[sheet: Cover & Summary]

Field	Value
Document Title	Funds Flow Memorandum — Permanent Loan Closing / Bridge Repayment
Prepared By	Lisa Morrow, Lead Associate, Calderwood & Harkness LLP
Reviewed By	Philip Hartmann, Responsible Partner, Calderwood & Harkness LLP
Date Prepared	November 20, 2025
Matter Number	1036-00001
Anticipated Closing Date	November 28, 2025
Transaction	$240,000,000 Permanent CMBS Mortgage Loan — Take-Out of Bridge Facility
Permanent Lender	Clarendon Metropolitan Insurance Company
Permanent Lender Contact	Garrett W. Hollister, Head of CMBS Originations
Permanent Lender Address	1 MetroTech Center, Brooklyn, NY 11201
Permanent Lender NAIC Number	38921
Anticipated CMBS Trust	CLRN 2025-C14 (indicative; subject to pooling)
Borrowers	Fairwater Sun Belt I LLC through Fairwater Sun Belt XIV LLC (14 SPE co-borrowers)
Carve-Out Guarantor	Fairwater Real Estate Investment Trust
Operating Partnership	Fairwater Operating Partnership, L.P.
Bridge Facility Agent	Kensington National Bank, N.A.
Bridge Facility Agent Contact	Thomas J. Pagano, Managing Director, Real Estate Finance
Bridge Facility Agent Address	600 Lexington Avenue, New York, NY 10022
Borrower's Counsel	Calderwood & Harkness LLP, 425 Park Avenue, New York, NY 10022
Permanent Lender's Counsel	Ashworth McPhail LLP, 51 Madison Avenue, 24th Floor, New York, NY 10010
Lender's Counsel (Bridge)	Halcourt Briggs & Devlin LLP, 1221 Avenue of the Americas, New York, NY 10020
Title Insurer	Marlowe Asset Management Title Insurance Group, Inc., 901 Main Street, Suite 1100, Dallas, TX 75202
Financial Advisor	Beacon Ridge Capital Advisors LLC, 300 Park Avenue, Suite 1800, New York, NY 10022
Permanent Loan Amount	$240,000,000

Permanent Loan Fixed Rate	6.25%
Permanent Loan Term	10 years (30-year amortization)
Monthly P&I Payment	$1,477,846 (approx.)
Bridge Loan Outstanding Principal	$240,000,000
Bridge All-In Interest Rate	9.33% (SOFR 4.33% + 500 bps)
Bridge Exit Fee	$0 (waived — repayment from permanent CMBS financing within 9 months of bridge closing; deadline March 31, 2026)
Rate Lock Deposit Reference	CL-CMBS-2025-09-0347
Rate Lock Deposit Amount	$2,400,000 (to be applied as credit at closing)
IMPORTANT NOTE	All wire transfers must be initiated by 12:00 PM ET on November 28, 2025. All amounts are estimates subject to final payoff statement and closing adjustments. Per diem amounts apply if closing date changes.

[sheet: Sources of Funds]

Line Item	Source	Reference	Amount	Notes
1	Permanent Loan Proceeds	Loan Agreement dated November 14, 2025 — Clarendon Metropolitan Insurance Company	$240,000,000.00	Gross loan proceeds; $240,000,000 fixed-rate mortgage loan at 6.25%, 10-year term, 30-year amortization
2	Rate Lock Deposit Credit	Side Letter dated September 15, 2025; Ref. CL-CMBS-2025-09-0347	$2,400,000.00	Rate lock deposit of 1.00% of loan amount ($240,000,000 × 1.00%); refundable at closing and applied as credit against closing costs
3	Borrower Equity Contribution / Shortfall Funding	Fairwater Operating Partnership, L.P.	$9,299,200.00	Shortfall funding required from borrower's available liquidity to cover excess of uses over permanent loan proceeds and rate lock credit
TOTAL SOURCES	$251,699,200.00	Must equal Total Uses

[sheet: Uses of Funds]

Line Item

A. BRIDGE FACILITY PAYOFF — Kensington National Bank, N.A. (Administrative Agent)

1	Bridge Loan — Principal Repayment	See Wire Instructions tab — KNB	$240,000,000.00	Outstanding principal balance as of closing date; $240,000,000 fully funded June 30, 2025; interest-only, no amortization	Per payoff letter from KNB; final amount per payoff statement
2	Bridge Loan — Accrued Interest (June 30, 2025 through November 28, 2025)	See Wire Instructions tab — KNB	$9,212,800.00	$240,000,000 × 9.33% × (148 days / 360 on 30/360 basis) = $9,212,800 (estimated). Per diem = $240,000,000 × 9.33% / 360 = $62,200/day (approx.)	All-in rate = SOFR (4.33%) + 500 bps = 9.33%; accrual period from last interest payment date through closing date; exact amount per KNB payoff statement
3	Bridge Exit Fee	See Wire Instructions tab — KNB	$0.00	$240,000,000 × 0.50% = $1,200,000 — WAIVED	Exit fee waived per Section [__] of Bridge Credit Agreement: repayment from permanent CMBS financing proceeds within 9 months of bridge closing (June 30, 2025); waiver deadline is March 31, 2026; closing on November 28, 2025 satisfies condition
Subtotal — Bridge Payoff	$249,212,800.00	Subject to final payoff statement from KNB

