1036-00001 · Banking & Finance practice group · Transaction Documents

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CALDERWOOD & HARKNESS LLP Attorneys at Law

425 Park Avenue New York, New York 10022

Telephone: (212) 554-7000 Facsimile: (212) 554-7001 www.calderwoodharkness.com

DRAFT — FOR DISCUSSION PURPOSES ONLY

Matter No. 1036-00001

Prepared by: Lisa Morrow, Lead Associate, Banking & Finance Reviewed by: Philip Hartmann, Responsible Partner, Banking & Finance

[___], 2025

Clarendon Metropolitan Insurance Company 1 MetroTech Center Brooklyn, New York 11201

Attention: Garrett W. Hollister, Head of CMBS Originations

and its successors and assigns (including any trustee of CLRN 2025-C14 or any successor CMBS trust)

Re: $240,000,000 Mortgage Loan from Clarendon Metropolitan Insurance Company to Fairwater Sun Belt I LLC, Fairwater Sun Belt II LLC, Fairwater Sun Belt III LLC, Fairwater Sun Belt IV LLC, Fairwater Sun Belt V LLC, Fairwater Sun Belt VI LLC, Fairwater Sun Belt VII LLC, Fairwater Sun Belt VIII LLC, Fairwater Sun Belt IX LLC, Fairwater Sun Belt X LLC, Fairwater Sun Belt XI LLC, Fairwater Sun Belt XII LLC, Fairwater Sun Belt XIII LLC, and Fairwater Sun Belt XIV LLC, as Co-Borrowers, and Fairwater Real Estate Investment Trust, as Guarantor

Ladies and Gentlemen:

I. Introduction

We have acted as counsel to Fairwater Sun Belt I LLC, Fairwater Sun Belt II LLC, Fairwater Sun Belt III LLC, Fairwater Sun Belt IV LLC, Fairwater Sun Belt V LLC, Fairwater Sun Belt VI LLC, Fairwater Sun Belt VII LLC, Fairwater Sun Belt VIII LLC, Fairwater Sun Belt IX LLC, Fairwater Sun Belt X LLC, Fairwater Sun Belt XI LLC, Fairwater Sun Belt XII LLC, Fairwater Sun Belt XIII LLC, and Fairwater Sun Belt XIV LLC (each a Delaware limited liability company, individually a "Co-Borrower" and collectively the "Co-Borrowers"), and Fairwater Real Estate Investment Trust, a Maryland real estate investment trust (the "Guarantor"), in connection with the $240,000,000 fixed-rate mortgage loan (the "Loan") made by Clarendon Metropolitan Insurance Company, a New York domestic insurance company (the "Lender"), to the Co-Borrowers. A complete list of the Co-Borrowers and their respective Properties is set forth in Exhibit A attached hereto.

This opinion letter is being delivered to you pursuant to Section 9.1(b)(vii) of the Loan Agreement dated as of [Closing Date], 2025 (as defined below), as a condition to the closing of the Loan. This opinion is delivered for the benefit of the Lender and its successors and assigns, including, without limitation, any trustee, special servicer, master servicer, operating advisor, certificate holders, and rating agencies in connection with any securitization of the Loan, including any securitization effected through a commercial mortgage-backed securities trust designated as CLRN 2025-C14 or any successor CMBS trust. This opinion is rendered in connection with our engagement referenced under Matter No. 1036-00001.

II. Definitions of Loan Documents

As used in this opinion letter, the following terms have the meanings set forth below:

"Loan Documents" means, collectively, the following documents and instruments executed and delivered in connection with the Loan:

(a) Loan Agreement dated as of [Closing Date], 2025, among Fairwater Sun Belt I LLC, Fairwater Sun Belt II LLC, Fairwater Sun Belt III LLC, Fairwater Sun Belt IV LLC, Fairwater Sun Belt V LLC, Fairwater Sun Belt VI LLC, Fairwater Sun Belt VII LLC, Fairwater Sun Belt VIII LLC, Fairwater Sun Belt IX LLC, Fairwater Sun Belt X LLC, Fairwater Sun Belt XI LLC, Fairwater Sun Belt XII LLC, Fairwater Sun Belt XIII LLC, and Fairwater Sun Belt XIV LLC, as Co-Borrowers, and Clarendon Metropolitan Insurance Company, as Lender (the "Loan Agreement");

(b) Promissory Note dated as of [Closing Date], 2025, in the original principal amount of $240,000,000.00, made by the Co-Borrowers in favor of the Lender (the "Note"), bearing interest at a fixed rate of 6.25% per annum, with a maturity date of ten (10) years from the date of origination and an amortization schedule of thirty (30) years;

(c) Guaranty Agreement dated as of [Closing Date], 2025, made by Fairwater Real Estate Investment Trust in favor of the Lender (the "Guaranty" or the "Non-Recourse Carve-Out Guaranty"), pursuant to which the Guarantor has guaranteed certain recourse carve-out obligations and exceptions to non-recourse liability as more particularly set forth therein;

(d) Environmental Indemnity Agreement dated as of [Closing Date], 2025, made by the Co-Borrowers and Fairwater Real Estate Investment Trust in favor of the Lender (the "Environmental Indemnity"), pursuant to which the Co-Borrowers and the Guarantor have agreed to indemnify, defend, and hold harmless the Lender with respect to certain environmental matters relating to the Properties;

(e) Cash Management Agreement dated as of [Closing Date], 2025, among the Co-Borrowers, the Lender, and KeyBridge National Trust Company (the "Cash Management Bank") (the "Cash Management Agreement"), establishing the lockbox account, cash management account, and related reserve and escrow sub-accounts for the collection and application of Property revenues;

(f) Fourteen (14) separate Mortgage, Assignment of Leases and Rents, and Security Agreements, each dated as of [Closing Date], 2025, executed by the applicable Co-Borrower in favor of the Lender, covering the Properties located in the following states: Texas (five (5) Properties), Georgia (three (3) Properties), Florida (three (3) Properties), North Carolina (two (2) Properties), and Tennessee (one (1) Property) (collectively, the "Mortgages"), as more particularly described in Exhibit A hereto;

(g) Fourteen (14) separate Assignments of Leases and Rents, each dated as of [Closing Date], 2025, executed by the applicable Co-Borrower in favor of the Lender, assigning to the Lender as additional security for the Loan all of such Co-Borrower's right, title, and interest in and to the leases, rents, issues, and profits arising from its respective Property (collectively, the "Assignments");

(h) UCC Financing Statements (Form UCC-1 and any related amendments or continuation statements) to be filed with the Secretary of State of the State of Delaware (with respect to each Co-Borrower, as debtor) and in each county in which a mortgaged Property is located, as fixture filings and otherwise (the "Financing Statements"); and

A complete enumerated list of all Loan Documents, together with the date and parties for each, is set forth in Exhibit B attached hereto.

"Organizational Documents" means, collectively, the following documents and instruments:

(i) the Amended and Restated Limited Liability Company Agreement of each Co-Borrower (fourteen (14) separate agreements), each dated as of various dates, by and between Fairwater Operating Partnership, L.P., a Delaware limited partnership, as the sole member of each such Co-Borrower, incorporating CMBS separateness covenants, independent director/manager provisions, and special purpose entity restrictions customary for loans intended for securitization;

(ii) the Declaration of Trust and Bylaws of Fairwater Real Estate Investment Trust, as currently in effect; and

(iii) the Amended and Restated Agreement of Limited Partnership of Fairwater Operating Partnership, L.P., as currently in effect.

The Loan Documents and the Organizational Documents are collectively referred to herein as the "Transaction Documents."

As used in this opinion letter, the following additional defined terms shall have the meanings ascribed to them below:

"Co-Borrowers" means Fairwater Sun Belt I LLC, Fairwater Sun Belt II LLC, Fairwater Sun Belt III LLC, Fairwater Sun Belt IV LLC, Fairwater Sun Belt V LLC, Fairwater Sun Belt VI LLC, Fairwater Sun Belt VII LLC, Fairwater Sun Belt VIII LLC, Fairwater Sun Belt IX LLC, Fairwater Sun Belt X LLC, Fairwater Sun Belt XI LLC, Fairwater Sun Belt XII LLC, Fairwater Sun Belt XIII LLC, and Fairwater Sun Belt XIV LLC, each a Delaware limited liability company, as more particularly described in Exhibit A hereto.

"Guarantor" means Fairwater Real Estate Investment Trust, a Maryland real estate investment trust, whose shares of beneficial interest are listed on the New York Stock Exchange under the ticker symbol "FWTR" (Employer Identification Number: 52-2847193).

"Operating Partnership" means Fairwater Operating Partnership, L.P., a Delaware limited partnership (Employer Identification Number: 52-2847201), in which the Guarantor serves as the sole general partner and holds a 99.2% partnership interest.

"Properties" means the fourteen (14) multifamily apartment communities comprising the Sun Belt Portfolio, totaling approximately 4,200 residential apartment units across the states of Texas, Georgia, Florida, North Carolina, and Tennessee, as more particularly described in Exhibit A hereto.

III. Documents Examined and Diligence Performed

In connection with rendering the opinions expressed herein, we have examined originals or copies (certified or otherwise identified to our satisfaction) of the following documents, records, and instruments:

(a) Executed copies of each of the Loan Documents, including each of the documents listed in Section II above and in Exhibit B hereto;

(b) Certificates of Formation for each Co-Borrower, as filed with the Secretary of State of the State of Delaware, together with all amendments thereto;

(c) Good standing certificates for each Co-Borrower issued by the Secretary of State of the State of Delaware, each dated within ten (10) business days of the date hereof, and good standing certificates (or certificates of authorization) for each Co-Borrower issued by the applicable Secretary of State or other appropriate governmental authority of each state in which such Co-Borrower is qualified as a foreign limited liability company to transact business (namely, the State of Texas, the State of Georgia, the State of Florida, the State of North Carolina, or the State of Tennessee, as applicable to the state in which such Co-Borrower's Property is located);

(d) Good standing certificate for Fairwater Real Estate Investment Trust issued by the Maryland State Department of Assessments and Taxation (SDAT Entity ID: D19483726), dated within ten (10) business days of the date hereof;

(e) Certificate of Limited Partnership for Fairwater Operating Partnership, L.P., as filed with the Secretary of State of the State of Delaware, together with all amendments thereto, and a good standing certificate for the Operating Partnership issued by the Secretary of State of the State of Delaware, dated within ten (10) business days of the date hereof;

(f) Amended and Restated Limited Liability Company Agreements for each Co-Borrower, each incorporating CMBS separateness covenants, special purpose entity restrictions, and independent director/manager provisions;

(g) Declaration of Trust and Bylaws of the Guarantor, each as currently in effect;

(h) Amended and Restated Agreement of Limited Partnership of the Operating Partnership, as currently in effect;

(i) Resolutions of the Board of Trustees of Fairwater Real Estate Investment Trust, adopted at a duly convened meeting held on September 8, 2025, authorizing (A) the permanent financing of the Sun Belt Portfolio through the Loan, (B) the execution, delivery, and performance by the Guarantor of the Guaranty and the Environmental Indemnity, (C) the authorization and direction of the Operating Partnership, as sole member of each Co-Borrower, to cause each Co-Borrower to execute, deliver, and perform the Loan Documents to which it is a party, and (D) the designation of Jonathan R. Calder, Chief Executive Officer, and Naomi T. Sinclair, Chief Financial Officer, as authorized signatories with full power and authority to execute all Loan Documents and related closing deliverables on behalf of the Co-Borrowers and the Guarantor;

(j) Written consent of Fairwater Operating Partnership, L.P. (acting through Fairwater Real Estate Investment Trust, as its sole general partner), authorizing each Co-Borrower to enter into, execute, deliver, and perform the Loan Documents to which such Co-Borrower is a party;

(k) Officer's certificates executed by authorized officers of each Co-Borrower and the Guarantor, delivered at the closing of the Loan (each, a "Borrower's Closing Certificate"), certifying, among other things, the truth and accuracy of the representations and warranties made by each such entity in the Loan Documents, the absence of any default or event of default, and the incumbency and specimen signatures of each authorized signatory;

(l) Uniform Commercial Code lien search results from the Secretary of State of the State of Delaware, conducted with respect to each Co-Borrower (as debtor) and the Operating Partnership (as debtor), reflecting the results of searches completed within thirty (30) days prior to the date hereof; and

(m) Such other documents, certificates, records, and instruments as we have deemed necessary or appropriate for the purpose of rendering the opinions expressed herein.

