ESTOPPEL CERTIFICATE COMPILATION (EXECUTED) — PORTFOLIO BINDER
Fairwater Real Estate Investment Trust
Acquisition of 14-Property Sun Belt Logistics & Office Portfolio from Greystone Meridian Partners Fund III, L.P.
Purchase Price: $1,100,000,000
Closing Date: June 6, 2024
Prepared by:
Calderwood & Harkness LLP 450 Park Avenue, 28th Floor New York, New York 10022
Matter Number: 1036-00004
CONFIDENTIAL — ATTORNEY-CLIENT PRIVILEGED
This document and the information contained herein are confidential and privileged, prepared by counsel at the direction of and for the benefit of the client. This compilation is not intended for distribution to any person or entity other than the addressees and authorized recipients identified herein. Any unauthorized review, use, disclosure, or distribution is strictly prohibited.
SECTION 1: COVER MEMORANDUM
1.1 Header and Addressees
MEMORANDUM
June 6, 2024
TO: Douglas Fairchild, Partner, Calderwood & Harkness LLP
FROM: Grace Nakamura, Lead Associate, Calderwood & Harkness LLP
CC: Angela Fontaine, Counsel, Calderwood & Harkness LLP Rafael Dominguez, Associate, Calderwood & Harkness LLP Marcus Devereaux, Executive Vice President — Acquisitions, Fairwater Real Estate Investment Trust Camille Oduya, Senior Vice President & Associate General Counsel, Fairwater Real Estate Investment Trust David Elgin Park, Vice President — Acquisitions, Fairwater Real Estate Investment Trust
RE: Compilation of Executed Tenant Estoppel Certificates — Fairwater REIT Acquisition of GMP Fund III Portfolio (14-Property Sun Belt Logistics & Office Portfolio)
Matter No.: 1036-00004
1.2 Purpose. This binder compiles all seventy-nine (79) executed tenant estoppel certificates received on or prior to the closing date of June 6, 2024, in connection with the acquisition by Fairwater Real Estate Investment Trust ("Buyer" or "Fairwater REIT") of the fourteen-property Sun Belt logistics and office portfolio (the "Portfolio") from Greystone Meridian Partners Fund III, L.P. ("Seller" or "GMP Fund III") for an aggregate purchase price of One Billion One Hundred Million Dollars ($1,100,000,000).
The estoppel certificates were solicited pursuant to Section 7.3 of that certain Purchase and Sale Agreement dated as of February 28, 2024 (as amended by that certain First Amendment to Purchase and Sale Agreement dated as of April 12, 2024, and that certain Second Amendment to Purchase and Sale Agreement dated as of May 28, 2024, collectively, the "PSA"), by and between Greystone Meridian Partners Fund III, L.P., as Seller, and Fairwater Real Estate Investment Trust, as Buyer.
The form of estoppel certificate utilized in connection with this solicitation is the form attached to the PSA as Exhibit E (the "Standard Estoppel Form"). On March 4, 2024, Calderwood & Harkness LLP transmitted an estoppel transmittal letter, together with copies of the Standard Estoppel Form pre-populated with relevant lease data from the Seller's rent roll (PSA Exhibit H), to Seller's counsel at Blackridge Hayes LLP (attention: Thomas Keating, Partner). In accordance with Section 7.3(b) of the PSA, Seller assumed responsibility for the distribution of the estoppel certificate forms to all eighty-seven (87) tenants across the fourteen (14) properties comprising the Portfolio.
The estoppel delivery deadline under the PSA, as originally set forth in Section 7.3(c), was May 10, 2024 (seventy (70) days following the execution of the PSA). Pursuant to Section 2(a) of the First Amendment dated April 12, 2024, the estoppel delivery deadline was extended by five (5) days to May 15, 2024 (seventy-five (75) days from the execution of the PSA) to accommodate the timing of certain logistics tenants whose corporate approval processes required additional time. All seventy-nine (79) estoppel certificates compiled herein were received on or before the May 15, 2024 delivery deadline, with the exception of three (3) estoppels received between May 16, 2024 and May 31, 2024, which Buyer agreed to accept notwithstanding their late delivery.
This memorandum summarizes the estoppel certificate results, confirms satisfaction of the applicable closing conditions, identifies the eight (8) outstanding estoppels, and provides a property-by-property index keyed to the individual tabs contained in this binder.
1.3 PSA Estoppel Requirements — Summary
Section 7.3 of the PSA establishes the following requirements with respect to tenant estoppel certificates as a condition precedent to Buyer's obligation to close:
(a) ABR Coverage Threshold. Seller is required to deliver to Buyer executed estoppel certificates from tenants representing at least eighty percent (80%) of the total in-place annual base rent ("ABR") of the Portfolio as of the date of the PSA. Based on the rent roll attached to the PSA as Exhibit H (the "Rent Roll"), total annual in-place base rent across all fourteen (14) properties is Seventy-Four Million Eight Hundred Thousand Dollars ($74,800,000). Accordingly, the eighty percent (80%) threshold is Fifty-Nine Million Eight Hundred Forty Thousand Dollars ($59,840,000) in ABR.
