SCHEDULES 2-1 THROUGH 2-14
PROPERTY-SPECIFIC DISCLOSURE SCHEDULES
To that certain Purchase and Sale Agreement dated as of February 28, 2024 (the "Agreement")
by and between
GREYSTONE MERIDIAN PARTNERS FUND III, L.P., a Delaware limited partnership ("Seller")
and
FAIRWATER REAL ESTATE INVESTMENT TRUST, a Maryland real estate investment trust ("Buyer")
Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Agreement. These Property-Specific Disclosure Schedules (the "Property Schedules") supplement and form a part of the general Disclosure Schedules (Schedule 1) delivered pursuant to the Agreement. The inclusion of any item herein shall not be deemed an admission that such item is material or that it constitutes a breach of any representation, warranty, or covenant of Seller under the Agreement. The information set forth in each Schedule is organized by Target Entity and corresponding Property. All disclosures are made to the actual knowledge of the Seller's Knowledge Individuals: Victor Lansdell, Elise Rathborne, and Sean Kilpatrick.
Unless otherwise indicated, all references to Section numbers are to Sections of the Agreement. References to Exhibits are to Exhibits to the Agreement. Dollar amounts are expressed in United States dollars. Square footage figures represent rentable square footage ("RSF") as determined in accordance with the measurement standards set forth in the applicable leases or, where no lease standard is specified, the Building Owners and Managers Association ("BOMA") 2017 Office Standard or BOMA 2019 Industrial Standard, as applicable. All Annual Base Rent ("ABR") figures are stated on an annualized basis as of January 1, 2024, consistent with the rent rolls delivered to Buyer pursuant to Section 4.05(a) of the Agreement.
The Portfolio consists of fourteen (14) Properties held by fourteen (14) separate Target Entities, each a Delaware limited liability company wholly owned by Seller, and each qualified to do business in the state where its respective Property is located. The Properties are located across five states (Georgia, Texas, Florida, Tennessee, and North Carolina) and comprise ten (10) logistics/distribution facilities and four (4) office properties, with an aggregate rentable area of approximately 5,224,000 RSF and aggregate portfolio ABR of approximately $74,800,000.
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SCHEDULE 2-1
GMP FAIRFIELD I LLC — FAIRFIELD LOGISTICS CENTER I
Section A: Target Entity Information
GMP Fairfield I LLC was formed as a single-purpose entity for the acquisition, ownership, operation, and management of the Property identified below. As of the date of the Agreement, the Target Entity has no subsidiaries, no outstanding equity interests other than the membership interest held by Seller, and no outstanding options, warrants, or convertible securities. The Target Entity is in good standing in each jurisdiction in which it is organized or qualified to do business. There are no pending or threatened proceedings for the dissolution, liquidation, or winding up of the Target Entity.
Section B: Property Information
The Property is situated within the Fairfield Industrial Park, a master-planned industrial park located in the City of Fairburn, Fulton County, Georgia, approximately 22 miles southwest of downtown Atlanta. The Property benefits from direct access to Interstate 85 via the Fairfield Industrial Boulevard interchange.
Section C: Title Matters
Permitted Exceptions. The following matters are listed as Permitted Exceptions specific to this Property, as set forth in Exhibit P to the Agreement:
1. Deed of Trust, Assignment of Leases and Rents, Security Agreement, and Fixture Filing dated September 15, 2020, recorded in Deed Book 62478, Page 341, Fulton County, Georgia records, securing the Pinnacle Federal Bank, N.A. loan designated as Loan 1-A under the Master Loan Agreement.
2. Easement Agreement for Shared Access Road and Utilities, dated July 8, 2019, by and between Fairfield Industrial Park Developer LLC and GMP Fairfield I LLC, recorded in Deed Book 61842, Page 718, Fulton County records, granting reciprocal ingress, egress, and utility easements benefiting and burdening the Property and the adjacent parcel (Fairfield Logistics Center II).
3. Utility Easement in favor of Drayton Holdings, dated June 22, 2019, recorded in Deed Book 61790, Page 105, Fulton County records, encumbering a 20-foot-wide strip along the northern boundary of the Property for overhead and underground electric utility facilities.
4. Drainage Easement in favor of Fulton County, dated May 15, 2019, recorded in Deed Book 61744, Page 889, Fulton County records, encumbering a 30-foot-wide drainage corridor along the eastern boundary of the Property for stormwater management facilities.