We have not independently verified any of the factual matters set forth in the documents, certificates, and records reviewed by us, and we have relied upon the accuracy and completeness of such documents, certificates, and records for purposes of this opinion. With respect to certain factual matters, we have relied upon the representations and warranties made by the Co-Borrowers and the Guarantor in the Loan Documents and the Borrower's Closing Certificates without independent investigation or verification.

IV. Assumptions

In rendering the opinions expressed herein, we have assumed the following, without independent investigation or verification:

(a) The genuineness of all signatures on the Transaction Documents and all other documents and instruments reviewed by us, other than the signatures of persons signing on behalf of the Co-Borrowers and the Guarantor;

(b) The authenticity of all documents submitted to us as originals and the conformity to authentic originals of all documents submitted to us as copies (whether certified, photostatic, electronic, or otherwise);

(c) The due authorization, execution, and delivery of the Loan Documents by the Lender and by all parties thereto other than the Co-Borrowers and the Guarantor, including the Cash Management Bank;

(d) That the Lender and each other party to the Loan Documents (other than the Co-Borrowers and the Guarantor) have all requisite corporate, trust, partnership, or other organizational power and authority to enter into, execute, deliver, and perform each of the Loan Documents to which they are a party;

(e) That each of the Loan Documents constitutes a legal, valid, and binding obligation of the Lender and each other party thereto (other than the Co-Borrowers and the Guarantor), enforceable against each such party in accordance with its respective terms, subject to applicable bankruptcy, insolvency, and equitable limitations;

(f) That all of the factual representations and warranties contained in the Loan Documents, the Borrower's Closing Certificates, the Organizational Documents, and any other certificates or instruments delivered in connection with the closing of the Loan are true, correct, and complete in all material respects as of the date hereof;

(g) That each Co-Borrower and the Operating Partnership have been operated at all times since their respective dates of formation in compliance with their respective Organizational Documents and with all applicable laws, rules, and regulations, and that each has observed all requisite organizational formalities;

(h) That the Loan constitutes a bona fide arm's-length transaction between the Lender, on the one hand, and the Co-Borrowers and the Guarantor, on the other hand, and that the Lender has acted in good faith throughout the negotiation, documentation, and closing of the Loan;

(i) That each independent director or independent manager of each Co-Borrower (as required under the Amended and Restated Limited Liability Company Agreement of such Co-Borrower) has been duly appointed in accordance with the applicable Organizational Documents, is qualified to serve in such capacity, satisfies any applicable independence requirements, and has exercised and will continue to exercise independent judgment with respect to matters submitted for his or her consideration; and

(j) That the UCC Financing Statements described in clause (h) of the definition of Loan Documents set forth in Section II above will be duly and timely filed in the appropriate filing offices of the Secretary of State of the State of Delaware and in the applicable county recording or filing offices in the states of Texas, Georgia, Florida, North Carolina, and Tennessee, and that the Mortgages will be duly and timely recorded in the applicable county recording offices in each such state, in each case with all requisite filing and recording fees having been paid and all necessary transfer, mortgage recording, and documentary stamp taxes having been paid, as applicable.

V. Qualifications and Limitations

The opinions expressed herein are limited in all respects to the following bodies of law, and we express no opinion as to the laws of any other jurisdiction or as to any other body of law:

(a) The laws of the State of New York, which is the governing law elected in the Loan Agreement, the Note, the Guaranty, the Environmental Indemnity, and the Cash Management Agreement;

(b) The Delaware Limited Liability Company Act, 6 Del. C. §§ 18-101 et seq., as applicable to each Co-Borrower, and the Delaware Revised Uniform Limited Partnership Act, 6 Del. C. §§ 17-101 et seq., as applicable to the Operating Partnership;

(c) The general corporation and trust laws of the State of Maryland, including the Maryland REIT Law set forth in Title 8 of the Corporations and Associations Article of the Annotated Code of Maryland, as applicable to the Guarantor in its capacity as a Maryland real estate investment trust; and

(d) The federal law of the United States of America, to the extent applicable to the transactions contemplated by the Loan Documents.

Without limiting the generality of the foregoing, we express no opinion as to the laws of the State of Texas, the State of Georgia, the State of Florida, the State of North Carolina, or the State of Tennessee. We understand that separate legal opinions addressed to the Lender will be delivered by local counsel admitted to practice in each of those jurisdictions, which opinions will address, among other things, the enforceability of the Mortgages and the Assignments in each applicable state, the due recording and priority of the Mortgages, real property law matters, state-specific usury and lending requirements, and other issues arising under the laws of such states. We express no opinion on any matter covered by such local counsel opinions, and you should look solely to such local counsel opinions with respect to such matters.

In addition, no opinion is expressed herein with respect to any of the following:

(i) Federal or state tax law, including matters relating to income tax, transfer tax, or any other tax;

(ii) Environmental law, including the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, and any state or local environmental statutes, regulations, or ordinances;

(iii) Insurance regulatory law, including the laws and regulations governing the investment activities and capital adequacy of insurance companies;

(iv) Federal or state securities law, including the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended;

(v) The Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and regulations promulgated thereunder, or Section 4975 of the Internal Revenue Code of 1986, as amended;

(vi) Federal or state antitrust or competition law; and

(vii) intellectual property law, including patent, trademark, copyright, and trade secret law.

We express no opinion as to the compliance of the Guarantor with the requirements for qualification or continued qualification as a real estate investment trust under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the "Code"). We understand that matters relating to the Guarantor's REIT qualification, to the extent required by the Lender, are addressed, if at all, by Crestline & Alderman LLP, corporate and securities counsel to Fairwater Real Estate Investment Trust.

VI. Opinions

Based upon and subject to the foregoing, and subject further to the qualifications and limitations set forth in Section VII below, we are of the opinion that:

Opinion 1 — Due Organization and Good Standing (Co-Borrowers)

Each of the Co-Borrowers, namely Fairwater Sun Belt I LLC, Fairwater Sun Belt II LLC, Fairwater Sun Belt III LLC, Fairwater Sun Belt IV LLC, Fairwater Sun Belt V LLC, Fairwater Sun Belt VI LLC, Fairwater Sun Belt VII LLC, Fairwater Sun Belt VIII LLC, Fairwater Sun Belt IX LLC, Fairwater Sun Belt X LLC, Fairwater Sun Belt XI LLC, Fairwater Sun Belt XII LLC, Fairwater Sun Belt XIII LLC, and Fairwater Sun Belt XIV LLC, is a limited liability company duly organized, validly existing, and in good standing under the laws of the State of Delaware. Each Co-Borrower is duly qualified to transact business and is in good standing as a foreign limited liability company in the state in which its respective Property is located, as follows:

(a) Fairwater Sun Belt I LLC, Fairwater Sun Belt II LLC, Fairwater Sun Belt III LLC, Fairwater Sun Belt IV LLC, and Fairwater Sun Belt V LLC are each duly qualified to transact business and in good standing as foreign limited liability companies in the State of Texas;

(b) Fairwater Sun Belt VI LLC, Fairwater Sun Belt VII LLC, and Fairwater Sun Belt VIII LLC are each duly qualified to transact business and in good standing as foreign limited liability companies in the State of Georgia;

(c) Fairwater Sun Belt IX LLC, Fairwater Sun Belt X LLC, and Fairwater Sun Belt XI LLC are each duly qualified to transact business and in good standing as foreign limited liability companies in the State of Florida;

(d) Fairwater Sun Belt XII LLC and Fairwater Sun Belt XIII LLC are each duly qualified to transact business and in good standing as foreign limited liability companies in the State of North Carolina; and

(e) Fairwater Sun Belt XIV LLC is duly qualified to transact business and in good standing as a foreign limited liability company in the State of Tennessee.

Opinion 2 — Due Organization and Good Standing (Operating Partnership)

Fairwater Operating Partnership, L.P. is a limited partnership duly organized, validly existing, and in good standing under the laws of the State of Delaware. The Operating Partnership is the sole member of each Co-Borrower.

Opinion 3 — Due Organization and Good Standing (Guarantor)

Fairwater Real Estate Investment Trust is a real estate investment trust duly organized, validly existing, and in good standing under the laws of the State of Maryland (Maryland State Department of Assessments and Taxation Entity ID: D19483726). The Guarantor is the sole general partner of the Operating Partnership, holding a 99.2% partnership interest therein.

Opinion 4 — Power and Authority

Each Co-Borrower has the limited liability company power and authority under its Amended and Restated Limited Liability Company Agreement and the Delaware Limited Liability Company Act to own, lease, and operate its respective Property, and to execute, deliver, and perform its obligations under each of the Loan Documents to which it is a party. The Guarantor has the trust power and authority under its Declaration of Trust and Bylaws and the laws of the State of Maryland to execute, deliver, and perform its obligations under the Guaranty and the Environmental Indemnity. The Operating Partnership has the partnership power and authority under its Amended and Restated Agreement of Limited Partnership and the Delaware Revised Uniform Limited Partnership Act to authorize each Co-Borrower to enter into and perform the Loan Documents to which such Co-Borrower is a party.

Opinion 5 — Due Authorization

The execution, delivery, and performance of each of the Loan Documents by each Co-Borrower that is a party thereto have been duly authorized by all necessary limited liability company action on the part of such Co-Borrower, including the written consent of Fairwater Operating Partnership, L.P., as the sole member of each Co-Borrower, to the execution, delivery, and performance of such Loan Documents. The execution, delivery, and performance of the Guaranty and the Environmental Indemnity by the Guarantor have been duly authorized by all necessary trust action on the part of the Guarantor, including the resolutions of the Board of Trustees of Fairwater Real Estate Investment Trust duly adopted at a meeting held on September 8, 2025, at which a quorum was present and acting throughout. The persons who have executed the Loan Documents on behalf of each Co-Borrower and the Guarantor, namely Jonathan R. Calder, Chief Executive Officer, and Naomi T. Sinclair, Chief Financial Officer, have been duly authorized to execute such documents and instruments in their respective capacities and no other action or approval on the part of any Co-Borrower, the Operating Partnership, or the Guarantor is necessary for the valid execution, delivery, and performance of the Loan Documents.

Opinion 6 — Due Execution and Delivery

Each of the Loan Documents has been duly executed and delivered by each Co-Borrower and the Guarantor that is a party thereto.

Opinion 7 — Enforceability

Each of the Loan Documents constitutes a legal, valid, and binding obligation of each Co-Borrower and the Guarantor that is a party thereto, enforceable against such Co-Borrower or the Guarantor, as applicable, in accordance with its respective terms. This opinion is subject to the enforceability qualifications set forth in Section VII below.

Opinion 8 — No Conflicts

The execution, delivery, and performance of the Loan Documents by each Co-Borrower and the Guarantor do not and will not:

(a) Violate, conflict with, or result in a breach of any provision of the Organizational Documents of any Co-Borrower, the Operating Partnership, or the Guarantor, including without limitation the Amended and Restated Limited Liability Company Agreement of each Co-Borrower, the Amended and Restated Agreement of Limited Partnership of the Operating Partnership, or the Declaration of Trust and Bylaws of the Guarantor;

(b) Violate any law, rule, or regulation of the State of New York, the State of Delaware, the State of Maryland, or the United States of America applicable to any Co-Borrower or the Guarantor, in each case to the extent that such laws, rules, and regulations are within the scope of this opinion as described in Section V above;

(c) Result in a breach of, or constitute a default under, or result in the acceleration of any obligation under, or result in the creation or imposition of any lien, charge, or encumbrance upon any property or assets of any Co-Borrower or the Guarantor (other than the liens and security interests created by the Loan Documents themselves) under, any agreement, instrument, indenture, or other obligation known to us to which any Co-Borrower or the Guarantor is a party or by which any of them or any of their respective properties or assets is bound, in each case limited to those agreements and instruments that have been provided to us for review in connection with this engagement.

