June 8, 1912





RECORD  AND   GUTDE





123;





gestion. A deliberate policy of locating
express stations on different subways on
different slreets rather than on the same
streets would undoubtedly tend to dis¬
tribute business and diminish congestion.
In the case of the Broadway-Seventh
Avenue Subway, however, there is some¬
thing to be said for locating expi-ess sta¬
tions bolh at 23d, 33d and 42d streets.
Thai subway is, of course, essentially
a loop. Its main purpose is to enable the
travellers on the Brooklyn Rapid Tran¬
sit lines to reach the central parts of
Manhattan quickly and for a flve cent
fare. These travellers will want par¬
ticularly to have convenient access to the
central business and shoppiiig and amuse¬
ment district of Manhattan—the districi
stretching from Madison to Long Acre
Squares, and it might stimulate traflic
■without any excessive use of time to
stop the trains three times in this par¬
ticular and—just as the subway express
now runs as locals norlh of 96th street
and south of Brooklyn Bridge. Accord¬
ing to this arrangment the only express
stations in Manhattan on the Broadway-
Seventh avenue route would be one down-
tow-n at Vesey street and Broadway, one
al Canal street and Broadway, the three
just mentioned between Madison and
Long Acre Squares, and a flfth at 59th
street   and   Lexington   avenue.

The Seventh Avenue Association is
very much alive to the necessity of im¬
proving the street-car service on that
thoroughfare; and to this end it should
seek to engineer some arrangement be¬
tween the city government and the New
Tork City Railways Company for a new
Seventh avenue surface line, following
the route of the new Seventh avenue.
Such an additioild line would be of the
utmost public convenience. There is no
through surface car route on the "west
side between Broadway and Eighth ave¬
nue and its establishment would not
inerely be useful under existing condi¬
tions, but, would considerably improve
the business availability of the whole
Seventh avenue district. No other chance
remains of building in Manhattan a sur-
fact line of really considerable value,
and   it  should  not  be neglected.





The Week in Real Estate.

The brokerage news of the week is in
keeping with the mixed nature of the in¬
fluences operative at present in the rea!
estate market. Among these may be
mentioned an abundance of capital sink¬
ing investment in mortgage loans and an
assured prospect of large-scale rapid
transit building, on the one hand; and,
on the other, an oversupply of mercantile
buildings, coupled with falling rents, and
a more or less general state of quiet in
the trades that are the principal users
of  space  in mercantile  structures.

The oversupply of mercantile build¬
ings is, of course, a result of tlie easy
conditions that have prevailed in tihe
mortgage loan market for several years.
Lenders have been eager to encourage
building operations in the midtown sec¬
tion, a section that has invited immi¬
gration of business houses and offered
unusual opportunities for real estate spec¬
ulation and investment, owing to recent
and prospective changes in the city's
transportation routes. It was inevitable
that some overbuilding should take place
there. The only question of conseciuence
is whether or not the supply of mercan¬
tile space has reached excessive propor¬
tions.

Brokers who take a large view of the
renting situation admit that vacancies
are more numerous than they should like
to see them and that net rents of lofts
are declining, but they argue that a mod¬
erate decline of loft rents is in the in¬
terest of the business prosperity of the
city. That prosperity depends upon the
cost of doing business, in which rent is
a large element. The amazing growth
of industry in this town, since the intro¬
duction of steel construction, has been
due in notable measure to reasonable loft
rents, to the general tendency with such
construction to build in advance of ac¬
tual current needs. However, during the
business boom whieh culminated in 1907,
Ioft rents rose to a high mark, and the
present reduction is merely in the way
of bringing them  back to a normal level.

No well-informed broker, so far as can
be learned, is of the opinion that the re¬
duction will be excessive. As yet it is
registered mainly in the form of tem¬
porary   concessions.     It   has   not  affected





freehold values, except in the old whole¬
sale section below 14th street. Further¬
more, it is likely to be soon checked by
diversion of building loan capital from
the midtown district into other fields of
operation opened up by the new sub¬
ways. This supposition is borne out by
the week's brokerage news. The deals
reported from the midtown section were
concerned less with sites for loft build¬
ings than with dwelling houses on the
outskirts of the shopping district, pur¬
chased for conversion to  business use.

With a let-up of construction work in
the midtown section, the Ioft vacancies
there should be reduced to normal pro¬
portion within a reasonable time. Manu¬
facturing and wholesale trades are un¬
questionably influenced by the political
situation, although the influence may not
be so pronounced as it has been in some
other presidential campaigns; and we
may look forward to a considerable ex¬
pansion of business as the uncertainties
of the political situation clear up. The
policies of Presidential candidates and
of political parties with respect to indus¬
trial corporations, transportation and
other public service companies, banks
and the tariff has more to do with the
demand for lofts in New York than is
apparent on the surface, and business
men at the head of large affairs are dis¬
posed to hold new enterprises in abey¬
ance until the outcome of the campaign
is fairly certain. Meanwhile, it is clear
that the professional element in the real
estate market is turning its attention to
localities that will be directly benefltted
by the new rapid transit lines. The con-
flrmative action taken by the Board of
Estimate on the Interborough and Brook¬
lyn Rapid Transit contracts is too re¬
cent to be reflected conspicuously in the
real estate news, but brokers interviewed
this week for the Record and Guide are
unanimous in saying that they are hav¬
ing inquiries for "subway property."
This is particularly the case with brokers
interested in the sections penetrated by
the Lexington avenue and 'Seventh ave¬
nue lines.

