1036-00004 · Client 1036 · Tax

state-income-franchise-tax-memorandum.docx DOCUMENT Real Estate

130 / 172 ← → ✕

MEMORANDUM

PRIVILEGED AND CONFIDENTIAL — ATTORNEY-CLIENT COMMUNICATION

FROM: Sylvia Hartwell, Partner, Tax Calderwood & Harkness LLP 1700 K Street NW, Suite 900 Washington, DC 20006

TO: Douglas Fairchild, Partner, Real Estate — Calderwood & Harkness LLP David Elgin Park, General Counsel — Fairwater Real Estate Investment Trust Naomi Ikeda, CPA, Tax Partner — Ashford Prewitt LLP

DATE: May 17, 2024

RE: State Income and Franchise Tax Filing Obligations Arising from the Acquisition of 14 Target Entities in Georgia, Texas, Florida, Tennessee, and North Carolina

MATTER NO.: 1036-00004

CLIENT: Fairwater Real Estate Investment Trust

Right-click to update Table of Contents

I. Executive Summary and Purpose

This memorandum identifies and analyzes the state income tax, franchise tax, and related filing obligations that will arise from Fairwater Real Estate Investment Trust's ("Fairwater REIT" or the "Company") acquisition of 100% of the membership interests in 14 single-purpose Delaware limited liability companies (collectively, the "Target Entities") from Greystone Meridian Partners Fund III, L.P. ("GMP Fund III" or the "Seller"). The acquisition is being consummated pursuant to that certain Purchase and Sale Agreement, dated as of March 22, 2024, by and among Fairwater REIT, as Buyer, and GMP Fund III, as Seller (the "PSA"), with an anticipated closing date of June 6, 2024 (the "Closing Date").

The Target Entities collectively own and operate a 14-property Sun Belt logistics and office portfolio spanning five states: Georgia (4 properties), Texas (3 properties), Florida (3 properties), Tennessee (3 properties), and North Carolina (1 property). The portfolio encompasses approximately 5,224,000 rentable square feet ("RSF") across a mix of Class A and Class B logistics/distribution facilities and office properties. The aggregate purchase price for the portfolio is $1,100,000,000, subject to customary prorations and adjustments as set forth in the PSA.

The entity-level acquisition structure — pursuant to which Fairwater REIT is acquiring 100% of the membership interests in each Target Entity, rather than acquiring the underlying real property assets directly — carries significant state tax implications. Under this structure, each Target Entity will continue in existence as the same legal entity, with the same employer identification number, the same state registrations, and the same contractual relationships. The only change at the entity level is the substitution of Fairwater REIT as the sole member of each LLC in place of GMP Fund III. This structural feature means that the ongoing state-level tax filing and registration obligations of the Target Entities themselves continue without interruption, and Fairwater REIT, as the new sole member, assumes responsibility for ensuring compliance with those obligations from and after the Closing Date.

Each of the 14 Target Entities is a Delaware LLC that is, and will continue to be, treated as a disregarded entity for federal income tax purposes under Treasury Regulation § 301.7701-3 by virtue of its status as a single-member limited liability company. Prior to closing, each Target Entity is disregarded into GMP Fund III (a Delaware limited partnership classified as a partnership for federal tax purposes), and the activities of each Target Entity are reported on GMP Fund III's partnership returns. After closing, each Target Entity will be disregarded into Fairwater REIT for federal and (in most states) state income tax purposes, and the activities of each Target Entity will be reported on Fairwater REIT's state income and franchise tax returns in the applicable jurisdictions.

This memorandum addresses the following categories of state tax filing obligations on a state-by-state basis:

(a) Ongoing franchise tax, net worth tax, and registration tax obligations applicable to the Target Entities and/or Fairwater REIT in each state where the Target Entities own real property;

(b) Income tax reporting obligations of Fairwater REIT, as the new owner of the Target Entities, in each such state;

(c) Transitional filing requirements applicable to the short tax period of GMP Fund III's ownership (January 1, 2024 through June 5, 2024), as well as coordination between the Buyer's and Seller's respective tax filing obligations;

(d) Delaware annual tax obligations for all 14 Target Entities as Delaware-formed LLCs;

(e) Impact on Fairwater REIT's existing Maryland state income tax filings; and

(f) REIT-specific considerations that affect the Company's state tax posture across all five property states.

All state income and franchise tax returns referenced in this memorandum should be prepared and filed by Ashford Prewitt LLP under the direction of Naomi Ikeda, CPA, Tax Partner, in coordination with Fairwater REIT's in-house tax and finance teams. This memorandum is intended to serve as a comprehensive roadmap for the tax compliance workstream and should be read in conjunction with the separate Transfer Tax Analysis — Five States memorandum prepared by this firm.

II. Transaction Structure — Tax Context

A. Fairwater Real Estate Investment Trust (Buyer)

Fairwater Real Estate Investment Trust is a Maryland real estate investment trust, publicly traded on the New York Stock Exchange under the ticker symbol "FREIT." Fairwater REIT's employer identification number is 52-2198437. The Company is headquartered at 7200 Chesapeake Parkway, Suite 1100, Columbia, Maryland 21044. Fairwater REIT has elected to be treated as a real estate investment trust under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the "Code"), and has maintained its REIT qualification continuously since its initial public offering in 2001. As a qualified REIT, Fairwater is generally not subject to federal corporate income tax on its REIT taxable income to the extent such income is distributed to shareholders as dividends, subject to certain exceptions (including the 4% excise tax on undistributed income under Section 4981 of the Code). The Company's REIT status has significant implications for its state-level tax obligations, as discussed in detail in Section VI below.

B. Greystone Meridian Partners Fund III, L.P. (Seller)

The Seller is Greystone Meridian Partners Fund III, L.P., a Delaware limited partnership with employer identification number 83-1647205. GMP Fund III's general partner is Greystone Meridian Capital LLC, a Delaware limited liability company with employer identification number 83-1520984. GMP Fund III is classified as a partnership for federal income tax purposes and files an annual federal partnership return on Form 1065. For state income tax purposes, GMP Fund III files partnership returns in each state in which it has nexus, including each of the five property states at issue in this transaction. Prior to closing, all income and expenses of the Target Entities flow through to GMP Fund III's partnership returns by virtue of the disregarded entity treatment of the Target Entities. GMP Fund III's tax advisors are Caldwell Murray & Oakes LLP, with William Oakes, CPA serving as Engagement Partner.

C. The 14 Target Entities

All 14 Target Entities are Delaware limited liability companies. Each is a single-member LLC that is treated as a disregarded entity for federal and state income tax purposes under the default classification rules of Treasury Regulation § 301.7701-3(b)(1)(ii). None of the Target Entities has made an election on Form 8832 to be classified as an association taxable as a corporation. The Target Entities, their employer identification numbers, and the states in which their respective properties are located are as follows:

Because the Target Entities are disregarded entities, prior to closing they are treated as divisions or branches of GMP Fund III (a partnership) for federal and state tax purposes. Their activities — including rental income, operating expenses, depreciation, and all other items of income, deduction, gain, and loss — are reported on GMP Fund III's federal and state partnership returns. After closing on June 6, 2024, each Target Entity will be disregarded into Fairwater REIT. For the 2024 tax year, therefore, the income and expenses of each Target Entity will be split between two reporting taxpayers: GMP Fund III (for the pre-closing period from January 1, 2024 through June 5, 2024) and Fairwater REIT (for the post-closing period from June 6, 2024 through December 31, 2024).

D. Fairwater REIT's Federal Tax Status

As noted above, Fairwater REIT qualifies as a REIT under Sections 856–860 of the Code. As a REIT, Fairwater generally is not subject to federal income tax on distributed REIT taxable income. However, this federal-level treatment does not automatically translate into an exemption from state-level income or franchise taxes. Each state's treatment of REITs varies, and the availability of a state-level dividends-paid deduction (or equivalent mechanism) must be analyzed on a jurisdiction-by-jurisdiction basis. Those state-specific analyses are set forth in Section III (state-by-state analysis) and Section VI (REIT-specific considerations) of this memorandum.

E. Operating Account Bank

The operating account bank for the Target Entities is Magnolia Commerce Bank, N.A., located at 225 Peachtree Street NE, Suite 100, Atlanta, Georgia 30303 (employer identification number 58-1834672). The primary banking contact is Linda Prescott, Vice President, Commercial Banking. Post-closing, the Target Entity operating accounts are to be transitioned to Fairwater REIT's banking platform during the 90-day transition services period established under the Transition Services Agreement executed at closing. The banking transition timeline may affect the logistics of state tax payments for the initial post-closing period, and Fairwater's finance department should coordinate with Magnolia Commerce Bank to ensure that all state tax obligations can be satisfied from the appropriate accounts during the transition period.

III. State-by-State Analysis

A. Georgia.

1. Properties and Target Entities. Fairwater REIT will own four properties in Georgia through the following Target Entities:

(a) GMP Fairfield I LLC (EIN 84-2310561) — Fairfield Logistics Center I, located at 4200 Fairfield Industrial Boulevard, Fairburn, Georgia 30213. This is a 412,000 RSF Class A logistics/distribution facility situated within the South Fulton submarket of metropolitan Atlanta.

(b) GMP Fairfield II LLC (EIN 84-2310578) — Fairfield Logistics Center II, located at 4300 Fairfield Industrial Boulevard, Fairburn, Georgia 30213. This is a 387,000 RSF Class A logistics/distribution facility adjacent to Fairfield Logistics Center I and comprising the second phase of the Fairfield development.

(c) GMP Buckhead LLC (EIN 84-2639901) — Buckhead Place Office Tower, located at 3380 Peachtree Road NE, Atlanta, Georgia 30326. This is a 285,000 RSF Class A multi-tenant office building in the Buckhead submarket of Atlanta.

(d) GMP Peachtree LLC (EIN 84-2741063) — Peachtree Corners Logistics Center, located at 5900 Peachtree Industrial Boulevard, Peachtree Corners, Georgia 30071. This is a 345,000 RSF logistics/distribution facility in Gwinnett County.

The aggregate Georgia portfolio comprises approximately 1,429,000 RSF across three logistics facilities and one office property, representing approximately 27.4% of the total portfolio by square footage.

2. Georgia Net Worth Tax and Corporate Income Tax. Georgia imposes two principal state-level taxes on corporations and entities doing business in the state: the corporate net worth tax and the corporate income tax.

Corporate Net Worth Tax. Under O.C.G.A. § 48-13-70 et seq., Georgia levies an annual net worth tax on every domestic and foreign corporation doing business in the state. The tax is computed on the net worth of the corporation as allocated and apportioned to Georgia. REITs are generally subject to the Georgia net worth tax as entities organized in a form that is treated as a corporation for state tax purposes. The net worth tax rates are graduated, ranging from $10 for corporations with a net worth of $10,000 or less to a maximum of $5,000 for corporations with a net worth exceeding $22,000,000. Given the scale of Fairwater REIT's operations, the maximum net worth tax of $5,000 will likely apply in Georgia. The net worth tax is reported and paid in conjunction with the Georgia corporate income tax return.

Corporate Income Tax. Under O.C.G.A. § 48-7-20 et seq., Georgia imposes a corporate income tax at a rate of 5.75% on the net income of corporations doing business in Georgia, as apportioned to Georgia using the applicable apportionment formula. Fairwater REIT, as a Maryland REIT owning real property in Georgia through disregarded entities, will be treated as doing business in Georgia and will have a Georgia income tax filing obligation. Fairwater's presence in Georgia through the ownership and operation of four properties generating rental income clearly establishes nexus sufficient to subject Fairwater to Georgia's corporate income tax.

As a REIT, Fairwater's dividends-paid deduction may significantly reduce — or in many years effectively eliminate — Georgia taxable income. Georgia generally follows federal REIT treatment, and the dividends-paid deduction available under Section 857(b)(2)(B) of the Code should be available in computing Georgia taxable income. Nevertheless, the filing obligation remains regardless of whether any tax is ultimately due. Additionally, certain items of income (such as built-in gains, prohibited transaction income, or foreclosure property income) that are taxable at the entity level for federal purposes would also be subject to Georgia income tax.

Each Target Entity, as a disregarded entity, does not separately file a Georgia corporate income tax return. All income, deductions, gains, and losses of the four Georgia Target Entities flow up to and are reported on Fairwater REIT's Georgia corporate income tax return (Form 600).

