PART ONE
BLACKRIDGE HAYES LLP ATTORNEYS AT LAW
BLACKRIDGE HAYES LLP 1285 Avenue of the Americas, 34th Floor New York, New York 10019 Tel: (212) 554-8100
April 8, 2024
VIA EMAIL AND OVERNIGHT DELIVERY
Douglas Fairchild, Esq. Calderwood & Harkness LLP 450 Park Avenue, 28th Floor New York, New York 10022
Copy to: Grace Nakamura, Esq., Lead Associate, Calderwood & Harkness LLP (via email: gnakamura@calderwoodharkness.com)
Re: Response to Buyer's Title Objection Letter dated March 27, 2024 Purchase and Sale Agreement dated February 28, 2024 (the "PSA") Between Greystone Meridian Partners Fund III, L.P. ("Seller") and Fairwater Real Estate Investment Trust ("Buyer") 14-Property Sun Belt Logistics & Office Portfolio (the "Portfolio")
Dear Mr. Fairchild:
I write on behalf of our client, Greystone Meridian Partners Fund III, L.P., a Delaware limited partnership ("Seller"), acting by and through its general partner, Greystone Meridian Capital LLC, a Delaware limited liability company ("GMC"), in response to your letter dated March 27, 2024 (the "Objection Letter"), in which you identified, on behalf of Fairwater Real Estate Investment Trust ("Buyer"), twenty-three (23) title objection items across the fourteen (14) properties comprising the Portfolio. We appreciate your thorough review of the title commitments issued by Commonwealth National Title Insurance Company (Kenneth Stanhope, Senior Vice President and Title Officer) and the corresponding ALTA/NSPS surveys prepared by Meridian Land Surveying, Inc.
As you are aware, pursuant to Section 5.3(b) of the PSA, Seller has fifteen (15) business days from receipt of the Objection Letter to notify Buyer of those title objection items that Seller is willing to cure, those items that Seller proposes to have treated as Permitted Exceptions under the PSA, and those items that Seller contends should be deleted from Schedule B-II of the applicable title commitment upon the provision of satisfactory evidence. This response is timely delivered within that period.
We note at the outset that certain of the objection items identified in the Objection Letter constitute Mandatory Cure Items as defined in Section 5.3(a) of the PSA, which provides that Seller is obligated to cure (or cause to be cured) prior to the Closing Date any and all (i) monetary liens and encumbrances (including mortgages, deeds of trust, and security interests), (ii) mechanic's and materialmen's liens, (iii) delinquent real property taxes, assessments, and governmental charges, (iv) judgment liens against any of the Target Entities, and (v) any title exceptions or encumbrances arising by, through, or under Seller (or any Target Entity) after the effective date of the applicable title commitment. Seller acknowledges its obligation to cure all such Mandatory Cure Items and has identified them as such in this response.
This letter sets forth Seller's proposed cures, explanations, and responses to each of the twenty-three (23) objection items, organized by property and state, as presented in the Objection Letter. For ease of reference, we have maintained the same item numbering used in the Objection Letter.
I. GEORGIA PROPERTIES (4 PROPERTIES)
A. Objection Items 1–3: GMP Fairfield I LLC — Fairfield Logistics Center I
Property Address: 4200 Fairfield Industrial Blvd, Fairburn, GA 30213 Target Entity: GMP Fairfield I LLC, a Delaware limited liability company Title Commitment No.: CNT-2024-FA01-0042
Item 1: Outstanding Mechanic's Lien — Parking Lot Resurfacing Subcontractor (Approximately $47,200). The Objection Letter identifies an outstanding mechanic's lien filed by a subcontractor in connection with the 2023 parking lot resurfacing project at Fairfield Logistics Center I. The lien was filed in the Fulton County Superior Court records in the approximate amount of Forty-Seven Thousand Two Hundred Dollars ($47,200.00).
Seller's Response: This item constitutes a Mandatory Cure Item under Section 5.3(a)(ii) of the PSA. Seller agrees to cure this item in its entirety prior to the Closing Date.
Specifically, Seller will obtain a full release and satisfaction of the mechanic's lien from the subcontractor (or, if required, through payment of the lien amount into escrow or by bond). Seller's construction counsel is presently in contact with counsel for the subcontractor to negotiate and obtain the payoff letter and corresponding lien release instrument. Upon receipt, the lien release will be recorded in the official records of Fulton County, Georgia, and a copy of the recorded release will be provided to Commonwealth National Title Insurance Company for deletion of the corresponding exception from Schedule B-II of the title commitment for this property. Seller anticipates that the release will be obtained and recorded within thirty (30) days of the date of this letter.
Item 2: Expired Temporary Construction Easement Reference on Schedule B-II. The Objection Letter identifies a reference to a temporary construction easement agreement appearing as a Schedule B-II exception on the title commitment for this property.
Seller's Response: Seller will provide evidence that the referenced temporary construction easement, which was originally granted in 2019 in connection with the construction of an adjacent parcel improvement, expired by its own terms on December 31, 2020, and is no longer in force or effect. No work was performed under the easement after the expiration date, and the easement contains no renewal or extension provision.
Seller will provide Commonwealth National Title Insurance Company with the following documentation to support deletion of this exception from Schedule B-II: (i) a certified copy of the original temporary construction easement agreement showing the express expiration date of December 31, 2020; and (ii) an affidavit from an authorized officer of GMP Fairfield I LLC confirming the expiration of the easement by its terms and that no party has asserted any rights under the easement since its expiration. Seller will request that Commonwealth Title either delete the exception entirely or annotate it as expired and of no further force or effect.
Item 3: Utility Easement in Favor of Drayton Holdings. The Objection Letter identifies a utility easement recorded in favor of Drayton Holdings in the official records of Fulton County (recorded in 2005) and notes a potential conflict between the easement corridor and the building footprint as depicted on the ALTA/NSPS survey prepared by Meridian Land Surveying, Inc.