(b) Major Tenant Requirement. In addition to the ABR coverage threshold, Seller is required to deliver executed estoppel certificates from each tenant that occupies twenty-five thousand (25,000) or more rentable square feet ("RSF") at any single property in the Portfolio (each such tenant, a "Major Tenant"). There are twelve (12) Major Tenants in the Portfolio, as identified on the Rent Roll.
(c) Form Requirement. Each estoppel certificate must be substantially in the form of the Standard Estoppel Form (PSA Exhibit E) and must be in form and substance reasonably acceptable to Buyer and Buyer's lenders. The lenders to the Portfolio are: (i) Pinnacle Federal Bank, N.A. (lender under Loan Pool 1, covering the logistics properties identified as Loans 1-A through 1-H); (ii) Veltrano Capital Lending Corp. (lender under Loan Pool 2, covering the office properties identified as Loans 2-A through 2-D); and (iii) Sycamore Life Insurance Company (lender under Loan Pool 3, covering the logistics properties identified as Loans 3-A and 3-B).
(d) Delivery Deadline. Estoppel certificates were required to be delivered no later than May 15, 2024, as extended by the First Amendment. Buyer retained the right, in its sole discretion, to accept estoppel certificates received after such date, and Buyer exercised such right with respect to three (3) estoppels received after May 15, 2024.
1.4 Results Summary
As of the closing date of June 6, 2024, the estoppel solicitation results are as follows:
• Total leases in Portfolio: 87
• Estoppel certificates received and executed by closing: 79 of 87
• Estoppel certificates outstanding at closing: 8 of 87
• ABR coverage of received estoppels: $68,371,200 of $74,800,000 = 91.4%
• ABR coverage exceeds the 80% contractual threshold ($59,840,000) by $8,531,200
• All twelve (12) Major Tenant estoppels (tenants occupying 25,000 or more RSF) have been received
• PSA estoppel condition precedent: SATISFIED
The foregoing results confirm that Buyer's closing condition under Section 7.3 of the PSA has been fully satisfied. The received estoppel certificates cover tenants accounting for 91.4% of the Portfolio's in-place ABR, which materially exceeds the 80% contractual threshold by approximately $8.5 million. Furthermore, every Major Tenant — without exception — has delivered a fully executed estoppel certificate in form and substance that has been approved by Buyer and by each of the three existing mortgage lenders (or their respective counsel).
1.5 Discrepancy Resolution
During the course of the estoppel review process, six (6) executed estoppel certificates were identified as containing information that was inconsistent with the data reflected on the Rent Roll (PSA Exhibit H). These discrepancies were documented in detail in the Estoppel Review Memorandum — Material Discrepancies, dated May 8, 2024, prepared by Calderwood & Harkness LLP and circulated to Buyer's deal team and to Seller's counsel.
The nature of the discrepancies varied but included: (i) discrepancies in stated base rent amounts (attributable in two cases to contractual rent escalations that had taken effect between the Rent Roll date and the estoppel execution date); (ii) one instance in which the tenant identified an outstanding tenant improvement allowance balance not reflected on the Rent Roll; and (iii) three instances involving inconsistencies in lease expiration dates or option exercise periods.
Following identification of these discrepancies, Calderwood & Harkness LLP transmitted a detailed inquiry letter to Seller's counsel, Thomas Keating at Blackridge Hayes LLP, on May 6, 2024, requesting supplemental disclosure and documentation to resolve each identified item. Seller responded with supplemental disclosure materials between May 10 and May 22, 2024, addressing each of the six discrepancies. In each case, the discrepancy was satisfactorily explained and, where applicable, supporting documentation was provided (including copies of lease amendments, rent escalation schedules, and landlord accounting records).
As of the closing date, no unresolved material discrepancies remain with respect to any of the seventy-nine (79) executed estoppel certificates compiled in this binder.
1.6 Cross-Reference to Related Documents
The following documents are referenced throughout this binder and should be consulted in conjunction with the estoppel certificates compiled herein:
1. PSA Exhibit E — Form of Tenant Estoppel Certificate (the "Standard Estoppel Form")
2. PSA Exhibit H — Rent Roll as of December 31, 2023
3. Estoppel Tracking Spreadsheet (Final) — Maintained by Calderwood & Harkness LLP, reflecting the status of all 87 estoppel solicitations as of June 6, 2024
4. Estoppel & SNDA Compliance Certificate dated June 6, 2024 — Executed by Douglas Fairchild, Partner, Calderwood & Harkness LLP, and delivered at closing
5. Estoppel Review Memorandum — Material Discrepancies dated May 8, 2024 — Prepared by Grace Nakamura, Calderwood & Harkness LLP, identifying six discrepancies from the Rent Roll and the resolution thereof
Each of the foregoing documents is maintained in the closing files at Calderwood & Harkness LLP and has been uploaded to the transaction data room maintained by Meridian Virtual Data Room Services (Project Code: "Sun Belt Logistics").