3. Georgia Annual Registration. Delaware LLCs that are qualified to do business in Georgia as foreign limited liability companies must file annual registrations with the Georgia Secretary of State pursuant to O.C.G.A. § 14-11-1103. Each of the four Georgia Target Entities currently maintains a foreign LLC registration in Georgia. These registrations must be maintained on an ongoing basis, and the annual registration fee is approximately $50 per entity. As part of the post-closing workstream, foreign qualification filings to update the ownership information of each Target Entity — reflecting the change from GMP Fund III to Fairwater REIT as the sole member — are being prepared and filed by the Calderwood & Harkness corporate team. Until such updates are filed and processed, it is important that the existing registrations remain current and in good standing.

4. Transitional Filing — GMP Fund III. For the pre-closing period (January 1, 2024 through June 5, 2024), GMP Fund III, as a partnership, will report the Georgia-source income of the four Georgia Target Entities on its Georgia partnership income tax return (Form 700). This is the Seller's obligation under both the PSA and applicable Georgia tax law. The four Georgia Target Entities were disregarded into GMP Fund III during this period, and all rental income, operating expenses, depreciation, and other tax items attributable to the Georgia properties for the pre-closing period will flow through GMP Fund III's Form 700 to its partners.

Fairwater REIT will report the Georgia-source income attributable to the four Georgia properties from June 6, 2024 through December 31, 2024 on its Georgia corporate income tax return (Form 600). The parties should coordinate through their respective accountants to ensure that the closing-date cutoff is applied consistently, such that no items of income or deduction are either double-reported or omitted.

5. Key Filing Deadlines.

• Georgia Form 600 (Corporation/REIT income tax return, including net worth tax): Due on the 15th day of the 4th month following the close of the taxable year. For calendar year 2024, the due date is April 15, 2025. Georgia allows automatic extensions conforming with the federal extension period; if a federal extension is filed, the Georgia filing deadline extends to the 15th day of the 10th month following the close of the taxable year (October 15, 2025 for calendar year 2024).

• Georgia Net Worth Tax Return: Filed concurrently with Form 600, on the same schedule and subject to the same extension provisions.

• Annual Registration (each Georgia Target Entity): Due annually by April 1. The next filing deadline is April 1, 2025.

B. Texas.

1. Properties and Target Entities. Fairwater REIT will own three properties in Texas through the following Target Entities:

(a) GMP Westlake LLC (EIN 84-2415693) — Westlake Distribution Hub, located at 11500 Westlake Parkway, Houston, Texas 77082. This is a 624,000 RSF Class A logistics/distribution facility in the Energy Corridor/Westlake submarket of Houston.

(b) GMP Katy LLC (EIN 84-2415710) — Katy Freeway Logistics Park, located at 22600 Katy Freeway, Katy, Texas 77449. This is a 538,000 RSF Class A logistics/distribution facility in the Katy/Grand Parkway submarket of western Houston.

(c) GMP Alliance LLC (EIN 84-2415728) — Alliance Commerce Center, located at 2800 Alliance Gateway Boulevard, Fort Worth, Texas 76177. This is a 485,000 RSF Class A logistics/distribution facility in the Alliance submarket of the Dallas-Fort Worth metroplex.

The aggregate Texas portfolio comprises approximately 1,647,000 RSF across three logistics/distribution facilities, representing approximately 31.5% of the total portfolio by square footage. All three Texas properties are logistics assets; the Texas portfolio does not include any office properties.

2. Texas Franchise Tax (Margin Tax). Texas does not impose a traditional corporate income tax. Instead, Texas imposes a franchise tax (commonly referred to as the "Texas margin tax") under Texas Tax Code Chapter 171 on taxable entities doing business in Texas. The franchise tax applies to all entities with Texas nexus, including corporations, limited liability companies, limited partnerships, professional associations, business trusts, and REITs. The tax is imposed on each entity's "taxable margin," which is the lesser of: (i) 70% of total revenue; (ii) total revenue minus cost of goods sold (as defined under the franchise tax provisions); or (iii) total revenue minus compensation. An entity may alternatively elect to use the E-Z computation method if its total revenue does not exceed $20 million, in which case the tax rate is 0.331% of total revenue.

Disregarded Entity Treatment. Under Texas franchise tax rules, a single-member LLC that is disregarded for federal income tax purposes is generally not separately subject to the franchise tax as a standalone taxable entity. Instead, the activities of the disregarded entity are reported by its owner. However, the Comptroller has taken the position that a disregarded entity that itself has nexus with Texas must ensure that its owner (the taxable entity) includes the disregarded entity's Texas-source revenue in its Texas franchise tax report. Accordingly, Fairwater REIT, as the sole member of the three Texas Target Entities, must include the revenue generated by GMP Westlake LLC, GMP Katy LLC, and GMP Alliance LLC in its Texas franchise tax report.

Applicable Tax Rate. The Texas franchise tax rate for entities other than retailers and wholesalers is 0.75% of the entity's taxable margin. For entities that primarily earn revenue from retail or wholesale trade, a reduced rate of 0.375% applies. Fairwater REIT, as a REIT that earns rental income from commercial real property, would be subject to the standard 0.75% rate (or the 0.331% E-Z computation rate if total Texas revenue is $20 million or less, which is unlikely given the scale of the Texas portfolio). Given the expected rental revenue from three major logistics facilities totaling 1,647,000 RSF, Fairwater's Texas-source revenue will almost certainly exceed $20 million, and the standard rate and computation methods will apply.

REIT-Specific Considerations. Because the Texas franchise tax is a margin-based tax (computed on revenue less allowable deductions) rather than an income tax, the federal dividends-paid deduction that benefits REITs for income tax purposes does not have a direct analog under the Texas franchise tax regime. REITs may, however, be eligible for certain Texas franchise tax exclusions or deductions that reduce their taxable margin. The specific treatment of REIT distributions under Texas franchise tax law requires careful analysis and coordination with Ashford Prewitt LLP. This issue is discussed further in Section VI below.

No Separate State Income Tax. Texas does not impose a personal or corporate income tax separate from the franchise tax. The franchise tax is the sole state-level tax on business income/margin in Texas.

3. Texas Annual Report / Public Information Report. Each entity that files a Texas franchise tax report must concurrently file a Public Information Report ("PIR") with the Texas Comptroller of Public Accounts. The PIR discloses the entity's officers, directors (or managers/members, in the case of an LLC), principal office address, principal place of business, registered agent, and SIC code. Each of the three Texas Target Entities, as foreign LLCs qualified to do business in Texas, must be included in the PIR filing or must have their own PIRs filed in conjunction with the franchise tax report.

In addition, foreign qualification filings to update member/manager information — reflecting the change from GMP Fund III to Fairwater REIT as the sole member of each Texas Target Entity — must be filed with the Texas Secretary of State. These updates are being prepared as part of the separate post-closing entity maintenance workstream.

4. Transitional Filing — GMP Fund III. For the pre-closing period, GMP Fund III is responsible for reporting the Texas-source activities of the three Texas Target Entities on its own Texas franchise tax report (or, if applicable, on the franchise tax report of its general partner, Greystone Meridian Capital LLC, depending on how GMP Fund III's reporting chain is structured for Texas franchise tax purposes). This is the Seller's obligation under the PSA and applicable Texas law.

Fairwater REIT's Texas franchise tax filing obligation with respect to the three Texas Target Entities commences as of the Closing Date (June 6, 2024). Because the Texas franchise tax is a privilege tax for the "privilege of doing business in Texas" during the relevant privilege period, the 2025 franchise tax report (due May 15, 2025) will be the first report on which Fairwater REIT includes the Texas-source revenue of the three Target Entities. That report will reflect revenue data from the 2024 accounting period (which, for Fairwater, means the post-closing portion from June 6, 2024 through December 31, 2024 with respect to these entities).

5. Key Filing Deadlines.

• Texas Franchise Tax Report and PIR: Due May 15 of each year for the privilege period beginning January 1 of that year. The first filing for Fairwater REIT with respect to the Texas Target Entities will be due May 15, 2025 for the 2025 privilege period, reporting 2024 accounting period data. Extensions are available upon request; an initial extension to November 15 is available by filing a timely extension request, and a second extension to the following May 15 may be available in certain circumstances.

• Foreign Qualification Updates: Should be filed with the Texas Secretary of State promptly following closing.

C. Florida.

1. Properties and Target Entities. Fairwater REIT will own three properties in Florida through the following Target Entities:

(a) GMP Lakeland LLC (EIN 84-2527834) — Lakeland Crossings Industrial, located at 7100 Drane Field Road, Lakeland, Florida 33811. This is a 372,000 RSF logistics/distribution facility in the I-4 Corridor submarket of central Florida.

(b) GMP Southport LLC (EIN 84-2527849) — Southport Logistics Park, located at 3200 Southport Connector Road, Jacksonville, Florida 32218. This is a 410,000 RSF logistics/distribution facility in the Southport/Westside submarket of Jacksonville.

(c) GMP Brickell LLC (EIN 84-2639932) — Brickell Bay Office Building, located at 1450 Brickell Avenue, Miami, Florida 33131. This is a 152,000 RSF Class A multi-tenant office building in the Brickell financial district of Miami.

The aggregate Florida portfolio comprises approximately 934,000 RSF across two logistics facilities and one office property, representing approximately 17.9% of the total portfolio by square footage.

2. Florida Corporate Income Tax. Florida imposes a corporate income tax under Section 220.11, Florida Statutes, at a current rate of 5.5% on adjusted federal income apportioned to Florida. The tax applies to all corporations, associations, and artificial entities doing business, earning income, or existing in Florida. REITs are subject to the Florida corporate income tax to the extent they have Florida-source taxable income.

Critically for Fairwater, Florida follows federal REIT treatment for purposes of computing the Florida corporate income tax base. This means that Fairwater's dividends-paid deduction — which is allowed in computing REIT taxable income under Section 857(b)(2)(B) of the Code — should be available in computing Florida taxable income. Provided that Fairwater distributes a sufficient portion of its taxable income to its shareholders as REIT dividends (as it has historically done), the dividends-paid deduction should substantially reduce or eliminate Florida taxable income. However, as with Georgia, the filing obligation remains regardless of whether any tax is ultimately due.

Each of the three Florida Target Entities, as disregarded entities, does not file a separate Florida corporate income tax return. All income and deductions attributable to the three Florida properties are reported on Fairwater REIT's Florida corporate income tax return (Form F-1120). Fairwater REIT will be required to register with the Florida Department of Revenue as a corporate income taxpayer and to file Florida Form F-1120 on an annual basis. If Fairwater is not currently registered with the Florida Department of Revenue (the Company does not currently own properties in Florida), a new registration application will need to be submitted promptly following closing.

3. Florida Annual Report. Each Florida-qualified LLC must file an annual report with the Florida Department of State, Division of Corporations, pursuant to Section 605.0212, Florida Statutes. The annual report filing fee for foreign LLCs is $138.75 per entity. Each of the three Florida Target Entities must maintain its annual report filing on a current basis. Foreign qualification updates for each of the three Florida Target Entities — reflecting the change from GMP Fund III to Fairwater REIT as the sole member — are being handled as part of the post-closing entity maintenance workstream overseen by the Calderwood & Harkness corporate team.

4. Transitional Filing — GMP Fund III. For the pre-closing period (January 1, 2024 through June 5, 2024), GMP Fund III will report the Florida-source income of the three Florida Target Entities on its Florida partnership information return (Form F-1065). This is the Seller's obligation under both the PSA and applicable Florida tax law. The three Florida Target Entities were disregarded into GMP Fund III during the pre-closing period, and all rental income, operating expenses, depreciation, and other tax items attributable to the Florida properties for this period will flow through GMP Fund III's Form F-1065 to its partners.

Fairwater REIT picks up the Florida-source income from June 6, 2024 forward and will report such income on its Florida Form F-1120 for the 2024 tax year. As with the other states, coordination between the Buyer's and Seller's respective accountants is essential to ensure consistent treatment of the June 6, 2024 cutoff.

5. Key Filing Deadlines.

• Florida Form F-1120 (Corporate income tax return): Due on the 1st day of the 5th month following the close of the taxable year. For calendar year 2024, the due date is May 1, 2025. Florida allows extensions conforming with the federal extension period; if a federal extension is filed, the Florida filing deadline extends automatically.

• Florida Annual Report (each Florida Target Entity): Due May 1 of each year. The annual report fee is $138.75 per entity. The next filing deadline for the three Florida Target Entities is May 1, 2025.

D. Tennessee.

1. Properties and Target Entities. Fairwater REIT will own three properties in Tennessee through the following Target Entities:

(a) GMP Murfreesboro LLC (EIN 84-2527856) — Murfreesboro Distribution Center, located at 1600 Joe B. Jackson Parkway, Murfreesboro, Tennessee 37127. This is a 502,000 RSF Class A logistics/distribution facility in the Nashville metro area's Rutherford County submarket.