Seller's Response: Seller notes that this utility easement is a standard utility corridor easement that was recorded in 2005, well prior to Seller's acquisition of the property. The easement is situated within a fifteen-foot (15') utility corridor running along the western boundary of the property. Seller has reviewed the ALTA/NSPS survey certified by Daniel Caulfield, PLS, PE, and, based on Seller's review, there is no actual encroachment of the building or any other improvements into the easement corridor. The survey depicts the easement corridor in its entirety, and the nearest building improvement is located more than eight feet (8') from the eastern edge of the easement area.
Seller proposes that this item be treated as a Permitted Exception pursuant to PSA Section 5.3(c) and Exhibit P thereto, on the basis that the easement (a) was in place prior to Seller's acquisition, (b) does not materially affect the use, value, or operations of the property, and (c) is of the type commonly found in connection with industrial and logistics properties in the metropolitan Atlanta area.
However, if Buyer requires additional assurance, Seller is willing to cooperate in good faith in obtaining a written confirmation from Drayton Holdings (or its successor or assign) that no relocation, expansion, or upgrade of facilities within the easement corridor is currently planned. Seller notes that any such inquiry is subject to the utility company's responsiveness and cooperation, which Seller cannot guarantee on a specific timeline.
B. Objection Items 4–5: GMP Fairfield II LLC — Fairfield Logistics Center II
Property Address: 4300 Fairfield Industrial Blvd, Fairburn, GA 30213 Target Entity: GMP Fairfield II LLC, a Delaware limited liability company Title Commitment No.: CNT-2024-FA02-0043
Item 4: Delinquent 2023 Ad Valorem Property Taxes ($82,315 Including Penalties and Interest). The Objection Letter identifies delinquent 2023 ad valorem property taxes in the amount of Eighty-Two Thousand Three Hundred Fifteen Dollars ($82,315.00), inclusive of accumulated penalties and interest, owed to the Fulton County Tax Commissioner.
Seller's Response: This item constitutes a Mandatory Cure Item under Section 5.3(a)(iii) of the PSA. Seller agrees to cure this item in its entirety prior to the Closing Date.
Seller will pay all delinquent 2023 ad valorem property taxes, together with all accrued penalties and interest, to the Fulton County Tax Commissioner's Office prior to the Closing Date. Seller will provide evidence of payment, including a paid tax receipt or tax clearance letter from the Fulton County Tax Commissioner, to Commonwealth National Title Insurance Company for deletion of the tax delinquency exception from Schedule B-II of the applicable title commitment. For the avoidance of doubt, the proration of 2024 ad valorem property taxes as between Seller and Buyer at closing shall be calculated in accordance with the methodology set forth in Section 7.4 and Exhibit U of the PSA.
Item 5: Recorded but Unsatisfied Security Deed Securing Pre-Acquisition Construction Loan ($18,500,000 Original Principal Amount). The Objection Letter identifies a security deed (deed to secure debt) recorded in the official records of Fulton County, Georgia, originally securing a construction loan in the principal amount of Eighteen Million Five Hundred Thousand Dollars ($18,500,000.00). The Objection Letter notes that the security deed remains of record and has not been cancelled or released.
Seller's Response: This item constitutes a Mandatory Cure Item under Section 5.3(a)(i) of the PSA as a monetary lien or encumbrance of record. Seller agrees to cure this item prior to the Closing Date.
Seller confirms that the underlying construction loan secured by this security deed was fully paid and satisfied at the time of Seller's acquisition of the property in 2020. The original lender received full payment of all amounts owed under the construction loan; however, a cancellation of the security deed was not recorded in the Fulton County records at that time due to an administrative oversight by the prior lender's servicing department. Seller, through its counsel at Blackridge Hayes LLP, is currently in contact with counsel for the prior lender (and its successor-in-interest, if applicable) to obtain and execute a proper cancellation of security deed instrument in recordable form. Upon receipt, the cancellation instrument will be recorded in the official records of Fulton County, Georgia, and a certified copy of the recorded cancellation will be provided to Commonwealth National Title Insurance Company for deletion of the security deed exception from Schedule B-II.
C. Objection Item 6: GMP Buckhead LLC — Buckhead Place Office Tower
Property Address: 3380 Peachtree Road NE, Atlanta, GA 30326 Target Entity: GMP Buckhead LLC, a Delaware limited liability company Title Commitment No.: CNT-2024-BK01-0044
Item 6: Restrictive Covenant Limiting Building Height to 12 Stories (Recorded 1998). The Objection Letter identifies a restrictive covenant recorded against the property in 1998 by a prior owner, which limits the maximum building height on the property to twelve (12) stories.
Seller's Response: Seller acknowledges the existence of this restrictive covenant, which runs with the land and was in place at the time of Seller's acquisition of the property. Seller notes, however, that the existing Buckhead Place Office Tower is ten (10) stories in height and is therefore in full compliance with the height restriction imposed by the covenant. The covenant does not restrict the current use of the property as a Class A office tower, nor does it impair the value of the property based on its present configuration and operation.
Seller proposes that this item be treated as a Permitted Exception pursuant to PSA Section 5.3(c) and Exhibit P thereto, on the basis that the restrictive covenant does not materially affect the current use, value, or operations of the property. The covenant is of the type commonly encountered in Buckhead-area commercial developments and reflects the original developer's planning considerations for the surrounding neighborhood.
Seller is willing to cooperate with Buyer in obtaining a title endorsement from Commonwealth National Title Insurance Company, if available, addressing the restrictive covenant and providing Buyer with additional assurance regarding the building's compliance. Seller notes that the availability of such an endorsement is subject to Commonwealth Title's underwriting review and approval.
D. Objection Item 7: GMP Peachtree LLC — Peachtree Corners Logistics Center
Property Address: 5900 Peachtree Industrial Blvd, Peachtree Corners, GA 30071 Target Entity: GMP Peachtree LLC, a Delaware limited liability company Title Commitment No.: CNT-2024-PC01-0045
Item 7: Recorded Reciprocal Access Easement Benefiting Adjacent Parcel. The Objection Letter identifies a recorded access easement benefiting the adjacent parcel and objects to the terms of the easement on the grounds that it may allow excessive vehicular traffic across the northeast corner of the Peachtree Corners Logistics Center property.