SECTION 2: SUMMARY OF ESTOPPEL COVERAGE
2.1 Portfolio-Level Coverage
The following table summarizes the estoppel coverage achieved across the entire fourteen-property Portfolio as of the closing date:
As reflected above, the executed estoppel certificates received represent 91.4% of the Portfolio's total in-place annual base rent, exceeding the PSA's 80% coverage requirement by a surplus of $8,531,200 in covered ABR. The eight (8) outstanding estoppels, representing $6,428,800 in aggregate ABR (8.6% of total), are all from tenants occupying less than 25,000 RSF and therefore do not implicate the Major Tenant requirement.
2.2 Coverage by Property Type
Logistics Properties (10 Properties)
The logistics portfolio, which comprises the majority of the Portfolio's value and income, achieved a 93.2% estoppel coverage rate. The four outstanding estoppels in the logistics portfolio relate to smaller tenants occupying ancillary space in multi-tenant logistics facilities.
Office Properties (4 Properties)
The office portfolio achieved an 87.1% estoppel coverage rate. The four outstanding estoppels in the office portfolio relate to smaller tenants in multi-tenant office buildings, each occupying less than 10,000 RSF.
Overall Weighted-Average Occupancy: 93.2%
2.3 Coverage by State
The following table presents the estoppel coverage by state, reflecting the geographic distribution of the Portfolio:
Each state exceeds the 80% ABR coverage threshold on a standalone basis, although the PSA measures the threshold at the portfolio level rather than on a per-state or per-property basis. North Carolina, which contains a single property (SouthPark Corporate Center), achieved 100% tenant participation (4 of 4 leases), with a 95.0% coverage rate based on ABR (reflecting that the four executed estoppels represent $3,800,000 of the $4,000,000 total ABR at that property, with the remaining $200,000 attributable to rounding adjustments in the Rent Roll calculation).
2.4 Top 5 Tenants — Estoppel Status
The following table confirms that each of the five (5) largest tenants in the Portfolio, measured by annual base rent, has delivered a fully executed estoppel certificate:
These five tenants collectively represent $33,446,000 in annual base rent, or approximately 44.7% of the Portfolio's total in-place ABR. Each of these tenants is classified as a Major Tenant under the PSA, and each has delivered an estoppel certificate substantially in the Standard Estoppel Form, without material deviations, qualifications, or claimed defaults. All five estoppel certificates have been reviewed and accepted by Buyer and by each of the three existing mortgage lenders (through their respective counsel).
SECTION 3: PROPERTY-BY-PROPERTY ESTOPPEL INDEX
The following index sets forth, on a property-by-property basis, the leases at each property, the corresponding tab numbers in this binder, and the status of each estoppel certificate. The properties are presented in the same order as they appear in the PSA schedules and in the closing checklist.
3.1 Property 1: Fairfield Logistics Center I
Notes: This is a single-tenant industrial property. Thornton-Whitaker Pharmaceuticals Corp. is the sole tenant, occupying the entire 412,000 RSF facility under a net lease with approximately 8.3 years of remaining term. The executed estoppel certificate confirms no defaults, no outstanding landlord work obligations, and no pending disputes. The tenant confirmed the existence of two five-year renewal options and one right of first offer on the adjacent Fairfield Logistics Center II parcel, each consistent with the lease and the Rent Roll. Security deposit: $515,000.
3.2 Property 2: Fairfield Logistics Center II
Notes: All three tenants at Fairfield Logistics Center II delivered executed estoppel certificates prior to the May 15, 2024 deadline. No deviations from the Standard Estoppel Form. No defaults or pending disputes identified. Aggregate security deposits at this property: $285,000.
3.3 Property 3: Westlake Distribution Hub
Notes: This is a single-tenant distribution facility. Cascade Supply Chain Solutions Inc. is the Portfolio's largest tenant by ABR ($8,736,000) and by leased RSF (624,000). The executed estoppel certificate was among the first received, arriving on April 15, 2024. The estoppel confirms no defaults, a current rent of $14.00 per RSF, a remaining lease term of approximately 7.5 years, and two five-year renewal options at ninety-five percent (95%) of fair market rent. Security deposit: $728,000. The tenant confirmed that no assignments, subleases, or subletting arrangements are in effect.
Environmental Note: The Phase I Environmental Site Assessment for this property identified de minimis recognized environmental conditions (RECs) related to historical agricultural use of the property. This environmental matter is not relevant to the estoppel certificate content but is noted here for cross-reference purposes. The environmental matters are addressed in the environmental due diligence binder.
3.4 Property 4: Katy Freeway Logistics Park
Notes: Single-tenant logistics facility occupied by Zynvaro Distribution Holdings LLC, the Portfolio's second-largest tenant by ABR. The estoppel certificate confirms the lease is in full force and effect, with no modifications other than the First Amendment to Lease dated August 14, 2022 (which extended the lease term by two years and adjusted the base rent escalation schedule). The tenant confirmed current base rent of $14.00 per RSF with annual escalations of 2.5%. Security deposit: $627,000. No defaults claimed. One five-year renewal option remains unexercised.
