Telefonica, Miami and New York
At the end of the 90s, The Spanish Telecom Giant Telefonica made the strategic decision to gradually transfer its global headquarters to the USA and specifically to Miami, and from there manage its expansion throughout the American continent. As a result of its striking growth, Telefonica became one of the largest real estate occupiers in Miami, where the Spanish group leased over 220,000 square feet of class A office space on Brickell avenue, and acquired a 300,000 sqft flex/industrial property in the Doral soon to be converted into Telefonica's main regional data center.
In addition to its Miami's installation, Telefonica opened offices in New York and Boston and expanded south of the US border through the acquisition of regional telecom companies in Argentina, Brazil, Peru, Chile and other key Latin American markets.
Following the "crash of the dot coms", Telefonica's initial strategy was drastically reversed. In 2001, the new CEO decided to reduce the Group's exposure in the US and throughout the region. The restructuring included the reduction of personnel in Miami from 523 to 78 employees.
Approach and Results:
Falgler Investment Realty was retained by Telefonica in 2002 to assist the Spanish Telecom Company in coordinating and implementing its real estate divestiture strategy. Following an exhaustive planning phase, Flagler succeeded in obtaining outstanding financial results. We negotiated the termination of Telefonica's lease agreement at 1221 Brickell avenue (approximately 220,000 square feet of office space) for 21% of the total residual lease value. The remaining employees were then relocated on 18,000 sqft at 1111 Brickell avenue where PIX negotiated favorable terms for a new 10 year lease.
Flagler partnered with CBRE to sublet approximately 20,000 sqf of class A office space in Midtown Manhattan minimizing Telefonica's losses to approximately 12% of its New York's real estate liabilities.
As a result of these exceptional outcomes, Flagler was invited by Telefonica's real estate group to assist in multiple assignments in Latin America.