MEMORANDUM
ATTORNEY-CLIENT PRIVILEGED AND CONFIDENTIAL ATTORNEY WORK PRODUCT
FROM: Grace Nakamura, Calderwood & Harkness LLP, 450 Park Avenue, 28th Floor, New York, NY 10022
TO: Douglas Fairchild, Responsible Partner, Calderwood & Harkness LLP
CC: Angela Fontaine, Partner, Calderwood & Harkness LLP Rafael Dominguez, Associate, Calderwood & Harkness LLP Camille Oduya, In-House Real Estate Counsel, Fairwater Real Estate Investment Trust Marcus Devereaux, EVP Acquisitions, Fairwater Real Estate Investment Trust Leah Torrance, SVP Asset Management, Fairwater Real Estate Investment Trust
Date: April 10, 2024
Re: Property Condition Assessment Review — 14-Property Sun Belt Logistics & Office Portfolio — Fairwater Real Estate Investment Trust Acquisition from Greystone Meridian Partners Fund III, L.P.
Matter No.: 1036-00004
THIS MEMORANDUM IS PROTECTED BY THE ATTORNEY-CLIENT PRIVILEGE AND CONSTITUTES ATTORNEY WORK PRODUCT PREPARED IN ANTICIPATION OF LITIGATION AND IN CONNECTION WITH THE RENDERING OF LEGAL ADVICE. THIS MEMORANDUM AND ITS CONTENTS ARE STRICTLY CONFIDENTIAL AND MAY NOT BE DISCLOSED TO ANY THIRD PARTY WITHOUT THE PRIOR WRITTEN CONSENT OF CALDERWOOD & HARKNESS LLP AND FAIRWATER REAL ESTATE INVESTMENT TRUST.
I. Executive Summary
This memorandum reviews and summarizes the findings of fourteen (14) Property Condition Assessment reports (each, a "PCA" and collectively, the "PCAs") prepared by Rampart Building Sciences, Inc. ("Rampart"), under the direction of Alan Westbrook, PE, Project Manager, with offices at 1414 Key Highway, Suite 300, Baltimore, MD 21230, in connection with Fairwater Real Estate Investment Trust's ("Fairwater" or "Buyer") proposed acquisition of 100% of the membership interests in fourteen single-purpose Delaware limited liability companies (each, a "Target Entity" and collectively, the "Target Entities") from Greystone Meridian Partners Fund III, L.P. ("GMP Fund III" or "Seller") pursuant to that certain Membership Interest Purchase and Sale Agreement dated as of March 1, 2024, as amended by that certain First Amendment to Membership Interest Purchase and Sale Agreement dated as of April 12, 2024 (as amended, the "PSA").
Transaction Context. The transaction involves the entity-level acquisition of a 14-property Sun Belt logistics and office portfolio (the "Portfolio") at a gross purchase price of $1,100,000,000. The Portfolio comprises ten (10) logistics/distribution warehouse properties and four (4) office properties located across five states: Georgia, Texas, Florida, Tennessee, and North Carolina. The Portfolio totals approximately 5,224,000 rentable square feet ("RSF"). The properties range in vintage from 2016 to 2021, with the logistics assets generally representing the newer construction (2019–2021) and the office assets representing the older construction (2016–2019).
PCA Scope. Rampart conducted Property Condition Assessments at all 14 properties in accordance with the ASTM E2018-15 Standard Guide for Property Condition Assessments. Site inspections were performed between November 15, 2023, and January 19, 2024. Rampart's scope encompassed structural systems, building envelope, roofing, mechanical/HVAC, plumbing, electrical, fire/life safety, vertical transportation (elevators), interior finishes, site improvements (parking, paving, landscaping, and drainage), and ADA compliance. The PCAs did not include destructive testing, concealed-space investigations, or environmental assessments, as those workstreams were separately addressed by Trident Environmental Group LLC.
Key Finding. Rampart identified aggregate estimated immediate repair costs of $2,140,000 across four (4) of the fourteen (14) properties. The four properties with immediate repair needs are Buckhead Place Office Tower (Atlanta, GA), Cool Springs Office Park (Brentwood, TN), Lakeland Crossings Industrial (Lakeland, FL), and SouthPark Corporate Center (Charlotte, NC). The remaining ten (10) properties had no material immediate repair needs identified and were generally assessed to be in good to excellent condition.
Negotiated Resolution. Following delivery of the PCA findings to Seller's counsel, Blackridge Hayes LLP, and a subsequent negotiation of the appropriate credit, the parties agreed to a PCA credit of $1,070,000, representing 50% of the aggregate immediate repair costs. This credit is reflected in the PSA First Amendment dated April 12, 2024, and is applied as a reduction to the cash equity payment at closing. After application of the PCA credit, the adjusted purchase price is $1,098,930,000.
Recommendation. Based on our review of all 14 PCA reports and the related due diligence materials, the PCA findings do not present material impediments to closing. The negotiated $1,070,000 credit adequately addresses the identified deficiencies on a shared-risk basis. Fairwater should budget for the remaining $1,070,000 of immediate repair costs in its post-acquisition capital expenditure plan and prioritize the highest-risk items (Buckhead Place HVAC and curtain wall, Cool Springs roofing) in the near term following closing.
II. Scope of Review and Methodology
A. Engagement of Rampart Building Sciences, Inc.
Calderwood & Harkness LLP ("C&H") engaged Rampart Building Sciences, Inc. on behalf of Fairwater REIT pursuant to the preliminary due diligence request list dated October 25, 2023. The engagement was structured to provide a comprehensive physical condition evaluation of all 14 properties in the Portfolio in accordance with the ASTM E2018-15 Standard Guide for Property Condition Assessments. Rampart's engagement letter, executed on November 1, 2023, established the scope of services, deliverables, timeline, and fee structure. Alan Westbrook, PE, served as the designated Project Manager and was the responsible professional engineer for all 14 reports.
Rampart conducted site inspections at all 14 properties between November 15, 2023, and January 19, 2024. The inspections were organized in two phases to accommodate property access logistics and tenant notification requirements. Phase 1 addressed the ten (10) logistics/distribution properties, with site inspections conducted between November 15, 2023, and December 15, 2023. Phase 2 addressed the four (4) office properties, with site inspections conducted between December 18, 2023, and January 19, 2024. The phased approach reflected the relative complexity of office property inspections, which required additional coordination with building management to access tenant-occupied floors, mechanical rooms, elevator shafts, and parking structures.