Seller's Response: Seller notes that this easement is a reciprocal access agreement that has been in place since 2017, when it was executed in connection with the development of the adjacent industrial park. The easement is non-exclusive in nature and is limited to rights of ingress and egress for vehicular and pedestrian access. Critically, the easement agreement expressly prohibits the adjacent property owner (or its tenants, invitees, or contractors) from parking vehicles, staging materials, or conducting any operations on the Seller's property within the easement area. The permitted use is confined to through-traffic access along a designated travel lane.
Seller proposes that this item be treated as a Permitted Exception pursuant to PSA Section 5.3(c) and Exhibit P thereto. The easement was in place at the time Seller acquired the property, and tenants at the Peachtree Corners Logistics Center have operated continuously without disruption or complaint related to the easement. The reciprocal nature of the agreement also provides the Peachtree Corners property with beneficial access rights over the adjacent parcel, which enhances the property's connectivity and utility.
Seller will provide Buyer's counsel with a complete copy of the reciprocal access agreement, including all amendments and exhibits thereto, for review and confirmation of the limitations and restrictions described above.
II. TEXAS PROPERTIES (3 PROPERTIES)
A. Objection Items 8–9: GMP Westlake LLC — Westlake Distribution Hub
Property Address: 11500 Westlake Parkway, Houston, TX 77082 Target Entity: GMP Westlake LLC, a Delaware limited liability company Title Commitment No.: CNT-2024-WL01-0046
Item 8: UCC-1 Financing Statement Filed Against GMP Westlake LLC ($312,000 Original Secured Amount). The Objection Letter identifies a UCC-1 financing statement filed against GMP Westlake LLC, as debtor, by an equipment vendor in 2021, securing an original amount of Three Hundred Twelve Thousand Dollars ($312,000.00) in connection with an equipment lease.
Seller's Response: This item constitutes a Mandatory Cure Item under Section 5.3(a)(i) of the PSA as a security interest or monetary lien encumbering assets of the Target Entity. Seller agrees to cure this item prior to the Closing Date.
Seller confirms that the underlying equipment lease was fully satisfied and paid off in 2022. However, a UCC-3 termination statement was not filed at that time due to an administrative oversight. Seller will obtain and file a UCC-3 termination statement with the Delaware Secretary of State (GMP Westlake LLC being organized under the laws of the State of Delaware) prior to the Closing Date. Seller will provide Commonwealth National Title Insurance Company with evidence of the UCC-3 filing, including a file-stamped copy of the termination statement, for deletion of the financing statement exception from Schedule B-II of the applicable title commitment.
Item 9: Unrecorded Drainage Easement Referenced in Subdivision Plat Notes. The Objection Letter identifies a drainage easement referenced in the property's subdivision plat notes that does not appear as a separately recorded instrument in the official records of Harris County, Texas.
Seller's Response: Seller notes that the drainage easement in question is depicted on and referenced in the original subdivision plat recorded in the official records of Harris County, Texas. The easement is a standard municipal storm drainage easement established as a condition of the original subdivision and development of the property. Because the easement is created by the recorded plat itself, no separate recorded instrument is necessary; the plat creates and defines the easement by operation of law under Texas property law.
The easement area runs along a designated drainage corridor and does not encroach into any building area, truck court, loading dock, or other operational area of the property. The drainage easement is consistent with the original development plan and has not materially affected the use, value, or operations of the property since its creation.
Seller proposes that this item be treated as a Permitted Exception pursuant to PSA Section 5.3(c) and Exhibit P thereto. Seller will provide Buyer's counsel with a copy of the recorded subdivision plat, clearly depicting the drainage easement corridor and its relationship to the improvements on the property.
B. Objection Item 10: GMP Katy LLC — Katy Freeway Logistics Park
Property Address: 22600 Katy Freeway, Katy, TX 77449 Target Entity: GMP Katy LLC, a Delaware limited liability company Title Commitment No.: CNT-2024-KT01-0047
Item 10: Spreader/Amendment to Pinnacle Federal Bank Mortgage (Loan 1-D) Recorded February 2024. The Objection Letter identifies a mortgage instrument recorded in the official records of Harris County, Texas, in February 2024—after the effective date of the title commitment—described as a spreader/amendment to the existing Pinnacle Federal Bank mortgage securing Loan 1-D.
Seller's Response: Seller clarifies that this recorded instrument is not a new lien or encumbrance but rather a recorded amendment and spreader agreement to the existing mortgage lien held by Pinnacle Federal Bank, N.A., securing Loan 1-D under the Master Loan Agreement dated September 15, 2020 (the "Master Loan Agreement"). The amendment was recorded as part of a prior loan modification that occurred in the ordinary course of Seller's management of the existing Pinnacle Federal Bank indebtedness. The Pinnacle Federal Bank loans (designated as Loans 1-A through 1-H under the Master Loan Agreement) have an aggregate outstanding principal balance of approximately Four Hundred Twenty-One Million Six Hundred Thousand Dollars ($421,600,000.00).
As Buyer is aware, the Pinnacle Federal Bank loans are being assumed by Buyer at closing, subject to the receipt of the change of control consent from Pinnacle Federal Bank. Accordingly, the existing Pinnacle mortgage liens, including this amendment/spreader, constitute part of the assumed indebtedness and should be treated as Permitted Exceptions under the PSA, consistent with the treatment of all other Pinnacle mortgage instruments encumbering Portfolio properties.
Seller proposes that this item be treated as a Permitted Exception pursuant to PSA Section 5.3(c) and Exhibit P thereto, as part of the existing assumed mortgage indebtedness. Seller will provide Buyer's counsel with a complete copy of the recorded amendment/spreader instrument for review and confirmation.
