PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT This memorandum was prepared by counsel at Calderwood & Harkness LLP in connection with the representation of Fairwater Real Estate Investment Trust and is protected by the attorney-client privilege and the work product doctrine. This document and the information contained herein are not to be disclosed to any third party without the prior written consent of Calderwood & Harkness LLP.
MEMORANDUM
CALDERWOOD & HARKNESS LLP 450 Park Avenue, 28th Floor New York, New York 10022
FROM: Rafael Dominguez, Working Associate, Real Estate Practice Group Calderwood & Harkness LLP, Washington, DC Office
TO: Douglas Fairchild, Responsible Partner, Real Estate Practice Group Calderwood & Harkness LLP, New York Office
Grace Nakamura, Lead Associate, Real Estate Practice Group Calderwood & Harkness LLP, New York Office
CC: Angela Fontaine, Billing Partner, Real Estate Practice Group Calderwood & Harkness LLP, New York Office
Camille Oduya, In-House Real Estate Counsel Fairwater Real Estate Investment Trust
DATE: April 22, 2024
RE: Final Certified ALTA/NSPS Land Title Surveys — Confirmation of Receipt, Review, and Certification for All 14 Properties — Fairwater REIT Acquisition of GMP Fund III Sun Belt Logistics & Office Portfolio
MATTER NO.: 1036-00004
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1. Purpose and Executive Summary
This memorandum confirms that Calderwood & Harkness LLP ("C&H" or the "Firm") has received, reviewed, and approved the final certified ALTA/NSPS Land Title Surveys (collectively, the "Surveys," and each a "Survey") for all fourteen (14) real properties (collectively, the "Properties," and each a "Property") comprising the Sun Belt Logistics & Office Portfolio (the "Portfolio") being acquired by Fairwater Real Estate Investment Trust ("Fairwater" or the "Buyer") from Greystone Meridian Partners Fund III, L.P. ("GMP Fund III" or the "Seller") pursuant to that certain Purchase and Sale Agreement dated February 28, 2024 (the "PSA"). This memorandum is intended to serve as a comprehensive record of the survey workstream, to confirm compliance with all applicable requirements, and to document the readiness of the Surveys for closing and related purposes.
The Surveys were prepared by Meridian Land Surveying, Inc. ("Meridian"), under the direction of Daniel Caulfield, PLS, PE, Lead Surveyor, with offices located at 2745 Lenox Road NE, Suite 300, Atlanta, Georgia 30324. Meridian was engaged by C&H on behalf of Fairwater in accordance with the Survey Instruction Letter issued by C&H on November 8, 2023 (the "Survey Instruction Letter"), which established the scope, standards, certification requirements, Table A optional item selections, delivery schedule, and other specifications applicable to the survey engagement.
Following receipt and review of preliminary survey drafts in late February and early March 2024, C&H issued a comprehensive Survey Review Comment Letter dated March 15, 2024 (the "Comment Letter"), identifying certain corrections, revisions, and clarifications required across several Properties. Meridian provided revised final certified Surveys in stages from late March through mid-April 2024, and all comment items have been fully addressed and resolved to C&H's satisfaction.
All fourteen (14) final certified Surveys comply with the 2021 ALTA/NSPS Minimum Standard Detail Requirements for ALTA/NSPS Land Title Surveys (the "2021 Standards"), including all Table A optional items specified in the Survey Instruction Letter. Each Survey bears a certification running in favor of the required parties, specifically: (i) Fairwater Real Estate Investment Trust, as Buyer; (ii) Commonwealth National Title Insurance Company ("Commonwealth National Title"), as title insurer and escrow agent; (iii) Pinnacle Federal Bank, N.A. ("Pinnacle"), as mortgage lender for Loans 1-A through 1-H; (iv) Veltrano Capital Lending Corp. ("Veltrano"), as mortgage lender for Loans 2-A through 2-D; and (v) Sycamore Life Insurance Company ("Sycamore"), as mortgage lender for Loans 3-A and 3-B; and (vi) Calderwood & Harkness LLP, as counsel to Buyer.
Based upon C&H's review, the Surveys are suitable for: (a) closing of the acquisition of the Portfolio on the scheduled closing date; (b) issuance of ALTA Owner's Policies of Title Insurance (2021 form) and corresponding loan policies by Commonwealth National Title for each of the fourteen Properties; (c) satisfaction of the survey delivery requirements under the assumed loan documents with each of the three mortgage lenders; and (d) deletion of the standard survey exception from the Schedule B-II exceptions in each title policy.
No material adverse survey conditions have been identified that would affect the consummation of the transaction or the insurability of the Properties.
