Real Estate Record

AND     BUILDERS'    GUIDE.





Vol. XVII.





NEW YOEK, SATUEDAY, APEIL 8, 1876.





No. 421.





Published Weekly by

THE REAL ESTATE RECORD ASSOCIATION

C. W. SWEET...............PRESIDENT and Tbeasuber

PRESTON I. SWEET...........Seoretaey.

L. ISRAELS.........................Business Ma-Nager





TERMS.
ONE YEAR, in advance.





.$10 00.





Communications should be addressed to

C    SS.   S^VEET,

Nos. 345 and 347 Bboadway





EEALTY AS AN INVESTHiENT.





To the Editor of the Meal Estate Becord:

Sik: I judge from tbe bearish character of your
recent articles that you have no faith in real estate
investments. Now, does not the history of prices
in this country show that the surest Investment for
money is really ? that the national growth of the
country is rapidly enhancing the intrinsic value of
farms and city property ? and is it not also true
that the greatest fortunes, as well as the surest in¬
vestments, are in real estate ?   ■               Truth.

Comments by Editoe.—Our correspondent is
mistaken in supposing that we are of these wha
do not believe in real estate, and most mistaken
because we are convinced that, after the present
depression is over, the prices of real estate
will steadily advance, and if the paper money era
continues it is our impression that the next great
specula ion will he in landed property. It ts
true that the great fortunes of the country find
their ultimate expression in the ownership of
land. Ten persons have been enriched by the
increased value of land where one person has
achieved a fortune by banking and general busi¬
ness. It is subject to fewer fluctuations
and affects a vastly greater number of per¬
sons than does manufacturing, commerce,
or banking. There are, moreover, special causes
why land should become a more favorite in-
veslment than at any time in the past. Yet we
doubt if in the future, as in the past, as much
money will be made in what has been generally
known as fancy, costly city lots. The railroad
is a great equalizer of values. For instance,
with rapid transit on the island, and steam-
roads connecting New York City over bridges
vrith Brooklyn on the East, Hudson County,
New Jersey on the "West, and Westchester
County on the North, the immense area from
which people might choose would render it im¬
possible to obtain such enormous prices for par¬
ticular localities, such as Fifth avenue. The
area of choice would be extended; but, at the
• same time, the running of these roads through
to Westchesttr County, Kings County, and New
Jersey would add materially to the general
value of land both urban and suburban.

Still another cause will be the growing sense
of insecurity in corporate investments. Public
confidence has been rudely shocked at the waste





of corporations. Discoveries are being made on
every hand that, unless a company is under the
control of some one individual or some one fam¬
ily, its means are wasted and its property
stolen, and that the impossibility of fixing re¬
sponsibility in a joint stock operation necessarily
leads to corruption and extravagance. There
are yet more painful developments in this direc¬
tion to be expected in the future, and every
second man one meets is found to ha.ve been
robbed by some railroadj life insurance, or man-
ufactuiing enterprise. The result of this dis-
ti'ust will be to induce those who have savings
to put them in landed property; and the coinpe-
tition thus created, together with the natural
growth of the county, will make real estate in¬
vestments continuously more valuable. Any¬
one who can secure good property at present
prices could not lay by a better investment for
his children.





Bia BONANZA BUILDINGS.





One of the legacies of the paper money and
era of high prices is the costly edifices erected
in New York from 1866 to the panic. Indeed,
the fall of 1873 caught several of these buildings
Tinder way, and they were only finished with
great difficulty. These structures are, therefore,
likely to be noted in our commercial history as
evidences of the craze which possessed our rich
corporations in the great paper-money and high-
price era. It is not likely that a similar lunacy
will affect rich men and great corporations for a
generation to come. Among the costly build¬
ings which properly belong to this class may be
mentioned the following. The Equitable build¬
ing. Western Union building, Iribune building,
NeV York Life Insm-ance Company's building,
Bennett building, comer Fulton and Ann
streets, Stevens' Apartment Hotel, Booth's
Theatre, Domestic Sewing Machine Company
building, A. T. Stewart's private residence.
Park Bank building, Dr. Hall's Church.

The list might be extended, but the above is
a fair sample of extravagant architecture built
in defiance of all lessons of prudence, economy,
and entire disregard of the exceptional state of
the times, and without the least forethought of
the inevitable futiure, which would render these
buildings unproductive. In other words, the
projectors forgot that "there was a to-morrow,"
and that the inflated values which commenced
in 1866, and culminated in 1872, could not
continue forever. It is worthy of notice that
the majority of buildings in the above list were
constructed by corporations. Mr. Bennett was
not so much to blame, being a young man and
unaware of tbe unwisdom of building in high-
priced times. The result, however, is the same,
and he has simply constructed an edifice from
which he can never expect to realize adequate
interest.   Mr. Edwin Booth, who was bankrupt¬





ed by his unreasonable and costly theatre, was,
it was quite evident, not a business man,
but an artist who erected a theatre in de¬
fiance of all precedent. Usually successful
houses of entertainments of that kind have an
entrance only upon a leading thoroughfare, the
edifice itself being constructed in the rear, on
cheap property. A good deal of ground is re¬
quired, and the history of all theatres which
have paid expenses proves that it is not
expedient to take valuable property for the
building proper. The fronts should be avail¬
able for stores. Jn the case cf Booth's The¬
atre, every condition requisite to make it a
valuable piece of property has been violated.
As a matter of course, bankruptcy was the in¬
evitable result. But it is really amazing that
Mr. Henderson, who is the real owner of the
Evening Fast building, and who is a shrewd,
sharp, enterprising man, shouldhave been guilty
of such a mistake as he made in projecting the
edifice corner of Broadway and Fulton street.
In his case he was beaten before the start. The
enormous ground rent ($25,000 per annumi, be¬
sides the cost in fee of a gore slip amounting to
$150,000, made it incumbent upon him to move
rapidly to secure an income, or we doubt very
much w^hether Mr. Henderson would be found
among the Bonanza builders.

In one respect be has shown his good sense,
which is his reduetion of rents and the filling of
his buildings, which at any rate paj s ground
rent and taxes, but there are no rents which he
can secure tbat will fully repay interest on the
money invested. The Western Union structure
is another costly folly, which has sunk double
the amotmt of the original design, and there is
no possibility that it or any of the other build¬
ings in the above bst will ever repay more than
one or two per cent, on the original investment.
There is no legitimate business outside of bank¬
ing which is able or willing to pay the enormous
rents demanded for these costly structures. A
few rich and showy concerns will be wiUing to
occupy these spacious and extravagant offices,
but they are necessaiily few. We Ameri¬
cans have overdone this business of splen¬
did stores. Abroad our countrymen are sur¬
prised to find no buildings corresponding
to their extensive commercial piles. In Lon¬
don, Paris, and the other European capitals
all the great stores are in side streets; for the
item of rent is so large a one, that people having
goods to sell choose inexpensive places instead
of the costly structures deemed so essential in
NewYork.- In this respect the system of car¬
rying on business, in this city has so essentially
changed within the last few years, tbat we find
every year less demand for large stores and
buildings. The great vacant stores on Broad¬
way teU their own story of wasteful expenditure,
and of so great demands for rents that no oidi-
nary business can afford them.   One of the les