Wonders of Manhattan Real Estate

CROMWELL CHILDE January 1 1909

Wonders of Manhattan Real Estate

CROMWELL CHILDE January 1 1909

Wonders of Manhattan Real Estate

CROMWELL CHILDE

Reprinted from Herald Magazine

IF, sixty-five years ago, John Smith, of New York—“Honest John,” who had made a nice little competence “down town”—had put a few of his surplus thousands into Fifth Avenue lots his grandchildren would now be multi-millionaires of Manhattan.

But John Smith was afraid. A contemporary record of the time says he was. He talked it over with his business cronies.

“Can’t risk the money,” said “Honest John.” “The price is altogether too high. You know where Thirty-sixth Street is on the new city map, Bill?” He waved his hand to indicate distance. “They want $500 for a Fifth Avenue lot up there, and the best you can do is $100 down.”

So John Smith put. his money into other things. Perhaps he was wise— at that time—for, two years later, another New York man, a millionaire of those days, John Hunt, bought the corner of Fifth Avenue and Thirty-sixth Street—a corner, mind you—for $2,400, was called insane by his family, and the courts were appealed to determine his competency.

But had John Smith not been afraid, every little $500 he put into Fifth Avenue property would now bring close to $400,000.

Four hundred thousand dollars? Yes. A broker laughed heartily at me the other afternoon when I, hurriedly calculating, asked him if $250,000—a quarter of a million—was too high a value to-day for inside lots on Fifth Avenue just above Thirty-fourth Street and a little below it.

“I could sell all you’d bring in at that 118

price quick as a wink, within an hour,” he said. “But you’re away off. Two hundred and fifty thousand dollars a lot is only ten thousand dollars a front foot. Fifth Avenue lots up to Forty-second Street and several blocks below Thirty-fourth Street are easily worth half as much again. You can’t buy them now for even $15,000 a front foot.

“It would surprise you to see the list of owners of Fifth Avenue property today, the strongest names in New York. Every piece of property from Thirtieth to Forty-fifth Street has been gone over as with a fine tooth comb. None of it is to be had.

“Along Thirty-fourth Street, from Fifth to Sixth Avenue, it’s just the same. One lot within the last two years brought $425,000—yes, it did, really,, a twentyfive foot lot. There are only two lots in that block now that can be bought. If they weren’t tied up any number of men would jump for them at three-quarters of a million for the two.”

From $500 to $375,000 in a little more than half a century is going some. If old John Smith hadn’t been scared and had invested $20,000 out of the $50,000 he probably had then, his heirs would now possess property worth $15,000,000 to-day and no one knows how much more a few years from now.

It might have bee 1 even better. If old John had bought he very likely would have picked up a corner or two, perhaps several. Those Fifth Avenue corners would fetch to-day, conservatively (if their owners would sell them, they probably would not), $650,000 each, on the average, a very pretty profit.

That’s not all. The records do not tell definitely what Thirty-fourth Street lots went for around 1850. But Mayor Brady bought several in Thirty-seventh and Thirty-eighth Streets, between Fifth and Sixth Avenues, in 1847 at a corporation auction sale for S300 each. Thirty-fourth Street had no special advantages over the other cross streets near it then.

Probably $400, in the late forties, would have picked up that Thirty-fourth Street lot that sold for $425,000 two years ago. Just a little 1,100 per cent, advance.

The wonders of Manhattan real estate! Bless us, they are all wonders ! Of course, the wonder side doesn’t strike the cold, hard headed real estate broker or owner who sees no romance but only the very satisfying fact that - this or that lot is worth so many hundred thousand and that there will be an eager crowd of buyers at his elbow if he just raises his finger.

Considering the fortune which the ownership of even the smallest bit of well situated land means on the island of Manhattan to-day, it is interesting TD pick up a certain little pamphlet, now just forty-eight years old, on “The Value T Real Estate in the City of New York, Past, Present and Prospective,” and read the fulminations of its author, who calls himself “A Retired Merchant.”

“Retired Merchant” wrote these little essays in 1858, 1859 and i860. He vigorously scolds the men of his day because they believe that the top of real estate values on their island has been reached forever.

