The sun. [volume] (New York [N.Y.]) 1833-1916, 1909-06-13
REALTY AND THE TUNNELS
EFFECTS or THE OPENING or
THE M'ADOO TUBES.
store Rents In Cortlandt, Fulton and
Dey streets Near the Big Downtown
Terminal Have Greatly increased
Decreases In the Ferry Streets.

W hAeNe ohse
Decreases In the Ferry streets,
A great many people who have watched
the Hudson tunnel system rapidly APP
preaching completion have been wonder
ing what effect the opening of the big
Terminal station on Church street will
have upon rents and real estate values in
streets that lead to the tunnel buildings
and in streets that lead 10 the railroad
ferries. As the MoAdoo tubes will not
he in operation before the first part .!
July it is a little too early TO tell definitely
just what changes will take place. This
much, however. is quite certain:
=. Store rents on Broadway. Church street,
Fulton, Dey and Cortlandt streets-the
approaches to the terminal buildings-wi will
Increase very materially; while store rents
10 the present ferry approaches-Cham-
bers. Warren, Barclay. Vesey. Liberty and
Cedar streets-will no doubt show a cor
responding decrease.
The extent of these increases and de-
creases cannot be definitely forecast,
although some shrewd guesses. backed
up by typical examples, have beer made
by downtown real estate men. The gen.
eral consensus favors a considerable loss
in the value Of rentable ground floor
space in the old ferry streets. but it is ex-
pected that this depreciation will be
merely temporary.
The territory south OF Chambers street
and west of Broadway contains very few
tall Office buildings. but those that nave
been built there are among the newest
and largest in the city. 1t is expected
that the blocks between Broadway. Church
street, Fulton street and Chambers street
will be the scene of a great transformation
before long and that a few years from
now the old fashioned business buildings
there will have been replaced by tall
modern structures. When the first few
skyscrapers have been erected and are
filed with tenants store rents in their
vicinity will begin to increase. This in
crease in store rents will bring about a
proportionate increase in the value OF
adjacent land. which will necessitate the
erection Of modern buildings.
Land values in downtown Manhattan
are based primarily upon store rents.
The amount of rent a store tenant can
afford t o pay is dependent upon the num-
Der of passersby who enter his establish
ment and purchase what he has for sale,
The density of population IS increased by
the building Of twenty. thirty or forty
etory Office structures on sites formerly
occupied by low buildings, and also 10y the
multiplication and increase in the carry
ing Capacity of rapid transit lines. Thus
each new skyscraper that adds its quota
Of tenants to the transient population OF
lower Manhattan enhances the value OF
adjacent land by increasing the profits OF
st~orekeepers and adding to the amount
of rent they can afford to pay.
Office rents do not enter into the value
of the land for the reason that at their
preeent leve, they do not, save in ex-
ceptional instances. yield any surplus
revenue above the interest charges on
the capital invested in that part OF the
building above the ground floor. As a
matter Of fact, many downtown sky
ecrapers even when no provision is
made for a sinking fund, do not bring
in a return Of more than ga per cent; OF
the total amount OF capital invested in
the land and the building. .
? ,,pe effect Of the increasing height OF
tall buildings on narrow streets has
been to shut out light and air from a num-
her of floors. This leaves the older ten
to fifteen story structures with a smaller
PROPORTION Of desirable Offices and also
renders it difficult to rent space on the
third to seventh floors OF the new stric-
lures.
item in the list Of assets in New York
distinct commercial value. Sites 'front.'
ing on wide open spaces such as Trinity
churchyard, for example. are worth
a great deal more than building
plots not 80 f~avorably situated. Thus
the Empire Building. which overlooke
the ~churchyard, commands three dollars
a square foot for office space on all its
aoors. while the average Office rent along
lower Broadway is from s2-5 to $3.50 a
square foot.
The introduction Of the s%kyscraper has
proved OF great and lasting benefit to
tenants. Measured by services rendered
office rents have declined in the faoe OF
wealth and industry. Office rents to-day
are nominally no higher than they were
twenty years ago. despite the fact that
they cover charges not previously IN
cluded under rent.
Competition has induced landlords to
provide every conceivable facility, for
econom and despatch. The Vincent and
Eouitabie buildings maintain expensive
law libraries in charge OF trained libra
rians for the exclusive use OF tenants.
the Commercial Cable Building provides
tireproof safes in each office, the Park
Row and st. Paul buildings. among others
where newspaper correspondents and ad-
vertising agents have offices. are kept
open day and night all year.
Office rents in the section below Cham
hers street vary from 81 so to t2.50 a square
foot a year. In preferred locations, as
in the Instance OF the Empire Building,
ofioes bring as high as 50 a square foot.
The highest office rents are obtained in the
financial district in the blocks bounded
by Wall and Broad streets, Broadway.
Pine and Nassau streets. Next in high
once rent Is the diamond trade centre at
Broadway and Maiden lane.
Btore rents. being dependent upon the
relative congestion OF street travel. ex-
hibit a much wider range than office rents.
They vary in the downtown district all
the way from 81 a square foot a year to
500 q square foot. In a few specific in
stances they run ever higher. As store
rents determine land values, for reasons
previously explained. a most extraor-
binary variety in the prices Of real estate
may be found south OF Chambers street.
Every block has its W scale OF prices
and Its WI experience as regards en-
hancement, The assessed valuations, for
example, range from SIS a square foot 30
a2sO q square foot The highest priced
1and Is Of course In the financial district,
Sut not always where the biggest sky
-crapers are, as store rents are affected
more by the confluence Of street travel
than by density OF local Office population.
II may readily be seen. therefore. that
tie opening OF important new lines Of
transportation. with the resultant diver
skon Of street traffic from its former chan