Contract analysis

1. IRS Form 2848 (Power of Attorney and Declaration of Representative)

2. IRS User Fee Payment of $38,000 (Category 2 — Specific Issues, per Rev. Proc. 2025-1, Appendix A) via Ridgeline National Bank, N.A. check no. 00471826, payable to "United States Treasury"

3. Supporting Exhibits A through I, as described in Section IX herein Authorized Representatives: All communications regarding this ruling request should be directed to: Sylvia Hartwell, Partner Calderwood & Harkness LLP 1750 K Street NW, Suite 900 Washington, DC 20006 Telephone: (202) 555-7400 Email: shartwell@calderwoodharkness.com Right-click to update Table of Contents

I. INTRODUCTION A. Purpose of the Request Calderwood & Harkness LLP, as tax counsel to Fairwater Real Estate Investment Trust ("Fairwater" or "FREIT"), respectfully requests private letter rulings from the Internal Revenue Service ("IRS" or the "Service") regarding whether certain transactions undertaken in connection with Fairwater's proposed acquisition of a portfolio of eleven (11) mixed-use properties (collective

1. User Fee. The required user fee of $38,000 (Category 2 — Specific Issues, per Rev. Proc. 2025-1, Appendix A) is enclosed with this request. Payment is made by check drawn on Ridgeline National Bank, N.A., check no. 00471826, in the amount of $38,000, payable to "United States Treasury." A copy of the check is attached hereto as Exhibit B.

2. Power of Attorney. IRS Form 2848 (Power of Attorney and Declaration of Representative) is enclosed as Exhibit A, designating Sylvia Hartwell (PTIN: P01882447) and Garrett Simmons (PTIN: P02094518) of Calderwood & Harkness LLP as the authorized representatives of Fairwater Real Estate Investment Trust with respect to this ruling request and all matters related thereto. The Form 2848 was executed on September 19, 20

3. Supporting Exhibits. The supporting exhibits listed in Section IX herein are enclosed with this request, including certified copies of Fairwater's Articles of Trust, an organizational chart of Fairwater's current and proposed subsidiary structure, a summary of the Southgate Portfolio properties, the executive summary of the independent appraisal supporting the arm's-length rent determination, the form of the propo

4. Communications. All communications from the Service regarding this ruling request should be directed to Sylvia Hartwell at the address set forth on the cover page of this request. Ms. Hartwell is authorized to receive all correspondence, participate in all conferences, and take all actions necessary in connection with this request on behalf of Fairwater. C. Confidentiality Notice This ruling request contains "retu

II. STATEMENT OF FACTS A. Description of the Taxpayer — Fairwater Real Estate Investment Trust

1. Entity Information. Fairwater Real Estate Investment Trust is a Maryland real estate investment trust organized under the laws of the State of Maryland. The following summarizes Fairwater's key organizational information: • Full Legal Name: Fairwater Real Estate Investment Trust • Entity Type: Maryland real estate investment trust • Employer Identification Number (EIN): 52-4718263 • Headquarters: 2400 Harbor Prome

2. REIT Status History. Fairwater elected REIT status effective for its taxable year ended December 31, 2009, by filing a timely federal income tax return on IRS Form 1120-REIT for that taxable year in which it affirmatively elected to be treated as a real estate investment trust under Subchapter M, Part II of the Code. Since that initial election, Fairwater has continuously qualified as a REIT under Sections 856 thr

3. Business Overview. Fairwater's primary business consists of the ownership, operation, acquisition, development, and management of Class-A office, retail, and mixed-use properties across the Mid-Atlantic and Southeast regions of the United States. Fairwater is among the leading REITs in the Mid-Atlantic region, with a diversified portfolio spanning multiple states and property types. As of the date of this ruling r

4. Current REIT Qualification Metrics (Pre-Acquisition). For its most recently completed taxable year ended December 31, 2024, Fairwater satisfied all applicable REIT qualification requirements under the Code, including the following: Distribution Requirement (IRC § 857(a)(1)). Fairwater distributed approximately 92.7% of its REIT taxable income (as defined in Section 857(b)(2) of the Code, determined without regard