3.5 Property 5: Alliance Commerce Center
Notes: All four tenants delivered executed estoppels prior to the May 15, 2024 deadline. No deviations from the Standard Estoppel Form were noted. The estoppel from Pinnacle Logistics Operations Inc. confirmed an outstanding tenant improvement allowance balance of $0 (fully disbursed). Aggregate security deposits at this property: $412,000.
Clarification: Although the tenant name "Pinnacle Logistics Operations Inc." shares a name element with the lender Pinnacle Federal Bank, N.A., these are unrelated entities. No conflict of interest or related-party issue exists.
3.6 Property 6: Lakeland Crossings Industrial
Notes: Three of four tenants at Lakeland Crossings Industrial delivered executed estoppels. Lakeside Environmental Services Inc. (Building 3-B, 22,000 RSF, $286,000 ABR) did not return the estoppel certificate despite multiple follow-up requests from Seller's property management team. This tenant occupies less than 25,000 RSF and is therefore not a Major Tenant. Its ABR is included in the aggregate outstanding amount. Aggregate security deposits from received estoppels: $248,000.
3.7 Property 7: Southport Logistics Park
Notes: Single-tenant logistics park occupied by Atlas Freight Logistics Corp., the Portfolio's fifth-largest tenant by ABR. The executed estoppel certificate confirms no defaults by either party, no outstanding landlord work obligations, no pending disputes, and no subleases or assignments. The tenant confirmed current base rent of $13.00 per RSF with annual escalations of 2.75% commencing January 1, 2025. Security deposit: $444,000. Two five-year renewal options remain unexercised. The tenant also confirmed the existence of a right of first refusal on the adjacent undeveloped parcel, consistent with Section 38 of the lease.
3.8 Property 8: Murfreesboro Distribution Center
Notes: Three of four tenants at Murfreesboro Distribution Center delivered executed estoppels. MidSouth Equipment Rental LLC (Building C-2, 18,000 RSF, $216,000 ABR) did not return the estoppel certificate. This tenant is not a Major Tenant. The estoppel from Heritage Consumer Brands Inc. was one of the six estoppels initially identified with discrepancies (the tenant stated a lease expiration date of September 30, 2029, while the Rent Roll reflected September 30, 2030). This discrepancy was resolved through Seller's supplemental disclosure, which confirmed that the Rent Roll contained a typographical error and the correct expiration date is September 30, 2029, as stated in the estoppel. Aggregate security deposits from received estoppels: $398,000.
3.9 Property 9: Buckhead Place Office Tower
Notes: Seven of nine tenants at Buckhead Place Office Tower delivered executed estoppels. Two smaller tenants — Lighthouse Coworking LLC (Suite 100–200, 9,500 RSF, $361,000 ABR) and Peach State Accounting Group P.C. (Suite 2500, 6,200 RSF, $235,600 ABR) — did not return the estoppel certificate. Neither tenant is a Major Tenant. The estoppel from Meridian Capital Advisors LLC included minor qualifying language regarding a pending HVAC maintenance dispute (estimated cost: $12,000), which was reviewed and deemed not to constitute a material discrepancy or a default. Aggregate security deposits from received estoppels: $468,000.
PCA Note: The Property Condition Assessment for this property identified $890,000 in immediate repair costs related to the building's facade system and parking deck waterproofing. This matter is not relevant to the estoppel certificate content but is noted here for cross-reference to the PCA binder.
3.10 Property 10: SouthPark Corporate Center
Notes: SouthPark Corporate Center is a single-tenant office building occupied by Birchwood Technology Group Inc., the Portfolio's fourth-largest tenant by ABR ($5,668,000). The executed estoppel certificate was received on April 19, 2024, and confirms the lease is in full force and effect without modification. The tenant confirmed current base rent of $26.00 per RSF, annual escalations of 3.0%, a security deposit of $472,000, and no defaults or pending disputes. The tenant has one five-year renewal option and an expansion right of first offer on the remaining floors in the building. The estoppel was in strict conformity with the Standard Estoppel Form without any deviations.
3.11 Property 11: Cool Springs Office Park
Notes: Five of six tenants at Cool Springs Office Park delivered executed estoppels. Cool Springs Physical Therapy LLC (Suite 1000, 7,800 RSF, $202,800 ABR) did not return the estoppel certificate. This tenant is not a Major Tenant. The estoppel from Volunteer Healthcare Management Inc. initially contained a discrepancy regarding the rent escalation effective date (tenant stated January 1, 2025; Rent Roll reflected July 1, 2024). This discrepancy was one of the six identified in the May 8, 2024 memorandum and was resolved through Seller's supplemental disclosure, confirming that the correct escalation date is January 1, 2025, consistent with the lease amendment dated March 15, 2023. Aggregate security deposits from received estoppels: $265,000.
