ (2,174,000)	0
Swap instrument two maturing October18, 2026 | Cash flow hedging
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Notional amount of derivative	$ 30,000,000	0
Fixed Rate Per annum	0.973%
Fair Value	$ (938,000)	0
Swap instrument two matures on December 17, 2023 | Cash flow hedging
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Notional amount of derivative	$ 200,000,000	200,000,000
Fixed Rate Per annum	2.636%
Fair Value	$ (9,648,000)	(3,939,000)
Swap instrument two matures on April 27, 2024 | Cash flow hedging
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Notional amount of derivative	$ 200,000,000	200,000,000
Fixed Rate Per annum	2.642%
Fair Value	$ (9,500,000)	(3,802,000)
Swap instrument one maturing December 17, 2024 | Cash flow hedging
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Notional amount of derivative	$ 125,000,000	0
Fixed Rate Per annum	1.014%
Fair Value	$ (704,000)	0
Swap instrument two maturing December 17, 2024 | Cash flow hedging
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Notional amount of derivative	$ 100,000,000	0
Fixed Rate Per annum	1.035%
Fair Value	$ (584,000)	0
Swap instrument three maturing October 18, 2026 | Cash flow hedging
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Notional amount of derivative	$ 75,000,000	0
Fixed Rate Per annum	1.11%
Fair Value	$ (866,000)	0
Swap instrument one maturing April 27, 2025 | Cash flow hedging
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Notional amount of derivative	$ 100,000,000	0
Fixed Rate Per annum	1.088%
Fair Value	$ (540,000)	0
Swap instrument two maturing April 27, 2025 | Cash flow hedging
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Notional amount of derivative	$ 125,000,000	0
Fixed Rate Per annum	1.082%
Fair Value	$ (666,000)	0
Swap instrument four maturing October 18, 2026 | Cash flow hedging
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Notional amount of derivative	$ 75,000,000	0
Fixed Rate Per annum	0.977%
Fair Value	$ (422,000)	$ 0

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Derivative Instruments - Power Purchase Agreements (Details) $ in Thousands	1 Months Ended	12 Months Ended
	Mar. 31, 2019 agreement	Dec. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)
Derivative [Line Items]
Increase in utilities expense		$ 1,200	$ 700	$ 0
Reclassification of other comprehensive income to utilities expense		1,204	749	$ 0
Fair Value		$ (3,926)	(6,693)
Piscataway | Calpine Energy Solutions, LLC
Derivative [Line Items]
Expiration Date		Feb. 28, 2029
Fair Value		$ (2,162)	(2,919)
Chicago | Calpine Energy Solutions, LLC
Derivative [Line Items]
Expiration Date		Feb. 28, 2029
Fair Value		$ (1,764)	$ (3,774)
Power Purchase Agreements
Derivative [Line Items]
Term of agreement	10 years
Power Purchase Agreements | Chicago and Piscataway
Derivative [Line Items]
Number of agreements | agreement	2

