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and any remaining assets of the trusts distributed when the
youngest living Stevens child reached the age of 30.
At the time of decedent’s death, decedent and the Trust each
owned, as tenants in common, a one-half interest in the following
properties: (1) 5100 West 123d Street, Alsip, Illinois (Kmart
property); (2) 333 El Camino Real, San Bruno, California
(Walgreen property); and (3) 4540 El Camino Real, Los Altos,
California (Wells Fargo property). Decedent and her husband had
been jointly engaged in the business of developing, managing, and
leasing real estate, and these properties were purchased in
furtherance of that business. Each of the properties is
discussed in detail below.
Kmart Property
In 1980, decedent and her husband purchased the land and
improvements on the Kmart property. The 1,203,000-square-foot
site included a 464,818-square-foot, single-story warehouse, with
an office, a cafeteria, and a lounge, built in 1971. The
building was in good condition. In 1977, decedent and her
husband agreed to lease the property to Kmart Corp. for 20 years,
commencing on May 1, 1977. The lease rate was $1.19 per square
foot with no rent escalation clause in the lease. At the
valuation date, the market lease rate was $2 per square foot,
making the Kmart rental rate 40 percent below market. There was
an option to extend the lease for another 10 years and three more
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