C. Objection Items 11–12: GMP Alliance LLC — Alliance Commerce Center
Property Address: 2800 Alliance Gateway Blvd, Fort Worth, TX 76177 Target Entity: GMP Alliance LLC, a Delaware limited liability company Title Commitment No.: CNT-2024-AL01-0048
Item 11: Judgment Lien Against "Alliance Commerce LLC" (Not the Target Entity). The Objection Letter identifies a judgment lien appearing in the official records of Tarrant County, Texas, against an entity named "Alliance Commerce LLC." The Objection Letter raises this item as a potential cloud on title due to the similarity between the judgment debtor's name and the Target Entity's name (GMP Alliance LLC).
Seller's Response: Seller represents and warrants that the judgment identified in the Objection Letter was entered against "Alliance Commerce LLC," a separate and distinct legal entity from the Target Entity, "GMP Alliance LLC" (EIN: 84-2415728). GMP Alliance LLC has no affiliation, common ownership, or relationship with Alliance Commerce LLC. The similarity in names is coincidental and does not reflect any identity of parties.
To facilitate the deletion of this exception from Schedule B-II, Seller will provide the following supporting documentation to Commonwealth National Title Insurance Company:
(i) An affidavit from an authorized officer of Greystone Meridian Partners Fund III, L.P. (acting through its general partner, Greystone Meridian Capital LLC), confirming that the judgment debtor "Alliance Commerce LLC" is not the Target Entity "GMP Alliance LLC," that GMP Alliance LLC has no connection to Alliance Commerce LLC, and that the judgment was not entered against any Target Entity in the Portfolio;
(ii) A certificate of good standing for GMP Alliance LLC issued by the Delaware Secretary of State, confirming the entity's current legal status and unique identification; and
(iii) Such additional documentation as Commonwealth Title may reasonably require to distinguish the judgment debtor from the Target Entity.
Seller will request that Commonwealth National Title Insurance Company delete the judgment lien exception from Schedule B-II based on the name differentiation and supporting documentation described above.
Item 12: Fence Encroachment by Adjacent Property (Approximately 2.3 Feet). The Objection Letter identifies an encroachment of the adjacent property's fence line approximately 2.3 feet onto the Alliance Commerce Center property along the south boundary, as depicted on the ALTA/NSPS survey prepared by Meridian Land Surveying, Inc. and certified by Daniel Caulfield, PLS, PE.
Seller's Response: Seller acknowledges the encroachment as depicted on the certified survey. The encroachment consists of approximately 2.3 feet of chain-link fencing belonging to the adjacent property owner that extends across the south boundary line of the Alliance Commerce Center property. The encroachment is minor in nature and does not interfere with any building improvement, truck court, parking area, loading dock, or operational area on the property. The encroachment does not materially affect the use, value, or operations of the Alliance Commerce Center.
Seller proposes the following resolution:
(a) Primary Approach: Seller will request that Commonwealth National Title Insurance Company issue an ALTA survey endorsement (Endorsement 28.1 or equivalent form available in the State of Texas) affirmatively insuring over the encroachment and providing coverage against any loss or damage arising from the encroachment of the adjacent property's fence onto the Alliance Commerce Center property.
(b) Alternative Approach: In the event the survey endorsement is not available or sufficient, Seller will use commercially reasonable efforts to negotiate with the adjacent property owner for the removal or relocation of the encroaching fence. However, Seller cannot guarantee the adjacent owner's cooperation or the timeline for any such removal.
Seller proposes that this item be treated as a Permitted Exception upon the issuance of the survey endorsement described above, given the minor and non-material nature of the encroachment.
III. FLORIDA PROPERTIES (3 PROPERTIES)
A. Objection Items 13–14: GMP Lakeland LLC — Lakeland Crossings Industrial
Property Address: 7100 Drane Field Road, Lakeland, FL 33811 Target Entity: GMP Lakeland LLC, a Delaware limited liability company Title Commitment No.: CNT-2024-LK01-0049
Item 13: Open Building Permit — 2022 Warehouse Expansion. The Objection Letter identifies an open building permit issued by Polk County, Florida, in connection with the 2022 warehouse expansion at the Lakeland Crossings Industrial property. The permit remains open because the final mechanical and electrical inspections have not yet been completed.
Seller's Response: Seller acknowledges that the building permit for the 2022 warehouse expansion remains open as of the date of this letter. The construction work itself was completed in early 2023, and the property has been fully operational since that time. The remaining open items relate solely to the final mechanical and electrical inspection sign-offs, which were delayed due to scheduling issues with the Polk County Building Department.
Seller will obtain the final inspection sign-off and the certificate of completion from the Polk County Building Department prior to the Closing Date. Seller's property manager, Argyle Property Services LLC (Sean Kilpatrick, Portfolio Manager), is actively coordinating with the county building department to schedule and complete the required inspections. Seller anticipates that the inspections will be completed and the certificate of completion issued within thirty (30) days of the date of this letter.
In the event that the final inspection cannot be completed and the certificate of completion cannot be obtained prior to the Closing Date, Seller proposes that an escrow holdback in the amount of Fifty Thousand Dollars ($50,000.00) be established at closing from Seller's proceeds to cover the cost of completing any remaining work required to obtain the final inspection sign-off and certificate of completion. Such escrow would be released to Seller upon Buyer's receipt of the certificate of completion, or disbursed to Buyer if the inspections are not passed within ninety (90) days following closing.
Item 14: Recorded Stormwater Management Covenant. The Objection Letter identifies a recorded covenant requiring maintenance of a stormwater management system on the property, and objects that the covenant may impose an operational burden on the property owner.
Seller's Response: Seller notes that this stormwater management covenant is a standard regulatory instrument required by the Southwest Florida Water Management District ("SWFWMD") as a condition of the original development permit for the Lakeland Crossings Industrial property. The covenant is a routine requirement for industrial and commercial properties in the SWFWMD's jurisdictional area and runs with the land. The covenant was in place at the time of Seller's acquisition and has been complied with throughout Seller's ownership period.
