Flagler Signs Starwood to Estimated $32M Lease

ORLANDO-Completing its first spec class A office building since 2001, Flagler Development Co. of Jacksonville has signed White Plains, NY-based Starwood Vacation Ownership to a 137,000-sf lease at Building 1000 being completed in the developer’s 176-acre SouthPark Center at John Young Parkway and the Beeline Expressway in south Orlando.

A Flagler representative says company policy prohibits her from disclosing the length of the lease or its estimated value but confirms it is “a long-term lease.” However, local industrial brokers familiar with SouthPark Center, now at 95% occupancy, tell GlobeSt.com the lease is for at least 10 years at an estimated effective rent of $23 per sf. That would place the estimated aggregate value of the deal at about $32 million and make it one of the biggest class A office leases signed this year in Central Florida.

Building 1000 is being completed at an estimated hard construction cost of $150 per sf or about $20 million, area construction industry sources say. The building broke ground in March of this year when few speculatively built commercial projects in any category were being done.

“The tone of the Florida rental market and improvement in the overall occupancy at all of Flagler’s Parks created the need to add more space into the rental pipeline,” Robert W. Anestis, chairman, president and CEO of St. Augustine-based Florida East Coast Industries Inc., the corporate parent of Flagler Development Co., says in a prepared statement. “Starwood’s lease of the entire building validates the financial commitment [Flagler] has made to expand SouthPark Center through the acquisition of additional acres and the needed infrastructure investments.”

Flagler has 63 developable acres ready for future development and may be planning another spec building shortly, says Flagler president G. John Carey. “We have been working with Starwood for some time and credit both Starwood Vacation Ownership and our entire team, including design and construction, development and marketing, with getting this deal done before the building is completed.”

He adds, “At the time we started Building 1000, SouthPark Center was 95% occupied and needed additional space to accommodate existing and future tenants. With SVO filling the space in the pipeline, we would expect the start of a new spec building in the near future.”

SouthPark Center, formerly Gran Park at SouthPark, is planned for 2.9 million sf of office and commercial space. Among the park’s national tenants are Lockheed Martin, Marriott Vacations, CHEP and Fairfield Resorts.

Scott Bell and Todd Davis of Carter and Associates negotiated the lease for Starwood. John Guitar and Damien Madsen represented Flagler.