Contract analysis

I. Executive Summary The purpose of this memorandum is to analyze all transfer-related taxes and mortgage recording taxes applicable to the proposed acquisition of the real property and improvements located at 450 West 34th Street, New York, New York 10001 (Block 754, Lot 42, Borough of Manhattan) (the "Property") by BFO 450 West 34th LLC, a Delaware limited liability company to be formed as a single-purpose acquisit

II. Transaction Overview Set forth below is a summary of the material terms of the proposed transaction, as reflected in the LOI and as discussed with the parties and their respective advisors. These terms form the basis for the tax analysis contained in this memorandum. Buyer. BFO 450 West 34th LLC (the "Buyer" or "BFO SPV"), a Delaware limited liability company to be formed as a single-purpose acquisition vehicle.

III. New York City Real Property Transfer Tax (NYC RPT) A. Statutory Framework The New York City Real Property Transfer Tax is imposed pursuant to Chapter 21 of Title 11 of the New York City Administrative Code (§§ 11-2101 through 11-2115) (the "RPT"). The RPT is administered by the New York City Department of Finance. Section 11-2102 of the Administrative Code imposes a tax on each deed at the time of delivery by a

IV. New York State Real Estate Transfer Tax (NYS RETT) A. Statutory Framework The New York State Real Estate Transfer Tax is imposed pursuant to Article 31 of the New York Tax Law (§§ 1401 through 1410) (the "RETT"). The RETT is administered by the New York State Department of Taxation and Finance and is imposed on each conveyance of real property or interest therein where the consideration for the conveyance exceeds

Section 1402 of the New York Tax Law imposes the base RETT at the rate of $2.00 per $500 of consideration, or fractional part thereof (equivalent to 0.40% of consideration). In addition to the base tax, Section 1402-a imposes a supplemental tax—commonly referred to as the "mansion tax"—on certain conveyances of residential real property, which is analyzed separately in Section VI of this memorandum. Further, for conv

V. Total Transfer Tax Summary The following summarizes the total transfer tax obligations arising from the conveyance of the Property from the Seller to the Buyer: The entire $3,930,000 in transfer taxes is a Seller obligation under the terms of the LOI, and this allocation will be confirmed and documented in the PSA. Impact on Seller's Net Proceeds. The transfer taxes represent a significant closing cost for the Sel

VI. New York State "Mansion Tax" Analysis — Residential Component A. Statutory Framework New York Tax Law § 1402-a imposes an additional transfer tax — commonly known as the "mansion tax" — on each conveyance of "residential real property" where the consideration for the conveyance is $1,000,000 or more. The mansion tax is payable by the grantee (Buyer), in contrast to the RETT base tax, which is a grantor (Seller) o

1. Confirm our analysis with Laura Siddiqui, CPA, at Edgemont Nash & Co. LLP, who serves as the Buyer's tax advisor for this transaction.

2. Monitor for any recent TSB-M advisory memoranda, opinion letters, or legislative amendments that may bear on the applicability of the mansion tax to mixed-use properties.

3. Include protective language in the PSA addressing the allocation of mansion tax risk in the event that the NYC Department of Finance or the NYS Department of Taxation and Finance takes a contrary position and assesses the mansion tax on all or a portion of the consideration. C. Risk Assessment We assess the risk of mansion tax imposition on this transaction as low based on the current statutory language and availa

VII. Mortgage Recording Tax (MRT) A. Statutory Framework The Mortgage Recording Tax is imposed under two separate but complementary statutory schemes applicable to mortgages recorded on property located within New York City: New York State Mortgage Recording Tax: Imposed under Article 11 of the New York Tax Law (§§ 253 through 258), the state MRT applies to the recording of each mortgage of real property situated in

1. CEMA Overview. New York Tax Law § 255 provides a mechanism by which the MRT may be reduced when an existing mortgage on a property is assigned, rather than satisfied and discharged, in connection with a refinancing or acquisition. Under a CEMA structure, the existing mortgage is assigned by the existing lender to the new lender (or to the borrower as an intermediate step), and the existing mortgage is then consoli