The maintenance obligations imposed by the covenant are already incorporated into the property's annual operating budget and are passed through to the property's tenants through common area maintenance ("CAM") charges as part of the triple-net lease structure. The annual cost of stormwater system maintenance has historically averaged approximately $12,000 to $15,000 per year and is fully recoverable.
Seller proposes that this item be treated as a Permitted Exception pursuant to PSA Section 5.3(c) and Exhibit P thereto. The covenant is typical for properties in this area and does not materially impair the use, value, or operations of the property.
B. Objection Item 15: GMP Southport LLC — Southport Logistics Park
Property Address: 3200 Southport Connector Road, Jacksonville, FL 32218 Target Entity: GMP Southport LLC, a Delaware limited liability company Title Commitment No.: CNT-2024-SP01-0050
Item 15: Tax Deed in Chain of Title (Recorded 2015). The Objection Letter identifies a tax deed recorded against a portion of the property in 2015, prior to Seller's ownership of the property, and raises questions regarding the validity and marketability of the chain of title.
Seller's Response: Seller notes that the tax deed was issued in 2015 to a prior owner of the property, who subsequently conveyed the property by special warranty deed in 2017. Seller acquired the property from a successor owner thereafter. The tax deed was issued following the completion of all statutory requirements under Florida law for tax deed sales, and the applicable redemption period has long since expired.
Commonwealth National Title Insurance Company has reviewed the chain of title in connection with the issuance of the title commitment for this property and has indicated its willingness to insure over the tax deed matter in the final owner's policy. Seller will provide Buyer's counsel with the following supporting documentation:
(i) A complete chain-of-title abstract covering the period from the issuance of the tax deed in 2015 through the present date;
(ii) A copy of the 2017 special warranty deed by which the tax deed grantee conveyed the property to its successor;
(iii) Evidence that all applicable redemption periods and statutory challenge periods under Florida Statutes Chapter 197 have expired; and
(iv) A pro forma title commitment or commitment endorsement from Commonwealth Title reflecting its willingness to insure over the matter without special exception.
Seller proposes that this item be treated as a Permitted Exception, provided that Commonwealth National Title Insurance Company affirmatively insures over the tax deed matter in the final ALTA Owner's Policy issued to Buyer at closing.
C. Objection Item 16: GMP Brickell LLC — Brickell Bay Office Building
Property Address: 1450 Brickell Avenue, Miami, FL 33131 Target Entity: GMP Brickell LLC, a Delaware limited liability company Title Commitment No.: CNT-2024-BR01-0051
Item 16: Condominium Declaration Referenced in Title Commitment. The Objection Letter objects to a condominium declaration referenced in the title commitment for this property, expressing concern that the Brickell Bay Office Building may be subject to a condominium regime.
Seller's Response: Seller clarifies that the condominium declaration referenced in the title commitment pertains solely to the parking garage component of the building complex, which is a legally separate parcel from the office tower. The Brickell Bay Office Building (the office tower) and the associated parking garage are situated on separate legal parcels and are governed by separate legal regimes. The office parcel, which is the property owned by the Target Entity (GMP Brickell LLC), is not a unit within any condominium and is not subject to any condominium declaration, bylaws, or association governance.
To confirm the foregoing and to support the deletion of this exception from Schedule B-II, Seller will provide Buyer's counsel and Commonwealth National Title Insurance Company with the following documentation:
(i) A legal description of the office tower parcel confirming its separate legal identity from the parking garage parcel;
(ii) A letter from the condominium association for the parking garage confirming that the Brickell Bay Office Building (office tower) is not a unit in the condominium and is not subject to the condominium declaration; and
(iii) A title affidavit from an authorized officer of GMP Brickell LLC confirming that the office tower property is not part of any condominium regime.
Seller proposes that this exception be deleted from Schedule B-II upon Commonwealth Title's receipt and review of the supporting documentation described above.
IV. TENNESSEE PROPERTIES (3 PROPERTIES)
A. Objection Items 17–18: GMP Murfreesboro LLC — Murfreesboro Distribution Center
Property Address: 1600 Joe B. Jackson Parkway, Murfreesboro, TN 37127 Target Entity: GMP Murfreesboro LLC, a Delaware limited liability company Title Commitment No.: CNT-2024-MU01-0052
Item 17: State of Tennessee Tax Lien — Franchise/Excise Tax ($23,450). The Objection Letter identifies a State of Tennessee tax lien for franchise and excise taxes assessed against GMP Murfreesboro LLC in the amount of Twenty-Three Thousand Four Hundred Fifty Dollars ($23,450.00).
Seller's Response: This item constitutes a Mandatory Cure Item under Section 5.3(a)(iii) of the PSA as a delinquent governmental tax obligation. Seller agrees to cure this item in its entirety prior to the Closing Date.
Seller will pay the outstanding franchise and excise tax liability to the Tennessee Department of Revenue and obtain a formal release of the tax lien. Evidence of payment and a copy of the lien release (or, if applicable, a certificate of tax clearance from the Tennessee Department of Revenue) will be provided to Commonwealth National Title Insurance Company prior to the Closing Date for deletion of the tax lien exception from Schedule B-II of the applicable title commitment.
Item 18: Railroad Spur Easement (Recorded 1962). The Objection Letter identifies a railroad spur easement crossing the southeastern portion of the Murfreesboro Distribution Center property, which was originally recorded in 1962.
Seller's Response: Seller notes that this railroad spur easement is a historical instrument dating from 1962 and that the railroad spur tracks were physically removed from the property prior to Seller's acquisition. The easement has not been actively used for railroad purposes in over thirty (30) years. The ALTA/NSPS survey prepared by Meridian Land Surveying, Inc. and certified by Daniel Caulfield, PLS, PE, confirms that there is no physical evidence of the railroad spur or any active railroad use on the property. Notwithstanding the foregoing, the easement of record has not been formally released or terminated by the railroad company or its successor-in-interest.