2. Background and Process Summary
This section provides a chronological overview of the survey workstream from initial engagement through final delivery and approval.
2.1 Engagement and Survey Instruction Letter
On November 8, 2023, C&H issued the Survey Instruction Letter to Meridian Land Surveying, Inc. on behalf of Fairwater, formally engaging Meridian to prepare ALTA/NSPS Land Title Surveys for all fourteen (14) Properties in the Portfolio. The Survey Instruction Letter was prepared in accordance with C&H's standard survey protocols and was tailored to address the specific requirements of this transaction, taking into account the nature of the Properties (a mix of logistics/industrial and office assets across five Sun Belt states), the anticipated title insurance requirements, and the survey specifications set forth in the existing loan documents with Pinnacle, Veltrano, and Sycamore.
The Survey Instruction Letter specified the following key parameters:
(a) Scope. Each Survey was required to be a full ALTA/NSPS Land Title Survey prepared in accordance with the 2021 Minimum Standard Detail Requirements for ALTA/NSPS Land Title Surveys, jointly established by the American Land Title Association and the National Society of Professional Surveyors.
(b) Table A Optional Items. The following Table A optional items were required to be included in each Survey:
Items 1, 2, 3, 4, 6(a), 6(b), 7(a), 7(b)(1), 7(c), 8, 9, 10, 11(a), 11(b), 13, 14, 16, 17, 18, and 19.
(c) Certification. Each Survey was required to bear a certification running in favor of Fairwater Real Estate Investment Trust, Commonwealth National Title Insurance Company, each applicable mortgage lender (Pinnacle Federal Bank, N.A.; Veltrano Capital Lending Corp.; Sycamore Life Insurance Company), and Calderwood & Harkness LLP, utilizing the standard ALTA/NSPS certification language.
(d) Delivery Schedule. Preliminary drafts of all Surveys were required to be delivered no later than February 28, 2024, to allow adequate time for review and comment during the due diligence period established under the PSA.
(e) Legal Descriptions and Title Commitments. C&H provided Meridian with copies of the legal descriptions for each Property, together with copies of the pro forma title commitments issued by Commonwealth National Title, to ensure that the Surveys accurately reflected the legal descriptions of record and depicted all easements, encumbrances, and other matters referenced in the title commitments.
(f) Coordination with Local Authorities. Meridian was instructed to coordinate with local zoning and building departments, as necessary, to confirm setback lines and applicable zoning requirements for each Property.
A copy of the Survey Instruction Letter is attached hereto as Attachment B.
2.2 Receipt of Preliminary Surveys
Meridian delivered preliminary draft surveys for all fourteen (14) Properties in late February and early March 2024. The preliminary surveys were received within the timeframe contemplated by the Survey Instruction Letter and the due diligence period under the PSA (which was scheduled to expire on April 15, 2024). Upon receipt, C&H conducted a comprehensive review of each preliminary survey in coordination with Grace Nakamura, Lead Associate, and with input from Camille Oduya, In-House Real Estate Counsel at Fairwater.
2.3 Survey Review Comment Letter
Following the review of the preliminary surveys, C&H issued the Survey Review Comment Letter dated March 15, 2024, to Meridian Land Surveying, Inc. The Comment Letter identified specific corrections, revisions, and clarifications required across several Properties, including but not limited to: deficiencies in the depiction of certain easements, the need for updated flood zone notations to reflect current effective FEMA Flood Insurance Rate Map ("FIRM") panels, requests for clarification of boundary lines where discrepancies were noted between the metes-and-bounds descriptions in the deeds of record and adjoining subdivision plats, and notations regarding minor encroachments observed during field inspections.
A copy of the Survey Review Comment Letter is attached hereto as Attachment C.
2.4 Revised Final Certified Surveys
Meridian provided revised final certified Surveys in stages from late March through mid-April 2024. C&H reviewed each revised Survey as it was received and confirmed that the applicable comment items had been satisfactorily addressed. The final revised Survey for the last Property (SouthPark Corporate Center, Charlotte, NC) was received on April 17, 2024. As of the date of this memorandum, all fourteen (14) final certified Surveys have been received, reviewed, and confirmed in compliance with the 2021 Standards, the Table A optional item specifications, the certification requirements, and all corrections and clarifications requested in the Comment Letter.
Meridian confirmed the resolution of all comment items by correspondence dated April 18, 2024. A copy of that correspondence is attached hereto as Attachment D.
2.5 Survey Costs
Total estimated survey costs for all fourteen (14) Surveys are $196,000. Pursuant to Section 10.3(b) of the PSA, survey costs are the responsibility of the Buyer. Meridian's invoices have been received and are being processed for payment through Fairwater's accounts payable department, with copies maintained in C&H's billing records for Matter No. 1036-00004.
