0001AE2004-VWHO

APPRAISAL REPORT

Prepared for
ABC Bank

Prepared by

PL
E

September 15, 2004

(Signature)SA
M

Takashi Yamaguchi (Appraiser)
Value Workers, Inc.
20-1-303 Kitamachi, Shinjuku, Tokyo, 162-0834, Japan

Pursuant to your request, I have prepared a summary report of a complete appraisal
for the subject property. The attached report details the scope of work, level ofreporting, definition of value, valuation methodology, and pertinent data researched andanalyzed in the development of this appraisal.

(Note)
The forecasts, projections, or operating estimates contained herein are based on
current market conditions, anticipated a continuing depression. These forecasts are,therefore, subject to changes with future conditions.

Japan suffered a heavy land bubble and its collapse.
This report reflects those conditions.
Please also take a look at "What Caused the Bubble?"

01. Memories of a Bubble in Japan
http://www.value-workers.com/design/chick-earthworm-english.htm
02. Swarm Intelligence
http://www.value-workers.com/design/chick-swarm-intelligence-english.htm
03. Diffusion of Inflational Expectations
http://www.value-workers.com/design/chick-fever-infection-english.htm
04. Genes of Speculation, Price, and Value
http://www.value-workers.com/design/chick-pricevalue-gene-english.htm
05. Mechanism of a New Type Emergence
http://www.value-workers.com/design/chick-newtype-emergence-english.htm

Table of Contents
Final Opinion, Definition of Value, Effective Date of Appraisal… P.01
Scope of Work… P.02
History of Subject Property… P.02
Identification of the Property… P.03
Property Right Appraised, Owner on the registry book
… P.04
Date of On-site inspection and Report… P.04General Assumptions and Limiting Conditions… P.04
Purpose, Intended Use of the Appraisal, Intended User(s)… P.05
Valuing Process… P.06
1. General factors which influence the price of real estate… P.06
2. Location and Transportation… P.07
3. General Condition of Subject Neighborhood… P.07
4. General Condition of Subject Property, and Zoning… P.08
5. Highest and Best Use… P.106. Marketability of Hotel… P.11(1) Market trend of leisure related service industries… P.11(2) Hotel Dealing Market in Japan… P.11(3) Sales price of hotels… P.12(4) Possibility of the structural conversion… P.13
7. Application of Appraisal Methods… P.137-1. Cost Approach… P.147-2. Market Approach… P.17
7-3. Income Approach… P.187-4. Reconciliation and Final Opinion of Value… P.18
Sheet 1
Land sales data comparison sheet
Sheet 2Development analysis sheet
Sheet 3
DCF method sheet (a)Sheet 4
DCF method sheet (b)Sheet 5
Transition of assets and liabilities, profit and loss, cash flow
Sheet 6
Depreciable assets list
Area map, Residential map, Public sectional map, Building drawings, Photos
Certification

SA
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PL
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-1-2-3-4-5-6-7-8-9-

-1-. Final Opinion, Definition of Value, Effective Date of Appraisal< Final Opinion of Value >JPY 2,393,300,000.(In terms of cash, not including consumption tax)
(Note: Since Income Approach is the most important in this appraisal, thevalue estimated is whole business value which includes real estate value.)(Net realizable value)
In case of self assessment of assets in financial institution, final opinion ofvalue to which the client may apply 100% loan-to-value ratio is appraisedPLE

bellow.
Above-mentioned value:
Brokerage fee:(a) X 0.0315 + 60,300 =Net realizable value:< Definition of Value >JPY 2,393,300,000. - (a)(a) - (b) =JPY 75,449,000. - (b)JPY 2,317,900,000. -SA
MFor the purpose of this report, market value is defined as:

The most probable price which a property should bring in a competitive

and open market, under all conditions requisite to a fair sale, the buyer andseller each acting prudently and knowledgeably, and assuming the price is
not affected by undue stimulus.
Implicit in this definition are the consummation of a sale as of a specified

date and the passing of title from seller to buyer under conditions whereby:
1. Buyer and seller are typically motivated.
2. Both parties are well-informed or well-advised, and acting in what they
consider their best interests.
3. A reasonable time is allowed for exposure in the open market.
4. Payment is made in terms of cash or in terms of financial arrangements
comparable thereto; and5. The price represents the normal consideration for the property sold
unaffected by special or creative financing or sales concessions granted byanyone associated with the sale.

< Reasonable Exposure Time >Around six months.
1

< Effective Date of Appraisal >September 30, 2004
-2-. Scope of Work
This appraisal is performed based on the following conditions.
1. This report is a Limited Report in compliance with the Uniform Standardsof Professional Appraisal Practice inasmuch as the simplifications of themarket approach. I think the direct market comparison method would not bePLEreliable in this case.
2. I conducted on-site inspection on the subject hotel.

3. I examined past 10 years' financial statements of the subject hotel.
4. I collected and examined many recent sale and disposal comparable data of
hotels in Japan.

SA
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5. I collaborated with CPAs who drew up the business restructuring plan.
-3-. History of Subject Property

After built as a hotel in 1990, subject property has not been transferred to any

other entities.

2

-4-. Identification of the Property(1) Land
Address: 10-12 XXX-cho, WW-ku, Tokyo, Japan<Legal description>(sq.m.: square meter)
Category oflands

Lot number

Area (sq.m.)(Registered Area)(1) 10-12 XXX-cho, WW-ku, Tokyo(2) 10-13 XXX-cho, WW-ku, Tokyo

Building site
Building site

2,843.85
251.75(2)

Building<Legal description>

Structure, Category

SA
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House number

PL
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Total

10-12 XXX-cho, WW-ku

Steel frame reinforced concrete
Flat roof
14 story, with 3 basements
Hotel

3

3,095.60

Area (sq.m.)(Registered Area)
1F 1,608.33
2F 2,572.57
3F 1,760.13
4F 2,131.24
5F 1,365.19
6F
33.00
7F 1,074.31
8F
676.729F
642.5210F
642.5211F
642.5212F
642.5213F
642.5214F
650.00B1F 1,622.58
B2F 2,408.51
B3F 2,486.29
Total 21,601.47

-5-. Property right appraised, Owner on the registry book
< Property right appraised >Land:
Fee simple [Occupant: Owner]
Building:
Fee simple (partly leased fee estate) [Occupant: Owner (partly Tenant)]< Owner on the registry book > (As of August 23, 2004)
Land:
Owner: ABC Hotel K.K.
Building:

PL
E(Address: 10-12, XXX-cho, WW-ku, Tokyo)
Owner: ABC Hotel K.K.

(Address: 10-12, XXX-cho, WW-ku, Tokyo)SAM-6-. Date of On-site inspection and ReportAugust 23, 2004 (Date of interior and exterior inspection)
September 15, 2004 (Date of Report)-7-. General Assumptions and Limiting Conditions
This appraisal report has been made with the following general assumptions andlimiting conditions:

1. Appraisal of owner-occupied building and its sites (with some tenants).
There are some tenants in the hotel. This appraisal has been developed on thecondition that the new owner will succeed the security deposits.
2. This appraisal is for a financial institution which considers disposal of collateralof bad loan.
3. The sizes of the land and the building depend on the registered size.
4. Premising of the mortgage erasure at the sale, the property is appraised free andclear of any or all liens or encumbrances (unless otherwise stated).
5. In recent years, hotel dealing market in Japan was under serious depression. So,
the forecasts, projections, or operating estimates contained herein are based on
current market conditions, anticipated a continued depression. These forecasts
4

are, therefore, subject to changes with future conditions.
6. Physical test for checking hazardous materials, which may or may not be present
on the properties, has not been performed. The value estimated in this report ispredicated on the assumption that no hazardous materials are on or in theproperties that would cause a loss in value. No responsibility is assumed for suchconditions or for any expertise or engineering knowledge required to discoverthem.
7. Any unknown conditions existing at the time of inspection could alter the value.
No responsibility is assumed for latent defects of any nature which may affectvalue, nor for any expertise required to disclose such conditions.
8. Appraiser who performed this appraisal has no present or prospective interest inPLE

the subject property. Compensation for the appraiser is not contingent on thereporting of a predetermined value or direction in value that favors the cause of
the client. This appraisal is performed in a manner that is independent, impartial
and objective.

SAM-8-. Purpose, Intended Use of the Appraisal, Intended User(s)Purpose and Intended Use of this appraisal is for valuation of the collateralproperty, and definition of value is the fair market value under the condition of
disposal of nonperforming loan. This appraisal is intended for the use of the client
only.

5

-9-. Valuing Process
1. General factors which influence the price of real estate< Economic conditions >In Japan, economic depression had continued about 1.5 decades after thecollapse of bubble economy (1990). Government had introduced various
anti-deflation measures. Bank of Japan had continued ultra-low-interest rate policy.
But, as a whole, Japanese economy does not get out of severe condition still now.
But recently the flattening-off trend is becoming clearer. According to the“Cabinet Office Economy Watchers Survey” in September 2004, “Japanese< Land price trend >PLEeconomy is picking up moderately”.