Rampart delivered its reports in corresponding phases. The Phase 1 logistics property reports were transmitted to C&H on December 22, 2023, and the Phase 2 office property reports were transmitted on February 2, 2024. All 14 reports were delivered in final form and bear the certification and seal of Alan Westbrook, PE. A transmittal index listing each report by property name, date of inspection, and date of report delivery is attached hereto as Exhibit A.
B. Assessment Scope
Each PCA followed the ASTM E2018-15 standard methodology and evaluated the following building systems and site conditions:
(i) Structural Systems — foundations, structural framing, load-bearing walls, columns, beams, and structural slab-on-grade or elevated structural slabs;
(ii) Building Envelope — exterior walls, cladding, curtain wall systems, windows, doors, sealants, and waterproofing;
(iii) Roofing — roof membranes (TPO, EPDM, or built-up roofing), flashings, drainage systems, skylights, and rooftop equipment supports;
(iv) Mechanical/HVAC — heating, ventilation, and air conditioning systems, including rooftop units, air handling units, chillers, boilers, cooling towers, ductwork, controls, and building automation systems;
(v) Plumbing — domestic water supply, sanitary waste, storm drainage, water heaters, and related plumbing fixtures;
(vi) Electrical — electrical service and distribution, switchgear, panelboards, transformers, emergency generators, and lighting systems;
(vii) Fire/Life Safety — fire alarm systems, sprinkler systems (including ESFR systems at warehouse properties), fire suppression equipment, standpipe systems, and fire department connections;
(viii) Vertical Transportation — elevators (passenger, freight, and service), escalators (where applicable), and associated controllers, motors, and cab finishes;
(ix) Interior Finishes — lobbies, common corridors, restrooms, tenant spaces (to the extent accessible), ceiling systems, flooring, and wall finishes;
(x) Site Improvements — parking lots, parking garages, driveways, sidewalks, curbing, landscaping, site drainage, retaining walls, fencing, and exterior signage; and
(xi) ADA Compliance — accessible routes, parking, signage, restroom compliance, and other Americans with Disabilities Act requirements.
Each PCA report includes Opinions of Probable Costs organized into four categories: (i) Immediate Repair Needs (Year 0), representing items requiring attention within the near term due to safety, code compliance, or risk of further deterioration; (ii) Short-Term Repair Needs (Years 1–2), representing items that should be addressed within the first two years of ownership; (iii) Physical Needs over the Evaluation Period (Years 1–10), representing anticipated capital expenditures over the ten-year evaluation horizon; and (iv) Replacement Reserve recommendations, expressed as a per-square-foot annual allocation to fund long-term capital needs.
It is important to note that Rampart did not perform destructive testing, concealed-space investigations, or laboratory analysis of building materials as part of its assessment. The PCAs are based on visual observation and readily accessible areas of the properties. Additionally, environmental assessments, including Phase I Environmental Site Assessments, asbestos-containing material surveys, lead-based paint surveys, and mold assessments, were not within Rampart's scope and were handled separately by Trident Environmental Group LLC under a distinct engagement.
C. C&H Review Process
Calderwood & Harkness LLP reviewed all 14 PCA reports in their entirety. Our review was conducted with the following objectives: (a) to identify and summarize all immediate repair needs (Year 0 items) across the Portfolio; (b) to assess the materiality of identified deficiencies in the context of the transaction and the PSA's due diligence and credit mechanisms; (c) to cross-reference PCA findings against tenant lease obligations to determine whether identified deficiencies are landlord-responsible or tenant-responsible items under the applicable lease agreements, as set forth in the separate Lease Audit Memorandum; (d) to coordinate PCA findings with the insurance coverage review to determine whether any identified conditions are covered by existing property insurance policies or would be addressed by the replacement insurance program at closing; and (e) to cross-reference PCA findings with title and survey matters to confirm that no PCA-related issues give rise to title exceptions, survey encroachments, or zoning compliance concerns.
In conducting this review, C&H coordinated extensively with Leah Torrance, Fairwater's Senior Vice President of Asset Management, and with Fairwater PM's internal engineering team. Ms. Torrance and her team provided valuable input on the reasonableness of Rampart's cost estimates, the prioritization of repair items, and the integration of PCA findings into Fairwater's post-acquisition capital planning framework. Additionally, C&H consulted with Marcus Devereaux, EVP Acquisitions, regarding the commercial implications of the PCA findings and the negotiation strategy for the PCA credit.
III. Portfolio Overview — PCA Summary by Property
A. Summary Table — All 14 Properties
The following table sets forth a summary of key PCA findings for each of the 14 properties in the Portfolio, including property identification, type, size, vintage, target entity, and Rampart's Opinions of Probable Costs across the four cost categories.
B. Summary Totals
The following key observations emerge from the Portfolio-level PCA data:
Total Portfolio RSF: 5,224,000 SF across 14 properties.
Aggregate Immediate Repair Costs (Year 0): $2,140,000. This amount represents Rampart's aggregate Opinion of Probable Cost for items classified as requiring immediate attention at four of the fourteen properties.
Properties with Immediate Repair Needs: Four (4) of fourteen (14) properties exhibit immediate repair needs, specifically: Buckhead Place Office Tower ($890,000), Cool Springs Office Park ($620,000), Lakeland Crossings Industrial ($380,000), and SouthPark Corporate Center ($250,000).
Properties with No Immediate Repair Needs: The remaining ten (10) of fourteen (14) properties had no immediate repair costs identified. These properties are generally in good to excellent condition and require only routine short-term maintenance and long-term capital planning.
Vintage Correlation: All four properties with immediate repair needs are among the older assets in the Portfolio, with construction dates ranging from 2016 to 2019. The Cool Springs Office Park, as the oldest asset in the Portfolio (2016 vintage), has the highest per-square-foot immediate repair costs and the highest recommended replacement reserve. In contrast, the 2020 and 2021 vintage logistics properties consistently received assessments of "good" to "excellent" condition, reflecting their recent construction and the apparently competent ongoing maintenance performed by Argyle Property Services LLC. This vintage correlation is consistent with expectations and does not raise any unusual concerns about construction quality or property management practices.
Aggregate Short-Term Needs (Years 1–2): $1,814,000 across all 14 properties. These items represent anticipated near-term capital expenditures that, while not classified as immediate, should be addressed within the first two years of ownership to prevent further deterioration and maintain the properties in competitive condition.