3. Certification Details
3.1 Certification Parties
Each Survey plat bears a certification running in favor of all of the following parties, as specified in the Survey Instruction Letter and as required under the PSA, the title insurance commitment requirements of Commonwealth National Title, and the applicable loan documents:
1. Fairwater Real Estate Investment Trust — 7200 Chesapeake Parkway, Suite 1100, Columbia, Maryland 21044 — in its capacity as Buyer of the Portfolio.
2. Commonwealth National Title Insurance Company — 191 Peachtree Street NE, Suite 800, Atlanta, Georgia 30303 — in its capacity as title insurer and escrow agent for the transaction.
3. Pinnacle Federal Bank, N.A. — 600 Travis Street, Suite 4400, Houston, Texas 77002 — in its capacity as mortgage lender for the properties securing Loans 1-A through 1-H (eight logistics/industrial properties).
4. Veltrano Capital Lending Corp. — 200 South Biscayne Boulevard, Suite 3100, Miami, Florida 33131 — in its capacity as mortgage lender for the properties securing Loans 2-A through 2-D (four office properties).
5. Sycamore Life Insurance Company — 100 Constitution Plaza, Hartford, Connecticut 06103 — in its capacity as mortgage lender for the properties securing Loans 3-A and 3-B (two logistics/industrial properties).
6. Calderwood & Harkness LLP — 450 Park Avenue, 28th Floor, New York, New York 10022 — in its capacity as counsel to Buyer.
For Properties securing loans with Pinnacle (Properties 1 through 8), each Survey is certified to Fairwater, Commonwealth National Title, Pinnacle, and C&H. For Properties securing loans with Veltrano (Properties 9 through 12), each Survey is certified to Fairwater, Commonwealth National Title, Veltrano, and C&H. For Properties securing loans with Sycamore (Properties 13 and 14), each Survey is certified to Fairwater, Commonwealth National Title, Sycamore, and C&H. In each case, the certification language encompasses all required parties for the respective Property.
3.2 Surveyor Certification Language
Each Survey includes the standard ALTA/NSPS certification executed by Daniel Caulfield, PLS, PE, on behalf of Meridian Land Surveying, Inc. The certification language on each Survey plat reads substantially as follows:
To Fairwater Real Estate Investment Trust, Commonwealth National Title Insurance Company, [applicable lender], and Calderwood & Harkness LLP:
This is to certify that this map or plat and the survey on which it is based were made in accordance with the 2021 Minimum Standard Detail Requirements for ALTA/NSPS Land Title Surveys, jointly established and adopted by ALTA and NSPS, and includes Items [specified Table A items] of Table A thereof. The fieldwork was completed on [date of final field inspection].
Daniel Caulfield, PLS, PE Meridian Land Surveying, Inc. Georgia Registered Land Surveyor No. [number]
Where applicable, Meridian's state licensure information includes registrations in the additional states in which the Properties are located (Texas, Florida, Tennessee, and North Carolina), and each Survey bears the seal and signature of the appropriately licensed surveyor for the state in which the respective Property is situated. In states where Daniel Caulfield is not directly licensed, the Survey bears the seal and signature of a Meridian associate surveyor licensed in that state, with the certification running through Meridian Land Surveying, Inc.
Each certification is dated as of the date of the final field inspection for the respective Property, which in all cases occurred no earlier than March 20, 2024, and no later than April 12, 2024. The certification dates for each Property are set forth in the property-by-property summary in Section 4.1 below.
4. Survey Summary — All 14 Properties
4.1 Property-by-Property Survey Chart
The following table provides a summary of the final certified Survey for each of the fourteen (14) Properties in the Portfolio, including the property name, address, target entity, applicable loan, survey and certification dates, confirmed rentable square footage, and key findings or notes.
Portfolio Summary:
• Total Portfolio RSF Confirmed: 5,224,000 square feet
• Logistics/Industrial Properties (10 properties): 4,373,000 RSF
• Office Properties (4 properties): 851,000 RSF
• States Covered: Georgia (4 properties), Texas (3 properties), Florida (3 properties), Tennessee (3 properties), North Carolina (1 property)
The confirmed rentable square footage figures set forth above are consistent with the square footage figures referenced in the PSA, the rent rolls delivered by Seller, and the property information packages prepared by Fairwater's acquisition team. No material discrepancies have been identified between the Survey-confirmed square footage and the figures used for valuation, underwriting, or financing purposes.
