REAL ESTATE
Hi
AND
(Copyright, 1917. by Th. Record and Ould* Co.)
NEW YORK, JULY 28, 1917
RECORD ESTABLISHED IN APARTMENT RENTING
Brokers Report Serious Shortage of Suites—Rentals
Raised About Ten Per Cent.—Property Owners Benefited
CCARCITY of apartments in New
^^ York City has been created, pri¬
marily, through the cessation of specu¬
lative building, and unless something is
done within the next year to relieve
condition the situation will become
acute. The high cost of building mate¬
rials,, the scarcity of labor, the with¬
drawal of many of the loaning institu¬
tions from the market, all have been fac¬
tors bringing about this condition.
The direct benefiter is the real estate
owner, he who had the foresight to buy
property against the market trend, and
also the capital to hold it through the
past few years of hardship. In almost
every section of the city rentals have
been raised on an average of ten per
cent, and tenants have been found who
are willing to meet this advance.
Of course the owner has additional
expenses to meet, therefore the increased
rental is not all profit, but still the per¬
centage is in his favor. Coal has soared
in price, and he must make arrange¬
ments so as to keep his tenants warm.
.Decorating is more expensive than in
memory of most of the active brokers
.of todav. This is due, in part, to the
paper shortage: also to the cost of lead
and other ingredients used in the manu¬
facture of paint, and other factors.
Apartment houses are now on a splen¬
did paving basis, and the owner has
cause for encouragement. He has had
much to contend with during the past
few years, but the wheel seems to have
turned in his favor.
Last year the renting conditions were
good, but the maior portion of the de¬
mand was confined to small sized suites.
This particular demand has been accen-
.tuated this year and has been enlarged
to embrace bigger and more, expensive
apartments.
As the result of a canvass among sev¬
eral of the prominent real estate brokers,
the Record and Guide prints the follow¬
ing expressions of opinions.
Roland F. Elliman, of Douglas L. Elli¬
man & Co., said: "The apartment house
renting situation has never been more
promis'ng. The floating supply has been
reduced to a minimum and. with more
than two months' active renting sea¬
son ahead of us. there is a very serious
problem of shortage in that section
east and south of Central Park. As a
. general rule July is a slack month, but
this vear is an exception, and through¬
out the month we have been working
almost at capacity. We have been do¬
ing an even volume of business through
what ordinarily would have been a dull
.period. Unless an unexpected burst
of buildine construction arrives soon,
the congestion which we fear now will
be magnified next year.*'
Joseph H. Nassoit. of Nassoit & Lan-
nmg: "Renting conditions this autumn
will be better than ever before in my
recollection. We have verv few apart¬
ments to rent at this time of the year.
and expect them to be completely rented
before the middle of September. Four,
five and six rooms are in most demand.
Our rent increases average from 10 to
•20- per cent., and at the present time
most of the houses under onr manage¬
ment net the owner from 12 to 15 per
cent. So soon as-the conditions become
D ENTING conditions in apart-
ment houses are better this
year than for many years past,
and never before have rentals been
so high as they are today. The
falling off in speculative building
is the direct cause. The Record
and Guide has completed a can¬
vass among many of the prom¬
inent real estate firms and prints
herewith opinions of several bro¬
kers who make apartment renting
a specialty. The concensus of
opinion is that 1918 will witness
an even more congested condition,
unless speculative builders again
enter the field in the near future.
This is hardly possible so long as
building materials maintain their
present high level and until the
shortage of labor is relieved.
normal, I look for a considerable boom
in real estate. The property bought to¬
day will certainly realize a good profit
to anybody who uses ordinary business
judgment. Only a few new houses have
been erected in the section, and this
building movement has not compared
favora]:)ly witli past years, and I feel
that unless things change there will be
less building next year than during
1917. which will naturally cause the
renting situation to become more
acute."
