The Wenatchee daily world. [volume] (Wenatchee, Wash.) 1905-1971, 1909-04-28
GROWTH BRINGS A
BIC CHANGE
RISE IN REAL ES-
TATE VALUES STRIKES BLOW AT
OLD SALES SYSTEM-LEASES
NOW APPROVED TRANSFER.

Chicago, April est Is easier to
buy a railroad system nowadays than
a block of business property in any
one of our big cities, said Chicago
millionaire the other day. The rea-
son is that controlling interest In
a railroad can be bought if one has
the proper number of millions to in
vest, but the most valuable real es-
tate is no longer bought and sold at
any figure-it is leased. This is one
of the latest and most important de-
velopments of the credit system,
which is today bringing about rev.
olution in many methods of business
finance.
Half the new buildings in Chicago
are put up on leased ground, accord
ing to real estate men here, and out
right sales of big city corners are
now getting as scarce as hens teeth.
An entire new branch of the real es-
tate business has been created to
handle these transactions, with spe-
cial brokers who deal in leases in
stead of deeds and trust companies
that safeguard the various parties at
interest. In another ten years the
practice will become nearly universal,
it is asserted, at least as far as the
most important property is con-
cerned
The concentration of business in
the big cities and the enormous rise
in real estate values is partly respon-
sible for this. The capitalist or bust
ness man who wants to put up new
hotel or a skyscraper does not always
find it easy or convenient to sink a
cool million or two of dollars in the
site alone. Instead he forms a syn
dictate and buys the right to use the
necessary property for period of SO
years, for which he pays a fixed rent
al, usually increasing in amount
every stated number of years. De-
posits to insure the carrying out of
the contract are put in the hands of
a trust company, which is often
called on to act as umpire in cases of
unforeseen dispute, and the owner of
the land settles back in his chair with
the comfortable assurance that he
and his heirs will continue to draw
a definite income for the next CEN
fury.
Probably the record transaction of
this nature is a lease that was made
in Chicago the other day for a period
of $50 years. Leases for such Pc
riod as this are not impossible though
they are not the rule said an Of
ficer of the Western Trust and Saw
ings Bank of Chicago, which has
played a leading part in this develop
ment 1.-The usual life of lease is
80 years, and the old custom of re-
valuation has been largely replaced
by provisions for a sliding scale of
rental, whereby the owner of the
property is assured a definite return
which takes into account the prob
able increase in value. In this way
bonds can be issued with perfect GER
tainty and more and more bond is
sues are now being made on leases.
The trust company. with it's stability
and continued life, is an important
factor in such arrangements. Inter-
est payments are paid through the
as we'll as deposits to pro-
tect the lessons, and the tranfer of
leases is made easy and automatic
A man who makes a lease of city
property in these days usually ex-
poets that the lease will change
hands many times during it's life"
Actual figures of the values of
modern city property, based on re-
cent transactions, are an interesting
commentary on the growth of the
country in the last 10 or 20 years
The highest mark in Chicago was
reached about two years ago, when a
lot on Jackson boulevard was leased
on the basis of $4,000 a front foot.
Rentals of 100000 a year or over
are by no means rare. The rental of
the new La Sale hotel site, for ex-
ample, is set at $90,0SO after the first
two years, which is considered low
for the property. The most valuable
spot in Chicago, and probably in the
entire country, outside of New York
City, has been officially fixed by the
board of review as on State street, at
the corner of Madison, in the heart
of the retail district