XML

Partners' Capital, Equity and Incentive Compensation Plans (Narrative) (Details)																	1 Months Ended	3 Months Ended	12 Months Ended
	Jan. 15, 2021 $ / shares	Jan. 07, 2021 $ / shares	Sep. 18, 2020 $ / shares	Jun. 19, 2020 $ / shares	Mar. 20, 2020 $ / shares	Dec. 20, 2019 $ / shares	Sep. 19, 2019 $ / shares	Jun. 25, 2019 $ / shares	May 08, 2019 shares	Mar. 20, 2019 $ / shares	Dec. 21, 2018 $ / shares	Jun. 25, 2018 $ / shares shares	Jun. 22, 2018	Mar. 15, 2018 $ / shares shares	May 04, 2017 USD ($) item shares	May 04, 2015 shares	Mar. 31, 2019	Mar. 31, 2019 shares	Dec. 31, 2020 USD ($) Partnership item $ / shares shares	Dec. 31, 2019 USD ($) shares	Dec. 31, 2018 USD ($)	Jun. 30, 2020 $ / shares shares	May 31, 2020 USD ($)	Jun. 30, 2019 USD ($) $ / shares	May 09, 2019 shares	Feb. 28, 2019 $ / shares shares	May 03, 2015 shares
Partners Capital And Distributions [Line Items]
Number of classes of partnership units outstanding | Partnership																			4
Vesting percentage																			8.375%
Equity based compensation expense unrecognized | $																			$ 26,500,000
Equity based compensation expense vesting period																			10 months 24 days
Dividend rate (as a percent)														7.125%
Proceeds from issuance or sale of equity | $																			$ (286,300,000)
Common stock issuance proceeds, net of costs | $																			$ 285,352,000	$ 268,259,000	$ 0
Preferred stock, liquidation preference (in dollars per share) | $ / shares														$ 25.00
Preferred stock, shares issued (in shares) | shares														4,280,000
At Market
Partners Capital And Distributions [Line Items]
Initial forward sale price per share, calculation value																			100.00%
QTS Realty Trust, Inc. Employee Stock Purchase Plan
Partners Capital And Distributions [Line Items]
Shares reserved for purchase under plan | shares																			250,000
2017 Plan
Partners Capital And Distributions [Line Items]
Minimum period of service															30 days
Minimum hours per week of service | item															30
Employee stock purchase plan number of purchase period per year | item															4
Common stock
Partners Capital And Distributions [Line Items]
Dividend paid to common stockholders (in dollars per share) | $ / shares			$ 0.47	$ 0.47	$ 0.47	$ 0.44	$ 0.44	$ 0.44		$ 0.44	$ 0.41
Shares issued | shares																				4,000,000
Common stock | Underwritten Offering
Partners Capital And Distributions [Line Items]
Share Price | $ / shares																						$ 64.90
Common stock | Subsequent Event
Partners Capital And Distributions [Line Items]
Dividend paid to common stockholders (in dollars per share) | $ / shares		$ 0.47
Class O Units
Partners Capital And Distributions [Line Items]
Equity based compensation awards intrinsic value | $																			$ 48,300,000
Class B Common Stock
Partners Capital And Distributions [Line Items]
Number of votes per share | item																			50
Class A Common Stock | Underwritten Offering
Partners Capital And Distributions [Line Items]
Shares issued | shares																		4,000,000
Common stock, shares authorized (in shares) | shares																										7,762,500
Shares to be issued on a forward basis (in shares) | shares																										3,762,500
Common stock, par value (in dollars per share) | $ / shares																										$ 0.01
Class A Common Stock | Prior At Market Offering Program
Partners Capital And Distributions [Line Items]
Maximum value of stock which may be issued | $																								$ 400,000,000
Common stock, par value (in dollars per share) | $ / shares																								$ 0.01
Class A Common Stock | At Market
Partners Capital And Distributions [Line Items]
Maximum value of stock which may be issued | $																							$ 500,000,000
Class A Common Stock | 2017 Plan
Partners Capital And Distributions [Line Items]
Shares reserved for purchase under plan | shares															239,989
Discount rate of purchase price of common stock															10.00%
Series A Redeemable Perpetual Preferred
Partners Capital And Distributions [Line Items]
Preferred stock, liquidation preference (in dollars per share) | $ / shares																			$ 25.00
Preferred stock redemption price per share | $ / shares																			$ 25.00
Threshold period of redemption of preferred stock																			120 days
Ownership interest																			50.00%
Convertible preferred stock par value | $ / shares																			$ 0.01
Share cap price | $ / shares																			1.46929
Series A Redeemable Perpetual Preferred | Underwriter's Option
Partners Capital And Distributions [Line Items]
Preferred stock, shares issued (in shares) | shares														280,000
Series A Redeemable Perpetual Preferred | Subsequent Event
Partners Capital And Distributions [Line Items]
Dividend paid to common stockholders (in dollars per share) | $ / shares	$ 0.45
Series B Convertible preferred stock
Partners Capital And Distributions [Line Items]
Dividend rate (as a percent)												6.50%
Preferred stock, liquidation preference (in dollars per share) | $ / shares												$ 100.00
Preferred stock, shares issued (in shares) | shares												3,162,500
Share cap price | $ / shares																			$ 5.1020
Minimum percentage of closing sale price of common stock under preferred stock conversion (as a percent)																			150.00%
Maximum trading days of closing sale price of common stock under preferred stock conversion including the last trading day (in days)																			30 days
Period of average daily volume weighted average price																			10 days
Series B Convertible preferred stock | Underwriter's Option
Partners Capital And Distributions [Line Items]
Preferred stock, shares issued (in shares) | shares												412,500
Series B Convertible preferred stock | Subsequent Event
Partners Capital And Distributions [Line Items]
Dividend paid to common stockholders (in dollars per share) | $ / shares	$ 1.63
Series B Convertible preferred stock
Partners Capital And Distributions [Line Items]
Dividend rate (as a percent)													6.50%
Minimum trading days of closing sale price of common stock under preferred stock conversion (in days)																			20 days
Maximum trading days of closing sale price of common stock under preferred stock conversion including the last trading day (in days)																			30 days
Conversion of stock, conversion rate																			2.1404
Preferred Units Series A | QualityTech, LP
Partners Capital And Distributions [Line Items]
Conversion ratio, stock for cash or stock																			1
Chief Executive Officer | Class B Common Stock
Partners Capital And Distributions [Line Items]
Percentage of operating partnership unit exchanged																			2.00%
Minimum | 2017 Plan
Partners Capital And Distributions [Line Items]
Minimum percentage of combined voting power															500.00%
Deductions per paycheck for purchase of shares | $															$ 20
Holding period after purchase of share															1 year
Maximum | 2017 Plan
Partners Capital And Distributions [Line Items]
Deductions per paycheck for purchase of shares | $															$ 1,000
Maximum | Common stock | Underwritten Offering
Partners Capital And Distributions [Line Items]
Common stock, shares authorized (in shares) | shares																						4,400,000
Restricted Class A Common Stock
Partners Capital And Distributions [Line Items]
Options outstanding | shares																			100,000
Performance-Based FFO Units | Minimum | Class A Common Stock
Partners Capital And Distributions [Line Items]
Percentage of target award																	0.00%
Performance-Based FFO Units | Maximum | Class A Common Stock
Partners Capital And Distributions [Line Items]
Percentage of target award																	200.00%
2013 Equity Incentive Plan | Class A Common Stock
Partners Capital And Distributions [Line Items]
Authorized shares to be issued under the plan | shares																									5,900,000		1,750,000
Additional shares available for issuance under plan approved by stockholders | shares									1,100,000							3,000,000.0
Second portion | Performance-Based FFO Units
Partners Capital And Distributions [Line Items]
Vesting period																	3 years

