October 15, 1910.





RECORD   AND   GUIDE





603









ESTABLISHED-^ l^.H Sm"^ 1868.
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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.