Also, in real estate dealing market, after the collapse of the bubble economy(from the second half of the 1980s to 1991), demand had been low under thesluggish economy. Although the transition of land price differs with areas, declineSAM

trend continued for over ten years.

According to the public survey of land price as of January 1, 2004, national

average of land price declined by 5.0% per year. It declined for 14 consecutive
years.

In three major metropolitan area (Tokyo, Osaka, and Nagoya), land pricedeclined by 3.9%. But decline rate has diminished by 2.0%. And in the central areaof these metropolitan areas, recovery of office building demand and expansion ofreal estate investment are observed recently.
Transition of Gov. published land price near the subject property(yen per sq.m.)

year

yen/sq.m.

1998

2,018,000

1999

1,715,000

2000

1,458,000

2001

1,239,000

2002

1,053,000

1,000,000

2003

948,000

500,000

2004

886,00002,500,000
2,000,000
1,500,000

1

2

6

3

4

5

6

7

< Condominium market trend >According to the National Real Estate Information Center, the average unit priceof the new condominiums in Tokyo metropolitan area declined by 0.2% per year
in 2003.
In Tokyo 23-wards it declined by 3.2%. In Tokyo Santama area it rose by 4.8%.
In Kanagawa Prefecture, it rose by 1.1%. In Saitama Prefecture, it rose by 0.5%.
In Chiba Prefecture, it rose by 1.2%.
2. Location and Transportation

PL
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Nearby railroad station:
XXXX station of the JR East XXXX line

Direction and distance (on road line) from the nearby railroad station:
Northeast, About 250m

SA
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3. General Condition of Subject Neighborhood
(1)

Range

I identified subject neighborhood for the 10th block of Y-Chome, XXX-Cho
where subject property exists.

(2)

Characteristics of the subject neighborhood< Street condition >Paved public road of 25m width is considered to be standard in this area, andarrangement and continuity of the roads are good.
< Access >Access to the nearby railroad station:

Good

Access to the nearby shopping center:

Good

Access to the public offices:

Normal< Environmental conditions >Subject neighborhood is a commercial area where medium and high-rise7

buildings (stores and offices) are standing along the road.
< Standard use of land in the area>
Width of the road:25m width public road.

Standard lot size:

150 square meters to 300 square meters.

Standard use:

Stores and offices.

< Future trend >Few factors are observed which change the subject neighborhood in the near
future.

PL
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4. General Condition of Subject Property, and Zoning
The property-specific value influences of subject land are as follows.
(1) Street conditions< Lot classification >SAM

Lot which fronts three roads.
< Street >Direction

Width

Pavement

Classification

Ground heightNorthwest side

About 6m

Paved

Public road

Equal level

Northeast side

About 25m

Paved

Public road

Equal level

Southwest side

About 6m

Paved

Public road

Equal level(2) Lot conditions< Topography >Level< Shape >Close to rectangle, but a little irregular.
< Dimensions >45 meters x 70 meters(3) Lifeline< Electric power service >Served< Public water service >Served< Public sewer service >Served< City gas service >Served(4) Present use of the land8

Site of a hotel.
The property-specific value influences of subject building are as follows.
< Construction time >November, 1990.
< Grade of materials and construction >Middle grade as a hotel.
< Present use >Building of a hotel.
< Maintenance and management >PL
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Normal level.
< Degree of depreciation >Normal, but large-scale repair would be needed in the near future.
< Facilities >Guest room: 205

Restaurant: Japanese cuisine: 1, Chinese cuisine: 1, French cuisine: 1

SA
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Conference room: Large: 2, Small or medium: 10
Swimming pool: 1
Parking space: 75
Elevator: 4

Shopping mall: 1

Business center: 1
Photo shop: 1

Hairdresser’s: 1
Flower shop: 1

Specific zoning classification and description< Designation of the city planning zone >Designated(Urbanizable zone)< Local zoning regulations >Range: Whole subject land.
Zoning:Existing in an area designated as Commercial Zone.
Building restriction:9

Maximum Building coverage ratio: 80%
Maximum Floor area ratio: 700% *Existing in an area designated as Fire Prevention Zone.
* Restriction by the front road width: Not applied.
(Article 52, 2nd clause of the Building Standards Law)
< Other regulations >(a) XX ward’s Guideline for the Land Development and the Construction of
medium/high-rise building.
(b) XX ward’s Ordinance for Prevention and the Reconciliation of disputes on
the construction of medium/high-rise building.
(c) XX ward’s Ordinance for Protection of Greens.

PLE(d) XX ward’s Guideline for Welfare Circumstance.
(e) Tokyo Metropolitan Ordinance for the Protection and Recovery of Nature.
5. Highest and Best Use< Highest and Best Use of the land as though vacant >SAM

In subject neighborhood, standard lot size is much smaller than the subject land.
If the lot was standard size, Highest and Best Use of the subject land as thoughvacant would be considered to be the site of a medium/high-rise store/officebuilding.

Many industries that are able to use such large land effectively (e.g., department

store, super market, hotel etc.) are now under serious depression. When thecommercial basis around XXXX station is taken into consideration, it is not soeasy to get large commercial buildings’ demand.
I think the demand that has normal ability and can present the highest price forthe subject land under this depression is the demand of lands for high-rise
condominiums (with stores/offices) that maintain good sales condition evenunder this depression.
(However, on a long-term viewpoint, there is possibility of commercial use.)< Highest and Best Use of the property as improved >I think the Highest and Best Use of the subject property as improved is the use
as a hotel.

106. Marketability of Hotel(1)

Market trend of leisure related service industries
According to the "White Paper on Leisure” (written by OPQ Association), themarket trend of leisure related industries is under severe depression.
Almost all types of leisure related industries are without ability to get out of thedeflationary spirals, such as decrease of visitors, debasement of service price,
deterioration of sales figure, and worsening of profit.
As the whole result of the investigation, the downward tendency is continuing in
the number of users, sales, profit, and the visitor unit price, in 17 types of leisure

(2)

PL
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related industries.
Hotel Dealing Market in Japan

Under the hotel market depression, there are many hotels which have heavy deficit
and are seeking another entity to transfer their business.

SAM

The major cause for this hotel market depression might be the structural changeof consumption customs under economic depression. Revenue from the party
section sharply decreased, and "simple wedding ceremony" pervaded.
The second cause might be the oversupply. Since many gorgeous hotels wereconstructed and excessive investment had been done in bubble era, oversupply of
hotel had been arisen.

And a large amount of debt and gorgeous facilities’ maintenance cost made theirbreak-even point lower.

In addition, there are many other types of failures, such as, miss-investment,
abandonment of reinvestment, change of locating circumstances, withdrawal led byfinancial institution, etc.
Although each hotel had tried expense cut down severely, it is already close to theceiling. So, there happened many hotel bankruptcies and closings. (See attachedsheet-8)
However, in public auction, buyers did not appear even at extremely low prices.
Also, in voluntary sales, prices of hotels were incredibly low (in many cases, they
were under a half of their value indicated by cost approach). (See attached Sheet-7)
When considering sale of a hotel, its possibility becomes major problem in thismarket. Until several years ago, it was quite difficult to sell a hotel in Japan.
11

Although taking over by foreign investors had become topics, there were many
obstacles. That is, Japanese hotel accounting was different from that of theirstandard, so they could not make operating plans easily, or there were large gap
between foreign investors’ recognition of value and that of Japanese.
But recently (2001 - 2004), hotel dealing market has remarkably improved inJapan. Servicer-system, Special Purpose Company (SPC) and Real Estate
Investment Trust (J-REAT) come to function. And marketability of hotel has
improved clearly.
(3)

Sales price of hotel

PL
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In Japan, high economic growth continued after the World War II, and there had
not happened any hotel market depression for a long time. On the other hand, in US,
waves of prosperity and depression repeated in hotel market and hotel dealing
market had been created in a long history. And the Income Approach (DCF method)is accepted in the market to estimate the value of hotels.

When based on this method, a hotel which does not yield any cash flow does notSAMhave any value.

But, as for DCF method, there are some issues in this appraisal.

(i) About earning capacity

In Income Capitalization Method (DCF method), appraisers have to examine

past financial statements and project future cash flow which subject property
would generate.

Future cash flow shall be influenced by various factors, such as, transition of
economic conditions, change of administrations, entry and withdrawal of otherhotels, operation of other hotels, management’s ability, etc.
(ii) About interest rate
In US, hotel investment had been considered as a high risk investment, because,
there are few barriers for new entries of other hotels (if a competitor starts theirbusiness in same area, profit might decrease sharply), and, hotel operating
circumstance is considered to be directly influenced by economic condition(construction rush times and demolishing rush times had been repeated in thepast), -- etc.
12For these reasons, foreign investors’ anticipated rate for hotel investment inJapan is at least 10% to 15% now. Their asking price becomes much lower thanthe value indicated by cost approach.
High risk↑

Raw landHigh interest rate

Hotel/Motel↑

Warehouse center
Shopping center
Office building
Condominium/Apartment
Ready-made residence
Low risk(4)

Industrial land

PL
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↓

Commercial network lease↓
Low interest rate

About structural conversion

In the areas nearby XXXX station, subject hotel is exceptionally large building.