Seller will use commercially reasonable efforts to identify the railroad's successor-in-interest and to obtain a quitclaim deed or formal release of the easement for recording in the official records of Rutherford County, Tennessee. Seller acknowledges, however, that identifying the current holder of the easement rights (given the passage of more than sixty years and potential mergers, acquisitions, and abandonments in the railroad industry) may prove difficult, and Seller cannot guarantee that a release will be obtained prior to the Closing Date.
In the event that a formal release cannot be obtained prior to closing, Seller proposes the following alternative:
(i) The railroad spur easement shall be treated as a Permitted Exception under the PSA; and
(ii) Seller will obtain a title endorsement from Commonwealth National Title Insurance Company affirmatively insuring Buyer against any loss or damage arising from the enforcement of the railroad spur easement against the property.
Given the complete absence of any physical evidence of the railroad spur, the more-than-thirty-year period of non-use, and the availability of title insurance coverage, Seller believes that this resolution fully protects Buyer's interests.
B. Objection Item 19: GMP Cool Springs LLC — Cool Springs Office Park
Property Address: 5000 Virginia Way, Brentwood, TN 37027 Target Entity: GMP Cool Springs LLC, a Delaware limited liability company Title Commitment No.: CNT-2024-CS01-0053
Item 19: Master Association Restrictive Covenants — Signage, Hours of Operation, and Architectural Modification. The Objection Letter identifies restrictive covenants imposed by the Cool Springs mixed-use development master association, which impose restrictions on signage, hours of operation, and architectural modifications at the Cool Springs Office Park property.
Seller's Response: Seller notes that these restrictive covenants are standard master-planned community covenants, conditions, and restrictions ("CC&Rs") that run with the land and are typical of properties located within the Cool Springs mixed-use development in Brentwood, Tennessee. The covenants were in place at the time of Seller's acquisition and are applicable to all properties within the Cool Springs development area.
The Cool Springs Office Park property has operated in full compliance with these CC&Rs throughout Seller's ownership period. The signage restrictions, hours of operation limitations, and architectural modification requirements are consistent with the Class A office environment of the Cool Springs development and have not impaired the property's use, value, or marketability. Tenants have been made aware of these restrictions in their lease agreements, and no tenant has raised any objection or complaint related to the CC&Rs.
Seller proposes that this item be treated as a Permitted Exception pursuant to PSA Section 5.3(c) and Exhibit P thereto. Seller will provide Buyer's counsel with (i) a complete copy of the master association CC&Rs, including all recorded amendments and supplements, and (ii) a compliance letter from the Cool Springs master association confirming that the property is currently in good standing and in compliance with the CC&Rs.
C. Objection Items 20–21: GMP Mount Juliet LLC — Mount Juliet Commerce Park
Property Address: 400 South Mount Juliet Road, Mount Juliet, TN 37122 Target Entity: GMP Mount Juliet LLC, a Delaware limited liability company Title Commitment No.: CNT-2024-MJ01-0054
Item 20: Survey Gap/Overlap Along Eastern Boundary (Approximately 0.08 Acres). The Objection Letter identifies an overlap or gap in the legal description between the Mount Juliet Commerce Park property and the adjacent parcel, as depicted on the ALTA/NSPS survey prepared by Meridian Land Surveying, Inc. The discrepancy encompasses approximately 0.08 acres along the eastern boundary of the property.
Seller's Response: Seller acknowledges the survey finding and takes this matter seriously. Seller believes the discrepancy results from a minor inconsistency between the metes-and-bounds legal description of the property and the corresponding legal description of the adjacent parcel, which may have arisen from historical surveying tolerances or the use of different survey reference points.
Seller will cooperate with Buyer and the adjacent landowner to prepare and execute a boundary line agreement (or lot line adjustment, as applicable under Wilson County, Tennessee, subdivision regulations) to resolve the discrepancy and establish a mutually agreed-upon boundary line. Seller will bear all costs associated with the preparation, negotiation, and recording of the boundary line agreement, including any additional survey work required by Meridian Land Surveying, Inc.
Seller proposes that, if the boundary line agreement cannot be fully executed and recorded prior to the Closing Date due to delays attributable to the adjacent landowner's cooperation or governmental processing times, Commonwealth National Title Insurance Company shall provide gap insurance coverage addressing the 0.08-acre discrepancy in the final ALTA Owner's Policy issued to Buyer. Seller will use commercially reasonable efforts to complete the boundary line agreement prior to closing.
Item 21: Unrecorded Option Agreement in Favor of Adjacent Landowner (0.5-Acre Strip). The Objection Letter identifies an unrecorded option agreement in favor of the adjacent landowner, granting such landowner the option to purchase a 0.5-acre strip along the northern boundary of the Mount Juliet Commerce Park property.
Seller's Response: Seller confirms that the option agreement in question expired by its own terms on December 31, 2022, and was never exercised by the adjacent landowner. No notice of exercise was received during the option period, and no extension or renewal was granted. The option agreement was never recorded in the official records of Wilson County, Tennessee, and therefore should not appear as a title exception or encumbrance on the title commitment.
Seller will provide Buyer's counsel with (i) a complete copy of the expired option agreement, showing the express expiration date of December 31, 2022, and (ii) an affidavit from an authorized officer of GMP Mount Juliet LLC confirming that the option was not exercised and has expired. Seller requests that any reference to the option agreement be deleted from the title commitment, as it is no longer in force or effect and was never recorded.
V. NORTH CAROLINA PROPERTY (1 PROPERTY)
A. Objection Items 22–23: GMP SouthPark LLC — SouthPark Corporate Center
Property Address: 6200 Fairview Road, Charlotte, NC 28210 Target Entity: GMP SouthPark LLC, a Delaware limited liability company Title Commitment No.: CNT-2024-SP02-0055
Item 22: Unreleased Deed of Trust Securing Prior Owner's Mezzanine Loan ($5,200,000). The Objection Letter identifies a deed of trust recorded in the official records of Mecklenburg County, North Carolina, securing a mezzanine loan in the original principal amount of Five Million Two Hundred Thousand Dollars ($5,200,000.00) from a prior owner's lender. The Objection Letter notes that the deed of trust remains of record despite the loan having been paid in full in 2019.