1. Purchase and Sale Agreement. On August 1, 2025, Fairwater and Thornfield executed a Purchase and Sale Agreement (the "PSA") pursuant to which Fairwater has agreed to acquire fee simple title to all eleven (11) properties comprising the Southgate Portfolio. The aggregate purchase price under the PSA is Eight Hundred Twelve Million Dollars ($812,000,000), subject to customary prorations and adjustments at closing. T

2. Southgate Portfolio — Property Detail. The following table sets forth a detailed summary of each of the eleven (11) properties comprising the Southgate Portfolio, including property name, location, property type, approximate rentable square footage, and allocated purchase price: A detailed property-by-property summary, including descriptions of the physical improvements, occupancy rates, lease roll schedules, and

3. Asset Allocation. Based on the independent appraisal conducted by Caldwell Valuation Group, LLC, and the analysis performed by Fairwater's internal tax and accounting teams, the aggregate purchase price of the Southgate Portfolio has been allocated between qualifying and non-qualifying assets as follows: Qualifying Real Estate Assets — $664,000,000 (approximately 81.8% of total portfolio value). This amount is att

1. Entity Formation. In connection with the acquisition of the Southgate Portfolio, Fairwater proposes to form Fairwater Southgate TRS, Inc. ("Southgate TRS") as a Maryland corporation organized under the Maryland General Corporation Law. Following its incorporation, Southgate TRS will jointly elect with Fairwater to be treated as a taxable REIT subsidiary under Section 856(l) of the Code. The joint election will be

2. Projected TRS Financials. Following the closing of the Southgate Portfolio acquisition and the transfer of the non-qualifying operating business assets to Southgate TRS, the projected financial profile of Southgate TRS is as follows: • Projected TRS Asset Value (post-restructuring): $147,000,000. This figure is slightly below the $148,000,000 non-qualifying asset allocation set forth in the Caldwell Valuation Grou

3. Intercompany Lease Structure. Following the closing of the acquisition, Fairwater (as fee owner and lessor) will enter into intercompany leases with Southgate TRS (as lessee) with respect to the real property underlying the TRS-operated spaces within the Southgate Portfolio properties. The material terms of the proposed intercompany leases are as follows: • Lessor: Fairwater Real Estate Investment Trust • Lessee:

4. Tenant Improvement Allowances. In addition to the intercompany leases with Southgate TRS, Fairwater, in its capacity as fee owner of the Southgate Portfolio properties, will fund certain tenant improvement allowances ("TIAs") for the benefit of third-party retail tenants occupying space in the Southgate Portfolio. These TIAs are provided directly to third-party tenants (not to Southgate TRS) and are designed to fa

III. REPRESENTATIONS Fairwater hereby makes the following representations in support of this ruling request. Fairwater understands that the rulings issued by the Service in response to this request will be based upon the accuracy and completeness of these representations, and that any material misstatement or omission may render any ruling inapplicable or subject to revocation. A. General Representations

1. Fairwater has qualified as a real estate investment trust under Sections 856 through 860 of the Code for every taxable year since its initial REIT election, effective for the taxable year ended December 31, 2009, and intends to continue qualifying as a REIT for all future taxable years.

2. All facts set forth in this ruling request are true, correct, and complete to the best of the knowledge and belief of Fairwater and its authorized officers. Fairwater is not aware of any material fact or circumstance that has been omitted from this request that could affect the analysis or conclusions set forth herein.

3. The proposed transactions described herein — including the acquisition of the Southgate Portfolio, the formation and capitalization of Southgate TRS, the execution of the intercompany leases, and the provision of tenant improvement allowances — are being undertaken for bona fide business purposes and are not designed, in whole or in part, to circumvent, avoid, or evade the REIT qualification requirements under the

4. The aggregate purchase price of $812,000,000 for the Southgate Portfolio was negotiated at arm's length between unrelated parties (Fairwater and Thornfield). No officer, director, trustee, or beneficial owner of more than five percent (5%) of Fairwater's shares of beneficial interest holds any direct or indirect ownership interest in Thornfield, Rowan Capital Partners, LP, or any other entity affiliated with Thorn

5. The allocation of the aggregate purchase price between qualifying real estate assets ($664,000,000) and non-qualifying operating business assets ($148,000,000) was determined based on an independent appraisal conducted by Caldwell Valuation Group, LLC, and reflects the fair market values of the respective asset categories as of the date of the appraisal. The allocation was not made for the purpose of artificially

6. Fairwater and Southgate TRS will timely file a joint election under Section 856(l) of the Code for Southgate TRS to be treated as a taxable REIT subsidiary for federal income tax purposes. The joint election will be filed in the manner prescribed by the Code, the Treasury Regulations, and applicable IRS guidance.