4.2 Lender-to-Property Survey Mapping
The following sets forth the mapping of each mortgage lender to the Properties securing the applicable loans, together with a confirmation of the number of Surveys certified to each lender:
Pinnacle Federal Bank, N.A. (Loans 1-A through 1-H) — 8 Surveys:
1. Fairfield Logistics Center I (Fairburn, GA) — Loan 1-A
2. Fairfield Logistics Center II (Fairburn, GA) — Loan 1-B
3. Westlake Distribution Hub (Houston, TX) — Loan 1-C
4. Katy Freeway Logistics Park (Katy, TX) — Loan 1-D
5. Alliance Commerce Center (Fort Worth, TX) — Loan 1-E
6. Lakeland Crossings Industrial (Lakeland, FL) — Loan 1-F
7. Southport Logistics Park (Jacksonville, FL) — Loan 1-G
8. Murfreesboro Distribution Center (Murfreesboro, TN) — Loan 1-H
All eight Surveys for the Pinnacle pool properties have been certified to Pinnacle Federal Bank, N.A. at the address specified in Section 3.1 above.
Veltrano Capital Lending Corp. (Loans 2-A through 2-D) — 4 Surveys:
9. Buckhead Place Office Tower (Atlanta, GA) — Loan 2-A
10. SouthPark Corporate Center (Charlotte, NC) — Loan 2-B
11. Cool Springs Office Park (Brentwood, TN) — Loan 2-C
12. Brickell Bay Office Building (Miami, FL) — Loan 2-D
All four Surveys for the Veltrano pool properties have been certified to Veltrano Capital Lending Corp. at the address specified in Section 3.1 above.
Sycamore Life Insurance Company (Loans 3-A and 3-B) — 2 Surveys:
13. Peachtree Corners Logistics Center (Peachtree Corners, GA) — Loan 3-A
14. Mount Juliet Commerce Park (Mount Juliet, TN) — Loan 3-B
Both Surveys for the Sycamore pool properties have been certified to Sycamore Life Insurance Company at the address specified in Section 3.1 above.
5. Table A Item Compliance Confirmation
C&H has confirmed that each of the fourteen (14) final certified Surveys includes all of the Table A optional items specified in the Survey Instruction Letter. A summary of each requested Table A item and the nature of the compliance reflected on the Surveys is set forth below:
Item 1 — Monuments. Monuments have been placed (or existing monuments found and identified) at all accessible property corners for each Property. Where corners were inaccessible due to physical obstructions (e.g., paving, heavy vegetation, or existing structures), reference monuments have been set and noted on the Survey plats in accordance with standard practice.
Item 2 — Address(es). The street address(es) of each surveyed Property are shown on the respective Survey plat, including any secondary or alternative addresses where applicable.
Item 3 — Flood Zone Classification. Each Survey includes the flood zone classification for the Property based on the applicable FEMA Flood Insurance Rate Map ("FIRM"), including the FIRM community and panel number, the effective date of the FIRM panel, and the flood zone designation. As noted in Section 4.1 above, the flood zone notation for the Lakeland Crossings Industrial property was updated on the revised Survey to reflect the current effective FIRM panel.
Item 4 — Gross Land Area. The gross land area of each Property has been calculated and shown on the Survey plat, expressed in both acres and square feet.
Item 6(a) — Setback Lines (Plat/Building Permit). Evidence of setback, building restriction, and building setback lines as shown on recorded subdivision plats or as established by building permits has been depicted on each Survey where applicable. For Properties not subject to a recorded subdivision plat, this item has been noted as not applicable.
Item 6(b) — Setback Lines (Zoning). Evidence of setback lines established by applicable zoning ordinances and regulations has been shown on each Survey, based on information obtained from the applicable local zoning or building department. In all cases, existing improvements have been confirmed as compliant with applicable setback requirements.
Item 7(a) — Exterior Building Dimensions. The exterior dimensions of all buildings at ground level have been measured and shown on each Survey plat.
Item 7(b)(1) — Exterior Footprint square Footage. The square footage of the exterior footprint of all buildings at ground level has been calculated and shown on each Survey.
Item 7(c) — Building Height. The measured height of all buildings above grade at the closest adjacent grade elevation has been determined and shown on each Survey.
Item 8 — Easements. All substantial observable evidence of easements, including but not limited to utility easements, access easements, drainage easements, and parking easements, has been shown on each Survey, together with applicable recording references where available.
Item 9 — Parking. The number of parking spaces has been counted and shown on each Survey, distinguishing between striped and unstriped spaces and noting all accessible (ADA-compliant) parking spaces.