SAM

And when the commercial foundation is taken into account, it might not be so easy
to expect commercial demands under this economic depression.
Moreover, the building structure is too special and the lower part of it is toogorgeous for normal commercial use (e.g., stores or offices). So, I think it is not sopractical to convert subject building structurally for other commercial use.

7. Application of Appraisal Methods

In this appraisal, I applied Cost Approach, Market Approach and Income Approachto estimate the value of subject property.

7-1. Cost Approach(1) Land value(i) Sales Comparison Approach for land value
I collected a lot of comparable land sales data in the subject and comparable

13

neighborhoods. Then, I compared the subject land with the comparables from theviewpoint of market-specific value influences and property-specific value
influences. And I estimated the “Value indicated by the Sales Comparison
Approach” of the subject land for JPY 612,000 /sq.m. (See attached sheet 1)(ii) Development procedure for land value
On the assumption of construction of a condominium and sale of it, I evaluatedthe whole sales return, and then deducted its construction cost and sales cost from
it. And I estimated the “Value indicated by the Development Procedure” of thesubject land for JPY 674,000 /sq.m. (See attached sheet 2)

As above mentioned,PLE(iii) Land value
Value indicated by the Sales Comparison Approach… JPY 612,000 /sq.m.
Value indicated by the Development Procedure …

JPY 674,000 / sq.m.

Diversity resulted between indicated values.

Then, I reexamined each stages of valuing process objectively and critically, andSA
Mreconsidered the feature of the methods and the data. Furthermore, relevancy to
the Gov. Published land price (based on the Land Price Publication Act) was also

taken into account.

Since office market condition had been not so good in subject and comparable

neighborhoods, the “Value indicated by the Sales Comparison Approach” might beindicated lower.

On the other hand, subject land has good conditions as a site for condominium

and its demand is strong, so the “Value indicated by the Development Procedure”
might be indicated higher.
However, since the subject land is a site of a hotel, “the Value indicated by theSales Comparison Approach” should be adopted. So I estimated the land value tobe JPY 1,894,500,000.- (JPY 612,000 / sq.m.).
3,095.60 sq.m. X

JPY 612,000 / sq.m. =1,894,500,000. -(2) Reproduction cost of subject building
Materials of the building, the grade of construction and the trend of the building
costs were examined, and I estimated the subject building reproduction cost to be
JPY 5,897,200,000.- (JPY 273,000 / sq.m.)
21,601.47 sq.m.

X273,000 / sq.m.
14=5,897,200,000. -(3)Reproduction cost of the subject property
The land value indicated by (1) were added to the Reproduction cost of subject
building indicated by (2), and I estimated the Reproduction cost of the subject
property to be JPY 7,791,700,000.-.

(4)

Depreciation and the “Value indicated by the Cost Approach”
Depreciated value (based on physical, functional, economical factor, which isestimated by the methods based on economic life and observation) was deductedfrom the reconstruction cost of the subject property, and I estimated the “Valueindicated by the Cost Approach" to be…

PLE

JPY 5,394,900,000.- (before deduction of expenditure of transfer and security
deposit).

JPY 4,686,500,000. - (after deduction of expenditure of transfer and security
deposit)SA
M<Calculation process>(Depreciation over a period)

Building depreciation (Straight line method, Salvage value = 0, are adopted)
Building

JPY 5,897,200,000.- X 0.65 X (14.0 / 37) = JPY 1,450,400,000. -Installations JPY 5,897,200,000.- X 0.35 X (14.0 / 15) =JPY 946,400,000. -Total

JPY 2,396,800,000. -(Depreciation based on observation)

Depreciation based on observation is estimated directly by inspecting theactual condition of the composition of the subject building.
Depreciation accrues from physical factors (e.g. ordinary wear and tear,breakage, damage), functional factors (e.g. equipment shortage, outdated design
and room arrangement), and external factors (e.g. marketability of thebuilding).
Hotel industry is under severe depression in Japan now, so the marketability
depreciation based on economical factor accrues considerably.
However, since in this appraisal, “sales comparison data” are compared with“the Values indicated by the Cost Approach before the deduction of expenditureof transfer and marketability depreciation”, so marketability depreciation was
not reflected in the value indicated by the Cost Approach.
15

(Marketability of the land)
If the economy would recover, subject land as though vacant might return to
the Highest and Best Use. But, under the present depression, the use as a site ofa hotel is not considered to be the Highest and Best Use of subject land.
However, in order to maintain the conformity of the comparison between“market price" and "the Value indicated by the Cost Approach", marketability
depreciation was not reflected in the value of subject land.
(Value indicated by the Cost Approach)
Above-mentioned depreciation was deducted from reproduction cost of thePLE

subject property, and “the Value indicated by the Cost Approach” wasestimated as follows. In addition, values were estimated before and after the
deduction of expenditures for transfer and security deposit, in order to comparethem with "the Values indicated by the Income Capitalization Approach".
(Value before deduction of expenditures for transfer and security deposit)

SAM

JPY 7,791,700,000 - JPY 2,396,800,000 = JPY 5,394,900,000. (Expenditure, Taxes and Deposit)
Buyer related Stamp duty--

JPY 360,000. -Buyer related Brokerage fee--

JPY 170,000,000. -Buyer related Real estate acquisition tax -- JPY 121,335,000. Buyer related Registration and license tax --JPY 142,196,000. -Buyer related Building consumption tax--

JPY 175,020,000. -Taken over Security deposit--

JPY 250,500,000. -

Total

--

JPY 859,411,000. -(Value after deduction of expenditures and security deposit)
JPY 5,394,900,000 - JPY 859,411,000 = JPY 4,535,000,000. -7-2. Market Approach
In Japan, it is unpopular to compare the value of a hotel with the value of otherhotels directly, because of difficulty in collecting appropriate sales data of same16

type hotels.
And, generally, under the present market condition in Japan, most hoteltransactions might have enforced under bankruptcies. Usually, sales prices (SP)under the conditions of bankruptcies are much lower than the "Value indicated by
the Cost Approach (VCA)”.
Therefore, here, I illustrated SP / VCA ratio in comparable sales, and Upset Price(UP) / VCA ratio in public auction cases. (Also see attached Sheet-7&8)
Following ratios are comparing "SP" or “UP” with "VCA before deduction of
expenditures for transfer".
<Hotel Disposal Cases>“Hotel S” in Taito-ku, Tokyo

PL
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(1)

A foreign company (hotel group) purchased the hotel which went bankrupt.
SP / VCA ratio
(2)

….44%

“RR Hotel” in Narita-shi, Chiba

Deficit had accumulated, so it was sold to a foreign investment company.
SP / VCA ratio“D Hotel” in Ota-ku, Tokyo

SA
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(3)

….45%

Location was too bad. Building was demolished when it was 14 years old.
And land was sold to a developer for a site of condominium.
SP / VCA ratio

(4)

….68%

“Hotel EC” in Yokohama-shi, Kanagawa

A bridal business company bought it.
SP / VCA ratio

(5)

….48%

“Hotel TA” in Taito-ku, Tokyo

There was no bidder even at the 3rd auction.
UP / VCA ratio

(6)

….34%

“New Hotel TA” in Taito-ku, Tokyo
There was no bidder even at the 3rd auction.
UP / VCA ratio

(7)

….25%

“Hotel OCS” in Tachikawa-shi, Tokyo
There was no bidder even at the 3rd auction.
UP / VCA ratio

(8)

….31%

“Hotel FKK” in Fussa-shi, TokyoA developer knocked down it at the 2nd auction, for a site of condominium.
UP / VCA ratio

….16%
17

(9)

“SP Hotel” in Sakura-shi, Chiba
There was no bidder even at the 3rd auction.
Although it is 13 years old building, it looks like a dilapidated house. It isthought appropriate to be sold as a vacant lot on the premise of demolishing
the building.
UP / VCA ratio….7%7-3. Income Approach
Income Capitalization Method (DCF method) is the method which indicatesPLE

capital value by analyzing the future income, expense, capital expenditures, etc.,
and anticipating the future cash flow which subject property would generate.
Future cash flow shall be influenced by transition of future economic conditions,operating competitions and transition of demand-and-supply balance etc. Therefore,
I adopted two scenarios of the future cash flow as follows, and estimated eachSAMvalue.
(a)When, under prolonged depression, operating figures would continue in a low

level as same as FY2003 for next 10 years.
Value before deduction of expenditure and security deposit.
JPY 2,821,700,000. - (See attached Sheet-3)

Value after deduction of expenditure and security deposit.
JPY 2,133,000,000. - (See attached Sheet-3)(b)When, under the Business Restructuring Plan, operating figures improve inthe future.
Value before deduction of expenditures and security deposit.
JPY 3,098,700,000. - (See attached Sheet-4)
Value after deduction of expenditures and security deposit.
JPY 2,393,300,000. - (See attached Sheet-4)7-4. Reconciliation and Final Opinion of ValueAs above mentioned,
Value indicated by the Cost Approach
18

JPY 5,394,900,000. - (before deduction of expenditures and security deposit)
JPY 4,535,000,000. - (after deduction of expenditures and security deposit)
Value indicated by the Market Approach
The disposal prices of hotels are much lower than the Values indicated by the
Cost Approach.
Value indicated by the Income Approach (a)JPY 2,821,700,000. - (before deduction of expenditures and security deposit)
JPY 2,133,000,000. - (after deduction of expenditures and security deposit)
Value indicated by the Income Approach (b)JPY 3,098,700,000. - (before deduction of expenditures and security deposit)

PL
E

JPY 2,393,300,000. - (after deduction of expenditures and security deposit)
Diversity resulted among indicated values.

