Evening star., 1936-01-04
ST|FFEN|NG RENTS
CHEER BUILDERS
Gradual Decrease in Space
Creates Optimism in
Industry.

with surplus renting space reduced
20 manageable proportions. and with
the tangles incident to the building
folIies of the late 20s fairly well
cleared up, builders in general feel
optimistic about the outlook for 1886"
says John c. Hegeman, president OF
Hegeman- Harris, Inc. large building
firm.
lover and beyond these favoring
factors, builders realize that private
building outside of Government
projects has been almost stagnant
for five or six years. something un-
precedented ma country accustomed
to investing five to seven billion dol
lars annually in new structures.
"At last we really seem to be at
the turning Of the road" Hegeman
said. "Stiffening rents for all kinds
of buildings indicate that there Is
no longer an unmanageable amount
of surplus renting space and there
Is plenty of evidence to show that
most of the headaches incident to
troublesome situations are well on
the way to being cured"
Declares Conditions Sound.
These conditions, Mr.. Hegeman be-
lieves, will tend to release vast
amount of emery and talent which,
as he points out, has always here
tofore found its natural outlet in
real estate and building construction
activities.
A further aid to building revival
according to Hegeman, is the fact
that deflation of wage scales and
costs of material entering into build
ing has been accomplished. In fact
as he indicates, the price trend Is
now upward and, in the case OF
structural steel, cement and several
other items, definitely higher price
levels have already been established.
This stiffening should not be con-
fused with the artificial bulge II
price levels which attended the in
auguration of N. r. A; today's mark
ups are the result Of actual demand
plus a shrewd appraisal Of the future
by hard-headed men working from
long-range outlook"
Any one contemplating a new
building project in the near future
is warned by Hegeman against figuring
that he can buy building labor al
lower levels than the prevailing fig'
ures Of today.
About the safest prediction thai
any one can make as to the immedi-
ate future of the building industry i!
that the cost Of building labor vii
not be any less than it is now" hs
said.
A still further condition fore
shadowing an early revival of the in
dustry is the accumulated total o.
building depreciation and obsoles.
Cence which, as Mr.. Hegeman notes
Continues in good times or bad, ex.
cept that in bad times we make do.
We are now confronted with the five
or six years total in these items.
LAS soon as our people find them.
selves possessed of increased income
they promptly move toward bettel
living conditions. This has been tru'
of other depreSSions; it is true today
Tbs is now being reflected in an in
creAed demand for new housing, a
the moment there being no surplus a
all Of small family houses and yer,
little in the apartment house field
In the field of large structures, such
as Office buildings institutional struc'
lures and others involving consider
able outlays, division of the industr!
which has always been last to fee
the force of revival, it can definitely
be stated that the tone OF inquiry i.
now better than it has been at any
time in the last five or six years.