Item 10 — Utilities (Observable Evidence). Observable evidence of the location of utilities serving or crossing each Property — including water, sanitary sewer, storm sewer, gas, electric, telephone, and cable — has been noted and depicted on each Survey.
Item 11(a) — Utility Services from Source. The location of utilities serving each Property as they enter the Property from their respective sources has been shown on each Survey, to the extent observable from surface evidence or from information provided by utility companies.
Item 11(b) — On-Site Utilities. The location of all on-site utility infrastructure, including storm and sanitary sewer lines, manholes, catch basins, retention ponds, detention ponds, and related infrastructure, has been depicted on each Survey.
Item 13 — Adjoining Owners. The names of owners of adjoining parcels, as disclosed by current public records (county tax assessor records and recorded deeds), have been noted on each Survey.
Item 14 — Access. All curb cuts, driveways, and points of vehicular and pedestrian access to each Property from abutting public rights-of-way have been shown on each Survey.
Item 16 — Encroachments. All observable evidence of encroachments by improvements on the Property onto adjoining parcels or rights-of-way, and by improvements on adjoining parcels onto the Property, has been identified and depicted on each Survey. Projections and overhangs affecting property boundaries have also been noted. Minor encroachments identified are discussed further in Section 6 below.
Item 17 — Exterior Signs. The location of all exterior signs observed on each Property has been noted on the Surveys.
Item 18 — Cemeteries. Each Survey includes a notation confirming that no observable evidence of cemeteries, burial grounds, or grave sites was found on the surveyed Property during the field inspection.
Item 19 — Railroad Tracks. Each Survey includes a notation regarding the presence or absence of observable evidence of railroad tracks, sidings, or crossings on or adjacent to the Property. Where railroad tracks or sidings are present (notably at certain logistics/industrial Properties), their locations have been depicted.
Based on C&H's review, all requested Table A optional items have been properly addressed and included in each of the fourteen (14) final certified Surveys, and no deficiencies remain.
6. Resolution of Survey Comment Items
6.1 Overview. As noted in Section 2.3 above, C&H issued the Survey Review Comment Letter dated March 15, 2024 (Attachment C hereto), identifying corrections, revisions, and clarifications required across multiple Properties following C&H's review of the preliminary draft surveys. Meridian responded to the Comment Letter in stages, delivering revised Surveys and supplemental correspondence addressing each comment item. All comment items have been satisfactorily resolved, and no outstanding survey corrections remain as of the date of this memorandum.
6.2 Summary of Key Comment Items and Resolutions
The following is a summary of the key comment items raised in the Comment Letter and the manner in which each was resolved:
Westlake Distribution Hub (Property No. 3; Houston, TX)
Comment: A utility easement along the western boundary of the Property, recorded in the Official Public Records of Harris County, Texas as File No. 2018-0342117, was referenced in the title commitment issued by Commonwealth National Title but was not initially depicted on the preliminary survey.
Resolution: Meridian corrected the revised Survey to depict the utility easement along the western boundary with the applicable recording reference. The easement boundaries were plotted based on the recorded easement instrument, and the easement area has been cross-hatched and labeled on the Survey plat. C&H has confirmed that the depiction is consistent with the easement description in the recorded instrument and the corresponding exception in the title commitment.
Lakeland Crossings Industrial (Property No. 6; Lakeland, FL)
Comment: The FEMA flood zone boundary notation on the preliminary survey referenced an outdated FIRM panel. The current effective FIRM panel for the Property (Panel No. 12105C0235G, effective December 22, 2022) had not been reflected, and the flood zone boundary as depicted did not correspond to the current FIRM data.
Resolution: Meridian updated the revised Survey to reference the current effective FIRM panel and to depict the flood zone boundary in accordance with the current FIRM data. The revised Survey confirms that a portion of the southern area of the parcel falls within FEMA Flood Zone AE (Special Flood Hazard Area), while the remainder of the Property, including all building improvements, is located within Zone X (areas determined to be outside the 500-year floodplain). This is consistent with the existing flood insurance coverage maintained by the Property and the flood zone determinations referenced in the Pinnacle loan documents.
Buckhead Place Office Tower (Property No. 9; Atlanta, GA)
Comment: The preliminary survey did not depict a parking easement that benefits the Property over an adjacent parcel (Fulton County Tax Parcel ID 17-0045-0001-085-3). The easement was established by that certain Easement Agreement recorded in the Office of the Clerk of the Superior Court of Fulton County, Georgia, in Deed Book 54821, Page 0411, and was referenced in the title commitment as a beneficial easement appurtenant to the Property.
