Chelsea, and particularly West Chelsea with the recently opened (first part of the) High Line Park, is in my opinion one of the most exciting areas of New York.
Since the mid-1990s, Chelsea has became a gallery destination as art-world brokers were priced out of Soho. From 16th Street to 27th Street, between 10th and 11th Avenues, there are more than 350 art galleries.
The city rezoned the area in 2005, allowing for a large district around the High Line in which air rights could be transferred, and also allowing for a bonus that permitted developers denser apartment buildings if they include one-fifth of the units as affordable housing.
The West Chelsea/High Line Rezoning Plan by the City of New Yorkâ€™s Department of Planning paired with the opening of the High Line park, has led to a construction boom that might be unrivaled in terms of the instant creation of super-expensive real estate and spurred the development of over 1,000 residential units and 2 million square feet of commercial space.
It would be fair to say that land value today has gone up significantly compared to 10 years ago, especially with the many new developments by "Starchitects" like Richard Meier, Neil Denari, Linda Roy, Gary Handel, Audrey Matlock, Enrique Norten and Robert A.M. Stern. Frank Gehry's IAC building, Shigeru Ban's Metal Shutter Houses, Annabelle Selldorf's 100 11th Avenue, and Jean Nouvel's 200 Eleventh Avenue.
As new parks that have recently opened and will open within the next couple of years, and as transportation is becoming easier with the subway slowly reaching the West side (26 st station planned to open 2012) property value has a good chance of raising even higher.
If you would like further advice feel free to contact me. I'd be happy to meet you and discuss land and development opportunities in the Chelsea/ High Line Area.
BOND NEW YORK
Take a look for yourself: http://web.mit.edu/CRE/research/papers/WP90wheatonbaranski.pdf
Lets look at simple supply and demand dynamics. An area's land is a fixed asset/commodity (technically), and that means that it's inherent value is directly correlated with the amount of demand placed on it by the population that occupies the land. This means that the value of land is directly connected to the increase of population, and thus is subject to localized inflation!
But this doesn't tell us the whole story. There is another aspect of this value: Technology! Skyscrapers and trains are actually fighting the rate of local inflation in the price of land!
As the population of the city increases, naturally, so will the land value within a certain radius of that city, but as technology increases the efficiency of a certain area of land, the land value itself starts to depreciate in nominal terms as you need less of it to create the same outcome!
Now, don't let this dissuade your future commercial development plans. Even thought the undeveloped land itself, as well as the structure you build on top of that parcel will depreciate over time. The return you would incur from developing and then properly utilizing that land would be more than enough to make your effort worth while! Let us not forget the multiplying powers of leveraging in this situation as well!