Columbia University Libraries Digital Collections: The Real Estate Record

Real estate record and builders' guide: v. 70, no. 1794: August 2, 1902

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August 2, 1902. RECORD AND GUIDE. 15; DBimD TO Y^l EstAH . BmLDIffc A^lCiflTECnURE .KoLSEriOU) DBJOifiioH. Busitfess juiDThemes or GeifcR^. iKTtR^. PRICE PER YEAR IN ADVANCE SIX DOLLARS Published eVerg Saturdag Commiiolcatlona sLoiild bo addreBBsd to C. Vf. SWEET, 14-16 Vesey Street, New YorK J, T. UNDHBT. Bualneaa Manftger Telephone, Cortlandt 3157 "Ente^-e-'~l he P' . "liic at Xi'W TorJ X. T.. as second-, ta s matter: Vol. LXX, AUGUST 2, 1902. No. 1794. The Index to Volume LXIX of the Record aud (Snide, cover, ing ihe period hetwecu January 1 and June -iO. 1902, is noiv ready for delivery. PivVc, *1. This Index in (/s enlorged form is now recofini:ed as indispensable lo erery one enga(jed or interested in real estate and Iniilding operations. If corers all transactions- deeds, nwrtiiages, leasts, avction sales, buildiiKj plans Jilcd, ele. Orders for the Index should be sent ut once to the office of imhl/ra- tion. 14 and 10 Vesey St. __________________ THE disposition to give certain wildly snefulative interests a clear stage for their operations in the Stock Market noted last week, has this week become a desire to realize, which explains the narrowing of the market and the decline in quotations which have since been seen, When the people who are responsible for this condition of affairs, become chastened into sobriety, matters will improve and confidence revive. The saving features of the situation are the prospective corn crop and the restriction of railroad building as compared with growth of population and corresponding growth of traffic. All that corn has apparently now to fear is frost, and that is a remote danger and one that does only partial damage in any case. Corn never suffers from frost, for instance, to the extent that it does from drought or hot winds. On the whole, a banner crop may be looked for with almost perfect confidence. The success of this crop will insure the country's good business for another year at least. As to the railroads, those that are prop¬ erly managed couid stand a considerable loss of business before the dividend obligations now assumed would be imperilled. An¬ other feature of importance is the ground lost by the anthracite miners by their outbreak of this week. The breaking of the strike would count for a good deal on the side of values. Europe is working out the reaction following her boom, and the mar¬ kets are extremely dull on that account. One of the latest signs of poor business is the dissolution of the German cement trust, which in a smaller way imitated the policy of the Amalgamated Copper Co. here, that of keeping up prices for the benefit of rivals that spray up on all sides, even though demand was de¬ clining. The great electrical manufacturing companies are mak¬ ing poorer and poorer reports as time goes on, and their stocks decline aci ordingiy. The reports of administrative officers of great European financial and industrial corporations are sin¬ gularly free from prophesies or speculations on the outlook for the future, from which we may safely infer that liquidation is not completed nor the time of revival in sight. THE Board of Aldermen have secured representation in a conference to arrange a new contract with the Pennsyl¬ vania R. R. Co. In view of the veto the aldermen have on the more important acts of the Board of Estimate it would be as well, if an understanding is arrived at with them before final action is taken on matters requiring their approval. This would save time and avoid confiicts unseemly in appearance which arise from a rather mixed legal situation, in which an attempt to pre¬ serve the dignity of the Board of Aldermen is made, while the Board of Estimate are the actual determining body in matters of municipal improvements, income and expenditure. The alder¬ men should bear in mind, that the railroad company's request for a franchise stands on different ground to that that would be ordinarily occupied hy applications for the privilege of operating a railroad on or under a public thoroughfare. The company pro¬ poses to spend a very large amount of money to join together properties they hold in fee, by links, which the Board say the city ought to have the right of breaking at intervals, providing the terms demanded for their continuance are not acceded. If the city is protected by a reasonable rental and provision for re- appraisement from time to time, the public are not only quite willing that the franchise should be granted under the terms sub¬ mitted to the Board, but are impatient because of the obstacle the Board have thrown in the way of the prompt commencement one of the most stimulating improvements that the city has ever had a chance to obtain. It is not merely that tbe esablish- men of the Pennsylvania terminus in