With respect to the opinion set forth in clause (c) above, we note that we have reviewed the existing $240,000,000 bridge credit facility dated June 30, 2025, among the Operating Partnership, as borrower, and Kensington National Bank, N.A., as administrative agent (the "Bridge Facility"). Based on our review of the Bridge Facility and the closing arrangements for the Loan, we note that upon the application of a portion of the Loan proceeds to the full repayment and discharge of all amounts outstanding under the Bridge Facility at the closing of the Loan, no conflict with or default under the Bridge Facility will arise as a result of the execution, delivery, or performance of the Loan Documents.

Opinion 9 — No Governmental Approvals Required

No authorization, approval, consent, license, order, or exemption of, or filing, registration, or qualification with, any federal, state, or local governmental authority or regulatory body is required for the execution, delivery, or performance of any of the Loan Documents by any Co-Borrower or the Guarantor, except for:

(a) The recording of the Mortgages in the applicable county recording offices in the following jurisdictions: five (5) counties in the State of Texas, three (3) counties in the State of Georgia, three (3) counties in the State of Florida, two (2) counties in the State of North Carolina, and one (1) county in the State of Tennessee;

(b) The filing of UCC Financing Statements (i) with the Secretary of State of the State of Delaware with respect to each Co-Borrower, as debtor, and with respect to the Operating Partnership, as debtor (to the extent the Operating Partnership has pledged its membership interests in the Co-Borrowers), and (ii) as fixture filings in the applicable county filing offices in the states of Texas, Georgia, Florida, North Carolina, and Tennessee; and

(c) Such post-closing filings, registrations, and recordings as may be required under applicable federal, state, or local laws, rules, or regulations in connection with the ongoing administration and servicing of the Loan.

We note that this opinion does not address real property recording requirements, documentary stamp taxes, mortgage recording taxes, intangible taxes, or similar charges or requirements under the laws of the State of Texas, the State of Georgia, the State of Florida, the State of North Carolina, or the State of Tennessee, all of which are addressed in the separate local counsel opinions being delivered to the Lender concurrently herewith.

Opinion 10 — Non-Consolidation / Separateness Opinion

Based upon our review and examination of (i) the organizational structure of the Co-Borrowers, the Operating Partnership, and the Guarantor, (ii) the Amended and Restated Limited Liability Company Agreements of each Co-Borrower (each of which incorporates CMBS separateness covenants and independent director/manager provisions customary for loans intended for securitization), (iii) the representations, warranties, and covenants set forth in the Loan Agreement (including, without limitation, the special purpose entity covenants contained in Section 5.2 thereof), and (iv) the Borrower's Closing Certificates and such other documents, certificates, and records described in Section III above, and assuming the continuing compliance by each Co-Borrower with the special purpose entity covenants set forth in its respective Amended and Restated Limited Liability Company Agreement and in the Loan Agreement, it is our opinion that:

(a) A court applying the laws of the State of Delaware in a case commenced under Title 11 of the United States Code (the "Bankruptcy Code") would not disregard the separate legal existence of any Co-Borrower by ordering the substantive consolidation of the assets and liabilities of such Co-Borrower with those of Fairwater Real Estate Investment Trust, Fairwater Operating Partnership, L.P., any other Co-Borrower, or any other affiliate of such Co-Borrower; and

(b) The assets and liabilities of each Co-Borrower would be treated as separate and distinct from those of the Guarantor, the Operating Partnership, and each other Co-Borrower for purposes of any proceeding under the Bankruptcy Code.

The foregoing non-consolidation opinion is subject to the non-consolidation qualifications set forth in Section VII below, including, without limitation, the following:

(i) Substantive consolidation determinations are inherently factual in nature, and a court may exercise its equitable discretion to order substantive consolidation based on the totality of circumstances prevailing at the time of any insolvency proceeding;

(ii) We have assumed that each Co-Borrower has been and will continue to be operated as a separate legal entity in accordance with its Organizational Documents and the special purpose entity covenants set forth in the Loan Agreement, including, without limitation, maintaining separate books and records, maintaining separate bank accounts, conducting business in its own name, holding itself out to creditors and other third parties as a separate entity, paying its own liabilities and expenses from its own funds, and observing all requisite organizational formalities;

(iii) We have assumed that each independent director or independent manager of each Co-Borrower has exercised and will continue to exercise independent judgment with respect to all matters submitted for his or her consideration, including, without limitation, any determination relating to the filing of a voluntary petition under the Bankruptcy Code;

(iv) We have assumed that sufficient separateness formalities have been observed at all times since the formation of each Co-Borrower, including the avoidance of any commingling of assets or funds with those of the Guarantor, the Operating Partnership, or any other affiliate; and

(v) We note that each Co-Borrower is a wholly owned subsidiary of the Operating Partnership, which in turn is 99.2% owned by the Guarantor. This common ownership structure does not, in and of itself, provide a basis for substantive consolidation, provided that the separateness covenants and organizational formalities described above have been and continue to be observed.

VII. Enforceability and Non-Consolidation Qualifications

A. Enforceability Qualifications

The enforceability opinions set forth in Opinion 7 of Section VI above are subject to and may be limited by the following:

(a) Applicable bankruptcy, insolvency, reorganization, moratorium, receivership, assignment for the benefit of creditors, fraudulent conveyance, fraudulent transfer, preferential transfer, and other similar laws of general applicability relating to or affecting the enforcement of creditors' rights generally, as now or hereafter in effect;

(b) General principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity), including, without limitation, principles of commercial reasonableness, good faith, fair dealing, and the possible unavailability of specific performance, injunctive relief, or other equitable remedies;

(c) The discretion of any court of competent jurisdiction in awarding specific performance, declaratory relief, injunctive relief, or other equitable remedies, and the general principle that the availability of such remedies is subject to the discretion of the court before which any proceeding for such relief may be brought;

(d) Limitations on the enforceability of provisions in the Loan Documents providing for indemnification, contribution, or exculpation, to the extent that such provisions may be held to be contrary to public policy or may be limited by applicable statutory or common law principles, including, without limitation, provisions purporting to indemnify a party against its own negligence or willful misconduct;

(e) Limitations on the enforceability of provisions of the Loan Documents that may be deemed to constitute penalties or forfeitures, including, without limitation, provisions relating to late charges, default interest, and prepayment premiums, to the extent a court may find that such provisions are unreasonable or constitute an unenforceable penalty;

(f) Limitations imposed by applicable usury laws on the rate of interest that may be charged, collected, or received in connection with the Loan; and

(g) The unenforceability of provisions in the Loan Documents purporting to waive rights or defenses that cannot, as a matter of law, be effectively waived, including, without limitation, waivers of the right to a jury trial (to the extent that such waivers may be challenged under applicable law), waivers of rights to notice and cure, and waivers of statutory rights provided for the protection of debtors.

B. Non-Consolidation Qualifications

The non-consolidation opinions set forth in Opinion 10 of Section VI above are subject to and limited by the following qualifications:

(a) A bankruptcy court's broad exercise of equitable discretion under Section 105(a) of the Bankruptcy Code and other provisions of the Bankruptcy Code, which may be invoked to order the substantive consolidation of two or more related entities in the interests of justice or equity;

(b) The inherently factual nature of a substantive consolidation analysis, which a court may undertake based upon a comprehensive examination of the totality of circumstances prevailing at the time of any insolvency proceeding, including, without limitation, the degree of difficulty in segregating and ascertaining individual assets and liabilities, the presence or absence of consolidated financial statements, the degree of commingling of assets and business functions, the transfers of assets without observance of formalities, and the degree of corporate or entity identity overlap, among other factors;

(c) The assumption that there has been and will continue to be compliance in all material respects with all separateness covenants and special purpose entity requirements set forth in the Organizational Documents and the Loan Agreement, including, without limitation, the requirements to maintain separate books and records, separate bank accounts, and a separate legal identity from each other Co-Borrower, the Operating Partnership, the Guarantor, and all other affiliates;

(d) The assumption that adequate capitalization of each Co-Borrower has been maintained since its formation and will continue to be maintained, and that no Co-Borrower has been rendered insolvent by the transactions contemplated by the Loan Documents; and

(e) We express no opinion as to the application of federal or state fraudulent transfer or fraudulent conveyance laws (including Sections 544, 547, 548, and 550 of the Bankruptcy Code, the Uniform Fraudulent Transfer Act, or the Uniform Voidable Transactions Act, as applicable) or preference laws to any of the transactions contemplated by the Loan Documents.

C. Additional Qualifications and Limitations

The opinions expressed in this letter are further subject to the following additional qualifications and limitations:

(a) Choice-of-law provisions contained in the Loan Documents (including provisions selecting the laws of the State of New York as the governing law) will generally be given effect under applicable principles of conflicts of law; however, a court in a jurisdiction other than New York may decline to apply New York law if it determines that another jurisdiction has a materially greater interest in the determination of the particular issue presented or that the application of New York law would be contrary to a fundamental policy of the jurisdiction whose law would otherwise govern;

(b) We express no opinion as to the creation, attachment, perfection, or priority of any security interest, mortgage lien, or other encumbrance created or purported to be created by the Loan Documents, including, without limitation, the security interests in personal property created by the Mortgages, the Financing Statements, and the Assignments. Such matters are addressed separately in the local counsel opinions being delivered in connection with the closing of the Loan and in UCC filing memoranda prepared by this firm or local counsel, as applicable;

(c) We express no opinion regarding real property matters, including, without limitation, matters of title, survey, zoning, land use, subdivision, environmental compliance, or compliance with building codes or similar requirements applicable to the Properties;

(d) We express no opinion as to compliance by any Co-Borrower or the Guarantor with any financial covenant, debt service coverage ratio, loan-to-value ratio, or other quantitative test or metric set forth in the Loan Documents;

(e) We express no opinion regarding usury matters under the laws of any jurisdiction other than the State of New York; and

(f) The opinions expressed herein are given as of the date hereof, and we undertake no obligation, and hereby disclaim any obligation, to update, revise, or supplement this opinion letter to reflect any changes of law, fact, or circumstance that may occur after the date hereof, or to inform you of any facts or circumstances that come to our attention after the date hereof that might alter or affect the opinions expressed herein.

VIII. Reliance and Benefit

This opinion letter is delivered solely for the benefit of the following parties, and may be relied upon solely by such parties:

(a) Clarendon Metropolitan Insurance Company, as Lender under the Loan Documents;

(b) The Lender's successors and assigns, including, without limitation, any trustee, master servicer, special servicer, operating advisor, directing certificateholder, controlling class representative, and certificate holders of any securitization trust (including any trust designated as CLRN 2025-C14 or any successor or additional CMBS trust) into which the Loan or any interest therein may be contributed, sold, transferred, or otherwise securitized; and

(c) Any nationally recognized statistical rating organization or other rating agency engaged in connection with any securitization of the Loan or any interest therein.

This opinion letter may not be relied upon by any other person or entity, and may not be quoted, cited, or referred to by any person or entity, without our prior written consent, except as expressly provided herein. Notwithstanding the foregoing, this opinion letter may be included among the closing deliverables for the Loan and may be referenced, summarized, or reproduced (in whole or in part) in any pooling and servicing agreement, co-lender agreement, intercreditor agreement, or similar securitization document executed in connection with the securitization of the Loan, and copies of this opinion letter may be provided to any of the parties described in clauses (a) through (c) above in connection therewith.

IX. Governing Law of Opinion

This opinion letter is governed by, and is to be construed and interpreted in accordance with, the laws of the State of New York (without regard to its conflicts of law principles), including the Legal Opinion Accord of the Section of Business Law of the American Bar Association (the "Accord"), to the extent that the Accord is referenced herein or is otherwise applicable to the interpretation of the opinions expressed in this letter.

