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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.