<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:** 832 Sierra Heights Suite 790, Johnsonberg, Texas 53628
**PREPARED BY:** Berry, Brock and Palmer

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, Derek Murillo, noted the complexity of the file.

**Environmental Review:** The Phase I Environmental Site Assessment (ESA) is noted as **further_investigation_required**. Several Recognized Environmental Conditions (RECs) were identified. Key among these are a minor issue of asbestos_containing_materials with potential remediation costs of $58591, a minor issue of asbestos_containing_materials with potential remediation costs of $21972, a minor issue of lead-based_paint. 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 **'good'**. The engineer's report highlighted several capital-intensive repairs. Specifically, electrical_system_outdated in the North wing, lower level requires attention with an estimated repair cost of $232,125. Specifically, facade_water_intrusion in the South wing, upper level requires attention with an estimated repair cost of $223,546. 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 150,684 sqft of a total 196,177 sqft, implying a vacancy of 23.19%. The rent roll is anchored by major tenants such as Gutierrez Group and Dorsey Group. The weighted average lease term (WALT) is approximately 5.7 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**. Notable encumbrances include: deed_restriction benefiting Hayden, Brooks and Morris; access_easement benefiting Allen Inc; access_easement benefiting White Group. The property is zoned C-2 (Seamless encompassing framework), and its current use is deemed compliant with local ordinances. We are not aware of any pending litigation concerning the property at this time. </data>
{
  "property_identifier": "832 Sierra Heights Suite 790, Johnsonberg, Texas 53628",
  "due_diligence_summary_date": "2025-08-14",
  "overall_risk_assessment": "low-to-moderate",
  "environmental_findings": {
    "phase1_status": "further_investigation_required",
    "recognized_environmental_conditions": [
      {
        "rec_type": "asbestos_containing_materials",
        "description": "Per food which if work teacher administration per campaign trade quite consumer parent.",
        "severity": "minor",
        "remediation_required": true,
        "estimated_cost": 58591
      },
      {
        "rec_type": "asbestos_containing_materials",
        "description": "Evidence occur perhaps cultural discover deep ago less.",
        "severity": "minor",
        "remediation_required": true,
        "estimated_cost": 21972
      },
      {
        "rec_type": "lead-based_paint",
        "description": "Letter loss kitchen guess blue throw region.",
        "severity": "minor",
        "remediation_required": false
      }
    ],
    "wetlands_impact": true
  },
  "structural_integrity": {
    "assessment_date": "2025-08-14",
    "overall_condition_rating": "good",
    "major_structural_issues": [
      {
        "issue_type": "electrical_system_outdated",
        "location": "North wing, lower level",
        "repair_recommendation": "Five cup fish include owner. Real face television government try recent.",
        "estimated_repair_cost": 232125
      },
      {
        "issue_type": "facade_water_intrusion",
        "location": "South wing, upper level",
        "repair_recommendation": "Stay guess follow can too. Or make program seem.",
        "estimated_repair_cost": 223546
      }
    ]
  },
  "lease_analysis_summary": {
    "total_occupied_sqft": 150684,
    "weighted_average_lease_term_years": 5.7,
    "major_tenants": [
      {
        "tenant_name": "Gutierrez Group",
        "lease_start_date": "2017-12-14",
        "lease_end_date": "2021-07-16",
        "annual_rent": 469999,
        "rent_escalation_mechanism": "cpi_indexed",
        "renewal_options": 2
      },
      {
        "tenant_name": "Dorsey Group",
        "lease_start_date": "2022-01-30",
        "lease_end_date": "2029-04-12",
        "annual_rent": 807925,
        "rent_escalation_mechanism": "fixed_steps",
        "renewal_options": 0
      },
      {
        "tenant_name": "Martin Inc",
        "lease_start_date": "2023-01-22",
        "lease_end_date": "2029-08-15",
        "annual_rent": 384260,
        "rent_escalation_mechanism": "cpi_indexed",
        "renewal_options": 3,
        "option_term_years": 5
      },
      {
        "tenant_name": "Flynn and Sons",
        "lease_start_date": "2020-09-09",
        "lease_end_date": "2030-01-16",
        "annual_rent": 644806,
        "rent_escalation_mechanism": "cpi_indexed",
        "renewal_options": 0
      }
    ],
    "vacancy_rate_percentage": 23.19,
    "tenant_defaults_identified": true
  },
  "title_and_legal": {
    "clear_title_confirmed": false,
    "pending_litigation_related_to_property": true,
    "zoning_classification": "C-2 (Seamless encompassing framework)",
    "zoning_compliance_confirmed": true,
    "major_encumbrances": [
      {
        "encumbrance_type": "deed_restriction",
        "description": "Try building message building thus or option identify set.",
        "parties_involved": "Hayden, Brooks and Morris"
      },
      {
        "encumbrance_type": "access_easement",
        "description": "Them hot watch investment thing protect exist action threat.",
        "parties_involved": "Allen Inc"
      },
      {
        "encumbrance_type": "access_easement",
        "description": "Over consider whole door few college big eight pass both act some truth magazine throw religious.",
        "parties_involved": "White Group"
      }
    ]
  },
  "analyst_firm": "Berry, Brock and Palmer"
}