Make The World
More Sustainable[Provisional Translation Only]
This English translation of the original Japanese document is provided solely for information purposes.
Should there be any discrepancies between this translation and the Japanese original, the latter shall prevail.

April 26, 2024
IssuerIchigo Office REIT Investment Corporation (“Ichigo Office,” 8975)
2-6-1 Marunouchi, Chiyoda-ku, Tokyo
Representative: Keisuke Chiba, Executive Director
www.ichigo-office.co.jp/en
Asset Management Company
Ichigo Investment Advisors Co., Ltd.
Representative: Hiroshi Iwai, President
Inquiries: Yuji Kamo, Head of Ichigo OfficeTel: +81-3-4485-5231

Sale of Two Portfolio Assets(Ichigo Ofuna Building, Ichigo Kudan 2 Chome Building)
Ichigo Office decided today to sell two assets, the Ichigo Ofuna Building and Ichigo Kudan
2 Chome Building.
1. Asset Sales Summary(Total Appraisal Value: JPY 3,360 million, Total Sale Price: JPY 4,470 million)
O-18
Asset Number
O-56
Ichigo Kudan 2 ChomeAsset Name
Ichigo Ofuna Building
BuildingOfficeOffice
Asset Type
Date Built

April 3, 1973

Legal Form of Asset

Trust beneficiary interest in real estate (juekiken)

Date Acquired

December 5, 2014

November 1, 2011

Buyer1Broker

Third-Party JapaneseCompany
Third-Party Broker

Third-Party JapaneseCompany
Third-Party Broker

Sale Price2 (A)JPY 2,420 million

JPY 2,050 million

Book Value3 (B)Sale Price vs. Book
Value 4(A) – (B)Gains on Sale

JPY 1,981 million

JPY 750 million

JPY 438 million

JPY 1,299 million

JPY 260 million

JPY 1,060 million

Appraisal Value5

JPY 2,180 million

JPY 1,180 million

Contract Date

April 26, 2024

April 26, 2024

Closing Date

April 26, 2024

October 31, 20241November 6, 1997

1The buyers, third-party Japanese companies, did not provide consent to disclose theirnames.
2
Sale Price is the sale price of the asset excluding incidental expenses such as fees andproperty, city planning, and consumption taxes.
3Book Value is an estimate based upon the most recent book value (October 2023 fiscal
period-end), adjusted for expected capital expenditures and depreciation through theClosing Date.
4
The difference between the Sale Price and Book Value is not equal to the gains on salefrom today’s sale.
5Appraisal Value is calculated by Tanizawa Sogo Real Estate Appraisal as of October
31, 2023, pursuant to the appraisal guidelines stipulated in Ichigo Office’s Articles ofIncorporation and the rules of the Investment Trusts Association of Japan.
2. Sales Rationale
Ichigo Office continues to work to improve the quality of its portfolio and drive
earnings by focusing its portfolio on high-quality, mid-size office assets that generate
stable cash flow.
Of the two assets being sold today, the Ichigo Ofuna Building is an office building
located in Kamakura City in Kanagawa Prefecture near Yokohama, and is a threeminute walk from Ofuna Station on the JR and Shonan Monorail Lines.
Since Ichigo Office’s acquisition in 2014, the building had been fully occupied due toits attractive location near a train station. Although a major bank tenant departed on
December 31, 2022 due to a branch reorganization, Ichigo Office successfully leased up
part of the vacant space to a new store tenant searching for a convenient location andhas maintained 85% occupancy since re-tenanting.
After exploring options to sell the building based on the policy described above, Ichigo
Investment Advisors (“IIA”) decided to accept an offer from the buyer for a price thatexceeds book value and the recent appraisal value. The buyer recognized the building’s
convenient location and potential to attract retail tenants in the service industry.
The second asset being sold today is the Ichigo Kudan 2 Chome Building, a highly
visible office building located an eight-minute walk from Ichigaya Station on the JRSobu Line and a nine-minute walk from Kudanshita Station on the Tokyo Metro andToei Subway Lines. After the building’s sole tenant occupying the entire building
departed in February 2022, Ichigo Office conducted value-add renovations of theentrance and common areas on each floor, and successfully leased up the building to a
new tenant in August 2022 with a 38.5% increase in rent.
As a result, the building’s appraisal value increased by 25.9% from JPY 937 million asof April 30, 2022 to JPY 1,180 million as of October 31, 2023. Please refer to Driving
Growth via Value-Add Capex (Ichigo Kudan 2 Chome Building) on the next page fordetails.
Given that the new tenant’s rent is near the upper limit of rent in the area, IIA
determined that it would be difficult to further increase rent. As such, after exploring
options to sell the building based on its policy described above, IIA decided to accept anoffer from the buyer for a price that is 2.7 times book value and 1.7 times recent
appraisal value. The buyer recognized the building’s convenient location in a quiet
neighborhood in central Tokyo.
IIA decided that the sale of this asset would drive long-term shareholder value in lightof anticipated increases in capital expenditures required for repairs and facility upgrades
to maintain and drive the building’s competitiveness, and the uncertain outlook for rent2levels in the area.
With these asset sales, Ichigo Office’s post-transaction portfolio will be 97.6% officeassets. Ichigo Office will use the proceeds from the asset sales for strategic investments
such as asset acquisitions and value-add capex.
Driving Growth via Value-Add Capex (Ichigo Kudan 2 Chome Building)-February 2022: Departure of sole tenant that occupied the entire building since
Ichigo Office’s acquisition due to tenant moving to its parent company office-Ichigo Office conducted value-add to renovate building entrance and common areas
to achieve re-tenanting at a higher rent (Value-add capex: JPY 34 million)-August 2022: Leased up entire building to a new tenant occupying the entirebuilding with a 38.5% increase in rent