Aggregate 10-Year Capital Needs: $12,092,000 across all 14 properties. This figure represents Rampart's aggregate opinion of anticipated capital expenditures over the ten-year evaluation period (inclusive of the short-term items). On a portfolio-wide basis, this equates to approximately $2.32/SF over the evaluation period, or approximately $0.23/SF/year on a weighted-average basis.
IV. Detailed Findings — Properties with Immediate Repair Needs
This section provides a detailed discussion of the PCA findings for each of the four properties identified by Rampart as having immediate repair needs (Year 0 items). For each property, we summarize the specific deficiencies identified, the estimated costs of remediation, and the potential implications for the transaction and post-acquisition operations.
A. Buckhead Place Office Tower — $890,000 Immediate Repairs
Property Address: 3380 Peachtree Road NE, Atlanta, GA 30326
Target Entity: GMP Buckhead LLC (EIN: 84-2639901)
Property Type / RSF: Class A Office / 285,000 RSF
Year Built: 2018
Current Property Manager: Argyle Property Services LLC (Sean Kilpatrick, Portfolio Manager)
Date of Inspection: January 8, 2024
Buckhead Place Office Tower is a twelve-story, Class A multi-tenant office building situated in the Buckhead submarket of Atlanta, Georgia. The property was constructed in 2018 and, at the time of Rampart's inspection, was approximately six years old. Despite its relatively recent construction, Rampart identified several building systems exhibiting premature wear or requiring immediate attention. The aggregate immediate repair cost for this property is $890,000, representing the highest single-property immediate repair cost in the Portfolio and 41.6% of the total Portfolio immediate repair costs.
Findings:
(1) HVAC System — $420,000. Rampart's mechanical engineer observed that two of the four rooftop air handling units ("AHUs") are exhibiting premature compressor degradation. Specifically, AHU-3 and AHU-4, which serve floors 7 through 12, showed signs of compressor short-cycling, elevated discharge temperatures, and refrigerant migration. Rampart noted visible oil residue at compressor fittings, suggesting active or recent refrigerant leaks. Rampart recommends full replacement of both AHUs, including compressors, condensing coils, and associated controls, at an estimated cost of $420,000. Rampart further recommends that this replacement be completed within six months to avoid potential unit failure during the peak summer cooling season. The remaining two AHUs (AHU-1 and AHU-2, serving floors 1 through 6) were assessed to be in good operating condition with no immediate repair needs.
(2) Building Envelope / Curtain Wall — $285,000. Rampart's building envelope specialist identified sealant failure at the southeast curtain wall joints on floors 8 through 12. The sealant degradation was characterized as adhesive failure (loss of bond between sealant and mullion substrate), which is atypical for a building of this age and may indicate improper sealant selection or installation during original construction. Rampart noted evidence of water infiltration at several locations, including moisture staining and minor mold growth on interior drywall surfaces adjacent to the curtain wall at floor 10. Rampart recommends immediate remediation, including full sealant removal and replacement at the affected southeast elevation, at an estimated cost of $285,000. Rampart characterized this item as requiring immediate attention to prevent further moisture intrusion and potential damage to interior finishes, insulation, and structural components within the curtain wall cavity.
(3) Elevator Systems — $185,000. Rampart's vertical transportation consultant assessed all four passenger elevators serving the building. Two of the four elevators (Elevator Nos. 2 and 3) were found to have outdated relay-logic controllers and door operators exhibiting intermittent mechanical failures. Rampart noted that during the site inspection, Elevator No. 3 experienced a door close malfunction requiring a manual reset. Additionally, Rampart referenced correspondence from the local fire marshal (Fulton County Fire marshal's Office), which was provided by Argyle Property Services during the inspection, recommending controller upgrades to comply with current ASME A17.1 code provisions. Rampart recommends modernization of both elevator controllers and door operators at an estimated cost of $185,000. This item is classified as an immediate need due to the combination of intermittent operational failures and the fire marshal's code compliance recommendations.
Tenant Impact. Buckhead Place Office Tower is a multi-tenant office building with an occupancy rate of approximately 88% at the time of inspection. The HVAC deficiencies, particularly those affecting AHU-3 and AHU-4 serving the upper floors, have the potential to affect tenant comfort and satisfaction, particularly during summer months. The curtain wall water infiltration at floors 8 through 12 presents a risk of damage to tenant improvements and could, if unaddressed, give rise to tenant claims for landlord breach of the covenant of quiet enjoyment or failure to maintain building systems as required under the applicable lease agreements. The elevator operational issues similarly affect tenant experience and building accessibility. C&H has cross-referenced these findings against the lease audit memorandum and confirmed that HVAC maintenance, building envelope maintenance, and elevator systems are landlord-responsible obligations under the applicable leases at Buckhead Place. Accordingly, Fairwater, as successor landlord, will assume responsibility for these repairs.
Short-Term Needs (Years 1–2): Rampart identified $375,000 in additional short-term capital needs at Buckhead Place, including: (a) parking garage expansion joint and sealant repair at the four-level parking structure ($165,000), (b) fire alarm control panel upgrade to current NFPA 72 standards ($95,000), (c) cooling tower basin refurbishment ($65,000), and (d) common area restroom fixture upgrades ($50,000).
10-Year Capital Needs and Replacement Reserve. Rampart's aggregate 10-year capital expenditure projection for Buckhead Place is $2,138,000, reflecting the age-adjusted capital requirements of a 2018-vintage, 285,000 RSF office tower. Rampart recommends an annual replacement reserve of $0.75/SF/year ($213,750/year) to fund long-term capital needs, which is at the higher end of the office property range due to the curtain wall building envelope and the complexity of the building's mechanical systems.
B. Cool Springs Office Park — $620,000 Immediate Repairs
Property Address: 5000 Virginia Way, Brentwood, TN 37027
Target Entity: GMP Cool Springs LLC (EIN: 84-2639925)
Property Type / RSF: Class A Office / 196,000 RSF
Year Built: 2016 (oldest asset in the Portfolio)
Current Property Manager: Argyle Property Services LLC
Date of Inspection: January 12, 2024
Cool Springs Office Park is a four-story, multi-tenant office building located in the Cool Springs submarket of Brentwood, Tennessee, approximately 15 miles south of downtown Nashville. Constructed in 2016, Cool Springs is the oldest asset in the Portfolio and, as would be expected given its vintage, exhibits the most significant deferred maintenance among the office properties. The aggregate immediate repair cost for this property is $620,000, representing 29.0% of total Portfolio immediate repair costs.