[Remainder of this page intentionally left blank; signature page follows.]

Very truly yours,

CALDERWOOD & HARKNESS LLP

By: ________

Philip Hartmann, Partner Banking & Finance Group

EXHIBIT A

LIST OF CO-BORROWERS, PROPERTIES, AND JURISDICTIONS

The following table sets forth a complete list of each Co-Borrower, its respective Property, the location and state of qualification of such Property, and the approximate number of residential apartment units at each Property. Each Co-Borrower is a Delaware limited liability company, and Fairwater Operating Partnership, L.P. is the sole member of each Co-Borrower.

Total: approximately 4,200 units across 14 Properties in 5 states

Sole Member of each Co-Borrower: Fairwater Operating Partnership, L.P., a Delaware limited partnership (EIN: 52-2847201). The sole general partner of Fairwater Operating Partnership, L.P. is Fairwater Real Estate Investment Trust, a Maryland real estate investment trust (NYSE: FWTR; EIN: 52-2847193; SDAT Entity ID: D19483726), holding a 99.2% partnership interest therein.

EXHIBIT B

LIST OF LOAN DOCUMENTS

The following is a complete enumerated list of all Loan Documents referenced in Section II of this opinion letter, together with the date and parties for each:

Note: The foregoing list does not include ancillary closing documents, side letters, officer's certificates, title insurance policies, surveys, environmental reports, appraisals, or other deliverables required under the Loan Agreement that do not constitute "Loan Documents" as defined herein.

No.	Co-Borrower	Property Name	City, State	Units
1.	Fairwater Sun Belt I LLC	Ridgewater at Lakeline	Austin, TX	320
2.	Fairwater Sun Belt II LLC	Sagebrush Commons	San Antonio, TX	288
3.	Fairwater Sun Belt III LLC	Cypress Bend	Katy, TX	340
4.	Fairwater Sun Belt IV LLC	Willowbrook Terrace	Sugar Land, TX	310
5.	Fairwater Sun Belt V LLC	Heritage at Stonebriar	Frisco, TX	342
6.	Fairwater Sun Belt VI LLC	Peachtree Crossings	Alpharetta, GA	296
7.	Fairwater Sun Belt VII LLC	Cumberland Ridge	Smyrna, GA	264
8.	Fairwater Sun Belt VIII LLC	Sugarloaf Station	Duluth, GA	260
9.	Fairwater Sun Belt IX LLC	Bayshore Landings	Tampa, FL	308
10.	Fairwater Sun Belt X LLC	Solara at Millenia	Orlando, FL	292
11.	Fairwater Sun Belt XI LLC	Riverside Preserve	Jacksonville, FL	260
12.	Fairwater Sun Belt XII LLC	Stonewall Flats	Charlotte, NC	284
13.	Fairwater Sun Belt XIII LLC	Crabtree Pointe	Raleigh, NC	256
14.	Fairwater Sun Belt XIV LLC	Harpeth Valley	Nashville, TN	380
No.	Document	Date	Parties
1.	Loan Agreement	[Closing Date], 2025	Fairwater Sun Belt I LLC through Fairwater Sun Belt XIV LLC, as Co-Borrowers, and Clarendon Metropolitan Insurance Company, as Lender
2.	Promissory Note ($240,000,000; 6.25% fixed rate; 10-year term; 30-year amortization)	[Closing Date], 2025	Fairwater Sun Belt I LLC through Fairwater Sun Belt XIV LLC, as Co-Borrowers, in favor of Clarendon Metropolitan Insurance Company, as Lender
3.	Guaranty Agreement (Non-Recourse Carve-Out Guaranty)	[Closing Date], 2025	Fairwater Real Estate Investment Trust, as Guarantor, in favor of Clarendon Metropolitan Insurance Company, as Lender
4.	Environmental Indemnity Agreement	[Closing Date], 2025	Fairwater Sun Belt I LLC through Fairwater Sun Belt XIV LLC and Fairwater Real Estate Investment Trust, as Indemnitors, in favor of Clarendon Metropolitan Insurance Company, as Indemnitee
5.	Cash Management Agreement	[Closing Date], 2025	Fairwater Sun Belt I LLC through Fairwater Sun Belt XIV LLC, as Co-Borrowers, Clarendon Metropolitan Insurance Company, as Lender, and KeyBridge National Trust Company, as Cash Management Bank
6.	Mortgage, Assignment of Leases and Rents, and Security Agreement — Ridgewater at Lakeline, Austin, TX	[Closing Date], 2025	Fairwater Sun Belt I LLC, as Mortgagor, in favor of Clarendon Metropolitan Insurance Company, as Mortgagee
7.	Mortgage, Assignment of Leases and Rents, and Security Agreement — Sagebrush Commons, San Antonio, TX	[Closing Date], 2025	Fairwater Sun Belt II LLC, as Mortgagor, in favor of Clarendon Metropolitan Insurance Company, as Mortgagee
8.	Mortgage, Assignment of Leases and Rents, and Security Agreement — Cypress Bend, Katy, TX	[Closing Date], 2025	Fairwater Sun Belt III LLC, as Mortgagor, in favor of Clarendon Metropolitan Insurance Company, as Mortgagee
9.	Mortgage, Assignment of Leases and Rents, and Security Agreement — Willowbrook Terrace, Sugar Land, TX	[Closing Date], 2025	Fairwater Sun Belt IV LLC, as Mortgagor, in favor of Clarendon Metropolitan Insurance Company, as Mortgagee

10.	Mortgage, Assignment of Leases and Rents, and Security Agreement — Heritage at Stonebriar, Frisco, TX	[Closing Date], 2025	Fairwater Sun Belt V LLC, as Mortgagor, in favor of Clarendon Metropolitan Insurance Company, as Mortgagee
11.	Mortgage, Assignment of Leases and Rents, and Security Agreement — Peachtree Crossings, Alpharetta, GA	[Closing Date], 2025	Fairwater Sun Belt VI LLC, as Mortgagor, in favor of Clarendon Metropolitan Insurance Company, as Mortgagee
12.	Mortgage, Assignment of Leases and Rents, and Security Agreement — Cumberland Ridge, Smyrna, GA	[Closing Date], 2025	Fairwater Sun Belt VII LLC, as Mortgagor, in favor of Clarendon Metropolitan Insurance Company, as Mortgagee
13.	Mortgage, Assignment of Leases and Rents, and Security Agreement — Sugarloaf Station, Duluth, GA	[Closing Date], 2025	Fairwater Sun Belt VIII LLC, as Mortgagor, in favor of Clarendon Metropolitan Insurance Company, as Mortgagee
14.	Mortgage, Assignment of Leases and Rents, and Security Agreement — Bayshore Landings, Tampa, FL	[Closing Date], 2025	Fairwater Sun Belt IX LLC, as Mortgagor, in favor of Clarendon Metropolitan Insurance Company, as Mortgagee
15.	Mortgage, Assignment of Leases and Rents, and Security Agreement — Solara at Millenia, Orlando, FL	[Closing Date], 2025	Fairwater Sun Belt X LLC, as Mortgagor, in favor of Clarendon Metropolitan Insurance Company, as Mortgagee
16.	Mortgage, Assignment of Leases and Rents, and Security Agreement — Riverside Preserve, Jacksonville, FL	[Closing Date], 2025	Fairwater Sun Belt XI LLC, as Mortgagor, in favor of Clarendon Metropolitan Insurance Company, as Mortgagee
17.	Mortgage, Assignment of Leases and Rents, and Security Agreement — Stonewall Flats, Charlotte, NC	[Closing Date], 2025	Fairwater Sun Belt XII LLC, as Mortgagor, in favor of Clarendon Metropolitan Insurance Company, as Mortgagee
18.	Mortgage, Assignment of Leases and Rents, and Security Agreement — Crabtree Pointe, Raleigh, NC	[Closing Date], 2025	Fairwater Sun Belt XIII LLC, as Mortgagor, in favor of Clarendon Metropolitan Insurance Company, as Mortgagee
19.	Mortgage, Assignment of Leases and Rents, and Security Agreement — Harpeth Valley, Nashville, TN	[Closing Date], 2025	Fairwater Sun Belt XIV LLC, as Mortgagor, in favor of Clarendon Metropolitan Insurance Company, as Mortgagee
20.	Assignment of Leases and Rents — Ridgewater at Lakeline, Austin, TX	[Closing Date], 2025	Fairwater Sun Belt I LLC, as Assignor, in favor of Clarendon Metropolitan Insurance Company, as Assignee
21.	Assignment of Leases and Rents — Sagebrush Commons, San Antonio, TX	[Closing Date], 2025	Fairwater Sun Belt II LLC, as Assignor, in favor of Clarendon Metropolitan Insurance Company, as Assignee
22.	Assignment of Leases and Rents — Cypress Bend, Katy, TX	[Closing Date], 2025	Fairwater Sun Belt III LLC, as Assignor, in favor of Clarendon Metropolitan Insurance Company, as Assignee
23.	Assignment of Leases and Rents — Willowbrook Terrace, Sugar Land, TX	[Closing Date], 2025	Fairwater Sun Belt IV LLC, as Assignor, in favor of Clarendon Metropolitan Insurance Company, as Assignee
24.	Assignment of Leases and Rents — Heritage at Stonebriar, Frisco, TX	[Closing Date], 2025	Fairwater Sun Belt V LLC, as Assignor, in favor of Clarendon Metropolitan Insurance Company, as Assignee
25.	Assignment of Leases and Rents — Peachtree Crossings, Alpharetta, GA	[Closing Date], 2025	Fairwater Sun Belt VI LLC, as Assignor, in favor of Clarendon Metropolitan Insurance Company, as Assignee
26.	Assignment of Leases and Rents — Cumberland Ridge, Smyrna, GA	[Closing Date], 2025	Fairwater Sun Belt VII LLC, as Assignor, in favor of Clarendon Metropolitan Insurance Company, as Assignee
27.	Assignment of Leases and Rents — Sugarloaf Station, Duluth, GA	[Closing Date], 2025	Fairwater Sun Belt VIII LLC, as Assignor, in favor of Clarendon Metropolitan Insurance Company, as Assignee
28.	Assignment of Leases and Rents — Bayshore Landings, Tampa, FL	[Closing Date], 2025	Fairwater Sun Belt IX LLC, as Assignor, in favor of Clarendon Metropolitan Insurance Company, as Assignee
29.	Assignment of Leases and Rents — Solara at Millenia, Orlando, FL	[Closing Date], 2025	Fairwater Sun Belt X LLC, as Assignor, in favor of Clarendon Metropolitan Insurance Company, as Assignee
30.	Assignment of Leases and Rents — Riverside Preserve, Jacksonville, FL	[Closing Date], 2025	Fairwater Sun Belt XI LLC, as Assignor, in favor of Clarendon Metropolitan Insurance Company, as Assignee
31.	Assignment of Leases and Rents — Stonewall Flats, Charlotte, NC	[Closing Date], 2025	Fairwater Sun Belt XII LLC, as Assignor, in favor of Clarendon Metropolitan Insurance Company, as Assignee
32.	Assignment of Leases and Rents — Crabtree Pointe, Raleigh, NC	[Closing Date], 2025	Fairwater Sun Belt XIII LLC, as Assignor, in favor of Clarendon Metropolitan Insurance Company, as Assignee
33.	Assignment of Leases and Rents — Harpeth Valley, Nashville, TN	[Closing Date], 2025	Fairwater Sun Belt XIV LLC, as Assignor, in favor of Clarendon Metropolitan Insurance Company, as Assignee
34.	UCC Financing Statements (Form UCC-1) — Delaware filings (14 filings, one per Co-Borrower as debtor)	[Closing Date], 2025	Debtor: Each Co-Borrower, respectively; Secured Party: Clarendon Metropolitan Insurance Company

35.

