[For Information Purpose Only.
The Japanese language press release should be referred to as the original.]
March 10, 2016
To All Concerned Parties
Name of REIT Issuer:
Invincible Investment Corporation
Name of representative:
Naoki Fukuda, Executive Director
Roppongi Hills Mori Tower
6-10-1 Roppongi, Minato-ku, Tokyo, Japan(Securities code: 8963)
Asset manager:
Consonant Investment Management Co., Ltd.
Naoki Fukuda, CEOContact: Masayuki Inagaki, General Manager ofPlanning Department(Tel. +81-3-5411-2731)

Notice concerning Acquisition of Assets and Entering into Leasing Contract
Invincible Investment Corporation (“INV”) announced the acquisition of assets (four hotels and one residential
property, or the “Five Properties”) today as decided by Consonant Investment Management Co., Ltd. (“CIM”),
the asset manager of INV). In connection with the acquisition of the Five Properties, INV will enter into newleasing contracts with respect to each of Five Properties.
1.

Overview of Acquisition

Use

Property
NumberD43

Property Name

Hotel MyStays
Gotanda Station

Location

AnticipatedAcquisition Price(million yen)

Shinagawaku, Tokyo(Note 1)

Appraisal
Value(millionyen)

24,67424,800

Tsuki Tokutei
Mokuteki Kaisha

21,300

Septentrio Tokutei
Mokuteki Kaisha
Septentrio 2 Tokutei
Mokuteki Kaisha
Septentrio 3 Tokutei
Mokuteki Kaisha

Hotel
D44

Hotel Epinard
Nasu

Nasu,
Tochigi

20,981

Seller(Note 2)CategoryofSpecified
Assets

Trust
Beneficial
Interest

This English language notice is a translation of the Japanese-language notice released on March 10, 2016 and was prepared solely for the convenience of, and referenceby, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on theirown investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties orassurances are given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In theevent of any discrepancy between this translation and the Japanese original, the latter shall prevail in all respects.

1

Use

Property
Number

Property Name

Location

D45

Hotel MyStays
Fukuoka Tenjin

Fukuoka ,Fukuoka

D46

Hotel MyStays
Hamamatsucho

Minato-ku,
Tokyo

AnticipatedAcquisition Price(million yen)
(Note 1)

Appraisal
Value(millionyen)

Seller

8,059

8,100

Navaro Tokutei
Mokuteki Kaisha

7,959

8,000

Navaro Tokutei
Mokuteki Kaisha

61,67362,200(Note 2)CategoryofSpecified
Assets

Trust
Beneficial

Subtotal

Residence

Interest

Trust

A104

Royal Parks
ShindenAdachi-ku,
Tokyo

5,024

5,100

Momo Tokutei
Mokuteki Kaisha

Beneficial
Interest

Total

66,69767,300・Purchase and sale agreement execution date

: March 10, 2016

・Anticipated acquisition date

: March 31, 2016 (Note 3): Funds raised through an issuance of new
investment units (those from public offering)(Note 4) and a new loan (Note 5): Lump-sum payment at time of delivery (Note 3)

・Acquisition funds

・Settlement method(Note 1)

Anticipated acquisition prices do not include adjustments for property taxes, city planningtaxes, or national or local consumption taxes; hereinafter the same.

(Note 2)For an overview of the sellers, please refer to “4. Overview of Sellers of the Five Properties”
below.

(Note 3)In the event that the fund raised through the issuance of new investment units and the newloan does not reach the total anticipated acquisition price, INV may ask the seller to postpone
the payment date for Hotel MyStays Gotanda Station and Hotel Epinard Nasu to a later date,pursuant to the purchase and sale agreement with regard these two properties.

(Note 4)For details of the issuance of new investment units, please refer to the “Notice concerning
Issuance of New Investment Units and Secondary Distribution of Investment Units” dated asof today.

(Note 4)For details of the new loan, please refer to the “Notice concerning Debt Financing” dated asof today.

(Note 5) Amounts are rounded down to the nearest million yen; hereinafter the same.
2.

Reasons for Acquisitions
Consistent with its strategy, INV decided to acquire the Five Properties (four hotel properties and one
residential property) due to their revenue generating capability, overall market conditions and otherfactors that will contribute to the further stability and growth opportunities for its portfolio.