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Partners' Capital, Equity and Incentive Compensation Plans (Summary of Award Activity Under 2010 Equity Incentive Plan and 2013 Equity Incentive Plan and Related Information) (Details) - $ / shares	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
2010 Equity Incentive Plan | Class O Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Beginning balance, number of units (in shares)	82,310	102,279	568,040
Number of units, granted (in shares)	0	0	0
Number of units, exercised/vested (in shares)	(6,875)	(19,969)	(465,761)
Number of units, cancelled/expired (in shares)	0	0	0
Ending balance, number of units (in shares)	75,435	82,310	102,279
Beginning balance, weighted average exercise price units (in dollars per share)	$ 24.97	$ 24.05	$ 23.52
Weighted average exercise price units, granted (in dollars per share)	0	0	0
Weighted average exercise price units, exercised (in dollars per share)	25.00	20.25	23.40
Weighted average exercise price units, cancelled/expired (in dollars per share)	0	0	0
Ending balance, weighted average exercise price units (in dollars per share)	25.00	24.97	24.05
Beginning balance, weighted average fair value (in dollars per share)	5.97	5.67	5.00
Weighted average fair value, granted (in dollars per share)	0	0	0
Weighted average fair value, exercised (in dollars per share)	4.49	4.42	4.76
Weighted average fair value, cancelled/ expired (in dollars per share)	0	0	0
Ending balance, weighted average fair value (in dollars per share)	$ 6.11	$ 5.97	$ 5.67
2013 Equity Incentive Plan | Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Beginning balance, options outstanding (in shares)	1,934,838	2,037,163	1,369,270
Options, granted (in shares)	99,872	135,594	674,081
Options, exercised (in shares)	(98,303)	(125,213)	(6,188)
Options, cancelled/expired (in shares)	0	(112,706)	0
Ending balance, options outstanding (in shares)	1,936,407	1,934,838	2,037,163
Beginning balance, weighted average exercise price options outstanding (in dollars per share)	$ 37.11	$ 36.86	$ 38.18
Weighted average exercise price options outstanding, granted (in dollars per share)	56.84	42.27	34.05
Weighted average exercise price options outstanding, exercised (in dollars per share)	28.84	30.80	21.50
Weighted average exercise price options outstanding, cancelled/expired (in dollars per share)	0	45.86	0
Ending balance, weighted average exercise price options outstanding (in dollars per share)	38.55	37.11	36.86
Beginning balance, weighted average fair value, options (in dollars per share)	7.05	7.10	7.80
Weighted average fair value, granted, options (in dollars per share)	9.35	7.62	5.63
Weighted average fair value, vested, options (in dollars per share)	5.18	6.21	3.68
Weighted average fair value, cancelled/expired, options (in dollars per share)	0	9.43	0
Ending balance, weighted average fair value, options (in dollars per share)	$ 7.26	$ 7.05	$ 7.10
2013 Equity Incentive Plan | Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Beginning balance, number of units (in shares)	389,750	420,309	381,864
Number of units, granted (in shares)	302,591	274,564	348,152
Number of units, exercised/vested (in shares)	(264,466)	(279,429)	(224,660)
Number of units, cancelled/expired (in shares)	(11,379)	(25,694)	(85,047)
Ending balance, number of units (in shares)	416,496	389,750	420,309
Beginning balance, weighted average exercise price units (in dollars per share)	$ 39.67	$ 37.83	$ 46.37
Weighted average exercise price units, granted (in dollars per share)	57.47	42.25	35.27
Weighted average exercise price units, exercised (in dollars per share)	39.89	39.20	46.23
Weighted average exercise price units, cancelled/expired (in dollars per share)	49.38	42.17	43.50
Ending balance, weighted average exercise price units (in dollars per share)	$ 52.20	$ 39.67	$ 37.83
2013 Equity Incentive Plan | Performance-Based Relative TSR Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Beginning balance, number of units (in shares)	84,350	0	0
Number of units, granted (in shares)	84,202	86,089	0
Number of units, exercised/vested (in shares)	0	0	0
Number of units, cancelled/expired (in shares)	0	(1,739)	0
Ending balance, number of units (in shares)	168,552	84,350	0
Weighted average exercise price units, exercised (in dollars per share)	$ 0	$ 0	$ 0
Beginning balance, weighted average fair value, options (in dollars per share)	54.64	0	0
Weighted average fair value, granted, options (in dollars per share)	79.18	54.64	0
Weighted average fair value, cancelled/expired, options (in dollars per share)	0	54.64	0
Ending balance, weighted average fair value, options (in dollars per share)	$ 66.90	$ 54.64	$ 0
2013 Equity Incentive Plan | Performance-Based FFO Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Beginning balance, number of units (in shares)	84,350	0	0
Number of units, granted (in shares)	84,202	86,089	0
Number of units, performance adjustment (in shares)	59,844
Number of units, exercised/vested (in shares)	(96,129)	0	0
Number of units, cancelled/expired (in shares)	0	(1,739)	0
Ending balance, number of units (in shares)	132,267	84,350	0
Weighted average exercise price units, performance adjustment (in dollars per share)	$ 42.01
Weighted average exercise price units, exercised (in dollars per share)	42.01	$ 0	$ 0
Beginning balance, weighted average fair value, options (in dollars per share)	42.01	0	0
Weighted average fair value, granted, options (in dollars per share)	56.84	42.01	0
Weighted average fair value, cancelled/expired, options (in dollars per share)	0	42.01	0
Ending balance, weighted average fair value, options (in dollars per share)	$ 51.45	$ 42.01	$ 0

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Partners' Capital, Equity and Incentive Compensation Plans (Summary of Assumptions and Fair Values for Restricted Stock and Options to Purchase Shares of Class A Common Stock Granted) (Details) - $ / shares	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Fair value of TSR units granted	79.18	54.64
Expected term (years)	5 years 6 months	5 years 6 months
Expected volatility	27.00%	28.00%	28.00%
Expected dividend yield			4.82%
Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Fair value of restricted stock granted	$ 56.84	$ 42.01	$ 34.03
Fair value of options granted	$ 9.35	$ 7.56	$ 5.55
Expected term (years)			5 years 6 months
Expected dividend yield	3.31%	3.89%
Expected risk-free interest rates	0.61%	2.33%	2.69%
Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Fair value of restricted stock granted	$ 65.96	$ 51.25	$ 54.01
Fair value of options granted		$ 8.28	$ 5.64
Expected term (years)			6 years
Expected dividend yield		4.19%
Expected risk-free interest rates		2.56%	2.73%

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Partners' Capital, Equity and Incentive Compensation Plans (Summary of Information About Awards Outstanding) (Details)	12 Months Ended
	Dec. 31, 2020 $ / shares shares
QualityTech LP
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Awards outstanding	75,435
QTS Realty Trust, Inc.
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Awards outstanding	2,653,722
QTS Realty Trust, Inc. | Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Awards outstanding	416,496
Remaining term of awards	1 year
QTS Realty Trust, Inc. | Performance-Based Relative TSR Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Awards outstanding	168,552
Remaining term of awards	10 months 24 days
QTS Realty Trust, Inc. | Performance-Based FFO Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Awards outstanding	132,267
Remaining term of awards	8 months 12 days
QTS Realty Trust, Inc. | Options to purchase Class A common stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Lower limit of exercise price | $ / shares	$ 21.00
Upper limit of exercise price | $ / shares	$ 56.84
Awards outstanding	1,936,407
Remaining term of awards	10 months 24 days
Class O Units | QualityTech LP
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Upper limit of exercise price | $ / shares	$ 25.00
Awards outstanding	75,435