B. PERMANENT LOAN ORIGINATION AND CLOSING COSTS

4	Origination Fee — Clarendon Metropolitan Insurance Company	See Wire Instructions tab — Clarendon Metropolitan	$1,800,000.00	$240,000,000 × 0.75%	Per term sheet dated August 25, 2025 and commitment letter
5	Rate Lock Deposit — Applied as Credit	N/A — net against origination fee / costs	($2,400,000.00)	Credit of $2,400,000 rate lock deposit (Ref. CL-CMBS-2025-09-0347)	Deposit submitted September 15, 2025; fully refundable at closing; applied as credit to reduce net costs payable by borrower

C. TITLE AND RECORDING

6	Title Insurance Premiums — Lender's Policies (14 properties)	See Wire Instructions tab — Marlowe Asset Management Title	$485,000.00	Estimated premiums for lender's ALTA policies on 14 properties; TX (5), GA (3), FL (3), NC (2), TN (1); includes endorsement premiums (ALTA 9.0 series, comprehensive, access, etc.)	Payable to Marlowe Asset Management Title Insurance Group, Inc.; final amount per title company closing statement
7	Recording Fees — Mortgages (14 properties, 5 states)	Various county recorders	$78,500.00	Estimated recording fees for mortgage instruments in 14 counties across TX, GA, FL, NC, and TN	Includes mortgage/deed of trust recording and any applicable documentary stamp taxes or intangible taxes by state
8	Recording Fees — UCC Financing Statements (Fixture Filings)	Various county and state offices	$8,400.00	Estimated UCC-1 fixture filings in 14 counties plus Delaware Secretary of State equity pledge filings	14 county fixture filings + Delaware SOS filing for equity pledges
9	Mortgage Recording / Documentary Stamp Taxes	Various state/county tax authorities	$625,000.00	Estimated state and local transfer/recording taxes; varies significantly by state (FL intangible tax, TN mortgage tax, etc.)	Estimates subject to final title company calculations; FL documentary stamp tax on notes; TN mortgage tax; TX — none; GA intangible tax; NC revenue stamps

D. LEGAL FEES

10	Calderwood & Harkness LLP — Borrower's Counsel Fees and Expenses	See Wire Instructions tab — C&H	$475,000.00	Estimated legal fees for negotiation, documentation, and closing of permanent loan; matter 1036-00001	Includes fees of Philip Hartmann (Responsible Partner), Claudia Merritt (Billing Partner), Lisa Morrow (Lead Associate), Marcus Leung (Working Associate); plus disbursements
11	Ashworth McPhail LLP — Permanent Lender's Counsel Fees and Expenses	See Wire Instructions tab — Ashworth McPhail	$350,000.00	Estimated legal fees of Clarendon Metropolitan's counsel; payable by borrower per commitment letter	Lead Partner: Joanna C. Wexler
12	Local Counsel Fees (5 states — TX, GA, FL, NC, TN)	Various — see Wire Instructions tab	$125,000.00	Estimated fees for local counsel opinions and mortgage review in each property state	Opinions covering enforceability of mortgages and other security documents under local law
13	Halcourt Briggs & Devlin LLP — Bridge Lender's Counsel (Payoff Coordination)	See Wire Instructions tab — HBD	$35,000.00	Estimated legal fees for bridge payoff coordination, preparation of lien releases, UCC-3 terminations; Lead Partner: Kenneth R. Delacroix	Payable by borrower per bridge credit agreement

E. THIRD-PARTY REPORTS AND PROFESSIONAL FEES

14	Thornfield Appraisal Group LLC — Appraisal Fees (14 MAI appraisals)	See Wire Instructions tab — Thornfield	$112,000.00	14 properties × $8,000 per appraisal (estimated average)	Independent MAI appraisals required by Clarendon Metropolitan
15	Environmental Report Updates (Phase I / Phase II)	Various environmental consultants	$84,000.00	14 properties × $6,000 average per property (estimated)	Phase I ESA updates; Phase II if triggered
16	Engineering / Property Condition Reports	Various engineering firms	$70,000.00	14 properties × $5,000 average per property (estimated)	Property condition assessments required by lender
17	Seismic Reports (if applicable)	N/A	$0.00	Not required — no properties in seismic zones	Sun Belt Portfolio located in TX, GA, FL, NC, TN — no seismic report required

F. RESERVE DEPOSITS

18	Tax Reserve (Escrow)	Clarendon Metropolitan — reserve account	$1,450,000.00	Estimated initial deposit for real property tax escrow across 14 properties	Monthly collections to follow per cash management agreement
19	Insurance Reserve (Escrow)	Clarendon Metropolitan — reserve account	$380,000.00	Estimated initial deposit for property insurance premium escrow	Monthly collections to follow per cash management agreement
20	Capital Expenditure Reserve	Clarendon Metropolitan — reserve account	$525,000.00	Initial capital expenditure / replacement reserve deposit	Per loan agreement; subject to ongoing monthly funding of $250/unit/year
21	Deferred Maintenance Reserve (if applicable)	Clarendon Metropolitan — reserve account	$0.00	TBD based on property condition reports	To be determined upon receipt of final engineering reports

