New-York tribune., 1921-10-30

" Whtch are encumoered Dy nuge
trucks, are little else than alleys. But
II you are anticipating that we will or
can intelligently advise you as to the
current rate, you are doomed to disap-
pointment
Your chairman has conversed infor-
maily with many of the leading man.
ayers of property and has had numer-
Gus interviews with brokers looking for
listings or shopping for space, and it is
futile to approximate the prevailing
rate, even in general way.
That there is considerable space
available cannot be denied and that
there will be more if business condi-
tions do not improve, is true. One of
our committee reports that on a given
date recently his office alone had listed
for renting in the district below Cham
bers Street approximately 100000
square feet of rentable area.
president Ellis, of the Chicago as
sociation, recently stated that the
chief question is What is proper and
adequate rental and how can we main
tain such rentals when they are once
established?'
Tenants Fix Rates
My own experience is that tenants,
not landlords, fix the rates They do
so partly in the natural operation of
supply and demand, and partly because,
due to lack of intelligent cooperation
upon the part of owners, a sound
method of determining and maintain
ing adequate rentals has never been
agreed upon. 1t is undeniable that the
value of your land and building during
the life of the improvement is limited
to the earning power of the property
as unit, and we have deceived our
selves with the delusion that the in
crement in land would offset the lack
of proper return on invested capital in
the building.
ule fixed by what you hear are the
rates charged by competing building.
Determine for yourselves q rate based
upon equity and justice and stick to
it. Remember that in these sad days
there is little new business and a great
contraction in the old business and
that scramble of tenants to fill vacan-
cies, made by sacrificing fair and
proper rate, simply to induce a tenant
to move~f from your building to mine is
stupidly ruinous.
"Your committee on rental conditions
appeals to each of you to see that at
least one new owner or real estate
manager of property is brought into
this association. Not because there is
likely to be deficit this year but be-
cause a committee on rental conditions
cannot begin to fulfill it's functions
adequately until the real owners and
managers actually get together and
work in harmony to establish the Office
building business on business basis.
All of US working together can accom-
plish something, but few of US can
not afford to embark upon a given
policy, no matter how equitable, if a
great number are on the outside pur-
suing their selfish end, but meanwhile
infiicting tremendous losses upon the
business in general. This committee
. since its organization, has stressed one
thing, and that is the futility of the
solicitation of business by under bid
ding the so-called prevailing square
foot rate.
"a prominent New York firm was
advertising S4 spnce when the mini
mum was $5, and now it depresses
values and makes renewing difficult
with a sign prominently displayed
within ten feet of the entrance to one
os the largest uptown buildings, read
ing as follows: Desirable Office space
in this district is So per square foot
and up. Can a manager get $4 per
square foot for space, or even So, when
his prospect enters the renting office
with this advertisement in his mind
Is this not an attempt to get prospects
by prominently advertising So as the
rate for desirable office space in this
district. and is not this kind Of adver-
tising by one of our own members hav-
ing most depressing influence at a
most depressing time? / think So"