5. Declaration of Covenants, Conditions, and Restrictions for Fairfield Industrial Park, dated March 1, 2018, recorded in Deed Book 61102, Page 512, Fulton County records, as amended by that certain First Amendment dated September 30, 2019, recorded in Deed Book 61900, Page 213 (the "CC&Rs"). The CC&Rs impose customary use restrictions consistent with industrial and logistics operations, establish common area maintenance obligations and assessments, and include architectural review requirements for exterior modifications.
6. Subdivision Plat of Fairfield Industrial Park — Phase II, recorded in Plat Book 428, Page 67, Fulton County records. The plat establishes minimum setback requirements (front: 50 feet; side: 25 feet; rear: 35 feet) and maximum building coverage of 55% of lot area. The Property is in compliance with all plat conditions as of the date hereof.
7. Real property taxes and assessments for the tax year 2024, not yet due and payable.
Monetary Liens. There are no monetary liens encumbering the Property other than the Pinnacle Federal Bank, N.A. Deed of Trust described in item 1 above and the lien for real property taxes not yet due and payable.
Condemnation. There are no pending or, to the knowledge of the Seller's Knowledge Individuals, threatened condemnation, eminent domain, or similar proceedings affecting the Property or any portion thereof.
Section D: Environmental Matters
Phase I Environmental Site Assessment. A Phase I Environmental Site Assessment ("Phase I ESA") for the Property was prepared by Trident Environmental Group LLC (Rachel Kwan, Senior Environmental Scientist, Project Manager), dated October 18, 2023, Project No. TEG-2023-4201 (the "Fairfield I Phase I ESA"). The Fairfield I Phase I ESA was prepared in conformance with ASTM Standard Practice E1527-21. A copy of the Fairfield I Phase I ESA has been made available to Buyer in the electronic data room and is listed in Exhibit N to the Agreement.
Findings. The Fairfield I Phase I ESA identified no Recognized Environmental Conditions (RECs), no Controlled Recognized Environmental Conditions (CRECs), and no Historical Recognized Environmental Conditions (HRECs) in connection with the Property. The Phase I ESA report concluded that the Property presents a "clean" environmental condition with no further investigation recommended.
Additional Environmental Disclosures:
(a) No underground storage tanks (USTs), aboveground storage tanks (ASTs), or evidence of former tanks were identified at the Property.
(b) No releases of hazardous substances, petroleum products, or pollutants have been reported or are known to have occurred at the Property.
(c) No environmental remediation obligations exist or are contemplated with respect to the Property.
(d) No pending or, to the knowledge of the Seller's Knowledge Individuals, threatened environmental enforcement actions, citations, notices of violation, or proceedings of any kind have been received or are pending with respect to the Property.
(e) The Property is not listed on any federal, state, or local environmental database as a site of contamination, potential contamination, or remedial activity, including but not limited to the National Priorities List (NPL), the Comprehensive Environmental Response, Compensation, and Liability Information System (CERCLIS), or the Georgia Hazardous Site Inventory.
(f) No Phase II Environmental Site Assessment was recommended or required.
Section E: Tenant and Lease Matters
Tenant Roster and Lease Summary:
Tenant Details — Thornton-Whitaker Pharmaceuticals Corp.
(a) Tenant. Thornton-Whitaker Pharmaceuticals Corp., a Georgia corporation, with its principal offices at 2400 Pharma Drive, Suite 500, Alpharetta, Georgia 30005 (the "Tenant").
(b) Lease. Industrial Lease Agreement dated as of November 15, 2020, by and between GMP Fairfield I LLC, as landlord, and Thornton-Whitaker Pharmaceuticals Corp., as tenant, as amended by that certain First Amendment to Industrial Lease Agreement dated March 12, 2022 (collectively, the "Lease").
(c) Leased Premises. The entire building located at 4200 Fairfield Industrial Blvd, Fairburn, Georgia 30213, comprising approximately 412,000 RSF. The Tenant's proportionate share for purposes of additional rent (operating expenses, taxes, insurance) is 100%.
(d) Annual Base Rent. $6,180,000.00 per annum ($15.00 per RSF), payable in equal monthly installments of $515,000.00 on the first day of each month. ABR represents approximately 8.3% of the aggregate portfolio ABR of $74,800,000.
(e) Rent Escalations. ABR increases by 2.75% annually on each anniversary of the Lease Commencement Date.