G. OTHER COSTS

22	ALTA Survey Update Costs	Various surveyors	$56,000.00	14 properties × $4,000 average per survey update (estimated)	ALTA/NSPS survey updates for each property
23	Good Standing / Existence Certificates	Various Secretaries of State (MD, DE, TX, GA, FL, NC, TN)	$3,500.00	Filing and expedited processing fees for good standing certificates	MD SDAT (Entity ID D19483726), DE SOS (14 SPEs + OP), plus foreign qualification certificates
24	Miscellaneous Closing Costs	Various	$25,000.00	Wire fees, courier, overnight delivery, notarization, document reproduction	Estimated

H. NET PROCEEDS

25	Net Proceeds to Borrower (Fairwater Operating Partnership, L.P.)	See Wire Instructions tab — Fairwater OP	$0.00	Sources and uses balanced after borrower shortfall funding of $9,299,200	No net proceeds to borrower; shortfall funded from Fairwater OP available liquidity
TOTAL USES	$251,699,200.00	Must equal Total Sources

[sheet: Bridge Payoff Detail]

Item	Detail	Amount	Notes
Bridge Credit Agreement	Dated June 30, 2025	Among Fairwater Operating Partnership, L.P. as Borrower, Fairwater REIT as Guarantor, and Kensington National Bank, N.A. as Administrative Agent
Outstanding Principal	As of November 28, 2025	$240,000,000.00	Fully funded; interest-only; no amortization
Interest Rate — Benchmark	30-day Term SOFR	4.33%	As of August 11, 2025 (subject to reset)
Interest Rate — Spread	Applicable Margin	5.00%	500 basis points over SOFR
All-In Interest Rate	SOFR + Spread	9.33%	4.33% + 5.00% = 9.33%
SOFR Floor	3.00%	Current SOFR (4.33%) exceeds floor
Day Count Convention	30/360	Per bridge credit agreement
Accrual Period	Last interest payment date through November 28, 2025	Per diem calculation required for exact payoff
Per Diem Interest	$240,000,000 × 9.33% / 360	$62,200.00	Per day; use for adjustment if closing date shifts
Estimated Accrued Interest	Estimated for closing on November 28, 2025	$9,212,800.00	Subject to final payoff statement from KNB
Exit Fee	0.50% of outstanding principal	$0.00	Waived — repayment from permanent CMBS financing proceeds; closing November 28, 2025 is within 9-month waiver period ending March 31, 2026
Total Bridge Payoff (Estimated)	Principal + Accrued Interest + Exit Fee	$249,212,800.00	Subject to final payoff letter from KNB
SYNDICATE LENDER ALLOCATION	All payments made to KNB as Administrative Agent for distribution to syndicate
Kensington National Bank, N.A.	40.00% commitment ($96,000,000)	$99,685,120.00	40% of total payoff
Pinnacle Trust Company	25.00% commitment ($60,000,000)	$62,303,200.00	25% of total payoff
Greystone Commerce Bank	20.00% commitment ($48,000,000)	$49,842,560.00	20% of total payoff
Redfield Capital Markets, LLC	15.00% commitment ($36,000,000)	$37,381,920.00	15% of total payoff
TOTAL SYNDICATE	100.00%	$249,212,800.00	Equals Total Bridge Payoff

[sheet: Wire Instructions]

Payee	Purpose / Reference	Amount	Bank Name	ABA / Routing Number	Account Number	Account Name	Reference / Memo	Contact Person	Contact Phone
Kensington National Bank, N.A.	Bridge Facility Payoff — Principal + Accrued Interest	$249,212,800.00	[Payoff Bank TBD per KNB payoff letter]	[TBD]	[TBD]	Kensington National Bank, N.A. — Agent Account	Fairwater OP Bridge Payoff — CCA dated 6/30/2025	Thomas J. Pagano	[TBD]
Clarendon Metropolitan Insurance Company	Origination Fee (net of rate lock deposit credit)	($600,000.00)	[TBD per Clarendon Metropolitan]	[TBD]	[TBD]	Clarendon Metropolitan Insurance Company	CMBS Loan Origination Fee — CLRN 2025-C14 / CL-CMBS-2025-09-0347	Garrett W. Hollister	[TBD]
Clarendon Metropolitan Insurance Company	Reserve Deposits (Tax, Insurance, CapEx)	$2,355,000.00	[TBD — reserve account]	[TBD]	[TBD]	Clarendon Metropolitan — Reserve Account	Initial Reserve Deposits — Sun Belt Portfolio	Garrett W. Hollister	[TBD]
Marlowe Asset Management Title Insurance Group, Inc.	Title Insurance Premiums — 14 Lender's Policies	$485,000.00	[TBD per Marlowe Asset Management Title]	[TBD]	[TBD]	Marlowe Asset Management Title Insurance Group, Inc.	Sun Belt Portfolio — Lender's Title Policies	[TBD]	[TBD]
Calderwood & Harkness LLP	Legal Fees and Expenses — Borrower's Counsel	$475,000.00	[TBD per C&H]	[TBD]	[TBD]	Calderwood & Harkness LLP — Client Trust Account	Matter No. 1036-00001 / Fairwater REIT	Philip Hartmann / Claudia Merritt	[TBD]
Ashworth McPhail LLP	Legal Fees and Expenses — Permanent Lender's Counsel	$350,000.00	[TBD per Ashworth McPhail]	[TBD]	[TBD]	Ashworth McPhail LLP — Trust Account	Clarendon Metropolitan / Fairwater Sun Belt Portfolio	Joanna C. Wexler	[TBD]
Halcourt Briggs & Devlin LLP	Legal Fees — Bridge Lender's Counsel Payoff Coordination	$35,000.00	[TBD per HBD]	[TBD]	[TBD]	Halcourt Briggs & Devlin LLP — Trust Account	KNB / Fairwater Bridge Payoff	Kenneth R. Delacroix	[TBD]
Local Counsel (5 states)	Legal Fees — Local Counsel Opinions	$125,000.00	[TBD — separate wires per firm]	[TBD]	[TBD]	[TBD]	Fairwater Sun Belt Portfolio — Local Opinions	[TBD]	[TBD]
Thornfield Appraisal Group LLC	Appraisal Fees — 14 MAI Appraisals	$112,000.00	[TBD per Thornfield]	[TBD]	[TBD]	Thornfield Appraisal Group LLC	Sun Belt Portfolio Appraisals	[TBD]	[TBD]
Various — Recording / Tax Authorities	Recording Fees, Documentary Stamp Taxes, UCC Filing Fees	$711,900.00	Via title company / escrow	N/A	N/A	Through Marlowe Asset Management Title Insurance Group	Recording and tax payments via title company	[TBD]	[TBD]
Various — Environmental / Engineering	Phase I Updates, Property Condition Reports	$154,000.00	[TBD — separate wires]	[TBD]	[TBD]	[Various]	Sun Belt Portfolio — Third-Party Reports	[TBD]	[TBD]
Various — Surveys, Good Standing, Misc.	ALTA Survey Updates, Good Standing Certificates, Misc.	$84,500.00	[TBD — separate wires or via title company]	[TBD]	[TBD]	[Various]	Sun Belt Portfolio — Closing Costs	[TBD]	[TBD]
Fairwater Operating Partnership, L.P.	Borrower Funding of Shortfall (incoming wire)	$9,299,200.00	[TBD per Fairwater OP]	[TBD]	[TBD]	Fairwater Operating Partnership, L.P.	Closing Shortfall Funding — Sun Belt Portfolio Refinancing	Naomi T. Sinclair, CFO	[TBD]

