Kenneth,
I hope this message finds you well. I am writing to follow up on the Endorsement Request Letter we circulated to Commonwealth National Title Insurance Company in connection with the above-referenced matter — Fairwater Real Estate Investment Trust's acquisition of the 14-property Sun Belt logistics and office portfolio from Greystone Meridian Partners Fund III, L.P. (Calderwood & Harkness LLP Matter No. 1036-00004). As you know, the due diligence period expired on April 15, 2024, and the parties are now working toward the scheduled closing on May 31, 2024. With that timeline in mind, we would like to consolidate the outstanding endorsement items, confirm the pro forma owner's policy specifications, and establish a clear path to finalizing all title deliverables well ahead of closing.
**I. Pro Forma Owner's Policy Specifications — Confirmation Requested**
We have reviewed and approved the following specifications for the pro forma owner's policies and ask that you confirm these are accurately reflected in the pro formas currently being prepared by Commonwealth Title:
- **Policy Form:** ALTA Owner's Policy (2021 form) for each of the 14 properties. - **Aggregate Insured Amount:** $1,100,000,000, allocated among the 14 properties in accordance with the Purchase Price Allocation Schedule (PSA Exhibit K), based on appraised values from Stonebridge Valuation Advisors, LLC. - **Named Insured:** Fairwater Real Estate Investment Trust, a Maryland real estate investment trust. - **Effective Date of Policies:** To be the actual closing date (currently scheduled for May 31, 2024). - **Permitted Exceptions:** Per PSA Exhibit P. The marked-up title commitments reflecting the negotiated permitted exceptions have been previously circulated to Commonwealth Title. - **Schedule B-I Requirements:** We request confirmation that all Schedule B-I requirements can be satisfied at or prior to closing, including receipt of executed title affidavits from Seller (each Target Entity, by authorized officer of Greystone Meridian Capital LLC, as general partner of GMP Fund III). - **Gap Coverage:** Please confirm that Commonwealth Title's gap indemnity / bring-down letter will provide coverage from the commitment effective date through closing and recording. - **Survey Certification:** All surveys are to be certified to Fairwater Real Estate Investment Trust, Commonwealth National Title Insurance Company, and each applicable lender: Pinnacle Federal Bank, N.A.; Veltrano Capital Lending Corp.; and Sycamore Life Insurance Company.
**II. Endorsement Request — Comprehensive Summary**
Set forth below is the comprehensive list of endorsements requested for the 14 properties, as detailed in our prior Endorsement Request Letter. We ask that you and Virginia confirm the availability of each endorsement on a property-by-property and jurisdiction-by-jurisdiction basis. As you will note, the specific endorsements vary slightly between logistics and office properties and across the five states (Georgia, Texas, Florida, Tennessee, and North Carolina).
*A. Standard Endorsements Requested for All 14 Properties:*
1. Owner's Comprehensive Endorsement (ALTA 9 series) 2. Access Endorsement (ALTA 17 or 17.1) — confirming access to public roads 3. Survey Endorsement (ALTA 25 or 25.1) — removing standard survey exception based on ALTA/NSPS surveys 4. Zoning Endorsement (ALTA 3 or 3.1) — zoning compliance; zoning confirmation letters have been obtained for all 14 properties 5. Contiguity Endorsement — where applicable, for multi-parcel properties (specifically, Fairfield Logistics Center I and Fairfield Logistics Center II in Fairburn, GA) 6. Tax Parcel Endorsement (ALTA 18 or 18.1) — confirming tax parcel identification 7. Same-as-Survey Endorsement — confirming legal description matches survey 8. Non-Imputation Endorsement — reflecting entity-level transfer structure (see Section IV below for additional detail) 9. Fairway/Eagle (or equivalent) Endorsement — addressing entity ownership change 10. Deletion of Creditors' Rights Exception (or modification thereof)
*B. Additional Property-Specific and State-Specific Endorsements:*
- **Georgia (4 properties: Fairfield Logistics Center I — GMP Fairfield I LLC; Fairfield Logistics Center II — GMP Fairfield II LLC; Buckhead Place Office Tower — GMP Buckhead LLC; Peachtree Corners Logistics Center — GMP Peachtree LLC):** Georgia form endorsements as available; controlling-interest transfer endorsement addressing Georgia controlling-interest transfer tax implications for title coverage.
- **Texas (3 properties: Westlake Distribution Hub — GMP Westlake LLC; Katy Freeway Logistics Park — GMP Katy LLC; Alliance Commerce Center — GMP Alliance LLC):** Texas-specific T-19 series endorsements as applicable. We note that Texas has no state transfer tax; nominal local fees only.
- **Florida (3 properties: Lakeland Crossings Industrial — GMP Lakeland LLC; Southport Logistics Park — GMP Southport LLC; Brickell Bay Office Building — GMP Brickell LLC):** Florida form endorsements as available. Please note documentary stamp tax on deemed consideration of approximately $1,680,000 for all Florida properties.
- **Tennessee (3 properties: Murfreesboro Distribution Center — GMP Murfreesboro LLC; Cool Springs Office Park — GMP Cool Springs LLC; Mount Juliet Commerce Park — GMP Mount Juliet LLC):** Tennessee form endorsements as available.