Manhattan has and will still further improve real estate values in a large section of the borough, but the concentration of its lines at this point breaks a monopoly of the metropolitan carrying business that has too long existed, and the result cannot fail to be of inestimable value to the business of the city. The Real Estate Situation. ■Hf^HE consolidation of the real estatecompaniesnowabout to be ■^ effected is still provoking a great deal of interested discus- sion among real estate brokers and operators. On the one hand the opinion is expressed that the new corporation is the perfectly legitimate outcome of certain large and permanent aspects of the real estate situation. On tbe other hand less favorable critics declare that it is the culmination of a long series of attempts to increase the value of certain high-priced property by issuing and selling sheaves of securities against them. Both of these opin¬ ions have, as we pointed out last week, some truth in them. The new company will be the outcome of a systematic effort ot the part of real estate speculators to exploit high-prxed real estate in New York City. They have not been content, merely to buy property that looked cheap, and then to wait until they could get an increased price. They have adopted the much more vigorous method of acquiring certain selected and desirable plots even at a high price, and then erecting on them the kind and size of a building best adapted to the location—the whole enterprise be¬ ing based upon the assumption that this class of property could hy skillful exploitation and management be made intrinsically much more valuable. The only doubtful part of the business is the extensive capitalizing in advance of these anticipated profits; and a large part of the securities of the new consolidated com¬ pany will represent such paper values. But the important poin' is that a large corporation with abundant resources in cash and credit will be in a much better position to maintain these values than a number of smaller companies. Indeed, it is probably being organized for just this purpose; and for that reason it is likely in the long run to become exclusively an investment com¬ pany. The constituent corporations carry on at the present time a business that is more speculative and constructional than it is investment: but the consolidated corporation will he too un¬ wieldly to take over these various operations. If it is to suc¬ ceed as a holding, and perhaps, as a lending company, it must be managed with the utmost conservatism. Otherwise it can¬ not expect to sell its securities to the public in any large quan¬ tities. A real estate investment company, particularly one which capitalizes prospective profits, cannot expect to pay very large dividends. It must be content to give to its security holders, the permanent assurance of a small but sufficient rate of interest. The new corporation can doubtless put the shrewd speculative talent, now associated with the smaller companies to good use but it would be an unwise step to mix up this speculation with the investment purchase of high-priced property. Broadway continues to be that part of the West Side, in which there is most activity. During the past week a cor¬ ner of 68th street was acquired by a new speculative company, while plans were filed for an apartment hotel on a corner of 98th street. And this activity continues in spite of the fact that the Subway excavations are still having a bad effect upon renting along the whole line of the avenue on the West Side. The truth is that only recently has that part of Broadway coine into its rights. During the whole of the early development of the West Side, Broadway was neglected, partly because property for im¬ provement could be bought cheaper on other avenues, and partly because the elevated road on Columbus avenue tended to con¬ centrate business along that line. It was not until values all over the West Side were very considerably increased, and un¬ til larger apartment houses came to be biiiit on larger plots that the turn of Broadway arrived. Ever since 1899 its improvement has been rapid and continuous, until now it seems destined to become relatively as important on the West Side as it is further south. Doubtless the Subway has had a good deal to do with this; but still more important is the fact that the West Side has reached in its development a stage which demands a spacious and handsome business thoroughfare. Broadway was the only avenue, which could assume that position, both because of its width, and because its combination of going uptown, while also going across the city makes it peculiarly convenient. The consequence is that the cream of the West Side retail and gen¬ eral business will hereafter go to Broadway, while at the same time it will remain, as it has not remained downtown, a thor¬ oughfare on which people will live. It is the only avenue on the West Side, that is proving very popular with the builders of