Resolution: Meridian added the parking easement to the revised Survey, depicting the easement area on the adjacent parcel with reference to the recorded Easement Agreement. The easement provides for 85 surface parking spaces on the adjacent parcel for the benefit of tenants and visitors of the Buckhead Place Office Tower. The depiction is consistent with the terms of the recorded Easement Agreement and the corresponding notation in the title commitment.
SouthPark Corporate Center (Property No. 10; Charlotte, NC)
Comment: C&H identified a discrepancy between the metes-and-bounds legal description in the deed of record for the Property and the boundary of the adjoining subdivision plat along the southern property line. Specifically, the deed description called for a bearing and distance that appeared to differ from the plat boundary by approximately 1.8 feet over a course of approximately 340 feet, resulting in a potential gap or overlap along the southern boundary.
Resolution: Meridian conducted a field re-inspection of the southern boundary of the Property, including a re-survey of the boundary monuments along the southern line and the adjacent subdivision plat boundary. Meridian also coordinated with local counsel Haversham Cole PLLC (Marshall Haversham, principal) to research the chain of title and subdivision history for the adjoining parcels. Following the re-inspection and research, Meridian confirmed that the southern boundary of the Property is consistent with the legal description set forth in the title commitment issued by Commonwealth National Title and that the apparent discrepancy was attributable to a drafting error in the adjoining subdivision plat (a minor bearing error in the plat that has since been corrected by a corrective plat recorded in Mecklenburg County Book of Maps 62, Page 417). The revised Survey depicts the southern boundary in accordance with the deed description and the corrected plat, and Meridian's certification confirms the boundary as shown. Commonwealth National Title (Virginia Moorehead, AVP, National Counsel) has confirmed that this resolution is satisfactory for title insurance purposes.
6.3 Minor Encroachments
Minor encroachments were identified on several Properties during the survey process, including:
• Adjacent fence lines extending onto the surveyed Properties at Fairfield Logistics Center I, Katy Freeway Logistics Park, and Mount Juliet Commerce Park (in each case, encroachments of less than one foot attributable to neighboring property fencing);
• Utility infrastructure (e.g., an above-grade transformer pad and associated conduit) encroaching onto a portion of the Southport Logistics Park property from the adjoining utility easement area; and
• A concrete retaining wall on the Buckhead Place Office Tower property extending approximately 0.4 feet beyond the western property line into the adjacent parcel (which is also subject to the parking easement discussed above).
All identified minor encroachments have been noted on the respective Surveys and have been addressed in connection with the title review workstream. Pursuant to Section 5.2(c) of the PSA and Exhibit P thereto (Permitted Exceptions), these minor encroachments are classified as Permitted Exceptions and do not constitute grounds for a title objection or a reduction in the purchase price. The treatment of these encroachments as Permitted Exceptions has been confirmed with Camille Oduya, In-House Real Estate Counsel at Fairwater, and with Commonwealth National Title in connection with the preparation of the final marked-up title commitments.
6.4 Confirmation of Resolution
All comment items identified in the Comment Letter have been satisfactorily resolved, and no outstanding survey corrections or clarifications remain. Meridian's confirmation of the resolution of all comment items, dated April 18, 2024, is attached hereto as Attachment D.
7. Coordination with Title Workstream
7.1 Delivery to Commonwealth National Title
The final certified Surveys for all fourteen (14) Properties have been delivered to Commonwealth National Title Insurance Company for use in connection with the issuance of title insurance policies for the transaction. Specifically, the Surveys were delivered to:
• Kenneth Stanhope, Senior Vice President, Title Officer, Commonwealth National Title Insurance Company, 191 Peachtree Street NE, Suite 800, Atlanta, Georgia 30303; and
• Virginia Moorehead, Assistant Vice President, National Counsel, Commonwealth National Title Insurance Company, same address.
Commonwealth National Title is the title insurer and escrow agent for the transaction and will issue ALTA Owner's Policies of Title Insurance (2021 form) for each of the fourteen (14) Properties, with an aggregate insured amount of $1,100,000,000, allocated on a per-property basis in accordance with the property schedule set forth in the PSA. Commonwealth National Title will also issue ALTA Loan Policies (2021 form) to each of the three mortgage lenders in connection with the assumed loan obligations.
7.2 Deletion of Standard Survey Exception
The final certified Surveys support the deletion of the standard survey exception (the so-called "survey exception" or "pre-printed survey exception") from the Schedule B-II exceptions in each Owner's Policy and Loan Policy to be issued by Commonwealth National Title. The standard survey exception, which typically reads:
"Any facts, rights, interests, or claims that are not shown by the Public Records but that could be ascertained by an inspection of the Land or that may be asserted by persons in possession of the Land"
— or words to similar effect — will be deleted from each title policy based on Commonwealth National Title's review and acceptance of the certified Surveys. C&H has confirmed with Kenneth Stanhope and Virginia Moorehead that the Surveys are acceptable for this purpose and that no additional survey-related requirements need to be satisfied for the deletion.