“I wish to say,” writes “Retired Merchant” in one of the paragraphs in which he most mercilessly scores the affrighted capitalists, “that there is not a lot of ground now unoccupied of good grade on this island between the Battery and the Harlem River and the North and East Rivers that is not intrinsically worth this day (1858), $1,100 for a lot 25 by 100 feet to any man who will at once improve it, and in ten years, if the past is any guide for the future, any of the said lots will be worth more than twice that sum, and many of them more than $10,000 each.”

In another paragraph “Retired Merchant” says:

“No prudent man then believed ( 1830) that lots so far out of town (Union Square) would ever be of much value. Indeed, the insurance companies were unwilling to loan much on mortgage above the park (City Hall Park). But lots which would not bring in 1830 $1,100 are now worth $10,000, and are soon to be taken for stores at over $20,000.

“That lots at 100th Street will ever bring $1,000 is not now as improbable as it was in 1825 that lots around Union Square would ever bring $1,000! Madison Square was only sold by the acre. It was all hill and dale, bogs and swamps. Nobody offered to sell it and no one would take it as a gift, comparatively. Now every lot around it is worth on an average over $10,000.

‘This day I see before me hundreds of men going through Wall Street not knowing what to do with their money. All property, they say, is too high.”

And yet the “Retired Merchant” wasn’t believed, he wasn’t believed at all. Tne sturdy investors, men who knew good things down town and never let any of them get by, when they read the scoldings—for these were first printed in a newspaper of those times—smiled pityingly and said, “Oh. the crank!” or whatever was the expression fifty years ago. “Retired Merchant’s” personality was, so far as we know, always veiled, but if it was revealed at all at that time his oldest daughters certainly said, “dear me, why is pa so foolish? Such strange ideas! Mrs. Bellingham spoke of them after church yesterday,” And the young sprig of fashion who was calling upon her doubtless—surely—answered :

“Yes, of course. Might just as well bury the money in the ground up there.”

But “Retired Merchant” never foresaw the day that was to come. Just what the real estate wonders of Manhattan are in 1908 may best be appreciated by simple comparison with the dreams of this pamphleteer of half a century ago. His wildest fantasies—fantasies to the men of that day—never went further than picturing residence lots along the east side of Central Park in Fifth Avenue at $25.000. How far would $25,000 go today?

Either the old gentleman jogged afoot or sat behind a spanking team of trotteis as he inspected the New York that was to grow. Nothing could emphasize more clearly the contrast between the values then and now than by following in his footsteps or wagon tracks an even half century later in an automobile.

The car was typical of the new New York as the pair of Morgan thoroughbreds was of the old. What an altogether other New York! Then a city practically only built up to Forty-second Street, and almost entirely unpaved beyond it, with Central Park just commenced (its land cost only $7,800 an acre), with over thirty thousand vacant lots below Eightysixth Street and horse car lines but lately started, an upper west side not thought of at all as yet and an upper east side made up of scattered villages.

A very keen real estate broker guided the big machine, threading through the avenues and cross streets, each of which has been a gold mine for some one, possibly for a dozen.

“We are impressed,” he said, “by the wonderful figures of the enormous values down in Wall Street, where some land is rated as high as $400 a square foot— as much as $750,000 for a full-sized city lot—and the new shopping district of Thirty-fourth Street, where prices are three times what they were when the Waldorf-Astoria was. first built, a few years ago; yes, and the latter’s fast growing rival, Forty-second Street. But half a century back these localities all had some value to start with; Wall Street had a very material one. Practically all of the west side, however, has come up out of nothing in that time.

“Now, look at it. Here vou are in the heart of the Eighties. Values have more than doubled in many cases in the last ten years! Ten years ago vou could buy one hundred feet square for from $120,000 to $160,000. To-day that same land would cost $300,000—$75,000 for a twenty-five foot lot. Certain blocks down in the Seventies and along Riverside Drive will bring more than that. No, I never heard the top; many a consideration ;s kept secret nowadays, but a hundred thousand dollars has been paid more

than once.

“Values in real estate in a big city,” went on the broker, “advance in a logical way. As a general principle, the best locations for wholesale business have the lead, with the best residence properties next, the pick of the shopping district following that of wholesale business closely. In New York the sensational rise in properties has been like a curving ridge in the centre of the island, up Broadway to Twenty-third Street, then up boih Broadway and Fifth Avenue, with sharp increases at the subway stations all along the line.”