(f) Renewal Options. The Tenant has two (2) successive options to renew the Lease for additional terms of five (5) years each, exercisable by written notice delivered no later than twelve (12) months prior to the expiration of the then-current term. Renewal rent shall be at the greater of (i) the then-current ABR escalated by 2.75% or (ii) 95% of the then-prevailing fair market rental rate as determined in accordance with the procedures set forth in Section 38 of the Lease.
(g) Expansion / ROFO / ROFR. None.
(h) Early Termination. None.
(i) Major Tenant Classification. The Tenant is classified as a "Major Tenant" under the Agreement, as its ABR exceeds $1,500,000 and its leased RSF exceeds 25,000 RSF. Accordingly, the estoppel and SNDA requirements set forth in Sections 6.02(c) and 6.02(d) of the Agreement are applicable to this Lease.
(j) Co-Tenancy / Exclusive Use. The Lease does not contain any co-tenancy provisions, exclusive use restrictions, or operating covenants that would be triggered by or applicable to the transaction contemplated by the Agreement.
(k) Assignment / Subletting. The Lease prohibits assignment or subletting without the prior written consent of the landlord, such consent not to be unreasonably withheld, conditioned, or delayed. The transfer of the membership interests in the Target Entity as contemplated by the Agreement does not constitute an "assignment" under the Lease.
Security Deposit. The Tenant has deposited with the Target Entity a security deposit in the amount of $1,030,000.00, held in a non-interest-bearing account at Pinnacle Federal Bank, N.A. This amount is a portion of the aggregate security deposits of $4,283,000 held across the Portfolio.
Tenant Defaults. As of the date of the Agreement, no default by the Tenant exists under the Lease, and no event has occurred which, with the giving of notice or the passage of time, or both, would constitute a default by the Tenant. All rent payments are current.
Landlord Obligations. As of the date of the Agreement, the Target Entity has fulfilled all of its obligations under the Lease, including but not limited to tenant improvement allowance obligations, construction obligations, and maintenance responsibilities. There are no outstanding or unfulfilled landlord obligations.
Section F: Financial Matters
Allocated Purchase Price. The Purchase Price allocated to this Property is set forth in Exhibit K to the Agreement. The allocation was determined based on the appraisal prepared by Stonebridge Valuation Advisors, LLC, dated November 30, 2023, in accordance with the methodology described in Section 2.06 of the Agreement.
Real Property Tax Assessment and Estimated 2024 Taxes:
The estimated 2024 real property taxes for this Property represent a portion of the aggregate estimated 2024 real property taxes for the Portfolio of approximately $14,760,000. Real property taxes are payable to Fulton County, Georgia. No delinquent real property taxes exist with respect to the Property.
Georgia Transfer Tax. The Georgia controlling-interest transfer tax applicable to the transfer of the membership interests in the Target Entity is estimated as a portion of the aggregate Georgia transfer tax of approximately $1,250,000, allocated among the Georgia Properties (Fairfield Logistics Center I, Fairfield Logistics Center II, Buckhead Place Office Tower, and Peachtree Corners Logistics Center) as set forth in Exhibit K.
CAM / Operating Expense Reconciliation. The 2023 common area maintenance and operating expense reconciliation for this Property has been completed. Given that the Property is a single-tenant building on a net lease basis, the Tenant is responsible for its proportionate share (100%) of all operating expenses, real estate taxes, and insurance premiums. The 2023 reconciliation resulted in a net underpayment by the Tenant of $14,320, which amount has been invoiced and is expected to be collected in the ordinary course of business prior to Closing.
Section G: Property Condition Matters
Property Condition Assessment. A Property Condition Assessment ("PCA") for the Property was prepared by Rampart Building Sciences, Inc. (Alan Westbrook, P.E., Senior Engineer, Project Manager), dated November 8, 2023, Project No. RBS-2023-FL01 (the "Fairfield I PCA"). The Fairfield I PCA was prepared in conformance with ASTM Standard Practice E2018-15. A copy of the Fairfield I PCA has been made available to Buyer in the electronic data room.
Findings. The Fairfield I PCA identified no estimated immediate repair costs for the Property. The building is in good overall condition, consistent with its age (completed 2020) and use. The PCA identified certain short-term (one to five year) maintenance items totaling approximately $185,000, including routine roof maintenance, parking lot resealing, and HVAC filter and belt replacements, all of which are considered ordinary maintenance items and are not classified as immediate repair needs.
PCA Credit. No PCA credit is attributable to this Property.