7.3 Survey-Related Endorsements
The Surveys also support the issuance of certain survey-related endorsements requested by C&H in the Endorsement Request Letter delivered to Commonwealth National Title, including but not limited to:
• ALTA 9-06 (Restrictions, Encroachments, Minerals — Comprehensive Endorsement, including survey-based coverage);
• ALTA 17-06 (Access and Entry, based on survey-depicted access points);
• ALTA 17.1-06 (Indirect Access and Entry);
• ALTA 18-06 (Single Tax Parcel);
• ALTA 18.1-06 (Multiple Tax Parcel);
• ALTA 19-06 (Contiguity — Multiple Parcels, where applicable);
• ALTA 25-06 (Same as Survey); and
• ALTA 28-06 (Encroachments — Boundaries and Easements, based on survey-depicted matters).
The availability and issuance of these endorsements is being coordinated with Commonwealth National Title as part of the title workstream and is addressed in further detail in the Title Review Memorandum prepared by Grace Nakamura.
7.4 Cross-References to Title Workstream Documents
The Surveys should be read and reviewed in conjunction with the following related title workstream documents, each of which has been or will be distributed under separate cover:
• Title Review Memorandum — prepared by Grace Nakamura, Lead Associate, providing a comprehensive review and analysis of the title commitments, exception documents, and proposed Permitted Exceptions for all fourteen Properties;
• Marked-Up Title Commitments with Permitted Exceptions — annotated copies of the pro forma title commitments issued by Commonwealth National Title for each Property, indicating which Schedule B-II exceptions are Permitted Exceptions under the PSA and which have been the subject of title objections;
• Title Objection Letter dated March 27, 2024 — C&H's letter to Seller's counsel (Blackridge Hayes LLP, Thomas Keating, Partner) identifying title objections for certain Properties;
• Seller's Cure Response dated April 8, 2024 — Seller's response to C&H's Title Objection Letter, addressing each title objection and specifying cure actions taken or proposed; and
• Endorsement Request Letter — C&H's letter to Commonwealth National Title requesting specific endorsements for each Property.
Any matters arising at the intersection of the title and survey workstreams — including the treatment of survey-depicted easements, encroachments, and boundary matters as title exceptions — have been coordinated between the two workstreams and are reflected consistently in both the Title Review Memorandum and this Survey Transmittal Memorandum.
8. Coordination with Lender Requirements
8.1 Lender Survey Delivery Requirements
Each of the three mortgage lenders — Pinnacle Federal Bank, N.A., Veltrano Capital Lending Corp., and Sycamore Life Insurance Company — required delivery of current ALTA/NSPS Land Title Surveys, certified to the respective lender, as a condition of granting consent to the change of control of the borrower entities resulting from Fairwater's acquisition of the Portfolio. The survey delivery requirement is a standard condition under each loan agreement and is expressly referenced in the lender consent letters issued or to be issued in connection with the closing.
The specific survey requirements under each loan agreement are as follows:
Pinnacle Federal Bank, N.A. — Master Loan Agreement dated September 15, 2020, Section 6.1(d)(iv), requires delivery of a current ALTA/NSPS Land Title Survey for each mortgaged property, prepared in accordance with the then-current Minimum Standard Detail Requirements, including Table A Items 1 through 4, 6(a), 6(b), 7(a), 7(b)(1), 7(c), 8, 9, 10, 11(a), 11(b), 13, 14, 16, 17, 18, and 19, certified to the lender, the borrower's successor-in-interest, and the title insurer. The Surveys delivered for Properties 1 through 8 satisfy these requirements in all respects.
Veltrano Capital Lending Corp. — Loan Agreement dated February 1, 2021, Section 5.3(c)(iii), requires delivery of a current ALTA/NSPS survey for each collateral property, prepared in accordance with the Minimum Standard Detail Requirements, including substantially similar Table A items as specified by Pinnacle, certified to the lender, the new equity owner, and the title company. The Surveys delivered for Properties 9 through 12 satisfy these requirements in all respects.
Sycamore Life Insurance Company — Note Purchase Agreement dated November 22, 2019, Section 4.02(b)(v), requires delivery of an updated ALTA/NSPS survey for each mortgaged property, prepared in accordance with the Minimum Standard Detail Requirements, including all Table A items reasonably requested by the lender, certified to the lender, the purchaser of the equity interests, and the title insurer. The Surveys delivered for Properties 13 and 14 satisfy these requirements in all respects.
