Pittsburg dispatch. [volume] (Pittsburg [Pa.]) 1880-1923, 1890-06-14
Companies Being Constantly Formed
to Erect Mammoth
Office Buildings.
SEVENTEEN STORY STRUCTURES
Are Just Now in Exceedingly High Favor
Among This New and Growing
Class of Inventors.
PITFsBURGs BUILDINGS TOO COSTLY.
Those Now Going Up on Wood Street Are More Massive
Than Necessary.
rcoRREspoNDExcE OF THE D1l

CHICAGO, June 1.-THE Office buildings
Of Chicago, which form such striking
feature in the city's makeup, are for the
most part built by stock companies, organ
lied for that special purpose, and are very
favorite investment for the surplus wealth
of that large class of Chicagoans who are
satisfied with moderate returns but want
almost absolute safety. They are rapidly on
the increase. Half q dozen new ones have
been thrown upon the market within the
past year, others are nearing completion,
still others are just being started, and many
more are in the projected" stage.
The last three years may be said to have
revolutionized the method of building them,
and every new one pushes story or two
nearer heaven than its predecessor. Thus
the Rookery built two years ago at Lasalle
and Adams street, with its IL stories, stood
head and shoulders above the tall buildings
in its immediate neighborhood and looked
down with pitifuI disdain on the Grand
Pacific Hotel adjoining. The Tacoma, on
Lasalle and Madison streets, a couple of
blocks further north, built year later. piled
on two stories more, and with it's 19 floors
and basement, seemed to realize the ut
most renting space that could be got out of
given piece of land. Then the new Board
of Trade building, about 100 feet further
north, on Lasalle and Washington streets,
went the Tacoma one better, and its IA stories
are Just in the hands of its tenants.
Meanwhile, the Auditorium, down on the
lake front, had run its tower up to the
height of IL stories. filed with offices to the
very top, and a small eighteenth story was
- IL
United States Signal Service. If a granite
structure can be built IL stories high, surely
a steel-beam-and-terra-co building should
be no less reasoned, the capitalists controll
ing choice piece OF ground facing the post
office on jackson street, and ground has
just been broken for q History building at
that point.
Gazing on these phenomenal structures,
the tallest building of Pittsburg and Phila-
delphia seem tame and commonplace and
older buildings in which Chicago
took the greatest pride only five
years ago, are already regarded as
old-fashioned and poor. Where the ten
dency 10 climb skyward will find its ulti
mate limit, nobody seems able to tell. The
architects have placed it at 16 stories, but
the adoption of lighter and stronger mate
rials, year by year, have spoiled their cal
culations, and some OF them say it is more
than possible that the 2S-story building
projected by st. Paul member of their
profession will vet exist in reality.
One effect of all this building has been
to increase enormously the number of
Office rooms placed upon the mar
ket This year, for instance, the
supply has been increased BY at least
1000 Offices, and it is a remarkable evidence
of Chieago's wonderful growth that as fast
as they are built the new Office buildings are
eagerly absorbed.
THE RENTS THE SAME.
The rents do not come down. On the
contrary, they advance, and still the army
of tenants keeps on the increase. The older
buildings, which they have in tact deserted,
quickly fill up without any Office rent sacri-
fee of revenue; indeed, some of them, In the
face OF the advent of their rivals, are
actually Welding greater returns than ever
before. There is sort of combination or
trust among the capitalists controlling the
principal new buildings, and some OF
them have established q standard rate of
g per square foot per annum, but nobody
accuses the trust of keeping up the rates. 1t
is the enormous and increasing demand with
which the supply hardly keeps pace.
About ten years ago some partners who
were about to build, employed well-known
real estate man to make calculation of the
number of new offices that would be re-
quired, and figuring up from the number of
office men shown by the city directory for a
few years previous, and comparing it with
the increase in population, be came to the
conclusion that at least $40 additional rooms
would be needed every year if the popula-
tion kept on increasing as it had been doing.
The increase of population has been vastly
greater and the number of "ofice men" has
kept on increasing even faster than the
population, so that the 1000 or 1,20e new
Offices which have come into the field during
the past three or four years have been barely
sufficient TO satisfy them.
There is a constant increase in the number
of professional men, but it is small in COM
parison with the increase in the number of
Eastern and foreign manufacturers and
manufacturers agents who have hocked to
Chicago and established branch offices here
in order to capture their share of the great
trade Of the West To such men rent is a
small item and elegance and convenience
very important one. Thus the projectors of
the most recent Office buildings have been
quick to observe and have made their
buildings Veritable palaces of trade, withwalls
and staircases of the finest italian marble,
floors OF mosaic work, the like of which has
the finest hardwood finish and all the con-
venIences of swift, silent elevators, perfect
light, perfect ventilation, and a thousand
and one other things that the builders art
could suggest.
THE PROFIT IN IT.
As investments it is hard to tell Just what
thev yield, but the average seems TO be about
8 per cent per wear on the capital actually
invested. The stock companies which
erect these buildings in very few instances
own the land on which they are built.
Ususally they hold the land under lease for
q period ranging from 30 TO 80 years, some
times with fixed and permanent rent for
the whole period and sometimes with a re-
valuation every five or ten years. On the
wording of the lease greatly depends the
success of the building enterprise, and
many of these companies which secured
straight leases, without revaluation, 10
or 10 years ago, lconsider themselves in
the greatest luck imaginable.
The Chicago Opera House Company was
until very recently considered as the most
successful Of all Chicago Office build
ing enterprises. Four men who
acted as promoters and put its
stock upon the market are said to have di-
Uded 100000 among them, but they made |
3 lease with revaluations every five years,
and the ground rent has been increased SO |
much by the recent valuation that large |
share OF the enormous profit that once went |
TO the stockholder now goes to the owners |
OF the land. The Owings building, q
chimney Ike structure at Dearborn and |
Adams street, rests upon piece of ground
about 46x75 feet, which costs Sic. 600 wear
md ran ftrn- r.