Seller's Response: This item constitutes a Mandatory Cure Item under Section 5.3(a)(i) of the PSA as a monetary lien or encumbrance of record. Seller agrees to cure this item prior to the Closing Date.
Seller confirms that the mezzanine loan secured by this deed of trust was paid in full in 2019, prior to Seller's acquisition of the property. The prior lender received full payment of all amounts owed; however, a cancellation or satisfaction of the deed of trust was not recorded in the Mecklenburg County records. Seller, through its counsel at Blackridge Hayes LLP, is currently working with the prior lender's counsel to obtain and execute a cancellation, release, or satisfaction of the deed of trust in recordable form. Seller anticipates that the release instrument will be obtained and recorded within thirty (30) days of the date of this letter. Upon recording, a certified copy of the recorded cancellation will be provided to Commonwealth National Title Insurance Company for deletion of the deed of trust exception from Schedule B-II.
Item 23: City of Charlotte Sidewalk and Streetscape Easement (Recorded 2016; 20-Foot Width). The Objection Letter identifies a sidewalk and streetscape easement recorded in 2016 in favor of the City of Charlotte, North Carolina, and objects that the 20-foot width of the easement may potentially affect the parking area of the SouthPark Corporate Center property.
Seller's Response: Seller notes that this easement is a municipal easement that was recorded as a condition of the site plan approval for the SouthPark Corporate Center. The easement area is located entirely along the Fairview Road frontage of the property and was specifically designed and positioned to accommodate the City of Charlotte's streetscape improvement and pedestrian access requirements along the Fairview Road corridor.
Critically, the ALTA/NSPS survey prepared by Meridian Land Surveying, Inc. and certified by Daniel Caulfield, PLS, PE, confirms that the easement area does not encroach into any parking area currently in use at the SouthPark Corporate Center. The nearest parking space is located more than six feet (6') from the eastern edge of the easement area, and the building itself is set back well beyond the easement boundaries.
Seller proposes that this item be treated as a Permitted Exception pursuant to PSA Section 5.3(c) and Exhibit P thereto. Seller will provide Buyer's counsel with the following supporting documentation:
(i) A copy of the City of Charlotte's original site plan approval, showing the relationship between the easement, building, and parking areas;
(ii) The ALTA/NSPS survey sheet depicting the easement boundaries in relation to the existing improvements and parking area; and
(iii) A copy of the recorded easement instrument.
VI. SUMMARY OF SELLER'S PROPOSED CURES AND RESPONSES
For ease of reference, the following is a summary of Seller's responses to all twenty-three (23) objection items:
A. Mandatory Cure Items — Seller Agrees to Cure (6 Items)
Seller will deliver evidence of cure for each Mandatory Cure Item (including recorded releases, UCC-3 termination filings, tax lien releases, and payoff letters) to Buyer's counsel and Commonwealth National Title Insurance Company prior to the Closing Date.
B. Items Proposed as Permitted Exceptions (11 Items)
C. Items to Be Deleted Upon Cure or Evidence (6 Items)
VII. CONCLUSION AND RESERVATION OF RIGHTS
We respectfully request that Buyer and its counsel review Seller's proposed cures, explanations, and Permitted Exception designations set forth in this letter and respond within a reasonable time frame so that the parties may resolve all outstanding title matters in advance of the scheduled Closing Date.
Seller reserves all of its rights under the PSA, including without limitation (i) the right to assert additional items as Permitted Exceptions in accordance with Section 5.3(c) of the PSA, (ii) the right to cure any title objection item at any time prior to the Closing Date, and (iii) all rights and remedies available to Seller in connection with Buyer's obligations under the PSA. Nothing in this letter shall be deemed a waiver of any of Seller's rights or remedies under the PSA, at law, or in equity.
Seller reaffirms its commitment to close the transaction contemplated by the PSA on or before the scheduled Closing Date of May 31, 2024 (as the same may be extended or adjusted in accordance with the terms of the PSA), and looks forward to working cooperatively with Buyer and its counsel to bring all title matters to a satisfactory resolution.
Should you have any questions or wish to discuss any of the items addressed in this letter, please do not hesitate to contact me directly at (212) 554-8217 or npryce@blackridgehayes.com.
Very truly yours,
BLACKRIDGE HAYES LLP
By: ________
Nathaniel Pryce Partner
On behalf of Greystone Meridian Partners Fund III, L.P.
By: Greystone Meridian Capital LLC, its General Partner
cc: Victor Lansdell, Managing Director, Greystone Meridian Capital LLC Elise Rathborne, Vice President, Greystone Meridian Capital LLC Douglas Fairchild, Esq., Calderwood & Harkness LLP Grace Nakamura, Esq., Calderwood & Harkness LLP Thomas Keating, Esq., Blackridge Hayes LLP Kenneth Stanhope, SVP, Commonwealth National Title Insurance Company
PART TWO
CALDERWOOD & HARKNESS LLP ATTORNEYS AT LAW
CALDERWOOD & HARKNESS LLP 450 Park Avenue, 28th Floor New York, New York 10022 Tel: (212) 801-4500
April 11, 2024
VIA EMAIL AND OVERNIGHT DELIVERY
Nathaniel Pryce, Esq. Blackridge Hayes LLP 1285 Avenue of the Americas, 34th Floor New York, New York 10019
Copy to: Thomas Keating, Esq., Senior Associate, Blackridge Hayes LLP (via email: tkeating@blackridgehayes.com)
Re: Buyer's Response to Seller's Title Cure Letter dated April 8, 2024 Purchase and Sale Agreement dated February 28, 2024 (the "PSA") Between Greystone Meridian Partners Fund III, L.P. ("Seller") and Fairwater Real Estate Investment Trust ("Buyer") 14-Property Sun Belt Logistics & Office Portfolio (the "Portfolio")
Dear Mr. Pryce:
We write on behalf of our client, Fairwater Real Estate Investment Trust ("Buyer"), in response to your letter dated April 8, 2024 (the "Cure Letter"), in which you set forth, on behalf of Greystone Meridian Partners Fund III, L.P. ("Seller"), Seller's proposed cures, explanations, and responses to the twenty-three (23) title objection items identified in our letter dated March 27, 2024 (the "Objection Letter").