This English language notice is a translation of the Japanese-language notice released on March 10, 2016 and was prepared solely for the convenience of, and referenceby, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on theirown investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties orassurances are given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In theevent of any discrepancy between this translation and the Japanese original, the latter shall prevail in all respects.

2

INV, which had acquired eleven limited service hotels and three residential properties as of July 16, 2015
in connection with the global offering the payment date of which was July 15, 2015 (the “Previous Public
Offering”), acquired three limited service hotels on August 28, 2015 and then five limited service hotels
and one residential property on January 22, 2016.
The four hotel properties to be acquired (the “Four Hotel Properties”) are expected to make contributions
to further growth in portfolio revenues, while the one residential property to be acquired to stabilize theincome from the portfolio. Three out of the Four Hotel Properties are operated by MYSTAYS HOTELMANAGEMENT Co., Ltd. (“MHM”), an experienced hotel operator affiliated with the sponsor withextensive capabilities, and the remaining one hotel is operated by its subsidiary.
The four hotels to be acquired have a solid track record as represented by key performance indicators in2015 including ADR (average daily rate) of 14,623 yen (6.9% year-on-year growth), average occupancy
rate of 91.7% (6.3 points year-on-year growth).
(Note) Based on the data of three hotels out of four hotels to be acquired (excluding Hotel MyStays
Gotanda Station, which partially closed because of renovation in 2015)
The residential property INV will acquire is a relatively new property built in 2007 and has 243 units intotal, consisting of several types of rooms tailored to a wide variety of needs from families and DINKS
households. The Properties located in Tokyo 23 Wards account for 68.5% of the residential portfolio. The
residential property is expected to make contributions to mid- and long-term stable revenues as it is also
primarily consisted of rooms with the rent of less than 150,000 yen, which are in high demand.
Residential after Acquisition

Residential Portfolio Composition by Rent Size

Residential Portfolio Composition by Geography(Note 1) Based on 68 residential properties, including one to be acquired.
(Note 2) Based on the amount of monthly rents added by common service fees as of December 2015.

It is expected that appraisal NOI yield of the Five Properties and the anticipated portfolio (122 properties)
will be at 5.5% and 6.6%, respectively.
INV will continue to position hotels and residential properties as its core assets and pursue both growthThis English language notice is a translation of the Japanese-language notice released on March 10, 2016 and was prepared solely for the convenience of, and referenceby, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on theirown investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties orassurances are given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In theevent of any discrepancy between this translation and the Japanese original, the latter shall prevail in all respects.

3and stability in the portfolio revenue in a well-balanced manner through the implementation of its external
growth strategy based on an active investment in such properties, backed by the Sponsor’s strong
support (for details, please refer to “4. Strong and Visible Pipeline from Sponsor” below.

Existing Portfolio

Properties
to be Acquired

After Acquisition

Properties(Hotel Properties)

117 (42)5 (4)122 (46)

Acquisition Price(Note 1) (mn JPY)

184,022

66,697250,719

Appraisal Value(Note 1) (Note 2) (mn JPY)

225,262

67,300292,562

7.0％

5.5％

6.6％

Appraisal NOI Yield(Note 3)(Note 1) Both Acquisition Price and Appraisal Value are rounded down to one million yen.
(Note 2) Appraisal Value is based on appraisal value stated in the appraisal report on the record date ofDecember 31, 2015 and November 20, 2015 for the 111 properties owned as of December 31, 2015
and 6 properties acquired on January 22, 2016, respectively. For the five properties to be acquired,
Appraisal Value is based on the appraisal value stated in the appraisal report on the record date ofNovember 20, 2015, January 1, 2016 and January 31, 2016.
(Note 3) “Appraisal NOI yield” is represented by the figure calculated by dividing NOI based on a direct
capitalization method stated in the appraisal report by the total of Acquisition Prices, which isrounded down to one decimal place.

By Property Type (Note 1)(Note 1) Based on Acquisition Price.
(Note 2) Office buildings, commercial facilities and parking lots are included.

3.

Execution of Lease Contracts
In regards to three out of the Four Hotel Properties, INV will enter into a lease agreement with MHM, aswell as another lease agreement with Naqua Hotels & Resorts Management Co., Ltd.(“Naqua”) for Hotel
Epinard Nasu.

Lease agreements of all four hotel properties contain a significant variable rentThis English language notice is a translation of the Japanese-language notice released on March 10, 2016 and was prepared solely for the convenience of, and referenceby, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on theirown investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties orassurances are given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In theevent of any discrepancy between this translation and the Japanese original, the latter shall prevail in all respects.

