The Real Deal New York

This month in real estate history

October 03, 2008
By Adam Pincus

The Real Deal looks back at some of New York’s biggest real estate stories

1981: Record high mortgage rates stifle cooperative sales
The record high mortgage rates that peaked above 18 percent 27 years ago this month depressed sales of co-ops in the city, sales brokers said. The impact was felt most strongly among co-ops priced in the middle range at the time, between $90,000 and $250,000. The president of Darwood Management Company, which managed 40 co-op buildings at the time, reported that of the 50 sales it was working on that year, a quarter fell through.

“Many buyers have decided that it’s too expensive, and others can’t convince the bank to let them have [the money],” the company president told the New York Times.

Nationwide, annual housing sales hit a low in 1981; in the northeast they fell to 46,000 units. That was the lowest number on record from data that went back to 1963, accoring to the U.S. Census Bureau.

Anecdotal evidence from brokers illustrated the drop in volume. At the time, broker Brewster Ives of Douglas Elliman-Gibbons & Ives said the number of sales in the 200 buildings he worked in fell from 1,165 units four years earlier to 698 in 1981.

Hard data on co-op sales was not available in the 1980s and earlier.

Large banks such as Chase Manhattan Bank and Citibank also said applications for loans had declined that year.

1956: World’s first stainless-steel skyscraper opens
The Socony Mobil Building, the first high-rise office tower to be covered in a skin of stainless steel, opened 52 years ago this month near Grand Central Terminal. The 42-story tower occupying an entire block at 150 East 42nd Street between Lexington and Third avenues is covered with thousands of metal panels.

Although other skyscrapers such as the Chrysler Building have had skins of aluminum, no other significant building has been covered in stainless steel. In 2005 the Landmarks Preservation Commission designated the building a landmark.

Socony Mobil Oil Company moved to the  1.6 million-square-foot building 71 years after the Standard Oil Company of New York, its predecessor, first occupied 26 Broadway Downtown.

The 0.037-inch-thick panels stamped with a raised pattern were about one and a half times more expensive than brick, but the developers were friendly with the United States Steel Corporation, which covered the extra cost, the New York Times reported. The building was designed by architects Wallace Harrison and Max Abramovitz, who designed the United Nations and Avery Fisher Hall. The tower was developed by John Galbreath and Peter Ruffin on land owned by an old real estate family, the Goelets.

1921: $600M plan to extend Manhattan unveiled
Citing an effort to preserve the value of Downtown real estate, supporters announced a plan 87 years ago this month to develop a six-square-mile extension south of the Battery by filling in a swath of New York Bay.

Backers said there were no substantial engineering obstacles to the project that would be financed by private investments estimated at $600 million. Supporters, which included the president of the Real Estate Board of New York and the business group the Broadway Association, were concerned that Downtown was losing its office market value as companies migrated to Midtown.

“The ‘northward pull’ will render lower Manhattan a residential section within twenty years unless thoughtful people of vision join together to remedy the geographical defect,” Walter Russell, the president of the Manhattan Extension Inc., told the New York Times. “It would save land values from [severe] depreciation.” The creation of new land would increase the city’s land value by $5 billion, the group claimed.

The concept had been floated before, but it was not until 1921 that an advocacy corporation was created and the project presented formally to the governor and the Port of New York Authority.

Engineer H. L. Shadd threw cold water on the plan in 1922, noting Downtown developed less than half of its potential 4.5 million square feet. In 1926 a report said an advisory board of 100 men to advance the plan might soon be realized. The project appeared to have been quietly abandoned sometime later.

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