<format type="json">{ "property_identifier": "string", "due_diligence_summary_date": "date", "analyst_firm": "string optional", "overall_risk_assessment": "string", "environmental_findings": { "phase1_status": "string", "recognized_environmental_conditions": "list[{rec_type: string, description: string, severity: string, remediation_required: boolean, estimated_cost: number optional}]", "wetlands_impact": "boolean", "hazardous_materials_on_site": "list[string] optional" }, "structural_integrity": { "assessment_date": "date", "overall_condition_rating": "string", "major_structural_issues": "list[{issue_type: string, location: string, repair_recommendation: string, estimated_repair_cost: number optional}]", "ada_compliance_notes": "string optional" }, "lease_analysis_summary": { "total_occupied_sqft": "number", "weighted_average_lease_term_years": "number", "major_tenants": "list[{tenant_name: string, lease_start_date: date, lease_end_date: date, annual_rent: number, rent_escalation_mechanism: string, renewal_options: number, option_term_years: number optional}]", "vacancy_rate_percentage": "number", "tenant_defaults_identified": "boolean" }, "title_and_legal": { "clear_title_confirmed": "boolean", "major_encumbrances": "list[{encumbrance_type: string, description: string, parties_involved: string optional}] optional", "pending_litigation_related_to_property": "boolean", "zoning_classification": "string", "zoning_compliance_confirmed": "boolean" } }</format> <data>**CONFIDENTIAL DUE DILIGENCE MEMORANDUM**

**DATE:** 2025-08-14
**SUBJECT PROPERTY:** 1739 Salazar Divide Apt. 581, West Michelleton, Minnesota 57407
**PREPARED BY:** Harris Group

This report summarizes key findings from the due diligence conducted for the subject property. Our analysis, completed on 2025-08-14, indicates an overall risk profile assessed as **low-to-moderate** for a potential acquisition. The lead analyst, Sandra Wise, noted the complexity of the file.

**Environmental Review:** The Phase I Environmental Site Assessment (ESA) is noted as **completed**. Several Recognized Environmental Conditions (RECs) were identified. Key among these are a minor issue of groundwater_impact, a moderate issue of asbestos_containing_materials. The assessment found no evidence of direct wetlands impact. No significant quantities of hazardous materials were noted on-site.

**Structural and Physical Condition:** A Property Condition Assessment was performed on 2025-08-14, rating the property's overall condition as **'fair'**. The engineer's report highlighted several capital-intensive repairs. Specifically, roof_system_degradation in the West wing, upper level requires attention. Specifically, foundation_settlement in the North wing, lower level requires attention with an estimated repair cost of $213,705. Specifically, foundation_settlement in the North wing, lower level requires attention with an estimated repair cost of $218,238. The inspection was briefly delayed due to a minor scheduling conflict with a vendor.

**Lease and Tenancy Analysis:** The property's financial stability appears robust, with tenants occupying 49,815 sqft of a total 62,581 sqft, implying a vacancy of 20.4%. The rent roll is anchored by major tenants such as Marshall, Holmes and Bowen and Dalton, Roberts and Torres. The weighted average lease term (WALT) is approximately 6.1 years, providing stable near-term cash flow. Rent escalation for key tenants is a mix of mechanisms, including cpi_indexed. Our review found no evidence of current tenant defaults.

**Title and Legal Matters:** The preliminary title report review indicates that clear title is **not yet confirmed**. The property is zoned I-1 (Phased optimal application), and its current use is deemed non-compliant with local ordinances. We are not aware of any pending litigation concerning the property at this time. </data>
{
  "property_identifier": "1739 Salazar Divide Apt. 581, West Michelleton, Minnesota 57407",
  "due_diligence_summary_date": "2025-08-14",
  "overall_risk_assessment": "low-to-moderate",
  "environmental_findings": {
    "phase1_status": "completed",
    "recognized_environmental_conditions": [
      {
        "rec_type": "groundwater_impact",
        "description": "Prove gun drug to someone hope child add forward recent.",
        "severity": "minor",
        "remediation_required": false
      },
      {
        "rec_type": "asbestos_containing_materials",
        "description": "Financial edge within home property take on health fact industry political.",
        "severity": "moderate",
        "remediation_required": false
      }
    ],
    "wetlands_impact": false
  },
  "structural_integrity": {
    "assessment_date": "2025-08-14",
    "overall_condition_rating": "fair",
    "major_structural_issues": [
      {
        "issue_type": "roof_system_degradation",
        "location": "West wing, upper level",
        "repair_recommendation": "Article agency chance throughout mouth cut."
      },
      {
        "issue_type": "foundation_settlement",
        "location": "North wing, lower level",
        "repair_recommendation": "Game suggest bag black college evening personal.",
        "estimated_repair_cost": 213705
      },
      {
        "issue_type": "foundation_settlement",
        "location": "North wing, lower level",
        "repair_recommendation": "Last leader bed share rise provide statement. Amount among direction.",
        "estimated_repair_cost": 218238
      }
    ]
  },
  "lease_analysis_summary": {
    "total_occupied_sqft": 49815,
    "weighted_average_lease_term_years": 6.1,
    "major_tenants": [
      {
        "tenant_name": "Marshall, Holmes and Bowen",
        "lease_start_date": "2024-03-16",
        "lease_end_date": "2030-12-10",
        "annual_rent": 162133,
        "rent_escalation_mechanism": "cpi_indexed",
        "renewal_options": 0
      },
      {
        "tenant_name": "Dalton, Roberts and Torres",
        "lease_start_date": "2023-03-08",
        "lease_end_date": "2030-02-07",
        "annual_rent": 277320,
        "rent_escalation_mechanism": "fixed_steps",
        "renewal_options": 2
      }
    ],
    "vacancy_rate_percentage": 20.4,
    "tenant_defaults_identified": false
  },
  "title_and_legal": {
    "clear_title_confirmed": false,
    "pending_litigation_related_to_property": false,
    "zoning_classification": "I-1 (Phased optimal application)",
    "zoning_compliance_confirmed": false
  },
  "analyst_firm": "Harris Group"
}