Columbia University Libraries Digital Collections: The Real Estate Record

Real estate record and builders' guide: [v. 100, no. 2576: Articles]: July 28, 1917

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REAL ESTATE Hi AND (Copyright, 1917. by Th. Record and Ould* Co.) NEW YORK, JULY 28, 1917 RECORD ESTABLISHED IN APARTMENT RENTING Brokers Report Serious Shortage of Suites—Rentals Raised About Ten Per Cent.—Property Owners Benefited CCARCITY of apartments in New ^^ York City has been created, pri¬ marily, through the cessation of specu¬ lative building, and unless something is done within the next year to relieve condition the situation will become acute. The high cost of building mate¬ rials,, the scarcity of labor, the with¬ drawal of many of the loaning institu¬ tions from the market, all have been fac¬ tors bringing about this condition. The direct benefiter is the real estate owner, he who had the foresight to buy property against the market trend, and also the capital to hold it through the past few years of hardship. In almost every section of the city rentals have been raised on an average of ten per cent, and tenants have been found who are willing to meet this advance. Of course the owner has additional expenses to meet, therefore the increased rental is not all profit, but still the per¬ centage is in his favor. Coal has soared in price, and he must make arrange¬ ments so as to keep his tenants warm. .Decorating is more expensive than in memory of most of the active brokers .of todav. This is due, in part, to the paper shortage: also to the cost of lead and other ingredients used in the manu¬ facture of paint, and other factors. Apartment houses are now on a splen¬ did paving basis, and the owner has cause for encouragement. He has had much to contend with during the past few years, but the wheel seems to have turned in his favor. Last year the renting conditions were good, but the maior portion of the de¬ mand was confined to small sized suites. This particular demand has been accen- .tuated this year and has been enlarged to embrace bigger and more, expensive apartments. As the result of a canvass among sev¬ eral of the prominent real estate brokers, the Record and Guide prints the follow¬ ing expressions of opinions. Roland F. Elliman, of Douglas L. Elli¬ man & Co., said: "The apartment house renting situation has never been more promis'ng. The floating supply has been reduced to a minimum and. with more than two months' active renting sea¬ son ahead of us. there is a very serious problem of shortage in that section east and south of Central Park. As a . general rule July is a slack month, but this vear is an exception, and through¬ out the month we have been working almost at capacity. We have been do¬ ing an even volume of business through what ordinarily would have been a dull .period. Unless an unexpected burst of buildine construction arrives soon, the congestion which we fear now will be magnified next year.*' Joseph H. Nassoit. of Nassoit & Lan- nmg: "Renting conditions this autumn will be better than ever before in my recollection. We have verv few apart¬ ments to rent at this time of the year. and expect them to be completely rented before the middle of September. Four, five and six rooms are in most demand. Our rent increases average from 10 to •20- per cent., and at the present time most of the houses under onr manage¬ ment net the owner from 12 to 15 per cent. So soon as-the conditions become D ENTING conditions in apart- ment houses are better this year than for many years past, and never before have rentals been so high as they are today. The falling off in speculative building is the direct cause. The Record and Guide has completed a can¬ vass among many of the prom¬ inent real estate firms and prints herewith opinions of several bro¬ kers who make apartment renting a specialty. The concensus of opinion is that 1918 will witness an even more congested condition, unless speculative builders again enter the field in the near future. This is hardly possible so long as building materials maintain their present high level and until the shortage of labor is relieved. normal, I look for a considerable boom in real estate. The property bought to¬ day will certainly realize a good profit to anybody who uses ordinary business judgment. Only a few new houses have been erected in the section, and this building movement has not compared favora]:)ly witli past years, and I feel that unless things change there will be less building next year than during 1917. which will naturally cause the renting situation to become more acute." Henry R. Dwight. of Perry, Goodale & Dwight, said: "We find renting very good. We do not have to do any ad¬ vertising to obtain tenants. Renting conditions in apartments never have been better, in fact never have been as good as at the present time. The great¬ est demand for apartments is for those renting from $800 to $1,500 a year. Our experience has been that for the large apartments the demand is much slower. The apartments from five to eight rooms, I feel, are in the greatest demand. The inquiry for the ten rooms, with three baths, is not so large, though we expect it to quicken later." J. D. Knap, of Knap & Wasson Co., Inc., said: "Renting conditions on Wash¬ ington Heights are splendid. At the present time there are many rentals be¬ ing closed. The renewals are coming in well, at advanced rates. The percentage of renewals is higher than usual, and there is a disposition on the part of most tenants not to move. The reason for- this is tliat tenants are finding it difficult to obtain equally good quarters elsewhere, and even though they are not quite satisfied with their present homes, still they are staying there, be¬ cause they cannot better themselves. There has only been a small percentage of new construction of the better class houses on Washington Heights, and therefore the demand is greater than the supply. The average increase in rentals has been abotit 10 per cent. Even at the extreme north of Washington Heights, in the Fort George section, the renting condition is also very promising. Those houses,, which, under ordinary conditions had four or 6ve vacancies, this year are 100 per cent, tenanted." W. E. Barton, of Pease & Elliman. said: "Renting conditions, up to about a month ago, were booming, but at the present time there is a slight letting down, on account of families having left town. This is only a temporary condition and I look to the rest of the autumn renting season to see houses practically 100 per cent. full. The aver¬ age rental increase in that section east and south of Central Park has been about 10 per cent. The tenants seem to be willing to meet this increase, for they realize that general conditions war¬ rant the advance. The two serious prob¬ lems for next winter are fuel and labor. The price of coal has advanced, and labor is scarce, and good help is hard to obtain. The owner, on his part, must stand the increased cost, but even taking this into consideration, his net return should be greater than last year. This, of course, is due to the fact that the percentage of vacancies is practically nil. It has been our experience that many tenants have shown a disposition to meet the landlord at least part way in the matter of decorations. It is well known that decoration costs much more this vear than last. This is caused by the shortage of paper, and also lead and other materials, which go to make up the component parts of paint. Many tenants in our houses have expressed their willingness to have a minimum amount of decorating done. This has been largelv prompted by patriotic mo¬ tives, so that the general condition of the market may be stimulated." W. H. Dolson, of F. R. Wood-W. H. Dolson, Co., said: "Renting condi¬ tions in apartment houses on the Mid¬ dle West Side have never been better, that is, during the last ten years. Con¬ ditions are more than satisfactory. I do not look for any resumption of build¬ ing in that section during next year, and present indications point to the fact that next year will be enually as good as, if not better than, 1917. In fact, 1918 ought to be a real banner year. The high rentals are not producing bargains, but owners are retaining their proper¬ ties. They are satisfied with their in¬ come return, which is a great deal better than it has been in past years. This net income return to the owner is some¬ what offset by the additional cost he is required to pay for coal, and addi¬ tional monev expended for decorations, but the rental vines of property, even with these conditions, are very much improved." Frederick G. Hobbs. of Slawson & Hobbs, said: "Renting conditions on the West Side are much better than for several years past. As a matter of fact they are the best we have had in our thirty years' experience. We have made an average advance in rentals of about 10 per cent., and the tenants are re¬ maining at the new prices. There is practicallv no new apartment house construction on the West Side, and it looks to me as though there will be a very (rreat scarcitv of suites on October 1. The demand is general, no partic¬ ular class of apartment being in special favor. We have apartments in this office from $40 a month to about $400 a month, and we expect to be 100 per cent, rented by September 1." RECORD AND GUIDE 19 IW ITS FIFTIETH YEAR OF CONTINUOUS PUBLICATION.