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June 29, 1912 RECORD AND GUIDE 1395 THE WISDOM OF A SKYSCRAPER SPECIALIST A Professional Talk to Real Estate Men on Latter-Day Methods—Suburban Development and Building Management* By GEORGE T. MORTIMER, Vice-President of the U. S. Really and Improvement Co. THIS profession has grown witli marked rapidity during the past decade; in fact, the 'growing tendency of the public to avoid Wall street and its p-itfalls a few years ago brought about a speculation in real estate which was almost of the "wildcat" variety. The entire United States was plotted until farmland became so scarce that necessity, in rectifying the evils which were brought ahout. has begun to turn some of the lots and plots back again into farms. Of this wildcat developing I have little to say, except that it is hurting your busi¬ ness and mine. It is tending to cast a stigma on the business from which you and I gain our livelihood, on the profes¬ sion which it is your duty and mine to protect and to elevate. Going hand in hand with this wildcat speculation in land ^vas a tremendous amount of worthless stocks and bonds in fake realty companies and boom develop¬ ments. A friend in Duluth, who is at¬ tending this convention, wrote me about some slock his client bought in a boom development on Long Island, which proved to be a baiTen sand bar. Another in Seattle, one or two in Chicago and others wrote me inquiring about rea] es¬ late securities of an almost worthless character, bought by friends and clients. Surely this is the kind of thing you and I must help lo stop; especiaiy as conditions are shaping themselves day by day so as to make legitimate real estate security more essentia] than ever, and the market has got lo be kept clean. The very fact that real estate is one of the few lines of business which can, in some instances, be entered wilh little or no capital and less experience, aug¬ mented by the fact that the rewards are often great, opens this business to the wanton attacks of those who are un¬ scrupulous, and who, lured on by com¬ missions, go about handing out gold bricks lo their clients to the detriment of the profession at large, as well as to their own ultimate ruin. You suburban developers who are teaching the people how to live by buiid¬ ing sanitary honies, you builders "of idea.1 tenements in the congested districts of the cities, you builders of modern office buildings and other hives of industry, which are constructed so as to give their occupants the best possible living and working conditions, are engaged in the mosl ennobling work it is possible lo con¬ ceive of, preventing sickness, minimizing crime, increasing efficiency and prolong¬ ing life and happiness. As my particular specialty has been the development of the skyscraper, I am hardly competent to discuss suburban de¬ velopment, but as I tour about the coun¬ try I cannot but observe the nation's tendency to migrate from the closely- populated districts of the city back to the country. Assisted by the trolley and the automobile, as well as by occasional tun¬ nels, the people are taking advantage more and more of sunshine and shrubbery; and the developer who is building the style of house the people want, and who is building it well and who is laying his property out in an attractive manner and with suitable restrictions, will mar¬ ket his product. If, however, you do not do this, some one else will, and the re¬ sulting competition will spell failure for you. Whether office building or store, mansion or cottage, you have got to have something a little better and a little sooner than the other fellow to succeed. Some time ago a friend of mine ac¬ quired, under foreclosure, a row of seven¬ teen poorly constructed two-family houses and when he complained to me that out of the thirty-four apartments, only ten were rented. I went to look at them and found that in each of the twenty-four vacant apartments was a large and very objectionable "to let" sign, advertising the fact that the whole row was practically deserted. If the plague had hit the neighborhood it couldn't have looked worse. I at once advised him to take down all the signs but one. and to have cheap but neat lace curtains put at the front windows and •From a paper read before the National Con- vefition of .Real Eststp B:fchange,^ at LotUsyille, it was only a short time before the ma¬ jority of the vacancies were filled. Another row of houses stood idle for al¬ most a year. They were neat little one- family houses, well built, but poorly lo¬ cated. Pinally the owners had them all completely furnished at a cost of a.toout three hundred dollars each, and af let- adding five hundred dollars to the former asking price, put an attractive "ad" in the Sunday paper, offering the houses with the furniture as a bonus, and of my own knowledge the entire row was sold within twenty-four hours. This Is the Day o( Specialization. I do not helieve it is longer possible, except in some very remote cases, to con¬ duct the real estate business as it was conducted in the old days. It is only about flfteen years ago that the average real eslate office in New^ York embraced a variety of vocations, more or less allied to the main idea, which fiuctuated from selling coal to the householder up to placing an occasional life insurance pol¬ icy, and each man in the office was dele¬ gated to look after each of these many branches, meeting with more or less suc¬ cess measured accordingly as his ability or opportunity occasioned. No oflice made any pretense of engaging specialists, and the only specializing that was done was with the offlce itself, which generally specinlized in the handling of property and clients located in the immediate dis¬ trict which contained the office. From a perspective standpoint, our country is yet young, but we have long ago passed from the haphazard, catch-as-calch-can method of doing business, and have ascertained that the successful man in any depart¬ ment of industry had to be a specialist. Furthermore, we have learned something in recent years of scientific management. The successful offlce of the present time, therefore, is made up, not of an organisa¬ tion of free