Section H: Zoning and Land Use
Zoning Classification. The Property is zoned M-2 (Heavy Industrial) under the City of Fairburn Zoning Ordinance.
Conforming Use. The current use of the Property as a logistics and distribution facility is a permitted use under the M-2 zoning classification. A zoning confirmation letter dated September 22, 2023, was obtained from the City of Fairburn Department of Planning and Zoning confirming that the Property is in compliance with all applicable zoning requirements, including setback, height, parking, and building coverage requirements. A copy of the zoning confirmation letter has been made available to Buyer in the electronic data room.
Special Permits / Variances. No special permits, conditional use permits, or variances are required or have been obtained for the current use of the Property.
Pending Zoning Actions. To the knowledge of the Seller's Knowledge Individuals, there are no pending or contemplated changes to the zoning classification of the Property or the applicable zoning regulations that would adversely affect the current use of the Property.
Section I: Service Contracts
The following service contracts are in effect with respect to the Property, each as more fully described in Exhibit I to the Agreement:
All service contracts listed above are assignable or terminable upon not more than sixty (60) days' notice without penalty. No service contract contains a change-of-control provision that would be triggered by the transactions contemplated by the Agreement.
Section J: Litigation
There are no pending or, to the knowledge of the Seller's Knowledge Individuals, threatened lawsuits, actions, proceedings, arbitrations, investigations, or claims of any kind relating to the Target Entity or the Property. See Exhibit J to the Agreement.
Section K: Insurance
Current Insurance. The Target Entity currently maintains the following insurance coverage with respect to the Property:
(a) Property Insurance. All-risk property insurance in the amount of $42,500,000 (replacement cost), with a $50,000 deductible, provided by Ridgeway Mutual Insurance, Policy No. AMP-2023-7841, expiring June 30, 2024.
(b) General Liability Insurance. Commercial general liability insurance with combined single limits of $5,000,000 per occurrence and $10,000,000 aggregate, provided by Ridgeway Mutual Insurance, Policy No. AMP-2023-7842, expiring June 30, 2024.
(c) Umbrella / Excess Liability Insurance. Umbrella excess liability insurance in the amount of $25,000,000, provided by Ridgeway Mutual Insurance, Policy No. AMP-2023-7843, expiring June 30, 2024.
Replacement at Closing. In accordance with Section 6.08 of the Agreement, all existing insurance policies maintained by or on behalf of the Target Entity shall be replaced at or prior to Closing by Buyer's policies with Ironclad Indemnity Insurance Company, or such other insurer as Buyer may designate, in amounts and with coverage terms satisfying the requirements of the Applicable Loans.
SCHEDULE 2-2
GMP FAIRFIELD II LLC — FAIRFIELD LOGISTICS CENTER II
Section A: Target Entity Information
GMP Fairfield II LLC was formed as a single-purpose entity for the acquisition, ownership, operation, and management of the Property identified below. As of the date of the Agreement, the Target Entity has no subsidiaries, no outstanding equity interests other than the membership interest held by Seller, and no outstanding options, warrants, or convertible securities. The Target Entity is in good standing in each jurisdiction in which it is organized or qualified to do business.
Section B: Property Information
The Property is situated within the Fairfield Industrial Park, immediately adjacent to Fairfield Logistics Center I, and shares a common access road and utility infrastructure with that facility.
Section C: Title Matters
Permitted Exceptions. The following matters are listed as Permitted Exceptions specific to this Property, as set forth in Exhibit P to the Agreement:
1. Deed of Trust, Assignment of Leases and Rents, Security Agreement, and Fixture Filing dated September 15, 2020, recorded in Deed Book 62478, Page 398, Fulton County, Georgia records, securing the Pinnacle Federal Bank, N.A. loan designated as Loan 1-B under the Master Loan Agreement.
2. Easement Agreement for Shared Access Road and Utilities, dated July 8, 2019, by and between Fairfield Industrial Park Developer LLC and GMP Fairfield II LLC, recorded in Deed Book 61842, Page 718, Fulton County records (same agreement as referenced in Schedule 2-1), granting reciprocal ingress, egress, and utility easements benefiting and burdening the Property and the adjacent parcel (Fairfield Logistics Center I). This shared easement governs the common access road connecting both facilities to Fairfield Industrial Blvd and the shared stormwater detention basin serving both parcels.
3. Utility Easement in favor of Drayton Holdings, dated June 22, 2019, recorded in Deed Book 61790, Page 120, Fulton County records, encumbering a 20-foot-wide strip along the western boundary of the Property.