We have reviewed the Cure Letter in its entirety, in consultation with Buyer's in-house real estate team, including Camille Oduya, In-House Real Estate Counsel, and Marcus Devereaux, Executive Vice President, Acquisitions, as well as Buyer's local counsel in each applicable jurisdiction. We appreciate the thoroughness and responsiveness of Seller's submissions and the willingness to address the identified title matters.
In summary, Buyer accepts the substantial majority of Seller's proposed cures and Permitted Exception designations. However, Buyer has counter-comments and conditions on several items, as set forth in detail below. This letter constitutes Buyer's formal response to the Cure Letter and should be read in conjunction with the Objection Letter and the applicable provisions of the PSA.
I. ITEMS ACCEPTED WITHOUT COUNTER-COMMENT
Buyer accepts Seller's proposed cure or Permitted Exception designation, as applicable, without further comment with respect to the following items:
Items 1, 2, 4, 5, 8, 9, 11, 14, 16, 17, 19, 21, and 22
With respect to the foregoing, the following clarifications apply:
A. Mandatory Cure Items (Items 1, 4, 5, 8, 17, and 22)
Buyer confirms its acceptance of Seller's commitment to cure each of these Mandatory Cure Items prior to the Closing Date. Buyer requires that complete evidence of cure—including, as applicable, recorded lien releases, recorded cancellations of security deeds and deeds of trust, UCC-3 termination filings with file-stamped confirmation, tax lien releases, payoff letters, and paid tax receipts—be delivered to Calderwood & Harkness LLP and to Commonwealth National Title Insurance Company (Attn: Kenneth Stanhope, SVP) no later than five (5) business days prior to the scheduled Closing Date. Buyer's acceptance of Seller's commitment to cure these items is expressly conditioned upon timely delivery of such evidence; failure to deliver the required evidence within the specified timeframe shall constitute a failure to cure and shall entitle Buyer to exercise its remedies under Section 5.3(d) of the PSA, including, without limitation, the right to terminate the PSA and receive a return of the Deposit.
B. Items Proposed as Permitted Exceptions (Items 9, 14, and 19)
Buyer accepts Seller's designation of Items 9 (drainage easement at Westlake Distribution Hub), 14 (stormwater management covenant at Lakeland Crossings Industrial), and 19 (Cool Springs master association CC&Rs) as Permitted Exceptions. Buyer will update PSA Exhibit P to include these items upon final confirmation of the title commitments. With respect to Item 19, Buyer requests that Seller deliver the full CC&R document and the compliance letter from the Cool Springs master association within the timeframes specified in this letter.
C. Items to Be Deleted (Items 2, 11, 16, and 21)
Buyer accepts Seller's proposals for deletion of Items 2 (expired temporary construction easement), 11 (judgment against different entity), 16 (condominium declaration not applicable to office tower), and 21 (expired unrecorded option agreement), subject to receipt of the supporting documentation described in the Cure Letter, including the following:
• Item 2: Affidavit from authorized officer of GMP Fairfield I LLC confirming expiration of the temporary construction easement.
• Item 11: Affidavit from authorized officer of GMP Fund III confirming that the judgment debtor is not the Target Entity, together with a certificate of good standing for GMP Alliance LLC from the Delaware Secretary of State.
• Item 16: Legal description confirming separate parcels, condominium association letter, and title affidavit.
• Item 21: Copy of the expired option agreement and affidavit confirming non-exercise and expiration.
Buyer reserves the right to revive any of the foregoing objections if the supporting documentation, upon review, does not adequately confirm the basis for deletion.
II. ITEMS ACCEPTED WITH CONDITIONS AND COUNTER-COMMENTS
Buyer provides the following counter-comments and conditions with respect to the remaining items:
A. Item 3 — Brightwater Group Utility Easement (Fairfield Logistics Center I)
Buyer accepts Seller's proposal to treat Item 3 as a Permitted Exception, subject to the following condition: Seller shall obtain and deliver to Buyer a written confirmation from Drayton Holdings (or its successor or assign) that no relocation, expansion, or upgrade of utility facilities within the fifteen-foot (15') easement corridor along the western boundary of the property is planned or contemplated within the next five (5) years from the date of closing. The written confirmation should be on Drayton Holdings letterhead, addressed to the property owner and its assigns, and should be in a form reasonably acceptable to Buyer's counsel.
In the event that Seller is unable to obtain such written confirmation from Drayton Holdings within the timeframes contemplated by this letter, Buyer will accept an alternative resolution in the form of a title endorsement from Commonwealth National Title Insurance Company affirmatively insuring against interference with the building and improvements on the property arising from the exercise of rights under the utility easement. The cost of such endorsement shall be borne by Seller.
B. Item 6 — Height Restriction Covenant (Buckhead Place Office Tower)
Buyer accepts Seller's proposal to treat Item 6 as a Permitted Exception, noting that the existing ten-story building is within the twelve-story height restriction imposed by the covenant. However, Buyer requests that Seller cooperate in obtaining an ALTA 9.2 endorsement (or equivalent available endorsement form) from Commonwealth National Title Insurance Company, addressing the restrictive covenant and providing Buyer with assurance that the existing building and improvements do not violate the covenant and that Buyer's future redevelopment rights are not impaired to the extent such rights may be exercised in compliance with the covenant.