(b) GMP Cool Springs LLC (EIN 84-2639925) — Cool Springs Office Park, located at 5000 Virginia Way, Brentwood, Tennessee 37027. This is a 196,000 RSF Class A multi-tenant office park in the Cool Springs/Brentwood submarket of southern Nashville.

(c) GMP Mount Juliet LLC (EIN 84-2741070) — Mount Juliet Commerce Park, located at 400 South Mount Juliet Road, Mount Juliet, Tennessee 37122. This is a 298,000 RSF logistics/distribution facility in the eastern Nashville submarket of Wilson County.

The aggregate Tennessee portfolio comprises approximately 996,000 RSF across two logistics facilities and one office property, representing approximately 19.1% of the total portfolio by square footage.

2. Tennessee Franchise and Excise Tax. Tennessee imposes two separate but related taxes on entities doing business in the state: the excise tax and the franchise tax. Both are administered by the Tennessee Department of Revenue and are reported on a single combined return (Form FAE 170).

Excise Tax. Under Tenn. Code Ann. § 67-4-2007, Tennessee levies an excise tax at a rate of 6.5% on the net earnings of all entities doing business in Tennessee, as apportioned to Tennessee using the applicable apportionment formula. "Net earnings" is defined by reference to federal taxable income, with certain state-specific modifications. REITs are generally subject to the Tennessee excise tax, though the dividends-paid deduction available under federal REIT provisions should be available in computing the excise tax base, as Tennessee generally follows federal treatment for purposes of determining net earnings. The availability of this deduction may substantially reduce or eliminate Fairwater's Tennessee excise tax liability in years when the Company distributes a significant portion of its taxable income.

Franchise Tax. Under Tenn. Code Ann. § 67-4-2106, Tennessee imposes a franchise tax at a rate of 0.25% (25 cents per $100) of the greater of: (i) the entity's net worth apportioned to Tennessee, or (ii) the book value of real or tangible personal property owned or used in Tennessee. The minimum franchise tax is $100.

Franchise Tax Phase-Out. Importantly, legislation signed into law by Governor Lee in 2023 (Tennessee Public Chapter 377) provides for the phase-out of the Tennessee franchise tax over a multi-year period. Under the phase-out legislation, the franchise tax will be reduced in stages, with certain components of the tax being eliminated before others. However, the franchise tax remains in effect for the 2024 tax year and for certain subsequent periods. The precise timeline and mechanics of the phase-out, including any transition rules that may affect the computation of Fairwater's franchise tax liability, must be carefully analyzed. We recommend that Ashford Prewitt LLP monitor the implementation of the franchise tax phase-out and advise Fairwater REIT accordingly as the legislative changes take effect. For the 2024 tax year, the franchise tax remains fully operative, and Fairwater must plan to file accordingly.

Disregarded Entity Treatment. Disregarded entities are not separately subject to the Tennessee franchise and excise taxes. The owner of the disregarded entity — in this case, Fairwater REIT — files and reports the franchise and excise taxes attributable to the activities conducted through the disregarded entities. Accordingly, the three Tennessee Target Entities will not file separate Tennessee franchise and excise tax returns; all Tennessee-source income, net worth, and property values flow to Fairwater REIT's Tennessee return.

Fairwater REIT must register with the Tennessee Department of Revenue and file Tennessee franchise and excise tax returns (Form FAE 170) on an annual basis.

3. Tennessee Annual Report. Each Tennessee-qualified LLC must file an annual report with the Tennessee Secretary of State pursuant to Tenn. Code Ann. § 48-249-1103. The annual report fee is approximately $20 per entity. Each of the three Tennessee Target Entities must maintain its annual report filing on a current basis. Foreign qualification updates for each entity — reflecting the change from GMP Fund III to Fairwater REIT as the sole member — are being prepared and filed as part of the post-closing entity maintenance workstream.

4. Transitional Filing — GMP Fund III. For the pre-closing period (January 1, 2024 through June 5, 2024), GMP Fund III will report the Tennessee-source income and net worth of the three Tennessee Target Entities on its Tennessee partnership return. This is the Seller's obligation. The three Tennessee Target Entities were disregarded into GMP Fund III during this period, and all tax items attributable to the Tennessee properties for the pre-closing period will flow through GMP Fund III's Tennessee return.

Fairwater REIT reports the Tennessee-source income and net worth from June 6, 2024 forward on its Tennessee Form FAE 170. Coordination between the Buyer's and Seller's accountants is essential for purposes of the franchise tax component in particular, as the franchise tax base (net worth or property value) must be properly allocated between the pre-closing and post-closing periods, or reported as of the end of the taxable year (depending on Tennessee's specific rules for mid-year ownership changes).

5. Key Filing Deadlines.

• Tennessee Form FAE 170 (Franchise and excise tax return): Due on the 15th day of the 4th month following the close of the taxable year. For calendar year 2024, the due date is April 15, 2025. Tennessee allows extensions; a seven-month extension (to November 15) is available upon timely filing of an extension request.

• Tennessee Annual Report (each Tennessee Target Entity): Due annually by the 1st day of the 4th month following the entity's fiscal year-end. For calendar-year entities, this means a due date of April 1 of each year. The next filing deadline for the three Tennessee Target Entities is April 1, 2025.

E. North Carolina

1. Properties and Target Entities. Fairwater REIT will own one property in North Carolina through the following Target Entity:

(a) GMP SouthPark LLC (EIN 84-2639918) — SouthPark Corporate Center, located at 6200 Fairview Road, Charlotte, North Carolina 28210. This is a 218,000 RSF Class A multi-tenant office building in the SouthPark submarket of Charlotte.

The North Carolina portfolio comprises a single 218,000 RSF office property, representing approximately 4.2% of the total portfolio by square footage. Although the North Carolina component is the smallest portion of the portfolio by both square footage and number of properties, it nonetheless generates a separate set of state tax filing obligations that must be addressed.

2. North Carolina Corporate Income Tax and Franchise Tax. North Carolina imposes both a corporate income tax and a franchise tax on corporations and entities doing business in the state.

Corporate Income Tax. Under N.C. Gen. Stat. § 105-130.3, North Carolina imposes a corporate income tax on the net income of corporations doing business in the state, as apportioned to North Carolina. The corporate income tax rate for the 2024 tax year is 2.5%, reflecting the phased reduction enacted under Session Law 2021-180 (House Bill 334). The rate is scheduled to decrease further under the enacted legislation: to 2.25% for 2025, 2.0% for 2026, and ultimately to 0% by 2030, subject to revenue triggers. For the 2024 tax year, however, the 2.5% rate applies.

REITs are subject to the North Carolina corporate income tax. However, as with other states that follow federal REIT treatment, Fairwater's dividends-paid deduction should be available in computing North Carolina taxable income. To the extent Fairwater distributes a sufficient portion of its REIT taxable income to its shareholders, the dividends-paid deduction should substantially reduce or eliminate North Carolina corporate income tax liability. The filing obligation nevertheless remains.

Franchise Tax. Under N.C. Gen. Stat. § 105-122, North Carolina imposes a franchise tax on corporations for the privilege of doing business in the state. The franchise tax is computed at a rate of $1.50 per $1,000 based on the greater of: (i) the corporation's total investment in tangible property in North Carolina (computed as the cost of real and tangible personal property in North Carolina, less accumulated reserves for depreciation, depletion, and amortization), or (ii) 55% of the appraised value of all real and tangible personal property in North Carolina as determined for ad valorem tax purposes. The minimum franchise tax is $200.

For Fairwater REIT, the North Carolina franchise tax base for the single North Carolina property (SouthPark Corporate Center) will depend on the property's cost basis or appraised value, as applicable. Given the property's location in the SouthPark submarket of Charlotte and its classification as a Class A office building, the appraised value is expected to be significant, and the franchise tax liability should be computed with reference to the higher of the two alternative bases. Ashford Prewitt LLP should coordinate with Fairwater's tax team to determine the appropriate franchise tax base and compute the liability.

The disregarded entity (GMP SouthPark LLC) does not file a separate North Carolina corporate income or franchise tax return. All income, deductions, and property values attributable to GMP SouthPark LLC flow to Fairwater REIT's North Carolina return (Form CD-405).

3. North Carolina Annual Report. GMP SouthPark LLC, as a foreign LLC qualified to do business in North Carolina, must file an annual report with the North Carolina Secretary of State pursuant to N.C. Gen. Stat. § 57D-7-07. The annual report fee is $200. The foreign qualification update to reflect the change from GMP Fund III to Fairwater REIT as the sole member is being prepared and filed as part of the post-closing entity maintenance workstream.

4. Transitional Filing — GMP Fund III. For the pre-closing period (January 1, 2024 through June 5, 2024), GMP Fund III will report the North Carolina-source income of GMP SouthPark LLC on its North Carolina partnership income tax return (Form D-403). This is the Seller's obligation. GMP SouthPark LLC was disregarded into GMP Fund III during the pre-closing period, and all rental income, operating expenses, depreciation, and other tax items attributable to the SouthPark Corporate Center for this period will flow through GMP Fund III's Form D-403 to its partners.

Fairwater REIT reports the North Carolina-source income from June 6, 2024 forward on its North Carolina corporate income and franchise tax return (Form CD-405). As with the other states, coordination between the Buyer's and Seller's accountants is critical to ensure consistent treatment of the closing-date cutoff.

5. Key Filing Deadlines.

• North Carolina Form CD-405 (Corporate income and franchise tax return): Due on the 15th day of the 4th month following the close of the taxable year. For calendar year 2024, the due date is April 15, 2025. North Carolina allows extensions; a six-month extension (to October 15) is available upon timely filing of Form CD-419.

• North Carolina Franchise Tax Return: Filed concurrently with Form CD-405, on the same schedule.

• North Carolina Annual Report (GMP SouthPark LLC): Due annually by April 15. The next filing deadline is April 15, 2025. The annual report fee is $200.

IV. Delaware — Formation State of Target Entities

All 14 Target Entities are Delaware limited liability companies formed under the Delaware Limited Liability Company Act (6 Del. C. § 18-101 et seq.). As Delaware LLCs, the Target Entities are subject to Delaware's annual LLC tax requirement. Under 6 Del. C. § 18-1107, each domestic LLC formed in Delaware must pay an annual tax of $300 per entity, due on or before June 1 of each year. Failure to pay the annual tax results in a penalty of $200 plus interest at the rate of 1.5% per month.

Fairwater REIT, as the new sole member of each of the 14 Target Entities, will be responsible for ensuring timely payment of the $300 annual tax for each entity. The aggregate annual cost for maintaining the 14 Target Entities in good standing in Delaware is $4,200 per year ($300 × 14 entities). The next annual tax payment deadline is June 1, 2025. Fairwater's in-house legal team should calendar this deadline and coordinate payment through the registered agent or directly with the Delaware Division of Corporations.

Delaware does not impose a corporate income tax on LLCs that do not conduct business in Delaware. The Target Entities conduct their business operations exclusively in their respective property states (Georgia, Texas, Florida, Tennessee, and North Carolina), and none of the Target Entities conducts business in Delaware beyond its mere formation and existence as a Delaware LLC. Accordingly, no Delaware corporate income tax filing obligation arises with respect to the Target Entities.

Post-closing entity maintenance filings with the Delaware Secretary of State — including any certificates of amendment to reflect changes in the Target Entities' limited liability company agreements (such as the substitution of Fairwater REIT as the sole member) — are being handled as part of the separate post-closing entity maintenance workstream and are not addressed in detail in this memorandum.

V. Maryland — Fairwater REIT's State of Organization

Fairwater REIT is organized as a Maryland real estate investment trust under Title 8 of the Maryland Corporations and Associations Code. Maryland imposes a corporate income tax at a current rate of 8.25% on the taxable income of corporations and other entities organized in Maryland, as well as on entities doing business in Maryland. Fairwater REIT already files annual Maryland corporate income tax returns (Form 500) as a Maryland-organized entity, and no new Maryland filing obligation arises specifically as a result of this acquisition.

However, the acquisition of the 14 Target Entities will affect Fairwater's multistate apportionment factors. Maryland uses a single sales factor apportionment formula for purposes of apportioning income among states. The addition of the 14 Target Entities — which generate substantial rental income in Georgia, Texas, Florida, Tennessee, and North Carolina — will increase Fairwater's out-of-state sales (receipts) relative to its total sales, which may reduce the proportion of Fairwater's income apportioned to Maryland. Conversely, if the additional properties increase Fairwater's total income without a proportionate increase in the Maryland apportionment factor, the net effect on Maryland income tax could be a reduction. The precise impact will depend on the relative magnitude of the new properties' receipts compared to Fairwater's existing portfolio, and Ashford Prewitt LLP should model the effect on Fairwater's Maryland apportionment factors as part of the 2024 tax return preparation process.

