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Real estate record and builders' guide: v. 86, no. 2222: October 15, 1910

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October 15, 1910. RECORD AND GUIDE 603 ESTABLISHED-^ l^.H Sm"^ 1868. Dd^TED 10 REA.LESTAIt.BmLDIj/G #yRj::j{lTECTJ!^E.K0USEH01DDEe(ff;fTlt»^. Bt/sofess AftiThemes OF GEffeR^Hr/TE^Esi^ PRICE PER YEAR IN ADVANCE EIGHT DOLLARS Communications should be addressed fest C. W, SWEET Published EVerg Saturdag Ey THE RECORD AND GTJIDE CO. Prealdent, CLINTON W. SWEET Treasurer, F, W. DODGE Vice-Pres, & Genl. Mgr., H. W. DESMOND Secretary, F. T. MILLBB Nos. 11 to IS Eamt 24fli Street, New Yorl£ Cltr (Telephone, Madison Square, 4430 to 4433.) "Entered at the Post Office at New York, N. Y., as accoml-eias.'} matter." Copyrighted. 1!)10, hy The Record Sc Guide Co. Vol. LXXXVl, OCTOBER 15, 1910. No. 2222 THE announcement that the Adams Express Company pro¬ poses to build an office huilding on its Greenwich street property calls attention to the comparatively small number of improvements which have recently been made in and about the financial district. Apart from the Ba.nlvers' Trust Building the addition to the Whitehall Building and a few new struc¬ tures in the insurance district, construction has been almost at a standstill in that part of Manhattan. The reason is, of course, that large additions were made to the office floor space down town in.1906 and 1907, and that the business de¬ pression following thereafter prevented these buildings from being occupied by tenants as soon as was expected. Dur¬ ing the last three years this unoccupied space has been slowly fllling up; but the process has been retarded hy certain char¬ acteristics of the general business situation. From 1901 until 1907 the business development of the country was such as to create an imperative demand for olRce space in the New ^York financial district. Large corporations were organized, and needed space for New York headquarters. Corpora¬ tions doing business in other states, but dependent on finan¬ cial assistance, found it necessary to open ofiices in tliis city. Stock speculators assumed an enormous volume and increased the amount of space required by bankers aud brokers. Since the beginning of 190S none of these factors have had any¬ thing like their former effect, and the demand for office space soutb of Fulton street has consequently not been increasing as fast as it did during the first seven years of tlie decade. Neither is it likely to increase at anything like such a rate in the future. Political agitation has discouraged the whole process of business organization, which resulted in the con¬ centration of capital and headquarters staffs in New York. In several cases large corporations have actually abandoned their offices in this city. The brokerage and banking business, created by the process of capitalistic concentration and de- pendnent upon it, has naturally heen somewhat depressed. No one can tell how long these adverse conditions will last. Possibly the development of American business will never again justify tbe enormous increase of office space south of Fulton street characteristic of the first seven years of the current decade. This doea not mean that there wil! not be a steady increase in the scale of values and in the number of office buildings, but in all probability tbe increase will he comparatively slow. The new buildings will usually be very high and W'ill accommodate so many tenants that their number will because of this fact he correspondingly restricted, THE sharp changes in underlying conditions illustrated in the preceding paragraph makes speculation in New York real estate a tantalizing business. Activity jumps from district to district or from one class of building to another, and it is extremely difficult to predict hbw soon any particular movement will run its course. Between 1900 and 1904, almost -$50,000,000 were invested in apartment hotels situated between 26th and STth streets, and it looked for a time as if tbe construction of high-class house-keeping apartments would be entirely abandoned in that part of the city. But the craze for this class of improvement ceased as quickly as it had begun and now the construction of apart¬ ment hotels does not call for the expenditure of more than a few hundreds of thousands of dollars a year. Many illur trations to the same effect could be given. During the earlier part of the present decade, for instance, the construc¬ tion of mercantile buildings proceeded slowly and steadily. Some seven or eight millions of dollars a year covered expenditures on this type of building and the new space was not more than enough to meet the demands of the increase oC business. Since 1908, on the other hand, at a time when very little building was being undertaken in the financial dis¬ trict, there has been a sudden expansion of mercantile con¬ struction. New loft buildings have heen erected In two or three times the volume which used to be considered neces¬ sary, and at the present time many speculators and operators are trying hard to estimate the future duration and force of this movement. On its duration and force depends any proximate increase in value in large areas of property be¬ tween 23d and 42d street. Will large wholesale houses con¬ tinue to move from buildings situated south of 14th or 23d street into buildings north of those lines? If they do con¬ tinue to move, when will the process he checked by a decrease of rents in the older district? How large a part of the recent increase in mercantile construction is due to an actual in¬ crease in mercantile business and to real advantages of sit¬ uation and economy of operation enjoyed by the new build¬ ings? How far has the movement been merely a sudden spurt, whicii will be followed by some years of re-action and slow recovery? NO one can pretend to answer such questions with any¬ thing like dogmatic confldence; but it looks to the Record and Guide as if the increased volume of mercantile construction was based upon more permanent economic con¬ ditions than was the demand for office space in the financial district from 1901 to 1907. The process of cooperate con¬ centration has been checked. Owing to political impedi¬ ments, it may never he resumed; and if it is not resumed one source of the growth of New York and the increased value of real estate in tbe finaficial district will be cut off. But if New York is not becoming more a.nd more the financial metropolis of the country, it is unquestionably becoming more and more the mercantile metropolis. Buyers from all over the country, both retail and wholesale, are coming to New York more than ever before. All accounts agree that, in spite of the uncertainty of current business the New York hotels have been during the past few months unusually well filled with buyers of all classes. These men, even when the object of their trip is chiefly of a business character, often bring their wives with them. They come to New York for a good time as well as for business; and they contribute to the volume of local business in many different ways. The^ spend their money in the w^arehOBses, in the shops, iu the restaurants and in the theatres. Thus New York is becom¬ ing more than ever before the centre, from which' large amounts of merchandise are distributed; and it is obtaining this distinction, partly because Americans like to have an excuse for going to New York. It affords, not only the best opportunity for buying economically, but also the best oppor¬ tunities for entertainment. Thus the New York theatres, restaurants and the like contribute to its mercantile trade. The two sources of New York business re-enforce each other more and more every year. IF the foregoing account of the matter is true, it is a fair inference that the recent growth of the new mercantile district will continue—if not at the recently prevailing rate at least at a faster rate of speed than formerly. If buyers come to New York, not only because of the business ad¬ vantages of the trip, but because it is a gay, amusing and stimulating city, they wili naturally prefer to do business as far up-town as possible. There will be a good reason for the concentration of the mercantile, the retail and the amusement districts all in one continguous neighborhood— a neighborhood bounded in general by 14tb and 59th streets, Sth and 3rd avenues. In so far as the two aspects of Metropolitan prosperity become interdependent, they must also become .neighborly. Furthermore, the economic condi¬ tions which are working to produce this result have every ap¬ pearance of prominence. Even if the growth of huge cor¬ porations ceases and speculation in stocks is discouraged, mercantile business will necessarily increase in proportion to the growth of the country, in. popu.latipn and wealth, and if New York and particularly one part of Manhattan is reaping unusual advantages from this growth, it looks as if a certain regular increase of real estate values and building improve¬ ment could be predicted with confidence. Of course for the time being the eastern part of this new mercantile district is undoubtedly over-built, and a check in the volume of new building construction w-ill occur during the coming year. Nevertheless the Record and Guide fully believes that the check will not he of long duration.