BETTING ON BUSINESS PARKS
With the new corporate structure in place, Hevia
turned his attention to reorganizing the company’s
portfolio. He tackled the four lines of business one
by one, beginning with the operations platform.
Flagler owns and operates 100 buildings totaling 12
million square feet. Those assets—half industrial
and half office—are located in three key regions:
South Florida, Central Florida and Jacksonville, FL.
Deciding that the best way to manage the organi-
zation was along geographic lines, Hevia appointed a
market officer for each region. Those officers report
to executive vice presidents, who in turn report to
Hevia. “This structure is streamlined,” Hevia says. “I
get information quickly, but what’s more significant
is that our officers are on the ground and under-
stand the nuances of the market.”
Flagler’s land portfolio is a bigger animal. Flagler
owns 5,046 acres of Florida land. Sixteen hundred
of those acres are entitled for up to 18 million
square feet of development. Flagler could double
in size by developing just one-third of its land hold-
ings. Hevia organized the land portfolio as a two-
bucket business plan for core and non-core. Core
land is land that can support either industrial or
suburban office development.
“We have carved out a niche in master-planning business parks,”
Hevia says. “That is the keystone of our properties and is critical to
our operations because it fuels our organic growth and becomes a
source of income. We’ve entitled our parks so that, as they mature,
Business parks are also important to Flagler’s
repositioning because they allow the company to
respond to market trends. With a multi-million-
square-foot complex such as Flagler Station
Business Park in Miami, or Deerwood North
Business Park in Jacksonville, FL, the firm can
accommodate tenants as small as 5,000 feet or as
large as 150,000 square feet.
The firm’s diversity allowed it to continue inking
significant lease deals during the recession on various office and industrial asset classes. In the first
nine months of 2010, the company closed more
than 1. 2 million square feet of new and renewed
leases and nearly 1 million feet of property sales
through 92 transactions across Florida.
“For the past
three years we’ve
been working
to reposition the
company while
staying true to our
historical roots.”
JOSE M. HEVIA
President and Chief
Executive Officer
and came to Flagler from Miami-Dade County,
where he was in charge of environmental plan-
ning. “In most cases, we end up with a mixed-use
property that’s developed by us and others.”
Rodon is leading this process at the Flagler
Logistics Hub, a 300-acre green logistics park that
will let tenants transport goods by air, sea, ground or
any combination thereof. The land is unique in its
strategic position close to the railroad, port and air-
port. Flagler’s goal is to meet the demand for indus-
trial space that is expected to come after the Panama
Canal is expanded in 2014 and super-size ships from
Asia begin deluging South Florida’s ports. The park
will offer 4. 2 million square feet adjacent to the
Miami International Airport and includes an inter-
modal operation to the north, operated by sister
company Florida East Coast Railway.
“In addition to zoning and site planning, you
have the environmental issues,” Rodon says. “Most
of our properties have been wetlands that require a
team of professionals including a biologist. We also
work with transportation professionals to do traffic
studies necessary to ascertain what our impact
would be and what roadway improvements we have
to propose. By managing this process, we can move
more quickly and save quite a bit of money.”
SERVING CLIENTS AND COMPETITORS
The final piece of the repositioned corporate puzzle is the services
business. Flagler Real Estate Services is striving to become the best-in-class provider in the state. The company offers a full range of
services, from development to sales and acquisitions. Flagler also
has one of the largest brokerage and property-management operations in the state, managing a
portfolio of 26 million square feet.
“We offer A-to-Z services to clients,” Hevia says.
“This doesn’t compete with our core business; it
enhances it. The 635,000-square foot world head-
quarters we built for Office Depot and the
250,000-square foot headquarters we built for
Bacardi USA doesn’t compete with anything we do.
It showcases the third-party services, our joint-ven-
ture platform strength and our diversity.”
That answers the question of the company com-
peting against itself—but what about competing
against clients? Hevia says it doesn’t happen. Flagler
has built what he calls a Chinese wall between in-
house property management and brokerage teams
and third-party property management and broker-
age teams. The team works to prove it can build
developments cheaper, faster and better and that it
can negotiate stronger leases for landlords. Hevia
admits it’s a fine line, but one that the firm is walk-
ing. Clients include some of the top names in busi-
ness, including AMB Property Corp., TIAA-CREF
and J.P. Morgan Asset Management.
In 2010, Flagler formed the Asset Solutions
Group to leverage the company’s expertise in the
current state of the market. ASG provides services in
the areas of REO dispositions, investment and loan
sales, and workouts, property repositioning, property and asset management, recapitalizations, debt
and equity financing, development services, advi-
ENTITLEMENTS: FLAGLER’S SECRET SAUCE
Part of the firm’s secret sauce is its internal land-planning and entitlement process. While most
companies contract out the entitlement process,
Flagler coordinates and executes entitlement strategies in-house, with a team of internal and external professionals who prepare applications and
drawings for the various state agencies involved.
“By managing the process in-house, we can stay
on top of every piece of property to make sure it’s
meeting the highest and best use,” says executive
vice president Rafael Rodon, who is in charge of
planning, entitlement and government relations
“By managing
the entitlement
process in-house,
we can stay on top
of every piece of
property to make
sure it’s meeting
the highest and
best use.”
RAFAEL RODON