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Partners' Capital, Equity and Incentive Compensation Plans (Schedule of Quarterly Cash Dividends) (Details) - USD ($) $ / shares in Units, $ in Thousands																						3 Months Ended	12 Months Ended
	Jan. 15, 2021	Jan. 07, 2021	Sep. 30, 2020	Sep. 18, 2020	Jun. 30, 2020	Jun. 19, 2020	Mar. 31, 2020	Mar. 20, 2020	Dec. 31, 2019	Dec. 20, 2019	Sep. 30, 2019	Sep. 19, 2019	Jun. 30, 2019	Jun. 25, 2019	Mar. 31, 2019	Mar. 20, 2019	Dec. 31, 2018	Dec. 21, 2018	Jun. 25, 2018	Jun. 22, 2018	Mar. 15, 2018	Mar. 31, 2019	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Dividend rate (as a percent)																					7.125%
Preferred stock, shares issued (in shares)																					4,280,000
Preferred stock issuance proceeds, net of costs																							$ 0	$ 0	$ 407,477
Preferred stock, liquidation preference (in dollars per share)																					$ 25.00
Series A Redeemable Perpetual Preferred
Dividend rate (as a percent)																							7.125%	7.125%
Preferred stock, shares issued (in shares)									4,280,000														4,280,000	4,280,000
Preferred stock, liquidation preference (in dollars per share)									$ 25.00														$ 25.00	$ 25.00
Series A Preferred Stock
Dividend paid to common stockholders (in dollars per share)			$ 0.45		$ 0.45		$ 0.45		$ 0.45		$ 0.45		$ 0.45		$ 0.45		$ 0.45
Aggregate Dividend/Distribution Amount (in millions)			$ 1,900		$ 1,900		$ 1,900		$ 1,900		$ 1,900		$ 1,900		$ 1,900		$ 1,900						$ 7,600	$ 7,600
Series B Preferred Stock
Dividend paid to common stockholders (in dollars per share)			$ 1.63		$ 1.63		$ 1.63		$ 1.63		$ 1.63		$ 1.63		$ 1.63		$ 1.63
Aggregate Dividend/Distribution Amount (in millions)			$ 5,100		$ 5,100		$ 5,100		$ 5,100		$ 5,100		$ 5,100		$ 5,100		$ 5,100						$ 20,400	20,400
Series A Redeemable Perpetual Preferred
Preferred stock redemption price per share																							$ 25.00
Threshold period of redemption of preferred stock																							120 days
Ownership interest																							50.00%
Convertible preferred stock par value																							$ 0.01
Preferred stock, liquidation preference (in dollars per share)																							25.00
Share cap price																							$ 1.46929
Series B Convertible preferred stock
Dividend rate (as a percent)																				6.50%
Minimum trading days of closing sale price of common stock under preferred stock conversion (in days)																							20 days
Maximum trading days of closing sale price of common stock under preferred stock conversion including the last trading day (in days)																							30 days
Series B Convertible preferred stock
Dividend rate (as a percent)																			6.50%
Preferred stock, shares issued (in shares)																			3,162,500
Minimum percentage of closing sale price of common stock under preferred stock conversion (as a percent)																							150.00%
Maximum trading days of closing sale price of common stock under preferred stock conversion including the last trading day (in days)																							30 days
Preferred stock, liquidation preference (in dollars per share)																			$ 100.00
Period of average daily volume weighted average price																							10 days
Share cap price																							$ 5.1020
Subsequent Event | Series A Redeemable Perpetual Preferred
Dividend paid to common stockholders (in dollars per share)	$ 0.45
Subsequent Event | Series B Convertible preferred stock
Dividend paid to common stockholders (in dollars per share)	$ 1.63
Underwriter's Option | Series A Redeemable Perpetual Preferred
Preferred stock, shares issued (in shares)																					280,000
Underwriter's Option | Series B Convertible preferred stock
Preferred stock, shares issued (in shares)																			412,500
Underwritten Offering | Class A Common Stock
Shares issued																						4,000,000
Common stock
Dividend paid to common stockholders (in dollars per share)				$ 0.47		$ 0.47		$ 0.47		$ 0.44		$ 0.44		$ 0.44		$ 0.44		$ 0.41
Aggregate Dividend/Distribution Amount (in millions)				$ 32,000		$ 31,500		$ 31,500		$ 28,600		$ 27,300		$ 27,300		$ 27,300		$ 23,700					$ 123,600	$ 105,600
Shares issued																								4,000,000
Common stock | Subsequent Event
Dividend paid to common stockholders (in dollars per share)		$ 0.47

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Partners' Capital, Equity and Incentive Compensation Plans (Summary of Equity Issued) (Details) - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Subsidiary, Sale of Stock [Line Items]
Shares and net proceeds available as of December 31, 2019	3,795
Shares and net proceeds available as of December 31, 2019	$ 173,776
Forward Shares Sold/Settled , Number of Shares	9,961	3,795
Proceeds From Issuance Or Sale Of Equity1	$ 587,550	$ 173,776
Proceeds from issuance or sale of equity		177,800
Dividends, common stock		$ 4,000
February 2019 Offering - Settlement
Subsidiary, Sale of Stock [Line Items]
Forward shares (Settled) (in shares)	(931)
Net Proceeds (Received)	$ (35,841)
June '19 ATM
Subsidiary, Sale of Stock [Line Items]
Forward shares (Settled) (in shares)	(4,981)
Forward Shares Sold (in shares)	4,550
Net Proceeds (Received)	$ (250,496)
Net Proceeds Available	$ 243,577
May 2020 Current ATM Program - Sales
Subsidiary, Sale of Stock [Line Items]
Forward Shares Sold (in shares)	3,128
Net Proceeds Available	$ 189,640
June 2020 Offering - Sales
Subsidiary, Sale of Stock [Line Items]
Forward Shares Sold (in shares)	4,400
Net Proceeds Available	$ 266,894

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Related Party Transactions (Summary of Related Party Transactions) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Related Party Transaction [Line Items]
Other	$ 19,510	$ 15,695	$ 36,904
Affiliated Entity
Related Party Transaction [Line Items]
Lease term of facility with global cloud-based software company	10 years
Ownership interest	50.00%
Tax, utility, insurance and other reimbursement	$ 694	967	724
Rent expense	1,027	1,014	1,014
Capital assets acquired	0	704	464
Total	1,721	2,685	$ 2,202
Development Fees | Affiliated Entity
Related Party Transaction [Line Items]
Other	900	600
Management Fees | Affiliated Entity
Related Party Transaction [Line Items]
Other	$ 800	$ 600