lancers, but of a chain of specialists in the various departments, and as a chain is strong only to the ex¬ tent of its weakest link, the effort is to bqve each man the best in his particular line. Thv Skyscraper Speeiali.st. By no means the least important of these experts is the skyscraper special¬ ist; the man who shows the capitalist where to build liis twenty, thirty or forty story building, and how to plan it; who. through experience, has learned the ex- trava.gances to avoid and the essentials to install. In these days of keen competition and the survival of the fittest, the best plan¬ ned building is bound to be the most successful, and when you realize that the cost of the average modern offlce build¬ ing is well into the millions, you can readily appreciate this man's increasing importance. Information is your stock in trade, confidence the keynote of vour success, the degree of which will be measured by your own personality ■ and salesmanship. True, there are setbacks, but these very disappointments are the flres which temper the steel. Concentra¬ tion, system, energy, honesty to Yourself and your client are bound to bring re¬ sults. The nation is full of people with real estate and with money. Most of them don't know how to handle their own property or how to invest their monev. For every man with the price, there are a hundred sharpers. The ranks are crowded with brokers of the ordinary class, but 'there is an unlimited demand for the conscientious, specialized broker, who can give sound recognized advice on his specialty, just as the banker does on financial securities, and who merits a similar respect and standing in the com¬ munity. Choose your specially with care; "Tou can't catch trout in a muddy pond," and having chosen it, "stick," for "a rolling stone gathers no moss." Moilorn Riiildjng Management. If I may make this paper a little per¬ sonal, I would like to tell you about our own organization, so far as it applies to our real estate department. Our com¬ pany o-wns or controls over flfty million dollars' worth of New York real estate the large majority of -^hich is improved with such modern buildings as the Trin¬ ity. Flatiron, Whitehall. Everett. United States Realty and Mercantile Buildings. Directly, in charge of this property is the Vice-President. Under him there are vari¬ ous departnients, such as the local man¬ agers in the larger buildings, the engi¬ neering department in charge of a Super¬ vising Engineer, a purchasing depart¬ ment, a repair department and a depart¬ ment of acconnts. The very names of these departments so describe their func¬ tions that I need not bore you with a description of them. I would like to make an exception, however, of the en¬ gineering department. In the old days the chief engineer, who was generally superintendent as well, was the major donio. He hired and fired; he bought supplies, coal, waste, oil and the thousand and one things which are requisite to the wants of the modern skyscraper. He was kno-t\'n to take tips occasionally and once in a while a com¬ mission on some of the supplies. So far as our organization is concerned this man is no longer. Instead of the superinten¬ dent, -we have the building manager, generally a college man. who looks artet the building above ground, who caters to the whims of the tenants, who rents oflices and has charge of the help. The very class of the man precludes the pos¬ sibility of graft. The engineer has charge of the plant of everything below the street level. He is responsible directly to the supervising engineer. The super¬ vising engineer, as a part of his super¬ vision, keeps records of the consumption of coal, electricity and water and various other essential data, which are kept on charts, the curves of which show at a glance the daily histoi-y of the workings of the plants. These charts give imme¬ diate warning when an unusual situa¬ tion arises. The ofiice is similar to a great many others in New York and else¬ where, but is naturally the one I am most intimately acquainted wi'th, and I wont to take this opportunity of ex¬ pressing my pride in the men who make it up. Ne«- York City Valin-s. Years ago they told me in New York that We had reached the top notch in prices, but since then values have gone up by leaps and bounds, until we have reached the maximum at the rate of seven hundred dollars per square foot, and still we are not up to the top prices of either London or Paris. The net increase of land values in the City of New Y'nrk for a period of len years, from 1900 to 1910, was more than tbe combined gross out¬ put of ail the gold and silver mines of tbe United Stales by one hundred and seventy million dollars, -and ^^reater by two hundred and seventy-eight million dollars than all the dividends paid dur¬ ing this time by all the railroads of the United States. And during this time this land was paying satisfactory dividends on its investment. This is the land, which in 1626 was bought from the Indians for twenty-four dollars, or approximately nine cents for each one hundred acres. True there are occasional recessions, but these are mostly of a local nature, due to trade changes, and these very changes in localities are fruit for the broker, for whether his client is moving into or out of a district, he needs the broker. What applies to New York, is, I be¬ lieve, true of all the other large cities in the land: Chicago, Cleveland, Detroit. Denver. Omaha, Seattle, Louisville and the entire South are going througii a re¬ building process. The method of steel skeleton franie construction, developed by George A. Fuller in Chicago a little over twenty years ago. has created a new era in the building business, making it pos^ sible to reap . a greater crop from our city lots, and introducing conditions which have brought about the replanning and rebuilding of most of our large cities. New Tork even has awakened from its condition of lethargy and self-satisfac¬ tion, and, following the example of her smaller sisters, is now diligently study¬ ing a city planning proposition. Civic pride is the popularisni of the day, and in all parts of the country we see a rational and artistic touch being applied to the deve;opment Qt the l^nd.