Flagler Development Group to Begin Construction on Lakeside Five at Flagler Center in Jacksonville

-- Kemper Auto and Home Pre-Leases 80% of Building 


JACKSONVILLE, Fla., April 27  /PRNewswire-FirstCall/ -- Flagler Development Group ("Flagler"), the wholly owned commercial real estate arm of Florida East Coast Industries, Inc. (NYSE:FLA) ("FECI") will begin construction on Lakeside Five at Flagler Center, a 142,000 square foot, five story, Class-A office building. Flagler has entered into a lease with Kemper Auto and Home ("Kemper"), to occupy 80% of the building as Kemper's corporate headquarters. Lakeside Five is the last of the Lakeside buildings to be developed in this phase of Flagler Center, which is currently 95% occupied. Construction will commence in June, with completion expected in the second quarter of 2008.

Given the strong market demand for office space in the park, Flagler has commenced the design of its next office development within Flagler Center, which will be south of the Lakeside development.  That project will contain approximately 300,000 square feet of Class A office space and will also front I-95.

A subsidiary of Unitrin, Inc. (NYSE:UTR), Kemper sells personal insurance through a dedicated network of independent agencies nationwide. Kemper will relocate its corporate offices from Belfort Road in Jacksonville to Flagler Center.

"We are very pleased to be partnering with Flagler Development on this new endeavor," said Joanne Mackey, Vice President of Operations for Kemper. "For the first time in more than six years all of our employees will be together in one building. The increased space, location and design of the building add up to a great fit for our 500-plus employee population."

"We look forward to Kemper joining our list of well-established companies at Flagler Center. At Lakeside Five, Kemper will have great visibility with interstate frontage and its employees will enjoy a building and working environment designed with amenities to support a productive workplace," said Karl Hanson, Vice President of Flagler Development Group.  "By virtue of the park's size and location, Flagler Center was designed to accommodate the present and future needs of companies like Kemper, seeking customized space with room to expand."

The leasing agents for the property are Ross Carrier and Gary Cox of Flagler Real Estate Services, a division of Flagler Development Group. Curtis Loftin of Beacon Realty Services, Inc. represented Kemper.

Flagler Development Group (Flagler) owns, develops, leases and holds in joint ventures approximately 8.6 million square feet of Class-A office and industrial space, as well as an additional 1,916,000 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 as well as 10.5 million square feet for third parties) and brokerage services and owns 853 acres of entitled land in Florida, which is available for development of up to an additional 16.1 million square feet. Flagler also owns approximately 3,089 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 Jacksonville, 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 8.6 million square feet of Class-A office and industrial space, as well as an additional 1,916,000 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 as well as 10.5 million square feet for third parties) services and owns 853 acres of entitled land in Florida, which is available for development of up to an additional 16.1 million square feet. Flagler also owns approximately 3,089 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/.

Kemper Auto and Home, headquartered in Jacksonville, Florida, specializes in the sale of personal lines auto, homeowners and personal property insurance through a network of 2,500 dedicated independent agencies, which provide customers with a choice of insurance companies, policies and programs designed to meet their individual needs. Each of Kemper's underwriting companies is rated "A" (excellent) by A.M. Best, the insurance industry's most trusted rating authority. Kemper is the largest subsidiary of Unitrin, Inc. (NYSE:UTR), a $3 billion financial services company based in Chicago. For more information about Kemper Auto and Home, visit http://www.kemperautoandhome.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. 

DATASOURCE: Florida East Coast Industries, Inc.



CONTACT:   Investors, Bradley D. Lehan of Florida East Coast Industries,

[phone]; or Media, Rosemary Jackson of Flagler Development Group,

[phone]



Web site:  http://www.feci.com/

http://www.flaglerdev.com/.

Copyright