Flagler Development Group & TIAA-CREF Announce Build-To-Suit Transaction for Office Depot's New Global Headquarters in Boca Raton

JACKSONVILLE, Fla., Nov. 20 /PRNewswire-FirstCall/ -- Flagler Development Group, ("Flagler") the wholly owned commercial real estate arm of Florida East Coast Industries, Inc. ("FECI") and its joint venture partner, managed by TIAA-CREF Global Real Estate Group, have finalized an agreement with Office Depot to develop their new global headquarters. The headquarters complex will be built on 28 acres within the 54-acre Flagler/TIAA joint venture site in the Arvida Park of Commerce in Boca Raton, Florida.

Jose Hevia, Chief Operating Officer of Flagler Development Group, stated, "Flagler will oversee the design and development of the build-to-suit, and jointly with the TIAA-CREF partner, lease the facility to Office Depot. Office Depot, a leading global provider of office products and services, is recognized worldwide as a business leader and an outstanding corporate citizen, and is among the region's largest employers. We are excited by the opportunity to develop their new global headquarters, which will be a high- caliber facility and a positive economic impact for the community."

Building plans for the complex show three Class-A buildings linked by glass-enclosed bridges totaling approximately 625,000 square feet situated adjacent to the Old Course at Broken Sound. The design strategically incorporates features such as a celebration plaza for outdoor gatherings, a conference center, cafeteria and an employee fitness center. The plan also includes extensive setbacks and naturally landscaped buffers, which will maintain a campus-like feeling.

"The creation of a new global headquarters marks a significant milestone in Office Depot's history," noted Steve Odland, Chairman and CEO of Office Depot. "It symbolizes not only our growth - from a company operating a single store in South Florida to a $15 billion enterprise serving customers in 42 countries - but also our commitment to the local community that gave us our start."

The transaction represents the nation's largest build-to-suit lease in 2006 and follows Flagler's recent 226,000 square-foot build-to-suit lease for Burger King Corporation's new global headquarters facility in Coral Gables, Florida.

"We are proud to welcome Office Depot as our new neighbor and commend Flagler, a company with a well-established history of building high quality corporate projects throughout the region, for bringing our city this new landmark," said Boca Raton Mayor Steven Abrams.

Flagler has begun clearing the site and anticipates commencing construction by year-end with projected occupancy in the fourth quarter 2008.

Flagler Development Group (Flagler) owns, develops, leases and holds in joint ventures approximately 8.8 million square feet of Class-A office and industrial space, as well as an additional 1,056,700 square feet under construction. Flagler space consists of Class-A office and industrial properties, primarily in Jacksonville, Orlando, Ft. Lauderdale and Miami. In addition, Flagler provides construction, consulting, third party management (includes Flagler's wholly owned portfolio in addition to 11.1 million square feet for third parties) and brokerage services and owns 828 acres of entitled land in Florida, which is available for development of up to an additional 15.8 million square feet. Flagler also owns approximately 3,158 acres of other Florida properties. For more information, visit the Company's website at http://www.flaglerdev.com./

Florida East Coast Industries, Inc., (FECI) headquartered in St. Augustine, FL, conducts operations through Flagler Development Group (Flagler) and Florida East Coast Railway, L.L.C. (FECR). FECI conducts its real estate operations through Flagler which owns, develops, leases and holds in joint ventures approximately 8.8 million square feet of Class-A office and industrial space, as well as an additional 1,056,700 square feet under construction. Flagler space consists of Class-A office and industrial properties, primarily in Jacksonville, Orlando, Ft. Lauderdale and Miami. In addition, Flagler provides construction, consulting, third party brokerage and property management (includes Flagler's wholly owned portfolio in addition to 11.1 million square feet for third parties) services and owns 828 acres of entitled land in Florida, which is available for development of up to an additional 16 million square feet. Flagler also owns approximately 3,158 acres of other Florida properties. Florida East Coast Railway, L.L.C. (FECR), a subsidiary of FECI, is a regional freight railroad that operates 351 miles of mainline track from Jacksonville to Miami and provides intermodal drayage services at terminals located in Atlanta, Jacksonville, Ft. Pierce and Miami. For more information, visit the Company's website at http://www.feci.com/.

About TIAA-CREF

TIAA-CREF Global Real Estate Group is part of TIAA-CREF, the national financial services organization with more than $390 billion in combined assets under management (9/30/06) and the leading provider of retirement services in the academic, research, medical and cultural fields. TIAA is one of the largest institutional real estate investors with a $67 billion global real estate portfolio. For further information contact Chad Peterson at (212) 916-4808 or visit http://www.tiaa-cref.org/.

About Office Depot

Office Depot provides more office products and services to more customers in more countries than any other company.

Incorporated in 1986 and headquartered in Delray Beach, Fla., Office Depot has annual sales of nearly $15 billion, and employs approximately 50,000 associates around the world. Currently, the Company sells to customers directly or through affiliates in 42 countries.

Office Depot is a leader in every distribution channel -- from retail stores and contract delivery to catalogs and e-commerce. As of September 30, 2006, Office Depot had 1,121 retail stores in North America and another 323 stores, either company-owned, licensed or franchised, in other parts of the world. Office Depot serves a wide range of customers through a dedicated sales force, telephone account managers, direct mail offerings, and multiple web sites. With $4.2 billion in online sales during the last twelve months, the Company is also one of the world's largest e-commerce retailers.

Office Depot's common stock is listed on the New York Stock Exchange under the symbol ODP and is included in the S&P 500 Index. Additional press information can be found at: http://mediarelations.officedepot.com/.

This news release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements include the Company's present expectations or beliefs concerning future events. These statements may be identified by the use of words like "plan," "expect," "see," "aim," "believe," "project," "anticipate," "intend," "estimate," "will," "should," "could," "may," and other expressions that indicate future events and trends. The Company cautions that such statements are necessarily based on certain assumptions, which are subject to risks and uncertainties that could cause actual results to materially differ from those contained in these forward-looking statements. Important factors that could cause such differences include, but are not limited to, changes in the general and local real estate market or in general economic conditions, and other risks inherent in the real estate business. Further information on these and other risk factors is included in the Company's filings with Securities and Exchange Commission, including the Company's most recently filed Forms 10-K and 10-Q. The Company assumes no obligation to update the information contained in this news release, which speaks only as of its date.