Findings:
(1) Roofing — $340,000. Rampart's roofing specialist conducted a comprehensive inspection of the property's 60-mil TPO (thermoplastic polyolefin) membrane roof system, which was original to the 2016 construction. The inspection revealed multiple deficiencies, including: (a) punctures in the membrane at three locations, likely caused by HVAC service traffic on the roof surface without adequate walkway protection; (b) seam separations at approximately 240 linear feet of heat-welded seams along the eastern slope; and (c) ponding water at three low areas where the roof drainage slope is inadequate, including one area exceeding 48 hours of ponding following a rain event (observed via ponding marks and algae growth). Rampart characterized the roof as approaching the end of its functional service life in several sections and recommended partial roof section replacement and targeted repairs at an estimated cost of $340,000. Rampart flagged this as requiring immediate attention given the active leak potential and the risk of water infiltration to the occupied building interior. Rampart noted that if left unaddressed, the deficiencies could escalate to require a full roof replacement within 2–3 years, at an estimated cost of approximately $780,000.
(2) Plumbing — Domestic Hot Water System — $145,000. Rampart's plumbing assessment identified the domestic hot water boiler as being at or near the end of its useful life. The boiler, a gas-fired commercial unit original to the 2016 construction, showed signs of significant internal corrosion and reduced heating efficiency. Additionally, Rampart noted corrosion at several sections of the copper supply piping in the main mechanical room, with evidence of pinhole leaks that had been repaired with pipe clamps on a patchwork basis. Rampart recommends replacement of the domestic hot water boiler and remediation of the corroded supply piping at an estimated cost of $145,000.
(3) Parking / Site Work — $135,000. The main parking lot, which provides approximately 680 surface spaces, exhibited significant asphalt pavement deterioration. Rampart observed extensive alligator cracking (fatigue cracking) in multiple travel lanes and parking areas, as well as failed pavement sections with potholes along the main entrance drive. The deterioration is consistent with inadequate sub-base preparation during original construction and/or deferred seal coating and crack filling maintenance. Rampart recommends a mill-and-overlay program for the affected areas, along with restriping, at an estimated cost of $135,000.
Tenant Impact. Cool Springs Office Park is occupied by multiple office tenants totaling approximately 196,000 RSF. The roofing deficiencies present the most significant risk to tenants, as active or potential water infiltration could damage tenant improvements, disrupt tenant operations, and give rise to lease compliance issues. Under the applicable leases, roof maintenance and replacement are landlord-responsible obligations. The parking lot deterioration, while less critical from a structural standpoint, affects tenant and visitor experience and may present trip-and-fall liability concerns.
Short-Term and Long-Term Capital Needs. Rampart identified $294,000 in additional short-term capital needs (Years 1–2) at Cool Springs, including: (a) HVAC rooftop unit servicing and filter replacement across all units ($110,000), (b) exterior building signage and wayfinding updates ($45,000), (c) stairwell lighting and egress signage upgrades ($39,000), and (d) landscape irrigation system repairs ($100,000). The 10-year aggregate capital expenditure projection is $1,470,000.
Replacement Reserve. Rampart recommends an annual replacement reserve of $0.75/SF/year ($147,000/year) for Cool Springs, which is the highest per-SF replacement reserve recommendation in the Portfolio, consistent with the property's 2016 vintage and the anticipated capital needs of an aging office building approaching key system replacement cycles.
C. Lakeland Crossings Industrial — $380,000 Immediate Repairs
Property Address: 7100 Drane Field Road, Lakeland, FL 33811
Target Entity: GMP Lakeland LLC (EIN: 84-2527834)
Property Type / RSF: Logistics / Distribution Warehouse / 372,000 RSF
Year Built: 2019
Current Property Manager: Argyle Property Services LLC
Date of Inspection: December 1, 2023
Lakeland Crossings Industrial is a single-story, rear-load distribution warehouse facility with 32-foot clear heights and 22 dock-high loading doors, located in the Lakeland/Polk County logistics corridor of Central Florida. The property was constructed in 2019 and is the only logistics property in the Portfolio with immediate repair needs. The aggregate immediate repair cost for this property is $380,000, representing 17.8% of total Portfolio immediate repair costs.
Findings:
(1) Concrete Slab / Floor — $195,000. Rampart observed joint sealant deterioration and minor slab settlement at the dock-high loading areas, specifically at loading bays 12 through 18 along the eastern dock wall. The slab settlement, measured at approximately 3/8 inch to 1/2 inch differential at affected joints, is consistent with localized sub-grade compaction issues, potentially exacerbated by the heavy forklift and trailer traffic characteristic of logistics operations. The joint sealant in the affected area has deteriorated beyond its serviceable condition, with sections missing entirely and others exhibiting significant hardening and loss of flexibility. Rampart recommends slab leveling (via polyurethane injection), joint repair, and full re-sealing of the affected dock area at an estimated cost of $195,000. This item is classified as immediate due to the potential for continued slab settlement and the operational impact on dock-level loading activities.
(2) Fire Suppression — ESFR Sprinkler System — $110,000. Rampart's fire protection engineer identified six (6) sprinkler heads within the Early Suppression Fast Response ("ESFR") sprinkler system that require replacement due to visible corrosion. Rampart noted that the corrosion pattern is consistent with microbiologically influenced corrosion ("MIC"), which can affect sprinkler systems in environments with certain water quality characteristics. MIC can compromise the integrity of sprinkler heads and piping over time and should be addressed proactively. In addition, the wet alarm valve assembly at the main riser requires servicing, including replacement of the alarm valve seat and retarder. Rampart estimates the aggregate cost of sprinkler head replacement, MIC investigation and treatment, and wet alarm valve servicing at $110,000.
(3) Dock Equipment — $75,000. Rampart observed that four (4) of the property's twenty-two (22) dock levelers are exhibiting mechanical wear requiring motor and bumper pad replacement. The affected units (dock positions 3, 7, 14, and 19) showed sluggish operation, worn lip plates, and deteriorated bumper pads. Rampart estimates the cost of motor replacement, lip plate refurbishment, and bumper pad replacement for the four affected units at $75,000.
Cross-Reference — Environmental Due Diligence. Lakeland Crossings Industrial is one of two properties in the Portfolio (along with Westlake Distribution Hub) with de minimis recognized environmental conditions ("RECs") identified in the Phase I Environmental Site Assessment prepared by Trident Environmental Group LLC. As discussed in the separate Environmental Due Diligence Summary Memorandum, the environmental findings at Lakeland Crossings relate to a historical dry-cleaning operation on an adjacent parcel and are not related to the PCA building condition findings discussed herein. The PCA items relate exclusively to building systems and site improvements and do not raise any environmental concerns.