3.12 Property 12: Brickell Bay Office Building
Notes: Six of seven tenants at the Brickell Bay Office Building delivered executed estoppels. Coconut Grove Consulting Group Inc. (Floor 2, 6,500 RSF, $247,000 ABR) did not return the estoppel certificate. This tenant is not a Major Tenant. Of note, the estoppel from Miami River Trading Co. LLC was received on May 18, 2024, three days after the May 15, 2024 deadline; Buyer agreed to accept this late delivery. The estoppel from Coral Gables Venture Partners LLC confirmed an outstanding tenant improvement allowance balance of $142,000, which was one of the six discrepancies identified in the May 8, 2024 memorandum (the Rent Roll reflected a $0 TI allowance balance). This discrepancy was resolved through Seller's supplemental disclosure, confirming that $142,000 remained to be disbursed under a December 2023 lease amendment, and Seller agreed to fund the remaining balance prior to closing. Aggregate security deposits from received estoppels: $318,000.
3.13 Property 13: Peachtree Corners Logistics Center
Notes: All four tenants at Peachtree Corners Logistics Center delivered executed estoppels prior to the May 15, 2024 deadline. No deviations from the Standard Estoppel Form. No defaults or pending disputes identified. The estoppel from Northside Distribution Inc. confirmed two renewal options and a right of first refusal on Building 2, consistent with the lease. Aggregate security deposits: $296,000.
3.14 Property 14: Mount Juliet Commerce Park
Notes: Three of four tenants at Mount Juliet Commerce Park delivered executed estoppels. Volunteer State Janitorial Supply Co. (Building C-2, 20,000 RSF, $240,000 ABR) did not return the estoppel certificate. This tenant is not a Major Tenant. The estoppel from Providence Road Storage Solutions LLC was received on May 21, 2024, six days after the May 15, 2024 deadline; Buyer agreed to accept this late delivery. The estoppel from Wilson Creek Manufacturing LLC initially contained a discrepancy in the stated base rent amount ($11.80/RSF vs. the Rent Roll amount of $12.00/RSF). This discrepancy was one of the six identified in the May 8, 2024 memorandum and was resolved through Seller's supplemental disclosure, confirming that the tenant's 2024 rent escalation (from $11.80/RSF to $12.00/RSF) took effect on February 1, 2024, after the date of the tenant's initial estoppel response. The tenant subsequently confirmed the updated rent amount. Aggregate security deposits from received estoppels: $222,000.
SECTION 4: SUMMARY OF OUTSTANDING ESTOPPELS (8 TENANTS NOT RECEIVED)
4.1 List of 8 Outstanding Estoppels
The following table identifies the eight (8) tenants from whom executed estoppel certificates were not received by the closing date of June 6, 2024:
Note: The eighth outstanding estoppel relates to a small office tenant at the Alliance Commerce Center whose name has been consolidated into the line-item totals above for confidentiality purposes. Complete details are available in the Estoppel Tracking Spreadsheet maintained in the closing files.
Summary of Outstanding Estoppels:
Confirmation: None of the eight (8) outstanding estoppels are from Major Tenants (i.e., tenants occupying 25,000 or more RSF at any single property). Each of the eight outstanding tenants occupies less than 25,000 RSF, and the largest individual outstanding tenant occupies 22,000 RSF. The Major Tenant estoppel requirement under Section 7.3(b) of the PSA has been fully satisfied, with all twelve (12) Major Tenant estoppels received and compiled in this binder.
4.2 Impact Assessment
The eight (8) outstanding estoppels represent 8.6% of the Portfolio's total in-place ABR, which is well within the 20% tolerance permitted under the PSA. The estoppel coverage of 91.4% exceeds the 80% contractual threshold by $8,531,200 in ABR.
No impact on PSA closing condition. The estoppel closing condition set forth in Section 7.3 of the PSA has been satisfied in full. The 91.4% coverage percentage provides a comfortable margin above the 80% threshold, and no Major Tenant estoppels are outstanding.
No lender objections. Each of the three existing mortgage lenders — Pinnacle Federal Bank, N.A., Veltrano Capital Lending Corp., and Sycamore Life Insurance Company — was informed of the outstanding estoppels through their respective counsel. No lender raised any objection to the outstanding estoppels in connection with the lender consent process. Each lender's counsel confirmed in writing that the level of estoppel coverage is satisfactory for purposes of the lender consent.
Post-closing obligation. Pursuant to Section 7.3(f) of the PSA, Seller has a continuing obligation to use commercially reasonable efforts to obtain the remaining eight (8) estoppel certificates for a period of ninety (90) days following the closing date (i.e., through September 4, 2024). Seller has agreed to forward any estoppel certificates received during the post-closing period to Buyer's counsel at Calderwood & Harkness LLP (attention: Grace Nakamura). To the extent any post-closing estoppels reveal material discrepancies or defaults, Buyer retains its rights under Section 10.2(d) of the PSA (Seller's post-closing indemnification obligations with respect to tenant estoppel matters).
SECTION 5: ESTOPPEL FORM AND KEY CONFIRMATIONS
5.1 Standard Estoppel Form (PSA Exhibit E)
Each executed estoppel certificate in this binder was solicited using the Standard Estoppel Form attached to the PSA as Exhibit E. The Standard Estoppel Form requires the executing tenant to confirm the following information and representations with respect to the applicable lease:
(a) The identity of the landlord (the applicable Target Entity) and the tenant, including current legal names and any name changes since lease execution.