Fairwater REIT's existing Maryland corporate income tax return must be updated to reflect the changes in the Company's multistate apportionment factors resulting from the acquisition. No separate registrations or additional filings are required in Maryland beyond the Company's existing returns.

VI. REIT-Specific Considerations Across All States

Fairwater REIT's status as a qualified REIT under the Internal Revenue Code is a critical factor in determining the Company's effective state tax burden across all five property states. At the federal level, a REIT is entitled to deduct dividends paid to its shareholders in computing REIT taxable income under Section 857(b)(2)(B) of the Code. To the extent a REIT distributes 100% (or substantially all) of its taxable income, the dividends-paid deduction effectively eliminates the REIT's federal income tax liability on distributed income. The key question at the state level is whether each state conforms to the federal REIT treatment and allows the dividends-paid deduction (or an equivalent mechanism) in computing the state income or franchise tax base.

The following summarizes the availability of the dividends-paid deduction in each of the five property states:

Georgia. Georgia generally follows federal REIT treatment for purposes of computing Georgia corporate income tax. The dividends-paid deduction is available to reduce Georgia taxable income. Provided Fairwater distributes a sufficient portion of its REIT taxable income, the Georgia corporate income tax liability should be minimal or zero. However, the Georgia net worth tax (a separate, non-income-based tax) is not affected by the dividends-paid deduction and will remain due regardless.

Texas. The Texas franchise tax is a margin-based tax computed on revenue less allowable deductions (cost of goods sold, compensation, or the 70% revenue limitation). Because the franchise tax is not an income tax, the federal dividends-paid deduction does not have a direct analog in the Texas franchise tax computation. REIT-specific exclusions or deductions under the Texas franchise tax are limited. However, certain deductions available in computing taxable margin (such as cost of goods sold or compensation) may reduce the tax base. Additionally, to the extent Fairwater's Texas-source revenue falls below certain thresholds, reduced rates may apply. Careful analysis is required to determine whether any Texas-specific REIT provisions or exclusions can be utilized to minimize the franchise tax burden. This is the one state in the portfolio where the REIT structure provides the least benefit from a state tax perspective.

Florida. Florida follows federal REIT treatment for purposes of computing Florida corporate income tax. The dividends-paid deduction is available to reduce Florida taxable income. As with Georgia, provided Fairwater distributes a sufficient portion of its REIT taxable income, the Florida corporate income tax liability should be substantially reduced or eliminated.

Tennessee. Tennessee generally follows federal treatment for purposes of computing the excise tax base (net earnings). The dividends-paid deduction should be available to reduce the Tennessee excise tax base. As with other income-based state taxes, the excise tax liability should be minimal or zero if Fairwater distributes substantially all of its taxable income. However, the Tennessee franchise tax (which is based on net worth or property value, not income) is not reduced by the dividends-paid deduction and will remain due regardless of distributions. The franchise tax phase-out discussed in Section III.D above may ultimately eliminate this liability, but the timing and mechanics of the phase-out must be monitored.

North Carolina. North Carolina generally follows federal REIT treatment for purposes of computing North Carolina corporate income tax. The dividends-paid deduction is available to reduce North Carolina taxable income. The North Carolina franchise tax (which is based on tangible property investment or appraised value, not income) is not reduced by the dividends-paid deduction and will remain due regardless. The scheduled reduction of the North Carolina corporate income tax rate (ultimately to 0% by 2030) will further reduce the income tax burden over time.

Fairwater should coordinate with Ashford Prewitt LLP (Martin Ashford, Engagement Partner; Naomi Ikeda, Tax Partner) to ensure proper reporting of REIT distributions and the dividends-paid deduction on each state return. Particular attention should be paid to any state-specific modifications or limitations on the federal dividends-paid deduction, including any conformity dates that may affect the incorporation of recent federal tax law changes into state tax computations. The Texas franchise tax position requires the most detailed analysis, as the revenue-based computation framework may result in a tax liability even in years when the Company distributes 100% of its REIT taxable income.

VII. Summary of New Filing Obligations and Registrations

The following table summarizes the principal new state tax filing obligations and annual registrations arising from the acquisition of the 14 Target Entities:

Notes: Tax amounts designated "TBD" are dependent on income, revenue, net worth, or property value and cannot be determined until the relevant financial data for the 2024 tax year is compiled. All estimated fees are based on current schedules and are subject to adjustment by the applicable state authority. The Delaware annual LLC tax is not a new obligation arising from the acquisition; it is an existing obligation of each Target Entity that Fairwater REIT inherits as the new sole member.

VIII. Required State Tax Registrations for Fairwater REIT

In order to comply with the filing obligations described in this memorandum, Fairwater REIT must register (or confirm existing registration) as a taxpayer with the revenue departments of each of the five property states. The specific registration requirements are as follows:

(a) Georgia Department of Revenue — Fairwater REIT must register as a corporate income tax and net worth tax payer with the Georgia Department of Revenue. If Fairwater does not currently have a Georgia taxpayer identification number, a new registration must be completed using Form CRF-002 (Georgia Tax Registration Application for Corporations).

(b) Texas Comptroller of Public Accounts — Fairwater REIT must register as a franchise tax payer with the Texas Comptroller of Public Accounts. Registration can be completed online through the Comptroller's eSystems portal or by submitting a paper application. If Fairwater does not currently hold a Texas taxpayer number, a new registration must be obtained.

(c) Florida Department of Revenue — Fairwater REIT must register as a corporate income tax payer with the Florida Department of Revenue. Registration is completed by filing Form DR-1 (Florida Business Tax Application).

(d) Tennessee Department of Revenue — Fairwater REIT must register as a franchise and excise tax payer with the Tennessee Department of Revenue. Registration can be completed online through the Tennessee Taxpayer Access Point (TNTAP) portal or by submitting a paper registration form.

(e) North Carolina Department of Revenue — Fairwater REIT must register as a corporate income and franchise tax payer with the North Carolina Department of Revenue. Registration is completed by filing Form CD-405 (the corporate tax return itself serves as the registration document upon first filing, but advance registration is recommended to obtain a North Carolina taxpayer identification number).

All registrations should be completed promptly following closing (June 6, 2024) and in any event prior to the first filing deadlines identified in Section VII above. Ashford Prewitt LLP should coordinate the registration process with Fairwater REIT's in-house tax team to ensure that all registrations are completed in a timely manner and that the correct taxpayer identification numbers are obtained and used for all subsequent filings.

State Tax Identification Numbers. A determination should be made as to whether GMP Fund III's existing state tax identification numbers associated with the Target Entities can be utilized by Fairwater REIT for purposes of state-level reporting, or whether new state tax identification numbers must be obtained. In most states, the Target Entities (as disregarded entities) did not hold separate state tax identification numbers; rather, the activities of the Target Entities were reported under GMP Fund III's state taxpayer identification number. After closing, the activities will be reported under Fairwater REIT's state taxpayer identification number. To the extent new numbers are required, the registration applications described above should be submitted as soon as practicable.

IX. Transitional Considerations — Allocation Between Buyer and Seller

A. PSA Proration Provisions

The PSA provides that all income and expenses attributable to the portfolio properties are prorated as of the Closing Date (June 6, 2024), with the Seller entitled to income and responsible for expenses attributable to the period prior to closing, and the Buyer entitled to income and responsible for expenses attributable to the period from and after closing. The proration methodology is set forth in detail in Exhibit U to the PSA, which addresses real property taxes, operating income and expenses, tenant reimbursements, utility charges, and other customary proration items. The parties should also coordinate the allocation of state income and franchise tax liability for the 2024 tax year to ensure consistency with the PSA proration framework.

B. Pre-Closing Period (January 1 – June 5, 2024)

GMP Fund III is responsible for reporting and paying all state income, franchise, and excise taxes on income and margin earned by the Target Entities during the pre-closing period (January 1, 2024 through June 5, 2024). During this period, the Target Entities were disregarded into GMP Fund III for federal and state tax purposes, and all tax items attributable to the Target Entities' operations were reportable by GMP Fund III on its partnership returns (or franchise tax reports, as applicable) in each relevant state. GMP Fund III's tax compliance for the pre-closing period is the Seller's responsibility, and Fairwater REIT has no obligation to file or pay taxes with respect to the pre-closing period.

C. Post-Closing Period (June 6 – December 31, 2024)

Fairwater REIT is responsible for reporting and paying all state income, franchise, and excise taxes attributable to the Target Entities' operations during the post-closing period (June 6, 2024 through December 31, 2024). After closing, the Target Entities are disregarded into Fairwater REIT for federal and state tax purposes, and all tax items attributable to the Target Entities' operations are reportable by Fairwater REIT on its corporate income tax returns, franchise tax reports, and excise tax returns in each relevant state.

D. Coordination with Seller's Accountants

It is critical that the Buyer's and Seller's respective accountants coordinate the reporting of the June 6, 2024 cutoff to ensure that: (i) all items of income, deduction, gain, and loss are properly allocated between the pre-closing and post-closing periods; (ii) no items are either double-reported or omitted; and (iii) the allocation methodology is consistent across all five property states and between the Buyer's and Seller's returns. Ashford Prewitt LLP (Naomi Ikeda, Tax Partner) should coordinate directly with Caldwell Murray & Oakes LLP (William Oakes, CPA, Engagement Partner), GMP Fund III's accountants, to establish and document the allocation methodology and share relevant financial data.

E. Post-Closing Proration True-Up

The post-closing proration true-up, as required under the PSA, has a contractual deadline of September 4, 2024 (90 days following the Closing Date). The true-up should account for any state tax adjustments to the extent state income, franchise, or excise tax liabilities are included in the proration mechanism. As a practical matter, the actual state tax liabilities for 2024 will not be determinable until after year-end, when the full-year financial data is compiled and the returns are prepared. Accordingly, the proration true-up may need to include estimated state tax amounts, subject to further adjustment if the actual tax liabilities differ materially from the estimates.

We note for completeness that the final post-closing true-up amount was $347,218, representing a net credit to Buyer. This amount was agreed between the parties on August 28, 2024 and paid on September 5, 2024 (one day after the contractual deadline, by mutual agreement of the parties). The true-up amount incorporated adjustments for real property taxes, operating income and expenses, and certain other proration items as specified in the PSA. To the extent any further state tax adjustments are identified during the 2024 return preparation process, the parties should confer regarding the appropriate treatment under the PSA's post-closing adjustment provisions.

X. Coordination with Local Counsel

State-specific tax filing requirements discussed in this memorandum have been reviewed and confirmed with local counsel in each of the five property states. The following firms served as local counsel in connection with the closing of the acquisition and continue to be available for consultation on state-specific tax questions:

Texas: Breckenridge Osgood LLP

Attn: James Breckenridge, Partner

717 Texas Avenue, Suite 2600 Houston, TX 77002

Georgia: Talmadge Beaumont LLP

Attn: Catherine Beaumont, Partner

1180 Peachtree Street NE, Suite 1900 Atlanta, GA 30309

North Carolina: Haversham Cole PLLC

Attn: Marshall Haversham, Managing Member

301 South College Street, Suite 1400 Charlotte, NC 28202

Tennessee: Ellsworth Ridley LLP

Attn: Diane Ellsworth, Partner

424 Church Street, Suite 1500 Nashville, TN 37219

Florida: Palmetto Strauss PA

Attn: Roberto Strauss, Shareholder

100 Southeast Second Street, Suite 2800 Miami, FL 33131

Local counsel opinions delivered at closing in connection with the acquisition addressed matters of due authorization, enforceability of the membership interest transfer instruments, and transfer tax compliance (including confirmation of any applicable exemptions from real estate transfer taxes for entity-level transactions). The local counsel opinions did not cover ongoing income, franchise, or excise tax filing obligations of Fairwater REIT or the Target Entities; those obligations are addressed in this memorandum. To the extent questions arise regarding the interpretation or application of state-specific tax statutes, regulations, or administrative guidance, we recommend consulting with the applicable local counsel identified above.

XI. Recommendations and Next Steps

Based on the analysis set forth in this memorandum, we recommend the following actions:

1. Register Fairwater REIT as a taxpayer in all five property states. Fairwater REIT should register (or confirm existing registration) as a corporate income, franchise, and/or excise taxpayer with the revenue departments of Georgia, Texas, Florida, Tennessee, and North Carolina, to the extent the Company is not already registered in those jurisdictions. All registrations should be completed promptly following closing (June 6, 2024) and in any event no later than August 31, 2024, to allow sufficient time for processing and assignment of state taxpayer identification numbers well in advance of the first filing deadlines in April and May 2025.

