Los Angeles herald., 1908-04-02
TO UNI7IZE
OWNERSHIP
OF PROPERTY
UNION TRUST BUILDING DEED
is TRANSFERRED
TRUSTEE COMPANY TO ORGANIZE
ON UNIT BASIS
sooialistlc Method Of Ownership Aims
TO Give Better Management
and Larger Returns on
investments

by The owners Oh the C"iO =
bnilding. at the southeast corner OF
Snring and Fourth streets, the Irus-
fee company has taken over for unit
ization. according to its SPECIFIC meth
cd the entire premises, making the
deal direct with the trust company
after the matter had been Gully oe-
cided upon by the owners
The value of the property is placed
at SS500O0 and is owned by about
twelve persons. It is said that by
having the holdings untitled the prop
ertv will receive better management
and that better returns will result.
1t is explained that unit ownership
is a method by which central business
properties are divided permanently
into a definite number of units to
make them available for general own
ership without the use of the corporate
method commonly used to divide the
shares of railroads and other proper
ties involving large amounts OF capl-
tai The unit method is in measure
Socialistic. aiming to give the person
of small means chance to acquire In
terest in large business properties ana
10 share in the proceeds derived from
the yearly advance in the value OF the
properties. In this way the scheIne
differs from the usual methods OF
mortgage bonds, which bear only
set rate of interest.
Decided to trustee company
The Union Trust building has been
decided to the Trustee company ana
certifieates of ownership issued against
II on the unit plan These units range
from 800 to $1,000 and will be entitled
to the first 5 per cent of income earned
nv the property and tWo-thirds OF all
earnings in excess of per cent. The
remaining one-third in excess or the
per cent will go to the Trustee com
hof
holders will receive from 612 TO per
cent interest on their investments
The Union Trust building is, one OF
the best in the city, having frontage
of 81 feet on Fourth street and S6 rect
on Spring street. There are 223 ofnces
in the building, which is twelve stores
high The ground floor is occupied by
+he German-American Savings bank.
The building was erected in 1904 of
steel frame and brick structure and
strictly fireproof. 1t was erected by
interests identified with the Southern
California Savings bank, which or
ganized a trust and title company as
a holding corporation. 1t is understood
the cost of construction was approXi-
mately 100000. Bonds to the amount
of S500000 were issued to cover the
cost of the ground and building, and
later this was increased by $4,000. The
building was first known as the say
ln2S Bank ana trust DuliulllS' puI
soon afterward this was changed TO
the Braly building. About two years
ago the property was transferred to
the present corporation, which also
took over the business of the ~title and
trust company, and the name was
again changed to the Union Trust
building Subsequently the title and
trust business was sold.
Principal Stockholders
The Union Trust property at present
is owned by a corporation which in
c1udes among its principal stockhold-
ers Dr. West Hughes, Walter Trask,
Norman Sterry, w. r. Hervey, George
l. Cochran. DIR. John r. Haynes, DR..
H. Bert Ellis, Arthur Let's and the
Rindge estate.
Trustee companies are established in
Los Angeles, Seattle, Spokane, Port
land and New York city. A. L. HaWley
is the head of the institution in this
city, having come here from Seattle.
The company has taken over a number
of properties and is said to be rising
rapidly in popularity with the public.
The unit method of ownership had its
origin in Seattle.
The division of such property into
units is accomplished by a deed re-
corded in the county where the prop
erty is situated. This deed, which pro-
vides that no incumbrance shall ever
be placed upon the property, in addf
ton to dividing the property into units.
fixes all matters of management and
establishes the interests of the indi-
Vidual unit owners in the property The
deed places the management of the
property in the hands of a responsible
trust company and lays down un-
changeable rules for its management
and the distribution of its earnings. 1t
also provides that the managing trust
company shall make all leases, collect
rents pay the taxes and expenses,
place insurance and distribute the net
earnings to the unit owners
The provision for distribution of
earnings is unique, in that the manag-
ing trust company receives no compen-
sation until the owners of the units
have received dividends amounting to
at least $50 per unit per annum. The
distribution of the earnings is as fol-
lows;
l. Out of the rental returns the man.
aging trust company pays all taxes, in
surance, repairs and ordinary operat-
ing expenses.
Q It distributes to the unit owners
quarterly preferred dividend Of $12.50
per unit, or $50 per year.
8. 1t distributes to the unit owners
annually at the close of the last quarter
of the year a surplus remaining after
the payment of the preferred dividends.
4. The remaining one-third of the
surplus goes to the managing trust
company for management compensa-
zion.
Effects Fair Division
1t will be observed that under this
method Of distribution the unit owners
receive a preferred quarterly dividend
amounting to $50 per annum per unit,
and in addition receive tWO-thirds of
the surplus, before the managing trust
company receives anything This ac-
complishes a fair division, which is the
object of the plan, of the profits with
investors and provides a perfect as
surance of efficient management be-
cause the unit owners returns are pre-
ferred and the companY's compensation
is deferred and wholly contingent upon
the amount of surplus produced. 1t is
therefore very greatly to the interest
of the managing trust company to pro-
duce a s large an earning as possible.
Units are conveyed TO purchasers by
instruments issued under the terms of
the recorded deed. These instruments
are duly certified by a responsible trust
company distinct from the managing
trust company and are registered. They
are transferable without expense by
simple assignment and reregistration
This makes the transfer of units of
business property as simple as the
transfer of government bonds.
Benefit to Cities