At Columbia University the car swept into the Drive for a moment. Then it returned to Broadway, heading southward and pounding away at a speed and on a navement that of themselves were distinguishing marks of the new New York compared with the old.

“Downtown the general average of increase is four per cent, a year.” The broker began again. “In the upper part of the city it is ten per cent, per annum. At times it runs far over that. In the Thirty-fourth Street blocks from Seventh to Madison Avenue prices are to-day 150 to 300 per cent, higher than they were ten years ago. At Broadway and Fortysecond Street the ratio is probably even higher than that.

“What would you think of 800 oer cent, increase in four or five years? Yes, a stone’s throw from Broadway. It may sound like a fairy story, but it’s simply one instance of the golden ground of Manhattan for everybody, especially for those who keep their eyes open.

“A vear before the Pennsylvania tunnel. whose terminus and big station will be close by Herald Square, was started practically any property on its site could have been bought for $5 a square foot. Averaging up, the Pennsylvania, it is understood, paid $20 a square foot. The land immediately contiguous to the station, fronting on the station property, not really worth any more to-day than before, because it is without a single improvement or change, is now held at $40 a square foot. It is not known, or even faintly surmised, what use this surrounding property will be put to eventually, but it has jumped to eight times its old value, and it sticks at that price.

“Some Manhattan real estate moves fast, some at a medium pace, slow but steady. Approximately all of it does move, though. The slowest moving section? Probably the little strip along the North River front, west of Ninth Avenue, from Twenty-fifth to Fifty-ninth Street. That is very nearly stationary.”

Another man and I stood in the shadow of old Trinity later that same day. How stones everywhere round about had been heaped upon stones, how frameworks of steel, hidden by brick and terra cotta, forced their way up into the air !

“I never crane my neck in this district of Mammon,” remarked my philosophical capitalist, “but I recall what one man wrote about the old five-storey office buildings of the city a good many years ago. He said that they were fairly profitable investments, but their fourth and fifth stories did not rent very well ; people got tired of climbing stairs.

“Most men would likely figure,” he continued, “that the chief factor in the development of Manhattan has been its rapid transit. That may be right, but the passenger elevator should have a good slice of the credit. Where would all this be”-

He waved his hand toward the loftiest of the Broadway structures, and then suddenly his mind wrent far back to the beginning of things in the old Dutch town.

“Did you ever, by any chance, hear the particulars of the first real estate transfer on Manhattan Island? No? It’s a quaint old story, much more interesting that how the entire island was bought from the Indians for $16. Everybody knows that wasn’t business—that the Indians had the worst end of the stick and never found it out. But this was bona fide trading. At first, of course, people picked out the land they wranted and settled down on it. After a time— to be exact, it was only seventeen years —the land close to the fort seemed more desirable than any other.

“Nine dollars and a half (twenty-four guilders) wras the sum the first buyer of Manhattan real estate paid over to the first seller. The ‘parcel’ was a lot thirty feet long and no feet deep, on Bridge Street, between Broad and Whitehall. Anthony Jansen Van Fees made this first purchase from Abraham Jacobsen Van Steenwyck. At this time this property was as valuable as any in town.”

The philosophical capitalist turned me over to one of those interesting men who have a head for figures and wdio keep stored away in their desks curious, striking facts.

“Forty thousand dollars a front foot,’’ said this broker, “is the approximate value of one Wall Street corner, the southeast corner of Wall Street and Broadway. That means, you know, an even million dollars for the ordinary twenty-five by one hundred New York city lot, $400 a square foot. Let me give you an idea of how values have grown. In 1871, before the ‘hard times’ of the seventies came on, Nos. 4 and 6 Pine Street just around the corner, was sold for $48.84 a square foot. The last ten years some of the striking big sales down here have been :

“No. 24 Broad Street, $201.25 a square foot.

“Nos. 5 and 7 Nassau Street, $256.93 a square foot.

Nos. 9 and 11 Nassau Street, on the southwest corner of Pine Street, $223.39 a square foot.

“Broadway, at the southeast corner of Maiden Lane, $211.72 a square foot.

“Nos. 41 and 43 Wall Street, $246.29 a square foot.

“Here’s a curious comparison. In 1857 the land that the old Fifth Avenue Hotel was to stand on brought $32,100, or $8.01 a square foot. In 1899 it changed hands for $800,721, twenty-five times as much, or $199.90 a square foot. That’s hard to beat.”