Tenant Impact. Lakeland Crossings is a single-tenant logistics facility. The concrete slab and dock equipment issues have the potential to affect warehouse operations, particularly at the affected loading bays. The ESFR sprinkler system deficiency, while not presenting an immediate safety hazard, should be addressed promptly to maintain fire protection system reliability and compliance with the applicable fire code and insurance underwriting requirements.
Short-Term and Long-Term Capital Needs. Rampart identified $148,000 in short-term capital needs (Years 1–2), including parking lot seal coating and restriping ($65,000), exterior LED lighting fixture replacement ($48,000), and HVAC unit servicing in the office/administrative area ($35,000). The 10-year aggregate capital expenditure projection is $930,000, and the recommended replacement reserve is $0.25/SF/year ($93,000/year).
D. SouthPark Corporate Center — $250,000 Immediate Repairs
Property Address: 6200 Fairview Road, Charlotte, NC 28210
Target Entity: GMP SouthPark LLC (EIN: 84-2639918)
Property Type / RSF: Class A Office / 218,000 RSF
Year Built: 2017
Current Property Manager: Argyle Property Services LLC
Date of Inspection: January 15, 2024
SouthPark Corporate Center is a six-story, Class A multi-tenant office building located in the SouthPark submarket of Charlotte, North Carolina. Constructed in 2017, the property is approximately seven years old and is in generally good condition, though Rampart identified several deferred maintenance items requiring near-term attention. The aggregate immediate repair cost for this property is $250,000, representing 11.7% of total Portfolio immediate repair costs — the lowest among the four properties with immediate repair needs.
Findings:
(1) HVAC — Variable Air Volume (VAV) box controls — $125,000. Rampart's mechanical engineer identified issues with the variable air volume (VAV) box controls serving floors 3 through 5. Multiple VAV boxes were found to be out of calibration, resulting in inconsistent zone temperatures and excessive energy consumption. Several VAV box actuators require replacement, and the associated building automation system ("BAS") programming requires reconfiguration to properly sequence the affected zones. Rampart estimates the cost of VAV box recalibration, actuator replacement, and BAS reprogramming at $125,000.
(2) Interior Finishes / Common Areas — $85,000. Rampart noted that the main lobby, common corridors, and shared restroom areas on floors 1 through 3 are showing signs of wear that detract from the Class A presentation of the building. Specific observations include: damaged and sagging ceiling tiles (acoustical tile system) at approximately 15 locations in the corridors, stained and worn carpet in the main lobby and elevator vestibules, and wall covering peeling at several locations in the common corridors. Rampart recommends a comprehensive common area refresh, including ceiling tile replacement, carpet replacement in the lobby and vestibules, and wall covering repair, at an estimated cost of $85,000.
(3) Exterior Lighting — $40,000. Rampart observed that approximately 30% of the pole-mounted LED parking lot light fixtures (approximately 18 of 60 fixtures) are non-operational due to driver or fixture failures. The non-operational fixtures are distributed across the parking lot, creating uneven lighting levels and potential security and liability concerns. Rampart recommends fixture replacement at an estimated cost of $40,000.
Tenant Impact. SouthPark Corporate Center is a multi-tenant office building. Birchwood Technology Group Inc. is the largest tenant at the property, occupying 218,000 RSF at an annual base rent of approximately $5,668,000. The common area finish deterioration directly affects the tenant experience and the building's competitive positioning in the SouthPark office market. The HVAC VAV box issues, while not presenting a comfort emergency, result in inconsistent climate control on the affected floors, which can generate tenant complaints and contribute to tenant dissatisfaction. The parking lot lighting deficiencies present a safety and security concern that should be addressed promptly. C&H has cross-referenced these findings against the Lease Audit Memorandum and notes that Fairwater should review the Birchwood Technology Group lease for any landlord improvement obligations or tenant rights to rent abatement related to building condition.
Severity Assessment. Rampart characterized the SouthPark immediate repair items as reflecting deferred maintenance rather than structural or life-safety concerns. Unlike the Buckhead Place curtain wall infiltration or the Cool Springs roofing deficiencies, the SouthPark items do not present a risk of progressive damage to building systems if not addressed in the very near term. However, they should be addressed within the first 90 days of ownership to restore the property's Class A presentation and address tenant-facing concerns.
Short-Term and Long-Term Capital Needs. Rampart identified $218,000 in short-term capital needs (Years 1–2), including elevator cab finish refurbishment ($95,000), exterior building washing and sealant inspection ($55,000), landscape renovation ($38,000), and generator load bank testing and minor repairs ($30,000). The 10-year aggregate capital expenditure projection is $1,308,000, and the recommended replacement reserve is $0.60/SF/year ($130,800/year).
V. Properties with No Immediate Repair Needs — Summary
Ten (10) of the fourteen (14) properties in the Portfolio had no immediate repair costs (Year 0 items) identified by Rampart. These properties are generally in good to excellent condition, reflecting a combination of recent construction vintage (the majority were built between 2020 and 2021), quality original construction, and ongoing maintenance performed by Argyle Property Services LLC as the current property manager for the Portfolio. Below is a brief property-by-property summary of Rampart's overall condition assessment for each of these ten properties.
1. Fairfield Logistics Center I — Fairburn, GA (2020 vintage; 412,000 SF). Rampart assessed this property as being in good condition overall. The tilt-up concrete warehouse building, with 36-foot clear heights and 30 dock-high doors, showed no signs of structural distress, and all building systems were functioning within expected parameters. Minor short-term items include dock seal replacement at three positions ($32,000) and HVAC unit filter replacement in the office area ($12,000). Rampart noted that the TPO roof membrane is in excellent condition with no deficiencies observed. The 10-year capital projection is $618,000 with a recommended replacement reserve of $0.15/SF/year.
2. Fairfield Logistics Center II — Fairburn, GA (2020 vintage; 387,000 SF). Rampart assessed this property as being in good condition overall. Fairfield II is substantially identical in construction to Fairfield I and is located on an adjacent parcel within the Fairfield Commerce Park master-planned development. The property exhibited no immediate repair needs. Minor short-term items include parking lot seal coating ($28,000) and exterior bollard replacement at two dock positions ($14,000). The 10-year capital projection is $581,000 with a recommended replacement reserve of $0.15/SF/year.