Entrance (Before)

Entrance (After)

Elevator Hall (After)
Outcomes
Occupancy
Feb 28, 2022
100%
Mar 31, 2022

0%

Aug 31, 2022

100%

Mar 31, 2024

100%NOI2021
JPY 45M(Beforep.a.
Re-tenanting)2023
JPY 63M(Afterp.a.
Re-tenanting)3

Appraisal Value
Apr 2022
JPY 937M
Oct 2022

JPY 1,160M

Apr 2023

JPY 1,160M

Oct 2023

JPY 1,180M

3. Asset Details(1) Ichigo Ofuna Building
Asset Name
Form of Ownership
Location
Trust Beneficiary
Trust Beneficiary Period
Property Right
Area
Land
ZoningCoverage Ratio
Floor Area Ratio
Property Right
Use
Building Structure
Total Floor Area
Date Built
Number of Tenants
Monthly Rental IncomeTenant Security Deposits
Leasable Area
Leased AreaOccupancy
Acquisition PriceAppraiser
Appraisal
Appraisal Date
Value
Appraisal Value

Asset Overview
Ichigo Ofuna Building
Trust beneficiary interest in real estate (juekiken)
1-26-29 Ofuna, Kamakura City, Kanagawa Prefecture
Sumitomo Mitsui Trust Bank, Limited
September 30, 2004 to September 30, 2024
Freehold
1,461.04m2
Residential
60%
200%
Freehold
Office/Parking Lot
Reinforced Concrete, B1F/8F
3,323.93m2
April 3, 1973
10 (as of March 31, 2024)
JPY 8.970 million (as of March 31, 2024)
JPY 89.054 million (as of March 31, 2024)
2,176.47m2 (as of March 31, 2024)
1,884.05m2 (as of March 31, 2024)
Apr 2022 Oct 2022 Apr 2023 Aug 2023
100%100%
94.3%
83.3%
JPY 2,000 million
Tanizawa Sogo Real Estate Appraisal Co., Ltd.
October 31, 2023
JPY 2,180 million

Mar 2024
86.6%

Monthly rental income and tenant security deposits are based on the monthly rental income(including common area service income) and tenant security deposits pursuant to tenantrental contracts.

