Sylvia,
Thank you to you, Garrett, and the entire Calderwood & Harkness team for the thorough and careful work in preparing the private letter ruling request. We have completed our internal review of the draft as circulated on September 15, 2025, and I am writing to provide Fairwater's formal sign-off and authorization to submit.
**Internal Review**
The draft ruling request was reviewed internally by me, Anita Bashar Reeves (General Counsel), and Douglas R. Pellegrini (CFO). In addition, our independent auditors and tax compliance advisors at Gresham Lowell CPAs LLP — specifically Nolan S. Carruthers — were consulted and confirmed they have no objections to the factual representations set forth in the submission.
**Formal Authorization**
On behalf of Fairwater Real Estate Investment Trust (EIN: 52-4718263), I hereby confirm Fairwater's final approval and sign-off on the private letter ruling request in the form circulated September 15, 2025. Calderwood & Harkness LLP is authorized to submit the following to the IRS National Office:
1. The private letter ruling request; 2. IRS Form 2848 (Power of Attorney and Declaration of Representative), designating Sylvia Hartwell (PTIN: P01882447) and Garrett Simmons (PTIN: P02094518) as authorized representatives — I have executed the Form 2848, and the signed original was sent to your office via courier earlier today for inclusion in the submission package; and 3. The IRS user fee payment of $38,000 (Category 2, Rev. Proc. 2025-1, Appendix A) via Ridgeline National Bank check no. 00471826, payable to "United States Treasury."
**Rulings Requested**
I confirm that we are comfortable with each of the three specific rulings being sought:
1. That rents received by Fairwater from Fairwater Southgate TRS, Inc. under the proposed intercompany leases will constitute "rents from real property" under IRC § 856(d), provided rents are at arm's-length rates as required by IRC § 856(d)(7)(B); 2. That the formation and capitalization of Fairwater Southgate TRS, Inc. will not cause Fairwater to fail the 20% TRS asset test under IRC § 856(c)(4)(B)(ii) or the 75%/25% asset tests under IRC § 856(c)(4); and 3. That certain tenant improvement allowances funded by Fairwater and provided to third-party retail tenants in the Southgate Portfolio will not be treated as "impermissible tenant service income" under IRC § 856(d)(7)(C)(i).
**Accuracy of Factual Representations**
I confirm that all factual representations contained in the ruling request submission are accurate and complete as of the date of signing. Specifically, I confirm the accuracy of the following:
- Aggregate purchase price of the Southgate Portfolio: $812 million (11 mixed-use properties, approximately 3.1 million rentable square feet), being acquired from Thornfield Development Group, LLC (EIN: 83-2956104) - Projected post-acquisition total assets: $8.03 billion - Projected TRS asset value: $147 million (1.83% of total assets) - 75% asset test: 81.9%; 75% gross income test: 80.3%; 95% gross income test: 97.1% - 2024 distribution ratio: 92.7% of REIT taxable income - Intercompany lease annual base rent: $18.7 million, supported by the Caldwell Valuation Group appraisal dated August 30, 2025 - Fairwater's continuous REIT qualification since its election effective December 31, 2009
**Next Steps**
Please proceed with the submission at the earliest opportunity. As you know, the target closing of the Southgate Portfolio acquisition remains Q1 2026, subject to receipt of a favorable ruling, and we very much appreciate the team's diligence in meeting the submission timeline. When the package has been shipped, could you or Garrett please confirm and share the Severin Partners LLC tracking number?
I am available for any follow-up questions. For reference, this is matter no. 1036-00006.
Best regards,
Jonathan M. Hirota Vice President, Tax Fairwater Real Estate Investment Trust 2400 Harbor Promenade, Suite 1100 Baltimore, MD 21202 (410) 553-8240