CALDERWOOD & HARKNESS LLP Attorneys at Law
425 Park Avenue New York, New York 10022
Telephone: (212) 554-7000 Facsimile: (212) 554-7001 www.calderwoodharkness.com
DRAFT — FOR DISCUSSION PURPOSES ONLY
Matter No. 1036-00001
Prepared by: Lisa Morrow, Lead Associate, Banking & Finance Reviewed by: Philip Hartmann, Responsible Partner, Banking & Finance
[___], 2025
Clarendon Metropolitan Insurance Company 1 MetroTech Center Brooklyn, New York 11201
Attention: Garrett W. Hollister, Head of CMBS Originations
and its successors and assigns (including any trustee of CLRN 2025-C14 or any successor CMBS trust)
Re: $240,000,000 Mortgage Loan from Clarendon Metropolitan Insurance Company to Fairwater Sun Belt I LLC, Fairwater Sun Belt II LLC, Fairwater Sun Belt III LLC, Fairwater Sun Belt IV LLC, Fairwater Sun Belt V LLC, Fairwater Sun Belt VI LLC, Fairwater Sun Belt VII LLC, Fairwater Sun Belt VIII LLC, Fairwater Sun Belt IX LLC, Fairwater Sun Belt X LLC, Fairwater Sun Belt XI LLC, Fairwater Sun Belt XII LLC, Fairwater Sun Belt XIII LLC, and Fairwater Sun Belt XIV LLC, as Co-Borrowers, and Fairwater Real Estate Investment Trust, as Guarantor
Ladies and Gentlemen:
I. Introduction
We have acted as counsel to Fairwater Sun Belt I LLC, Fairwater Sun Belt II LLC, Fairwater Sun Belt III LLC, Fairwater Sun Belt IV LLC, Fairwater Sun Belt V LLC, Fairwater Sun Belt VI LLC, Fairwater Sun Belt VII LLC, Fairwater Sun Belt VIII LLC, Fairwater Sun Belt IX LLC, Fairwater Sun Belt X LLC, Fairwater Sun Belt XI LLC, Fairwater Sun Belt XII LLC, Fairwater Sun Belt XIII LLC, and Fairwater Sun Belt XIV LLC (each a Delaware limited liability company, individually a "Co-Borrower" and collectively the "Co-Borrowers"), and Fairwater Real Estate Investment Trust, a Maryland real estate investment trust (the "Guarantor"), in connection with the $240,000,000 fixed-rate mortgage loan (the "Loan") made by Clarendon Metropolitan Insurance Company, a New York domestic insurance company (the "Lender"), to the Co-Borrowers. A complete list of the Co-Borrowers and their respective Properties is set forth in Exhibit A attached hereto.
This opinion letter is being delivered to you pursuant to Section 9.1(b)(vii) of the Loan Agreement dated as of [Closing Date], 2025 (as defined below), as a condition to the closing of the Loan. This opinion is delivered for the benefit of the Lender and its successors and assigns, including, without limitation, any trustee, special servicer, master servicer, operating advisor, certificate holders, and rating agencies in connection with any securitization of the Loan, including any securitization effected through a commercial mortgage-backed securities trust designated as CLRN 2025-C14 or any successor CMBS trust. This opinion is rendered in connection with our engagement referenced under Matter No. 1036-00001.
II. Definitions of Loan Documents
As used in this opinion letter, the following terms have the meanings set forth below:
"Loan Documents" means, collectively, the following documents and instruments executed and delivered in connection with the Loan:
(a) Loan Agreement dated as of [Closing Date], 2025, among Fairwater Sun Belt I LLC, Fairwater Sun Belt II LLC, Fairwater Sun Belt III LLC, Fairwater Sun Belt IV LLC, Fairwater Sun Belt V LLC, Fairwater Sun Belt VI LLC, Fairwater Sun Belt VII LLC, Fairwater Sun Belt VIII LLC, Fairwater Sun Belt IX LLC, Fairwater Sun Belt X LLC, Fairwater Sun Belt XI LLC, Fairwater Sun Belt XII LLC, Fairwater Sun Belt XIII LLC, and Fairwater Sun Belt XIV LLC, as Co-Borrowers, and Clarendon Metropolitan Insurance Company, as Lender (the "Loan Agreement");
(b) Promissory Note dated as of [Closing Date], 2025, in the original principal amount of $240,000,000.00, made by the Co-Borrowers in favor of the Lender (the "Note"), bearing interest at a fixed rate of 6.25% per annum, with a maturity date of ten (10) years from the date of origination and an amortization schedule of thirty (30) years;
(c) Guaranty Agreement dated as of [Closing Date], 2025, made by Fairwater Real Estate Investment Trust in favor of the Lender (the "Guaranty" or the "Non-Recourse Carve-Out Guaranty"), pursuant to which the Guarantor has guaranteed certain recourse carve-out obligations and exceptions to non-recourse liability as more particularly set forth therein;
(d) Environmental Indemnity Agreement dated as of [Closing Date], 2025, made by the Co-Borrowers and Fairwater Real Estate Investment Trust in favor of the Lender (the "Environmental Indemnity"), pursuant to which the Co-Borrowers and the Guarantor have agreed to indemnify, defend, and hold harmless the Lender with respect to certain environmental matters relating to the Properties;
(e) Cash Management Agreement dated as of [Closing Date], 2025, among the Co-Borrowers, the Lender, and KeyBridge National Trust Company (the "Cash Management Bank") (the "Cash Management Agreement"), establishing the lockbox account, cash management account, and related reserve and escrow sub-accounts for the collection and application of Property revenues;
(f) Fourteen (14) separate Mortgage, Assignment of Leases and Rents, and Security Agreements, each dated as of [Closing Date], 2025, executed by the applicable Co-Borrower in favor of the Lender, covering the Properties located in the following states: Texas (five (5) Properties), Georgia (three (3) Properties), Florida (three (3) Properties), North Carolina (two (2) Properties), and Tennessee (one (1) Property) (collectively, the "Mortgages"), as more particularly described in Exhibit A hereto;
(g) Fourteen (14) separate Assignments of Leases and Rents, each dated as of [Closing Date], 2025, executed by the applicable Co-Borrower in favor of the Lender, assigning to the Lender as additional security for the Loan all of such Co-Borrower's right, title, and interest in and to the leases, rents, issues, and profits arising from its respective Property (collectively, the "Assignments");
(h) UCC Financing Statements (Form UCC-1 and any related amendments or continuation statements) to be filed with the Secretary of State of the State of Delaware (with respect to each Co-Borrower, as debtor) and in each county in which a mortgaged Property is located, as fixture filings and otherwise (the "Financing Statements"); and
A complete enumerated list of all Loan Documents, together with the date and parties for each, is set forth in Exhibit B attached hereto.
"Organizational Documents" means, collectively, the following documents and instruments:
(i) the Amended and Restated Limited Liability Company Agreement of each Co-Borrower (fourteen (14) separate agreements), each dated as of various dates, by and between Fairwater Operating Partnership, L.P., a Delaware limited partnership, as the sole member of each such Co-Borrower, incorporating CMBS separateness covenants, independent director/manager provisions, and special purpose entity restrictions customary for loans intended for securitization;
(ii) the Declaration of Trust and Bylaws of Fairwater Real Estate Investment Trust, as currently in effect; and
(iii) the Amended and Restated Agreement of Limited Partnership of Fairwater Operating Partnership, L.P., as currently in effect.
The Loan Documents and the Organizational Documents are collectively referred to herein as the "Transaction Documents."
As used in this opinion letter, the following additional defined terms shall have the meanings ascribed to them below:
"Co-Borrowers" means Fairwater Sun Belt I LLC, Fairwater Sun Belt II LLC, Fairwater Sun Belt III LLC, Fairwater Sun Belt IV LLC, Fairwater Sun Belt V LLC, Fairwater Sun Belt VI LLC, Fairwater Sun Belt VII LLC, Fairwater Sun Belt VIII LLC, Fairwater Sun Belt IX LLC, Fairwater Sun Belt X LLC, Fairwater Sun Belt XI LLC, Fairwater Sun Belt XII LLC, Fairwater Sun Belt XIII LLC, and Fairwater Sun Belt XIV LLC, each a Delaware limited liability company, as more particularly described in Exhibit A hereto.
"Guarantor" means Fairwater Real Estate Investment Trust, a Maryland real estate investment trust, whose shares of beneficial interest are listed on the New York Stock Exchange under the ticker symbol "FWTR" (Employer Identification Number: 52-2847193).
"Operating Partnership" means Fairwater Operating Partnership, L.P., a Delaware limited partnership (Employer Identification Number: 52-2847201), in which the Guarantor serves as the sole general partner and holds a 99.2% partnership interest.
"Properties" means the fourteen (14) multifamily apartment communities comprising the Sun Belt Portfolio, totaling approximately 4,200 residential apartment units across the states of Texas, Georgia, Florida, North Carolina, and Tennessee, as more particularly described in Exhibit A hereto.
III. Documents Examined and Diligence Performed
In connection with rendering the opinions expressed herein, we have examined originals or copies (certified or otherwise identified to our satisfaction) of the following documents, records, and instruments:
(a) Executed copies of each of the Loan Documents, including each of the documents listed in Section II above and in Exhibit B hereto;
(b) Certificates of Formation for each Co-Borrower, as filed with the Secretary of State of the State of Delaware, together with all amendments thereto;
(c) Good standing certificates for each Co-Borrower issued by the Secretary of State of the State of Delaware, each dated within ten (10) business days of the date hereof, and good standing certificates (or certificates of authorization) for each Co-Borrower issued by the applicable Secretary of State or other appropriate governmental authority of each state in which such Co-Borrower is qualified as a foreign limited liability company to transact business (namely, the State of Texas, the State of Georgia, the State of Florida, the State of North Carolina, or the State of Tennessee, as applicable to the state in which such Co-Borrower's Property is located);
(d) Good standing certificate for Fairwater Real Estate Investment Trust issued by the Maryland State Department of Assessments and Taxation (SDAT Entity ID: D19483726), dated within ten (10) business days of the date hereof;
(e) Certificate of Limited Partnership for Fairwater Operating Partnership, L.P., as filed with the Secretary of State of the State of Delaware, together with all amendments thereto, and a good standing certificate for the Operating Partnership issued by the Secretary of State of the State of Delaware, dated within ten (10) business days of the date hereof;
(f) Amended and Restated Limited Liability Company Agreements for each Co-Borrower, each incorporating CMBS separateness covenants, special purpose entity restrictions, and independent director/manager provisions;
(g) Declaration of Trust and Bylaws of the Guarantor, each as currently in effect;
(h) Amended and Restated Agreement of Limited Partnership of the Operating Partnership, as currently in effect;
(i) Resolutions of the Board of Trustees of Fairwater Real Estate Investment Trust, adopted at a duly convened meeting held on September 8, 2025, authorizing (A) the permanent financing of the Sun Belt Portfolio through the Loan, (B) the execution, delivery, and performance by the Guarantor of the Guaranty and the Environmental Indemnity, (C) the authorization and direction of the Operating Partnership, as sole member of each Co-Borrower, to cause each Co-Borrower to execute, deliver, and perform the Loan Documents to which it is a party, and (D) the designation of Jonathan R. Calder, Chief Executive Officer, and Naomi T. Sinclair, Chief Financial Officer, as authorized signatories with full power and authority to execute all Loan Documents and related closing deliverables on behalf of the Co-Borrowers and the Guarantor;
(j) Written consent of Fairwater Operating Partnership, L.P. (acting through Fairwater Real Estate Investment Trust, as its sole general partner), authorizing each Co-Borrower to enter into, execute, deliver, and perform the Loan Documents to which such Co-Borrower is a party;
(k) Officer's certificates executed by authorized officers of each Co-Borrower and the Guarantor, delivered at the closing of the Loan (each, a "Borrower's Closing Certificate"), certifying, among other things, the truth and accuracy of the representations and warranties made by each such entity in the Loan Documents, the absence of any default or event of default, and the incumbency and specimen signatures of each authorized signatory;
(l) Uniform Commercial Code lien search results from the Secretary of State of the State of Delaware, conducted with respect to each Co-Borrower (as debtor) and the Operating Partnership (as debtor), reflecting the results of searches completed within thirty (30) days prior to the date hereof; and
(m) Such other documents, certificates, records, and instruments as we have deemed necessary or appropriate for the purpose of rendering the opinions expressed herein.
We have not independently verified any of the factual matters set forth in the documents, certificates, and records reviewed by us, and we have relied upon the accuracy and completeness of such documents, certificates, and records for purposes of this opinion. With respect to certain factual matters, we have relied upon the representations and warranties made by the Co-Borrowers and the Guarantor in the Loan Documents and the Borrower's Closing Certificates without independent investigation or verification.
