Yesterday's auction of 1441 Chestnut - a parking lot in Center City that has been awaiting redevelopment for years - gave some good indications of where the local commercial real estate market stands. The property traded hands for $12,000,000, with the winning bidder being one of the partners in the group that already owned the property and had been trying to develop it as a hotel and condo tower.
The main conclusion to be drawn from auctions like this one is that
there is still very little demand for speculative properties in
Philadelphia, especially vacant land. Even in one of the best locations
in the city this property sold for roughly the same price that it traded
for in 2000 when its development prospects were much murkier and Center
City in general was a less-proven market.
Read a full report on the auction here.