“Value indicated by the Cost Approach” is estimated by focusing on the costs. It
is indicated by estimating the reconstruction cost of subject property, and deductingfrom it the depreciated value based on physical, functional, external factors.

SA
M

Special purpose business properties with poor profit, of which business had
worsened under the economical depression, could not be sold for the pricecorresponding to their cost in many cases.
Even if the “Value indicated by the Cost approach” could be an "Asking Price"of the transferor, it exceeds the price which enables the transferee’s operating
figures to go well.

Since if the property is not transferred, seller’s deficit would accumulates farther,

the seller’s side is under severe situation that the property must be transferred. Fromthe buyer’s side, the reasonable value would be the "Value indicated by the Income
Approach". Then the price is set by paying large attention to the "Value indicated by
the Income approach".
On the other hand, when applying the Income Approach, the prospect of the
future cash flow would be inevitably accompanied by the problem of uncertainty of
the future business condition.
Scenario (a) is premised on that, under the prolonged depression, sales figures

would continue at low level as same as FY2003 for next 10 years. Scenario (b) ispremised on that, under the Business Restructuring Plan, operating figures would
improve in the future.
19

Business restructuring plan was drawn up after repeated market analysis,
acquisition of new cooperators, introduction of an effective cost reduction policy
and is considered to be persuasive
In this appraisal, Market Approach is not applied directly. But it indicates the sales
price level of hotels under this depression. Those data are corroborating the value
indicated by Income Approach.
The client of this appraisal is a financial institution who considers disposal of thecollateral property of bad loan.

PL
E

Synthetically in consideration of above mentioned items, in this appraisal the“Value indicated by the Income Approach (b)” is considered to be the mostpersuasive.

Then I estimated the market value, as defined, of the subject property to be JPY
2,393,300,000.- (value after deduction of expenditures for transfer and securitySAM

deposit).

In addition, I estimated the land price by using above-mentioned land value ratio

in the Cost Approach, and also estimated the price of building and other properties
by deducting the land price from whole price.
Land

JPY 2,393,300,000 X 35.1% =JPY 840,000,000. -Building and other properties

JPY 2,393,300,000 - JPY 840,000,000 = JPY 1,553,300,000. -(Note)
The forecasts, projections, or operating estimates contained herein are based on
current market conditions, anticipated a continuing depression. These forecasts are,therefore, subject to changes with future conditions.

20

SALES DATA COMPARISON TABLE

Sale Condit-Time ajast-Standard- Market
Property
A×B×C×D×E Standard price
Indicated Value
influences
ions (B) ment (C) izing (D) influences(E)category building site
100
88
100
100
2-123 XXX-cho, XX-ku
92.39㎡
1,011,123
711,831
size
100
100
100
125
JPY/㎡
JPY/㎡
date 2002/12/11①②
category building site
100
94
100
100
87
2-223 XXX-cho, XX-ku
100.77㎡
509,145718,613704,000
612,000
size
90
100
100
74
100
JPY/㎡
JPY/㎡
JPY/㎡
JPY/㎡
date 2003/11/06③④⑪
category building site
100
97
100
100
2-323 XXX-cho, XX-ku
254.29㎡
397,980
680,848
size
100
100
105
54
JPY/㎡
JPY/㎡
date 2004/05/07⑤⑥
category building site
95
100
100
87
Gov. Publishedland price, XX 5-X size
117㎡
886,000－－
551,000
－
100
100
133
100
JPY/㎡
JPY/㎡
JPY/㎡
2004/01/01⑦⑧⑪
5-123 XXX-cho, XX-ku datecategory
95
100
100
87
0
－
－
size
－
100
100
100
100
JPY/㎡
JPY/㎡
JPY/㎡
⑪
date 2004/01/01⑨⑩
Property-specific value influences and standardizing (D)Market-specific value influences (E)Memoranda
Accessi- environ- administAccessi- environ- administment
ment
ration otherrationRoadbilitytotal
Roadbility
site
other
total
100
100
100
100
100
100
100
100
100
100
100
100
100
*1
*4 profitability+20
*5
100
100
100
100
100
100
100
100
100
125
100
100
125
*2
*1
①
*2
*3
*4
*5
②
*3
*3 station -1
100
100
100
100
100
100
100
100
100
100
100
100
100
*1
*4 profitability -5
100
100
100
100
100
100
100
88
99
95
90
100
74
*2
*5 FAR -10*2 road -12
③
④
*1
*5
*3
*4
100
100
100
100
100
100
100
100
100
100
100
100
100
*1 three road +5 *4 profitability-20*5 FAR -17
100
100
100
100
105
100
105
86
95
80
83
100
54
*2 road -14
*1
*2
*3
*4
*5
⑤
⑥
*3 station -5*4 profitability+35
100
100
100
100
100
100
100
100
100
100
100
100
100
*1
*5
100
100
100
100
100
100
100
95
100
140
100
100
133
*2 road -5
⑦
⑧
*3
*2
*3
*4
*5
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
⑨
⑩
100
100
100
100
87
100
87
Memoranda*1 too large -20, three road +7
100
100
100
100
100
100
100
*1
⑪

C
α
β

A
B
C
α
β
Sub.L.

F
a
c
t
o
r
s

Time ajastment

M

B

Sale price
(A)

SA

A

category, size, datePL
E

Lot number

C
o
m
p
a
r
i
s
o
n

Sheet-1

January/01/2002
January/01/2003
January/01/2004～～～

December/31/2002
December/31/2003
September/30/2004- 10.0％- 6.5％- 4.9％

Development Analysis Table (Construction of Condominium)
Sheet-2
1. Plan outline

3. Present Value (PV) Calculation Table
3,095.60 ㎡

Area for Sale

3,095.60 ㎡

Structure and Use

Item （ % ）
I
n
c
o
m
e

SRC・16F2B・Condominium

Total Floor Srea

24,000.00 ㎡

Selling Area

18,500.00 ㎡

Number of Units

250 戸

Average Exclusive Area

210,000 JPY/㎡

Selling Unit Price

495,000 JPY/㎡

Memo(*1) Total Selling Amount

E
x
p
e
n
s
e

(*4) Rate of Return on Investment

12% / year

months0

Planning and 0
Application
Construction

1

2

3

4

5

15 months

0.8679160

794,794,077

〃

0%

0

0 months

1.0000000

0〃

Remainder

8,241,750,000

26 months

0.7822780

6,447,339,707

6

7

8

(*1)

9

1,680,000,000

6 months

0.9449110

1,587,450,480

1,680,000,000

16 months

0.8597570

1,444,391,760〃

Remainder

1,680,000,000

26 months

0.7822780

1,314,227,040

Sub Total(*2)

5,040,000,000

4,346,069,280

Expenses

60%

549,450,000

7 months

0.9360290

514,301,134〃

Remainder

366,300,000

23 months

0.8047580

294,782,855

Land Value

11

(*3)

12

13

14

915,750,000

809,083,989

5,955,750,000(a) - (b) ＝

15

16

17

(ｂ)

JPY 2,086,980,000

18

19

20

21

22

23

(

24

25

26

27

28

29

30

6

6

16

26

start
(payment, 1/3)

(payment, 1/3)

completion(remainder)

15

26（Collection）

start

10%

remainder

723(payment, 60%)

(remainder)

26

Sheet-2

12

0

5,155,153,269

674,000 JPY/㎡ )Sale

Expenses

7,242,133,784

(a)

1 / 3

Total

10

9,157,500,000〃

SA

10% of Total Selling Amount

2. Schedule

915,750,000

Sub Total(*3) Selling, Operating Expenses

Present Value10%

M

JPY 5,040,000,000

PV Rate (*4)

Construction Cost 1 / 3

JPY 9,157,500,000(*2) Total Construction Costs （include
expenses of design, leveling, lifeline)

PeriodIncomeTotal

74.00 ㎡

Construction Unit Cost

Income and Expense

PL
E

Development Area

■ DCF method

Sheet-3（In the case that the same sales level as FY2003 would continue）（Yen）

CategoryYear

1st year

2nd year

3rd year

4th year

5th year

6th year

7th year

8th year

9th year

10th year

Time of resale

IncomeBridal Sales

759,370,000

759,370,000

759,370,000

759,370,000

759,370,000

759,370,000

759,370,000

759,370,000

759,370,000

759,370,000

Banquet Sales

967,554,000

967,554,000

967,554,000

967,554,000

967,554,000

967,554,000

967,554,000

967,554,000

967,554,000

967,554,000

Staying Sales

393,963,000

393,963,000

393,963,000

393,963,000

393,963,000

393,963,000

393,963,000

393,963,000

393,963,000

393,963,000

Restaurant Sales

409,080,000

409,080,000

409,080,000

409,080,000

409,080,000

409,080,000

409,080,000

409,080,000

409,080,000

409,080,000

15,914,000

15,914,000

15,914,000

15,914,000

15,914,000

15,914,000

15,914,000

15,914,000

15,914,000

15,914,000

Rent

34,840,000

34,840,000

34,840,000

34,840,000

34,840,000

34,840,000

34,840,000

34,840,000

34,840,000

34,840,000

Miscellaneous I.