4component based on gross operating profit, or GOP.
Based on such lease agreement with variable rents, INV will be able to take advantage of potential
growth from the hotel operating income after deducing related costs and retains by the tenants. In GOP
upward trend situations, INV could benefit from the growth in GOP by receiving most of the upside in
GOP based on such variable rent scheme, which could boost profits of INV through the relative highprofit margin. When GOP in downward trend, INV could take advantage from the fixed part of the rent
scheme to protect itself from further loss.

<Overview of Tenant and Operator>
An overview of the tenants and operators for the Four Hotels is as follows;
The tenant and operator for Hotel MyStays Gotanda Station, Hotel MyStays Fukuoa Tenjin, andHotel MyStays Hamamatsucho
(i)

Name

MyStays Hotel Management Co., Ltd.

(ii)

Location

Roppongi Hills North Tower 14th Floor, 6-2-31 Roppongi, Minato-ku,
Tokyo, Japan

(iii)

Title

and

name

of

Atsuki Asano, President and CEO

representative officer(iv)

Business

Hotel and Ryokan (Japanese inn) operation and management(v)

CapitalJPY 100 million(as of the date of thisnotice)(vi)

Date of establishment

July 8, 1999

(vii)

Net assets

Not disclosed (Note)(viii)

Total assets

Not disclosed (Note)(ix)

Investor

Not disclosed (Note)(xii)

Relationship between INV/Asset Manager and the Tenant/Operator
Capital relationships

While there are no capital relationships that should be noted between
INV/CIM and the tenant/operator, the parent company of the tenant isindirectly owned by funds managed by affiliates of Fortress Investment
Group LLC (“FIG”), which is an affiliate of Calliope Godo Kaisha(“Calliope”). Calliope holds 609,942 units of INV’s outstanding investment
units (investment unit holding ratio: 19.09%) as of December 31, 2015.
Further, as of the date of this notice, Calliope is the parent company of
CIM, holding 100% of its outstanding shares.

Personal relationships

As of the date of this notice, among the employees of CIM, twoemployees are seconded from the tenant/operator.

Transactional

INV has entered into a lease contract with the tenant/operator withrelationships

respect to 30 hotel properties

This English language notice is a translation of the Japanese-language notice released on March 10, 2016 and was prepared solely for the convenience of, and referenceby, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on theirown investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties orassurances are given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In theevent of any discrepancy between this translation and the Japanese original, the latter shall prevail in all respects.

5Whether the Operator

The tenant/operator is not a related party of INV or CIM. Further, related

is a related party

persons and affiliates of the tenant are not related parties of INV or CIM.
Furthermore, the tenant is not an interested party, etc. of CIM as provided
in the Act on Investment Trusts and Investment Corporations(“Investment Trust Act”).

(Note) Not disclosed because consent has not been obtained
The tenant and operator of Hotel Epinard Nasu
(i)

Name

Naqua Hotels & Resorts Management Co., Ltd.

(ii)

Location

3-7-1, Nishi-Shimbashi Minato-ku, Tokyo, Japan(iii)

Title and name of

Takayuki Oyata, President and CEO

representative officer(iv)

Business

Entrusted management of hotels(v)

CapitalJPY 10million(as of the date of thisnotice)(vi)

Date of establishment

May 2008(vii)

Net assets

Not disclosed (Note)(viii)

Total assets

Not disclosed (Note)(ix)

Investor

Not disclosed (Note)(x)

Relationship between INV/Asset Manager and the Tenant/Operator
Capital relationships

While there are no capital relationships that should be noted between
INV/CIM and the tenant/operator, the parent company of thetenant/operator is indirectly owned by funds managed by affiliates of FIG,
which is an affiliate of Calliope. The tenant/operator is a wholly-owned
subsidiary of MHM.

Personal relationships

As of the date of this notice, among the employees of CIM, no employees
are seconded from the tenant/operator.

Transactional

As of the date of today, there are no transactional relationships between

relationships

INV/CIM and the tenant/operator.

Whether the Operator

The tenant/operator is not a related party of INV or CIM. Further, related

is a related party

persons and affiliates of the tenant are not related parties of INV or CIM.
Furthermore, the tenant is not an interested party, etc. of CIM as provided
in the Act on Investment Trusts and Investment Corporations(“Investment Trust Act”).