3. Westlake Distribution Hub — Houston, TX (2019 vintage; 624,000 SF). Rampart assessed this property as being in good condition overall. Westlake is the largest property in the Portfolio by RSF and features 40-foot clear heights and cross-dock configuration with 44 dock-high doors. Rampart identified no immediate repair needs. Short-term items include concrete truck court joint resealing ($68,000), HVAC preventive maintenance for the office/mezzanine area ($42,000), and fire alarm panel software update ($46,000). It should be noted that Westlake Distribution Hub is one of two properties with de minimis RECs identified in the Phase I ESA by Trident Environmental Group LLC; as discussed in the separate Environmental Due Diligence Summary Memorandum, the environmental findings relate to historical petroleum storage on the site and are unrelated to the PCA building condition findings. The 10-year capital projection is $1,248,000 with a recommended replacement reserve of $0.20/SF/year, slightly above the logistics average due to the property's larger size and 2019 vintage.
4. Katy Freeway Logistics Park — Katy, TX (2021 vintage; 538,000 SF). Rampart assessed this property as being in excellent condition overall. As one of the newest properties in the Portfolio, the Katy Freeway property exhibited minimal wear and no deferred maintenance. Short-term items are limited to minor landscape irrigation adjustments ($18,000) and fire extinguisher replacement ($8,000). Additional minor items total approximately $28,000 over the Years 1–2 period. The 10-year capital projection is $484,000, reflecting the property's recent vintage and the low near-term capital requirements typical of a 2021-built logistics facility. The recommended replacement reserve is $0.15/SF/year.
5. Alliance Commerce Center — Fort Worth, TX (2020 vintage; 485,000 SF). Rampart assessed this property as being in good condition overall. The Alliance Commerce Center is a rear-load distribution facility located within the established Alliance/North Fort Worth logistics corridor. Rampart identified no immediate repair needs. Short-term items include concrete apron crack repair at the truck court ($45,000), HVAC air handler belt replacement ($22,000), and parking lot lighting timer replacement ($30,000). The 10-year capital projection is $728,000 with a recommended replacement reserve of $0.15/SF/year.
6. Southport Logistics Park — Jacksonville, FL (2021 vintage; 410,000 SF). Rampart assessed this property as being in excellent condition overall. Southport is a recently constructed front-load logistics facility with 36-foot clear heights. All building systems were found to be in excellent operating condition. Short-term items are minimal and include dock bumper replacement at two positions ($15,000) and emergency exit signage upgrades ($10,000), along with routine maintenance items totaling approximately $16,000. The 10-year capital projection is $410,000, the second lowest in the Portfolio on a per-SF basis, consistent with the property's 2021 vintage. The recommended replacement reserve is $0.15/SF/year.
7. Murfreesboro Distribution Center — Murfreesboro, TN (2020 vintage; 502,000 SF). Rampart assessed this property as being in good condition overall. The Murfreesboro facility is a cross-dock distribution center located in the growing Murfreesboro/Smyrna industrial corridor southeast of Nashville. Rampart identified no immediate repair needs. Short-term items include parking lot crack sealing and restriping ($40,000), HVAC condensing unit cleaning and servicing ($35,000), and storm drainage inlet grate replacement ($25,000). The 10-year capital projection is $753,000 with a recommended replacement reserve of $0.15/SF/year.
8. Brickell Bay Office Building — Miami, FL (2019 vintage; 152,000 SF). Rampart assessed this property as being in good condition overall. Brickell Bay is the smallest property in the Portfolio by RSF and is the only office asset with no immediate repair needs, reflecting its relatively recent 2019 construction. The property is a six-story office building with a ground-floor retail component. Rampart noted that all building systems, including HVAC, elevators, fire/life safety, and building envelope, are functioning within expected parameters. Short-term items include exterior window washing equipment (davit system) annual certification ($28,000), lobby finish touch-up ($22,000), and parking garage lighting upgrade ($26,000). The 10-year capital projection is $608,000 with a recommended replacement reserve of $0.40/SF/year, at the lower end of the office property range.
9. Peachtree Corners Logistics Center — Peachtree Corners, GA (2020 vintage; 345,000 SF). Rampart assessed this property as being in good condition overall. The Peachtree Corners facility is a rear-load distribution warehouse in the northeast Atlanta suburbs. Rampart identified no immediate repair needs. Short-term items include concrete truck court expansion joint resealing ($35,000), fire sprinkler five-year inspection ($18,000), and HVAC air handler preventive maintenance ($16,000). The 10-year capital projection is $518,000 with a recommended replacement reserve of $0.15/SF/year.
10. Mount Juliet Commerce Park — Mount Juliet, TN (2021 vintage; 298,000 SF). Rampart assessed this property as being in excellent condition overall. Mount Juliet is the smallest logistics property in the Portfolio and one of the two 2021-vintage assets. As expected for a recently constructed facility, Rampart found minimal wear and no deferred maintenance. Short-term items are the most modest in the Portfolio, totaling only $30,000 and consisting primarily of routine fire protection system testing and landscaping adjustments. The 10-year capital projection is $298,000, the lowest in the Portfolio, and the recommended replacement reserve is $0.15/SF/year.
Replacement Reserve Ranges. Across the ten properties with no immediate repair needs, Rampart's recommended replacement reserves range from $0.15/SF/year to $0.40/SF/year. The logistics properties cluster at the lower end of this range ($0.15–$0.20/SF/year), reflecting the relatively simple building systems, durable tilt-up concrete construction, and recent vintage of these assets. The single office property with no immediate repair needs (Brickell Bay) carries a $0.40/SF/year recommendation, reflecting the more complex mechanical and vertical transportation systems inherent in office buildings. The full range of replacement reserve recommendations across the entire 14-property Portfolio, including properties with immediate repair needs, spans from $0.15/SF/year (several logistics properties) to $0.75/SF/year (Buckhead Place and Cool Springs).
VI. Allocation of Immediate Repair Costs — Summary
The following table sets forth the allocation of the $2,140,000 in aggregate immediate repair costs across the four affected properties, together with each property's percentage share of the total.
