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Real estate record and builders' guide: [v. 100, no. 2589: Articles]: October 27, 1917

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REAL ESTATE AND (Copyright, 191T, by The Record and Guide Co.) NEW YORK, OCTOBER 27, 1917 SHORTAGE OF RENTABLE SPACE IN ALL BOROUGHS FOUND THROUGH SURVEY JUST FINISHED Committee On Demand For Buildings Makes Report T NVESTIGATIONS pursued by the ^ Committee on the Demand for Build¬ ings, Henry Atterbury Smith, chairman, has revealed the fact that there is an urgent demand for buildings of nearly every type, though in some instances rentals sufficient to make construction work profitable cannot be obtained. The situation is an unusual one, and real estate today is in a healthier con¬ dition than for many years past. Real estate owners are receiving good returns on their investments,_ though cost of maintenance and operation have increased. Probably never before in the history of the city have fewer vacancies existed than at the present time, and the ultimate result should be that investors will come back and place their moneys in this form of security. The demands of the Government, so that the war can be properly prosecuted, come first, and the response to the Second Liberty Bond issue clearly demonstrates that the people with money are standing back of the country. No immediate increase of purchasing power, so far as real estate is concerned is looked for until such time as the war conditions are fully understood, but when the turn does come people prominently identified with the market look for a movement, both in new construction and in invest¬ ment buying, such as has not been seen in years. The new construction work will in all probability precede invest¬ ment buying, but owners today are now more firmly entrenched than for a long time. Loaning institutions are taking the stand that while new commitments can¬ not be expected for the time being, still every eflFort will be made to allow exist¬ ing mortgages to remain and not hamper the mortgagor. This is certainly a word of encouragement, for. except in iso¬ lated cases, these institutions do not expect to make owners reduce their loans. In other words, these interests wish to cooperate with owners and stabilize real estate values. The Committee on the Demand for Buildings, which is a sub-committee of the Committee on the Alleviation of Building Stagnation, Elliott Smith, chair¬ man, has compiled a large amount of data from various sources, some of which are printed in this issue. The demand for office space is in¬ sistent, not only in that section south of Chambers street, but also in the Grand Central Terminal zone. From the various opinions quoted below it will be seen that war conditions have been an influencing factor in filling up available office space, and while it is expected that there will be a certain amount of office space thrown back on the market after the war ceases, never¬ theless the natural growth of the city will tend toward taking up of not only this space, but create a demand for more. Several large office buildings have been ^ erected in the Grand Central Terminal zone during the past two or three years.^ They have been promptly filled at prices equal to. and in some cases larger than, obtained downtown. It is generally conceded that the rate at which new office buildings have INTEREST in the movement to end ^ the stagnation in the huilding industry in the Metropolitan Zone is increasing daily. Printed herewith is a condensed report of the Com¬ mittee on the Demand for Buildings, which includes many expressions of opinion from men well versed in the situation. The concensus of opinion is that there is a shortage in nearly every class of building, and unless something is done to relieve the condition, the shortage will be¬ come acute. There is a general feeling that rentals will increase materially, unless a huilding move¬ ment is inaugurated. been erected during the past few years can be continued for some time, and tenants readily found. Following is a digest of expressions of opinions given by a number of lead¬ ing concerns who keep in close touch with the office building situation, espe¬ cially in the section south of Chambers street and in the Grand Central Termi¬ nal zone : J. C. Cushman, of Heckscher & De Snulles: "All the available uptown office buildings are practically full. Buildings recently completed have been completely tenanted as soon as occu¬ pancy could be leiven. This is notably true of 50 East 42d street, now 95 per cent, rented, and the Vanderbilt-Con- course Euildiner. 100 per cent, rented. Too many buildings are a detriment, but this district is not over-housed, and tenants can be found for office buildings after they are built at the same pace as during the past few years. The downtown district is also in demand. We recently had an order for 1,800 snuare feet in an office building between Wall street and the Battery, and the following were the only vacant spaces found for rent: at 11 Broadwav, 1,767 square feet, $3,000; American Express Buildine:, one entire floor; at 66 Broad¬ wav, 300 square feet; at 42 Broadway, 600'square feet, $1,000, and at 31 Libertv street, 1,537 square feet. $28,000." August Heckscher: "A great deal of space is obtainable at reasonable rates and at rates actually lower than present conditions, in the way of costs and delays, would warrant. Rents have not advanced even approximated within the range of increased cost. Money on bond and mortgage will be increasingly difficult to obtain." James S. Coddington, of Wm. A. White & Sons: "There is a fundamental demand for office space in the down¬ town section. All of the high-class office buildings under our management are fully tenanted, and in the uptown sec¬ tion buildings are being rented with rapidity." Edward C. Cammann, of Cammann, Voorhees & Floyd: "Ofifice buildings today are extremely well filled, due in no small part to the war. and while it may be expected that there will be a falling off when the war is over, so few buildings have been erected in recent years that the demand for space, due to the natural growth of the city, should in a short time fill up the^ vacancies created when war conditions have ceased their demands." Laurence McGuire, President of the U. S. Realty and Improvement Com¬ pany: "The demand for space far exceeds the supply. After new build¬ ings are erected tenants can readily be found." Geo. T. Mortimer, President Equit¬ able Office Building Corporation: "Prac¬ tically all office space is occupied, due largely to war conditions. I feel that some of this space will be back on the market when the war is over, though to what extent no one can foretell. A large amount of space has been taken by the representatives of foreign gov¬ ernments for purchasing departments, as well as for various propaganda in connection with war matters." Frank Lord, of Cross & Brown Company: "The demand for new build¬ ings and for space is better than it has been for five years. South of Chambers street the market is in an excellent con¬ dition, a vast number of vacancies hav¬ ing been filled. In the uptown district there is a shortage of office space, and a number of new buildings, were they to be erected, could be filled with desir¬ able tenants." Lawrence B. Elliman, of Pease & Elli¬ man: "There is a very large demand for space in both downtown and up¬ town office buildings, especially in the wholesale district south of 33d street. There is but little to oflfer to applicants. This same condition applies to the financial district." Albert B. Ashforth: "In the down¬ town district, there is an unprecedented demand should continue to be active, story buildings arsi 100 per cent, rented, and we are increasing rentals as the leases expire. It would appear that the demand should continue to be active, and that any new buildings erected south of Chambers street could be quickly tenanted. The Uptown district has not felt the demand as much as the Wall street section. This is due, in all probability, to the fact that around the Grand Central Terminal, several high buildings have been erected. How¬ ever, a dearth of space in this section is imminent." Charles F. Noyes, of Charles F. Noyes Company: "All desirable down¬ town office buildings are 100 per cent rented. There is a healthy demand for space of this character. Rents are con¬ siderably above the average, but it looks to me as though these conditions would continue for several years to come." Russell Marston, of Marston & Com¬ pany: "The majority of ofifice buildings below Chambers street are fully rented and there is a big demand for space. Many of the office buildings uptown are fully rented, but there still remains a sufficient number of vacancies to supply the demand at present." M. Morgenthau, Jr., of M. Morgen¬ thau, Jr., Company: "Downtown ofifice space is in fair demand, at rentals about 50 per cent in excess of what they were two years ago, and the same conditions apply to the L^ptown district." Samuel A. Herzog: "In my opinion, the present supply of new buildings in the Grand Central Terminal zone will afford such additional space to the present accommodation, that there will RBCORD AND GUIDE) IS IN ITS FIFTIETH YEAR OF CONTINUOUS PUBLICATION.