Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-07-18
LIFE COMPANIES
KEEN FOR REALTY
Billions to Be Invested When
Demand for Space Is
Revealed.
Special Dispatch to The Star.

Special Dispatch to The star.
SEATTLE, Wash, July 18.-The great
life insurance companies OF America,
which already have investments totaling
billions Of dollars In real estate mort
cages, have not lost faith in real estate,
and stand ready to invest additional
billions when the demand for space
warrants new construction. This was
the message from the insurance COM
panies to the National Association Of
Building owners and Managers, deliv-
cred by Osgood F.. Fifield, vice president
of the Massachusetts Life Insurance Co.
Of Springfield, Mass, at the annual con-
ventlon of the association today.
"At q period when we have large
surplus of vacancies and falling income
from rentals, loans in default, burden
some taxes and expenses, there Is little
to encourage investors to consider Loan
ing on new construction" said Mr.. FL
field. Security must be made attractive
character of Improvements, ownership,
margin of security and management.
1.-The life insurance companies OF
America have many billions of dollars
invested in real estate mortgage loans
They have not lost faith in real estate
and to the many billions already in
vested in real estate mortgages there are
now and will continue to add more
billions.
Conservative Companies.
These companies are often criticized
for being conservative in the amounts
loaned on securities offered. They have
built confidence on conservatism. We
desire and expect to continue along
these lines. These companies are con-
sentative; the property owner should be
conservative likewise. We should not
undertake a building before he has
sufficient capital together, with con-
sentative financing, to carry the project
to completion. Excessive loans, i'm
proper financing or poor management
often result in failures. with the loss of
the property to the owner and possible
loss to the lender"
The skyscraper industry, representing
in excess of $7,000,000000 of the Ma
tons wealth, is between the millstones
Of two powerful economic forcesAthe
law of supply and demand and immuta-
BILE fixed chargeS-and vigorous meas
ureS must be adopted to preserve this
great capital structure, Charles F. Pal
mer of Atlanta, president of the Ma
tional Association of Building Owners
and Managers, told the convention.
Our economic position is very SINH
lar to that Of the railroads. They are
asking for an increase in rates in a
buyers market to Offset the decrease in
patronage. The railroads have great
fixed charges, such as ours. Together
with us, they cannot make temporary
adjustments in the cost Of production.
In effect, they are forced to get a rate
that will protect the investment" Mr..
Palmer said.
Profit in Experience.
If we have the good sense to profit
by the experience of the past two years,
IN my opinion, the worst is over. see
no cause for alarm. We know our out
put. 1t Is practically at a standstill as
Tar as new ONCE buildings are con-
cerned. Further overproduction is next
to impossible, because the speculative
bond houses which spewed worthless
real estate securities from its NAV have
gone the way Of all such enterprises and
collapsed. The conservative bond houses
and the insurance companies will finance
only those enterprises that are econom-
tcally sound, and these, Of course, we
wish to see brought into being.
More than IS per cent of our costs
are made up Of fixed charges we cannot
lower, such as taxes, insurance, electric
light and power rates, obSolescence and
depreciation. Costs cannot be mate
rally adjusted to meet a depression in
our industry any more than lowered
prices will increase consumption"