2. Coordinate with Ashford Prewitt LLP for preparation and fili

MEMORANDUM
PRIVILEGED AND CONFIDENTIAL — ATTORNEY-CLIENT COMMUNICATION
FROM: Sylvia Hartwell, Partner, Tax Calderwood & Harkness LLP 1700 K Street NW, Suite 900 Washington, DC 20006
TO: Douglas Fairchild, Partner, Real Estate — Calderwood & Harkness LLP David Elgin Park, General Counsel — Fairwater Real Estate Investment Trust Naomi Ikeda, CPA, Tax Partner — Ashford Prewitt LLP
DATE: May 17, 2024
RE: State Income and Franchise Tax Filing Obligations Arising from the Acquisition of 14 Target Entities in Georgia, Texas, Florida, Tennessee, and North Carolina
MATTER NO.: 1036-00004
CLIENT: Fairwater Real Estate Investment Trust
Right-click to update Table of Contents
I. Executive Summary and Purpose
This memorandum identifies and analyzes the state income tax, franchise tax, and related filing obligations that will arise from Fairwater Real Estate Investment Trust's ("Fairwater REIT" or the "Company") acquisition of 100% of the membership interests in 14 single-purpose Delaware limited liability companies (collectively, the "Target Entities") from Greystone Meridian Partners Fund III, L.P. ("GMP Fund III" or the "Seller"). The acquisition is being consummated pursuant to that certain Purchase and Sale Agreement, dated as of March 22, 2024, by and among Fairwater REIT, as Buyer, and GMP Fund III, as Seller (the "PSA"), with an anticipated closing date of June 6, 2024 (the "Closing Date").
The Target Entities collectively own and operate a 14-property Sun Belt logistics and office portfolio spanning five states: Georgia (4 properties), Texas (3 properties), Florida (3 properties), Tennessee (3 properties), and North Carolina (1 property). The portfolio encompasses approximately 5,224,000 rentable square feet ("RSF") across a mix of Class A and Class B logistics/distribution facilities and office properties. The aggregate purchase price for the portfolio is $1,100,000,000, subject to customary prorations and adjustments as set forth in the PSA.
The entity-level acquisition structure — pursuant to which Fairwater REIT is acquiring 100% of the membership interests in each Target Entity, rather than acquiring the underlying real property assets directly — carries significant state tax implications. Under this structure, each Target Entity will continue in existence as the same legal entity, with the same employer identification number, the same state registrations, and the same contractual relationships. The only change at the entity level is the substitution of Fairwater REIT as the sole member of each LLC in place of GMP Fund III. This structural feature means that the ongoing state-level tax filing and registration obligations of the Target Entities themselves continue without interruption, and Fairwater REIT, as the new sole member, assumes responsibility for ensuring compliance with those obligations from and after the Closing Date.
Each of the 14 Target Entities is a Delaware LLC that is, and will continue to be, treated as a disregarded entity for federal income tax purposes under Treasury Regulation § 301.7701-3 by virtue of its status as a single-member limited liability company. Prior to closing, each Target Entity is disregarded into GMP Fund III (a Delaware limited partnership classified as a partnership for federal tax purposes), and the activities of each Target Entity are reported on GMP Fund III's partnership returns. After closing, each Target Entity will be disregarded into Fairwater REIT for federal and (in most states) state income tax purposes, and the activities of each Target Entity will be reported on Fairwater REIT's state income and franchise tax returns in the applicable jurisdictions.
This memorandum addresses the following categories of state tax filing obligations on a state-by-state basis:
(a) Ongoing franchise tax, net worth tax, and registration tax obligations applicable to the Target Entities and/or Fairwater REIT in each state where the Target Entities own real property;
(b) Income tax reporting obligations of Fairwater REIT, as the new owner of the Target Entities, in each such state;
(c) Transitional filing requirements applicable to the short tax period of GMP Fund III's ownership (January 1, 2024 through June 5, 2024), as well as coordination between the Buyer's and Seller's respective tax filing obligations;
(d) Delaware annual tax obligations for all 14 Target Entities as Delaware-formed LLCs;
(e) Impact on Fairwater REIT's existing Maryland state income tax filings; and
(f) REIT-specific considerations that affect the Company's state tax posture across all five property states.
All state income and franchise tax returns referenced in this memorandum should be prepared and filed by Ashford Prewitt LLP under the direction of Naomi Ikeda, CPA, Tax Partner, in coordination with Fairwater REIT's in-house tax and finance teams. This memorandum is intended to serve as a comprehensive roadmap for the tax compliance workstream and should be read in conjunction with the separate Transfer Tax Analysis — Five States memorandum prepared by this firm.
II. Transaction Structure — Tax Context
A. Fairwater Real Estate Investment Trust (Buyer)
Fairwater Real Estate Investment Trust is a Maryland real estate investment trust, publicly traded on the New York Stock Exchange under the ticker symbol "FREIT." Fairwater REIT's employer identification number is 52-2198437. The Company is headquartered at 7200 Chesapeake Parkway, Suite 1100, Columbia, Maryland 21044. Fairwater REIT has elected to be treated as a real estate investment trust under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the "Code"), and has maintained its REIT qualification continuously since its initial public offering in 2001. As a qualified REIT, Fairwater is generally not subject to federal corporate income tax on its REIT taxable income to the extent such income is distributed to shareholders as dividends, subject to certain exceptions (including the 4% excise tax on undistributed income under Section 4981 of the Code). The Company's REIT status has significant implications for its state-level tax obligations, as discussed in detail in Section VI below.
B. Greystone Meridian Partners Fund III, L.P. (Seller)
The Seller is Greystone Meridian Partners Fund III, L.P., a Delaware limited partnership with employer identification number 83-1647205. GMP Fund III's general partner is Greystone Meridian Capital LLC, a Delaware limited liability company with employer identification number 83-1520984. GMP Fund III is classified as a partnership for federal income tax purposes and files an annual federal partnership return on Form 1065. For state income tax purposes, GMP Fund III files partnership returns in each state in which it has nexus, including each of the five property states at issue in this transaction. Prior to closing, all income and expenses of the Target Entities flow through to GMP Fund III's partnership returns by virtue of the disregarded entity treatment of the Target Entities. GMP Fund III's tax advisors are Caldwell Murray & Oakes LLP, with William Oakes, CPA serving as Engagement Partner.
C. The 14 Target Entities
All 14 Target Entities are Delaware limited liability companies. Each is a single-member LLC that is treated as a disregarded entity for federal and state income tax purposes under the default classification rules of Treasury Regulation § 301.7701-3(b)(1)(ii). None of the Target Entities has made an election on Form 8832 to be classified as an association taxable as a corporation. The Target Entities, their employer identification numbers, and the states in which their respective properties are located are as follows:
Because the Target Entities are disregarded entities, prior to closing they are treated as divisions or branches of GMP Fund III (a partnership) for federal and state tax purposes. Their activities — including rental income, operating expenses, depreciation, and all other items of income, deduction, gain, and loss — are reported on GMP Fund III's federal and state partnership returns. After closing on June 6, 2024, each Target Entity will be disregarded into Fairwater REIT. For the 2024 tax year, therefore, the income and expenses of each Target Entity will be split between two reporting taxpayers: GMP Fund III (for the pre-closing period from January 1, 2024 through June 5, 2024) and Fairwater REIT (for the post-closing period from June 6, 2024 through December 31, 2024).
D. Fairwater REIT's Federal Tax Status
As noted above, Fairwater REIT qualifies as a REIT under Sections 856–860 of the Code. As a REIT, Fairwater generally is not subject to federal income tax on distributed REIT taxable income. However, this federal-level treatment does not automatically translate into an exemption from state-level income or franchise taxes. Each state's treatment of REITs varies, and the availability of a state-level dividends-paid deduction (or equivalent mechanism) must be analyzed on a jurisdiction-by-jurisdiction basis. Those state-specific analyses are set forth in Section III (state-by-state analysis) and Section VI (REIT-specific considerations) of this memorandum.
E. Operating Account Bank
The operating account bank for the Target Entities is Magnolia Commerce Bank, N.A., located at 225 Peachtree Street NE, Suite 100, Atlanta, Georgia 30303 (employer identification number 58-1834672). The primary banking contact is Linda Prescott, Vice President, Commercial Banking. Post-closing, the Target Entity operating accounts are to be transitioned to Fairwater REIT's banking platform during the 90-day transition services period established under the Transition Services Agreement executed at closing. The banking transition timeline may affect the logistics of state tax payments for the initial post-closing period, and Fairwater's finance department should coordinate with Magnolia Commerce Bank to ensure that all state tax obligations can be satisfied from the appropriate accounts during the transition period.
III. State-by-State Analysis
A. Georgia.
1. Properties and Target Entities. Fairwater REIT will own four properties in Georgia through the following Target Entities:
(a) GMP Fairfield I LLC (EIN 84-2310561) — Fairfield Logistics Center I, located at 4200 Fairfield Industrial Boulevard, Fairburn, Georgia 30213. This is a 412,000 RSF Class A logistics/distribution facility situated within the South Fulton submarket of metropolitan Atlanta.
(b) GMP Fairfield II LLC (EIN 84-2310578) — Fairfield Logistics Center II, located at 4300 Fairfield Industrial Boulevard, Fairburn, Georgia 30213. This is a 387,000 RSF Class A logistics/distribution facility adjacent to Fairfield Logistics Center I and comprising the second phase of the Fairfield development.
(c) GMP Buckhead LLC (EIN 84-2639901) — Buckhead Place Office Tower, located at 3380 Peachtree Road NE, Atlanta, Georgia 30326. This is a 285,000 RSF Class A multi-tenant office building in the Buckhead submarket of Atlanta.
(d) GMP Peachtree LLC (EIN 84-2741063) — Peachtree Corners Logistics Center, located at 5900 Peachtree Industrial Boulevard, Peachtree Corners, Georgia 30071. This is a 345,000 RSF logistics/distribution facility in Gwinnett County.
The aggregate Georgia portfolio comprises approximately 1,429,000 RSF across three logistics facilities and one office property, representing approximately 27.4% of the total portfolio by square footage.
2. Georgia Net Worth Tax and Corporate Income Tax. Georgia imposes two principal state-level taxes on corporations and entities doing business in the state: the corporate net worth tax and the corporate income tax.
Corporate Net Worth Tax. Under O.C.G.A. § 48-13-70 et seq., Georgia levies an annual net worth tax on every domestic and foreign corporation doing business in the state. The tax is computed on the net worth of the corporation as allocated and apportioned to Georgia. REITs are generally subject to the Georgia net worth tax as entities organized in a form that is treated as a corporation for state tax purposes. The net worth tax rates are graduated, ranging from $10 for corporations with a net worth of $10,000 or less to a maximum of $5,000 for corporations with a net worth exceeding $22,000,000. Given the scale of Fairwater REIT's operations, the maximum net worth tax of $5,000 will likely apply in Georgia. The net worth tax is reported and paid in conjunction with the Georgia corporate income tax return.
Corporate Income Tax. Under O.C.G.A. § 48-7-20 et seq., Georgia imposes a corporate income tax at a rate of 5.75% on the net income of corporations doing business in Georgia, as apportioned to Georgia using the applicable apportionment formula. Fairwater REIT, as a Maryland REIT owning real property in Georgia through disregarded entities, will be treated as doing business in Georgia and will have a Georgia income tax filing obligation. Fairwater's presence in Georgia through the ownership and operation of four properties generating rental income clearly establishes nexus sufficient to subject Fairwater to Georgia's corporate income tax.
As a REIT, Fairwater's dividends-paid deduction may significantly reduce — or in many years effectively eliminate — Georgia taxable income. Georgia generally follows federal REIT treatment, and the dividends-paid deduction available under Section 857(b)(2)(B) of the Code should be available in computing Georgia taxable income. Nevertheless, the filing obligation remains regardless of whether any tax is ultimately due. Additionally, certain items of income (such as built-in gains, prohibited transaction income, or foreclosure property income) that are taxable at the entity level for federal purposes would also be subject to Georgia income tax.
Each Target Entity, as a disregarded entity, does not separately file a Georgia corporate income tax return. All income, deductions, gains, and losses of the four Georgia Target Entities flow up to and are reported on Fairwater REIT's Georgia corporate income tax return (Form 600).
3. Georgia Annual Registration. Delaware LLCs that are qualified to do business in Georgia as foreign limited liability companies must file annual registrations with the Georgia Secretary of State pursuant to O.C.G.A. § 14-11-1103. Each of the four Georgia Target Entities currently maintains a foreign LLC registration in Georgia. These registrations must be maintained on an ongoing basis, and the annual registration fee is approximately $50 per entity. As part of the post-closing workstream, foreign qualification filings to update the ownership information of each Target Entity — reflecting the change from GMP Fund III to Fairwater REIT as the sole member — are being prepared and filed by the Calderwood & Harkness corporate team. Until such updates are filed and processed, it is important that the existing registrations remain current and in good standing.