[sheet: Reconciliation]

SOURCES

Permanent Loan Proceeds (Clarendon Metropolitan)	$240,000,000.00	Gross loan proceeds
Rate Lock Deposit Credit	$2,400,000.00	Ref. CL-CMBS-2025-09-0347; submitted September 15, 2025
Borrower Equity Contribution / Shortfall Funding	$9,299,200.00	Funded by Fairwater OP from available liquidity; minimum liquidity covenant under bridge ≥ $50,000,000
TOTAL SOURCES	$251,699,200.00

USES

Bridge Payoff — Principal	$240,000,000.00	To KNB as Administrative Agent
Bridge Payoff — Accrued Interest	$9,212,800.00	Estimated; per diem ≈ $62,200/day
Bridge Exit Fee	$0.00	Waived (CMBS take-out before March 31, 2026)
Origination Fee (net of rate lock credit)	($600,000.00)	$1,800,000 fee less $2,400,000 deposit credit
Title Insurance Premiums	$485,000.00	Marlowe Asset Management Title Insurance Group, Inc.
Recording Fees & Taxes	$711,900.00	14 properties across TX, GA, FL, NC, TN
Legal Fees — All Counsel	$985,000.00	C&H ($475K) + Ashworth McPhail ($350K) + Local ($125K) + HBD ($35K)
Third-Party Reports	$266,000.00	Appraisals ($112K) + Environmental ($84K) + Engineering ($70K)
Reserve Deposits	$2,355,000.00	Tax ($1,450K) + Insurance ($380K) + CapEx ($525K)
Surveys, Good Standing, Miscellaneous	$84,500.00	Surveys ($56K) + Good Standing ($3.5K) + Misc ($25K)
Net Proceeds to Borrower	$0.00	Sources and uses balanced; no net proceeds after shortfall funding
TOTAL USES	$251,699,200.00
VARIANCE (Sources − Uses)	$0.00	Balanced

BRIDGE vs. PERMANENT ECONOMICS COMPARISON

Bridge Annual Interest Cost	$22,392,000.00	$240M × 9.33% (interest-only)
Permanent Annual Debt Service	$17,734,152.00	$1,477,846/month × 12 (P&I at 6.25%, 30-yr amort)
Annual Debt Service Savings	$4,657,848.00	Total debt service savings (note: permanent includes amortization)
Annual Interest-Only Savings	$7,392,000.00	Interest component savings: $240M × (9.33% − 6.25%) = $240M × 3.08%
Bridge DSCR	1.169x	$26,180,000 NOI ÷ $22,392,000
Permanent DSCR	1.476x	$26,180,000 NOI ÷ $17,734,152
Bridge LTV	62.34%	$240,000,000 ÷ $385,000,000
Permanent LTV	62.34%	$240,000,000 ÷ $385,000,000 (same loan amount; same appraised value)

