December 23, 1911.





RECORD  AND  GUIDE





951





HINTS   ON   CITY   OFFICE   BUILDINGS.

Expert Advice on Construction and Management of Skyscraper*,
Clarke Dailey Before the Y.  M. C. A. Real Estate Clasi.





By

AVERY interesting lecture on the "Con¬
struction and Management of Office
Buildings" was delivered this week be¬
fore the Real Estate Class of the West
Side y. M, C. A. by Clarke Dailey, vice-
president of the Alliance Realty Co, Mr.
Dailey  said  In  part:





land. Perhaps it is truer to say, that the
value of the land depends on the height
to which one can successfully build upon
it. I should say that, as a general aver¬
age, land under a 20-story building is
worth about $100 a square foot, and un¬
der a 12-story building about $60 a square





"1 am often asked how much  do  office   . foot,  but this,  of course, is a rough esti-





buildings pay. As a friend of mine used
to say, this is like asking, 'How long is a
piece of string'^'

"It is frequently stated that office
huildings bring in only about 3% or 4% on
the investment. This is often true when
the building is no longer an adequate im¬
provement. A 10-story offlce structure
built a decade ago, may pay 4% on the
value of the land to-day, but it undoubt¬
edly paid G% or S% on the value at the
time it was built.

"I also find confusion as to wliether
the return is based upon the equity when
the property is mortgaged, or upon the
basis of a free and clear investment.

"An office buiiding which has just been
erected, and which is fairly successful,
certainly should bring in G% net on the
total value of the operation. This means
from S% to 10% on the equity. I should
consider any new building which did not
bring in this amount an unsatisfactory
operation. Our most successful offlce
building operation brought in about 9%
on the total value, or nearly 20% on the
equity, but this was unusual and due
largely to the low price at which the land
was obtained.

"In selecting a site for an offlce build¬
ing, light is the flrst essential. To-day
you cannot rent offices where there is not
plenty of good natural liglit. The next
important feature is accessibility. We
used to think that an olfice building must
be upon some busy thoroughfare, but this
is not necessarily so, if tlie property be
accessible. When we flrst considered con¬
structing the original Whitehall Euilding,
and the one at the corner of 4ist street
and Park avenue, we were told that
neither proposition would pay, as both
sites were off the line of travel. Both,
however, were accessible, and the suc¬
cess of these operations amply justifled
our convictions. It is well, though not
indispensable, that a location be secured
where a definite line of business is cen¬
tered. In the offlce building district, as in
the mercanitle section, there are certain
well-defined centers where business firms
in a similar line congregate. We have the
financial center on Wall and Broad
streets; the insurance center on and near
William street, and the jewelry center on
Maiden lane. The builders should, of
course, keep in mind the needs of the class
of tenants to whom he expects to appeal.

"The next most important consideration
is the price to be paid for the property,
and let me emphasize one thing, con¬
sider quality before price, I do not mean
by this that you. should buy at any price
asked, because it is true that, other things
being equal, the more you pay for the
land the less will be your profit. Here is
where judgment must be used, but re¬
member that an unsuitable location should
not he selected, no matter how attractive
the price may seem.

Have   Experts   Elxamlne   Plans.

"In constructing an offlce building, the
plans should not be left entirely to an
architect, as he is sometimes apt to be
carried away by his artistic feelings. It
is essential that the plans should be gone
over first by an expert builder. From his
practical experience he will point out
many ways by which money can be saved
in construction. Secondly, plans should
be gone over by an insurance expert. He
will see that every feature is introduced
which will reduce the fire hazard and keep
the insurance rate on the building and its
contents at a minimum. Thirdly, a rental
expert should examine the plans in de¬
tail. His suggestions will be valuable, as
he is the man who sells the goods.

"The percentage of land which may be





mate and given only as a matter of in¬
terest. Excessively high buildings are
undesirable. They diminish light and in¬
crease the congestion in the streets.
Buildings such as the Woolworth, Singer,
and Metropolitan Life are designed, not
only to be investments, but great adver¬
tisements, or at least monuments, for
their owners.

"The finish of the building depends to
a great extent upon the class of tenants
to whom one expects to rent. Where it is
expected to obtain a rental of $3 per
square foot, the finish must be of the
finest, but where less is expected some
economies can be effected. The endeavor
should always be to get a maximum of
quality at a minimum expenditure.

MalDtcnnuce  a  Big Feature.

"The cost of maintenance is a feature
which should always be borne in mind.
For instance, we now make it a point to
avoid polished brass knobs, as we have
found it expensive to keep them in proper
condition. Roughing for future wash
basins should be brought through the wall
and capped and the electrical conduits
should be laid out with judgment and
foresight. In a new building it is well not
to sub-divide all the floors. Very often
large tenants desire their own sub-divi¬
sion. By not extending corridors the full
length of the building we are frequently
able to save on the cost of construction,
and to charge tenants for space which
would otherwise be lost. In renting large
space care must be taken in cutting off
stairways, as trouble on tliis score niay
arise later with the fire department.

"In a building of over twelve stories in
height all wood must be fireproof. This
is a requirement of the Building Depart¬
ment, taut the Fire Insurance Exchange
does not seem to have a very high opinion
of this so-called fireproof wood. Many
builders now prefer concrete floors, as
they are less expensive and much more
fii-eproof. Tenants, however, have not as
a rule become accustomed to these floors,
A simple style of architecture is always
safe, as simplicity is usually artistic and
certainly ecnomical. Light colors are
to be preferred. They are to me. more
pleasing, and in the dark canyons of
lower New York more neigliborly.. Courts
should always be built of light faced
hrick,

"The question of elevators is an ex¬
tremely important one, as the New Tork
business man is always in a hurry. There
should be at least one for every 20,000
feet of rentable space, but this depends
somewhat on the height of the building.
Details must also be carefully watched in
constructing an offlce building, such as
outlets for desk lights, vacuum cleaning
system and suitable storage space for
coal. A smokestack is always an unde¬
sirable citizen. If it is an interior stack
it is apt to make adjoining offices liot;
and an outside stack usually blocks the
light of .some window, and is always an
eyesore. A little ingenuity will usually
solve  this problem.