4. Transitional Filing — GMP Fund III. For the pre-closing period (January 1, 2024 through June 5, 2024), GMP Fund III, as a partnership, will report the Georgia-source income of the four Georgia Target Entities on its Georgia partnership income tax return (Form 700). This is the Seller's obligation under both the PSA and applicable Georgia tax law. The four Georgia Target Entities were disregarded into GMP Fund III during this period, and all rental income, operating expenses, depreciation, and other tax items attributable to the Georgia properties for the pre-closing period will flow through GMP Fund III's Form 700 to its partners.
Fairwater REIT will report the Georgia-source income attributable to the four Georgia properties from June 6, 2024 through December 31, 2024 on its Georgia corporate income tax return (Form 600). The parties should coordinate through their respective accountants to ensure that the closing-date cutoff is applied consistently, such that no items of income or deduction are either double-reported or omitted.
5. Key Filing Deadlines.
• Georgia Form 600 (Corporation/REIT income tax return, including net worth tax): Due on the 15th day of the 4th month following the close of the taxable year. For calendar year 2024, the due date is April 15, 2025. Georgia allows automatic extensions conforming with the federal extension period; if a federal extension is filed, the Georgia filing deadline extends to the 15th day of the 10th month following the close of the taxable year (October 15, 2025 for calendar year 2024).
• Georgia Net Worth Tax Return: Filed concurrently with Form 600, on the same schedule and subject to the same extension provisions.
• Annual Registration (each Georgia Target Entity): Due annually by April 1. The next filing deadline is April 1, 2025.
B. Texas.
1. Properties and Target Entities. Fairwater REIT will own three properties in Texas through the following Target Entities:
(a) GMP Westlake LLC (EIN 84-2415693) — Westlake Distribution Hub, located at 11500 Westlake Parkway, Houston, Texas 77082. This is a 624,000 RSF Class A logistics/distribution facility in the Energy Corridor/Westlake submarket of Houston.
(b) GMP Katy LLC (EIN 84-2415710) — Katy Freeway Logistics Park, located at 22600 Katy Freeway, Katy, Texas 77449. This is a 538,000 RSF Class A logistics/distribution facility in the Katy/Grand Parkway submarket of western Houston.
(c) GMP Alliance LLC (EIN 84-2415728) — Alliance Commerce Center, located at 2800 Alliance Gateway Boulevard, Fort Worth, Texas 76177. This is a 485,000 RSF Class A logistics/distribution facility in the Alliance submarket of the Dallas-Fort Worth metroplex.
The aggregate Texas portfolio comprises approximately 1,647,000 RSF across three logistics/distribution facilities, representing approximately 31.5% of the total portfolio by square footage. All three Texas properties are logistics assets; the Texas portfolio does not include any office properties.
2. Texas Franchise Tax (Margin Tax). Texas does not impose a traditional corporate income tax. Instead, Texas imposes a franchise tax (commonly referred to as the "Texas margin tax") under Texas Tax Code Chapter 171 on taxable entities doing business in Texas. The franchise tax applies to all entities with Texas nexus, including corporations, limited liability companies, limited partnerships, professional associations, business trusts, and REITs. The tax is imposed on each entity's "taxable margin," which is the lesser of: (i) 70% of total revenue; (ii) total revenue minus cost of goods sold (as defined under the franchise tax provisions); or (iii) total revenue minus compensation. An entity may alternatively elect to use the E-Z computation method if its total revenue does not exceed $20 million, in which case the tax rate is 0.331% of total revenue.
Disregarded Entity Treatment. Under Texas franchise tax rules, a single-member LLC that is disregarded for federal income tax purposes is generally not separately subject to the franchise tax as a standalone taxable entity. Instead, the activities of the disregarded entity are reported by its owner. However, the Comptroller has taken the position that a disregarded entity that itself has nexus with Texas must ensure that its owner (the taxable entity) includes the disregarded entity's Texas-source revenue in its Texas franchise tax report. Accordingly, Fairwater REIT, as the sole member of the three Texas Target Entities, must include the revenue generated by GMP Westlake LLC, GMP Katy LLC, and GMP Alliance LLC in its Texas franchise tax report.
Applicable Tax Rate. The Texas franchise tax rate for entities other than retailers and wholesalers is 0.75% of the entity's taxable margin. For entities that primarily earn revenue from retail or wholesale trade, a reduced rate of 0.375% applies. Fairwater REIT, as a REIT that earns rental income from commercial real property, would be subject to the standard 0.75% rate (or the 0.331% E-Z computation rate if total Texas revenue is $20 million or less, which is unlikely given the scale of the Texas portfolio). Given the expected rental revenue from three major logistics facilities totaling 1,647,000 RSF, Fairwater's Texas-source revenue will almost certainly exceed $20 million, and the standard rate and computation methods will apply.
REIT-Specific Considerations. Because the Texas franchise tax is a margin-based tax (computed on revenue less allowable deductions) rather than an income tax, the federal dividends-paid deduction that benefits REITs for income tax purposes does not have a direct analog under the Texas franchise tax regime. REITs may, however, be eligible for certain Texas franchise tax exclusions or deductions that reduce their taxable margin. The specific treatment of REIT distributions under Texas franchise tax law requires careful analysis and coordination with Ashford Prewitt LLP. This issue is discussed further in Section VI below.
No Separate State Income Tax. Texas does not impose a personal or corporate income tax separate from the franchise tax. The franchise tax is the sole state-level tax on business income/margin in Texas.
3. Texas Annual Report / Public Information Report. Each entity that files a Texas franchise tax report must concurrently file a Public Information Report ("PIR") with the Texas Comptroller of Public Accounts. The PIR discloses the entity's officers, directors (or managers/members, in the case of an LLC), principal office address, principal place of business, registered agent, and SIC code. Each of the three Texas Target Entities, as foreign LLCs qualified to do business in Texas, must be included in the PIR filing or must have their own PIRs filed in conjunction with the franchise tax report.
In addition, foreign qualification filings to update member/manager information — reflecting the change from GMP Fund III to Fairwater REIT as the sole member of each Texas Target Entity — must be filed with the Texas Secretary of State. These updates are being prepared as part of the separate post-closing entity maintenance workstream.
4. Transitional Filing — GMP Fund III. For the pre-closing period, GMP Fund III is responsible for reporting the Texas-source activities of the three Texas Target Entities on its own Texas franchise tax report (or, if applicable, on the franchise tax report of its general partner, Greystone Meridian Capital LLC, depending on how GMP Fund III's reporting chain is structured for Texas franchise tax purposes). This is the Seller's obligation under the PSA and applicable Texas law.
Fairwater REIT's Texas franchise tax filing obligation with respect to the three Texas Target Entities commences as of the Closing Date (June 6, 2024). Because the Texas franchise tax is a privilege tax for the "privilege of doing business in Texas" during the relevant privilege period, the 2025 franchise tax report (due May 15, 2025) will be the first report on which Fairwater REIT includes the Texas-source revenue of the three Target Entities. That report will reflect revenue data from the 2024 accounting period (which, for Fairwater, means the post-closing portion from June 6, 2024 through December 31, 2024 with respect to these entities).
5. Key Filing Deadlines.
• Texas Franchise Tax Report and PIR: Due May 15 of each year for the privilege period beginning January 1 of that year. The first filing for Fairwater REIT with respect to the Texas Target Entities will be due May 15, 2025 for the 2025 privilege period, reporting 2024 accounting period data. Extensions are available upon request; an initial extension to November 15 is available by filing a timely extension request, and a second extension to the following May 15 may be available in certain circumstances.
• Foreign Qualification Updates: Should be filed with the Texas Secretary of State promptly following closing.
C. Florida.
1. Properties and Target Entities. Fairwater REIT will own three properties in Florida through the following Target Entities:
(a) GMP Lakeland LLC (EIN 84-2527834) — Lakeland Crossings Industrial, located at 7100 Drane Field Road, Lakeland, Florida 33811. This is a 372,000 RSF logistics/distribution facility in the I-4 Corridor submarket of central Florida.
(b) GMP Southport LLC (EIN 84-2527849) — Southport Logistics Park, located at 3200 Southport Connector Road, Jacksonville, Florida 32218. This is a 410,000 RSF logistics/distribution facility in the Southport/Westside submarket of Jacksonville.
(c) GMP Brickell LLC (EIN 84-2639932) — Brickell Bay Office Building, located at 1450 Brickell Avenue, Miami, Florida 33131. This is a 152,000 RSF Class A multi-tenant office building in the Brickell financial district of Miami.
The aggregate Florida portfolio comprises approximately 934,000 RSF across two logistics facilities and one office property, representing approximately 17.9% of the total portfolio by square footage.
2. Florida Corporate Income Tax. Florida imposes a corporate income tax under Section 220.11, Florida Statutes, at a current rate of 5.5% on adjusted federal income apportioned to Florida. The tax applies to all corporations, associations, and artificial entities doing business, earning income, or existing in Florida. REITs are subject to the Florida corporate income tax to the extent they have Florida-source taxable income.
Critically for Fairwater, Florida follows federal REIT treatment for purposes of computing the Florida corporate income tax base. This means that Fairwater's dividends-paid deduction — which is allowed in computing REIT taxable income under Section 857(b)(2)(B) of the Code — should be available in computing Florida taxable income. Provided that Fairwater distributes a sufficient portion of its taxable income to its shareholders as REIT dividends (as it has historically done), the dividends-paid deduction should substantially reduce or eliminate Florida taxable income. However, as with Georgia, the filing obligation remains regardless of whether any tax is ultimately due.
Each of the three Florida Target Entities, as disregarded entities, does not file a separate Florida corporate income tax return. All income and deductions attributable to the three Florida properties are reported on Fairwater REIT's Florida corporate income tax return (Form F-1120). Fairwater REIT will be required to register with the Florida Department of Revenue as a corporate income taxpayer and to file Florida Form F-1120 on an annual basis. If Fairwater is not currently registered with the Florida Department of Revenue (the Company does not currently own properties in Florida), a new registration application will need to be submitted promptly following closing.
3. Florida Annual Report. Each Florida-qualified LLC must file an annual report with the Florida Department of State, Division of Corporations, pursuant to Section 605.0212, Florida Statutes. The annual report filing fee for foreign LLCs is $138.75 per entity. Each of the three Florida Target Entities must maintain its annual report filing on a current basis. Foreign qualification updates for each of the three Florida Target Entities — reflecting the change from GMP Fund III to Fairwater REIT as the sole member — are being handled as part of the post-closing entity maintenance workstream overseen by the Calderwood & Harkness corporate team.
4. Transitional Filing — GMP Fund III. For the pre-closing period (January 1, 2024 through June 5, 2024), GMP Fund III will report the Florida-source income of the three Florida Target Entities on its Florida partnership information return (Form F-1065). This is the Seller's obligation under both the PSA and applicable Florida tax law. The three Florida Target Entities were disregarded into GMP Fund III during the pre-closing period, and all rental income, operating expenses, depreciation, and other tax items attributable to the Florida properties for this period will flow through GMP Fund III's Form F-1065 to its partners.
Fairwater REIT picks up the Florida-source income from June 6, 2024 forward and will report such income on its Florida Form F-1120 for the 2024 tax year. As with the other states, coordination between the Buyer's and Seller's respective accountants is essential to ensure consistent treatment of the June 6, 2024 cutoff.
5. Key Filing Deadlines.
• Florida Form F-1120 (Corporate income tax return): Due on the 1st day of the 5th month following the close of the taxable year. For calendar year 2024, the due date is May 1, 2025. Florida allows extensions conforming with the federal extension period; if a federal extension is filed, the Florida filing deadline extends automatically.
• Florida Annual Report (each Florida Target Entity): Due May 1 of each year. The annual report fee is $138.75 per entity. The next filing deadline for the three Florida Target Entities is May 1, 2025.
D. Tennessee.
1. Properties and Target Entities. Fairwater REIT will own three properties in Tennessee through the following Target Entities:
(a) GMP Murfreesboro LLC (EIN 84-2527856) — Murfreesboro Distribution Center, located at 1600 Joe B. Jackson Parkway, Murfreesboro, Tennessee 37127. This is a 502,000 RSF Class A logistics/distribution facility in the Nashville metro area's Rutherford County submarket.
(b) GMP Cool Springs LLC (EIN 84-2639925) — Cool Springs Office Park, located at 5000 Virginia Way, Brentwood, Tennessee 37027. This is a 196,000 RSF Class A multi-tenant office park in the Cool Springs/Brentwood submarket of southern Nashville.
(c) GMP Mount Juliet LLC (EIN 84-2741070) — Mount Juliet Commerce Park, located at 400 South Mount Juliet Road, Mount Juliet, Tennessee 37122. This is a 298,000 RSF logistics/distribution facility in the eastern Nashville submarket of Wilson County.
The aggregate Tennessee portfolio comprises approximately 996,000 RSF across two logistics facilities and one office property, representing approximately 19.1% of the total portfolio by square footage.