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Employee Benefit Plan (Narrative) (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2016	Dec. 31, 2015
Defined Benefit Plan Disclosure [Line Items]
Employer contribution on employee benefit plan	$ 2.6	$ 2.5	$ 2.5
First 6% of Employee Contribution
Defined Benefit Plan Disclosure [Line Items]
Employer contribution rate as a percentage of employee contribution					50.00%
Percentage contribution from employees					6.00%
First 1% Percent of Contributions
Defined Benefit Plan Disclosure [Line Items]
Employer contribution rate as a percentage of employee contribution				100.00%
Percentage contribution from employees				1.00%
Next 5 % Percent of Employee Contribution
Defined Benefit Plan Disclosure [Line Items]
Employer contribution rate as a percentage of employee contribution				50.00%
Percentage contribution from employees				5.00%

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Noncontrolling Interest (Narrative) (Details)	12 Months Ended
	Dec. 31, 2020	Oct. 13, 2013
Stock conversion ratio	1
Previous Owners of QualityTech LP | QualityTech, LP
QualityTech LP ownership percentage in operating partnership	9.20%	21.20%

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Earnings per share (Computation of Basic and Diluted Net Income per Share) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Earnings Per Share [Abstract]
Net income (loss)	$ (10,660)	$ 6,907	$ 10,209	$ 8,120	$ (3,606)	$ 6,588	$ 7,535	$ 21,148	$ 14,576	$ 31,665	$ (7,175)
(Income) loss attributable to noncontrolling interests									1,330	(374)	2,715
Preferred stock dividends									(28,180)	(28,180)	(16,666)
Earnings attributable to participating securities									(16,360)	(7,828)	(947)
Net loss available to common stockholders after allocation to participating securities									$ (28,634)	$ (4,717)	$ (22,073)
Weighted average shares outstanding - basic (in shares)									60,717,301	54,836,801	50,432,590
Effect of Class O units, TSR units, FFO units and options to purchase Class A common stock on an "as if" converted basis (in shares)									0	0	0
Weighted average shares outstanding - diluted (in shares)									60,717,301	54,836,801	50,432,590
Basic net loss per share (in dollars per share)	$ (0.33)	$ (0.07)	$ (0.05)	$ (0.01)	$ (0.20)	$ (0.05)	$ (0.03)	$ 0.20	$ (0.47)	$ (0.09)	$ (0.44)
Diluted net loss per share (in dollars per share)	$ (0.33)	$ (0.07)	$ (0.05)	$ (0.01)	$ (0.20)	$ (0.05)	$ (0.03)	$ 0.20	$ (0.47)	$ (0.09)	$ (0.44)

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Earnings per share (Antidilutive) (Details) - shares shares in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Class A Common Stock
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
Antidilutive shares excluded from the computation of diluted net earning per share	6,648	6,671	6,653
Class O units, TSR units, FFO units and options to purchase common stock on an "as if" converted basis
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
Antidilutive shares excluded from the computation of diluted net earning per share	1,118	518	350
Series B Convertible preferred stock
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
Antidilutive shares excluded from the computation of diluted net earning per share	6,778	6,729	3,484

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Contracts with Customers (Details) $ in Thousands	Dec. 31, 2020 USD ($)
Revenue from Contract with Customer [Abstract]
2021	$ 435,906
2022	359,860
2023	263,413
2024	214,215
2025	165,002
Thereafter	493,839
Total	$ 1,932,235

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Fair Value of Financial Instruments (Details) - USD ($) $ in Millions	Dec. 31, 2020	Oct. 07, 2020
Senior Notes due 2028
Fair Value Of Financial Instruments [Line Items]
Interest rate	3.875%	3.875%
Senior Notes | Fair Value Measurements, Level 2
Fair Value Of Financial Instruments [Line Items]
Fair value of loan based on current market rates	$ 508.8

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Quarterly Financial Information (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Effect of Fourth Quarter Events [Line Items]
Revenues	$ 143,897	$ 137,538	$ 131,640	$ 126,292	$ 123,707	$ 125,255	$ 119,167	$ 112,689	$ 539,368	$ 480,818	$ 450,524
Operating income	17,151	15,016	17,859	15,631	4,218	13,606	14,598	28,734	65,657	61,156	18,661
Net income (loss)	(10,660)	6,907	10,209	8,120	(3,606)	6,588	7,535	21,148	14,576	31,665	(7,175)
Net income (loss) attributable to QTS Realty Trust, Inc.	(8,922)	6,925	9,892	8,010	(2,511)	6,637	7,483	19,558	15,906	31,291	(4,460)
Net income (loss) attributable to common stockholders	$ (15,967)	$ (120)	$ 2,847	$ 965	$ (9,556)	$ (408)	$ 438	$ 12,513	$ (12,274)	$ 3,111	$ (21,126)
Basic (in dollars per share)	$ (0.33)	$ (0.07)	$ (0.05)	$ (0.01)	$ (0.20)	$ (0.05)	$ (0.03)	$ 0.20	$ (0.47)	$ (0.09)	$ (0.44)
Diluted (in dollars per share)	$ (0.33)	$ (0.07)	$ (0.05)	$ (0.01)	$ (0.20)	$ (0.05)	$ (0.03)	$ 0.20	$ (0.47)	$ (0.09)	$ (0.44)

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Subsequent Events (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands									12 Months Ended
	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Feb. 03, 2021
Subsequent Event [Line Items]
Net proceeds									$ 285,352	$ 268,259	$ 0
Series A Preferred Stock
Subsequent Event [Line Items]
Dividend paid to common stockholders (in dollars per share)	$ 0.45	$ 0.45	$ 0.45	$ 0.45	$ 0.45	$ 0.45	$ 0.45	$ 0.45
Series B Preferred Stock
Subsequent Event [Line Items]
Dividend paid to common stockholders (in dollars per share)	$ 1.63	$ 1.63	$ 1.63	$ 1.63	$ 1.63	$ 1.63	$ 1.63	$ 1.63
Subsequent Event
Subsequent Event [Line Items]
Cash dividend payable per common share												$ 0.50
Subsequent Event | Series A Preferred Stock
Subsequent Event [Line Items]
Cash dividend payable per common share												0.45
Subsequent Event | Series B Preferred Stock
Subsequent Event [Line Items]
Cash dividend payable per common share												$ 1.63

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Schedule II - Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Allowance for uncollectible receivables
Balance at beginning of period	$ 2,279	$ 3,764	$ 11,453
Charge to expenses	5,051	2,859	(2,275)
Additions/(deductions)	(1,891)	(4,344)	(5,414)
Balance at end of period	5,439	2,279	3,764
Valuation allowance for deferred tax assets
Balance at beginning of period	24,747	8,361	713
Charge to expenses	1,877	16,386	7,648
Additions/(deductions)	0	0	0
Balance at end of period	$ 26,624	$ 24,747	$ 8,361