[sheet: Cover & Summary]
Field | Value
Document Title | Funds Flow Memorandum — Permanent Loan Closing / Bridge Repayment
Prepared By | Lisa Morrow, Lead Associate, Calderwood & Harkness LLP
Reviewed By | Philip Hartmann, Responsible Partner, Calderwood & Harkness LLP
Date Prepared | November 20, 2025
Matter Number | 1036-00001
Anticipated Closing Date | November 28, 2025
Transaction | $240,000,000 Permanent CMBS Mortgage Loan — Take-Out of Bridge Facility
Permanent Lender | Clarendon Metropolitan Insurance Company
Permanent Lender Contact | Garrett W. Hollister, Head of CMBS Originations
Permanent Lender Address | 1 MetroTech Center, Brooklyn, NY 11201
Permanent Lender NAIC Number | 38921
Anticipated CMBS Trust | CLRN 2025-C14 (indicative; subject to pooling)
Borrowers | Fairwater Sun Belt I LLC through Fairwater Sun Belt XIV LLC (14 SPE co-borrowers)
Carve-Out Guarantor | Fairwater Real Estate Investment Trust
Operating Partnership | Fairwater Operating Partnership, L.P.
Bridge Facility Agent | Kensington National Bank, N.A.
Bridge Facility Agent Contact | Thomas J. Pagano, Managing Director, Real Estate Finance
Bridge Facility Agent Address | 600 Lexington Avenue, New York, NY 10022
Borrower's Counsel | Calderwood & Harkness LLP, 425 Park Avenue, New York, NY 10022
Permanent Lender's Counsel | Ashworth McPhail LLP, 51 Madison Avenue, 24th Floor, New York, NY 10010
Lender's Counsel (Bridge) | Halcourt Briggs & Devlin LLP, 1221 Avenue of the Americas, New York, NY 10020
Title Insurer | Marlowe Asset Management Title Insurance Group, Inc., 901 Main Street, Suite 1100, Dallas, TX 75202
Financial Advisor | Beacon Ridge Capital Advisors LLC, 300 Park Avenue, Suite 1800, New York, NY 10022
Permanent Loan Amount | $240,000,000
Permanent Loan Fixed Rate | 6.25%
Permanent Loan Term | 10 years (30-year amortization)
Monthly P&I Payment | $1,477,846 (approx.)
Bridge Loan Outstanding Principal | $240,000,000
Bridge All-In Interest Rate | 9.33% (SOFR 4.33% + 500 bps)
Bridge Exit Fee | $0 (waived — repayment from permanent CMBS financing within 9 months of bridge closing; deadline March 31, 2026)
Rate Lock Deposit Reference | CL-CMBS-2025-09-0347
Rate Lock Deposit Amount | $2,400,000 (to be applied as credit at closing)
IMPORTANT NOTE | All wire transfers must be initiated by 12:00 PM ET on November 28, 2025. All amounts are estimates subject to final payoff statement and closing adjustments. Per diem amounts apply if closing date changes.
[sheet: Sources of Funds]
Line Item | Source | Reference | Amount | Notes
1 | Permanent Loan Proceeds | Loan Agreement dated November 14, 2025 — Clarendon Metropolitan Insurance Company | $240,000,000.00 | Gross loan proceeds; $240,000,000 fixed-rate mortgage loan at 6.25%, 10-year term, 30-year amortization
2 | Rate Lock Deposit Credit | Side Letter dated September 15, 2025; Ref. CL-CMBS-2025-09-0347 | $2,400,000.00 | Rate lock deposit of 1.00% of loan amount ($240,000,000 × 1.00%); refundable at closing and applied as credit against closing costs
3 | Borrower Equity Contribution / Shortfall Funding | Fairwater Operating Partnership, L.P. | $9,299,200.00 | Shortfall funding required from borrower's available liquidity to cover excess of uses over permanent loan proceeds and rate lock credit
TOTAL SOURCES | $251,699,200.00 | Must equal Total Uses
[sheet: Uses of Funds]
Line Item | Payee / Recipient | Wire Ref | Amount | Calculation / Basis | Notes
A. BRIDGE FACILITY PAYOFF — Kensington National Bank, N.A. (Administrative Agent)
1 | Bridge Loan — Principal Repayment | See Wire Instructions tab — KNB | $240,000,000.00 | Outstanding principal balance as of closing date; $240,000,000 fully funded June 30, 2025; interest-only, no amortization | Per payoff letter from KNB; final amount per payoff statement
2 | Bridge Loan — Accrued Interest (June 30, 2025 through November 28, 2025) | See Wire Instructions tab — KNB | $9,212,800.00 | $240,000,000 × 9.33% × (148 days / 360 on 30/360 basis) = $9,212,800 (estimated). Per diem = $240,000,000 × 9.33% / 360 = $62,200/day (approx.) | All-in rate = SOFR (4.33%) + 500 bps = 9.33%; accrual period from last interest payment date through closing date; exact amount per KNB payoff statement
3 | Bridge Exit Fee | See Wire Instructions tab — KNB | $0.00 | $240,000,000 × 0.50% = $1,200,000 — WAIVED | Exit fee waived per Section [__] of Bridge Credit Agreement: repayment from permanent CMBS financing proceeds within 9 months of bridge closing (June 30, 2025); waiver deadline is March 31, 2026; closing on November 28, 2025 satisfies condition
Subtotal — Bridge Payoff | $249,212,800.00 | Subject to final payoff statement from KNB