4

Appraisal Details
Asset Name
Appraisal Value
Appraiser
Appraisal Date

Appraisal Value
Value by Direct Capitalization
MethodIncomeMaximum Obtainable
Rental Income
Vacancy LossExpenses
Administrative andMaintenance Expenses
Utility Expenses

Repair Expenses

PM FeeLeasing Brokerage Fees
Taxes
Insurance Premiums
Other Expenses
Net Operating Income(NOI)
Income on Investment ofDeposits Received
CapitalExpenditure
Net Profit
Cap Rate

Ichigo Ofuna Building
JPY 2,180,000,000
Tanizawa Sogo Real Estate Appraisal Co., Ltd.
October 31, 2023
Amount (JPY)Note
Calculated using an income approach,with a DCF valuation as a basis and2,180,000,000
verified using a direct capitalization
valuation
2,190,000,000
148,753,944Based on expected long-term, stable
158,532,047 rental income, common area service
income, and other income
9,778,103 Based on a vacancy rate of 5.0%
31,477,829
Based on management expenses
8,540,468 pursuant to management agreement
and historical actual amounts
10,264,233 Based on historical actual amounts
Based on engineering reports,
reference to similar assets, and a 3:7(Repair Expenses: Capital
1,660,000Expenditure) allocation based on theCorporate Tax Law Basic InterpretiveRegulations
2,770,992 Based on existing contractual fees
Based on assumption that 10% of849,842
tenants will change annually
6,970,100 Based on FY2023 actual amounts
Based on quotes from insurance
273,440
companies
148,754 Based on historical actual amounts
117,276,115
820,383 Based on a 1.0% investment yield
Based on engineering reports,
reference to similar assets, and a 3:7(Repair Expenses: Capital
4,150,000Expenditure) allocation based on theCorporate Tax Law Basic Interpretive
Regulations
113,946,498
Based on transactions of similar assets,
5.2% while taking into account the discountrate
5Value via DCF Method
Discount Rate
Terminal Cap RateValue via Cost Approach
Ratio of Land

Ratio of Building

2,180,000,000
Base rate adjusted for individual risks
assuming a holding period of ten years
5.4% Cap rate adjusted for uncertainties
2,130,000,000
Based upon the value recorded in thegovernment land assessment
86.1%(koujikakaku) and transactions ofsimilar assets
Based on current replacement costs
13.9% and depreciation due to building age
from engineering reports
Notes
5.1%

Given that demand for the building comes primarily from investors making decisions basedon profitability, Ichigo Office believes the price has been determined based on profitability
in light of the building’s current condition and competitiveness.

6(2) Ichigo Kudan 2 Chome Building
Asset Name
Form of Ownership
Location
Trust Beneficiary
Trust Beneficiary Period
Property Right
Area
Land
ZoningCoverage Ratio
Floor Area Ratio
Property RightUse
Building Structure
Total Floor Area
Date Built
Number of Tenants
Monthly Rental Income2
Tenant Security Deposits2
Leasable Area
Leased Area
Occupancy
Acquisition PriceAppraiser
Appraisal
Appraisal DateValue
Appraisal Value

Asset Overview
Ichigo Kudan 2 Chome Building
Trust beneficiary interest in real estate (juekiken)
2-8-4 Kudan Minami, Chiyoda-ku, Tokyo
Resona Bank
June 29, 2011 to June 30, 2031
Freehold
322.74m2
Commercial
80%500%
Freehold
OfficeSteel/Reinforced Concrete, B1F/7F
1,664.79m2
November 6, 1997
1 (as of March 31, 2024)
JPY 6.891 million (as of March 31, 2024)
JPY 53.6 million (as of March 31, 2024)
1,265.76m2 (as of March 31, 2024)
1,265.76m2 (as of March 31, 2024)
Apr 2022 Oct 2022 Apr 2023 Aug 2023
–100%
100%
100%
JPY 763 millionDaiwa Real Estate Appraisal Co., Ltd.
October 31, 2023
JPY 1,180 million

Mar 2024
100%

Monthly rental income and tenant security deposits are based on the monthly rental income(including common area service income) and tenant security deposits pursuant to tenantrental contracts.