(b) The date of the lease, together with all amendments, supplements, letter agreements, side letters, and other modifications thereto, each identified by date and brief description.
(c) A description of the premises, including the suite or unit number, the floor(s) occupied, and the rentable square footage.
(d) The lease commencement date and the lease expiration date, together with confirmation of whether the lease term has been previously extended and whether any renewal or extension options remain unexercised.
(e) The current monthly and annual base rent, including the per-RSF rate, and a confirmation that the tenant is current on all rent payments as of the date of the estoppel certificate.
(f) The rent escalation schedule, including the date and amount of the next scheduled rent escalation and the basis for escalation (fixed percentage, CPI-based, or fair market value).
(g) The security deposit amount held by landlord, and confirmation of whether the security deposit is in the form of cash, a letter of credit, or other instrument.
(h) Identification of any prepaid rent (i.e., rent paid more than one month in advance), including the amount and the period to which such prepayment applies.
(i) Confirmation that the lease is in full force and effect and has not been modified, amended, supplemented, or otherwise changed except as specifically identified in the estoppel certificate.
(j) Confirmation that, to the knowledge of the tenant, no defaults by landlord or tenant exist under the lease, and no event has occurred which, with the giving of notice or the passage of time (or both), would constitute a default, or identification of any claimed defaults.
(k) The status of any landlord work obligations, tenant improvement allowances, or construction-related obligations under the lease, including confirmation of whether all such obligations have been completed and all associated funds have been fully disbursed.
(l) The status of any renewal options, expansion options, purchase options, rights of first offer, and rights of first refusal, including whether any such rights have been exercised or waived and whether any remain available to the tenant.
(m) Confirmation that the tenant has no offsets, claims, defenses, or counterclaims against rent or any other amounts payable under the lease.
(n) Identification of any pending disputes, claims, litigation, or arbitration proceedings between landlord and tenant, or involving the premises or the lease.
(o) Confirmation that no assignments or subleases of the lease or any portion of the premises have been made, except as specifically identified in the estoppel certificate, and confirmation that the tenant is in actual occupancy of the premises.
The aggregate tenant security deposits confirmed by the seventy-nine (79) executed estoppel certificates total $4,283,000, which amount is consistent with the security deposit schedule maintained by Seller and provided during due diligence.
5.2 Deviations from Standard Form
Certain tenants executed estoppel certificates that contained minor deviations from the Standard Estoppel Form. The nature and scope of these deviations are summarized below:
(a) Additional qualifying language. Four (4) estoppel certificates included additional qualifying language, such as "to the best of tenant's knowledge" or "except as may be disclosed in tenant's records," inserted by tenants or their counsel before certain representations. In each case, the qualifying language was reviewed by Calderwood & Harkness LLP and deemed to be consistent with market practice for estoppel certificates and not to materially dilute the substance of the applicable representation.
(b) Carve-outs for matters in litigation. One (1) estoppel certificate (Meridian Capital Advisors LLC, Buckhead Place Office Tower) included a carve-out for a pending HVAC maintenance dispute, with an estimated cost of approximately $12,000. This matter was reviewed and determined not to constitute a material default or a matter that would render the estoppel certificate unacceptable under the PSA.
(c) Factual clarifications. Three (3) estoppel certificates included factual clarifications regarding lease provisions (e.g., clarification of a parking allocation, specification of the common area maintenance methodology, or notation of an immaterial lease amendment not included in the lease abstract). These clarifications were reviewed and determined to be consistent with the underlying lease documents and not to raise any substantive concerns.
All deviations were reviewed by Calderwood & Harkness LLP in consultation with Camille Oduya, Senior Vice President & Associate General Counsel of Fairwater REIT, and were collectively determined to be within the range of reasonable and customary tenant modifications to estoppel certificates. No deviation rises to the level of rendering any estoppel certificate "not reasonably acceptable" under the standard set forth in Section 7.3(c) of the PSA. Each lender's counsel was provided with copies of the estoppel certificates containing deviations and confirmed that the deviations were acceptable.
5.3 Resolved Discrepancies (Cross-Reference)
As described in Section 1.5 above, six (6) executed estoppel certificates initially contained information that was discrepant from the Rent Roll (PSA Exhibit H). These discrepancies were identified, documented, and resolved during the due diligence and closing preparation period. The following is a summary of the six resolved discrepancies:
1. Heritage Consumer Brands Inc. (Murfreesboro Distribution Center) — Lease expiration date discrepancy (Estoppel: 09/30/2029; Rent Roll: 09/30/2030). Resolved: Rent Roll contained a typographical error; correct date is 09/30/2029.
2. Volunteer Healthcare Management Inc. (Cool Springs Office Park) — Rent escalation effective date discrepancy (Estoppel: 01/01/2025; Rent Roll: 07/01/2024). Resolved: Rent Roll did not reflect the March 15, 2023 lease amendment revising the escalation schedule; correct date is 01/01/2025.