2. Tennessee Franchise and Excise Tax. Tennessee imposes two separate but related taxes on entities doing business in the state: the excise tax and the franchise tax. Both are administered by the Tennessee Department of Revenue and are reported on a single combined return (Form FAE 170).
Excise Tax. Under Tenn. Code Ann. § 67-4-2007, Tennessee levies an excise tax at a rate of 6.5% on the net earnings of all entities doing business in Tennessee, as apportioned to Tennessee using the applicable apportionment formula. "Net earnings" is defined by reference to federal taxable income, with certain state-specific modifications. REITs are generally subject to the Tennessee excise tax, though the dividends-paid deduction available under federal REIT provisions should be available in computing the excise tax base, as Tennessee generally follows federal treatment for purposes of determining net earnings. The availability of this deduction may substantially reduce or eliminate Fairwater's Tennessee excise tax liability in years when the Company distributes a significant portion of its taxable income.
Franchise Tax. Under Tenn. Code Ann. § 67-4-2106, Tennessee imposes a franchise tax at a rate of 0.25% (25 cents per $100) of the greater of: (i) the entity's net worth apportioned to Tennessee, or (ii) the book value of real or tangible personal property owned or used in Tennessee. The minimum franchise tax is $100.
Franchise Tax Phase-Out. Importantly, legislation signed into law by Governor Lee in 2023 (Tennessee Public Chapter 377) provides for the phase-out of the Tennessee franchise tax over a multi-year period. Under the phase-out legislation, the franchise tax will be reduced in stages, with certain components of the tax being eliminated before others. However, the franchise tax remains in effect for the 2024 tax year and for certain subsequent periods. The precise timeline and mechanics of the phase-out, including any transition rules that may affect the computation of Fairwater's franchise tax liability, must be carefully analyzed. We recommend that Ashford Prewitt LLP monitor the implementation of the franchise tax phase-out and advise Fairwater REIT accordingly as the legislative changes take effect. For the 2024 tax year, the franchise tax remains fully operative, and Fairwater must plan to file accordingly.
Disregarded Entity Treatment. Disregarded entities are not separately subject to the Tennessee franchise and excise taxes. The owner of the disregarded entity — in this case, Fairwater REIT — files and reports the franchise and excise taxes attributable to the activities conducted through the disregarded entities. Accordingly, the three Tennessee Target Entities will not file separate Tennessee franchise and excise tax returns; all Tennessee-source income, net worth, and property values flow to Fairwater REIT's Tennessee return.
Fairwater REIT must register with the Tennessee Department of Revenue and file Tennessee franchise and excise tax returns (Form FAE 170) on an annual basis.
3. Tennessee Annual Report. Each Tennessee-qualified LLC must file an annual report with the Tennessee Secretary of State pursuant to Tenn. Code Ann. § 48-249-1103. The annual report fee is approximately $20 per entity. Each of the three Tennessee Target Entities must maintain its annual report filing on a current basis. Foreign qualification updates for each entity — reflecting the change from GMP Fund III to Fairwater REIT as the sole member — are being prepared and filed as part of the post-closing entity maintenance workstream.
4. Transitional Filing — GMP Fund III. For the pre-closing period (January 1, 2024 through June 5, 2024), GMP Fund III will report the Tennessee-source income and net worth of the three Tennessee Target Entities on its Tennessee partnership return. This is the Seller's obligation. The three Tennessee Target Entities were disregarded into GMP Fund III during this period, and all tax items attributable to the Tennessee properties for the pre-closing period will flow through GMP Fund III's Tennessee return.
Fairwater REIT reports the Tennessee-source income and net worth from June 6, 2024 forward on its Tennessee Form FAE 170. Coordination between the Buyer's and Seller's accountants is essential for purposes of the franchise tax component in particular, as the franchise tax base (net worth or property value) must be properly allocated between the pre-closing and post-closing periods, or reported as of the end of the taxable year (depending on Tennessee's specific rules for mid-year ownership changes).
5. Key Filing Deadlines.
• Tennessee Form FAE 170 (Franchise and excise tax return): Due on the 15th day of the 4th month following the close of the taxable year. For calendar year 2024, the due date is April 15, 2025. Tennessee allows extensions; a seven-month extension (to November 15) is available upon timely filing of an extension request.
• Tennessee Annual Report (each Tennessee Target Entity): Due annually by the 1st day of the 4th month following the entity's fiscal year-end. For calendar-year entities, this means a due date of April 1 of each year. The next filing deadline for the three Tennessee Target Entities is April 1, 2025.
E. North Carolina
1. Properties and Target Entities. Fairwater REIT will own one property in North Carolina through the following Target Entity:
(a) GMP SouthPark LLC (EIN 84-2639918) — SouthPark Corporate Center, located at 6200 Fairview Road, Charlotte, North Carolina 28210. This is a 218,000 RSF Class A multi-tenant office building in the SouthPark submarket of Charlotte.
The North Carolina portfolio comprises a single 218,000 RSF office property, representing approximately 4.2% of the total portfolio by square footage. Although the North Carolina component is the smallest portion of the portfolio by both square footage and number of properties, it nonetheless generates a separate set of state tax filing obligations that must be addressed.
2. North Carolina Corporate Income Tax and Franchise Tax. North Carolina imposes both a corporate income tax and a franchise tax on corporations and entities doing business in the state.
Corporate Income Tax. Under N.C. Gen. Stat. § 105-130.3, North Carolina imposes a corporate income tax on the net income of corporations doing business in the state, as apportioned to North Carolina. The corporate income tax rate for the 2024 tax year is 2.5%, reflecting the phased reduction enacted under Session Law 2021-180 (House Bill 334). The rate is scheduled to decrease further under the enacted legislation: to 2.25% for 2025, 2.0% for 2026, and ultimately to 0% by 2030, subject to revenue triggers. For the 2024 tax year, however, the 2.5% rate applies.
REITs are subject to the North Carolina corporate income tax. However, as with other states that follow federal REIT treatment, Fairwater's dividends-paid deduction should be available in computing North Carolina taxable income. To the extent Fairwater distributes a sufficient portion of its REIT taxable income to its shareholders, the dividends-paid deduction should substantially reduce or eliminate North Carolina corporate income tax liability. The filing obligation nevertheless remains.
Franchise Tax. Under N.C. Gen. Stat. § 105-122, North Carolina imposes a franchise tax on corporations for the privilege of doing business in the state. The franchise tax is computed at a rate of $1.50 per $1,000 based on the greater of: (i) the corporation's total investment in tangible property in North Carolina (computed as the cost of real and tangible personal property in North Carolina, less accumulated reserves for depreciation, depletion, and amortization), or (ii) 55% of the appraised value of all real and tangible personal property in North Carolina as determined for ad valorem tax purposes. The minimum franchise tax is $200.
For Fairwater REIT, the North Carolina franchise tax base for the single North Carolina property (SouthPark Corporate Center) will depend on the property's cost basis or appraised value, as applicable. Given the property's location in the SouthPark submarket of Charlotte and its classification as a Class A office building, the appraised value is expected to be significant, and the franchise tax liability should be computed with reference to the higher of the two alternative bases. Ashford Prewitt LLP should coordinate with Fairwater's tax team to determine the appropriate franchise tax base and compute the liability.
The disregarded entity (GMP SouthPark LLC) does not file a separate North Carolina corporate income or franchise tax return. All income, deductions, and property values attributable to GMP SouthPark LLC flow to Fairwater REIT's North Carolina return (Form CD-405).
3. North Carolina Annual Report. GMP SouthPark LLC, as a foreign LLC qualified to do business in North Carolina, must file an annual report with the North Carolina Secretary of State pursuant to N.C. Gen. Stat. § 57D-7-07. The annual report fee is $200. The foreign qualification update to reflect the change from GMP Fund III to Fairwater REIT as the sole member is being prepared and filed as part of the post-closing entity maintenance workstream.
4. Transitional Filing — GMP Fund III. For the pre-closing period (January 1, 2024 through June 5, 2024), GMP Fund III will report the North Carolina-source income of GMP SouthPark LLC on its North Carolina partnership income tax return (Form D-403). This is the Seller's obligation. GMP SouthPark LLC was disregarded into GMP Fund III during the pre-closing period, and all rental income, operating expenses, depreciation, and other tax items attributable to the SouthPark Corporate Center for this period will flow through GMP Fund III's Form D-403 to its partners.
Fairwater REIT reports the North Carolina-source income from June 6, 2024 forward on its North Carolina corporate income and franchise tax return (Form CD-405). As with the other states, coordination between the Buyer's and Seller's accountants is critical to ensure consistent treatment of the closing-date cutoff.
5. Key Filing Deadlines.
• North Carolina Form CD-405 (Corporate income and franchise tax return): Due on the 15th day of the 4th month following the close of the taxable year. For calendar year 2024, the due date is April 15, 2025. North Carolina allows extensions; a six-month extension (to October 15) is available upon timely filing of Form CD-419.
• North Carolina Franchise Tax Return: Filed concurrently with Form CD-405, on the same schedule.
• North Carolina Annual Report (GMP SouthPark LLC): Due annually by April 15. The next filing deadline is April 15, 2025. The annual report fee is $200.
IV. Delaware — Formation State of Target Entities
All 14 Target Entities are Delaware limited liability companies formed under the Delaware Limited Liability Company Act (6 Del. C. § 18-101 et seq.). As Delaware LLCs, the Target Entities are subject to Delaware's annual LLC tax requirement. Under 6 Del. C. § 18-1107, each domestic LLC formed in Delaware must pay an annual tax of $300 per entity, due on or before June 1 of each year. Failure to pay the annual tax results in a penalty of $200 plus interest at the rate of 1.5% per month.
Fairwater REIT, as the new sole member of each of the 14 Target Entities, will be responsible for ensuring timely payment of the $300 annual tax for each entity. The aggregate annual cost for maintaining the 14 Target Entities in good standing in Delaware is $4,200 per year ($300 × 14 entities). The next annual tax payment deadline is June 1, 2025. Fairwater's in-house legal team should calendar this deadline and coordinate payment through the registered agent or directly with the Delaware Division of Corporations.
Delaware does not impose a corporate income tax on LLCs that do not conduct business in Delaware. The Target Entities conduct their business operations exclusively in their respective property states (Georgia, Texas, Florida, Tennessee, and North Carolina), and none of the Target Entities conducts business in Delaware beyond its mere formation and existence as a Delaware LLC. Accordingly, no Delaware corporate income tax filing obligation arises with respect to the Target Entities.
Post-closing entity maintenance filings with the Delaware Secretary of State — including any certificates of amendment to reflect changes in the Target Entities' limited liability company agreements (such as the substitution of Fairwater REIT as the sole member) — are being handled as part of the separate post-closing entity maintenance workstream and are not addressed in detail in this memorandum.
V. Maryland — Fairwater REIT's State of Organization
Fairwater REIT is organized as a Maryland real estate investment trust under Title 8 of the Maryland Corporations and Associations Code. Maryland imposes a corporate income tax at a current rate of 8.25% on the taxable income of corporations and other entities organized in Maryland, as well as on entities doing business in Maryland. Fairwater REIT already files annual Maryland corporate income tax returns (Form 500) as a Maryland-organized entity, and no new Maryland filing obligation arises specifically as a result of this acquisition.
However, the acquisition of the 14 Target Entities will affect Fairwater's multistate apportionment factors. Maryland uses a single sales factor apportionment formula for purposes of apportioning income among states. The addition of the 14 Target Entities — which generate substantial rental income in Georgia, Texas, Florida, Tennessee, and North Carolina — will increase Fairwater's out-of-state sales (receipts) relative to its total sales, which may reduce the proportion of Fairwater's income apportioned to Maryland. Conversely, if the additional properties increase Fairwater's total income without a proportionate increase in the Maryland apportionment factor, the net effect on Maryland income tax could be a reduction. The precise impact will depend on the relative magnitude of the new properties' receipts compared to Fairwater's existing portfolio, and Ashford Prewitt LLP should model the effect on Fairwater's Maryland apportionment factors as part of the 2024 tax return preparation process.
Fairwater REIT's existing Maryland corporate income tax return must be updated to reflect the changes in the Company's multistate apportionment factors resulting from the acquisition. No separate registrations or additional filings are required in Maryland beyond the Company's existing returns.
VI. REIT-Specific Considerations Across All States
Fairwater REIT's status as a qualified REIT under the Internal Revenue Code is a critical factor in determining the Company's effective state tax burden across all five property states. At the federal level, a REIT is entitled to deduct dividends paid to its shareholders in computing REIT taxable income under Section 857(b)(2)(B) of the Code. To the extent a REIT distributes 100% (or substantially all) of its taxable income, the dividends-paid deduction effectively eliminates the REIT's federal income tax liability on distributed income. The key question at the state level is whether each state conforms to the federal REIT treatment and allows the dividends-paid deduction (or an equivalent mechanism) in computing the state income or franchise tax base.
