Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-11-03
GAINS IN BUILDING
OPERATIONS SEEN
Large Interests Wait for
Business Trend to Develop
Before Placing Orders.
TROwBRIDGE GALLOWAY,
Special Dispatch to The Star.
NEW WORK. November 1-ReS

Special Dispatch to The Star.
NEW YORK, November 2.-Real
estate men, construction engineers,
material producers and builders are
waiting eagerly for investment trends
to crystalize after the excitement in
a huge volume of building has been
held up due to difhculty In financing
new construction. They hope that with
the disappearance of the general public
from the speculative markets, money
will become more readily available and
investments will turn toward securities
backed by building construction.
There seems to be general feeling
that bonds backed by real estate mort
cages again viii become favorite type
Of investment and that such offerings
will be eagerly accepted. In this con-
nection the operations of the New York
Real Estate Exchange, which will open
within the next six weeks, viii be
watched with extreme interest. The
object of this new market is to provide
board Of trading by which established
real estate bond issues and securities
backed by real estate and construction
values can ind ready purchase and
sale. The difficulty of realizing promptly
on real estate bonds not listed on recog-
niZed exchanges in the past has been
one of the factors mitigating against
this type Of finance.
Building Contracts Drop.
Building contract awards showed q
decided slump after August. In Sep
TENDER they were approximately 20
per cent lower than in September, 1928.
In fact, the drop in building so far this
year has been about 10 per cent below
the corresponding period OF last year
In 1928 the Fall months showed a de-
cided step upward. This year the de-
cline in October has been above IS
per cent. Building men say that while
housing needs may have been fairly
well covered, necessity exists for adj
ditional construction of commercial, tp-
dllstrial and public building. They hope
that II the investment trends favor
them the plans for such buildings will
be transformed into active operation
and that the cost of construction, in
Guiding financing, viii be sufficiently
low to assure adequate returns.
There are no indications of any
marked decline in construction cost at
the moment Skilled labor in the build
ing trade Is now averaging approx
mately $l.3S per hour, compared with
$1.35 year ago. Building materials are
lower owing to excessive production of
cement, brick and lumber but the two
factors have about balanced each other
The stimulation to building, therefore,
is expected to come from lower money
rates.
Business Needs.
Approximately two and one-half billion
dollars win be needed in the next year
for business and industrial construc-
ton alone, 1t is estimated by real estate
men. Some real estate operators are
inclined to turn to the investment trusts
as method Of financing this construc-
ton, and several such organizations
field.
There is also q trend toward equity
securities" represented by preferred and
common stock. The insurance COM
panieS Still are counted on to furnish
a huge volume of funds for building
purposes. The New York Life, for ex-
ample, has outstanding at present $685.
347, 900 in mortgage loan investments, of
which $54, $751; 92 was loaned in the first
nine months Of this year. Other large
insurance corporations have closely fol-
lowed this trend. The real estate loans
OF the Prudential Insurance Co. total
$l42,26O,541 for the first nine months of
this year.
Watching Effect Of Crash.
Although real estate and construction
men are extremely hopeful for the
future, IL Is doubtful If even low money
rates would result in an Immediate
squirt OF awarding Of building contracts.
They are waiting to see just what eject
the furry in Wall Street has had upon
the remainder of the country and bust
ness IN general and they are unlikely
to start new projects until they are
sure building expansion is justified.
They have been greatly treasured bv
the statements of President Hoover.
Secretary of Commerce Lamont and DR.,
Julius Klein of the Department Of
Commerce that business conditions are
essentially sound.