11,197,000

11,197,000

11,197,000

11,197,000

11,197,000

11,197,000

11,197,000

11,197,000

11,197,000

11,197,000

Other Income

643,000

643,000

643,000

643,000

643,000

643,000

643,000

643,000

643,000

643,000

0

0

0

0

0

0

0

0

0

Security deposit
Sub total

250,500,000

PL
E

Parking Sales

250,500,000 2,592,561,000 2,592,561,000 2,592,561,000 2,592,561,000 2,592,561,000 2,592,561,000 2,592,561,000 2,592,561,000 2,592,561,000 2,592,561,000

Expense727,940,000

727,940,000

727,940,000

727,940,000

727,940,000

727,940,000

727,940,000

727,940,000

727,940,000

727,940,000

Personnel Expenses

843,489,000

843,489,000

843,489,000

843,489,000

843,489,000

843,489,000

843,489,000

843,489,000

843,489,000

843,489,000

Operating Expenses

87,924,000

87,924,000

87,924,000

87,924,000

87,924,000

87,924,000

87,924,000

87,924,000

87,924,000

87,924,000

M

Cost of Sales

74,570,000

74,570,000

74,570,000

74,570,000

74,570,000

74,570,000

74,570,000

74,570,000

74,570,000

74,570,000

327,736,000

327,736,000

327,736,000

327,736,000

327,736,000

327,736,000

327,736,000

327,736,000

327,736,000

327,736,000

Equipment Expenses

70,594,000

70,594,000

70,594,000

70,594,000

70,594,000

70,594,000

70,594,000

70,594,000

70,594,000

70,594,000

Real Estate Taxes

52,321,000

52,321,000

52,321,000

52,321,000

52,321,000

52,321,000

52,321,000

52,321,000

52,321,000

52,321,000

Capital Expenditures

250,000,000

100,000,000

100,000,000

100,000,000

100,000,000

100,000,000

100,000,000

100,000,000

100,000,000

100,000,000

Own Security deposit

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

250,500,000

SA

Office Expenses
Management Expenses

Oother Expense
Security deposit
Sub total
Cash Flow (CF)

0 2,434,574,000 2,284,574,000 2,284,574,000 2,284,574,000 2,284,574,000 2,284,574,000 2,284,574,000 2,284,574,000 2,284,574,000 2,535,074,000
250,500,000

157,987,000

307,987,000

307,987,000

307,987,000

307,987,000

307,987,000

307,987,000

307,987,000

CF (present value)

250,500,000

143,624,545

254,534,711

231,395,192

210,359,265

191,235,696

173,850,632

158,046,029

143,678,209

Total CF (present value)

1,910,004,559

Resale price (present value)

911,674,649

57,487,000

130,616,553

22,163,727

Resale price

2,821,700,000 （Total CF (present value)＋Resale price (present value)）-438,250,565

Capitalization rate

Taken over security deposit-250,500,000

Rate of growth

0.0%

2,132,900,000

Terminal risk rate

2.0%

10.0% (after considering the profit belonging to the management)

292,987,000
2,364,649,246

Sheet-3

Indicated value
Purchaser's expense
Indicated value（sale price）

307,987,000

■ DCF method

Sheet-4（In the case that under the Business Restructuring Plan, management would improve in the future.）（Yen）

CategoryYear

1st year

2nd year

3rd year

4th year

5th year

6th year

7th year

8th year

9th year

10th year

Time of resale

IncomeBridal Sales

800,000,000

775,000,000

750,000,000

725,000,000

700,000,000

700,000,000

700,000,000

700,000,000

700,000,000

700,000,000

Banquet Sales

960,000,000

910,000,000

860,000,000

860,000,000

860,000,000

860,000,000

860,000,000

860,000,000

860,000,000

860,000,000

Staying Sales

450,000,000

430,000,000

410,000,000

410,000,000

410,000,000

410,000,000

410,000,000

410,000,000

410,000,000

410,000,000

Restaurant Sales

400,000,000

400,000,000

400,000,000

400,000,000

400,000,000

400,000,000

400,000,000

400,000,000

400,000,000

400,000,000

16,000,000

16,000,000

16,000,000

16,000,000

16,000,000

16,000,000

16,000,000

16,000,000

16,000,000

16,000,000

Rent

35,000,000

35,000,000

35,000,000

35,000,000

35,000,000

35,000,000

35,000,000

35,000,000

35,000,000

35,000,000

Miscellaneous I.

11,000,000

11,000,000

11,000,000

11,000,000

11,000,000

11,000,000

11,000,000

11,000,000

11,000,000

11,000,000

Other Income

500,000

500,000

500,000

500,000

500,000

500,000

500,000

500,000

500,000

500,000

0

0

0

0

0

0

0

0

0

Security deposit
Sub total

250,500,000

PL
E

Parking Sales

250,500,000 2,672,500,000 2,577,500,000 2,482,500,000 2,457,500,000 2,432,500,000 2,432,500,000 2,432,500,000 2,432,500,000 2,432,500,000 2,432,500,000

Expense801,098,901

776,064,560

751,030,220

725,995,879

700,961,538

700,961,538

700,961,538

700,961,538

700,961,538

700,961,538

Personnel Expenses

778,000,000

760,000,000

754,000,000

752,000,000

750,000,000

750,000,000

750,000,000

750,000,000

750,000,000

750,000,000

Operating Expenses

85,000,000

77,000,000

72,000,000

72,000,000

72,000,000

72,000,000

72,000,000

72,000,000

72,000,000

72,000,000

M

Cost of Sales

61,000,000

59,000,000

57,000,000

57,000,000

57,000,000

57,000,000

57,000,000

57,000,000

57,000,000

57,000,000

320,000,000

309,000,000

309,000,000

309,000,000

309,000,000

309,000,000

309,000,000

309,000,000

309,000,000

309,000,000

Equipment Expenses

67,000,000

66,000,000

66,000,000

66,000,000

66,000,000

66,000,000

66,000,000

66,000,000

66,000,000

66,000,000

Real Estate Taxes

52,000,000

52,000,000

52,000,000

52,000,000

52,000,000

52,000,000

52,000,000

52,000,000

52,000,000

52,000,000

Capital Expenditures

250,000,000

100,000,000

100,000,000

100,000,000

100,000,000

100,000,000

100,000,000

100,000,000

100,000,000

100,000,000

Own Security deposit

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

250,500,000

SA

Office Expenses
Management Expenses

Oother Expense
Security deposit
Sub total
Cash Flow (CF)

0 2,414,098,901 2,199,064,560 2,161,030,220 2,133,995,879 2,106,961,538 2,106,961,538 2,106,961,538 2,106,961,538 2,106,961,538 2,357,461,538
250,500,000

258,401,099

378,435,440

321,469,780

323,504,121

325,538,462

325,538,462

325,538,462

325,538,462

CF (present value)

250,500,000

234,910,090

312,756,562

241,525,004

220,957,667

202,133,772

183,757,975

167,052,704

151,866,095

Total CF (present value)

2,132,450,531

Resale price (present value)

966,288,753

75,038,462

138,060,086

28,930,575

Resale price

3,098,700,000 （Total CF (present value)＋Resale price (present value)）-454,899,015

Capitalization rate

Taken over security deposit-250,500,000

Rate of growth

0.0%

2,393,300,000

Terminal risk rate

2.0%

10.0% (after considering the profit belonging to the management)

310,538,462
2,506,304,167

Sheet-4

Indicated value
Purchaser's expense
Indicated value（sale price）

325,538,462

Sheet-5

Transition of assets and liabilities, profit and loss, cash flow

Since this report is a sample,

SA
M

PL
E

this page is intentionally excluded.

