I have been involved in the health and fitness industry for over 15 years and an increasing trend that I've noticed through literature and first hand experience is the surfacing of "specialty studios".

There are many investment properties in the area.The property also has space adjoining the detached garage - 1/3 was much earlier converted to an office but never rented out, the rest of the space is currently storage.2) He was offered $90,000 upfront with payments of $350/month for the next 13 years (totaling around 145k) by an investor which is what sparked him to want to sell it.

I spend a lot of time in the ocean and pay little to no attention to the many sharks lurking below the surface.  

It is less than 1/4 mile from the City of Redding limits, and my lot adjoins commercial zoning. 

You appear on the surface to be a lazy landlord.

All of the details although on the surface seem legit they are also very common stories related to professional tenants.

Pre-fab and small cottages are out.We've also reached out to adjoining neighbors, but no takers so far.  

the mold remediation specialist is right. concrete does take years to cure, which can result in moisture on the surfaces of concrete. as such, any carpet on the concrete slab would eventually cause mold. however, you stated that the floor is tile, so, that would not be an issue. 65% is kind of high for humidity, and given the fact that they have too much stuff in the place, that gives the mold spores something to feed on. consequently, they are causing their own problem. since no one else had such a problem prior to them moving in, common sense says that they are the problem. i would offer them a buy out on their lease and send them packing

You want to renew, so it surprises me that this sort of behavior just surfaced.  

I would plan on exploring this from either Sheetrock wall on opposite side of opening up the wall from the tiled surface in the bathroom.You probably will not be able to keep the deposit in this case, and as you mentioned it was a 2 "flat" I am assuming you're in the greater Chicago metro and your L & T laws are very strict there.I would do as another post suggested and either have it repaired by current owner prior to closing to your satisfaction - meaning you are physically on the job site to witness extent of damage or lack there of due to water, or, renegotiate and ask for a concession for the issue - and this could be a moderately expensive problem depending on the length of time it has been leaking and given the possible location of the shower/bath to supporting wall etc should lumber need to be replaced.