Tom,
I hope you're doing well. As you know, we represent Fairwater Real Estate Investment Trust ("Buyer") in connection with its acquisition of the 14-property portfolio from Greystone Meridian Partners Fund III, L.P. ("Seller") pursuant to that certain Purchase and Sale Agreement dated February 28, 2024 (the "PSA"). Attached for Blackridge Hayes's review and comment is our draft First Amendment to the PSA (Word format). The amendment addresses two items that have been the subject of recent discussions between the parties, as summarized below.
**1. Extension of Estoppel and SNDA Delivery Deadline**
As you know, Section 8.2(a) of the PSA requires Seller to deliver tenant estoppel certificates from tenants representing at least 80% of in-place base rent ($59,840,000 of the $74,800,000 aggregate annual in-place ABR across the portfolio) and from every tenant occupying 25,000 or more RSF (the "Major Tenants"), in each case in form reasonably acceptable to Buyer and Buyer's lenders, no later than the estoppel delivery deadline of May 10, 2024. Based on discussions between Marcus Devereaux at Fairwater and Seller's asset management team, and in light of the volume of estoppels required across 87 leases in the portfolio, the parties have agreed to extend the estoppel delivery deadline by five days to May 15, 2024. For consistency, the SNDA delivery deadline will also be aligned to May 15, 2024. Section 1 of the draft amendment reflects these extensions.
**2. PCA Credit Mechanics Clarification**
As you are aware, the property condition assessments prepared by Rampart Building Sciences, Inc. across all 14 properties identified aggregate estimated immediate repair costs of $2,140,000, allocated among four properties as follows:
- Buckhead Place Office Tower (GMP Buckhead LLC): $890,000 - Cool Springs Office Park (GMP Cool Springs LLC): $620,000 - Lakeland Crossings Industrial (GMP Lakeland LLC): $380,000 - SouthPark Corporate Center (GMP SouthPark LLC): $250,000
As negotiated between the parties, Seller will provide a credit to Buyer at closing equal to 50% of the aggregate estimated immediate repair costs — i.e., $1,070,000 (the "PCA Credit"). The PCA Credit will be applied as a reduction to the cash equity portion of the purchase price at closing, such that the $488,000,000 cash equity component will be reduced by $1,070,000, resulting in net cash to Seller of $486,930,000, subject to prorations and other customary adjustments. Section 2 of the draft amendment clarifies that the PCA Credit does not constitute a representation or warranty by Seller regarding property condition and does not affect Buyer's acceptance of the properties in their as-is condition following expiration of the Due Diligence Period on April 15, 2024. The amendment also sets forth the PCA Credit allocation among the four properties for purchase price allocation purposes under Exhibit K.
**Next Steps**
We would appreciate it if your team could review the draft and provide any comments by end of day Friday, April 12, so that we can finalize and execute the amendment promptly. As you know, the Due Diligence Period expires on April 15 and the additional hard deposit of $27,500,000 is due on April 16, so it would be helpful to have the amendment fully executed in advance of those dates.
I am available to discuss any comments by phone at your convenience. If it would be useful, we are also happy to set up a call with Doug Fairchild and Nathaniel Pryce to work through any open points.
Thanks, Tom. Looking forward to your comments.
Best regards,
Grace Nakamura Lead Associate Calderwood & Harkness LLP 450 Park Avenue, 28th Floor New York, NY 10022 T: (212) 554-3187 E: gnakamura@calderwoodharkness.com
Matter No. 1036-00004
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