Columbia University Libraries Digital Collections: The Real Estate Record

Real estate record and builders' guide: v. 88, no. 2282: December 9, 1911

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I^<^ ^^T^^^ <^^^^S mm^. Vol. LXXXVIII DECEMBER g, 1911 No. 2282 REMODELING ANTIQUATED PREMISES ■ Some Remarkable Instances of Increased Revenue Obtained From Old Build¬ ings—Declining Rents Due as a Rule to Failure to Meet "Utility" Changes. THE constant changes taking place in the various business and residential districts of the city demand careful study. In the case of operators and brokers this study is a part of their everyday busi¬ ness. The operator must be able to fore¬ see new conditions if he would make profils, and he can only argue that be¬ cause certain things have transpired cer¬ tain other happenings will come to pass. He forms his judgment, then takes his chance and the results may or may not prove lo his advantage. The broker's work is somewhat similar, but aside from assisting the operator in foretelling future profits, he must also be able to handle properties in their present condition and to make them profitable to the nwner. In other words, the broker is dealing both with thing.s as they will be and things as they are. He may be proficient in the one and not in the other, and still be suc¬ cessful and serve well the interests of those reason of trade changes, buildings have become unsuited to the neighborhood, they must be altered to fit the new cir¬ cumstances and to meet the needs of other lines of trade. The inability of the average owner to appreciate these facts is the main reason .why many properties in the city are not producing the revenue that they should. If owners, intsead of complaining because Iheir buildings have become unproductive would study out means lo make them good investments they would not only beneflt themselves, but in many eases would help the community at large. It is in such work as this that the ar¬ chitect and buildei' are of immense value, as it is a part of their business to dis¬ cover ways of making old property pro¬ ductive by remodeling it to meet new conditions. A few of ihe builders, who make a specialty of alterations, are them¬ selves practical real estale men and are leasing. The broiter was able to demon¬ strate his plan in a forcible fashion and a lease of the entire properly resulted. A good working plan was drawn and the . lessee altered the building at a cost of about $30,000. most of which amount he obtained from the owner. Within a rea¬ sonable time after the alterations were completed, the lessee sub-rented the ground floor and basement of the building for more than he paid the bank for 'the en¬ tire structure, which was several stories high, and his total yearly profit on the lease was a very substantial one. The bank later on realized that it had over¬ looked a chance to make its property valuable, and the president told the build¬ er that the institution could have paid ■$10,000 for his plan of alteration and still been considerably ahead. Had the owner laken the trouble to study conditions and to consult with an architect or builder before making the lease, a plan could HOUSTON & SUFFOLK STREET. BEFORE ALTERATION. THE SAME BUILDING AS IT NOW LOOKS. who employ him. But whether he excels in one or both flelds of endeavor, he must devote much of his time to careful study and must spare no pains to make himself thoroughly familiar with conditions af¬ fecting the territory in which he works. The invesling owner is as vitally inter¬ ested as cither the broker or the operator. Yet in most cases he fails lo make full use of his opportunities, largely because he will not devote suflicient study to his property. Most men when they embark in a busiuess venture and invest their capital, watch it with jealous eyes and spend days and nights in planning meth¬ ods to make it more profitable. The aver¬ age property owner seems content to in¬ vest his money and trust to luck or to the judgment of others to make his in¬ vestment profitable, and this, too. when he has to deal mainly with existing con¬ ditions, which a moderate amount of ap¬ plication would enable him to understand. Real estate is a commodity, the value of which is based on present or future in¬ come, and as an article of conimerce must be marketed as are other wares. To de¬ rive income from a building the space must be rented and in order to market it to'the best advantage a careful study of existing conditions is absolutely essen¬ tial. If no market is apparent one must be created; if the space has become unde¬ sirable through age or inattention it must be again put in attractive sliape and if by able to plan their work in such a way as to produce actual returns. The problem of making profitable alter¬ ations is not confined to any one locality but confronts the owner in all parts of the city. A dwelling in the Fifth avenue section may have outlived its usefulness for residential purposes, but may be made a valuable source of income by altering it for business. A building in some down¬ town section may become unsuited to, its former uses, but with the aid of a builder, may be made lo produce an adeciuate in¬ come. An apartment house after some years may become antiquated and iusuffi- cierttly remunerative, but a capable archi¬ tect may change it 'in such a way as to bring it up to date and make it a pro¬ ducer. Some very striking examples of what may be accomplished in this respect are to be met with in various portions of the city. An excellent illustration of profitable altering, in one of the older parts of town, is presented by a building at the corner of Warren and Greenwieh streets, form¬ erly the home of the Irving National Eank. "When llie bank decided to move to other quarters, the structure as it was, being unsuited for other lines of busi¬ ness, remained untenanted for two years. A broker familiar with the needs of the section, thought out a plan for alterations and laid it before an operator who had considerable experience in speculative have been obtained for a few hundred dollars and the institution could have reaped the benefit instead of the lessee. The lenement house district of the old East Side does not naturally appeal to one as a location for profltable alterations of this nature, but Houston street fur¬ nishes an excellent example of what brains and foresight may accomplish. Next door to the restaurant known as Lit¬ tle Hungary and on the corner of Suffolk street, was an old business building own¬ ed by an estate which could not sell. John H. Scheier, a builder and operator from the Fifth avenue district, saw pos¬ sibilities in this property and obtained a long lease from the estate. When he took ■ over the building, _the store was bringing in a rental of $o40 a year and the lofts above rented for about $250 a year. He spent between $6,000 and $7,- 000 in remodeling the structure, putting in smart looking show windows and mak¬ ing the upper part of the building habit¬ able and sanitary. Real estate men and owners in the vicinity laughed at him and said he was wasting the money used in remodeling. Before the store altera¬ tions were completed it was rented for .$2,700 a year and the lofts afterwards brought in from $400 to $600 a year each. Other owners in the vicinity, seeing his success, altered their own buildings and made them more profitable. In this case, the alteration of one building was the