The sun., 1909-01-03
The REAL ESTATE MARKET
OUTLOOK FOR BUYING AND
BUILDING ~ MANHATTAN.
Recent Demand for business Premises,
Apartments aud Nv eilings Likely to
Grow IN Volume aud lie the Feature
OF This Years Investment Market.

OF THIS Years Investment Market.
Ap account was gwen in this column
last Sunday Of the effect which industrial
depression has had on rental values in
Manhattan during 1903 1t was pointed
out that owing to the prevalence of long
term leases business property had sus-
tAined a comparatively unimportant loss.
II was found also that apartment houses
snd dwellings on the West Side, including
Morningside Heights and Washington
Heights had maintained their rental
value. The only kinds of premises that
had experienced a severe and at the same
time general depreciation in rental in
come were expensive apartments and
dwellings in the fashionable East Side
resdence quarter and the ordinary run
Of hats and tenements,
The selling value OF real estate is of
course based uponits rental value. How
ever. as the selling value is the COM
pettive price given for the expected
future rent IL is far less stable than is
the rent itself Thus the selling value
of q piece Of real estate leased at a net
annual rent for a long term will differ
according 10 the number Of buyers and
sellers in the market and the return open
IN capital in other fields of investment
than realty. Hence under the abnormal
financial nd industrial conditions which
prevailed last year the factors that exer-
cised a controlling influence on real
estate prices had but little connection
with rents The great bulk OF the prop
erty sold last year was evidently sold
under abnormal pressure and at a re-
oeseiop in price. Much of it was sold
not because it earned less income but
because the owner was unable to replace |
an expiring mortgage or because Of other
circumstances that had no reference to |
the income from the property itself.
Consequently in attempting to forecast
the market OF 1909 IL is of small conse-
uuenoe whether prices went down last |
year, but it is Of the first Importance |
to know what attitude buyers took |
toward the several kinds Of property, On ,
this point the record OF private and public /
sales leaves no room for doubt II was
evident all through the year that at some /
moderate price reduction buyers could /
generally be found for business realty. |
The sale Of such property could as a rule
be negotiated at private contract on terms
which enabled the seller TO realize part
OF his equity. The amount of business
property that was foreclosed was sur
prisingly small. The same was true of
apartment houses and dwellings. Even
in the case of dwellings in the fashionable
East Side residence quarter, which
brought noticeebly low prices, there was
no occasion 10 resort to the auction room
b,,lr nf ha hat
under the hammer by order of court cont
prised fats and tenements and antiquated
dwellings surviving in fat and tenement
neighborhoods. For property Of this
kind there was So little demand that
only in rare instances did it find buyers
even in the auction room, and most Of
II which figured there was taken ovs~ '
by the holders of mortgages on bids
that completely wiped out owners squi- /,
ties. Il
It Is instructive to note t'v while there
vas no effective auction biLding for Man
haitian fat and tenement property.
whether improved OF unimproved, several
important lot offerings last spring where
industrial conditions were at their worst
attracted buyers in unexpectedly large ,
numbers. For example, n trade in The
Bronx that was put up at auction 10y an {
operating company because of the calling
10 Of mortgage was sold of without q
difficulty 10 small investors at prices ,
which yielded the company fair profit
Meanwhile the amount Ot fla, ana ,
tenement property that was forced un- /
der the hammer was not large in pro- q
portion 10 the total amount of such prop
erty IN existence. The fact is that the !
number of foreclosures of whatever kind j
~ realty was perhaps smaller in the /
after panic year. 1903. than that fire. a
quently seen in periods of prosperity I
and active building up TO some half l
dozen years ago. The business Of lend
ing on mortgage has of late been con !
centrated in the hands of few large i,
institutions and these were under no /.
special pressure 20 call in mortgage loans ,
Where mortgages held by these hnsti- !,
tutions expired last year they were re- +
newed. though at a higher rate of in :
terest. The foreclosure sales that were l.
held in the course OF the year were praC- {
tlcally all in pursuance OF decrces of :
court obtained by private lenders.
10 view Of the financial strength Of u
The interests which now control the buln
OF the mortgage loans III this borough
II is not likely that much property will
be forced on the market because Of 3
financial troubles on the part of lend =
ers. Owners of fats and tenements !
will therefore be able to carry their hold {
ings for recovery in the demand or 40 g
trade of equities without greater loss I II
than diminished rent rolls actually call 9
for :
The real estate market therefore !
enters the new year with every prospect .
II very considerable activity. The in i
vesting public is evidently eager TO buy :
all kinds OF Manhattan realty except n
fats and tenements, provided prices show Z
a substantial present return. Their atti- 7
tude is determined by the conviction =
that the selling value Of most realty in I
this borough will be restored to its former Il
lsvel In the very near future. As there
Is still a good deal Of underpriced realty 4
In the market there will no doubt be u
Substantial volume of investment buying +
Owing to the general fall in fat and =
tenement rents, coupled with sharp COM p
petition by the outlying boroughs. the .
investing public apparently does not /
look for a quick recovery of prices in the Z
Fat and tenement districts There will
in all likelihood be com n
paratively few cash purchases of realty n
there. However, such realty will no Ia
doubt be traded extensively for other 81
realty. a
In addition to a substantial volume r.
of investment buying there is certain /,
10 be an active building campaign in the n
construction Of elevator apartments on =
" Washington Heights. h
And Of loft building in the midtown
section a notable campaign OF this gen. !;
sral character is already assured by the ~
Jl4uR n led in the last three months with | u