How to finish Over Troubled Water

[BlazeOfSun]

I've gone over every square in khorminos, every square in the outskirts, and every square in the undermountain multiple times. I've waited by the docks in the undermountain for a full two days. Where on earth is the goddamned red labrys?

 

[Savin]

I've gone over every square in khorminos, every square in the outskirts, and every square in the undermountain multiple times. I've waited by the docks in the undermountain for a full two days. Where on earth is the goddamned red labrys?

It's in the warehouse Varena takes you to as part of that quest.