The Daily Missoulian. [volume] (Missoula, Mont.) 1904-1961, 1909-04-23
GROWTH OF CHICAGO
REMARKABLE
SPECTACULAR RISE IN REAL
ESTATE VALUES THROUGH
OUT THE COUNTRY.

chicago, April 22.-1t is easier to
buy a railroad system nowadays than
block of business property in any
one of our big cities, said Chicago
multimillionaire tue other day. The
reason is that controlling interest in
railroad can be- bought If one has
the proper number If millions to in
vest, but the most valuable real estate
is no longer bought and sold at any
figure--it is leased. This is one of the
latest and most important develop
ment of the credit system, which is
today bringing about Il revolution 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 cut
right sales of big city corners are now
getting as scarce as han's teeth. An
entire new brancn of the real estate
business has been created to handle
these transactions, with special brok-
ers who deal in leases instead Of deeds
and trust companies that safeguard
the various parties ct interest. In
another ten years the practice will
become nearly universal, it is assert
ed, at least as far as the most I'M
portant property is concerned.
The concentration Of business in the
big cities and the enormous rise in
real estate values is partly rtsponsi-
bic for this. The capitalist or busi-
ness man who wants to put up a new
hotel or skyscrarar does not always
find 1t easy or convenient to sink a
cool million or two Of dollars in the
81 q a Tno = 114
cate and buys the right to use the
necessary property for period of SO
years, for which he pays a fixed rem
tai. usually increasing in amount every
stated number Of years. Deposits to
insure the carrying out of the con-
tract are put in the hands of 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 COM
Portable assurance that he and his
heirs will continue to draw a definite
income for the next century.
Probably the record transaction of
this nature is lease that was made
in Chicago the other day for a period
of $50 years. Leases for such
though they are not the rule" said
an officer of the Western Trust and
Savings bank of Chicago, which has
played leading part in this develop
ment. THE usual life of lease is 80
years. and the old custom of revalua-
ton has been largely replaced by pro-
visions for q sliding scale of rental,
whereby the owner of the property is
assured definite return which takes
into account the probable increase in
value. In this way bonds can be is
sued with perfect certainty and more
and more bond issues ape now being
made on leases. The trust company,
with its stability and continued life, is
an important factor in such arrange
ments. Interest payments and usually
insurance premiums are paid through
the company. as well as deposits to
protect the lessons, and the transfer If
leases is made easy and automatic.
A man who makes a lease of city
in these days usually expects
that the lease will change hands many
times during its life"
Actual figures of the value of mod
ern city property, based on recent
transactions, are an interesting COM
mentary on the growth of the country
in the last ten or twenty years. The
highest mark in Chicago was reached
about two years ago, when a lot on
Jackson boulevard was leased on the
basis of 100000 a front foot Rentals
of 100000 year or over are by no
means rare. The rental of the new
La Sale hotel site, for example, is set
at $90,S00 after the first two years, |
which is considered low for the prop
erty. The most valuable spot in Chi
go, and probably in the entire coun-
try 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.