(Note) Not disclosed because consent has not been obtained.

4.

Strong and Visible Pipeline from Sponsor
INV entered into an MOU with Fortress-related SPCs in regards to preferential negotiation rights over
26 limited service hotels on May 21, 2014, 22 limited service hotels on June 23, 2014, and 21 hotels andThis English language notice is a translation of the Japanese-language notice released on March 10, 2016 and was prepared solely for the convenience of, and referenceby, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on theirown investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties orassurances are given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In theevent of any discrepancy between this translation and the Japanese original, the latter shall prevail in all respects.

6

9 residential properties on June 25, 2015, respectively.
In addition, INV renewed the previous MOU and entered into a new MOU on January 20, 2016 with
Fortress-related SPCs in regards to preferential negotiation rights over a total of 34 hotels (with ten newhotels added to the 24 hotels except the 6 hotels that were already acquired). In addition, the MOU was
renewed again on March 10, 2016 to add 2 more hotels (Art Hotels Hamamatsucho and Art Hotels
Omori) (the “March 2016 MOU”). Under the March 2016 MOU, effective March 10, 2016 through March 9,2017, the SPCs are obligated to provide INV an opportunity to have a good faith discussion with respect
to the sale of any property covered by the March 2016 MOU, if the SPC plans to sell such property,
before the SPC informs other potential buyers. Refer to the list below of properties covered by March
2016 MOU.
INV will continue to seek to utilize Fortress’s potential pipeline support to achieve substantial external
growth through accretive growth opportunities, based on the preferential negotiation rights over 24 hotels(6,454 rooms) and 9 residential properties (743 units) granted from the sponsor under the March 2016
MOU.
<Properties subject to the March 2016 MOU >No.

Asset Name

Asset Type (Note 9)

Location

No. ofRooms

1

Hotel MyStays Akasaka (Note 2)

Limited Service Hotel

Minato-ku,Tokyo

327

2

Hotel MyStays Yokohama -Kannai (Note 3)

Limited Service Hotel

Yokohama, Kanagawa

166

3

Rihga Royal Hotel Kyoto (Note 4)

Full Service Hotel

Kyoto, Kyoto

489

4

Narita Excel Hotel Tokyu

Full Service Hotel

Narita, Chiba

706

5

Art Hotels Sapporo

Full Service Hotel

Sapporo, Hokkaido

418

6Best Western Hotel Fino Sapporo

Limited Service Hotel

Sapporo, Hokkaido

242

7Best Western Hotel Fino Oita

Limited Service HotelOita, Oita

145

8

Takamatsu Tokyu REI Hotel

Limited Service Hotel

Takamatsu, Kagawa

191

9Hotel Naqua City Hirosaki

Full Service Hotel

Hirosaki, Aomori

134

10 Beppu Kamenoi Hotel

Resort Hotel

Beppu, Oita

322

11 Fusaki Resort Village

Resort Hotel

Ishigaki, Okinawa

195

Full Service Hotel

Urayasu, Chiba

1,016

13 Hotel Shin-Osaka Conference Center

Limited Service Hotel

Osaka, Osaka397

14 Hotel MyStays Kanazawa

Limited Service Hotel

Kanazawa,Ishikawa

244

Full Service Hotel

Asahikawa, Hokkaido

265

Limited Service Hotel

Kanazawa, Ishikawa

206

Full Service Hotel

Matsuyama, Ehime

161

Limited Service Hotel

Taito-ku, Tokyo150

12 Sheraton Grande Tokyo Bay Hotel (Note 5)

15 Art Hotels Asahikawa
16 Hotel MyStays Kanazawa Castle
17 Hotel JAL City Matsuyama
18 Hotel Ueno East

This English language notice is a translation of the Japanese-language notice released on March 10, 2016 and was prepared solely for the convenience of, and referenceby, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on theirown investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties orassurances are given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In theevent of any discrepancy between this translation and the Japanese original, the latter shall prevail in all respects.

7

No.

