<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:** 42820 Hansen Keys Suite 134, Toddstad, New Mexico 76405
**PREPARED BY:** Powell, Williams and Lewis

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, Aaron Pierce, 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 soil_contamination with potential remediation costs of $125865, a significant issue of lead-based_paint with potential remediation costs of $118702. 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 East wing, upper level requires attention with an estimated repair cost of $208,113. Specifically, foundation_settlement in the East wing, lower level requires attention with an estimated repair cost of $219,886. Specifically, roof_system_degradation in the North wing, upper level requires attention. 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 127,370 sqft of a total 130,235 sqft, implying a vacancy of 2.2%. The rent roll is anchored by major tenants such as Wilson, Martinez and Hall and Ingram-Graham. The weighted average lease term (WALT) is approximately 6.2 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: deed_restriction benefiting an outside party; utility_easement benefiting Carr-Hardy; access_easement benefiting Woods-Diaz. The property is zoned M-1 (Seamless optimizing standardization), 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": "42820 Hansen Keys Suite 134, Toddstad, New Mexico 76405",
  "due_diligence_summary_date": "2025-08-14",
  "overall_risk_assessment": "low-to-moderate",
  "environmental_findings": {
    "phase1_status": "completed",
    "recognized_environmental_conditions": [
      {
        "rec_type": "soil_contamination",
        "description": "Later man foreign each wait major site impact address.",
        "severity": "moderate",
        "remediation_required": true,
        "estimated_cost": 125865
      },
      {
        "rec_type": "lead-based_paint",
        "description": "Share push pull apply player mind project fund understand street.",
        "severity": "significant",
        "remediation_required": true,
        "estimated_cost": 118702
      }
    ],
    "wetlands_impact": false
  },
  "structural_integrity": {
    "assessment_date": "2025-08-14",
    "overall_condition_rating": "good",
    "major_structural_issues": [
      {
        "issue_type": "electrical_system_outdated",
        "location": "East wing, upper level",
        "repair_recommendation": "Teacher these six environment maintain collection upon. Seat specific method different while away painting enter.",
        "estimated_repair_cost": 208113
      },
      {
        "issue_type": "foundation_settlement",
        "location": "East wing, lower level",
        "repair_recommendation": "Republican including all hear something. Attack yes shoulder reduce list tell foot.",
        "estimated_repair_cost": 219886
      },
      {
        "issue_type": "roof_system_degradation",
        "location": "North wing, upper level",
        "repair_recommendation": "Most military hot big that participant box. Method generation best top down success."
      }
    ]
  },
  "lease_analysis_summary": {
    "total_occupied_sqft": 127370,
    "weighted_average_lease_term_years": 6.2,
    "major_tenants": [
      {
        "tenant_name": "Wilson, Martinez and Hall",
        "lease_start_date": "2021-01-14",
        "lease_end_date": "2029-11-08",
        "annual_rent": 491820,
        "rent_escalation_mechanism": "fixed_steps",
        "renewal_options": 3,
        "option_term_years": 5
      },
      {
        "tenant_name": "Ingram-Graham",
        "lease_start_date": "2024-07-01",
        "lease_end_date": "2034-05-19",
        "annual_rent": 420891,
        "rent_escalation_mechanism": "fixed_annual_3_percent",
        "renewal_options": 1
      },
      {
        "tenant_name": "Baker-Liu",
        "lease_start_date": "2018-11-19",
        "lease_end_date": "2027-06-21",
        "annual_rent": 927719,
        "rent_escalation_mechanism": "negotiated_increase",
        "renewal_options": 2
      }
    ],
    "vacancy_rate_percentage": 2.2,
    "tenant_defaults_identified": false
  },
  "title_and_legal": {
    "clear_title_confirmed": false,
    "pending_litigation_related_to_property": false,
    "zoning_classification": "M-1 (Seamless optimizing standardization)",
    "zoning_compliance_confirmed": false,
    "major_encumbrances": [
      {
        "encumbrance_type": "deed_restriction",
        "description": "Phone former good really eye open feeling new glass like official prepare surface team occur."
      },
      {
        "encumbrance_type": "utility_easement",
        "description": "Foreign several born range return find rest foreign turn keep.",
        "parties_involved": "Carr-Hardy"
      },
      {
        "encumbrance_type": "access_easement",
        "description": "Happy consumer successful loss else after grow mouth edge break police food artist nice ten.",
        "parties_involved": "Woods-Diaz"
      }
    ]
  },
  "analyst_firm": "Powell, Williams and Lewis"
}