The tax-oriented deal allowed Flagler to buy out Duke at three buildings in Beacon Station, South Florida's largest business park, located northwest of Miami International Airport. Flagler and Duke had owned the buildings in a 50-50 joint venture. The three 180,000-sf, 100%-leased buildings were constructed in 1999.

In Jacksonville, Flagler acquired the four-year-old, 59,000-sf, 100%-leased Office Centre at Southpoint and the land along J. Turner Butler Boulevard in the Southpoint corridor. Another 59,000-sf building can be built on the site.

Flagler didn't break out prices for the individual assets but in a prepared statement, company president G. John Carey says "the transaction was sensible for both the buyer and seller." Carey says the deal was done by Flagler "with previously identified Section 1031 funds which allowed the company to defer taxes on gains from previous realty sales."

Carey says Flagler's parent company, real estate and railroad conglomerate Florida East Coast Industries of St. Augustine, FL, held cash and equivalent balances at yearend 2002, including $70.4 million for buying properties via the tax-free Section 1031 of the IRS Code. To date, $21.3 million of the $70.4 million has been used to buy 1031 properties. FECI plans to use the remaining $49.1 million to reduce revolving bank debt.

At full build out, Beacon Station will total nine million sf of commercial and industrial space and an undetermined amount of retail. Flagler owns, develops, leases and manages 6.9 million sf of class A office and industrial, including 300,000 sf of class A office in joint ventures with Duke and 471,000 sf in the development phase. The bulk of Flagler's class A properties are in Jacksonville, Miami and Fort Lauderdale, FL.

Flagler also owns a total 6,530 acres comprised of 1,030 acres of entitled land in Florida and 5,500 acres of other Florida properties. The company can build an additional 14.7 million sf of office, industrial and retail on the 1,030 acres at a later date.