No. ofAsset Type (Note 9)

Location

Limited Service Hotel

Osaka, Osaka

120

Limited Service Hotel

Sapporo, Hokkaido

86

Limited Service Hotel

Yokohama, Kanagawa

70

Limited Service Hotel

Taito-ku, Tokyo64

23 Art Hotels Hamamatsucho

Limited Service Hotel

Minato-ku, Tokyo120

24 Art Hotels Omori

Limited Service Hotel

Shinagawa-ku, Tokyo

220

19

20

Asset Name
(Tentative) Hotel Mystays Honmachi 3-chome(Osaka) (Note 6)
Hotel MyStays Sapporo Nakajima Park (Note7)

21 Flexstay Inn Sakuragicho
22

MyCUBE by MYSTAYS Asakusa Kuramae(Note 8)

Hotel Subtotal
Residential/Small Type

25 Gran Charm Hiroo(Note 9)Residential/Small Type

26 Plestay Win Kinshicho(Note 9)Residential/Small Type

27 Gran Charm Kichijoji(Note 9)Residential/Small Type

28 Green Patio Noda

(Note 9)Residential/Small Type

29 Dainichi F-45

(Note 9)Residential/Small Type

30 Gran Charm Urayasu(Note 9)Residential/Small Type

31 Gran Charm Urayasu 5(Note 9)Residential/Small Type

32 Gran Charm Minami Gyotoku I(Note 9)33 Gran Charm Minami Gyotoku II(Note 1)

(Note 2)
(Note 3)(Note 4)(Note 5)(Note 6)(Note 7)(Note 8)(Note 9)Residential/Small Type
(Note9)

Rooms

6,454
Shibuya-ku, Tokyo

121

Sumida-ku, Tokyo

92

Musashino, Tokyo

28

Noda, Chiba

240

Urayasu, Chiba

54

Urayasu, Chiba

54

Ichikawa, Chiba

54

Ichikawa, Chiba

52

Ichikawa, Chiba

48

Residential Property Subtotal

743

Hotel / Residential Property Total

7,197

The March 2016 MOU is effective from March 10, 2016 (the date of the execution) to March 9, 2017. Regarding
the properties listed above, there is no guarantee that INV will be offered an opportunity for considering
acquisition of the properties or be able to acquire the properties.
Hotel MyStays Akasaka is scheduled to be completed in June 2016, and opened in August 2016..
Hotel MyStays Yokohama Kannai is scheduled to be completed in September 2016 and to opened in October
2016.
Rihga Royal Hotel Kyoto is scheduled to reopen partially on September 1, 2016 after renovation and fully on
November 1, 2016. No. of rooms after renovation is written on the table above
The annex building of the Sheraton Grande Tokyo Bay Hotel is currently under construction, which isanticipated to be completed in February 2017. No. of rooms noted above includes that of the annex building.
(Tentative) Hotel Mystays Honmachi 3-chome (Osaka) is scheduled to be completed in October 2017 andopened December 2017.
Hotel MyStays Sapporo Nakajima Park will be changed its name from Kita Hotel in April 27, 2016.
MYCUBE by MYSTAYS Asakusa Kuramae is scheduled to be completed April 2016, and opened in June 2016.
The definition of Asset type is as below
・ “Limited Service Hotel” means a hotel property which focuses on revenues from guest rooms and provides
only limited services in terms of food and beverage, banquet, spa and gym facilities.
・ “Full Service Hotel” means a hotel property which provides accommodation, food and beverage andThis English language notice is a translation of the Japanese-language notice released on March 10, 2016 and was prepared solely for the convenience of, and referenceby, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on theirown investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties orassurances are given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In theevent of any discrepancy between this translation and the Japanese original, the latter shall prevail in all respects.

8

・
・

5.

banquet services,“Resort Hotel” means a hotel property which is located in tourist spots or resort districts, and provides
accommodation and food and beverage services and incidental facilities.
“Small Type” means a residential property in which the majority of dwelling units have space of less than
30m2 each.

Details of Assets to be Acquired(1) Details of the Five Properties
Details, profit and loss status and outline of appraisal reports of the five properties to be acquired
are as follows:a.

“Type and Location of Specified Assets, etc.” column:

・ “Date of Planned Acquisition” shows the date when an acquisition is executed, which is
specified in the trust beneficiary right sales agreement.
・ “Purchase Price or Planned Purchase Price” shows a purchase price of an anticipatedacquisition which is specified in the trust beneficiary right sales agreement; Consumption tax is
not included, and rounded down to the nearest million yen.
・ “Appraisal Value” shows reported price by appraisal agency for anticipated acquisitions.
・ The details in “Location” (excluding address), “Lot Area,” “Structure/No. of Stories,” “Total Floor
Area,” “Purpose of Use,” and “Construction Date” are as shown in the property registry.