Sheet-6- P.1

Depreciable Assets List
March 31, 2003

Building made of steel-reinforced-concrete B1F 13F
GardenPavement
Anti-electric-wave-obstruction facilities
JR XX station signboard
JR YY station signboard
Electric power incoming units, transformation units
Electric power generating unit
Storage battery
Electric installation
Water supply, drainage and plumbing installation
Gas applianceAir conditioning installation
Elevator
Escalator
Escalator hand rail
Escalator hand rail coping
Fire fighting, smoke eliminating, fire alarm equipments
Multi-storey parking facility
Multi-storey parking chain girdle
Building inside cable TV equipment
Building inside broadcast equipment
Purchasing Division office
Heating installation
Dumb waiter
Interphone equipment
Guest rooms visual display unit
Bathing installation
Tents for shops
Woolen carpet replacement ( corridor)
Woolen carpet replacement ( corridor)
ScreenScreenCarpet replacemen
Baton lifting equipment
Chandelier
Curtain replacement
Chandelier
Chandelier
Chandelier
Woolen carpet replacement
Rolling screen
Chandelier
Sliding wall ｒepair
Sliding wall ｒepair
Sliding wall ｒepair
Electromotive curtain
Telephone switchboard
Frozen refrigeration room
Cold room
Frozen refrigeration room
Frozen refrigeration room
Refrigeration room
Cooling water equipment
Exterior aluminum panel wall
kitchen partition

SA
M

Building
Equipments
Equipments
Equipments
Equipments
Equipments
Equipments
Equipments
Equipments
Equipments
Equipments
Equipments
Equipments
Equipments
Equipments
Equipments
Equipments
Equipments
Equipments
Equipments
Equipments
Equipments
Equipments
Equipments
Equipments
Equipments
Equipments
Equipments
Equipments
７F guest rooms
12F guest rooms
2F banquet hall
5,6F banquet rooms
5,6F lobbies
Western Cuisine 2
Western Cuisine 2
Western Cuisine 2
1F stairs
1F lobby front desk
1F lobby entrance
1F lobby
1F
2F banquet hall
2F banquet hall
5F banquet rooms
6F banquet rooms
6F banquet rooms
Tel operation room
B3
B3 Japanese Cuisine
B3 Chinese Cuisine
B3Western Cuisine
2F pantry
6F roof top
6F roof top
B3 Japanese Cuisine

1991/12
1991/12
1991/12
1997/11
1999/04
1999/07
1991/12
1991/12
1991/12
1991/12
1991/12
1991/12
1991/12
1991/12
1991/12
1992/05
1992/08
1991/12
1991/12
1997/02
1991/12
1991/12
1993/01
1991/12
1991/12
1991/12
1991/12
1991/12
1991/12
1996/05
1996/05
1991/12
1991/12
1996/08
1991/12
1991/12
1996/07
1991/12
1991/12
1991/12
1996/07
1997/02
1991/12
1997/01
1991/12
1991/12
1991/12
1991/12
1991/12
1991/12
1991/12
1991/12
1991/12
1991/12
1997/01
1991/12

47.0
20.0
10.0
10.0
10.0
10.0
15.0
15.0
6.0
15.0
15.0
15.0
15.0
17.0
15.0
15.0
15.0
8.0
15.0
15.0
18.0
6.0
10.0
15.0
17.0
6.0
15.0
15.0
3.0
3.0
3.0
5.0
5.0
3.0
17.0
15.0
3.0
15.0
15.0
15.0
3.0
15.0
15.0
3.0
15.0
15.0
15.0
10.0
26.0
26.0
26.0
26.0
26.0
15.0
3.0
3.0

PL
E

Category(Depreciation is suspended because of management aggravation.)
Acquisitio Usefu
AssetsAgen datel life(JPY, Year)Acquisition
cost

Book value

11.0 5,819,969,751
11.0
9,695,134
11.0
5,133,104
5.0
7,745,850
4.0
1,730,500
3.0
3,318,500
11.0
52,761,880
11.0
31,693,947
11.0
10,448,544
11.0 419,953,497
11.0 372,177,877
11.0
75,488,750
11.0 834,520,154
11.0 194,241,402
11.0
65,335,907
10.0
5,839,383
10.0
656,11311.0 163,350,861
11.0 137,352,076
6.0
2,600,000
11.0
16,291,589
11.0
24,005,495
10.0
2,600,000
11.0
11,199,276
11.0
2,063,734
11.0
2,430,222
11.0
7,553,736
11.0
4,568,357
11.0
487,4176.0
1,367,114
6.0
1,367,114
11.0
4,104,964
11.0
2,188,303
6.0
9,498,800
11.0
6,815,072
11.0
2,582,581
6.0
1,052,800
11.0
705,72811.0
5,135,645
11.0
2,166,625
6.0
1,600,000
6.0
6,500,000
11.0
17,736,310
6.0
200,000
11.0
4,525,101
11.0
4,874,449
11.0
2,107,973
11.0
19,950,000
11.0
6,273,789
11.0
3,199,680
11.0
4,349,150
11.0
7,242,145
11.0
2,381,045
11.0
12,112,033
6.0
350,000
11.0
311,053

4,583,291,027
4,750,616
513,310
3,969,751
1,107,520
2,198,507
17,073,748
10,256,163
1,044,854
135,896,955
120,436,769
24,428,366
270,050,734
78,560,371
21,142,706
2,035,611
238,563
16,335,086
44,447,132
1,647,360
7,108,569
2,400,550
260,000
3,624,090
834,675
243,0222,444,395
1,478,324
48,742
136,711
136,711
410,496
218,830
949,880
2,756,340
835,725
105,280
228,374
1,661,896
701,125
160,000
4,118,400
5,739,474
20,0001,464,328
1,577,373
682,145
1,995,000
3,794,296
1,935,122
2,630,298
4,379,939
1,440,023
3,919,458
35,00031,105

Sheet-6- P.2

Sign board
Seawater cooler
Japanese Cuisine equipment
kitchen equipments
kitchen equipments
Filter cleaning
Porch signal lamp
Partition
Special lighting device
Special lighting device
Woolen carpet replacement
Wall cloth replacement
Wall cloth replacement
Special lighting device
Lighting device addition
Woolen carpet replacement
Wall cloth replacement
Wall cloth replacement
Sound equipments
Wireless microphone equipment
Sound equipments
Sound equipments
VTR equipment
Simultaneous interpretation equipments
Wall cloth replacement
Movable partitions
Movable partitions
Movable partitions
Movable partitions
Kitchen equipments
Partition
Kitchen equipments
Partition
Kitchen equipments
Partition
Kitchen equipments
Air conditioner
Kitchen equipments
Kitchen equipments
Kitchen equipments
Pantry repair
Kitchen equipments
Kitchen equipments
Carpet replacement
RepairSound equipments
Sound equipments
Kitchen equipments
Kitchen equipments
Equipments addition
Kitchen equipments
Carpet replacement
Curtain replacement
Mirror replacement
Counter repair
Equipments addition
Kitchen equipments
Labor Union office remodeling
Napping room partition
Napping room partition

SAM

B3 Japanese Cuisine
B3 Japanese Cuisine
B1 Japanese Cuisine
B3 Western Cuisine
B3 Japanese Cuisine
B3 Japanese Cuisine
B3 Japanese Cuisine
tel switchboard
2F banquet hall
3F banquet rooms
3F banquet rooms
5F banquet rooms
5F banquet rooms
6F banquet rooms
6F banquet rooms
6F banquet rooms
6F lobbies
6F banquet rooms
2F banquet hall
2F banquet hall
5F banquet rooms
6F banquet rooms
Banquet rooms
Banquet rooms
2F banquet rooms
2F banquet hall
2F foyer
2F waiting room
5F banquet rooms
Japanese Cuisine
Japanese Cuisine
Chinese Cuisine
Chinese Cuisine
Western Cuisine
Western Cuisine
2F pantry
2F pantry
5F pantry
6F pantry
6F pantry
6F pantry
Chinese Cuisine 2
Chinese Cuisine 3
Chinese Cuisine 3
B1 Golden room
B1 Golden room
B1 Golden room
1F Western Cuisine 2
1F Western Cuisine 2
Bakery14F Cofee House 2
14F Cofee House 2
Cofee House 2
Cofee House 2
Cofee House 2
Variety shop
B2 dining-room
B2
B2
B2

1991/12
1991/12
1991/12
1991/12
1991/12
1991/12
1991/12
1992/03
1991/12
1991/12
1995/08
1996/06
1996/08
1991/12
1992/04
1995/08
1996/05
1996/06
1991/12
1995/08
1991/12
1991/12
1991/12
1991/12
1996/11
1991/12
1991/12
1991/12
1991/12
1991/12
1991/12
1991/12
1991/12
1991/12
1991/12
1991/12
1995/07
1991/12
1991/12
1991/12
1995/07
1991/12
1991/12
1994/11
1996/09
1996/11
1996/11
1991/12
1991/12
1991/12
1991/12
1995/05
1996/05
1996/05
1996/08
1991/12
1991/12
1992/06
1997/01
1997/01

