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Real estate record and builders' guide: v. 17, no. 421: April 8, 1876

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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