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Schedule III - Real Estate Investments (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Initial costs of land	$ 92,947
Initial costs of buildings and improvements	373,326
Initial costs of construction in progress	349,243
Costs capitalized subsequent to acquisition, land	72,162
Costs capitalized subsequent to acquisition, buildings and improvements	2,465,934
Costs capitalized subsequent to acquisition, construction in progress	679,521
Gross carrying amount, land	165,109
Gross carrying amount, buildings and improvements	2,839,260
Gross carrying amount, construction in progress	1,028,764
Accumulated depreciation and amortization	(702,944)	$ (558,560)	$ (467,644)	$ (394,823)
Owned Properties
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Initial costs of land	92,947
Initial costs of buildings and improvements	312,254
Initial costs of construction in progress	349,243
Costs capitalized subsequent to acquisition, land	72,162
Costs capitalized subsequent to acquisition, buildings and improvements	2,443,381
Costs capitalized subsequent to acquisition, construction in progress	679,142
Gross carrying amount, land	165,109
Gross carrying amount, buildings and improvements	2,755,635
Gross carrying amount, construction in progress	1,028,385
Accumulated depreciation and amortization	(674,468)
Owned Properties | Ashburn, Virginia (DC-1)
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Initial costs of land	16,476
Initial costs of buildings and improvements	0
Initial costs of construction in progress	0
Costs capitalized subsequent to acquisition, land	0
Costs capitalized subsequent to acquisition, buildings and improvements	371,725
Costs capitalized subsequent to acquisition, construction in progress	13,653
Gross carrying amount, land	16,476
Gross carrying amount, buildings and improvements	371,725
Gross carrying amount, construction in progress	13,653
Accumulated depreciation and amortization	$ (23,423)
Year of acquisition	2017
Owned Properties | Ashburn, Virginia (DC-2)
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Initial costs of land	$ 0
Initial costs of buildings and improvements	0
Initial costs of construction in progress	20,603
Costs capitalized subsequent to acquisition, land	0
Costs capitalized subsequent to acquisition, buildings and improvements	0
Costs capitalized subsequent to acquisition, construction in progress	109,254
Gross carrying amount, land	0
Gross carrying amount, buildings and improvements	0
Gross carrying amount, construction in progress	129,857
Accumulated depreciation and amortization	$ 0
Year of acquisition	2019
Owned Properties | Ashburn, Virginia (DC-3)
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Initial costs of land	$ 0
Initial costs of buildings and improvements	0
Initial costs of construction in progress	35,198
Costs capitalized subsequent to acquisition, land	0
Costs capitalized subsequent to acquisition, buildings and improvements	0
Costs capitalized subsequent to acquisition, construction in progress	7,194
Gross carrying amount, land	0
Gross carrying amount, buildings and improvements	0
Gross carrying amount, construction in progress	42,392
Accumulated depreciation and amortization	$ 0
Year of acquisition	2017
Owned Properties | Atlanta, Georgia (DC-1)
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Initial costs of land	$ 2,078
Initial costs of buildings and improvements	35,473
Initial costs of construction in progress	2,209
Costs capitalized subsequent to acquisition, land	11,212
Costs capitalized subsequent to acquisition, buildings and improvements	538,751
Costs capitalized subsequent to acquisition, construction in progress	991
Gross carrying amount, land	13,289
Gross carrying amount, buildings and improvements	574,224
Gross carrying amount, construction in progress	3,200
Accumulated depreciation and amortization	$ (221,800)
Year of acquisition	2006
Owned Properties | Atlanta, Georgia (DC-2)
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Initial costs of land	$ 10,569
Initial costs of buildings and improvements	0
Initial costs of construction in progress	0
Costs capitalized subsequent to acquisition, land	0
Costs capitalized subsequent to acquisition, buildings and improvements	124,864
Costs capitalized subsequent to acquisition, construction in progress	124,252
Gross carrying amount, land	10,569
Gross carrying amount, buildings and improvements	124,864
Gross carrying amount, construction in progress	124,252
Accumulated depreciation and amortization	$ (2,737)
Year of acquisition	2017
Owned Properties | Atlanta, Georgia Land
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Initial costs of land	$ 23,572
Initial costs of buildings and improvements	0
Initial costs of construction in progress	52,754
Costs capitalized subsequent to acquisition, land	7,726
Costs capitalized subsequent to acquisition, buildings and improvements	1,054
Costs capitalized subsequent to acquisition, construction in progress	10,866
Gross carrying amount, land	31,298
Gross carrying amount, buildings and improvements	1,054
Gross carrying amount, construction in progress	63,619
Accumulated depreciation and amortization	$ (449)
Year of acquisition	2017, 2019, 2020
Owned Properties | Chicago, Illinois
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Initial costs of land	$ 0
Initial costs of buildings and improvements	0
Initial costs of construction in progress	17,764
Costs capitalized subsequent to acquisition, land	9,400
Costs capitalized subsequent to acquisition, buildings and improvements	250,335
Costs capitalized subsequent to acquisition, construction in progress	86,353
Gross carrying amount, land	9,400
Gross carrying amount, buildings and improvements	250,335
Gross carrying amount, construction in progress	104,117
Accumulated depreciation and amortization	$ (34,134)
Year of acquisition	2014
Owned Properties | Dulles, Virginia
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Initial costs of land	$ 3,154
Initial costs of buildings and improvements	29,583
Initial costs of construction in progress	0
Costs capitalized subsequent to acquisition, land	0
Costs capitalized subsequent to acquisition, buildings and improvements	24,740
Costs capitalized subsequent to acquisition, construction in progress	4,148
Gross carrying amount, land	3,154
Gross carrying amount, buildings and improvements	54,323
Gross carrying amount, construction in progress	4,148
Accumulated depreciation and amortization	$ (17,191)
Year of acquisition	2017
Owned Properties | Eemshaven, Netherlands
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Initial costs of land	$ 0
Initial costs of buildings and improvements	0
Initial costs of construction in progress	29,915
Costs capitalized subsequent to acquisition, land	5,366
Costs capitalized subsequent to acquisition, buildings and improvements	21,712
Costs capitalized subsequent to acquisition, construction in progress	17,616
Gross carrying amount, land	5,366