The Inquiries come mainly from op¬
erators, who naturally have no intention
of paying inflated prices; owners, how¬
ever, are generally asking tall figures,
and brokers find it difficult to close trans¬
actions. As is always the case when old
price standards have been superseded
through some notable development affect¬
ing property values, early negotiations of
-sales are slow and difficult. However,
after a few transactions have been put
through, the data thus supplied will fa¬
cilitate later deals. "Subw^ay property,"
as a matter of fact, was fairly well rep¬
resented in the week's brokerage news
Despite the fact that all, previous
records for building plans filed in Greater
New Tork -have been broken since Jan¬
uary first, the volume of building ma¬
terials now moving is much lower t'han
during similar periods in 1911, 1910 or
1909.

Building Bureau statistics show that
while the filings are exceptionally heavy,
the total volume of actual construction is
below sixty per cent. In New York this
is accounted for by the probability of the
Introduction of a new building code,
which, should it pass in its present form,
would increase fhe cost of certain kinds
of construction from fifteen to twentv
per cent. But there is little likelihood of
the ordinance immediately passing, be¬
cause a revision commission is to be ap¬
pointed by the Aldermanic committee, so
that probably another year will elapse
before the code is reported back to the
board.

Either the money market is sufficiently
easy to warrant the preparation of plans
for prospective construction or builders
have for the moment, become panic
stricken over the code situation. Another
possible explanation of the remarkable
increase in filings is found in the fact
that practically every building now being
erected in Manhattan is of the fireproof
type and there is also a larger increase
in the number of stories to a building.
In the Bronx, where all records have
been shattered, the increase is attribut¬
able to a larger number of apartment
house operations going ahead. In Brook¬
lyn the detached and semi-detached
house is being superseded by the apart-
iment house and the iapartment hotel.
Factory construction also has been going
on apace in that borough. In Richmond
flat and store construction predominates:
while Queens is holding its own by reason
of the erection of quantities of detached
■houses by development companies. In
Newark and the suburbs there is a slight
falling off in general building and tene-
n-ient house work.

Herein then is found the real cause of
the firmness in prices and. at 'the same
time, timidity among buyers.





The demand for common brick, for in¬
stance, iast week netted only thirty-five
cargo sales, whereas the normal for the
last week in May should be about seven¬
ty-six cargoes Prices, however, were
held stiffly at $15.75 to $7.00. In hard wood
the demand is light in all sections of the
metropolitan district, but prices have
sharply advanced from $2.00 to $3.00 per
thousand feet. In Portland cement there
are 1,000,000 barrels less than last year's
mill flgures available for this market in
the Lehigh Valley district, and while the
demand is light the $1.33 quotation is
stiffly maintained here, except in the case
of a few companies which are aggressive¬
ly after new business. In ordinary grades
of lumber prices are also stiff at $2S to
?30 for yellow pine, although market re¬
quirements just now are somewhat be¬
low normal.

The most striking illustration of the
very unusual conditions of the building
market just now is found in the behavior
of varnish and paint making materials.
Linseed oil is quoted at $0.79 with only a
hand to mouth market, and china wood
oil used in the manufacture of varnish
is bringing about $0.11 a pound. Paints,
therefore, are in a close buying market,
and the volume of varnish that is moving
is somewhat restricted. Painting con¬
tractors report a large amount of work
held in abeyance.

Financial interests are able to show
that m^ney is beginning to tighten on
practically all kinds of construction work,
but Ihey are also able to show that there
is still a verj' heavy demand for loans.





Measuring Value by Tests.

Careful management of improved
property is ?hown now^here to better ad¬
vantage and profit than in th.e buying
of equipment and supplies. The pur¬
chasing departments of the big real es¬
tate companieis that majie a specialty of
managing are as highly^organized as the
purchasing departments of railroads or
industrial concerns, and in no business is
there greater variety of supplies bought
or a more versatile knowledge necessary
on  the part of  the purchasing agent.

There are few sitaples ithat can be
bought to advantage on a strictly com¬
petitive price basis, but it is becoming
recognised that mere weight or other
measure d-^es not accurately represent
value; and the need of determining the
exact efflciency of a given article has de¬
veloped the technical engineer and his
laboratory and demonstrated the great
possibilities of saving through making
use of his service. Some of the tests for
W'hich the services of the laboratories are
imoslt frequently sought are to deter¬
mine the heat units in coal, the voltage,
candle power and life of electric lamps,
the efflciency of generators and motors,
freedom from leakage in insulations, and
accuracy of meters and other recording
instruments.

In the purchase of ne-w equipment a
defect is frequently detected by the ex¬
pert which, if passed, would during the
life of the equipment cost many times ils
value in loss of power. Similarly low
elRciency of lamps or defective insula¬
tion causes continual loss which would
pay the small expense of tests many
times over. Good authorities claim that
the comparative low returns which some
improved property gives the owners.is not
due so much to poor rental conditions as
to extravagant methods of operation. In
many cases a losing property may be
made lo return a good income by locating
financial leaks through the aid of the real
estate manager and power leaks through
-the aid of the testing laboratory.





The 96th Street Section.

Ninety-sixth s'tneet, ait the intersec¬
tion of Broadway, which has been a civic
center since colonial days, will have its
position emphasized by the erection of
another large playhouse. Ninety-sixth
street has the only river landing between
79th street and Manhattan Valley, and
most of the building material for the up¬
per West Side, during the period of its
development, came that way. In early
(times this was the particular landing
place for Bloomingdale village, the
nucleus from which has grown the large
and beautiful West End section of our
day.

Already there is a theatre at the north¬
west corner of 96th street and Broadway,
erected last year, and the one now pro¬
jected will be on the 97th street cor¬
ner of the same block. The site was this
week leased for a long term to the same
syndicate which built the other play¬
house  and  found  it  a  successful  invest-