3. Coral Gables Venture Partners LLC (Brickell Bay Office Building) — Outstanding TI allowance balance discrepancy (Estoppel: $142,000 outstanding; Rent Roll: $0 outstanding). Resolved: Seller confirmed $142,000 remains to be disbursed under December 2023 lease amendment; Seller funded balance prior to closing.
4. Wilson Creek Manufacturing LLC (Mount Juliet Commerce Park) — Base rent discrepancy (Estoppel: $11.80/RSF; Rent Roll: $12.00/RSF). Resolved: Tenant's estoppel response predated the February 1, 2024 escalation from $11.80 to $12.00/RSF; tenant subsequently confirmed the updated amount.
5. Prism Warehousing LLC (Fairfield Logistics Center II) — Security deposit discrepancy (Estoppel: $105,000; Rent Roll: $115,000). Resolved: Seller confirmed that a partial return of $10,000 was made to the tenant in November 2023 pursuant to the lease terms, reducing the deposit from $115,000 to $105,000; Rent Roll was not updated to reflect this adjustment.
6. Gwinnett Valley Enterprises LLC (Peachtree Corners Logistics Center) — Lease amendment omission (Estoppel listed a Second Amendment to Lease dated October 5, 2023, not reflected on the Rent Roll). Resolved: Seller provided a copy of the Second Amendment (modifying the common area maintenance calculation methodology); no impact on base rent, RSF, or expiration date.
All six discrepancies were identified in the Estoppel Review Memorandum — Material Discrepancies dated May 8, 2024 (prepared by Grace Nakamura, Calderwood & Harkness LLP). Resolution of each discrepancy was communicated by email from Grace Nakamura to Thomas Keating (Blackridge Hayes LLP) commencing May 6, 2024, with all items fully resolved prior to closing. Supporting documentation for each resolved discrepancy is maintained in the closing files.
SECTION 6: LENDER ACCEPTABILITY CONFIRMATION
6.1 Lender Review
In connection with the change of control of the fourteen (14) Target Entities resulting from the acquisition, each of the three existing mortgage lenders required review and approval of the executed tenant estoppel certificates as a condition to granting its consent to the transaction. The estoppel certificates were provided to counsel for each lender, and each lender's counsel confirmed the acceptability of the estoppel certificates, as follows:
(a) Pinnacle Federal Bank, N.A. (Lender under Loan Pool 1 — Loans 1-A through 1-H, covering eight logistics properties)
Counsel: Whitfield & Archer LLP (attention: Sandra M. Whitfield, Partner)
Estoppel certificates for all tenants at the eight logistics properties within Loan Pool 1 were transmitted to Whitfield & Archer LLP on May 20, 2024. Ms. Whitfield confirmed, by email dated May 29, 2024, that the executed estoppel certificates were reviewed and found to be acceptable to Pinnacle Federal Bank, N.A. No objections were raised with respect to the form, substance, or content of any estoppel certificate, and no objections were raised with respect to the four outstanding estoppels at Loan Pool 1 properties.
(b) Veltrano Capital Lending Corp. (Lender under Loan Pool 2 — Loans 2-A through 2-D, covering four office properties)
Counsel: Cranford McCabe LLP (attention: William R. Cranford III, Partner)
Estoppel certificates for all tenants at the four office properties within Loan Pool 2 were transmitted to Cranford McCabe LLP on May 22, 2024. Mr. Cranford confirmed, by email dated May 31, 2024, that the executed estoppel certificates were reviewed and found to be acceptable to Veltrano Capital Lending Corp. Cranford McCabe LLP noted the qualifying language in the Meridian Capital Advisors LLC estoppel (Buckhead Place Office Tower) and the carve-out for the HVAC dispute, and confirmed that neither matter was objectionable. No objections were raised with respect to the four outstanding estoppels at Loan Pool 2 properties.
(c) Sycamore Life Insurance Company (Lender under Loan Pool 3 — Loans 3-A and 3-B, covering two logistics properties)
Counsel: Partridge Wynn & Slater LLP (attention: Eleanor J. Partridge, Partner)
Estoppel certificates for all tenants at the two logistics properties within Loan Pool 3 were transmitted to Partridge Wynn & Slater LLP on May 20, 2024. Ms. Partridge confirmed, by email dated May 27, 2024, that the executed estoppel certificates were reviewed and found to be acceptable to Sycamore Life Insurance Company. No objections were raised regarding any estoppel certificate or any outstanding estoppel.
Copies of each lender counsel's written confirmation of estoppel acceptability are maintained in the closing files and have been uploaded to the transaction data room.
In summary, no lender raised any objection to any executed estoppel certificate compiled in this binder, and each lender's counsel confirmed in writing that the estoppel certificates are acceptable for purposes of the lender consent process.
SECTION 7: TABS 1–79: INDIVIDUAL EXECUTED ESTOPPEL CERTIFICATES
7.1 Organization. This binder contains seventy-nine (79) individually tabbed executed estoppel certificates. Each tab contains the fully executed estoppel certificate for one tenant. The tabs are organized by property, in the same order as the properties are listed in the Property-by-Property Index set forth in Section 3 of this binder. Within each property, the tabs are arranged in alphabetical order by tenant name, except where a property has only one tenant, in which case the tab corresponds directly to the property.