The“Total Floor Area” is the gross floor area, and with respect to “Purpose of Use,” the primaryclass shown in the property registry is listed. Further, the “Construction Date” lists the time atwhich it was newly constructed, as shown in the property register.
・ “Transportation” shows the time to walk to the nearest station based on the description in theReal Estate Appraisal Report (in case there is no description of time distance in the Real
Estate Appraisal Report, “Transportation” is calculated by assuming walking time on the roaddistance of 80 meters per minute in accordance with the Fair Competition Code on the Real
Estate Representations (Fair Trade Commission Notification No.2 of 2003, including
subsequent revisions)(hereinafter, referred to as the “Fair Competition Code”) and theOrdinance for Enforcement of the Fair Competition Code.
・ In “Zoning,” the class of zoning under Article 8(1)(i) of the City Planning Act is listed.
・ In “Building Coverage Ratio,” the ratio of a building’s area with regard to the land area as set
forth under Article 53 of the Building Standards Act is listed.
・ In “Floor Area Ratio,” the ratio of a building’s floor area with regard to the land area as set forth
under Article 52 of the Building Standards Act is listed.
・ In “Trustee,” the planned trustee at the time of INV’s acquisition of the assets for anticipatedacquisitions is listed.
・ In “Trust Period,” the planned trust period at the time of INV’s acquisition of the assets for
anticipated acquisitions listed.
b.

“Lease Overview” column:

・ January 31, 2016 is used as the basis.
・ In “Number of Guest Rooms,” the number of guest rooms that can be sub-leased by tenants islisted.
This English language notice is a translation of the Japanese-language notice released on March 10, 2016 and was prepared solely for the convenience of, and referenceby, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on theirown investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties orassurances are given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In theevent of any discrepancy between this translation and the Japanese original, the latter shall prevail in all respects.

9

・ “Total No. of Tenants” is calculated by counting a lessee who has directly concluded a leaseagreement for each property as one tenant, and a tenant who has rented two or more rooms ina single property is calculated as one tenant. In case of subleasing of property in which a
lessee subleased rooms to end tenants and the seller, may be the owner, INV, or the trustee
concluded the “pass-through” form of lease contract without rent guarantee, total No. of
tenants is the total number of end tenants.
・ In “Leasable Area,” which means the total leasable floor area for each building, the leasablearea listed in the lease contract and diagram for the property, excluding the leasable area ofthe land (level parking lot), is listed.
・ In “Lease Area,” which means the total leased floor area for each building out of the total
leasable floor area, the leased area into which a leasing agreement has actually been enter
into and has been leased to an end-tenant, those listed in the lease contract, excluding theleased area of the land, is listed.
・ In “Occupancy Rate,” the ratio of the leased area to the leasable area is shown, rounded to thefirst decimal place.
・ “GOP,” or the gross operating profit, is the amount remaining after deducting the personnel,material, water, electricity and heating and advertising expenses for the hotel operations fromthe hotel’s revenues.
c.

“Overview of Lease Agreement” column:

・ Based on the lease contract entered into with the tenant・ In “Determination of rent of lease contract,” monthly rent amount is rounded down to nearest
ten thousand yen, and annual rent is rounded down to nearest one million yen.
・ The “management services fee” is a commission fee payable to the tenant in accordance withthe provisions of the leasing contract as a compensation for operational service provided by atenant under the agreement. The management services fee is not disclosed, as tenant’sconsent has not been obtained for disclosure.

However, for MHM, an amount of the

management services fee to be received is generally (i) an amount equal to 2% of monthly
sales, (ii) an amount equal to 0-6% of monthly sales from direct bookings made through the
MHM’s marketing department or website, and (iii) an amount equal to 4-6% of the monthly
GOP after deducting the amounts of (i) and (ii) above.
・ In “Security Deposit/Guarantee Money,” the amount of the security deposit/guarantee money
after amortization pursuant to the lease contract is listed.
d.