4. Drainage Easement in favor of Fulton County, dated May 15, 2019, recorded in Deed Book 61744, Page 903, Fulton County records, encumbering a 25-foot-wide drainage corridor along the southern boundary of the Property and connecting to the shared stormwater detention basin.
5. Declaration of Covenants, Conditions, and Restrictions for Fairfield Industrial Park, as referenced in Schedule 2-1, Section C, item 5.
6. Subdivision Plat of Fairfield Industrial Park — Phase II, as referenced in Schedule 2-1, Section C, item 6.
7. Real property taxes and assessments for the tax year 2024, not yet due and payable.
Monetary Liens. There are no monetary liens encumbering the Property other than the Pinnacle Federal Bank, N.A. Deed of Trust described in item 1 above and the lien for real property taxes not yet due and payable.
Condemnation. There are no pending or, to the knowledge of the Seller's Knowledge Individuals, threatened condemnation, eminent domain, or similar proceedings affecting the Property or any portion thereof.
Section D: Environmental Matters
Phase I Environmental Site Assessment. A Phase I ESA for the Property was prepared by Trident Environmental Group LLC (Rachel Kwan, Senior Environmental Scientist, Project Manager), dated October 18, 2023, Project No. TEG-2023-4301 (the "Fairfield II Phase I ESA"). The Fairfield II Phase I ESA was prepared in conformance with ASTM Standard Practice E1527-21 and is listed in Exhibit N.
Findings. The Fairfield II Phase I ESA identified no Recognized Environmental Conditions (RECs), no CRECs, and no HRECs in connection with the Property. The Phase I ESA report concluded a "clean" environmental condition with no further investigation recommended.
Additional Environmental Disclosures. No USTs, ASTs, hazardous substance releases, environmental remediation obligations, or environmental enforcement actions are known or pending. No Phase II ESA was recommended or required.
Section E: Tenant and Lease Matters
Tenant Roster and Lease Summary:
Major Tenant Classification:
(a) Southeast Auto Parts Distribution LLC (a Georgia limited liability company). This tenant is classified as a Major Tenant, as its ABR of $2,730,000 exceeds $1,500,000 and its leased RSF of 195,000 exceeds 25,000 RSF. The Lease provides for annual rent escalations of 2.50% on each anniversary of the Lease Commencement Date. The Tenant holds one (1) five-year renewal option exercisable upon twelve (12) months' prior written notice. No ROFO, ROFR, or expansion rights.
(b) Palmetto Cold Chain Logistics Inc. (a South Carolina corporation, qualified in Georgia). This tenant is classified as a Major Tenant, as its ABR of $1,914,000 exceeds $1,500,000 and its leased RSF of 132,000 exceeds 25,000 RSF. The Lease provides for annual rent escalations of 3.00%. The Tenant holds two (2) five-year renewal options. No ROFO, ROFR, or expansion rights.
(c) Redstone Fulfillment Services Corp. (a Georgia corporation). This tenant's ABR of $870,000 is below the $1,500,000 Major Tenant ABR threshold; however, its leased RSF of 60,000 exceeds the 25,000 RSF threshold. Accordingly, this tenant is classified as a Major Tenant. The Lease provides for annual rent escalations of 2.50%. The Tenant holds one (1) three-year renewal option.
Security Deposits. Aggregate security deposits held by the Target Entity with respect to this Property total $331,200, allocated as follows: Southeast Auto Parts Distribution LLC — $136,500; Palmetto Cold Chain Logistics Inc. — $127,600; Redstone Fulfillment Services Corp. — $67,100. These amounts are a portion of the aggregate security deposits of $4,283,000 held across the Portfolio.
Tenant Defaults. As of the date of the Agreement, no default by any tenant exists under any Lease at the Property, and no event has occurred which, with the giving of notice or the passage of time, or both, would constitute a default by any tenant. All rent payments are current.
Co-Tenancy / Exclusive Use. No Lease at this Property contains co-tenancy or exclusive use provisions that would be triggered by or applicable to the transaction contemplated by the Agreement.
Section F: Financial Matters
Allocated Purchase Price. The Purchase Price allocated to this Property is set forth in Exhibit K to the Agreement, determined based on the Stonebridge Valuation Advisors, LLC appraisal.
Real Property Tax Assessment and Estimated 2024 Taxes:
No delinquent real property taxes exist with respect to the Property.