8.2 Delivery to Lender Counsel
The final certified Surveys have been transmitted electronically (in PDF format) to each lender's outside counsel, as follows:
• Whitfield & Archer LLP (Sandra Whitfield, Partner) — counsel to Pinnacle Federal Bank, N.A. — received Surveys for Properties 1 through 8;
• Cranford McCabe LLP (Leo Cranford, Partner) — counsel to Veltrano Capital Lending Corp. — received Surveys for Properties 9 through 12; and
• Partridge Wynn & Slater LLP (Claire Wynn, Partner) — counsel to Sycamore Life Insurance Company — received Surveys for Properties 13 and 14.
8.3 Confirmation of Compliance
As of the date of this memorandum, no additional survey requirements have been raised by any of the three mortgage lenders or by their respective outside counsel. C&H has been in regular communication with each lender's counsel throughout the survey process and has confirmed that the Surveys, as delivered, meet or exceed the survey specifications set forth in each loan agreement. Should any lender or lender counsel raise additional comments or requirements prior to closing, C&H will coordinate with Meridian to address them promptly.
9. Delivery and Distribution Log
The following table sets forth the delivery and distribution log for the final certified Surveys, documenting the recipients, delivery method, and date of delivery for each set of Surveys:
Hard-copy originals of all fourteen (14) final certified Survey plats (each bearing the original seal, signature, and certification of the licensed surveyor) are maintained in C&H's closing binder files at the New York office, 450 Park Avenue, 28th Floor, New York, New York 10022. Electronic copies (high-resolution PDF) of all Surveys are also maintained on C&H's secure document management system under Matter No. 1036-00004. Digital copies have been uploaded to the transaction data room maintained by Fairwater's acquisition team on the Thackeray Solutions platform (Project Sunstone).
10. Conclusion and Recommendations
Based upon C&H's comprehensive review of all fourteen (14) final certified ALTA/NSPS Land Title Surveys prepared by Meridian Land Surveying, Inc., and the analysis set forth in this memorandum, C&H confirms the following:
1. All fourteen (14) Surveys are complete, accurate, and in full compliance with the 2021 ALTA/NSPS Minimum Standard Detail Requirements for ALTA/NSPS Land Title Surveys, including all Table A optional items specified in C&H's Survey Instruction Letter dated November 8, 2023.
2. All Surveys are properly certified to Fairwater Real Estate Investment Trust (Buyer), Commonwealth National Title Insurance Company (title insurer and escrow agent), the applicable mortgage lender for each Property (Pinnacle Federal Bank, N.A.; Veltrano Capital Lending Corp.; or Sycamore Life Insurance Company, as applicable), and Calderwood & Harkness LLP (Buyer's counsel).
3. All corrections, revisions, and clarifications requested in C&H's Survey Review Comment Letter dated March 15, 2024, have been fully addressed and resolved by Meridian. No outstanding survey corrections or issues remain.
4. No material adverse survey conditions have been identified that would affect the consummation of the transaction, the insurability of the Properties, or the enforceability of the mortgage liens securing the assumed loan obligations.
5. The Surveys are suitable for:
(a) Closing of the acquisition of the Portfolio on the scheduled closing date;
(b) Issuance of ALTA Owner's Policies of Title Insurance (2021 form) and ALTA Loan Policies (2021 form) by Commonwealth National Title Insurance Company for each of the fourteen Properties;
(c) Satisfaction of the survey delivery requirements under the assumed loan documents with Pinnacle Federal Bank, N.A., Veltrano Capital Lending Corp., and Sycamore Life Insurance Company, and the lender consent conditions for the change of control; and
(d) Deletion of the standard survey exception from the Schedule B-II exceptions in each title policy and issuance of survey-related endorsements as requested.
Recommendations. C&H recommends the following actions:
(i) Copies of the final certified Surveys should be included in the closing binders for the transaction, and original hard-copy Survey plats should be maintained in C&H's files for post-closing reference and for production to any party entitled to rely on the certifications.
(ii) Upon closing, C&H should confirm with Commonwealth National Title that the title policies issued for each Property reflect the deletion of the standard survey exception and the issuance of all requested survey-related endorsements.
(iii) Fairwater should maintain copies of the Surveys in its permanent property files for each Property, as the Surveys will be relevant for ongoing property management, future financing, potential dispositions, and any future title insurance claims.
Please do not hesitate to contact me with any questions regarding this memorandum or the Surveys. I am available to discuss any aspect of the survey workstream at your convenience.
11. Attachments