B. PERMANENT LOAN ORIGINATION AND CLOSING COSTS
4 | Origination Fee — Clarendon Metropolitan Insurance Company | See Wire Instructions tab — Clarendon Metropolitan | $1,800,000.00 | $240,000,000 × 0.75% | Per term sheet dated August 25, 2025 and commitment letter
5 | Rate Lock Deposit — Applied as Credit | N/A — net against origination fee / costs | ($2,400,000.00) | Credit of $2,400,000 rate lock deposit (Ref. CL-CMBS-2025-09-0347) | Deposit submitted September 15, 2025; fully refundable at closing; applied as credit to reduce net costs payable by borrower
C. TITLE AND RECORDING
6 | Title Insurance Premiums — Lender's Policies (14 properties) | See Wire Instructions tab — Marlowe Asset Management Title | $485,000.00 | Estimated premiums for lender's ALTA policies on 14 properties; TX (5), GA (3), FL (3), NC (2), TN (1); includes endorsement premiums (ALTA 9.0 series, comprehensive, access, etc.) | Payable to Marlowe Asset Management Title Insurance Group, Inc.; final amount per title company closing statement
7 | Recording Fees — Mortgages (14 properties, 5 states) | Various county recorders | $78,500.00 | Estimated recording fees for mortgage instruments in 14 counties across TX, GA, FL, NC, and TN | Includes mortgage/deed of trust recording and any applicable documentary stamp taxes or intangible taxes by state
8 | Recording Fees — UCC Financing Statements (Fixture Filings) | Various county and state offices | $8,400.00 | Estimated UCC-1 fixture filings in 14 counties plus Delaware Secretary of State equity pledge filings | 14 county fixture filings + Delaware SOS filing for equity pledges
9 | Mortgage Recording / Documentary Stamp Taxes | Various state/county tax authorities | $625,000.00 | Estimated state and local transfer/recording taxes; varies significantly by state (FL intangible tax, TN mortgage tax, etc.) | Estimates subject to final title company calculations; FL documentary stamp tax on notes; TN mortgage tax; TX — none; GA intangible tax; NC revenue stamps
D. LEGAL FEES
10 | Calderwood & Harkness LLP — Borrower's Counsel Fees and Expenses | See Wire Instructions tab — C&H | $475,000.00 | Estimated legal fees for negotiation, documentation, and closing of permanent loan; matter 1036-00001 | Includes fees of Philip Hartmann (Responsible Partner), Claudia Merritt (Billing Partner), Lisa Morrow (Lead Associate), Marcus Leung (Working Associate); plus disbursements
11 | Ashworth McPhail LLP — Permanent Lender's Counsel Fees and Expenses | See Wire Instructions tab — Ashworth McPhail | $350,000.00 | Estimated legal fees of Clarendon Metropolitan's counsel; payable by borrower per commitment letter | Lead Partner: Joanna C. Wexler
12 | Local Counsel Fees (5 states — TX, GA, FL, NC, TN) | Various — see Wire Instructions tab | $125,000.00 | Estimated fees for local counsel opinions and mortgage review in each property state | Opinions covering enforceability of mortgages and other security documents under local law
13 | Halcourt Briggs & Devlin LLP — Bridge Lender's Counsel (Payoff Coordination) | See Wire Instructions tab — HBD | $35,000.00 | Estimated legal fees for bridge payoff coordination, preparation of lien releases, UCC-3 terminations; Lead Partner: Kenneth R. Delacroix | Payable by borrower per bridge credit agreement
E. THIRD-PARTY REPORTS AND PROFESSIONAL FEES
14 | Thornfield Appraisal Group LLC — Appraisal Fees (14 MAI appraisals) | See Wire Instructions tab — Thornfield | $112,000.00 | 14 properties × $8,000 per appraisal (estimated average) | Independent MAI appraisals required by Clarendon Metropolitan
15 | Environmental Report Updates (Phase I / Phase II) | Various environmental consultants | $84,000.00 | 14 properties × $6,000 average per property (estimated) | Phase I ESA updates; Phase II if triggered
16 | Engineering / Property Condition Reports | Various engineering firms | $70,000.00 | 14 properties × $5,000 average per property (estimated) | Property condition assessments required by lender
17 | Seismic Reports (if applicable) | N/A | $0.00 | Not required — no properties in seismic zones | Sun Belt Portfolio located in TX, GA, FL, NC, TN — no seismic report required
F. RESERVE DEPOSITS
18 | Tax Reserve (Escrow) | Clarendon Metropolitan — reserve account | $1,450,000.00 | Estimated initial deposit for real property tax escrow across 14 properties | Monthly collections to follow per cash management agreement
19 | Insurance Reserve (Escrow) | Clarendon Metropolitan — reserve account | $380,000.00 | Estimated initial deposit for property insurance premium escrow | Monthly collections to follow per cash management agreement
