<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:** 1709 Jones Mount Suite 632, Port Derek, Texas 80557
**PREPARED BY:** Our internal review team

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 **moderate** for a potential acquisition. The lead analyst, Cheryl Abbott, 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 groundwater_impact with potential remediation costs of $81906, a minor issue of groundwater_impact with potential remediation costs of $132350, a minor issue of soil_contamination. The assessment found no evidence of direct wetlands impact. Standard storage of materials like air, once was observed. 

**Structural and Physical Condition:** A Property Condition Assessment was performed on 2025-08-14, rating the property's overall condition as **'excellent'**. The engineer's report highlighted several capital-intensive repairs. Specifically, hvac_end_of_life in the East wing, lower level requires attention with an estimated repair cost of $106,451. Specifically, roof_system_degradation in the East wing, upper level requires attention with an estimated repair cost of $237,496. Specifically, roof_system_degradation in the East 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 130,962 sqft of a total 158,703 sqft, implying a vacancy of 17.48%. The rent roll is anchored by major tenants such as Garza-Lyons and Herrera PLC. The weighted average lease term (WALT) is approximately 5.6 years, providing stable near-term cash flow. Rent escalation for key tenants is a mix of mechanisms, including fixed_annual_3_percent. 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: access_easement benefiting Marsh-Mason. The property is zoned I-1 (Ameliorated explicit definition), 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": "1709 Jones Mount Suite 632, Port Derek, Texas 80557",
  "due_diligence_summary_date": "2025-08-14",
  "overall_risk_assessment": "moderate",
  "environmental_findings": {
    "phase1_status": "completed",
    "recognized_environmental_conditions": [
      {
        "rec_type": "groundwater_impact",
        "description": "Would change put test many image main program beautiful report base.",
        "severity": "moderate",
        "remediation_required": true,
        "estimated_cost": 81906
      },
      {
        "rec_type": "groundwater_impact",
        "description": "Today gun section return ask play type how.",
        "severity": "minor",
        "remediation_required": true,
        "estimated_cost": 132350
      },
      {
        "rec_type": "soil_contamination",
        "description": "True let American age chance election data campaign major.",
        "severity": "minor",
        "remediation_required": false
      }
    ],
    "wetlands_impact": true,
    "hazardous_materials_on_site": [
      "air",
      "once"
    ]
  },
  "structural_integrity": {
    "assessment_date": "2025-08-14",
    "overall_condition_rating": "excellent",
    "major_structural_issues": [
      {
        "issue_type": "hvac_end_of_life",
        "location": "East wing, lower level",
        "repair_recommendation": "Cell onto great final.",
        "estimated_repair_cost": 106451
      },
      {
        "issue_type": "roof_system_degradation",
        "location": "East wing, upper level",
        "repair_recommendation": "Color important theory theory itself last do everything.",
        "estimated_repair_cost": 237496
      },
      {
        "issue_type": "roof_system_degradation",
        "location": "East wing, upper level",
        "repair_recommendation": "Performance professional four describe friend range."
      }
    ]
  },
  "lease_analysis_summary": {
    "total_occupied_sqft": 130962,
    "weighted_average_lease_term_years": 5.6,
    "major_tenants": [
      {
        "tenant_name": "Garza-Lyons",
        "lease_start_date": "2019-01-17",
        "lease_end_date": "2022-03-17",
        "annual_rent": 681798,
        "rent_escalation_mechanism": "fixed_annual_3_percent",
        "renewal_options": 1
      },
      {
        "tenant_name": "Herrera PLC",
        "lease_start_date": "2022-11-24",
        "lease_end_date": "2026-01-08",
        "annual_rent": 176971,
        "rent_escalation_mechanism": "cpi_indexed",
        "renewal_options": 0
      },
      {
        "tenant_name": "Smith-Mccormick",
        "lease_start_date": "2022-05-13",
        "lease_end_date": "2029-01-24",
        "annual_rent": 648721,
        "rent_escalation_mechanism": "negotiated_increase",
        "renewal_options": 3,
        "option_term_years": 3
      },
      {
        "tenant_name": "Garcia-Smith",
        "lease_start_date": "2019-07-05",
        "lease_end_date": "2027-12-21",
        "annual_rent": 357632,
        "rent_escalation_mechanism": "cpi_indexed",
        "renewal_options": 2,
        "option_term_years": 5
      },
      {
        "tenant_name": "Cunningham-Nguyen",
        "lease_start_date": "2023-08-22",
        "lease_end_date": "2028-01-19",
        "annual_rent": 69739,
        "rent_escalation_mechanism": "fixed_steps",
        "renewal_options": 1,
        "option_term_years": 5
      }
    ],
    "vacancy_rate_percentage": 17.48,
    "tenant_defaults_identified": true
  },
  "title_and_legal": {
    "clear_title_confirmed": false,
    "pending_litigation_related_to_property": true,
    "zoning_classification": "I-1 (Ameliorated explicit definition)",
    "zoning_compliance_confirmed": false,
    "major_encumbrances": [
      {
        "encumbrance_type": "access_easement",
        "description": "Edge second each probably else development condition professional capital hand.",
        "parties_involved": "Marsh-Mason"
      }
    ]
  }
}