7

Appraisal Details
Asset Name
Appraisal Value
Appraiser
Appraisal Date

Appraisal Value
Value by Direct Capitalization
MethodIncomeMaximum Obtainable
Rental Income
Vacancy Loss
Expenses
Administrative andMaintenance Expenses
Utility Expenses
Repair Expenses
PM FeeLeasing Brokerage Fees
Taxes
Insurance Premiums
Other Expenses
Net Operating Income(NOI)
Income on Investment ofDeposits Received
CapitalExpenditure
Net Profit
Cap Rate
Value via DCF Method
Discount Rate
Terminal Cap Rate
Value via Cost Approach
Ratio of Land

Ichigo Kudan 2 Chome Building
JPY 1,180,000,000
Daiwa Real Estate Appraisal Co., Ltd.
October 31, 2023
Amount (JPY)Note
Calculated using an income approach,with a DCF valuation as a basis and1,180,000,000
verified using a direct capitalization
valuation
1,100,000,000
69,112,419
Based on expected long-term, stable
72,748,020 rental income, common area service
income, and other income
3,635,601 Based on a vacancy rate of 5.0%
20,836,171
5,307,060 Based on historical actual amounts
3,377,220 Based on historical actual amounts
Based on the average of the past 12
1,817,417
years of engineering reports
1,869,973 Based on existing contractual fees
Equivalent to 1.0 month rent for a new
556,539 tenant based on tenant acquisition
costs at similar assets
7,397,900 Based on FY2023 actual amounts
164,500 Based on current actual amounts
345,562 0.5% of rent revenue as reserves
48,276,248
556,539 Based on a 1.0% investment yield
4,930,500

Based on the average of the past 12years of engineering reports

43,902,287
4.0%
1,210,000,000
Based on transactions of similar assets
and the yields of financial assets
Based upon current NOI adjusted for
4.2% expected marketability at the end ofownership period.
965,000,000
Based upon the value recorded in thegovernment land assessment
82.6%(koujikakaku) and transactions ofsimilar assets
3.9%8

Ratio of Building

Based on current replacement costs
17.4% and depreciation due to building age
from engineering reports
Notes

Given that demand for the building comes primarily from investors making decisions basedon profitability and investment returns, Ichigo Office determined that the value by direct
capitalization method, which takes into consideration the market price from a profitability
perspective, is more appropriate than the value via cost approach.

94. Buyer Profiles
Ichigo Ofuna Building and Ichigo Kudan 2 Chome Building
Name

The buyers, both of which are domestic operating companies, did
not provide consent to disclose their names.

Relationship toIchigo Office orIchigo Investment
Advisors (IIA)

The buyers do not have any material capital, personnel, ortransactional relationship with Ichigo Office or IIA. In addition,
the buyers are not related parties as defined in the Act on Trusts
and Investment Corporations or the internal rules of IIA.

5. Forward Commitment (Ichigo Kudan 2 Chome Building)
Because the contract date for the Ichigo Kudan 2 Chome Building is October 31, 2024,
six months and five days from today, the asset sale constitutes a forward commitment
by Ichigo Office as stipulated in the Comprehensive Guidelines for Supervision of
Financial Instruments Business Operators by the Financial Services Agency1.
In the event of a violation of the provisions of the asset sale by Ichigo Office or thebuyer, the other party shall have the right to terminate the sale and claim up to 10% of
the sale price as a penalty.
Because Ichigo Office is the seller, it is highly unlikely that Ichigo Office will incur thepenalty or suffer a negative material impact on its financial position.
1Refers to a post-dated purchase and sales agreement under which payment andproperty delivery shall be made at least one month after the conclusion of theagreement, or any other agreement similar thereto.

6. Transaction Method
Lump-sum payments will be made for both the Ichigo Ofuna Building and the Ichigo
Kudan 2 Chome Building at the time of each sale.
7. Use of Proceeds
Ichigo Office will retain c. JPY 100 million of the c. JPY 260 million of gains on salefor the Ichigo Ofuna Building and c. JPY 100 million of the c. JPY 1.06 billion of gains
on sale for the Ichigo Kudan 2 Chome Building as retained earnings without incurring atax burden, and distribute the remaining amounts as dividends to shareholders for theApril 2024 fiscal period and the October 2024 fiscal period, respectively. Gains on saleis calculated by subtracting book value, brokerage fee, IIA’s gains on sale performancefee, and other asset sale-related expenses from each building’s sale price.
Ichigo Office will deploy the remainder of the sales proceeds towards strategic
investments such as asset acquisitions and value-add renovations.
8. Earnings Impact
Today’s sales have been factored into Ichigo Office’s April 2024 and October 2024
fiscal period earnings forecast announced in today’s release, “Upward Earnings Forecast
Revisions for the April 2024 Fiscal Period & October 2024 Fiscal Period.”