"The management of an office building
is very important, and the best of service
should always be given. Besides watch¬
ing the details connected with running a
huilding, the manager must see that his
tenants are satisfied, and in lliis respect
personality plays a big factor. After all
your tenants are your best advertisers,
and a satisfied tenant will always bring
others to a building, A good elevator
starter is important, as more criticism
arises on the elevator service than on
any other one thing in connection wilh
the running uf a buiiding. It is. there¬
fore,   important   that   the   maximum   effl-





covered   by   a   building   depends   entirely    ciency be obtained  from  the elevator in-





upon the nature of the plot, A flatiron
plot, for instance, can be covered to the
extent of 100%. Flatirons, by the way,
should have'a square point, if you will
excuse the paradox. One with a sharp
point has too shallow offices and is very
expensive to construct. The ideal flat-
iron plot has a width at the end of from
thirty to forty feet. If the building is on
a busy thoroughfare, it is well to econo¬
mize on entrance space so that more room
is left available for stores.

"The  height of  a  building  depends  on
the size of the plot and the value of the





stallation. Great care must be taken in
the purchasing of supplies, and we have
found it expedient to deal only with re¬
liable firms. The operating expense, in¬
cluding taxes, in an offlce building gen¬
erally runs from 3;i% to 40%.

"In leasing space it is necessary to have
a first-class renting man, and a competent
corps of canvassers. It has grown to be
a custom to take over unexpired leases in
order to obtain a tenant, bul this is a
policy which should be adopted with cau¬
tion, as it may easily be overdone. An¬
other important point which is often over¬





looked Is that one should keep the expira¬
tion of leases on each fioor as near as
possible in the same year, as you can
never tell when some large tenant will
want considerable space. It is also ad¬
visable in renting a new buiiding to make
special concessions to obtain some large
tenants who are leaders in their particular
lines, as they will surely attract similar
tenants in the same field.

"There is some overproduction of office
buildings at the present time, but in my
judgment one year of good business
throughout the country will cause the ab¬
sorption of all the available space. The
Old buildings and dark space will always
suffer."

Loft  Uuilding  Construction.

Edwin H. Hess, of the firm of M, & L,
Pless, also spoke on the subject of "Loft
Buildings." Among other things he said
"that the tendency to-day was toward
the construction of loft buildings on large
plots, and 20-siory buildings where manu¬
lacturing was carried on, are coming to
be a common feature.

"Light is an Important feature in the
construction of the present day loft build¬
ing, and great care must be taken to pro¬
vide windows of sufflcient size to admit
light to all parts of the floor. In order'
to properly accomplish this, windows
should extend as near as possible to the
ceiling.

"The item of insurance in loft buildings
where manufacturing is carried on, or
where large stocks of goods are in stor¬
age, is an important feature, \lany de¬
vices are now employed to lessen the
chance of damage by both fire and water.
In most of the new buildings sprinkler
systems are installed, and many of them
are provided with scuppers to permit the
rapid draining of water from the floors
immediately after a fire.

"The tendency of the wholesale trade
to-day is to locate in certain well defined
centers, of whicii the new Fourth avenue
section is a type. The old section of
Broadway and the Greene street district
have suffered extensively from this migra¬
tion, and it is doubtful if they can ever
recover their former value. In this con¬
nection, however, I do not believe that
many of the owners are really suffering
any severe loss, as for many years the
property in these districts was producing
an abnormally large income, and if the
owners were thrifty enough to set aside a
sinking fund each year, they will find on
casting up their accounts that they have
paid for their entire investment, and ob¬
tained a good, fair percentage as well.

"Accessibility is an important feature
to-day in the construction of loft build¬
ings, and the new wholesale centers are
all located close to the lines which afford
rapid transit."





Free   Rent.

It has become a custom of late years to
allow a reduction in the rent either in
time or rnoney, originally adopted by
owners or agents as a means of procuring
tenants for new buildings or on . new
buildmgs out of the renting season. Tho
habit has spread until it includes old
buildings as well, and it affects nearly
every section of the city. The custom is
a bad one, and not only inflicts a hard¬
ship on the owner but reflects on the
tenant, whose present attitude seems to
be to get more for his money than he is
justly   entitled   to.

Free rent is partially concealed under
the new name of concessions, and con-
cessio.ijs reduce the income value of prop¬
erty and increase the proportion of ex¬
penses, thus placing the owner at a dis¬
advantage, increasing his liabilities and
depriving him of legitimate proflt, Bolh
landlord and tenant are interested parties
iu the ■ property in which their relation
exists the one for business and the other
for a  home.

If the business goes badly the tenant
wtll suffer, so will the landlord, but each
m a different way. If the tenant, by
conduct, waste or negligence, deprives
himself or his neighbors of the full value
of the betterments or proper up-keep of
the property, by so much does he affect
the common interest of al!,—"Real Estate
Brokers' Bulletin."





A Popular Amusement.

Moving picture theatres are multiply¬
ing, and there aro now said to he over
seven hundred places in the eity where
such pictures are exhibited. During the
current year, owing to the careful censor¬
ship exercised by a national board, the
moving picture shows have become ex¬
tremely popular and many new places
have been opened, especially in uptown
sections of Manhattan.