Henry R. Dwight. of Perry, Goodale
& Dwight, said: "We find renting very
good. We do not have to do any ad¬
vertising to obtain tenants. Renting
conditions in apartments never have
been better, in fact never have been as
good as at the present time. The great¬
est demand for apartments is for those
renting from $800 to $1,500 a year. Our
experience has been that for the large
apartments the demand is much slower.
The apartments from five to eight
rooms, I feel, are in the greatest demand.
The inquiry for the ten rooms, with
three baths, is not so large, though we
expect it to quicken later."
J. D. Knap, of Knap & Wasson Co.,
Inc., said: "Renting conditions on Wash¬
ington Heights are splendid. At the
present time there are many rentals be¬
ing closed. The renewals are coming in
well, at advanced rates. The percentage
of renewals is higher than usual, and
there is a disposition on the part of
most tenants not to move. The reason
for- this is tliat tenants are finding it
difficult to obtain equally good quarters
elsewhere, and even though they are
not quite satisfied with their present
homes, still they are staying there, be¬
cause they cannot better themselves.
There has only been a small percentage
of new construction of the better class
houses on Washington Heights, and
therefore the demand is greater than the
supply. The average increase in rentals
has been abotit 10 per cent. Even at the
extreme north of Washington Heights,
in the Fort George section, the renting
condition is also very promising. Those
houses,, which, under ordinary conditions
had four or 6ve vacancies, this year are
100 per cent, tenanted."
W. E. Barton, of Pease & Elliman.
said: "Renting conditions, up to about
a month ago, were booming, but at the
present time there is a slight letting
down, on account of families having
left town. This is only a temporary
condition and I look to the rest of the
autumn renting season to see houses
practically 100 per cent. full. The aver¬
age rental increase in that section east
and south of Central Park has been
about 10 per cent. The tenants seem
to be willing to meet this increase, for
they realize that general conditions war¬
rant the advance. The two serious prob¬
lems for next winter are fuel and labor.
The price of coal has advanced, and
labor is scarce, and good help is hard to
obtain. The owner, on his part, must
stand the increased cost, but even taking
this into consideration, his net return
should be greater than last year. This,
of course, is due to the fact that the
percentage of vacancies is practically
nil. It has been our experience that
many tenants have shown a disposition
to meet the landlord at least part way in
the matter of decorations. It is well
known that decoration costs much more
this vear than last. This is caused by
the shortage of paper, and also lead and
other materials, which go to make up
the component parts of paint. Many
tenants in our houses have expressed
their willingness to have a minimum
amount of decorating done. This has
been largelv prompted by patriotic mo¬
tives, so that the general condition of
the market may be stimulated."
W. H. Dolson, of F. R. Wood-W.
H. Dolson, Co., said: "Renting condi¬
tions in apartment houses on the Mid¬
dle West Side have never been better,
that is, during the last ten years. Con¬
ditions are more than satisfactory. I
do not look for any resumption of build¬
ing in that section during next year,
and present indications point to the fact
that next year will be enually as good
as, if not better than, 1917. In fact,
1918 ought to be a real banner year. The
high rentals are not producing bargains,
but owners are retaining their proper¬
ties. They are satisfied with their in¬
come return, which is a great deal better
than it has been in past years. This
net income return to the owner is some¬
what offset by the additional cost he
is required to pay for coal, and addi¬
tional monev expended for decorations,
but the rental vines of property, even
with these conditions, are very much
improved."
Frederick G. Hobbs. of Slawson &
Hobbs, said: "Renting conditions on
the West Side are much better than for
several years past. As a matter of fact
they are the best we have had in our
thirty years' experience. We have made
an average advance in rentals of about
10 per cent., and the tenants are re¬
maining at the new prices. There is
practicallv no new apartment house
construction on the West Side, and it
looks to me as though there will be a
very (rreat scarcitv of suites on October
1. The demand is general, no partic¬
ular class of apartment being in special
favor. We have apartments in this
office from $40 a month to about $400
a month, and we expect to be 100 per
cent, rented by September 1."
RECORD AND GUIDE 19 IW ITS FIFTIETH YEAR OF CONTINUOUS PUBLICATION.