IV. Assumptions
In rendering the opinions expressed herein, we have assumed the following, without independent investigation or verification:
(a) The genuineness of all signatures on the Transaction Documents and all other documents and instruments reviewed by us, other than the signatures of persons signing on behalf of the Co-Borrowers and the Guarantor;
(b) The authenticity of all documents submitted to us as originals and the conformity to authentic originals of all documents submitted to us as copies (whether certified, photostatic, electronic, or otherwise);
(c) The due authorization, execution, and delivery of the Loan Documents by the Lender and by all parties thereto other than the Co-Borrowers and the Guarantor, including the Cash Management Bank;
(d) That the Lender and each other party to the Loan Documents (other than the Co-Borrowers and the Guarantor) have all requisite corporate, trust, partnership, or other organizational power and authority to enter into, execute, deliver, and perform each of the Loan Documents to which they are a party;
(e) That each of the Loan Documents constitutes a legal, valid, and binding obligation of the Lender and each other party thereto (other than the Co-Borrowers and the Guarantor), enforceable against each such party in accordance with its respective terms, subject to applicable bankruptcy, insolvency, and equitable limitations;
(f) That all of the factual representations and warranties contained in the Loan Documents, the Borrower's Closing Certificates, the Organizational Documents, and any other certificates or instruments delivered in connection with the closing of the Loan are true, correct, and complete in all material respects as of the date hereof;
(g) That each Co-Borrower and the Operating Partnership have been operated at all times since their respective dates of formation in compliance with their respective Organizational Documents and with all applicable laws, rules, and regulations, and that each has observed all requisite organizational formalities;
(h) That the Loan constitutes a bona fide arm's-length transaction between the Lender, on the one hand, and the Co-Borrowers and the Guarantor, on the other hand, and that the Lender has acted in good faith throughout the negotiation, documentation, and closing of the Loan;
(i) That each independent director or independent manager of each Co-Borrower (as required under the Amended and Restated Limited Liability Company Agreement of such Co-Borrower) has been duly appointed in accordance with the applicable Organizational Documents, is qualified to serve in such capacity, satisfies any applicable independence requirements, and has exercised and will continue to exercise independent judgment with respect to matters submitted for his or her consideration; and
(j) That the UCC Financing Statements described in clause (h) of the definition of Loan Documents set forth in Section II above will be duly and timely filed in the appropriate filing offices of the Secretary of State of the State of Delaware and in the applicable county recording or filing offices in the states of Texas, Georgia, Florida, North Carolina, and Tennessee, and that the Mortgages will be duly and timely recorded in the applicable county recording offices in each such state, in each case with all requisite filing and recording fees having been paid and all necessary transfer, mortgage recording, and documentary stamp taxes having been paid, as applicable.
V. Qualifications and Limitations
The opinions expressed herein are limited in all respects to the following bodies of law, and we express no opinion as to the laws of any other jurisdiction or as to any other body of law:
(a) The laws of the State of New York, which is the governing law elected in the Loan Agreement, the Note, the Guaranty, the Environmental Indemnity, and the Cash Management Agreement;
(b) The Delaware Limited Liability Company Act, 6 Del. C. §§ 18-101 et seq., as applicable to each Co-Borrower, and the Delaware Revised Uniform Limited Partnership Act, 6 Del. C. §§ 17-101 et seq., as applicable to the Operating Partnership;
(c) The general corporation and trust laws of the State of Maryland, including the Maryland REIT Law set forth in Title 8 of the Corporations and Associations Article of the Annotated Code of Maryland, as applicable to the Guarantor in its capacity as a Maryland real estate investment trust; and
(d) The federal law of the United States of America, to the extent applicable to the transactions contemplated by the Loan Documents.
Without limiting the generality of the foregoing, we express no opinion as to the laws of the State of Texas, the State of Georgia, the State of Florida, the State of North Carolina, or the State of Tennessee. We understand that separate legal opinions addressed to the Lender will be delivered by local counsel admitted to practice in each of those jurisdictions, which opinions will address, among other things, the enforceability of the Mortgages and the Assignments in each applicable state, the due recording and priority of the Mortgages, real property law matters, state-specific usury and lending requirements, and other issues arising under the laws of such states. We express no opinion on any matter covered by such local counsel opinions, and you should look solely to such local counsel opinions with respect to such matters.
In addition, no opinion is expressed herein with respect to any of the following:
(i) Federal or state tax law, including matters relating to income tax, transfer tax, or any other tax;
(ii) Environmental law, including the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, and any state or local environmental statutes, regulations, or ordinances;
(iii) Insurance regulatory law, including the laws and regulations governing the investment activities and capital adequacy of insurance companies;
(iv) Federal or state securities law, including the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended;
(v) The Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and regulations promulgated thereunder, or Section 4975 of the Internal Revenue Code of 1986, as amended;
(vi) Federal or state antitrust or competition law; and
(vii) intellectual property law, including patent, trademark, copyright, and trade secret law.
We express no opinion as to the compliance of the Guarantor with the requirements for qualification or continued qualification as a real estate investment trust under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the "Code"). We understand that matters relating to the Guarantor's REIT qualification, to the extent required by the Lender, are addressed, if at all, by Crestline & Alderman LLP, corporate and securities counsel to Fairwater Real Estate Investment Trust.
VI. Opinions
Based upon and subject to the foregoing, and subject further to the qualifications and limitations set forth in Section VII below, we are of the opinion that:
Opinion 1 — Due Organization and Good Standing (Co-Borrowers)
Each of the Co-Borrowers, namely Fairwater Sun Belt I LLC, Fairwater Sun Belt II LLC, Fairwater Sun Belt III LLC, Fairwater Sun Belt IV LLC, Fairwater Sun Belt V LLC, Fairwater Sun Belt VI LLC, Fairwater Sun Belt VII LLC, Fairwater Sun Belt VIII LLC, Fairwater Sun Belt IX LLC, Fairwater Sun Belt X LLC, Fairwater Sun Belt XI LLC, Fairwater Sun Belt XII LLC, Fairwater Sun Belt XIII LLC, and Fairwater Sun Belt XIV LLC, is a limited liability company duly organized, validly existing, and in good standing under the laws of the State of Delaware. Each Co-Borrower is duly qualified to transact business and is in good standing as a foreign limited liability company in the state in which its respective Property is located, as follows:
(a) Fairwater Sun Belt I LLC, Fairwater Sun Belt II LLC, Fairwater Sun Belt III LLC, Fairwater Sun Belt IV LLC, and Fairwater Sun Belt V LLC are each duly qualified to transact business and in good standing as foreign limited liability companies in the State of Texas;
(b) Fairwater Sun Belt VI LLC, Fairwater Sun Belt VII LLC, and Fairwater Sun Belt VIII LLC are each duly qualified to transact business and in good standing as foreign limited liability companies in the State of Georgia;
(c) Fairwater Sun Belt IX LLC, Fairwater Sun Belt X LLC, and Fairwater Sun Belt XI LLC are each duly qualified to transact business and in good standing as foreign limited liability companies in the State of Florida;
(d) Fairwater Sun Belt XII LLC and Fairwater Sun Belt XIII LLC are each duly qualified to transact business and in good standing as foreign limited liability companies in the State of North Carolina; and
(e) Fairwater Sun Belt XIV LLC is duly qualified to transact business and in good standing as a foreign limited liability company in the State of Tennessee.
Opinion 2 — Due Organization and Good Standing (Operating Partnership)
Fairwater Operating Partnership, L.P. is a limited partnership duly organized, validly existing, and in good standing under the laws of the State of Delaware. The Operating Partnership is the sole member of each Co-Borrower.
Opinion 3 — Due Organization and Good Standing (Guarantor)
Fairwater Real Estate Investment Trust is a real estate investment trust duly organized, validly existing, and in good standing under the laws of the State of Maryland (Maryland State Department of Assessments and Taxation Entity ID: D19483726). The Guarantor is the sole general partner of the Operating Partnership, holding a 99.2% partnership interest therein.
Opinion 4 — Power and Authority
Each Co-Borrower has the limited liability company power and authority under its Amended and Restated Limited Liability Company Agreement and the Delaware Limited Liability Company Act to own, lease, and operate its respective Property, and to execute, deliver, and perform its obligations under each of the Loan Documents to which it is a party. The Guarantor has the trust power and authority under its Declaration of Trust and Bylaws and the laws of the State of Maryland to execute, deliver, and perform its obligations under the Guaranty and the Environmental Indemnity. The Operating Partnership has the partnership power and authority under its Amended and Restated Agreement of Limited Partnership and the Delaware Revised Uniform Limited Partnership Act to authorize each Co-Borrower to enter into and perform the Loan Documents to which such Co-Borrower is a party.
Opinion 5 — Due Authorization
The execution, delivery, and performance of each of the Loan Documents by each Co-Borrower that is a party thereto have been duly authorized by all necessary limited liability company action on the part of such Co-Borrower, including the written consent of Fairwater Operating Partnership, L.P., as the sole member of each Co-Borrower, to the execution, delivery, and performance of such Loan Documents. The execution, delivery, and performance of the Guaranty and the Environmental Indemnity by the Guarantor have been duly authorized by all necessary trust action on the part of the Guarantor, including the resolutions of the Board of Trustees of Fairwater Real Estate Investment Trust duly adopted at a meeting held on September 8, 2025, at which a quorum was present and acting throughout. The persons who have executed the Loan Documents on behalf of each Co-Borrower and the Guarantor, namely Jonathan R. Calder, Chief Executive Officer, and Naomi T. Sinclair, Chief Financial Officer, have been duly authorized to execute such documents and instruments in their respective capacities and no other action or approval on the part of any Co-Borrower, the Operating Partnership, or the Guarantor is necessary for the valid execution, delivery, and performance of the Loan Documents.
Opinion 6 — Due Execution and Delivery
Each of the Loan Documents has been duly executed and delivered by each Co-Borrower and the Guarantor that is a party thereto.
Opinion 7 — Enforceability
Each of the Loan Documents constitutes a legal, valid, and binding obligation of each Co-Borrower and the Guarantor that is a party thereto, enforceable against such Co-Borrower or the Guarantor, as applicable, in accordance with its respective terms. This opinion is subject to the enforceability qualifications set forth in Section VII below.
Opinion 8 — No Conflicts
The execution, delivery, and performance of the Loan Documents by each Co-Borrower and the Guarantor do not and will not:
(a) Violate, conflict with, or result in a breach of any provision of the Organizational Documents of any Co-Borrower, the Operating Partnership, or the Guarantor, including without limitation the Amended and Restated Limited Liability Company Agreement of each Co-Borrower, the Amended and Restated Agreement of Limited Partnership of the Operating Partnership, or the Declaration of Trust and Bylaws of the Guarantor;
(b) Violate any law, rule, or regulation of the State of New York, the State of Delaware, the State of Maryland, or the United States of America applicable to any Co-Borrower or the Guarantor, in each case to the extent that such laws, rules, and regulations are within the scope of this opinion as described in Section V above;
