Iron Mountain is using a high-switching-cost records-storage annuity to underwrite a capital-heavy push into hyperscale data centers and hardware lifecycle services, and the equity is a debate about whether that cash engine is clean enough to fund both the dividend and the build.
The July leasing burst is the event that turned a development story into contracted cash. Management signed 75 megawatts in a single month after the quarter closed, including a 51 megawatt hyperscale lease in Mumbai and a take-up that filled the London Three hall. Combined with 13 megawatts signed inside the quarter, year-to-date leasing already cleared the original full-year target. That conversion is how a records REIT earns a data-center multiple: empty megawatts become rent, and rent is what holders can underwrite. A lease is not a press-release megawatt. It is a customer committing to pay for power and space over a decade-class term, which is the only way a development dollar becomes an underwritable cash flow. The July paper is therefore more important than the second-quarter leasing print inside the quarter, because it is the first time this year the company showed it can clear hyperscale size in more than one geography at once.
The tension is not growth. It is whether adjusted funds from operations, the REIT cash metric after certain capital items, and the 4.8 times net lease-adjusted leverage print are honest enough to carry a 3% dividend yield and a multi-year power build. Gotham City Research and General Industrial Partners published a short in November arguing true leverage sits near 9 times and that adjusted earnings have been inflated by add-backs. The company has not issued a line-by-line rebuttal. Operating cash flow in the first half was the strongest in company history, yet GAAP free cash flow stayed negative because growth capital spending still exceeds cash from operations.
What decides the file over the next year is not another slogan about digital transformation. It is whether the 325 megawatts scheduled to energize convert on time, whether asset lifecycle management keeps compounding after a timing pull-forward in decommissioning work, and whether physical records volume stays merely flat rather than rolling over. A mid-September quote near $112 is the working mark. That price implies equity value of about $33 billion against enterprise value near $54 billion.