CAM / Operating Expense Reconciliation. The 2023 CAM and operating expense reconciliation for this Property is in the process of being completed and is expected to be finalized prior to Closing. Preliminary reconciliation results indicate aggregate tenant underpayments of approximately $22,800, which amounts will be invoiced to tenants in the ordinary course.
Section G: Property Condition Matters
Property Condition Assessment. A PCA for the Property was prepared by Rampart Building Sciences, Inc. (Alan Westbrook, P.E.), dated November 8, 2023, Project No. RBS-2023-FL02.
Findings. The PCA identified no estimated immediate repair costs for the Property. The building is in good overall condition, consistent with its age (completed 2020) and use. Short-term maintenance items totaling approximately $162,000 were identified, including routine roof maintenance and HVAC servicing, all considered ordinary maintenance.
PCA Credit. No PCA credit is attributable to this Property.
Section H: Zoning and Land Use
Zoning Classification. The Property is zoned M-2 (Heavy Industrial) under the City of Fairburn Zoning Ordinance.
Conforming Use. The current use of the Property as a logistics and distribution facility is a permitted use under the M-2 zoning classification. A zoning confirmation letter dated September 22, 2023, was obtained from the City of Fairburn Department of Planning and Zoning. No special permits, variances, or conditional use permits are required. No pending zoning changes are known.
Section I: Service Contracts
The following service contracts are in effect with respect to the Property, each as more fully described in Exhibit I:
All service contracts are assignable or terminable upon not more than sixty (60) days' notice without penalty.
Section J: Litigation
There are no pending or, to the knowledge of the Seller's Knowledge Individuals, threatened lawsuits, actions, proceedings, arbitrations, investigations, or claims of any kind relating to the Target Entity or the Property. See Exhibit J.
Section K: Insurance
Current Insurance. The Target Entity currently maintains all-risk property insurance (replacement cost of $39,800,000), commercial general liability insurance ($5,000,000 per occurrence / $10,000,000 aggregate), and umbrella excess liability insurance ($25,000,000), all through Ridgeway Mutual Insurance, expiring June 30, 2024.
Replacement at Closing. All existing policies shall be replaced at or prior to Closing by Buyer's policies with Ironclad Indemnity Insurance Company in accordance with Section 6.08 of the Agreement.
SCHEDULE 2-3
GMP WESTLAKE LLC — WESTLAKE DISTRIBUTION HUB
Section A: Target Entity Information
GMP Westlake LLC was formed as a single-purpose entity for the acquisition, ownership, operation, and management of the Property identified below. The Target Entity has no subsidiaries, no outstanding equity interests other than the membership interest held by Seller, and no outstanding options, warrants, or convertible securities. The Target Entity is in good standing in Delaware and Texas.
Section B: Property Information
The Property is the largest facility in the Portfolio by rentable area. It is situated along Westlake Parkway in the Energy Corridor / Westchase submarket of Houston, Texas, with convenient access to Interstate 10, Beltway 8 (Sam Houston Tollway), and State Highway 6. The Property is well-positioned for regional distribution operations serving the greater Houston metropolitan area and the Gulf Coast corridor.
Section C: Title Matters
Permitted Exceptions. The following matters are listed as Permitted Exceptions specific to this Property, as set forth in Exhibit P to the Agreement:
1. Deed of Trust, Assignment of Leases and Rents, Security Agreement, and Fixture Filing dated September 15, 2020, recorded under Harris County Clerk's File No. 2020-412789, Harris County, Texas records, securing Loan 1-C.
2. Utility Easement in favor of Fenmore Corporation Houston Electric, LLC, dated February 14, 2019, recorded under Harris County Clerk's File No. 2019-067234, encumbering a 25-foot-wide strip along the southern boundary of the Property.
3. Pipeline Easement in favor of Penrose & Co., dated November 8, 2017, recorded under Harris County Clerk's File No. 2017-498321. This easement encumbers a 50-foot-wide corridor traversing the northeastern corner of the Property for an underground natural gas liquids pipeline. The pipeline is located entirely below grade, and no structures or improvements have been constructed within the easement area.
4. Storm Water Detention and Drainage Easement in favor of Harris County Flood Control District, dated January 22, 2019, recorded under Harris County Clerk's File No. 2019-028943, encumbering a stormwater detention area of approximately 2.3 acres in the northeastern portion of the Property.