(c) Result in a breach of, or constitute a default under, or result in the acceleration of any obligation under, or result in the creation or imposition of any lien, charge, or encumbrance upon any property or assets of any Co-Borrower or the Guarantor (other than the liens and security interests created by the Loan Documents themselves) under, any agreement, instrument, indenture, or other obligation known to us to which any Co-Borrower or the Guarantor is a party or by which any of them or any of their respective properties or assets is bound, in each case limited to those agreements and instruments that have been provided to us for review in connection with this engagement.
With respect to the opinion set forth in clause (c) above, we note that we have reviewed the existing $240,000,000 bridge credit facility dated June 30, 2025, among the Operating Partnership, as borrower, and Kensington National Bank, N.A., as administrative agent (the "Bridge Facility"). Based on our review of the Bridge Facility and the closing arrangements for the Loan, we note that upon the application of a portion of the Loan proceeds to the full repayment and discharge of all amounts outstanding under the Bridge Facility at the closing of the Loan, no conflict with or default under the Bridge Facility will arise as a result of the execution, delivery, or performance of the Loan Documents.
Opinion 9 — No Governmental Approvals Required
No authorization, approval, consent, license, order, or exemption of, or filing, registration, or qualification with, any federal, state, or local governmental authority or regulatory body is required for the execution, delivery, or performance of any of the Loan Documents by any Co-Borrower or the Guarantor, except for:
(a) The recording of the Mortgages in the applicable county recording offices in the following jurisdictions: five (5) counties in the State of Texas, three (3) counties in the State of Georgia, three (3) counties in the State of Florida, two (2) counties in the State of North Carolina, and one (1) county in the State of Tennessee;
(b) The filing of UCC Financing Statements (i) with the Secretary of State of the State of Delaware with respect to each Co-Borrower, as debtor, and with respect to the Operating Partnership, as debtor (to the extent the Operating Partnership has pledged its membership interests in the Co-Borrowers), and (ii) as fixture filings in the applicable county filing offices in the states of Texas, Georgia, Florida, North Carolina, and Tennessee; and
(c) Such post-closing filings, registrations, and recordings as may be required under applicable federal, state, or local laws, rules, or regulations in connection with the ongoing administration and servicing of the Loan.
We note that this opinion does not address real property recording requirements, documentary stamp taxes, mortgage recording taxes, intangible taxes, or similar charges or requirements under the laws of the State of Texas, the State of Georgia, the State of Florida, the State of North Carolina, or the State of Tennessee, all of which are addressed in the separate local counsel opinions being delivered to the Lender concurrently herewith.
Opinion 10 — Non-Consolidation / Separateness Opinion
Based upon our review and examination of (i) the organizational structure of the Co-Borrowers, the Operating Partnership, and the Guarantor, (ii) the Amended and Restated Limited Liability Company Agreements of each Co-Borrower (each of which incorporates CMBS separateness covenants and independent director/manager provisions customary for loans intended for securitization), (iii) the representations, warranties, and covenants set forth in the Loan Agreement (including, without limitation, the special purpose entity covenants contained in Section 5.2 thereof), and (iv) the Borrower's Closing Certificates and such other documents, certificates, and records described in Section III above, and assuming the continuing compliance by each Co-Borrower with the special purpose entity covenants set forth in its respective Amended and Restated Limited Liability Company Agreement and in the Loan Agreement, it is our opinion that:
(a) A court applying the laws of the State of Delaware in a case commenced under Title 11 of the United States Code (the "Bankruptcy Code") would not disregard the separate legal existence of any Co-Borrower by ordering the substantive consolidation of the assets and liabilities of such Co-Borrower with those of Fairwater Real Estate Investment Trust, Fairwater Operating Partnership, L.P., any other Co-Borrower, or any other affiliate of such Co-Borrower; and
(b) The assets and liabilities of each Co-Borrower would be treated as separate and distinct from those of the Guarantor, the Operating Partnership, and each other Co-Borrower for purposes of any proceeding under the Bankruptcy Code.
The foregoing non-consolidation opinion is subject to the non-consolidation qualifications set forth in Section VII below, including, without limitation, the following:
(i) Substantive consolidation determinations are inherently factual in nature, and a court may exercise its equitable discretion to order substantive consolidation based on the totality of circumstances prevailing at the time of any insolvency proceeding;
(ii) We have assumed that each Co-Borrower has been and will continue to be operated as a separate legal entity in accordance with its Organizational Documents and the special purpose entity covenants set forth in the Loan Agreement, including, without limitation, maintaining separate books and records, maintaining separate bank accounts, conducting business in its own name, holding itself out to creditors and other third parties as a separate entity, paying its own liabilities and expenses from its own funds, and observing all requisite organizational formalities;
(iii) We have assumed that each independent director or independent manager of each Co-Borrower has exercised and will continue to exercise independent judgment with respect to all matters submitted for his or her consideration, including, without limitation, any determination relating to the filing of a voluntary petition under the Bankruptcy Code;
(iv) We have assumed that sufficient separateness formalities have been observed at all times since the formation of each Co-Borrower, including the avoidance of any commingling of assets or funds with those of the Guarantor, the Operating Partnership, or any other affiliate; and
(v) We note that each Co-Borrower is a wholly owned subsidiary of the Operating Partnership, which in turn is 99.2% owned by the Guarantor. This common ownership structure does not, in and of itself, provide a basis for substantive consolidation, provided that the separateness covenants and organizational formalities described above have been and continue to be observed.
VII. Enforceability and Non-Consolidation Qualifications
A. Enforceability Qualifications
The enforceability opinions set forth in Opinion 7 of Section VI above are subject to and may be limited by the following:
(a) Applicable bankruptcy, insolvency, reorganization, moratorium, receivership, assignment for the benefit of creditors, fraudulent conveyance, fraudulent transfer, preferential transfer, and other similar laws of general applicability relating to or affecting the enforcement of creditors' rights generally, as now or hereafter in effect;
(b) General principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity), including, without limitation, principles of commercial reasonableness, good faith, fair dealing, and the possible unavailability of specific performance, injunctive relief, or other equitable remedies;
(c) The discretion of any court of competent jurisdiction in awarding specific performance, declaratory relief, injunctive relief, or other equitable remedies, and the general principle that the availability of such remedies is subject to the discretion of the court before which any proceeding for such relief may be brought;
(d) Limitations on the enforceability of provisions in the Loan Documents providing for indemnification, contribution, or exculpation, to the extent that such provisions may be held to be contrary to public policy or may be limited by applicable statutory or common law principles, including, without limitation, provisions purporting to indemnify a party against its own negligence or willful misconduct;
(e) Limitations on the enforceability of provisions of the Loan Documents that may be deemed to constitute penalties or forfeitures, including, without limitation, provisions relating to late charges, default interest, and prepayment premiums, to the extent a court may find that such provisions are unreasonable or constitute an unenforceable penalty;
(f) Limitations imposed by applicable usury laws on the rate of interest that may be charged, collected, or received in connection with the Loan; and
(g) The unenforceability of provisions in the Loan Documents purporting to waive rights or defenses that cannot, as a matter of law, be effectively waived, including, without limitation, waivers of the right to a jury trial (to the extent that such waivers may be challenged under applicable law), waivers of rights to notice and cure, and waivers of statutory rights provided for the protection of debtors.
B. Non-Consolidation Qualifications
The non-consolidation opinions set forth in Opinion 10 of Section VI above are subject to and limited by the following qualifications:
(a) A bankruptcy court's broad exercise of equitable discretion under Section 105(a) of the Bankruptcy Code and other provisions of the Bankruptcy Code, which may be invoked to order the substantive consolidation of two or more related entities in the interests of justice or equity;
(b) The inherently factual nature of a substantive consolidation analysis, which a court may undertake based upon a comprehensive examination of the totality of circumstances prevailing at the time of any insolvency proceeding, including, without limitation, the degree of difficulty in segregating and ascertaining individual assets and liabilities, the presence or absence of consolidated financial statements, the degree of commingling of assets and business functions, the transfers of assets without observance of formalities, and the degree of corporate or entity identity overlap, among other factors;
(c) The assumption that there has been and will continue to be compliance in all material respects with all separateness covenants and special purpose entity requirements set forth in the Organizational Documents and the Loan Agreement, including, without limitation, the requirements to maintain separate books and records, separate bank accounts, and a separate legal identity from each other Co-Borrower, the Operating Partnership, the Guarantor, and all other affiliates;
(d) The assumption that adequate capitalization of each Co-Borrower has been maintained since its formation and will continue to be maintained, and that no Co-Borrower has been rendered insolvent by the transactions contemplated by the Loan Documents; and
(e) We express no opinion as to the application of federal or state fraudulent transfer or fraudulent conveyance laws (including Sections 544, 547, 548, and 550 of the Bankruptcy Code, the Uniform Fraudulent Transfer Act, or the Uniform Voidable Transactions Act, as applicable) or preference laws to any of the transactions contemplated by the Loan Documents.
C. Additional Qualifications and Limitations
The opinions expressed in this letter are further subject to the following additional qualifications and limitations:
(a) Choice-of-law provisions contained in the Loan Documents (including provisions selecting the laws of the State of New York as the governing law) will generally be given effect under applicable principles of conflicts of law; however, a court in a jurisdiction other than New York may decline to apply New York law if it determines that another jurisdiction has a materially greater interest in the determination of the particular issue presented or that the application of New York law would be contrary to a fundamental policy of the jurisdiction whose law would otherwise govern;
(b) We express no opinion as to the creation, attachment, perfection, or priority of any security interest, mortgage lien, or other encumbrance created or purported to be created by the Loan Documents, including, without limitation, the security interests in personal property created by the Mortgages, the Financing Statements, and the Assignments. Such matters are addressed separately in the local counsel opinions being delivered in connection with the closing of the Loan and in UCC filing memoranda prepared by this firm or local counsel, as applicable;
(c) We express no opinion regarding real property matters, including, without limitation, matters of title, survey, zoning, land use, subdivision, environmental compliance, or compliance with building codes or similar requirements applicable to the Properties;
