Evening star. [volume] (Washington, D.C.) 1854-1972, 1927-01-29
REAL ESTATE
DISTRICT FEELING RESTRAIN
IN SURPLUS BUILDING WARNING
Straus Report of Saturation In Hotel and
Office Construction Borne Out by
Cut In Work Here.

Suspension for a period of six
months or a year of all new hotel.
once building. apartment hotel and
apartment house projects not now in
course OF construction, in all the
lai ger cities of the country. was
urgently recommended in a statement
today by S. W. Straus, New York
banker and economist.
This warming was met generally
with statements in corroboration.
both here and in New York. though
some students of the subjects are
more optimistic, and finds builders to
considerable extent already resting on
their tools and waiting for an indica-
ton that demand again was outstrip-
ping supplies in these lines of CON
struction
While it is improbable that there
Will be anywhere near a total sus-
pension of construction of office build
lngs, hotels, apartment houses and
apartment hotels in the District of
Columbia this year, there is prevalent
q noticeable feeling of restraint, and
the statement by the head of s. w.
StrauS & Co. comes as no sudden
warning. AS Harry Wardman says
succinctly: I'VE already are having a
breathing spell in Washington. +"
Wardman estimates his organization
this year will cut it's production to
half last years figure.
Saturation Point Reached.
Straus declared that studies just
completed show that in the past five
years of heavy building. in New York
and elsewhere, the saturation point
had been reached in these four types
of building. Due to the amount of
rentable space now on the market, he
said. there was grave danger Of over
production unless a general breathing
spell be taken at once.
Notwithstanding the curtailment he
contends is imperative, Mr.. Straus
FASTENED to make clear that he does
not apprehend any great falling off in
the aggregate volume of building this
year throughout the country and
points out that more than 81 900 ,000,-
1000 in construction was carried over
from 1925. He predicts, in fact, big
year for public building and public
utility construction and also exempts
construction of private homes from
his warning
Current conditions indicate there
should be temporary breathing spell
in the construction of office buildings,
hotels. apartment hotels and apart
ment houses throughout the United
States" Mr.. Straus declared. Il am
convinced of the ACCESSIBILITY of this
course in order that the supply of ac-
commodations of these types may not
become abnormally in excess of de-
mand A six months TO a years period
of extreme caution and conservatism
would be sufficient to maintain a nor
NAL condition of supply and demand.
This does not mean, of course, that
there may not be isolated cases in one
city or another where a legitimate de-
mand for hotels office buildings, apart
ment houses or apartment hotels exist
There WILL in fact, be new projects
started here and there in keeping with
good business judgment.
Sees No Radical Drop.
II wish to make it plain that / do
not look for any radical drop in the
volume of building in the country dur
ing 1927, and the general business in
terestS of the Nation need feel no APP
prehension on this point. There has
been at least So 600, 10000 worth of
private building carried over from
1926. There also is an unusual amount
of public building scheduled for this
year in addition to a considerable vol
ume of expenditure on power plants
and other types of construction by
public utility corporations.
Approximately 81, 600, 900, 900 worth
of building permits have been issued
in the last six months in the 500 prin-
cipal cities and towns of the country.
There is every indication that there
will be no let-up of consequence in
private home building of the invest
ment type, which is a form of thrift
and progress that should under no cir
cumstances be curtailed
My conclusions with regard to of
fee buildings, hotels, apartment
houses and apartment hotels have
been reached from studies showing
that after five years of very heavy
building we have reached the Satura-
ton point in these four types of struc-
tures.V~~Of course, all new buildings
must be. allowed a reasonable time in
which to become established and in
any case an occupancy of 80 per cent
is considered normal The market will
be able to absorb the rentable space
in the buildings now completed or in
process of construction"
with regard to the general building
situation, Mr.. Strauss said: