Here my Ai summary notes: Hidden Dangers (Due Diligence) Fri, 25 Sept 26 Frank Forte: Background and Firm Overview - Co-founder of Lucerne Capital, decade in small bay flex before it became mainstream - Banker and PE background before founding at age 27 - ~$500M transactional volume; ~$110-120M equity raised (mostly HNW/family office/retail) - 3-5 deals per year; net 33% IRR to investors over the decade - 92% of portfolio managed in-house; vertically integrated operations Hampton, VA Deal: A Due Diligence Case Study - Fully marketed deal, ~$3.5M, 20-year-old brick flex product near Port of Virginia - Seller: logistics family, not real estate operators, property mispriced - Compelling story: tight market, port dredging underway, NASA and Virginia Tech nearby - Key mistake: allowed themselves to get “romanced” into the deal before securing leases - Lease dump arrived with ~1 week of DD left; 6 of 9 leases materially wrong - Rents lower than stated (e.g., $10/ft gross vs. $12/ft NNN) - Tenants had 2x 5-year fixed options not disclosed - Retrade table built at a 7-cap: ~$286K adjustment requested - Roof (15-year-old metal): missing fastener replacements, needed silicone coating, bid at $105K - Survey revealed rear parking lot built ~30 feet into adjacent property - No easement existed; sellers unaware who built it - Adjacent land owned by Virginia Economic Development Authority and actively for sale - Parking supported tenant ratios; losing it created compliance risk - Environmental violation: parking in stream setback buffer - Sellers refused to move on price, easement, or parking removal; deal killed - Dead deal costs: ~$20K (third-party fees, survey, discounted attorney fees) WALT Strategy: Buying and Curating for Exit - Target: get to 60-70% of rent roll within the hold period (typically 3 years) - Leave remaining upside for the next buyer to avoid compressing exit cap rate - Curate WALT on the way out to ~2 years

Summary Notes from - Underwriting Your New Build Fri, 04 Sept 26 Know Your Buy Box First - Define target markets and objectives before site hunting - Population: 150,000–200,000 people within a 20-minute drive time - Median income: confirms whether local businesses can afford rents and whether rents will cover high construction costs - Growth signals: - Track residential and commercial permit activity via Tract IQ or Google Earth - In the Sunbelt, look for freshly disturbed red dirt as a proxy for growth - In the Northeast/Midwest, growth matters less; density of trades and small businesses is the signal - Spending per capita: $12,000+ is the key threshold for flex/small bay viability (source: Cody/World Engine report) - Clarify investment objective before underwriting: - Long-term cash flow hold (family/friends money) - JV with no hard IRR threshold - LP investors targeting 22%+ IRR on a 5-year exit Site Feasibility: Quick Calculations - Buildable area formula: acreage × 43,560 × 0.27 = buildable sq ft - Example: 5 acres → ~58,000 sq ft buildable - Rough site area breakdown: - Parking and drive aisles: ~40% - Setbacks and landscaping: 20–25% - Detention: ~10% - Easements and right-of-ways: ~5% - Always check FEMA flood maps and wetlands early: unusable acreage changes land price negotiation entirely - Utilities: distance from sewer, water, and electric can add hundreds of thousands to site work budget - Fire suppression: call the fire marshal early - Sprinklers can add ~$5/sq ft (5–6% cost increase on an efficiency build) - Demising with fire-rated walls every 12,000 sq ft (or per local code) can avoid sprinkler requirement - Paving and fire lane requirements can also reduce buildable area The 20-Minute Go/No-Go Underwrite - Run this before signing a PSA or spending any money; can be done in a long day - Eight variables to estimate: 1. Land cost (negotiate from ask; apply discount if motivated seller) 2. Buildable square footage (use the 27% formula) 3. Vertical construction cost (varies widely by finish level: basic high-bay vs. bathrooms, mezzanines, epoxy floors) 4. Soft costs: 8–10% of hard costs 5. Vacancy: 5–8% signals a healthy or undersupplied market 6. Site work: $5–$10/sq ft of disturbed area; biggest deal-killer across the whole process 7. Market rent: distinguish C-class comps from Class A achievable rents (can be several dollars/sq ft higher) 8. Exit cap rate and hold period: tied to market tier and investor strategy

Thanks Christen, I just signed up for a Tract IQ demo session and was impressed on what it could do

@Will Skillman same here

Thanks for the recordings. It’s a great resource to refer back to in the archives. Especially if I can’t make the original call.

I’ll put it on my calenda