The following summarizes the availability of the dividends-paid deduction in each of the five property states:
Georgia. Georgia generally follows federal REIT treatment for purposes of computing Georgia corporate income tax. The dividends-paid deduction is available to reduce Georgia taxable income. Provided Fairwater distributes a sufficient portion of its REIT taxable income, the Georgia corporate income tax liability should be minimal or zero. However, the Georgia net worth tax (a separate, non-income-based tax) is not affected by the dividends-paid deduction and will remain due regardless.
Texas. The Texas franchise tax is a margin-based tax computed on revenue less allowable deductions (cost of goods sold, compensation, or the 70% revenue limitation). Because the franchise tax is not an income tax, the federal dividends-paid deduction does not have a direct analog in the Texas franchise tax computation. REIT-specific exclusions or deductions under the Texas franchise tax are limited. However, certain deductions available in computing taxable margin (such as cost of goods sold or compensation) may reduce the tax base. Additionally, to the extent Fairwater's Texas-source revenue falls below certain thresholds, reduced rates may apply. Careful analysis is required to determine whether any Texas-specific REIT provisions or exclusions can be utilized to minimize the franchise tax burden. This is the one state in the portfolio where the REIT structure provides the least benefit from a state tax perspective.
Florida. Florida follows federal REIT treatment for purposes of computing Florida corporate income tax. The dividends-paid deduction is available to reduce Florida taxable income. As with Georgia, provided Fairwater distributes a sufficient portion of its REIT taxable income, the Florida corporate income tax liability should be substantially reduced or eliminated.
Tennessee. Tennessee generally follows federal treatment for purposes of computing the excise tax base (net earnings). The dividends-paid deduction should be available to reduce the Tennessee excise tax base. As with other income-based state taxes, the excise tax liability should be minimal or zero if Fairwater distributes substantially all of its taxable income. However, the Tennessee franchise tax (which is based on net worth or property value, not income) is not reduced by the dividends-paid deduction and will remain due regardless of distributions. The franchise tax phase-out discussed in Section III.D above may ultimately eliminate this liability, but the timing and mechanics of the phase-out must be monitored.
North Carolina. North Carolina generally follows federal REIT treatment for purposes of computing North Carolina corporate income tax. The dividends-paid deduction is available to reduce North Carolina taxable income. The North Carolina franchise tax (which is based on tangible property investment or appraised value, not income) is not reduced by the dividends-paid deduction and will remain due regardless. The scheduled reduction of the North Carolina corporate income tax rate (ultimately to 0% by 2030) will further reduce the income tax burden over time.
Fairwater should coordinate with Ashford Prewitt LLP (Martin Ashford, Engagement Partner; Naomi Ikeda, Tax Partner) to ensure proper reporting of REIT distributions and the dividends-paid deduction on each state return. Particular attention should be paid to any state-specific modifications or limitations on the federal dividends-paid deduction, including any conformity dates that may affect the incorporation of recent federal tax law changes into state tax computations. The Texas franchise tax position requires the most detailed analysis, as the revenue-based computation framework may result in a tax liability even in years when the Company distributes 100% of its REIT taxable income.
VII. Summary of New Filing Obligations and Registrations
The following table summarizes the principal new state tax filing obligations and annual registrations arising from the acquisition of the 14 Target Entities:
Notes: Tax amounts designated "TBD" are dependent on income, revenue, net worth, or property value and cannot be determined until the relevant financial data for the 2024 tax year is compiled. All estimated fees are based on current schedules and are subject to adjustment by the applicable state authority. The Delaware annual LLC tax is not a new obligation arising from the acquisition; it is an existing obligation of each Target Entity that Fairwater REIT inherits as the new sole member.
VIII. Required State Tax Registrations for Fairwater REIT
In order to comply with the filing obligations described in this memorandum, Fairwater REIT must register (or confirm existing registration) as a taxpayer with the revenue departments of each of the five property states. The specific registration requirements are as follows:
(a) Georgia Department of Revenue — Fairwater REIT must register as a corporate income tax and net worth tax payer with the Georgia Department of Revenue. If Fairwater does not currently have a Georgia taxpayer identification number, a new registration must be completed using Form CRF-002 (Georgia Tax Registration Application for Corporations).
(b) Texas Comptroller of Public Accounts — Fairwater REIT must register as a franchise tax payer with the Texas Comptroller of Public Accounts. Registration can be completed online through the Comptroller's eSystems portal or by submitting a paper application. If Fairwater does not currently hold a Texas taxpayer number, a new registration must be obtained.
(c) Florida Department of Revenue — Fairwater REIT must register as a corporate income tax payer with the Florida Department of Revenue. Registration is completed by filing Form DR-1 (Florida Business Tax Application).
(d) Tennessee Department of Revenue — Fairwater REIT must register as a franchise and excise tax payer with the Tennessee Department of Revenue. Registration can be completed online through the Tennessee Taxpayer Access Point (TNTAP) portal or by submitting a paper registration form.
(e) North Carolina Department of Revenue — Fairwater REIT must register as a corporate income and franchise tax payer with the North Carolina Department of Revenue. Registration is completed by filing Form CD-405 (the corporate tax return itself serves as the registration document upon first filing, but advance registration is recommended to obtain a North Carolina taxpayer identification number).
All registrations should be completed promptly following closing (June 6, 2024) and in any event prior to the first filing deadlines identified in Section VII above. Ashford Prewitt LLP should coordinate the registration process with Fairwater REIT's in-house tax team to ensure that all registrations are completed in a timely manner and that the correct taxpayer identification numbers are obtained and used for all subsequent filings.
State Tax Identification Numbers. A determination should be made as to whether GMP Fund III's existing state tax identification numbers associated with the Target Entities can be utilized by Fairwater REIT for purposes of state-level reporting, or whether new state tax identification numbers must be obtained. In most states, the Target Entities (as disregarded entities) did not hold separate state tax identification numbers; rather, the activities of the Target Entities were reported under GMP Fund III's state taxpayer identification number. After closing, the activities will be reported under Fairwater REIT's state taxpayer identification number. To the extent new numbers are required, the registration applications described above should be submitted as soon as practicable.
IX. Transitional Considerations — Allocation Between Buyer and Seller
A. PSA Proration Provisions
The PSA provides that all income and expenses attributable to the portfolio properties are prorated as of the Closing Date (June 6, 2024), with the Seller entitled to income and responsible for expenses attributable to the period prior to closing, and the Buyer entitled to income and responsible for expenses attributable to the period from and after closing. The proration methodology is set forth in detail in Exhibit U to the PSA, which addresses real property taxes, operating income and expenses, tenant reimbursements, utility charges, and other customary proration items. The parties should also coordinate the allocation of state income and franchise tax liability for the 2024 tax year to ensure consistency with the PSA proration framework.
B. Pre-Closing Period (January 1 – June 5, 2024)
GMP Fund III is responsible for reporting and paying all state income, franchise, and excise taxes on income and margin earned by the Target Entities during the pre-closing period (January 1, 2024 through June 5, 2024). During this period, the Target Entities were disregarded into GMP Fund III for federal and state tax purposes, and all tax items attributable to the Target Entities' operations were reportable by GMP Fund III on its partnership returns (or franchise tax reports, as applicable) in each relevant state. GMP Fund III's tax compliance for the pre-closing period is the Seller's responsibility, and Fairwater REIT has no obligation to file or pay taxes with respect to the pre-closing period.
C. Post-Closing Period (June 6 – December 31, 2024)
Fairwater REIT is responsible for reporting and paying all state income, franchise, and excise taxes attributable to the Target Entities' operations during the post-closing period (June 6, 2024 through December 31, 2024). After closing, the Target Entities are disregarded into Fairwater REIT for federal and state tax purposes, and all tax items attributable to the Target Entities' operations are reportable by Fairwater REIT on its corporate income tax returns, franchise tax reports, and excise tax returns in each relevant state.
D. Coordination with Seller's Accountants
It is critical that the Buyer's and Seller's respective accountants coordinate the reporting of the June 6, 2024 cutoff to ensure that: (i) all items of income, deduction, gain, and loss are properly allocated between the pre-closing and post-closing periods; (ii) no items are either double-reported or omitted; and (iii) the allocation methodology is consistent across all five property states and between the Buyer's and Seller's returns. Ashford Prewitt LLP (Naomi Ikeda, Tax Partner) should coordinate directly with Caldwell Murray & Oakes LLP (William Oakes, CPA, Engagement Partner), GMP Fund III's accountants, to establish and document the allocation methodology and share relevant financial data.
E. Post-Closing Proration True-Up
The post-closing proration true-up, as required under the PSA, has a contractual deadline of September 4, 2024 (90 days following the Closing Date). The true-up should account for any state tax adjustments to the extent state income, franchise, or excise tax liabilities are included in the proration mechanism. As a practical matter, the actual state tax liabilities for 2024 will not be determinable until after year-end, when the full-year financial data is compiled and the returns are prepared. Accordingly, the proration true-up may need to include estimated state tax amounts, subject to further adjustment if the actual tax liabilities differ materially from the estimates.
We note for completeness that the final post-closing true-up amount was $347,218, representing a net credit to Buyer. This amount was agreed between the parties on August 28, 2024 and paid on September 5, 2024 (one day after the contractual deadline, by mutual agreement of the parties). The true-up amount incorporated adjustments for real property taxes, operating income and expenses, and certain other proration items as specified in the PSA. To the extent any further state tax adjustments are identified during the 2024 return preparation process, the parties should confer regarding the appropriate treatment under the PSA's post-closing adjustment provisions.
X. Coordination with Local Counsel
State-specific tax filing requirements discussed in this memorandum have been reviewed and confirmed with local counsel in each of the five property states. The following firms served as local counsel in connection with the closing of the acquisition and continue to be available for consultation on state-specific tax questions:
Texas: Breckenridge Osgood LLP
Attn: James Breckenridge, Partner
717 Texas Avenue, Suite 2600 Houston, TX 77002
Georgia: Talmadge Beaumont LLP
Attn: Catherine Beaumont, Partner
1180 Peachtree Street NE, Suite 1900 Atlanta, GA 30309
North Carolina: Haversham Cole PLLC
Attn: Marshall Haversham, Managing Member
301 South College Street, Suite 1400 Charlotte, NC 28202
Tennessee: Ellsworth Ridley LLP
Attn: Diane Ellsworth, Partner
424 Church Street, Suite 1500 Nashville, TN 37219
Florida: Palmetto Strauss PA
Attn: Roberto Strauss, Shareholder
100 Southeast Second Street, Suite 2800 Miami, FL 33131
Local counsel opinions delivered at closing in connection with the acquisition addressed matters of due authorization, enforceability of the membership interest transfer instruments, and transfer tax compliance (including confirmation of any applicable exemptions from real estate transfer taxes for entity-level transactions). The local counsel opinions did not cover ongoing income, franchise, or excise tax filing obligations of Fairwater REIT or the Target Entities; those obligations are addressed in this memorandum. To the extent questions arise regarding the interpretation or application of state-specific tax statutes, regulations, or administrative guidance, we recommend consulting with the applicable local counsel identified above.
XI. Recommendations and Next Steps
Based on the analysis set forth in this memorandum, we recommend the following actions:
1. Register Fairwater REIT as a taxpayer in all five property states. Fairwater REIT should register (or confirm existing registration) as a corporate income, franchise, and/or excise taxpayer with the revenue departments of Georgia, Texas, Florida, Tennessee, and North Carolina, to the extent the Company is not already registered in those jurisdictions. All registrations should be completed promptly following closing (June 6, 2024) and in any event no later than August 31, 2024, to allow sufficient time for processing and assignment of state taxpayer identification numbers well in advance of the first filing deadlines in April and May 2025.
2. Coordinate with Ashford Prewitt LLP for preparation and fili

MEMORANDUM

MATTER NO.: 1036-00004

Record

Parties

Dates

Amounts