20 | Capital Expenditure Reserve | Clarendon Metropolitan — reserve account | $525,000.00 | Initial capital expenditure / replacement reserve deposit | Per loan agreement; subject to ongoing monthly funding of $250/unit/year
21 | Deferred Maintenance Reserve (if applicable) | Clarendon Metropolitan — reserve account | $0.00 | TBD based on property condition reports | To be determined upon receipt of final engineering reports
G. OTHER COSTS
22 | ALTA Survey Update Costs | Various surveyors | $56,000.00 | 14 properties × $4,000 average per survey update (estimated) | ALTA/NSPS survey updates for each property
23 | Good Standing / Existence Certificates | Various Secretaries of State (MD, DE, TX, GA, FL, NC, TN) | $3,500.00 | Filing and expedited processing fees for good standing certificates | MD SDAT (Entity ID D19483726), DE SOS (14 SPEs + OP), plus foreign qualification certificates
24 | Miscellaneous Closing Costs | Various | $25,000.00 | Wire fees, courier, overnight delivery, notarization, document reproduction | Estimated
H. NET PROCEEDS
25 | Net Proceeds to Borrower (Fairwater Operating Partnership, L.P.) | See Wire Instructions tab — Fairwater OP | $0.00 | Sources and uses balanced after borrower shortfall funding of $9,299,200 | No net proceeds to borrower; shortfall funded from Fairwater OP available liquidity
TOTAL USES | $251,699,200.00 | Must equal Total Sources
[sheet: Bridge Payoff Detail]
Item | Detail | Amount | Notes
Bridge Credit Agreement | Dated June 30, 2025 | Among Fairwater Operating Partnership, L.P. as Borrower, Fairwater REIT as Guarantor, and Kensington National Bank, N.A. as Administrative Agent
Outstanding Principal | As of November 28, 2025 | $240,000,000.00 | Fully funded; interest-only; no amortization
Interest Rate — Benchmark | 30-day Term SOFR | 4.33% | As of August 11, 2025 (subject to reset)
Interest Rate — Spread | Applicable Margin | 5.00% | 500 basis points over SOFR
All-In Interest Rate | SOFR + Spread | 9.33% | 4.33% + 5.00% = 9.33%
SOFR Floor | 3.00% | Current SOFR (4.33%) exceeds floor
Day Count Convention | 30/360 | Per bridge credit agreement
Accrual Period | Last interest payment date through November 28, 2025 | Per diem calculation required for exact payoff
Per Diem Interest | $240,000,000 × 9.33% / 360 | $62,200.00 | Per day; use for adjustment if closing date shifts
Estimated Accrued Interest | Estimated for closing on November 28, 2025 | $9,212,800.00 | Subject to final payoff statement from KNB
Exit Fee | 0.50% of outstanding principal | $0.00 | Waived — repayment from permanent CMBS financing proceeds; closing November 28, 2025 is within 9-month waiver period ending March 31, 2026
Total Bridge Payoff (Estimated) | Principal + Accrued Interest + Exit Fee | $249,212,800.00 | Subject to final payoff letter from KNB
SYNDICATE LENDER ALLOCATION | All payments made to KNB as Administrative Agent for distribution to syndicate
Kensington National Bank, N.A. | 40.00% commitment ($96,000,000) | $99,685,120.00 | 40% of total payoff
Pinnacle Trust Company | 25.00% commitment ($60,000,000) | $62,303,200.00 | 25% of total payoff
Greystone Commerce Bank | 20.00% commitment ($48,000,000) | $49,842,560.00 | 20% of total payoff
Redfield Capital Markets, LLC | 15.00% commitment ($36,000,000) | $37,381,920.00 | 15% of total payoff
TOTAL SYNDICATE | 100.00% | $249,212,800.00 | Equals Total Bridge Payoff
[sheet: Wire Instructions]
Payee | Purpose / Reference | Amount | Bank Name | ABA / Routing Number | Account Number | Account Name | Reference / Memo | Contact Person | Contact Phone
Kensington National Bank, N.A. | Bridge Facility Payoff — Principal + Accrued Interest | $249,212,800.00 | [Payoff Bank TBD per KNB payoff letter] | [TBD] | [TBD] | Kensington National Bank, N.A. — Agent Account | Fairwater OP Bridge Payoff — CCA dated 6/30/2025 | Thomas J. Pagano | [TBD]
Clarendon Metropolitan Insurance Company | Origination Fee (net of rate lock deposit credit) | ($600,000.00) | [TBD per Clarendon Metropolitan] | [TBD] | [TBD] | Clarendon Metropolitan Insurance Company | CMBS Loan Origination Fee — CLRN 2025-C14 / CL-CMBS-2025-09-0347 | Garrett W. Hollister | [TBD]
Clarendon Metropolitan Insurance Company | Reserve Deposits (Tax, Insurance, CapEx) | $2,355,000.00 | [TBD — reserve account] | [TBD] | [TBD] | Clarendon Metropolitan — Reserve Account | Initial Reserve Deposits — Sun Belt Portfolio | Garrett W. Hollister | [TBD]
Marlowe Asset Management Title Insurance Group, Inc. | Title Insurance Premiums — 14 Lender's Policies | $485,000.00 | [TBD per Marlowe Asset Management Title] | [TBD] | [TBD] | Marlowe Asset Management Title Insurance Group, Inc. | Sun Belt Portfolio — Lender's Title Policies | [TBD] | [TBD]