Gross carrying amount, buildings and improvements	21,712
Gross carrying amount, construction in progress	47,531
Accumulated depreciation and amortization	$ (1,017)
Year of acquisition	2019
Owned Properties | Fort Worth, Texas
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Initial costs of land	$ 136
Initial costs of buildings and improvements	610
Initial costs of construction in progress	48,984
Costs capitalized subsequent to acquisition, land	8,943
Costs capitalized subsequent to acquisition, buildings and improvements	123,444
Costs capitalized subsequent to acquisition, construction in progress	(47,920)
Gross carrying amount, land	9,079
Gross carrying amount, buildings and improvements	124,054
Gross carrying amount, construction in progress	1,064
Accumulated depreciation and amortization	$ (8,967)
Year of acquisition	2016
Owned Properties | Groningen, Netherlands
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Initial costs of land	$ 1,743
Initial costs of buildings and improvements	8,640
Initial costs of construction in progress	0
Costs capitalized subsequent to acquisition, land	153
Costs capitalized subsequent to acquisition, buildings and improvements	2,566
Costs capitalized subsequent to acquisition, construction in progress	3,730
Gross carrying amount, land	1,896
Gross carrying amount, buildings and improvements	11,206
Gross carrying amount, construction in progress	3,730
Accumulated depreciation and amortization	$ (1,456)
Year of acquisition	2019
Owned Properties | Hillsboro, Oregon
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Initial costs of land	$ 0
Initial costs of buildings and improvements	0
Initial costs of construction in progress	25,657
Costs capitalized subsequent to acquisition, land	18,414
Costs capitalized subsequent to acquisition, buildings and improvements	34,594
Costs capitalized subsequent to acquisition, construction in progress	52,733
Gross carrying amount, land	18,414
Gross carrying amount, buildings and improvements	34,594
Gross carrying amount, construction in progress	78,390
Accumulated depreciation and amortization	$ (880)
Year of acquisition	2017
Owned Properties | Irving, Texas
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Initial costs of land	$ 0
Initial costs of buildings and improvements	5,808
Initial costs of construction in progress	0
Costs capitalized subsequent to acquisition, land	8,606
Costs capitalized subsequent to acquisition, buildings and improvements	386,467
Costs capitalized subsequent to acquisition, construction in progress	99,591
Gross carrying amount, land	8,606
Gross carrying amount, buildings and improvements	392,275
Gross carrying amount, construction in progress	99,591
Accumulated depreciation and amortization	$ (81,213)
Year of acquisition	2013
Owned Properties | Lenexa, Kansas
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Initial costs of land	$ 400
Initial costs of buildings and improvements	3,100
Initial costs of construction in progress	0
Costs capitalized subsequent to acquisition, land	37
Costs capitalized subsequent to acquisition, buildings and improvements	781
Costs capitalized subsequent to acquisition, construction in progress	0
Gross carrying amount, land	437
Gross carrying amount, buildings and improvements	3,881
Gross carrying amount, construction in progress	0
Accumulated depreciation and amortization	$ (703)
Year of acquisition	2011
Owned Properties | Manassas Virginia (DC-1)
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Initial costs of land	$ 0
Initial costs of buildings and improvements	0
Initial costs of construction in progress	27,484
Costs capitalized subsequent to acquisition, land	0
Costs capitalized subsequent to acquisition, buildings and improvements	25
Costs capitalized subsequent to acquisition, construction in progress	33,586
Gross carrying amount, land	0
Gross carrying amount, buildings and improvements	25
Gross carrying amount, construction in progress	61,070
Accumulated depreciation and amortization	$ (2)
Year of acquisition	2018
Owned Properties | Manassas Virginia (DC-2)
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Initial costs of land	$ 0
Initial costs of buildings and improvements	0
Initial costs of construction in progress	5,911
Costs capitalized subsequent to acquisition, land	0
Costs capitalized subsequent to acquisition, buildings and improvements	0
Costs capitalized subsequent to acquisition, construction in progress	92
Gross carrying amount, land	0
Gross carrying amount, buildings and improvements	0
Gross carrying amount, construction in progress	6,003
Accumulated depreciation and amortization	$ 0
Year of acquisition	2018
Owned Properties | Miami, Florida
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Initial costs of land	$ 1,777
Initial costs of buildings and improvements	6,955
Initial costs of construction in progress	0
Costs capitalized subsequent to acquisition, land	0
Costs capitalized subsequent to acquisition, buildings and improvements	24,934
Costs capitalized subsequent to acquisition, construction in progress	577
Gross carrying amount, land	1,777
Gross carrying amount, buildings and improvements	31,889
Gross carrying amount, construction in progress	577
Accumulated depreciation and amortization	$ (13,796)
Year of acquisition	2008
Owned Properties | Phoenix, Arizona
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Initial costs of land	$ 0
Initial costs of buildings and improvements	0
Initial costs of construction in progress	24,668
Costs capitalized subsequent to acquisition, land	0
Costs capitalized subsequent to acquisition, buildings and improvements	0
Costs capitalized subsequent to acquisition, construction in progress	13,061
Gross carrying amount, land	0
Gross carrying amount, buildings and improvements	0
Gross carrying amount, construction in progress	37,729
Accumulated depreciation and amortization	$ 0
Year of acquisition	2017
Owned Properties | Piscataway, New Jersey
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Initial costs of land	$ 7,466
Initial costs of buildings and improvements	80,366
Initial costs of construction in progress	13,900
Costs capitalized subsequent to acquisition, land	0
Costs capitalized subsequent to acquisition, buildings and improvements	41,810
Costs capitalized subsequent to acquisition, construction in progress	16,501
Gross carrying amount, land	7,466
Gross carrying amount, buildings and improvements	122,176
Gross carrying amount, construction in progress	30,401
Accumulated depreciation and amortization	$ (16,600)
Year of acquisition	2016
Owned Properties | Princeton, New Jersey
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Initial costs of land	$ 20,700
Initial costs of buildings and improvements	32,126
Initial costs of construction in progress	0
Costs capitalized subsequent to acquisition, land	0
Costs capitalized subsequent to acquisition, buildings and improvements	3,135
Costs capitalized subsequent to acquisition, construction in progress	5
Gross carrying amount, land	20,700
