Evening star., 1933-05-20
LAND VALUE GAINS
SEEN DOWNTOWN
Morton ]. Luchs Forecasts
New Life for Capitals
Business Section.

The coming of the Federal triangle
development to that section of Penn
sylvania avenue between Seventh and
Fifteenth streets is destined to infuse
new life into this old downtown busi-
ness section, in the opinion of Morton
j. Luchs vice president of Shannon &
Luchs Co.
Analyzing commercial rental condi-
tions. Mr.. Luchs points out that oc-
cupancy of the new Justice and Post
ONCE Department Building, now being
constructed, will mark the next i'm
portant step in a movement which is
destined to make this one of the most
important retail centers of the city.
Declaring property values in this
area will soar to new high level, Mr..
Luchs says:
Eventual concentration of the bulk
of sixty-odd thousand workers in this
comparatively limited section cannot
but prove of great benefit to already
existing banks, stores, hotels, restau-
rants, and at the same time attract
other desirable enterprises. This trend
also will serve to focus attention on
the long-ignored need for rebuilding
a considerable part of the section and
the immediate advisability of mod
ernizing much of the remainder"
Earnings Satisfactory.
Earnings of commercial properties in
the best downtown sections have been
satisfactory, conditions considered, and
the so-called city central zone has
permanently been placed on a safe
rental basis for ownership, according
to Mr.. LuchS' analysis.
There has been a slight contraction
in the commercial rental field, but the
small amount of space thus left tempo
rarity untenanted is already being rap
idly reabsorbed. The number of fore
closures have steadily decreased and
of almost equal importance, there has
been noticeable improvement in col
lections."
Any analysis of the property situa-
ton in downtown Washington, says Mr..
Luchs, must be made on the basis of
a longtime view, since this type of
realty is almost invariably tied up in
long-term leases. Such leases, he adds,
have been a powerful influence in
stabilizing the values of the properties.
There is no intent to imply that
business property entirely escaped the
general marking up of prices to un-
justifable levels, but rather a purpose
to make it plain that the fluctuations
were not so severe In this class OF
realty as in properties Of more specu-
lative character 1t is likewise true
that where leases had expired or where
business troubles made such advisable,
new leases we're written at lower levels.
To the credit of many owners it can
be truthfully said that they volun-
tarily reduced rents wnen it became
apparent to them that rentals were
higher than the business of the tenant
could bear.
Section Holds Value.
Traffic growth has benefited the
neighborhood business centers, but this
has had but little effect in retarding
the steady growth in value of the
better downtown property. The fact
that practically all such properties are
now, and long have been. in the hands
of the most conservative elements
lends strong support to this conclusion.
THE much h-discuSSed partnership of
Government and business has yet to
prove it's merits in practical applica-
ton. The partnership of landlord and
merchant, however, has fully demon