3.0
10.0
15.0
15.0
15.0
15.0
15.0
3.0
15.0
15.0
3.0
3.0
3.0
15.0
15.0
3.0
3.0
3.0
15.0
15.0
15.0
15.0
6.0
6.0
3.0
15.0
15.0
15.0
15.0
15.0
3.0
15.0
3.0
15.0
3.0
15.0
15.0
15.0
15.0
15.0
15.0
15.0
15.0
3.0
15.0
15.0
15.0
15.0
15.0
15.0
15.0
3.0
3.0
3.0
3.0
15.0
15.0
15.0
15.0
15.0

PL
E

Category(Depreciation is suspended because of management aggravation.)
Acquisitio Usefu
AssetsAgen datel life
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
7.0
6.0
6.0
11.0
11.0
7.0
6.0
6.0
11.0
7.0
11.0
11.0
11.0
11.0
6.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
7.0
11.0
11.0
11.0
7.0
11.0
11.0
8.0
6.0
6.0
6.0
11.0
11.0
11.0
11.0
7.0
6.0
6.0
6.0
11.0
11.0
10.0
6.0
6.0

(JPY, Year)Acquisition
cost

Book value

1,329,305
211,072
436,607
77,34890,642
438,000
278,000
207,319
31,971,462
8,530,626
3,360,000
1,570,000
684,720
6,879,505
317,476
2,730,000
364,000
800,000
38,616,287
5,980,000
7,074,242
3,921,095
27,438,282
139,537
869,240
69,972,139
31,101,294
609,591
5,451,151
1,747,169
2,412,041
3,224,877
447,6022,470,903
628,774
1,013,198
2,950,000
112,974
930,216
153,041
13,340,000
42,376,709
26,558,292
1,550,000
21,700,000
643,690
721,359
785,125
116,000
22,663,013
1,496,398
2,581,000
1,890,000
485,300
468,000
3,023,687
797,345970,000
500,000
980,000

132,931
21,107141,290
25,032
29,331
141,738
89,962
20,732
10,345,969
2,760,510
336,000
157,000
68,4722,226,212
109,084
273,000
36,40080,00012,496,234
3,370,328
2,289,229
1,268,866
2,743,828
13,95486,924
22,642,986
10,064,383
197,269
1,763,995
565,389
241,204
1,043,573
44,760799,589
62,877
327,876
1,633,120
36,564
301,023
49,5297,385,024
13,713,109
8,594,265
155,000
13,206,620
398,188446,237
254,071
37,5407,333,756
484,234
258,100
189,000
48,53046,800978,467
258,022
342,992
314,300
616,028

Sheet-6- P.3

Repair (General Affairs Division, Accounting Division)
Anti-disaster equipments (office, dressing room)
Repair (General sales information desk)
Sprinkler attachment
Repair (locker room)
Woolen carpet attachment
Bill-board attachment
Fish grill machine replacement
Air-conditioner addition
Air-conditioning outlet replacement
Curtain replacement
Carpet replacement
Carpet replacement
Sound isolation work
Prefab storeroom
Sludge deposit equipment
Bell desk repair
Carpet replacement
Interior work
Sound proof wall
Sliding wall Repair
Air-conditioner addition
Air-conditioner addition
Signboard attachment (entrance)
Woolen carpet replacement
Wall paper replacement
Repair (Wireless microphone equipment)
Kitchen drain pipe works
Wall cloth replacement (corridor)
Interior work
Air conditioner replacement
Air conditioner replacement
Room air conditioner attachment
Repair (Elevator hall)
RepairRepair (corridor)
Wall cloth replacement (hall)
Wall cloth replacement (hall lobby)
Power transformer addtion
Wall cloth replacement (wellhole)
Wall cloth replacement (corridor)
Wall cloth replacement (hall)
Wall cloth replacement (corridor ceiling)
Wall cloth replacement (corridor ceiling)
Carpet replacement (corridor)
Repair (chapel)
Interior work
Video projector repair
Repair (chandelier)
Carpet replacement (hall)
warmer table replacement
Hall sliding wall repair
Wall cloth replacement (ceiling)
Interior work
Carpet replacement
Remodeling
Carpet replacement
Building management system CRTmonitor replacement
Wall cloth replacement (ceiling, wall)
Wall cloth replacement (hall, lobby, ceiling)

SA
M

B2
B2
3F
3F
2F
2F 3F
2F 3F
B3 Japanese Cuisine
Western Cuisine 2
6F banquet rooms
Cofee House 2
Emergency staircase
14F corridor
3F chapel
4F roof top
B3
Hotel
Cofee House 3
2F banquet hall
3F office room
2F banquet hall
3F waiting room
3F office room
3F office room
Western Cuisine 2
2F banquet hall
5F6F banquet rooms
Western Cuisine 2
14F
Chinese Cuisine3
B3
1FWestern Cuisine 2
1F drivers room
14F
Cofee House 2
14F
2F banquet rooms
1F
B3
1F to 4F
7F12F guest rooms
3F
6F guest rooms
3F
3F
3F
Chinese Cuisine2
2F banquet rooms
2F banquet rooms
3F
14F kitchen
3F
3F Sky Room
3F waiting room
3F waiting room
2F Ocean Room
2F Ocean Room
B3
Emergency staircase
5F

1994/11
1997/01
1993/04
1995/07
1993/04
1994/08
1997/04
1997/04
1997/05
1997/05
1997/05
1997/05
1997/05
1997/06
1997/06
1997/06
1997/06
1997/07
1997/08
1997/08
1997/08
1997/08
1997/08
1997/08
1997/08
1997/08
1997/08
1997/12
1998/05
1998/05
1998/05
1998/05
1998/05
1998/05
1998/05
1998/05
1998/06
1998/06
1998/06
1998/07
1998/08
1998/08
1998/08
1998/08
1998/08
1998/08
1998/08
1998/08
1998/08
1998/08
1998/08
1998/11
1998/11
1998/11
1998/11
1998/12
1998/12
1999/01
1999/04
1999/04

15.0
15.0
15.0
8.0
15.0
3.0
10.0
10.0
13.0
15.0
3.0
3.0
3.0
10.0
15.0
15.0
5.0
3.0
3.0
10.0
3.0
15.0
15.0
10.0
3.0
3.0
15.0
15.0
3.0
15.0
15.0
15.0
15.0
3.0
10.0
3.0
3.0
3.0
15.0
3.0
3.0
3.0
3.0
3.0
3.0
15.0
15.0
15.0
15.0
3.0
15.0
3.0
3.0
3.0
3.0
3.0
3.0
15.0
3.0
3.0

PL
E

Category(Depreciation is suspended because of management aggravation.)
Acquisitio Usefu
AssetsAgen datel life
8.0
6.0
10.0
7.0
10.0
8.0
6.0
6.0
5.0
5.0
5.0
5.0
5.0
5.0
5.0
5.0
5.0
5.0
5.0
5.0
5.0
5.0
5.0
5.0
5.0
5.0
5.0
5.0
4.0
4.0
4.0
4.0
4.0
4.0
4.0
4.0
4.0
4.0
4.0
4.0
4.0
4.0
4.0
4.0
4.0
4.0
4.0
4.0
4.0
4.0
4.0
4.0
4.0
4.0
4.0
4.0
4.0
4.0
4.0
4.0

(JPY, Year)Acquisition
cost

Book value

2,150,000
1,150,000
3,884,840
2,875,000
920,160
19,190,000
1,566,580
2,300,000
2,280,000
2,100,000
765,000
780,233
473,800
1,100,000
470,000
15,500,000
351,000
648,000
3,387,600
1,430,000
5,590,000
4,650,000
3,580,000
3,800,000
1,998,200
33,556,844
3,500,000
1,827,000
477,000
3,800,000
5,750,000
3,700,000
330,000
252,960
815,100
468,720
2,620,470
885,240
7,700,000
1,084,419
3,406,800
1,337,990
477,280
224,400
3,834,000
50,160,000
13,500,000
6,500,000
5,800,000
653,400
660,000
1,100,000
548,540
500,000
1,436,400
3,007,860
561,680
1,432,540
1,202,156
1,245,533

1,071,990
722,890
1,567,926
449,222
371,378
1,919,000
721,528
1,058,000
1,357,284
1,361,955
76,50078,02347,380522,500
307,145
10,129,250
35,10064,800338,760
700,700
559,000
3,084,810
2,374,972
1,862,000
199,820
3,355,684
2,321,900
1,248,211
47,7002,690,210
4,070,713
2,619,415
233,534
25,296454,419
46,872
262,047
88,524
5,489,330
108,441
340,680
133,799
47,72822,440383,400
36,255,648
9,757,800
4,698,200
4,192,240
65,340483,582
110,000
54,85450,000143,640
300,786
56,1681,070,899
120,215
124,553Sheet-6- P.4

