The owners of the Boston Flower Exchange have voted overwhelmingly to sell the company’s prime South End property, probably heralding the end of the century-old wholesaling collective and clearing the way for yet another high-end development in the neighborhood.
With at least five offers for their 5.6-acre site on Albany Street, the owners of more than 76 percent of the company’s shares voted to sell, easily surpassing the required two-thirds majority.
“Since more than two-thirds of the outstanding shares of stock of the exchange were voted in favor of the board pursuing negotiations with a prospective purchaser to sell the exchange, the board intends to pursue negotiations with interested parties,” the company’s board of directors told shareholders in a May 1 letter that was obtained by the Globe.
It was signed by board president Harold W. Potter Jr., who did not immediately respond to a message seeking comment.
Last month, the company told shareholders it had received bids of at least $35 million on the land from four developers. The latest communication disclosed that another developer made an offer last week. A second two-thirds vote would be needed to approve any particular deal the board negotiates.
The exchange’s property is occupied by a long one-story warehouse, where wholesalers hawk flowers, wreaths, and vases to retail shops and supermarket chains early each morning.
Bidding war over South End property
Three new developers have matched or exceeded a $35 million offer made last year on the Albany Street property in the South End.
Using the $35 million offer as a benchmark, real estate analysts said the new owner would have to demolish the unremarkable warehouse and construct a taller building in order to get a return on that investment.
When the Flower Exchange moved to its current location in 1971, the land was on the outskirts of the gritty Newmarket industrial area. Today, it is firmly in the orbit of the increasingly ritzy South End, just around the corner from high-end residential and retail projects such as Troy and the Ink Block. The property is one of the most sought-after in Boston, real estate analysts said.
“It’s a great time to sell any developable land,” said Frank Petz, managing director of capital markets for the commercial real estate firm Jones Lang LaSalle. “This development cycle won’t last forever, but right now, the economics are very favorable across a variety of markets — apartments, condos, office, hotel, retail, you name it.”
Petz said Boston’s hot real estate scene has attracted national and international prospectors, in addition to the usual cast of large Boston developers. That makes it difficult to guess at the bidders for the exchange land and what they might do with the property.
Similar parcels nearby have seen the construction of large mixed-use developments with retail on the ground floor and apartments or condos above.
But the exchange’s site has its own unique dynamics. It is adjacent to Boston Medical Center and other health care properties and just across Interstate 93 from the proposed locations for many Olympic Games venues, including the main stadium site at Widett Circle.
“The Flower Exchange site would obviously benefit from the Olympics, especially if there are public transportation improvements,” Petz said. “That would change the whole market down there.”
Two current vendors at the exchange who are also shareholders said the building’s 14 flower sellers met after the recent vote to discuss their options. One faction wants to band together and relocate the exchange, possibly to East Boston, the vendors said. Others have signaled they will either close up shop or go it alone after the sale of the South End property, citing the high cost of land in the Boston area.
The vendors asked not to be named because they were not authorized to speak publicly.
In a second letter from the Flower Exchange directors, dated May 4, the board promised to help vendors if a sale is consummated. It was not clear whether vendors would be allowed to finish out their leases, which expire in December 2017.
“The board wants to reaffirm its commitment to work with the tenants in the event that they decide to relocate to a new facility,” the directors said.