5. Restrictive Covenants for Westlake Business Park, recorded under Harris County Clerk's File No. 2016-384721, imposing use restrictions consistent with industrial and distribution operations, architectural standards, signage regulations, and common area assessments.
6. Real property taxes and assessments for the tax year 2024, not yet due and payable.
Monetary Liens. No monetary liens other than the Pinnacle Federal Bank, N.A. Deed of Trust and the lien for real property taxes not yet due.
Condemnation. No pending or threatened condemnation proceedings.
Section D: Environmental Matters
Phase I Environmental Site Assessment. A Phase I ESA for the Property was prepared by Trident Environmental Group LLC (Rachel Kwan, Senior Environmental Scientist), dated October 25, 2023, Project No. TEG-2023-1150 (the "Westlake Phase I ESA"). The Westlake Phase I ESA was prepared in conformance with ASTM Standard Practice E1527-21 and is listed in Exhibit N.
Findings. The Westlake Phase I ESA identified de minimis Recognized Environmental Conditions (RECs) in connection with the Property. The de minimis RECs are described as follows:
(a) Historical Agricultural Use. A review of historical aerial photographs, Trelwick fire insurance maps, and Texas Commission on Environmental Quality (TCEQ) records revealed that the Property was used for agricultural purposes (primarily rice farming and cattle grazing) from the early 1900s through approximately 2015. While no specific pesticide or herbicide contamination was identified, the historical agricultural use constitutes a de minimis REC due to the potential for residual agricultural chemical concentrations in near-surface soils.
(b) Minor Petroleum Hydrocarbon Staining. During the site reconnaissance, the Trident field team observed minor surface staining consistent with petroleum hydrocarbons (motor oil and diesel fuel) in a former loading area on the western side of the building. The staining is limited to an area of approximately 150 square feet and appears to be the result of incidental drips from delivery trucks and equipment. The staining does not extend beyond the surface concrete and does not appear to have impacted underlying soils based on visual observation.
Current Status. Both de minimis RECs are classified as controlled conditions. The historical agricultural use condition is considered de minimis given the extensive site grading, earthwork, and engineered fill placement that occurred during the 2018-2019 construction of the facility, which effectively capped any residual agricultural chemicals beneath approximately 3 to 5 feet of engineered fill and building pad materials. The petroleum hydrocarbon staining has been documented and is being monitored through the Target Entity's routine property management activities; no active remediation is required.
Phase II ESA. No Phase II Environmental Site Assessment was recommended by Trident Environmental Group LLC based on the de minimis nature of the identified conditions.
Additional Environmental Disclosures. No USTs, ASTs, or evidence of former tanks at the Property. No hazardous substance releases requiring reporting or remediation. No pending or threatened environmental enforcement actions, citations, or notices of violation. The Property is not listed on the NPL, CERCLIS, or the Texas TCEQ Superfund Registry.
Section E: Tenant and Lease Matters
Tenant Roster and Lease Summary:
Tenant Details — Cascade Supply Chain Solutions Inc.
(a) Tenant. Cascade Supply Chain Solutions Inc., a Washington corporation, qualified to do business in Texas, with its principal offices at 1800 Cascade Way, Suite 400, Bellevue, Washington 98004 (the "Tenant").
(b) Lease. Industrial Lease Agreement dated as of July 15, 2019, by and between GMP Westlake LLC, as landlord, and Cascade Supply Chain Solutions Inc., as tenant, as amended by that certain First Amendment to Industrial Lease Agreement dated April 8, 2021, and that certain Second Amendment to Industrial Lease Agreement dated January 15, 2023 (collectively, the "Lease").
(c) Leased Premises. The entire building located at 11500 Westlake Parkway, Houston, Texas 77082, comprising approximately 624,000 RSF, including the trailer parking area. The Tenant's proportionate share for purposes of additional rent is 100%.
(d) Annual Base Rent. $8,736,000.00 per annum ($14.00 per RSF), payable in equal monthly installments of $728,000.00. ABR represents approximately 11.7% of the aggregate portfolio ABR of $74,800,000, making this the largest tenant by ABR in the Portfolio.
(e) Rent Escalations. ABR increases by 2.50% annually on each anniversary of the Lease Commencement Date.
(f) Renewal Options. The Tenant has three (3) successive options to renew the Lease for additional terms of five (5) years each, exercisable by written notice delivered no later than fifteen (15) months prior to the expiration of the then-current term. Renewal rent shall be at the greater of (i) the then-current ABR escalated by 2.50% or (ii) 95% of fair market rent.