7. Southgate TRS will be a wholly owned subsidiary of Fairwater. Fairwater will own one hundred percent (100%) of the issued and outstanding shares of common stock of Southgate TRS. No other person or entity will hold any equity interest in Southgate TRS.

8. The projected TRS asset value of $147,000,000 will represent approximately 1.83% of Fairwater's projected total assets of $8,030,000,000 at the close of the calendar quarter in which the acquisition closes. This ratio is substantially below the 20% limitation imposed by Section 856(c)(4)(B)(ii) of the Code. Fairwater intends to monitor the TRS asset ratio on a quarterly basis to ensure continued compliance with th

9. Southgate TRS will operate the food-and-beverage, parking management, and co-working-space components of the Southgate Portfolio properties. Southgate TRS will not engage in any activities beyond the operation of these ancillary businesses and activities reasonably incidental thereto, unless Fairwater determines that such additional activities are consistent with maintaining Fairwater's REIT status. D. Representat

10. The annual base rent of $18,700,000 under the intercompany leases between Fairwater and Southgate TRS was determined to be arm's-length rent by an independent appraisal performed by Caldwell Valuation Group, LLC, dated August 30, 2025. The appraisal was conducted in accordance with generally accepted valuation standards and analyzed comparable lease transactions for similar property types in the relevant geograph

11. The intercompany leases will be structured as triple-net (NNN) leases with an initial term of ten (10) years, two (2) consecutive five (5)-year renewal options, and a fixed annual rent escalator of 2.5%. Under the triple-net structure, Southgate TRS will be solely responsible for all operating expenses, insurance premiums, and real property taxes attributable to the TRS-operated spaces within the Southgate Portfo

12. Fairwater will not furnish or render services to the tenants, customers, or occupants of the TRS-operated spaces, other than through Southgate TRS or through independent contractors from whom Fairwater derives no income. Any services provided in connection with the food-and-beverage, parking management, or co-working-space operations will be performed by employees of Southgate TRS or by independent contractors en

13. The tenant improvement allowances funded by Fairwater and provided to third-party retail tenants in the Southgate Portfolio are customary in the commercial real estate market and are consistent with industry practice for Class-A mixed-use properties. The amount and nature of the tenant improvement allowances are comparable to those provided by Fairwater to third-party tenants across its existing ninety-four (94)-

14. The tenant improvement allowances do not constitute compensation for services furnished or rendered by Fairwater to tenants. The allowances represent capital contributions by the landlord (Fairwater) to the build-out and improvement of the leased premises, which become a permanent part of the real property owned by Fairwater. The allowances are negotiated as a component of the overall lease economics and are refl

15. Fairwater will not manage or operate the spaces to which tenant improvement allowances relate in a manner that would give rise to impermissible tenant service income within the meaning of Section 856(d)(7)(C)(i) of the Code. The construction and build-out of tenant improvements will be performed by independent contractors retained by Fairwater or by the tenants themselves. Fairwater will not perform construction,

16. After giving effect to the proposed acquisition of the Southgate Portfolio and the formation and capitalization of Southgate TRS, Fairwater will satisfy each of the following REIT qualification tests: (a) The 75% asset test under Section 856(c)(4)(A) of the Code (projected result: 81.9%, exceeding the 75% threshold); (b) The 20% TRS asset test under Section 856(c)(4)(B)(ii) of the Code (projected result: 1.83%, w

17. Fairwater intends to continue distributing at least 90% of its REIT taxable income (as defined in Section 857(b)(2) of the Code, determined without regard to the deduction for dividends paid and excluding any net capital gain) for all future taxable years, in compliance with the distribution requirement of Section 857(a)(1) of the Code.

