Why This Tenant Avoided a Costly Mistake: Active Roof Leak Found in a “New” Warehouse

Howdy,

One of the biggest myths in commercial real estate is that inspections are only for buyers — not tenants.

This Field Notes case is a perfect example of why that thinking is dangerous.

The Setup: A 5-Year NNN Lease on a “Practically New” Warehouse

We were hired by a commercial tenant before they moved their business into an industrial warehouse under a five-year triple-net (NNN) lease.

The building looked great on paper:

• Only a couple of years old
• Modern exterior and finishes
• No obvious signs of distress during casual walkthroughs

Most tenants — and even many buyers — would have skipped an inspection altogether. Fortunately, this tenant didn’t.

What We Found: An Active Roof Leak and Water-Damaged Walls

During our commercial Property Condition Assessment (PCA), we observed water staining above window and storefront assemblies in one of the warehouse units.

At first glance, the staining appeared consistent with a common risk area: exterior awnings and canopy penetrations — a known flashing and detailing vulnerability.

But we didn’t stop at appearances.

We used thermal imaging and moisture meters to evaluate the interior wall assemblies and drywall finishes.

Initial readings did not indicate elevated moisture levels — a reminder that roof leaks can be intermittent and deceptive.

Then it started raining.

While we were still onsite, active water intrusion became visible. Water was observed running down the interior wall surfaces — confirming an active roof leak in a building that was only a few years old.

Why This Matters — Especially for Tenants

Under a triple-net lease, tenants are often responsible for more than they realize.

Depending on the lease language, issues like water intrusion can lead to:

• Business disruption
• Interior build-out damage
• Mold and indoor air quality concerns
• Disputes over responsibility and repairs
• Unexpected capital expenses

Had this tenant moved in without a PCA, they likely would have discovered the leak only after occupying the space — when leverage is gone and responsibility becomes murky.

Why “New” Commercial Buildings Still Have Major Defects

We find significant issues on both old and new commercial buildings.

Newer construction is not immune to:

• Improper roof detailing or flashing
• Rushed construction schedules
• Inadequate quality control
• Unresolved punch-list items
• Design details that fail under real-world conditions

In this case, the roof leak was likely present long before the tenant ever considered signing the lease — it just hadn’t been discovered yet.

Why Most Tenants (and Many Buyers) Skip PCAs

Many commercial tenants don’t realize they can hire inspectors — or that they should.

PCAs are often viewed as something only lenders or institutional buyers require. In reality, they are one of the most powerful tools a tenant has before signing a long-term lease.

A professional PCA documents conditions before occupancy, when problems can still be negotiated, repaired, or clarified in writing.

Why This Inspection Paid for Itself

This tenant gained:

• Proof of pre-existing water intrusion
• Leverage before lease execution
• Protection from future disputes
• Clarity about the building’s true condition

That is exactly what a commercial PCA is supposed to do.

Watch the Inspection Video

This video documents the conditions exactly as we found them — in real time.

The Bottom Line

Even “simple” industrial warehouse buildings should never be leased or purchased without a commercial Property Condition Assessment.

If this tenant hadn’t hired us, they would have moved into a building with an active roof leak — and discovered it the hard way.

We perform commercial PCAs across Houston, Sugar Land, Fort Bend County, and the Texas Triangle for:

• Tenants
• Buyers
• Investors
• Property managers
• Asset owners