10Reference: Post-Sale Portfolio
No.
O-02
O-03
O-04
O-05
O-06
O-07
O-09
O-10
O-11
O-12
O-14
O-15
O-16
O-17
O-19
O-20
O-21
O-22
O-23
O-24
O-26

1Asset Name

O-27
O-28
O-29

Ichigo Nishisando Building
Ichigo Mita Building
Ichigo Nanpeidai Building
Ichigo Hanzomon Building
Ichigo Hijirizaka Building
Ichigo Shibuya Kamiyamacho Building
Ichigo Shibakoen Building
Ichigo Ebisu Nishi Building
Ichigo Ginza 612 Building
Ichigo Uchikanda Building
Ichigo Yotsuya 4 Chome Building
Ichigo Tameike Building
Ichigo Jimbocho Building
Ichigo Hakozaki Building
Ichigo Kudan 3 Chome Building
Ichigo Gotanda Building
Ichigo Shin Yokohama Building
Ichigo Minami Ikebukuro Building
Ichigo Nakano North Building
Ichigo Eitai Building
Ichigo Ikejiri Building
Ichigo Nishi Ikebukuro Building
Ichigo Nishi Gotanda Building
Ichigo Kichijoji Building

O-34

Ichigo Sakae Building

O-37

Ichigo Marunouchi Building

O-38
O-39
O-42
O-46
O-47

Ichigo Toyamaeki Nishi Building
Ichigo Mirai Shinkin Building
Ichigo Takamatsu Building
Ichigo Kanda Nishikicho Building
Ichigo Akihabara North Building

O-48

Ichigo Sakaisuji Honmachi Building

O-49
O-50
O-51

Ichigo Kanda Ogawamachi Building
Ichigo Hatchobori Building
Ichigo Ebisu Green Glass

Area

Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Tokyo Metro Area
Tokyo Metro Area
Tokyo Metro Area
Tokyo Metro Area
Tokyo Metro Area
Tokyo Metro Area
Central Tokyo
Tokyo Metro Area
Four Major RegionalCities
Four Major RegionalCities
Other Regional Cities
Other Regional Cities
Other Regional Cities
Central Tokyo
Central Tokyo
Four Major RegionalCities
Central Tokyo
Central Tokyo
Central Tokyo
11

Acquisition
Price(JPY million)% ofPortfolio2

3,254
2,740
1,920
1,550
1,200
1,505
1,100
1,917
1,773
1,140
550
580
1,820
1,150
844
5,060
1,816
1,460
764
1,490
2,030
639
765
2,160

1.6
1.3
0.9
0.7
0.6
0.7
0.5
0.9
0.8
0.5
0.3
0.3
0.90.5
0.4
2.4
0.9
0.7
0.4
0.7
1.0
0.3
0.4
1.0

4,705

2.2

6,710

3.2

1,645
1,158
3,010
2,130
5,500

0.8
0.6
1.4
1.0
2.6

1,940

0.9

2,210
1,905
5,900

1.1
0.9
2.8

No.

Area1

Asset Name

O-52
O-53
O-54
O-55
O-57
O-58
O-59
O-60
O-61
O-62
O-63
O-64
O-65
O-66
O-67
O-68
O-69
O-70
O-71
O-72
O-73

Ichigo Omori Building
Ichigo Takadanobaba Building
Ichigo Omiya Building
Ichigo Sagamihara Building
Ichigo Sendai East Building
Ichigo Kumamoto Building
Ichigo Jingumae Building
Ichigo Shibuya Dogenzaka Building
Ichigo Hiroo Building
Ichigo Sasazuka Building
Ichigo Nihonbashi East Building
Ichigo Sakurabashi Building
Ichigo Shinkawa Building
Ichigo Kudan Building
Ichigo Higashi Gotanda Building
Axior Mita
Ichigo Higashi Ikebukuro Building
Koriyama Big-i (Office Section)
Ichigo Kawasaki Building
Ichigo Shibuya East Building
Ichigo Ningyocho Building