2. CEMA MRT Calculation. The MRT payable under a CEMA structure would be calculated as follows: New Mortgage Amount: $78,000,000 Existing Mortgage Amount (to be assigned): $28,700,000 New Money: $78,000,000 − $28,700,000 = $49,300,000 MRT Rate: 2.80% MRT on New Money = $49,300,000 × 0.028 = $1,380,400

3. CEMA Savings. The CEMA structure would yield the following savings to the Buyer: The potential savings of $803,600 represent a significant reduction in the Buyer's closing costs and strongly support the pursuit of a CEMA structure. We recommend that the Buyer make the achievement of a CEMA a priority in pre-closing negotiations and coordination.

4. CEMA Requirements and Practical Considerations. The successful implementation of a CEMA structure requires the cooperation and coordination of multiple parties, including the existing lender (Eastbridge), the new lender (Pinnacle), the title company (Granite State), and the attorneys for all parties. The following are the key requirements and practical considerations: Eastbridge Cooperation. Eastbridge Commercial

5. Risks to CEMA. While we are optimistic about the feasibility of a CEMA in this transaction, a number of risks should be noted: Eastbridge Refusal or Delay. Eastbridge has no legal obligation to cooperate in a CEMA. If Eastbridge declines to assign the Existing Mortgage — or imposes conditions that are commercially unreasonable or that cannot be satisfied within the available time frame — the CEMA will not be achie

VIII. Summary of All Tax Obligations Estimated Tax Obligations at Closing The following table consolidates all estimated transfer-related taxes and mortgage recording taxes applicable to the transaction: Total Buyer Tax Exposure Best Case (CEMA achieved): $1,380,400 (MRT on new money only) Worst Case (no CEMA): $2,184,000 (full MRT on $78,000,000 mortgage) Potential Additional Exposure (mansion tax, if assessed on re

IX. PSA Recommendations Based on the foregoing analysis, we recommend that the following provisions be incorporated into the PSA to properly document the allocation of tax obligations, to provide appropriate protections for the Buyer, and to facilitate the CEMA process:

1. Express Allocation of Transfer Taxes. The PSA should include an explicit provision confirming that the Seller is responsible for the payment of all transfer taxes arising from the conveyance, including (a) the NYC Real Property Transfer Tax in the amount of $3,150,000 (or such other amount as may be computed based on the final consideration at closing) and (b) the NYS Real Estate Transfer Tax in the amount of $780

2. Seller Cooperation Covenant for CEMA. The PSA should include a covenant by the Seller to use commercially reasonable efforts to cause Eastbridge Commercial Bank, N.A. to assign (rather than satisfy and discharge) the Existing Mortgage in connection with the closing, and to cooperate in all respects reasonably necessary to effectuate the CEMA, including by executing such documents and providing such information as

3. Seller Indemnification for Transfer Tax Obligations. The PSA should include a Seller indemnification in favor of the Buyer with respect to any and all transfer tax obligations arising from the conveyance, including any assessments, deficiencies, penalties, or interest imposed by the NYC Department of Finance or the NYS Department of Taxation and Finance in connection with the NYC RPT or the NYS RETT. This indemnif

4. Mansion Tax Contingency. The PSA should address the allocation of risk in the unlikely event that the mansion tax is assessed on all or a portion of the consideration attributable to the residential component of the Property. We recommend a provision specifying that (a) the Seller shall be responsible for any transfer-tax-related assessments attributable to the conveyance (including any mansion tax assessed agains

5. Tax Return Filing. The PSA should include a provision requiring the timely preparation and filing of all required transfer tax returns and reports, including Form NYC-RPT, Form TP-584, and Form RP-5217, in connection with the recording of the deed. The PSA should designate which party (or which party's counsel) is responsible for preparation of each return and should require cooperation by both parties in providin