(g) Expansion / ROFO / ROFR. The Tenant holds a right of first refusal ("ROFR") to lease any additional warehouse or logistics space developed by the landlord on any parcel adjacent to the Property that is owned or controlled by the landlord, to the extent any such space becomes available during the term of the Lease. As of the date of the Agreement, the landlord does not own or control any adjacent parcels.
(h) Early Termination. None.
(i) Major Tenant Classification. Classified as a Major Tenant under the Agreement (ABR exceeds $1,500,000; RSF exceeds 25,000).
(j) Co-Tenancy / Exclusive Use. None.
Security Deposit. The Tenant has deposited a security deposit in the amount of $728,000.00.
Tenant Defaults. No defaults exist. All rent payments are current.
Section F: Financial Matters
Allocated Purchase Price. Per Exhibit K.
Real Property Tax Assessment and Estimated 2024 Taxes:
No delinquent real property taxes. The estimated 2024 taxes represent a portion of the aggregate portfolio real property taxes of approximately $14,760,000.
Texas Transfer Tax. No state-level real estate transfer tax is applicable in the State of Texas. No controlling-interest transfer tax applies.
CAM / Operating Expense Reconciliation. The 2023 reconciliation for this single-tenant, net-lease property has been completed. A net underpayment by the Tenant of $18,460 was invoiced in January 2024 and is expected to be collected prior to Closing.
Section G: Property Condition Matters
PCA. Prepared by Rampart Building Sciences, Inc. (Alan Westbrook, P.E.), dated November 12, 2023, Project No. RBS-2023-WL01.
Findings. The PCA identified no estimated immediate repair costs for the Property. The building is in very good overall condition consistent with its age (completed 2019) and use as a modern distribution facility. Short-term maintenance items totaling approximately $210,000 were noted, including routine concrete joint sealant replacement in the warehouse floor and parking lot restriping. No PCA credit is attributable to this Property.
Section H: Zoning and Land Use
Zoning Classification. The Property is within an unrestricted zone in unincorporated Harris County, Texas. The Property is additionally subject to the Westlake Business Park restrictive covenants, which permit industrial and distribution uses.
Conforming Use. The current use is consistent with the applicable deed restrictions and land use regulations. A zoning/land use confirmation letter dated September 28, 2023, was obtained from the Harris County Engineering Department. No special permits or variances are required.
Section I: Service Contracts
The following service contracts are in effect with respect to the Property, as more fully described in Exhibit I:
All service contracts are assignable or terminable upon not more than sixty (60) days' notice without penalty.
Section J: Litigation
No pending or threatened litigation relating to the Target Entity or the Property. See Exhibit J.
Section K: Insurance
Current all-risk property insurance (replacement cost of $65,500,000), commercial general liability ($5,000,000/$10,000,000), and umbrella excess liability ($25,000,000), all through Ridgeway Mutual Insurance, expiring June 30, 2024. Policies to be replaced at Closing with Buyer's policies through Ironclad Indemnity Insurance Company per Section 6.08.
SCHEDULE 2-4
GMP KATY LLC — KATY FREEWAY LOGISTICS PARK
Section A: Target Entity Information
GMP Katy LLC is a single-purpose entity in good standing in Delaware and Texas. No subsidiaries, no outstanding equity interests other than the Seller's membership interest, and no outstanding options, warrants, or convertible securities.
Section B: Property Information
The Property is located along the Katy Freeway (Interstate 10) corridor in the City of Katy, Harris County, Texas, one of the most active industrial submarkets in the Houston metropolitan area. The Property benefits from frontage on Interstate 10 and proximity to the Grand Parkway (State Highway 99).
Section C: Title Matters
Permitted Exceptions. As set forth in Exhibit P:
1. Deed of Trust, Assignment of Leases and Rents, Security Agreement, and Fixture Filing dated September 15, 2020, recorded under Harris County Clerk's File No. 2020-412845, securing Loan 1-D.
2. Utility Easement in favor of Fenmore Corporation Houston Electric, LLC, dated April 3, 2020, recorded under Harris County Clerk's File No. 2020-148762, encumbering a 20-foot-wide strip along the eastern boundary of the Property.
3. Access Easement and Reciprocal Parking Agreement, dated March 15, 2020, recorded under Harris County Clerk's File No. 2020-112341, providing shared driveway access with the adjacent retail center on the north side of the Property.