Receiving power board UGS switch
Wall cloth replacement (guest rooms ceiling, wall)
Alkali ion water purifier
Alkali ion water purifier
Kitchen steamer replacement
Wall cloth replacement (guest rooms ceiling, wall)
Wall cloth replacement (banquet rooms)
Roll curtain
Repair (guest room toilets)
Repair (corridor)
Wall cloth replacement (corridor)
Corridor wall repair
Drain pipe works
Carpet repair
Machine room water storage tank
Wall cloth replacement (guest rooms ceiling, wall)
Carpet replacemen (guest rooms)
Guide plate (waiting room)
Entrance lighting equipment
Electric wiring attachment
Spring water drainage pump
Air conditioner replacement
Repair (dressing room, waiting room)
Wall cloth replacement (ceiling , wall)
Heat exchanger repair
Kitchen steamer replacement
Multi-pipe type flowing-through boiler
Storage battery replacement
Alkali ion water purifier
Alkali ion water purifier
Repair (lobby and Japanese-style room)
Western Cuisine 2 electric wire repair
Fire-fighting installation, Electric installation
Multi-pipe type flowing-through boiler
Kitchen Repair
Chinese Cuisine 3 remodelingWestern Cuisine 2 repair
Repair (lobby)
Power supply addition
Banquet rooms repair
Banquet rooms repair
Extension work (office room)
Office room partition
RepairRepair (lobby)
Chapel repair
Roof top repair
Air conditioner replacement
Air conditioner replacement
Sprinkler installation
Interior repair
Repair (wedding waiting room)
Exhaust equipment
Room air conditioner replacement
Fire-fighting installation repair
Repair (guest rooms)
Interior work (banquet hall lobbies)
Interior work (elevator front)
Interior work (waiting room)
Repair (air duct)

SA
M

1F
7F to 10F
Western Cuisine 2
Chinese Cuisine3
Chinese Cuisine2
11F to 14F
5F
Western Cuisine 2
1F to 3F
3F
3F
3F
3F
3F
B3F
7F to 14F
6F to 14F
2F3F
1F
Hotel
B3F
1F lobbies
B2F
3F banquet rooms
14F roof top
Chinese Cuisine
B3F
B3F
2F banquet rooms
5F pantry
6F
1F
B1F
B3F
B1 Chinese Cuisine3
B1F
Western Cuisine 2
1F
Western Cuisine 2
2F
2F
Shopping Arcade
B2F
Western Cuisine 2
3F
3F
3F
6F banquet rooms
5F banquet rooms
1F
6F banquet rooms
3F
B2F
B2F
B2F
B2F
2F
6F
2F
Chinese Cuisine

1999/04
1999/05
1999/05
1999/05
1999/05
1999/05
1999/06
1999/06
1999/08
2000/04
2000/04
2000/04
2000/04
2000/04
2000/04
2000/05
2000/05
2000/05
2000/05
2000/05
2000/07
2000/08
2000/08
2000/08
2000/09
2000/12
2001/03
2001/04
2001/04
2001/04
2001/04
2001/08
2001/08
2001/06
2001/08
2001/08
2001/08
2001/09
2001/11
2001/11
2001/12
2001/12
2002/04
2002/04
2002/04
2002/04
2002/05
2002/05
2002/05
2002/05
2002/05
2002/06
2002/07
2002/07
2002/07
2002/07
2002/09
2002/09
2002/09
2002/09

15.0
3.0
5.0
5.0
5.0
3.0
3.0
3.0
15.0
10.0
3.0
10.0
10.0
3.0
15.0
3.0
3.0
15.0
15.0
10.0
15.0
12.0
3.0
3.0
15.0
5.0
15.0
6.0
5.0
5.0
15.0
15.0
15.0
15.0
15.0
15.0
15.0
15.0
6.0
3.0
3.0
15.0
15.0
15.0
15.0
15.0
15.0
15.0
15.0
15.0
15.0
15.0
15.0
15.0
15.0
15.0
15.0
15.0
15.0
15.0

PL
E

Category(Depreciation is suspended because of management aggravation.)
Acquisitio Usefu
AssetsAgen datel life
4.0
3.0
3.0
3.0
3.0
3.0
3.0
3.0
3.0
3.0
3.0
3.0
3.0
3.0
3.0
2.0
2.0
2.0
2.0
2.0
2.0
2.0
2.0
2.0
2.0
2.0
2.0
2.0
2.0
2.0
2.0
1.0
1.0
1.0
1.0
1.0
1.0
1.0
1.0
1.0
1.0
1.0
1.0
1.0
1.0
1.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0

(JPY, Year)Acquisition
cost

Book value

2,360,640
3,938,660
160,000
670,000
428,400
3,401,520
1,640,000
686,400
32,400,000
960,400
157,500
1,460,000
210,000
153,750
3,253,257
10,551,550
18,927,100
589,000
1,980,000
161,000
506,800
16,939,000
2,650,000
1,401,200
4,485,000
400,000
8,852,400
3,319,650
484,000
475,000
6,011,860
947,000
2,486,060
8,852,400
1,780,000
39,000,000
5,255,000
6,850,000
495,000
891,400
1,036,040
1,160,000
766,640
2,350,000
5,039,600
853,800
250,000
8,114,490
8,542,740
1,650,000
5,220,601
1,582,240
350,000
550,000
220,000
3,000,000
25,993,165
1,145,000
2,763,010
1,900,000

1,799,752
393,866
47,200197,650
126,378
340,152
164,000
68,64023,399,280
701,092
15,894
1,065,800
153,300
15,516
2,673,528
1,328,178
2,382,451
486,957
1,636,965
118,738
424,017
13,564,752
532,120
281,363
3,796,777
232,000
7,756,917
2,327,740
309,760
304,000
5,297,652
853,248
2,239,942
7,888,375
1,603,780
35,139,000
4,734,755
6,205,758
390,234
512,935
622,039
1,068,128
721,1022,210,410
4,740,248
803,085
236,388
7,672,657
8,077,588
1,560,158
4,936,340
1,503,920
334,408
525,498
210,199
2,866,350
25,092,502
1,105,326
2,667,272
1,834,165

Sheet-6- P.5
Category
14F
Western Cuisine 2
3F
1F
2F banquet rooms
5F
1F
Western Cuisine 2
Western Cuisine 2
5F
2F
Cofee House 2
Chinese Cuisine 3
1F
1F
1F
Cofee House 2(Depreciation is suspended because of management aggravation.)
Acquisitio Usefu
AssetsAgen datel lifeKitchen air conditioner replacement
RepairRepair (sales office room)
Woolen carpet replacement (revolving door)
Interior work
Repair (Forest Room, lobby)
Gardening (entrance)
Gas fryer replacement
Signboard (entrance)
Interior work (Forest Room, lobby)
Interior work (lobby)
Interior work
Steamer replacement
Artificial trees (entrance)
Exterior tent repair
Artificial trees (lobby)
Ceiling lighting equipment replacement

2002/09
2002/11
2002/12
2002/11
2003/01
2003/01
2003/01
2003/01
2003/01
2003/01
2003/01
2003/01
2003/02
2003/03
2003/03
2003/03
2003/03
1902/12

15.0
15.0
15.0
3.0
15.0
15.0
15.0
15.0
15.0
15.0
15.0
15.0
15.0
15.0
15.0
15.0
15.0

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Total

0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0

(JPY, Year)Acquisition
cost

Book value

385,000
6,837,000
490,000
503,250
1,554,945
696,000
499,000
175,000
386,000
4,300,000
2,000,000
2,995,880
400,000
300,000
296,000
650,000
993,000

371,660
6,667,785
480,298
440,407
1,531,855
685,665
491,590
172,402380,268
4,236,145
1,970,300
2,951,392
396,040
298,515
294,535
646,783
988,085

9,366,512,275

5,869,787,568

Area map, Residential map,
Public sectional map, Building drawing, Photographs

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Since this report is a sample, pages ofMaps
Public sectional map, Building drawings, Photographs
are intentionally excluded.

Certification

I certify to the best of my knowledge and belief that:

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1. The statements of fact contained in this report are true and correct.
2. The reported analyses, opinions, and conclusions are limited only by the reported
assumptions and limiting conditions, and are my personal impartial, and unbiased
professional analyses, opinions, and conclusions.
3. I have no present or prospective interest in the property that is the subject of thisreport, and no personal interest with respect to the parties involved.
4. I have no bias with respect to the property that is the subject of this report or to theparties involved with this assignment.
5. My engagement in and compensation for this assignment were not contingent upondeveloping or reporting predetermined results, the amount of the value estimate, or aconclusion favoring the client.
6. My analyses, opinions, and conclusions were developed, and this report has been
prepared in conformity with the Uniform Standards of Professional Appraisal Practice.
7. I have the knowledge and experience to complete the assignment competently.
8. No one provided significant professional assistance to the person(s) signing thisreport.

Signature:

Takashi Yamaguchi

Date of certification: September 15, 2004