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a $60,000 prepayment penalty and created a new “lock-in”
provision that prevented the newly modified loan from being paid
off in the first 5 years. At the time of the modification, the
property owners had no indication that the Kmart lease would not
continue for the remaining 14 years.
In June 1996, a real estate broker informed the owners that
Kmart wanted to move out of the property and attempt to sublease
it. In November 1996, the Kmart owners signed an agreement to
sell the entire Kmart property, including the adjacent parking
lot, to Security Capital Industrial Trust (Security Capital) for
$8,250,000. A few weeks later, Kmart agreed to sell the adjacent
parking lot to the Kmart property owners for $350,000. On the
same day, the Kmart property owners terminated the Kmart lease,
paying a $150,000 lease termination fee to Kmart Corp. The sale
of the Kmart property to Security Capital was completed in
January 1997.
Walgreen Property
Decedent and her husband purchased the Walgreen property in
1968. The Walgreen property is a 57,106-square-foot site, with a
25,560-square-foot, single-story, commercial building on it,
built in 1972. The building was in average condition at the time
of decedent’s death. The building fronts a heavily traveled
arterial street and is located in a commercial/retail complex in
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Last modified: May 25, 2011