- **North Carolina (1 property: SouthPark Corporate Center — GMP SouthPark LLC):** North Carolina form endorsements as available.
**III. Property-by-Property Summary**
For ease of reference, the following table summarizes each property, the corresponding Target Entity, the applicable loan and lender, and the key endorsements to confirm. This information is consistent with the property-by-property endorsement summary chart previously circulated with our Endorsement Request Letter.
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With respect to Properties #3 (Westlake Distribution Hub) and #6 (Lakeland Crossings Industrial), we note that the Phase I Environmental Site Assessments identified de minimis recognized environmental conditions. We ask that you confirm there will be no environmental exclusion in the policies for those properties.
**IV. Non-Imputation Endorsement — Additional Detail**
We want to emphasize the critical importance of the non-imputation endorsement in this transaction. As you know, Fairwater is acquiring 100% of the membership interests in each of the 14 single-purpose Delaware LLCs that hold title to the properties. The properties will remain titled in the name of the same LLCs post-closing — there will be no deed transfer. The non-imputation endorsement is therefore essential to ensure that knowledge of the prior owners/members (GMP Fund III, L.P. and Greystone Meridian Capital LLC) is not imputed to Fairwater as the new sole member of each LLC. We ask that Kenneth and Virginia confirm (a) the availability of this endorsement in all five states, and (b) whether any additional documentation will be required beyond the title affidavits and closing certificates previously identified in the Schedule B-I requirements.
**V. Lender Policy Coordination**
In addition to the 14 owner's policies, lender policies will be required for each of the three lender groups, and endorsements thereon should be coordinated in parallel:
- **Pinnacle Federal Bank, N.A.** — 8 properties (Loans 1-A through 1-H); lender's counsel: Sandra Whitfield, Whitfield & Archer LLP - **Veltrano Capital Lending Corp.** — 4 properties (Loans 2-A through 2-D); lender's counsel: Leo Cranford, Cranford McCabe LLP - **Sycamore Life Insurance Company** — 2 properties (Loans 3-A and 3-B); lender's counsel: Claire Wynn, Partridge Wynn & Slater LLP
Total assumed mortgage debt across the three facilities is approximately $612,000,000. Could you and Virginia confirm whether lender's counsel for each of the three facilities have provided their endorsement requirements to Commonwealth Title? If not, we are happy to facilitate that communication directly.
Combined title insurance premiums for the owner's and loan policies are estimated at $2,420,000, which is the Buyer's responsibility under the PSA. We have prepared a title insurance premium allocation schedule distributing that amount across the 14 properties and ask that you confirm the premium calculations align with Commonwealth Title's rate schedules in each applicable jurisdiction.
**VI. Survey Coordination**
Please confirm that the final certified ALTA/NSPS surveys from Meridian Land Surveying, Inc. (Daniel Caulfield, PLS, PE) for all 14 properties have been received and are acceptable to Commonwealth Title for purposes of issuing the survey endorsements (ALTA 25 or 25.1) and removing the standard survey exceptions. The surveys comply with the ALTA/NSPS 2021 Minimum Standard Detail Requirements, including Table A Items 1–4, 6(a), 6(b), 7(a), 7(b)(1), 7(c), 8, 9, 10, 11(a), 11(b), 13, 14, 16, 17, 18, and 19. As you may recall, we sent a survey review comment letter on March 15, 2024, and revised/final surveys were returned by Meridian Land Surveying thereafter. We would appreciate confirmation that the final surveys have been received and reviewed by your team.
**VII. Timeline and Requested Action Items**
With the May 31, 2024 closing date approaching, we respectfully request that Kenneth and Virginia provide the following at your earliest convenience, and ideally by April 25, 2024:
1. Confirmation of endorsement availability for each property by jurisdiction. 2. Updated pro forma owner's policies reflecting all endorsements and the negotiated permitted exceptions per PSA Exhibit P. 3. Confirmation of Schedule B-I requirement satisfaction status for each property. 4. Confirmation of lender endorsement coordination status (including whether lender's counsel have submitted their requirements). 5. Final premium calculation confirmation against Commonwealth Title's applicable rate schedules.
All title deliverables will need to be finalized well in advance of the closing date to allow for review by the client and lender's counsel. We are happy to schedule a call with you, Virginia, and the Calderwood & Harkness team — including Grace Nakamura and Doug Fairchild — if it would be helpful to work through any open items or questions. Please let us know what time works best for your side.
Thank you, Kenneth, and please extend our thanks to Virginia as well, for your continued responsiveness on this matter. We very much appreciate Commonwealth Title's handling of this portfolio given the multi-state, multi-lender complexity, and we look forward to bringing this across the finish line together.
Please do not hesitate to reach out by phone or email at your convenience if you have any questions.
Best regards,
Rafael Dominguez Associate Calderwood & Harkness LLP 1700 K Street NW, Suite 900 Washington, DC 20006 Tel: (202) 555-4138 Email: rdominguez@calderwoodharkness.com
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