O-74

Ichigo Nishi Honmachi Building

O-75

Ichigo Hakata Building

O-76

Ichigo Nishiki First Building

O-78
O-79
O-80

Ichigo Ikebukuro East Building
Ichigo Motoazabu Building
Ichigo Otsuka Building

O-81

Ichigo Nagoya Building

O-82

Ichigo Fushimi Building

O-83

Ichigo Nishiki Building

O-84

Ichigo Minami Morimachi Building

O-85
O-86
O-87
O-88

Ichigo Shibuya Udagawacho Building
Win Gotanda Building
Ichigo Hongo Building
Oimachi Center Building

Central Tokyo
Central Tokyo
Tokyo Metro Area
Tokyo Metro Area
Other Regional Cities
Other Regional Cities
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Tokyo Metro Area
Other Regional Cities
Tokyo Metro Area
Central Tokyo
Central Tokyo
Four Major Regional
CitiesFour Major Regional
CitiesFour Major Regional
CitiesTokyo Metro Area
Central Tokyo
Tokyo Metro Area
Four Major Regional
CitiesFour Major Regional
CitiesFour Major Regional
CitiesFour Major Regional
CitiesCentral Tokyo
Central Tokyo
Tokyo Metro Area
Central Tokyo
12

Acquisition
Price(JPY million)
3,850

% of
Portfolio2

1,580
3,430
1,174
1,840
1,450
7,200
3,650
3,960
4,780
4,700
2,500
2,360
3,190
3,660
1,800
4,570
1,660
1,750
1,350
1,450

1.8
0.8
1.6
0.6
0.9
0.7
3.4
1.7
1.9
2.3
2.2
1.2
1.1
1.5
1.7
0.9
2.2
0.8
0.8
0.6
0.7

2,190

1.0

1,380

0.7

2,000

1.0

3,010
1,890
2,740

1.4
0.9
1.3

3,420

1.6

2,340

1.1

1,330

0.6

1,040

0.5

3,500
3,100
2,300
1,680

1.7
1.5
1.1
0.8

No.
O-89
O-90

Win Gotanda Building 2MIF Building

O-91

Ichigo Uchi Honmachi Building

O-92
O-93

Ichigo Minami Otsuka Building
Ichigo Nogizaka Building

O-94

Ichigo Hakata East Building

O-95
O-96

Ichigo Nakameguro Building
Ichigo Tachikawa Building
Ichigo Higashi Ikebukuro 3 ChomeBuilding

O-97

Acquisition
Price(JPY million)% ofPortfolio2

Central Tokyo
Central Tokyo
Four Major Regional
CitiesTokyo Metro Area
Central Tokyo
Four Major Regional
CitiesTokyo Metro Area
Tokyo Metro Area

3,300
2,200

1.6
1.0

1,900

0.9

2,780
3,315

1.3
1.6

2,250

1.1

1,495
3,830

0.7
1.8

Tokyo Metro Area

3,840

1.8

1,750

0.8

3,500

1.7

2,750

1.3

1,875
204,649
1,210
2,400
1,400
5,010
209,659

0.9
97.6
0.6
1.1
0.7
2.4
10038–Area1

Asset Name

Four Major Regional
CitiesFour Major Regional
O-99 Ichigo Hakataeki Higashi Building
CitiesFour Major Regional
O-100 Fukuoka Kensetsu KaikanCities
O-101 Ichigo Kinshicho South Building
Tokyo Metro Area
Subtotal - Office (83 Assets)
Z-09 Future IZUMIOther Regional Cities
Z-10 Ichigo Shibuya Bunkamura Dori Building Central Tokyo
Z-14 Ichigo Kamata Building
Tokyo Metro Area
Subtotal - Other (3 Assets)
Total (86 Assets)
O-98

Ichigo Marunouchi South Building

TK Equity Investment GK Kizuna1 TK Equity Interest
1Central Tokyo refers to Chiyoda, Minato, Chuo, Shinjuku, Shibuya, and Shinagawa Wards. Tokyo MetroArea refers to Tokyo (excluding the six wards above), Kanagawa, Chiba, and Saitama Prefectures. FourMajor Regional Cities refers to Osaka, Nagoya, Fukuoka, and Sapporo.
2% of Portfolio is based upon acquisition price.

13