Several observations are noteworthy in connection with this allocation:
Office Properties Dominate Immediate Repair Costs. The three office properties with immediate repair needs (Buckhead Place, Cool Springs, and SouthPark) collectively account for $1,760,000, or 82.2%, of the $2,140,000 total immediate repair cost, despite representing only 699,000 RSF (or 13.4% of total Portfolio RSF). When including Brickell Bay (the fourth office property, which had no immediate repair needs), the four office properties collectively represent 851,000 RSF, or 16.3% of the Portfolio. The disproportionate share of immediate repair costs attributable to the office properties is consistent with two factors: (a) the older vintage of the office assets (2016–2018) compared to the logistics assets (2019–2021), and (b) the inherently greater complexity of office building systems (HVAC, elevators, curtain wall, multi-story construction) relative to single-story logistics warehouses.
Logistics Properties in Strong Condition. The logistics portfolio accounts for only $380,000 (17.8%) of aggregate immediate repair costs, attributable solely to Lakeland Crossings Industrial. The remaining nine logistics properties had no immediate repair needs, reflecting the advantages of newer construction vintage, simpler building systems, and the durability of modern tilt-up concrete warehouse construction. This is a favorable condition for the Portfolio and supports the overall investment thesis that the logistics assets will require minimal capital investment in the near to medium term.
Per-SF Immediate Repair Cost. On a Portfolio-wide basis, the $2,140,000 in immediate repair costs equates to approximately $0.41/SF across the entire 5,224,000 SF Portfolio, which is a modest figure relative to typical acquisition portfolios of comparable size, age, and composition.
VII. PSA Credit Negotiation and Resolution
A. PCA Credit Mechanism Under the PSA
The PSA includes a standard due diligence framework pursuant to which the Buyer is entitled to conduct physical inspections and property condition assessments of all Portfolio properties during the Due Diligence Period, which commenced on March 1, 2024, and is scheduled to expire on April 15, 2024. Specifically, Section 5.3(c) of the PSA provides that Buyer may deliver notice to Seller of any property condition deficiencies identified during the Due Diligence Period, together with supporting documentation, and may request a purchase price credit or other accommodation with respect to such deficiencies. Section 5.3(c) further provides that the parties shall negotiate in good faith to reach agreement on the appropriate credit or remedy, and that any agreed-upon credit shall be reflected as a reduction to the cash equity payment at closing. The PSA's proration and working-capital methodology is set forth in PSA Exhibit U, and the PCA credit mechanism operates as a separate line item within the Closing Settlement Statement framework established by that Exhibit.
B. Negotiation Summary
On March 18, 2024, C&H delivered a comprehensive due diligence deficiency notice to Seller's counsel, Blackridge Hayes LLP (Nathaniel Pryce, Partner, and Thomas Keating, Senior Associate), which included, among other items, a summary of the PCA findings for the four properties with immediate repair needs and copies of the relevant PCA report excerpts. In the notice, C&H, on behalf of Fairwater, requested a full dollar-for-dollar credit of $2,140,000 against the purchase price, reflecting the aggregate immediate repair costs identified by Rampart.
Blackridge Hayes, on behalf of GMP Fund III and its principals, Victor Lansdell (Managing Partner) and Elise Rathborne (General Counsel), responded on March 25, 2024, countering with a credit offer of $749,000 (approximately 35% of the aggregate immediate repair costs). Seller's position was based on two principal arguments: (a) that certain items classified by Rampart as immediate repair needs (particularly the SouthPark common area refresh and exterior lighting, and portions of the Lakeland Crossings dock equipment repairs) are routine maintenance items that fall within the scope of the existing property management services provided by Argyle Property Services LLC and should not give rise to a purchase price adjustment; and (b) that certain repair items are partially addressed by existing service contracts maintained by Argyle, including an HVAC preventive maintenance contract with Carrier Commercial Service and a dock equipment service contract with Rite-Hite Service Corporation, which would reduce the incremental cost to the Buyer.
Following several rounds of negotiation between C&H and Blackridge Hayes, conducted via telephone conferences and email exchanges between March 25 and April 10, 2024, the parties reached agreement on a credit of $1,070,000, representing 50% of the $2,140,000 aggregate immediate repair costs. This 50/50 cost-sharing approach reflects a commercially reasonable resolution that acknowledges both the Seller's maintenance track record and the Buyer's assumption of real (and in some cases time-sensitive) repair obligations. The agreed-upon credit and the associated mechanics were documented in the First Amendment to the PSA, dated April 12, 2024, executed by both parties.
Key correspondence and communications related to the PCA credit negotiation are summarized in Exhibit C attached hereto.
C. Impact on Purchase Price and Settlement
The PCA credit affects the closing settlement as follows:
The financing structure for the acquisition contemplates the assumption by the Target Entities of approximately $612,000,000 in existing mortgage indebtedness (the "Assumed Debt"), with the balance to be funded by cash equity. The PCA credit is applied solely to the cash equity component, as follows:
This adjustment is reflected in both the Closing Settlement Statement (Buyer) and the Closing Settlement Statement (Seller) to be prepared and agreed upon by the parties prior to the Closing Date. The relevant excerpts of the PSA First Amendment documenting the PCA credit mechanics are attached hereto as Exhibit D.
D. Buyer's Remaining Exposure
Following the application of the $1,070,000 PCA credit, Fairwater bears the remaining $1,070,000 of the $2,140,000 in aggregate immediate repair costs as a post-acquisition capital expenditure. This remaining exposure is allocated among the four affected properties as follows:
Recommendation: Fairwater PM, under the direction of Leah Torrance, SVP Asset Management, should incorporate the Buyer's remaining $1,070,000 exposure into the 2024–2025 capital budget. Priority should be given to: (a) Buckhead Place HVAC AHU replacement and curtain wall sealant remediation ($705,000 combined, representing the highest dollar items and presenting the most significant risk of tenant impact and progressive damage); and (b) Cool Springs TPO roof section replacement ($340,000, representing the highest risk of active water infiltration). The Lakeland Crossings slab and fire suppression items and the SouthPark deferred maintenance items, while important, present lower risk of immediate escalation and can be sequenced accordingly within the capital plan.
VIII. Replacement Reserve Analysis — Portfolio-Level
In addition to the immediate repair costs and short-term capital needs discussed above, each of Rampart's PCA reports includes a ten-year capital expenditure projection and a recommended annual replacement reserve for the applicable property. These replacement reserve recommendations are intended to guide the Buyer's long-term capital planning and ensure that adequate funds are set aside to address anticipated building system replacements and major repairs over the evaluation period.
Aggregate 10-Year Capital Expenditure Projection. Rampart's aggregate 10-year capital expenditure projection across all 14 properties is $12,092,000. This figure represents the total anticipated capital expenditures for all building systems and site improvements over the Years 1–10 evaluation period (inclusive of the $1,814,000 in short-term needs for Years 1–2 discussed above, but exclusive of the $2,140,000 in immediate repair costs, which are Year 0 items).