(d) We express no opinion as to compliance by any Co-Borrower or the Guarantor with any financial covenant, debt service coverage ratio, loan-to-value ratio, or other quantitative test or metric set forth in the Loan Documents;
(e) We express no opinion regarding usury matters under the laws of any jurisdiction other than the State of New York; and
(f) The opinions expressed herein are given as of the date hereof, and we undertake no obligation, and hereby disclaim any obligation, to update, revise, or supplement this opinion letter to reflect any changes of law, fact, or circumstance that may occur after the date hereof, or to inform you of any facts or circumstances that come to our attention after the date hereof that might alter or affect the opinions expressed herein.
VIII. Reliance and Benefit
This opinion letter is delivered solely for the benefit of the following parties, and may be relied upon solely by such parties:
(a) Clarendon Metropolitan Insurance Company, as Lender under the Loan Documents;
(b) The Lender's successors and assigns, including, without limitation, any trustee, master servicer, special servicer, operating advisor, directing certificateholder, controlling class representative, and certificate holders of any securitization trust (including any trust designated as CLRN 2025-C14 or any successor or additional CMBS trust) into which the Loan or any interest therein may be contributed, sold, transferred, or otherwise securitized; and
(c) Any nationally recognized statistical rating organization or other rating agency engaged in connection with any securitization of the Loan or any interest therein.
This opinion letter may not be relied upon by any other person or entity, and may not be quoted, cited, or referred to by any person or entity, without our prior written consent, except as expressly provided herein. Notwithstanding the foregoing, this opinion letter may be included among the closing deliverables for the Loan and may be referenced, summarized, or reproduced (in whole or in part) in any pooling and servicing agreement, co-lender agreement, intercreditor agreement, or similar securitization document executed in connection with the securitization of the Loan, and copies of this opinion letter may be provided to any of the parties described in clauses (a) through (c) above in connection therewith.
IX. Governing Law of Opinion
This opinion letter is governed by, and is to be construed and interpreted in accordance with, the laws of the State of New York (without regard to its conflicts of law principles), including the Legal Opinion Accord of the Section of Business Law of the American Bar Association (the "Accord"), to the extent that the Accord is referenced herein or is otherwise applicable to the interpretation of the opinions expressed in this letter.
[Remainder of this page intentionally left blank; signature page follows.]
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Philip Hartmann, Partner Banking & Finance Group
EXHIBIT A
LIST OF CO-BORROWERS, PROPERTIES, AND JURISDICTIONS
The following table sets forth a complete list of each Co-Borrower, its respective Property, the location and state of qualification of such Property, and the approximate number of residential apartment units at each Property. Each Co-Borrower is a Delaware limited liability company, and Fairwater Operating Partnership, L.P. is the sole member of each Co-Borrower.
Total: approximately 4,200 units across 14 Properties in 5 states
Sole Member of each Co-Borrower: Fairwater Operating Partnership, L.P., a Delaware limited partnership (EIN: 52-2847201). The sole general partner of Fairwater Operating Partnership, L.P. is Fairwater Real Estate Investment Trust, a Maryland real estate investment trust (NYSE: FWTR; EIN: 52-2847193; SDAT Entity ID: D19483726), holding a 99.2% partnership interest therein.
EXHIBIT B
LIST OF LOAN DOCUMENTS
The following is a complete enumerated list of all Loan Documents referenced in Section II of this opinion letter, together with the date and parties for each:
Note: The foregoing list does not include ancillary closing documents, side letters, officer's certificates, title insurance policies, surveys, environmental reports, appraisals, or other deliverables required under the Loan Agreement that do not constitute "Loan Documents" as defined herein.
No. | Co-Borrower | Property Name | City, State | Units
1. | Fairwater Sun Belt I LLC | Ridgewater at Lakeline | Austin, TX | 320
2. | Fairwater Sun Belt II LLC | Sagebrush Commons | San Antonio, TX | 288
3. | Fairwater Sun Belt III LLC | Cypress Bend | Katy, TX | 340
4. | Fairwater Sun Belt IV LLC | Willowbrook Terrace | Sugar Land, TX | 310
5. | Fairwater Sun Belt V LLC | Heritage at Stonebriar | Frisco, TX | 342
6. | Fairwater Sun Belt VI LLC | Peachtree Crossings | Alpharetta, GA | 296
7. | Fairwater Sun Belt VII LLC | Cumberland Ridge | Smyrna, GA | 264
8. | Fairwater Sun Belt VIII LLC | Sugarloaf Station | Duluth, GA | 260
9. | Fairwater Sun Belt IX LLC | Bayshore Landings | Tampa, FL | 308
10. | Fairwater Sun Belt X LLC | Solara at Millenia | Orlando, FL | 292
11. | Fairwater Sun Belt XI LLC | Riverside Preserve | Jacksonville, FL | 260
12. | Fairwater Sun Belt XII LLC | Stonewall Flats | Charlotte, NC | 284
13. | Fairwater Sun Belt XIII LLC | Crabtree Pointe | Raleigh, NC | 256
14. | Fairwater Sun Belt XIV LLC | Harpeth Valley | Nashville, TN | 380
No. | Document | Date | Parties
1. | Loan Agreement | [Closing Date], 2025 | Fairwater Sun Belt I LLC through Fairwater Sun Belt XIV LLC, as Co-Borrowers, and Clarendon Metropolitan Insurance Company, as Lender
2. | Promissory Note ($240,000,000; 6.25% fixed rate; 10-year term; 30-year amortization) | [Closing Date], 2025 | Fairwater Sun Belt I LLC through Fairwater Sun Belt XIV LLC, as Co-Borrowers, in favor of Clarendon Metropolitan Insurance Company, as Lender
3. | Guaranty Agreement (Non-Recourse Carve-Out Guaranty) | [Closing Date], 2025 | Fairwater Real Estate Investment Trust, as Guarantor, in favor of Clarendon Metropolitan Insurance Company, as Lender
4. | Environmental Indemnity Agreement | [Closing Date], 2025 | Fairwater Sun Belt I LLC through Fairwater Sun Belt XIV LLC and Fairwater Real Estate Investment Trust, as Indemnitors, in favor of Clarendon Metropolitan Insurance Company, as Indemnitee
5. | Cash Management Agreement | [Closing Date], 2025 | Fairwater Sun Belt I LLC through Fairwater Sun Belt XIV LLC, as Co-Borrowers, Clarendon Metropolitan Insurance Company, as Lender, and KeyBridge National Trust Company, as Cash Management Bank
6. | Mortgage, Assignment of Leases and Rents, and Security Agreement — Ridgewater at Lakeline, Austin, TX | [Closing Date], 2025 | Fairwater Sun Belt I LLC, as Mortgagor, in favor of Clarendon Metropolitan Insurance Company, as Mortgagee
7. | Mortgage, Assignment of Leases and Rents, and Security Agreement — Sagebrush Commons, San Antonio, TX | [Closing Date], 2025 | Fairwater Sun Belt II LLC, as Mortgagor, in favor of Clarendon Metropolitan Insurance Company, as Mortgagee
8. | Mortgage, Assignment of Leases and Rents, and Security Agreement — Cypress Bend, Katy, TX | [Closing Date], 2025 | Fairwater Sun Belt III LLC, as Mortgagor, in favor of Clarendon Metropolitan Insurance Company, as Mortgagee
9. | Mortgage, Assignment of Leases and Rents, and Security Agreement — Willowbrook Terrace, Sugar Land, TX | [Closing Date], 2025 | Fairwater Sun Belt IV LLC, as Mortgagor, in favor of Clarendon Metropolitan Insurance Company, as Mortgagee
10. | Mortgage, Assignment of Leases and Rents, and Security Agreement — Heritage at Stonebriar, Frisco, TX | [Closing Date], 2025 | Fairwater Sun Belt V LLC, as Mortgagor, in favor of Clarendon Metropolitan Insurance Company, as Mortgagee
11. | Mortgage, Assignment of Leases and Rents, and Security Agreement — Peachtree Crossings, Alpharetta, GA | [Closing Date], 2025 | Fairwater Sun Belt VI LLC, as Mortgagor, in favor of Clarendon Metropolitan Insurance Company, as Mortgagee
12. | Mortgage, Assignment of Leases and Rents, and Security Agreement — Cumberland Ridge, Smyrna, GA | [Closing Date], 2025 | Fairwater Sun Belt VII LLC, as Mortgagor, in favor of Clarendon Metropolitan Insurance Company, as Mortgagee
13. | Mortgage, Assignment of Leases and Rents, and Security Agreement — Sugarloaf Station, Duluth, GA | [Closing Date], 2025 | Fairwater Sun Belt VIII LLC, as Mortgagor, in favor of Clarendon Metropolitan Insurance Company, as Mortgagee
14. | Mortgage, Assignment of Leases and Rents, and Security Agreement — Bayshore Landings, Tampa, FL | [Closing Date], 2025 | Fairwater Sun Belt IX LLC, as Mortgagor, in favor of Clarendon Metropolitan Insurance Company, as Mortgagee
15. | Mortgage, Assignment of Leases and Rents, and Security Agreement — Solara at Millenia, Orlando, FL | [Closing Date], 2025 | Fairwater Sun Belt X LLC, as Mortgagor, in favor of Clarendon Metropolitan Insurance Company, as Mortgagee
16. | Mortgage, Assignment of Leases and Rents, and Security Agreement — Riverside Preserve, Jacksonville, FL | [Closing Date], 2025 | Fairwater Sun Belt XI LLC, as Mortgagor, in favor of Clarendon Metropolitan Insurance Company, as Mortgagee
17. | Mortgage, Assignment of Leases and Rents, and Security Agreement — Stonewall Flats, Charlotte, NC | [Closing Date], 2025 | Fairwater Sun Belt XII LLC, as Mortgagor, in favor of Clarendon Metropolitan Insurance Company, as Mortgagee
18. | Mortgage, Assignment of Leases and Rents, and Security Agreement — Crabtree Pointe, Raleigh, NC | [Closing Date], 2025 | Fairwater Sun Belt XIII LLC, as Mortgagor, in favor of Clarendon Metropolitan Insurance Company, as Mortgagee
19. | Mortgage, Assignment of Leases and Rents, and Security Agreement — Harpeth Valley, Nashville, TN | [Closing Date], 2025 | Fairwater Sun Belt XIV LLC, as Mortgagor, in favor of Clarendon Metropolitan Insurance Company, as Mortgagee
20. | Assignment of Leases and Rents — Ridgewater at Lakeline, Austin, TX | [Closing Date], 2025 | Fairwater Sun Belt I LLC, as Assignor, in favor of Clarendon Metropolitan Insurance Company, as Assignee
21. | Assignment of Leases and Rents — Sagebrush Commons, San Antonio, TX | [Closing Date], 2025 | Fairwater Sun Belt II LLC, as Assignor, in favor of Clarendon Metropolitan Insurance Company, as Assignee
22. | Assignment of Leases and Rents — Cypress Bend, Katy, TX | [Closing Date], 2025 | Fairwater Sun Belt III LLC, as Assignor, in favor of Clarendon Metropolitan Insurance Company, as Assignee
23. | Assignment of Leases and Rents — Willowbrook Terrace, Sugar Land, TX | [Closing Date], 2025 | Fairwater Sun Belt IV LLC, as Assignor, in favor of Clarendon Metropolitan Insurance Company, as Assignee
24. | Assignment of Leases and Rents — Heritage at Stonebriar, Frisco, TX | [Closing Date], 2025 | Fairwater Sun Belt V LLC, as Assignor, in favor of Clarendon Metropolitan Insurance Company, as Assignee
25. | Assignment of Leases and Rents — Peachtree Crossings, Alpharetta, GA | [Closing Date], 2025 | Fairwater Sun Belt VI LLC, as Assignor, in favor of Clarendon Metropolitan Insurance Company, as Assignee
26. | Assignment of Leases and Rents — Cumberland Ridge, Smyrna, GA | [Closing Date], 2025 | Fairwater Sun Belt VII LLC, as Assignor, in favor of Clarendon Metropolitan Insurance Company, as Assignee
27. | Assignment of Leases and Rents — Sugarloaf Station, Duluth, GA | [Closing Date], 2025 | Fairwater Sun Belt VIII LLC, as Assignor, in favor of Clarendon Metropolitan Insurance Company, as Assignee
28. | Assignment of Leases and Rents — Bayshore Landings, Tampa, FL | [Closing Date], 2025 | Fairwater Sun Belt IX LLC, as Assignor, in favor of Clarendon Metropolitan Insurance Company, as Assignee
29. | Assignment of Leases and Rents — Solara at Millenia, Orlando, FL | [Closing Date], 2025 | Fairwater Sun Belt X LLC, as Assignor, in favor of Clarendon Metropolitan Insurance Company, as Assignee
30. | Assignment of Leases and Rents — Riverside Preserve, Jacksonville, FL | [Closing Date], 2025 | Fairwater Sun Belt XI LLC, as Assignor, in favor of Clarendon Metropolitan Insurance Company, as Assignee
31. | Assignment of Leases and Rents — Stonewall Flats, Charlotte, NC | [Closing Date], 2025 | Fairwater Sun Belt XII LLC, as Assignor, in favor of Clarendon Metropolitan Insurance Company, as Assignee
32. | Assignment of Leases and Rents — Crabtree Pointe, Raleigh, NC | [Closing Date], 2025 | Fairwater Sun Belt XIII LLC, as Assignor, in favor of Clarendon Metropolitan Insurance Company, as Assignee
33. | Assignment of Leases and Rents — Harpeth Valley, Nashville, TN | [Closing Date], 2025 | Fairwater Sun Belt XIV LLC, as Assignor, in favor of Clarendon Metropolitan Insurance Company, as Assignee
34. | UCC Financing Statements (Form UCC-1) — Delaware filings (14 filings, one per Co-Borrower as debtor) | [Closing Date], 2025 | Debtor: Each Co-Borrower, respectively; Secured Party: Clarendon Metropolitan Insurance Company
35. | UCC Financing Statements (Form UCC-1) — County fixture filings (14 filings, one per Property) | [Closing Date], 2025 | Debtor: Each Co-Borrower, respectively; Secured Party: Clarendon Metropolitan Insurance Company

CALDERWOOD & HARKNESS LLP Attorneys at Law

CALDERWOOD & HARKNESS LLP

EXHIBIT A

LIST OF CO-BORROWERS, PROPERTIES, AND JURISDICTIONS

EXHIBIT B

LIST OF LOAN DOCUMENTS

Record

Parties

Dates

Amounts