This section is from the book "Practical Real Estate Methods For Broker, Operator & Owner", by Thirty Experts. Also available from Amazon: Practical Real Estate Methods for Broker, Operator, Owner.
Joel S. DeSelding
Management of an office building frequently begins before the excavation for the foundations. The first lease is often signed before a single floor is laid. For the capable manager of office property is expected to-day to join forces with owner, engineer and architect in the very planning of the building. He must contribute to the consultations highly specialized information as to what qualities are necessary to make that building yield rents which, after expenses of maintenance are deducted, will give the proper net income on the investment. In this capacity, he acts as a safety valve on the architect's natural wish to create artistic effects. He must limit the cost of the projected building to a figure which will make it possible for the owner to gain the proper net returns. He must keep in mind such material and rent-influencing factors as cost of maintenance and cleaning, arrangement of floors and light and air. For, no matter how artistic the exterior, the entrance and the halls, the building will not bring maximum rents if the offices are improperly arranged, the windows too few or too small, the elevator service and other conveniences inadequate. There is also a financial limit as to the class of office building that will pay in a particular section.
To advise wisely in these several particulars, the manager or agent must know the rental rates of the district. He must understand the class of tenants that can be induced to enter the new building, must be able to foresee if changes in the character of the neighborhood indicate a new class of business inhabitants able and willing to pay higher rents and therefore demanding better buildings. This, after all, is simply determining in advance the supply and demand, but as the offices will not be ready perhaps for a year or more, it often involves difficult anticipation. This condition does not apply so much to Broadway property as to the districts occupied largely by special lines of business. It is sometimes a very nice problem to anticipate the tenancy of a new office building with three or four hundred offices, erected in the center of a district apparently already fairly supplied with quarters.