The following table summarizes the 10-year capital expenditure projection by major building system category across the entire Portfolio:
As the table reflects, HVAC/mechanical systems and roofing together account for approximately 47% of the 10-year projected capital needs, which is consistent with industry experience for portfolios of this composition and vintage.
Comparison to Fairwater's Internal Underwriting Assumptions. C&H coordinated with Leah Torrance and Fairwater PM's internal engineering team to compare Rampart's replacement reserve recommendations against Fairwater's internal underwriting assumptions. Fairwater's underwriting model for the Portfolio assumed a blended replacement reserve of $0.25/SF/year, which equates to approximately $1,306,000 per year, or $13,060,000 over the 10-year evaluation period. Rampart's recommended aggregate annual replacement reserve of approximately $1,209,200/year ($12,092,000 over 10 years), or an average of approximately $0.23/SF/year, is modestly below Fairwater's internal assumption. The modest shortfall is attributable to the favorable condition of the newer logistics assets, where Rampart's recommended reserves are at the lower end of the typical range. The Fairwater team has confirmed that the existing underwriting assumption provides an adequate cushion and does not require adjustment based on the PCA results.
Note on PSA Treatment. Replacement reserve recommendations are informational in nature and do not give rise to any additional PSA credit or purchase price adjustment. The replacement reserves inform the Buyer's post-acquisition capital planning only. The PSA credit negotiation addressed solely the immediate repair costs (Year 0 items), as discussed in Section VII above.
A detailed Rampart 10-Year Replacement Reserve Summary Table for all 14 properties is attached hereto as Exhibit E.
IX. Coordination with Other Due Diligence Workstreams
The PCA review was conducted in coordination with several other due diligence workstreams being managed by C&H on behalf of Fairwater in connection with the Portfolio acquisition. The following is a summary of the relevant cross-references and coordination points.
A. Environmental
The environmental due diligence for the Portfolio is the subject of a separate Environmental Due Diligence Summary Memorandum prepared by C&H. Phase I Environmental Site Assessments for all 14 properties were prepared by Trident Environmental Group LLC. Two properties — Westlake Distribution Hub (Houston, TX) and Lakeland Crossings Industrial (Lakeland, FL) — were identified as having de minimis recognized environmental conditions ("RECs"). As discussed in the environmental memorandum, the Westlake REC relates to a historical petroleum underground storage tank ("UST") on the property that was properly closed and remediated, with a no-further-action letter on file. The Lakeland Crossings REC relates to a former dry-cleaning facility on an adjacent parcel, with no evidence of impact to the subject property. In both cases, the RECs were characterized as de minimis and did not require Phase II Environmental Site Assessment investigation. It is important to emphasize that the environmental findings are entirely separate from and independent of the PCA building condition findings discussed in this memorandum. The PCA items relate to building systems and physical condition, not to environmental contamination or regulatory compliance.
B. Lease Audit
The lease audit workstream for the Portfolio is documented in the separate Lease Audit Memorandum — Portfolio Summary and Top 10 Tenants. The lease audit is relevant to the PCA review because certain immediate repair items identified by Rampart may implicate landlord obligations under the applicable lease agreements. In particular:
• At Buckhead Place Office Tower, the HVAC system, building envelope (curtain wall), and elevator systems are expressly identified as landlord-responsible maintenance items under the applicable multi-tenant office leases. C&H confirmed this determination through review of the relevant lease provisions, and Fairwater, as successor landlord following the entity-level acquisition, will assume these maintenance and repair obligations.
• At Cool Springs Office Park, the roof system and domestic hot water plumbing are landlord-responsible items under the applicable leases. The parking lot maintenance obligation is also a landlord responsibility under the common area maintenance provisions.
• At SouthPark Corporate Center, the HVAC system, common area finishes, and exterior site improvements (including parking lot lighting) are landlord-responsible obligations. Additionally, the Birchwood Technology Group Inc. lease (the property's largest tenant) includes provisions relating to landlord improvement obligations and tenant rights in connection with building system maintenance, which should be reviewed in connection with post-acquisition remediation planning.
C. Insurance
The insurance coverage review for the Portfolio is documented in the separate Insurance Coverage Review Memorandum. C&H coordinated with the insurance review team to determine whether any of the PCA-identified immediate repair items are covered under existing property insurance policies maintained by Argyle Property Services LLC on behalf of the current ownership. The review confirmed that the existing property policies do not cover deferred maintenance items, equipment wear and deterioration, or capital replacements arising from normal aging of building systems. The PCA credit mechanism under the PSA is the appropriate vehicle for addressing the cost exposure associated with these items.
At closing, the existing insurance program will be replaced with new property and casualty insurance policies to be issued by Ironclad Indemnity Insurance Company, placed through Hartwick Gunderson & Associates, Fairwater's insurance broker. The new policies will be structured to provide coverage consistent with Fairwater's corporate insurance standards but will similarly exclude deferred maintenance and equipment replacement from coverage.
D. Title and Survey
The title and survey review for the Portfolio is the subject of separate memoranda. C&H confirmed that no title or survey implications arise from the PCA findings. None of the identified building condition deficiencies affect the insurable title to the properties, create encroachments on adjacent properties, or implicate setback or building line restrictions identified in the surveys.
Additionally, zoning confirmation letters have been obtained for all 14 properties (14 of 14), confirming that each property's current use is in conformity with the applicable zoning classification. The PCA findings do not raise any zoning compliance concerns.
X. Limitations and Qualifications
The following limitations and qualifications should be noted in connection with this memorandum and the underlying PCA reports:
1. Visual Observation Only. Rampart's PCAs are based on visual observation of accessible building systems and site conditions conducted during walk-through inspections. Rampart did not perform destructive testing, concealed-space investigations, below-grade inspections (other than accessible basement and mechanical areas), or laboratory analysis of building materials. Accordingly, conditions concealed within wall cavities, above ceilings, below grade, or within other inaccessible areas were not evaluated and may exist that were not identified or reported.
2. Opinions of Probable Cost. Rampart's cost estimates are identified as "Opinions of Probable Costs" and represent Rampart's professional judgment based on contractor pricing in the applicable geographic markets as of the dates of inspection (November 2023 through January 2024). Actual costs of remediation may vary from these estimates based on changes in material and labor pricing, the scope of