6. Real Property Tax Proration. While not a transfer tax, the PSA should also address the proration of real property taxes at closing. The annual real property tax for the Property for the City of New York fiscal year 2025/2026 is approximately $2,640,000. Real property taxes should be prorated as of the closing date on a per diem basis, with the Seller responsible for taxes attributable to the period prior to and in

X. Coordination with Advisors The successful completion of this transaction, including the optimization of the Buyer's tax position and the achievement of CEMA savings, will require close coordination among the following advisors and service providers. Set forth below is a summary of the key contacts and their roles in connection with the transfer tax and MRT analysis: Edgemont Nash & Co. LLP — Laura Siddiqui, CPA. M

XI. Next Steps The following action items should be pursued in connection with the transfer tax and MRT matters addressed in this memorandum. We recommend that all items be initiated promptly to ensure adequate lead time prior to the target closing date of June 30, 2026:

1. Finalize and Transmit CEMA Request Letter to Eastbridge. The draft CEMA cooperation request letter prepared under separate cover should be finalized, approved by the Buyer, and transmitted to Eastbridge Commercial Bank, N.A. as soon as practicable. Given the importance of Eastbridge's cooperation to the realization of $803,600 in potential MRT savings, we recommend that this letter be transmitted no later than the

2. Confirm CEMA Structure with Pinnacle. We will coordinate with Daniel Ortega at Pinnacle Federal Savings Bank to confirm that the CEMA structure is acceptable to Pinnacle and to identify any specific requirements or conditions that Pinnacle may impose. This confirmation should be obtained prior to PSA execution (target: April 11, 2026) so that the CEMA provisions in the PSA can be drafted with specificity.

3. Confirm Mansion Tax Non-Applicability. We will coordinate with Laura Siddiqui, CPA, at Edgemont Nash & Co. LLP to confirm our analysis that the NYS mansion tax does not apply to this transaction. Ms. Siddiqui should review the relevant statutory provisions, available TSB-M memoranda, and any recent administrative guidance, and provide a written confirmation or analysis supporting (or, if necessary, qualifying) our

4. Incorporate Tax Provisions into Draft PSA. The transfer tax allocation provisions, CEMA cooperation covenants, indemnification provisions, mansion tax contingency language, and tax return filing provisions recommended in Section IX above should be incorporated into the draft PSA. We will prepare initial drafts of these provisions for inclusion in the PSA and will circulate them for review by Angela Fontaine and Ma

5. Coordinate with Granite State Title Insurance Company on CEMA. We will engage Martin Clearfield at Granite State to review the existing title policy for CEMA compatibility, to identify any title endorsement requirements specific to the CEMA structure, and to ensure that the title commitment for the new owner's and lender's policies reflects the CEMA transaction. This coordination should be initiated promptly so th

6. Prepare Draft Transfer Tax Returns. In coordination with Edgemont Nash & Co. LLP and the Seller's counsel, we will prepare drafts of the required transfer tax returns — Form NYC-RPT (New York City Real Property Transfer Tax Return), Form TP-584 (Combined Real Estate Transfer Tax Return), and Form RP-5217 (Real Property Transfer Report) — for review and finalization prior to closing. These returns must be in final

7. Monitor Legislative and Regulatory Developments. We will continue to monitor for any legislative proposals, enacted legislation, administrative rulings, or regulatory changes that may affect the applicable transfer tax rates, MRT rates, or mansion tax provisions prior to closing. In particular, we will monitor for any changes to the NYC RPT or NYS RETT rate schedules, any amendments to the mansion tax statute or i

XII. Disclaimer and Qualification This memorandum is based on the provisions of the New York Tax Law, the New York City Administrative Code, and the rules, regulations, and guidance issued by the New York State Department of Taxation and Finance and the New York City Department of Finance, in each case as currently in effect as of the date hereof (March 18, 2026). Tax rates, exemptions, and obligations are subject to