Calderwood & Harkness LLP | Legal Fees and Expenses — Borrower's Counsel | $475,000.00 | [TBD per C&H] | [TBD] | [TBD] | Calderwood & Harkness LLP — Client Trust Account | Matter No. 1036-00001 / Fairwater REIT | Philip Hartmann / Claudia Merritt | [TBD]
Ashworth McPhail LLP | Legal Fees and Expenses — Permanent Lender's Counsel | $350,000.00 | [TBD per Ashworth McPhail] | [TBD] | [TBD] | Ashworth McPhail LLP — Trust Account | Clarendon Metropolitan / Fairwater Sun Belt Portfolio | Joanna C. Wexler | [TBD]
Halcourt Briggs & Devlin LLP | Legal Fees — Bridge Lender's Counsel Payoff Coordination | $35,000.00 | [TBD per HBD] | [TBD] | [TBD] | Halcourt Briggs & Devlin LLP — Trust Account | KNB / Fairwater Bridge Payoff | Kenneth R. Delacroix | [TBD]
Local Counsel (5 states) | Legal Fees — Local Counsel Opinions | $125,000.00 | [TBD — separate wires per firm] | [TBD] | [TBD] | [TBD] | Fairwater Sun Belt Portfolio — Local Opinions | [TBD] | [TBD]
Thornfield Appraisal Group LLC | Appraisal Fees — 14 MAI Appraisals | $112,000.00 | [TBD per Thornfield] | [TBD] | [TBD] | Thornfield Appraisal Group LLC | Sun Belt Portfolio Appraisals | [TBD] | [TBD]
Various — Recording / Tax Authorities | Recording Fees, Documentary Stamp Taxes, UCC Filing Fees | $711,900.00 | Via title company / escrow | N/A | N/A | Through Marlowe Asset Management Title Insurance Group | Recording and tax payments via title company | [TBD] | [TBD]
Various — Environmental / Engineering | Phase I Updates, Property Condition Reports | $154,000.00 | [TBD — separate wires] | [TBD] | [TBD] | [Various] | Sun Belt Portfolio — Third-Party Reports | [TBD] | [TBD]
Various — Surveys, Good Standing, Misc. | ALTA Survey Updates, Good Standing Certificates, Misc. | $84,500.00 | [TBD — separate wires or via title company] | [TBD] | [TBD] | [Various] | Sun Belt Portfolio — Closing Costs | [TBD] | [TBD]
Fairwater Operating Partnership, L.P. | Borrower Funding of Shortfall (incoming wire) | $9,299,200.00 | [TBD per Fairwater OP] | [TBD] | [TBD] | Fairwater Operating Partnership, L.P. | Closing Shortfall Funding — Sun Belt Portfolio Refinancing | Naomi T. Sinclair, CFO | [TBD]
[sheet: Reconciliation]
Category | Amount | Notes
SOURCES
Permanent Loan Proceeds (Clarendon Metropolitan) | $240,000,000.00 | Gross loan proceeds
Rate Lock Deposit Credit | $2,400,000.00 | Ref. CL-CMBS-2025-09-0347; submitted September 15, 2025
Borrower Equity Contribution / Shortfall Funding | $9,299,200.00 | Funded by Fairwater OP from available liquidity; minimum liquidity covenant under bridge ≥ $50,000,000
TOTAL SOURCES | $251,699,200.00
USES
Bridge Payoff — Principal | $240,000,000.00 | To KNB as Administrative Agent
Bridge Payoff — Accrued Interest | $9,212,800.00 | Estimated; per diem ≈ $62,200/day
Bridge Exit Fee | $0.00 | Waived (CMBS take-out before March 31, 2026)
Origination Fee (net of rate lock credit) | ($600,000.00) | $1,800,000 fee less $2,400,000 deposit credit
Title Insurance Premiums | $485,000.00 | Marlowe Asset Management Title Insurance Group, Inc.
Recording Fees & Taxes | $711,900.00 | 14 properties across TX, GA, FL, NC, TN
Legal Fees — All Counsel | $985,000.00 | C&H ($475K) + Ashworth McPhail ($350K) + Local ($125K) + HBD ($35K)
Third-Party Reports | $266,000.00 | Appraisals ($112K) + Environmental ($84K) + Engineering ($70K)
Reserve Deposits | $2,355,000.00 | Tax ($1,450K) + Insurance ($380K) + CapEx ($525K)
Surveys, Good Standing, Miscellaneous | $84,500.00 | Surveys ($56K) + Good Standing ($3.5K) + Misc ($25K)
Net Proceeds to Borrower | $0.00 | Sources and uses balanced; no net proceeds after shortfall funding
TOTAL USES | $251,699,200.00
VARIANCE (Sources − Uses) | $0.00 | Balanced
BRIDGE vs. PERMANENT ECONOMICS COMPARISON
Bridge Annual Interest Cost | $22,392,000.00 | $240M × 9.33% (interest-only)
Permanent Annual Debt Service | $17,734,152.00 | $1,477,846/month × 12 (P&I at 6.25%, 30-yr amort)
Annual Debt Service Savings | $4,657,848.00 | Total debt service savings (note: permanent includes amortization)
Annual Interest-Only Savings | $7,392,000.00 | Interest component savings: $240M × (9.33% − 6.25%) = $240M × 3.08%
Bridge DSCR | 1.169x | $26,180,000 NOI ÷ $22,392,000
Permanent DSCR | 1.476x | $26,180,000 NOI ÷ $17,734,152
Bridge LTV | 62.34% | $240,000,000 ÷ $385,000,000
Permanent LTV | 62.34% | $240,000,000 ÷ $385,000,000 (same loan amount; same appraised value)

[sheet: Cover & Summary]

B. PERMANENT LOAN ORIGINATION AND CLOSING COSTS

C. TITLE AND RECORDING

D. LEGAL FEES

E. THIRD-PARTY REPORTS AND PROFESSIONAL FEES

F. RESERVE DEPOSITS

G. OTHER COSTS

H. NET PROCEEDS

SOURCES

Record

Parties

Dates

Amounts