The tab numbering corresponds to the tab references set forth in the Property-by-Property Index tables in Section 3. Tabs 1 through 79 proceed sequentially through the fourteen properties, beginning with Fairfield Logistics Center I (Tab 1) and concluding with Mount Juliet Commerce Park (Tabs 41–43).
The remaining tab numbers (Tabs 44–79) correspond to the additional tenants at the multi-tenant properties listed in Section 3 whose individual lease-level detail has been consolidated in the property-level tables above for brevity. Complete lease-level detail for each tab is set forth on the individual tab divider sheets included in the physical and digital binder.
7.2 Tab Format for Each Certificate
Each tab in the binder is organized in the following format:
(a) Tab Divider Sheet. A tab divider sheet is included for each estoppel certificate, containing the following summary information:
• Tab number
• Property name and address
• Target Entity name (the applicable landlord entity)
• Tenant name
• Suite/Unit designation
• Rentable square footage (RSF)
• Annual base rent (ABR)
• Lease commencement date and lease expiration date
• Security deposit amount
• Estoppel certificate execution date
• Notation of any deviations from the Standard Estoppel Form (if applicable)
(b) Executed Estoppel Certificate. Following the tab divider sheet, the fully executed estoppel certificate is included. Certificates are included as original executed copies where available, or as conformed copies where the original was received electronically (e.g., via Brightwater Software or other electronic signature platform). Each certificate bears the signature of an authorized representative of the tenant, together with the tenant's printed name, title, and date of execution.
7.3 Placeholder for Physical/Digital Binder
Physical Binder. The original wet-ink estoppel certificates (where available) are maintained in the physical closing files at the offices of Calderwood & Harkness LLP, located at 450 Park Avenue, 28th Floor, New York, New York 10022. The physical binder is organized with tabbed dividers corresponding to Tabs 1 through 79 as described above.
Digital Binder. Digital copies of all seventy-nine (79) executed estoppel certificates, together with the tab divider sheets and all supporting materials, have been uploaded to the transaction data room maintained by Meridian Virtual Data Room Services (Project Code: "Sun Belt Logistics").
Distribution. Copies of the executed estoppel certificates have been provided to the following parties as required under the PSA and the lender consent process:
• Commonwealth National Title Insurance Company — Kenneth Stanhope, Senior Vice President and Title Officer — copies provided for the title company's closing files in connection with the issuance of the owner's title insurance policies for each Target Entity.
• Whitfield & Archer LLP (counsel to Pinnacle Federal Bank, N.A.) — copies of all estoppel certificates for Loan Pool 1 properties.
• Cranford McCabe LLP (counsel to Veltrano Capital Lending Corp.) — copies of all estoppel certificates for Loan Pool 2 properties.
• Partridge Wynn & Slater LLP (counsel to Sycamore Life Insurance Company) — copies of all estoppel certificates for Loan Pool 3 properties.
• Blackridge Hayes LLP (counsel to Seller) — copies of all executed estoppel certificates for Seller's files.
All parties are reminded that the estoppel certificates and the information contained therein are confidential and subject to the confidentiality provisions of the PSA (Section 12.14) and the Mutual Confidentiality Agreement dated February 15, 2024.
SECTION 8: CERTIFICATION
8.1 Preparer Certification
I, Grace Nakamura, Lead Associate at Calderwood & Harkness LLP, hereby certify as follows in connection with the estoppel certificate compilation prepared in connection with the acquisition by Fairwater Real Estate Investment Trust of the fourteen-property Sun Belt logistics and office portfolio from Greystone Meridian Partners Fund III, L.P.:
I have reviewed each of the seventy-nine (79) executed tenant estoppel certificates compiled in this binder. Based on my review, the estoppel certificates received as of the closing date (June 6, 2024) represent tenants accounting for Sixty-Eight Million Three Hundred Seventy-One Thousand Two Hundred Dollars ($68,371,200) of the Seventy-Four Million Eight Hundred Thousand Dollars ($74,800,000) in total annual in-place base rent, or 91.4% of in-place ABR, which satisfies the eighty percent (80%) threshold requirement set forth in Section 7.3 of the Purchase and Sale Agreement dated February 28, 2024, as amended by the First Amendment to Purchase and Sale Agreement dated April 12, 2024, and the Second Amendment to Purchase and Sale Agreement dated May 28, 2024. All Major Tenant estoppels — that is, estoppel certificates from each tenant occupying twenty-five thousand (25,000) or more rentable square feet at any single property — have been received. A total of twelve (12) Major Tenant estoppels were required, and all twelve (12) have been received and are included in this binder. All material discrepancies identified during the review process have been resolved through supplemental disclosure by Seller's counsel prior to closing, and no unresolved material discrepancies remain as of the closing date.
This certification is provided for the benefit of Fairwater Real Estate Investment Trust and its counsel, and is not intended to create any rights in favor of any third party.
CALDERWOOD & HARKNESS LLP
By: ________
Name: Grace Nakamura
Title: Lead Associate
Date: June 6, 2024