Gross carrying amount, buildings and improvements	35,261
Gross carrying amount, construction in progress	5
Accumulated depreciation and amortization	$ (6,319)
Year of acquisition	2014
Owned Properties | Richmond, Virginia
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Initial costs of land	$ 2,000
Initial costs of buildings and improvements	11,200
Initial costs of construction in progress	7,029
Costs capitalized subsequent to acquisition, land	180
Costs capitalized subsequent to acquisition, buildings and improvements	222,727
Costs capitalized subsequent to acquisition, construction in progress	113,548
Gross carrying amount, land	2,180
Gross carrying amount, buildings and improvements	233,927
Gross carrying amount, construction in progress	120,577
Accumulated depreciation and amortization	$ (84,389)
Year of acquisition	2010 & 2019
Owned Properties | Sacramento, California
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Initial costs of land	$ 1,481
Initial costs of buildings and improvements	52,753
Initial costs of construction in progress	0
Costs capitalized subsequent to acquisition, land	0
Costs capitalized subsequent to acquisition, buildings and improvements	13,546
Costs capitalized subsequent to acquisition, construction in progress	12
Gross carrying amount, land	1,481
Gross carrying amount, buildings and improvements	66,299
Gross carrying amount, construction in progress	12
Accumulated depreciation and amortization	$ (16,325)
Year of acquisition	2012
Owned Properties | San Antonio, Texas
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Initial costs of land	$ 0
Initial costs of buildings and improvements	0
Initial costs of construction in progress	37,167
Costs capitalized subsequent to acquisition, land	0
Costs capitalized subsequent to acquisition, buildings and improvements	0
Costs capitalized subsequent to acquisition, construction in progress	3,213
Gross carrying amount, land	0
Gross carrying amount, buildings and improvements	0
Gross carrying amount, construction in progress	40,380
Accumulated depreciation and amortization	$ 0
Year of acquisition	2020
Owned Properties | Santa Clara, California
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Initial costs of land	$ 0
Initial costs of buildings and improvements	15,838
Initial costs of construction in progress	0
Costs capitalized subsequent to acquisition, land	0
Costs capitalized subsequent to acquisition, buildings and improvements	101,505
Costs capitalized subsequent to acquisition, construction in progress	9,385
Gross carrying amount, land	0
Gross carrying amount, buildings and improvements	117,343
Gross carrying amount, construction in progress	9,385
Accumulated depreciation and amortization	$ (52,742)
Year of acquisition	2007
Owned Properties | Suwanee, Georgia (Atlanta-Suwanee)
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Initial costs of land	$ 1,395
Initial costs of buildings and improvements	29,802
Initial costs of construction in progress	0
Costs capitalized subsequent to acquisition, land	2,126
Costs capitalized subsequent to acquisition, buildings and improvements	154,665
Costs capitalized subsequent to acquisition, construction in progress	6,701
Gross carrying amount, land	3,521
Gross carrying amount, buildings and improvements	184,467
Gross carrying amount, construction in progress	6,701
Accumulated depreciation and amortization	$ (90,323)
Year of acquisition	2005
Leased Properties
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Initial costs of land	$ 0
Initial costs of buildings and improvements	61,072
Initial costs of construction in progress	0
Costs capitalized subsequent to acquisition, land	0
Costs capitalized subsequent to acquisition, buildings and improvements	22,553
Costs capitalized subsequent to acquisition, construction in progress	379
Gross carrying amount, land	0
Gross carrying amount, buildings and improvements	83,625
Gross carrying amount, construction in progress	379
Accumulated depreciation and amortization	(28,476)
Leased Properties | Jersey City, New Jersey
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Initial costs of land	0
Initial costs of buildings and improvements	1,985
Initial costs of construction in progress	0
Costs capitalized subsequent to acquisition, land	0
Costs capitalized subsequent to acquisition, buildings and improvements	28,178
Costs capitalized subsequent to acquisition, construction in progress	223
Gross carrying amount, land	0
Gross carrying amount, buildings and improvements	30,163
Gross carrying amount, construction in progress	223
Accumulated depreciation and amortization	$ (15,455)
Year of acquisition	2006
Leased Properties | Overland Park, Kansas
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Initial costs of land	$ 0
Initial costs of buildings and improvements	0
Initial costs of construction in progress	0
Costs capitalized subsequent to acquisition, land	0
Costs capitalized subsequent to acquisition, buildings and improvements	866
Costs capitalized subsequent to acquisition, construction in progress	154
Gross carrying amount, land	0
Gross carrying amount, buildings and improvements	866
Gross carrying amount, construction in progress	154
Accumulated depreciation and amortization	(508)
Lease Facilities acquired in 2015
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Initial costs of land	0
Initial costs of buildings and improvements	59,087
Initial costs of construction in progress	0
Costs capitalized subsequent to acquisition, land	0
Costs capitalized subsequent to acquisition, buildings and improvements	(6,491)
Costs capitalized subsequent to acquisition, construction in progress	2
Gross carrying amount, land	0
Gross carrying amount, buildings and improvements	52,596
Gross carrying amount, construction in progress	2
Accumulated depreciation and amortization	$ (12,513)
Year of acquisition	2015

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Schedule III - Real Estate Investments - Impairment and Amount that Tax Basis of Net Real Estate Assets Less Than the Reported Amounts (Details) $ in Millions	12 Months Ended
	Dec. 31, 2020 USD ($)
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation Disclosure [Abstract]
Reduction of costs capitalized	$ 24.9
Reduction of accumulated depreciation	13.5
Tax basis of investments, cost for income tax purposes	$ 4,220.0

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Schedule III - Real Estate Investments - Summary of Historical Cost and Accumulated Depreciation) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Property
Balance, beginning of period	$ 3,230,428	$ 2,812,856	$ 2,357,322
Disposals	(7,821)	(41,363)	(43,616)
Additions (acquisitions and improvements)	810,527	458,935	499,150
Balance, end of period	4,033,134	3,230,428	2,812,856
Accumulated depreciation
Balance, beginning of period	(558,560)	(467,644)	(394,823)
Disposals	6,577	28,172	30,139
Additions (depreciation and amortization expense)	(150,961)	(119,088)	(102,960)
Balance, end of period	$ (702,944)	$ (558,560)	$ (467,644)