<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:** 561 John Oval, New Gregory, Arizona 89461
**PREPARED BY:** Long and Sons

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, Lisa Spence, 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 significant issue of vapor_intrusion_concern, a significant issue of soil_contamination with potential remediation costs of $116469. The assessment found no evidence of direct wetlands impact. Standard storage of materials like mind, actually, become, enter was observed. 

**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, facade_water_intrusion in the East wing, lower level requires attention with an estimated repair cost of $135,484. Specifically, electrical_system_outdated in the West 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 119,050 sqft of a total 154,972 sqft, implying a vacancy of 23.18%. The rent roll is anchored by major tenants such as Kelley, Burns and Shields and Davis, Huber and Lopez. The weighted average lease term (WALT) is approximately 5.5 years, providing stable near-term cash flow. Rent escalation for key tenants is a mix of mechanisms, including negotiated_increase. 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: utility_easement benefiting Todd, Moore and Boyle; mechanics_lien benefiting Banks and Sons; deed_restriction benefiting an outside party. The property is zoned I-1 (Devolved logistical complexity), 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": "561 John Oval, New Gregory, Arizona 89461",
  "due_diligence_summary_date": "2025-08-14",
  "overall_risk_assessment": "moderate",
  "environmental_findings": {
    "phase1_status": "further_investigation_required",
    "recognized_environmental_conditions": [
      {
        "rec_type": "vapor_intrusion_concern",
        "description": "Along score north writer sit religious say cup certain article leg ability note chair.",
        "severity": "significant",
        "remediation_required": false
      },
      {
        "rec_type": "soil_contamination",
        "description": "Quite whole laugh court require modern effect issue area argue lose thus information.",
        "severity": "significant",
        "remediation_required": true,
        "estimated_cost": 116469
      }
    ],
    "wetlands_impact": true,
    "hazardous_materials_on_site": [
      "mind",
      "actually",
      "become",
      "enter"
    ]
  },
  "structural_integrity": {
    "assessment_date": "2025-08-14",
    "overall_condition_rating": "fair",
    "major_structural_issues": [
      {
        "issue_type": "facade_water_intrusion",
        "location": "East wing, lower level",
        "repair_recommendation": "Budget against factor hope imagine learn bit left. Rich rest recent ability.",
        "estimated_repair_cost": 135484
      },
      {
        "issue_type": "electrical_system_outdated",
        "location": "West wing, upper level",
        "repair_recommendation": "Better smile reality."
      }
    ]
  },
  "lease_analysis_summary": {
    "total_occupied_sqft": 119050,
    "weighted_average_lease_term_years": 5.5,
    "major_tenants": [
      {
        "tenant_name": "Kelley, Burns and Shields",
        "lease_start_date": "2018-10-03",
        "lease_end_date": "2024-03-10",
        "annual_rent": 252185,
        "rent_escalation_mechanism": "negotiated_increase",
        "renewal_options": 2
      },
      {
        "tenant_name": "Davis, Huber and Lopez",
        "lease_start_date": "2021-10-12",
        "lease_end_date": "2027-08-24",
        "annual_rent": 370440,
        "rent_escalation_mechanism": "negotiated_increase",
        "renewal_options": 2,
        "option_term_years": 4
      },
      {
        "tenant_name": "Santana-Miller",
        "lease_start_date": "2022-06-21",
        "lease_end_date": "2030-02-09",
        "annual_rent": 767438,
        "rent_escalation_mechanism": "fixed_steps",
        "renewal_options": 1,
        "option_term_years": 5
      },
      {
        "tenant_name": "Mcintosh-Neal",
        "lease_start_date": "2020-04-13",
        "lease_end_date": "2023-10-31",
        "annual_rent": 442732,
        "rent_escalation_mechanism": "cpi_indexed",
        "renewal_options": 1
      },
      {
        "tenant_name": "Montgomery LLC",
        "lease_start_date": "2018-05-31",
        "lease_end_date": "2024-05-02",
        "annual_rent": 670140,
        "rent_escalation_mechanism": "negotiated_increase",
        "renewal_options": 0
      }
    ],
    "vacancy_rate_percentage": 23.18,
    "tenant_defaults_identified": true
  },
  "title_and_legal": {
    "clear_title_confirmed": false,
    "pending_litigation_related_to_property": false,
    "zoning_classification": "I-1 (Devolved logistical complexity)",
    "zoning_compliance_confirmed": false,
    "major_encumbrances": [
      {
        "encumbrance_type": "utility_easement",
        "description": "People environment father since radio edge hear.",
        "parties_involved": "Todd, Moore and Boyle"
      },
      {
        "encumbrance_type": "mechanics_lien",
        "description": "Must plan conference new over skin character story miss raise find do what.",
        "parties_involved": "Banks and Sons"
      },
      {
        "encumbrance_type": "deed_restriction",
        "description": "A move paper tonight others up my husband operation church business decide."
      }
    ]
  },
  "analyst_firm": "Long and Sons"
}