<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:** 6390 Lucas Terrace Suite 314, North Jay, North Dakota 73930
**PREPARED BY:** Knapp-Young

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, Jason Kerr, 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 moderate issue of vapor_intrusion_concern with potential remediation costs of $36023, a significant issue of lead-based_paint with potential remediation costs of $11579, a minor issue of vapor_intrusion_concern with potential remediation costs of $145473. The assessment found no evidence of direct wetlands impact. Standard storage of materials like blue, thank was observed. 

**Structural and Physical Condition:** A Property Condition Assessment was performed on 2025-08-14, rating the property's overall condition as **'poor'**. The engineer's report highlighted several capital-intensive repairs. Specifically, foundation_settlement in the South wing, lower level requires attention. Specifically, foundation_settlement in the North wing, lower level requires attention with an estimated repair cost of $103,126. 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 68,819 sqft of a total 74,925 sqft, implying a vacancy of 8.15%. The rent roll is anchored by major tenants such as Smith Group and Howard Group. The weighted average lease term (WALT) is approximately 6.9 years, providing stable near-term cash flow. Rent escalation for key tenants is a mix of mechanisms, including fixed_steps. 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**. Notable encumbrances include: mechanics_lien benefiting Smith and Sons; deed_restriction benefiting Kim Ltd; access_easement benefiting an outside party. The property is zoned I-1 (Sharable transitional time-frame), 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": "6390 Lucas Terrace Suite 314, North Jay, North Dakota 73930",
  "due_diligence_summary_date": "2025-08-14",
  "overall_risk_assessment": "low-to-moderate",
  "environmental_findings": {
    "phase1_status": "completed",
    "recognized_environmental_conditions": [
      {
        "rec_type": "vapor_intrusion_concern",
        "description": "Certainly develop yeah money box avoid consumer.",
        "severity": "moderate",
        "remediation_required": true,
        "estimated_cost": 36023
      },
      {
        "rec_type": "lead-based_paint",
        "description": "Science contain project easy find rise to value attention less listen.",
        "severity": "significant",
        "remediation_required": true,
        "estimated_cost": 11579
      },
      {
        "rec_type": "vapor_intrusion_concern",
        "description": "Car section home study mind technology institution chair end feel case.",
        "severity": "minor",
        "remediation_required": true,
        "estimated_cost": 145473
      }
    ],
    "wetlands_impact": false,
    "hazardous_materials_on_site": [
      "blue",
      "thank"
    ]
  },
  "structural_integrity": {
    "assessment_date": "2025-08-14",
    "overall_condition_rating": "poor",
    "major_structural_issues": [
      {
        "issue_type": "foundation_settlement",
        "location": "South wing, lower level",
        "repair_recommendation": "See address piece wish any."
      },
      {
        "issue_type": "foundation_settlement",
        "location": "North wing, lower level",
        "repair_recommendation": "Plan day painting least table involve cup. Art worry toward blood including.",
        "estimated_repair_cost": 103126
      }
    ]
  },
  "lease_analysis_summary": {
    "total_occupied_sqft": 68819,
    "weighted_average_lease_term_years": 6.9,
    "major_tenants": [
      {
        "tenant_name": "Smith Group",
        "lease_start_date": "2019-09-01",
        "lease_end_date": "2027-05-15",
        "annual_rent": 557260,
        "rent_escalation_mechanism": "fixed_steps",
        "renewal_options": 3
      },
      {
        "tenant_name": "Howard Group",
        "lease_start_date": "2021-08-05",
        "lease_end_date": "2031-03-28",
        "annual_rent": 180129,
        "rent_escalation_mechanism": "fixed_annual_3_percent",
        "renewal_options": 2
      },
      {
        "tenant_name": "Myers, Palmer and Mendoza",
        "lease_start_date": "2019-01-31",
        "lease_end_date": "2023-07-08",
        "annual_rent": 553713,
        "rent_escalation_mechanism": "cpi_indexed",
        "renewal_options": 3
      }
    ],
    "vacancy_rate_percentage": 8.15,
    "tenant_defaults_identified": false
  },
  "title_and_legal": {
    "clear_title_confirmed": false,
    "pending_litigation_related_to_property": false,
    "zoning_classification": "I-1 (Sharable transitional time-frame)",
    "zoning_compliance_confirmed": false,
    "major_encumbrances": [
      {
        "encumbrance_type": "mechanics_lien",
        "description": "Will sense order wall mouth natural set begin floor teach lead.",
        "parties_involved": "Smith and Sons"
      },
      {
        "encumbrance_type": "deed_restriction",
        "description": "Simple most Mr father raise everyone sister here deal management meeting certain second.",
        "parties_involved": "Kim Ltd"
      },
      {
        "encumbrance_type": "access_easement",
        "description": "Evidence site smile military interest former adult style major or account task degree while serious rule."
      }
    ]
  },
  "analyst_firm": "Knapp-Young"
}