IV. RULINGS REQUESTED Fairwater respectfully requests the following three (3) private letter rulings from the Internal Revenue Service: A. Ruling 1 — Rents from Real Property Fairwater requests a ruling that the rents received by Fairwater from Fairwater Southgate TRS, Inc. ("Southgate TRS") under the intercompany leases for the use of real property within the Southgate Portfolio properties will constitute "rents fro

V. LEGAL ANALYSIS A. Overview of REIT Qualification Requirements The Internal Revenue Code provides a comprehensive framework for the taxation of real estate investment trusts in Sections 856 through 860. Congress enacted the REIT provisions to enable investors to pool their capital for investment in diversified real estate portfolios and to receive the economic benefits of direct real estate ownership — including cu

1. Definition of Rents from Real Property. Section 856(d)(1) of the Code defines "rents from real property" for purposes of the 75% and 95% gross income tests. Subject to certain exclusions, the term includes (A) rents from interests in real property, (B) charges for services customarily furnished or rendered in connection with the rental of real property, whether or not such charges are separately stated, and (C) re

Section 856(d)(2) of the Code excludes certain amounts from the definition of rents from real property. The exclusions relevant to this ruling request include: (A) Rents based on net income or profits. Section 856(d)(2)(A) excludes from rents from real property any amount received or accrued, directly or indirectly, with respect to any real or personal property, if the determination of such amount depends in whole or

2. TRS Rent Exception Under IRC § 856(d)(8). Section 856(d)(8)(A) of the Code provides a critical exception to the related-party rent exclusion for rents received by a REIT from its TRS. Under this provision, amounts received by a REIT from a TRS shall not be excluded from "rents from real property" by reason of Section 856(d)(2)(B) — i.e., solely because the TRS is a related party — if the requirements of Section 85

Section 856(d)(8)(B) requires that at least 90% of the leased space of the property must be leased to persons other than TRSs and related persons, and that the amounts paid by the TRS are substantially comparable to rents paid by non-related-party tenants for comparable space. Alternatively, under Section 856(d)(8)(A)(ii), if the TRS itself operates the space (rather than subleasing it to third parties), the rents ar

3. Arm's-Length Rent Requirement Under IRC § 856(d)(7)(B). Section 856(d)(7)(B) of the Code provides that rents received from a TRS shall be treated as rents from real property only if the rents are "substantially comparable to" the rents paid by other tenants of the REIT's property for comparable space, or, where the TRS is the sole tenant of the property (or the sole tenant of a particular component), the rents mus

4. Conclusion — Ruling 1. Based on the foregoing analysis, the rents to be received by Fairwater from Southgate TRS under the intercompany leases satisfy the arm's-length requirement of Section 856(d)(7)(B) of the Code. Because the rents are at arm's-length rates, the exception provided by Section 856(d)(8) of the Code applies, and the rents are not excluded from "rents from real property" under Section 856(d)(2)(B)

1. The 20% TRS Asset Test — IRC § 856(c)(4)(B)(ii). Section 856(c)(4)(B)(ii) of the Code provides that not more than 20% of the value of a REIT's total assets may be represented by securities of one or more taxable REIT subsidiaries. This limitation was enacted as part of the REIT Improvement Act of 1999 and was subsequently amended by the Housing and Economic Recovery Act of 2008 (Public Law 110-289), which increase

2. The 75% Asset Test — IRC § 856(c)(4)(A). Section 856(c)(4)(A) of the Code requires that at least 75% of the value of a REIT's total assets at the close of each calendar quarter consist of real estate assets (as defined in Section 856(c)(5)(B)), cash and cash items (including receivables), and Government securities. Real estate assets include interests in real property, interests in mortgages on real property, and

3. The 25% / 5% / 10% Tests. In addition to the 75% asset test and the 20% TRS asset test, Section 856(c)(4)(B) of the Code imposes the following related asset tests: 25% Aggregate Securities Test (Section 856(c)(4)(B)(i)). Not more than 25% of the value of a REIT's total assets may be represented by securities (including TRS securities) other than those described in Section 856(c)(4)(A) (i.e., real estate assets, ca