“Overview of Building Conditions Survey Report” column:

・ For the anticipated acquisitions, INV has received a report from Tokio Marine & Nichido Risk
Consulting Co., Ltd. and Tokyo Building – Tech Center Co., Ltd., on building conditions survey,
building deterioration survey, short- and long-term repair plan decision, a condition survey incompliance with the Building Standards Act, a survey of dangerous substances contained in abuilding, and soil survey, amongst others, and has provided an overview of the report in thiscolumn. Further, an earthquake risk analysis has been conducted and reported to INV by Tokio
Marine & Nichido Risk Consulting Co., Ltd., and an overview of the report is listed in thiscolumn.
・ “Probable Maximum Loss (PML)” means the probable maximum loss from an earthquake.
There is probable maximum loss (PML) for individual properties and for portfolios as a whole.
This English language notice is a translation of the Japanese-language notice released on March 10, 2016 and was prepared solely for the convenience of, and referenceby, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on theirown investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties orassurances are given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In theevent of any discrepancy between this translation and the Japanese original, the latter shall prevail in all respects.

10Though there is not a strict, uniform definition for probable maximum loss (PML), in this press
release, it means to what extent damages would be borne from the largest-scale anticipatedearthquake in the anticipated planned term of use (50 years) (a large earthquake that has areoccurrence period of 475 years = a large earthquake with a roughly10% chance of occurringin 50 years), as indicated by the percentage (%) of the replacement price for planned recovery
costs from damage.
・ “Replacement Price” means the total amount of the appropriate costs needed in the event thatthe appraised building is to be rebuilt at the time of the survey.
・ “Short-term Repair Costs” indicates the repair and/or replacement costs for items which, at thetime of the survey, are below minimum maintenance level due to deterioration or items which
are in violation of law or regulations, etc. and which can be judged as best to be repaired or
replaced within one year.
・ “Long-term Repair Costs” consist of capital expenditures and repair costs.

Capitalexpenditures means, of the anticipated improvement costs necessary to maintain the building
at the set building functionality level, the costs to extend the use period of the building’s
equipment or to replace it entirely. Repair costs means, of the anticipated improvement costs
necessary to maintain the building at the set building functionality level, costs other than capital
expenditures.
e.

Descriptions in the “Area Characteristics, etc.” field
Descriptions in the “Area Characteristics, etc.” field are an abstract or summary of descriptionsin the Real Estate Appraisal Report on each real estate or real estate in trust, prepared byappraisal agencies, or created by referring to such descriptions.

f.

Descriptions in the “Special Matters”
Descriptions in the “Special Matters” fields are matters that are deemed important inconsideration of their impact on rights, appraisal value, profitability and disposability of each
asset acquired after the end of the 24th period or anticipated to be acquired.

<Explanation relating to overview of the status of income and expenses and real estate appraisalof the Six Properties>
g. “Income and Expenditures, Etc.” column:
・ Based on the information provided from the sellers for each operating period from January 1,
2014 to December 31, 2015. This is not a guarantee of future income and expenditures.
・ Amounts are rounded down to the nearest 1,000 yen. Therefore, the figures may notnecessarily match the total value when added together. Unless otherwise specifically noted,
the amounts do not include consumption tax, etc.
・ “Taxes and Public Dues,” which include property tax and city planning tax, are generally
imposed on the owner on January 1 of each year. For property tax and city planning tax thatwere borne by the current owner or previous owner at the time of INV’s acquisition of theassets, the estimated amount is included in the acquisition price, and is therefore not included
in “Taxes and Public Dues.”
・ “Non-life Insurance Premiums” is the total amount of paid insurance premiums distributed
proportionally over the relevant period.
This English language notice is a translation of the Japanese-language notice released on March 10, 2016 and was prepared solely for the convenience of, and referenceby, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on theirown investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties orassurances are given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In theevent of any discrepancy between this translation and the Japanese original, the latter shall prevail in all respects.

11

・ “NOI” (Net Operating Income) lists the actual figures as provided by the seller (following theadjustments for the trust fees, administration fees and insurance premiums when held by INV).
・ “Room Income” includes room use fees and lease fees.
・ “Other Income” includes items such as parking lot use fees, laundry fees, vending machinetransaction fees, etc. which do not fall under “Room Income”.
・ “ADR,” or Average Daily Rate, is the value of the total room sales for a certain period(excluding service fees) divided by the total number of sold rooms for the same period.
・ “RevPAR”, or Revenues Per Available Room, is calculated by dividing the total sales for acertain period by the aggregate number of rooms for the same period (rooms x number ofdays), and is the same figure as that of a product of room occupancy rate and ADR.
・ “Room Occupancy Rate” is calculated using the following formula:room occupancy rate = total number of rooms occupied during the relevant period ÷ (aggregate
number of rooms during the relevant period x number of business days during target period)・ “GOP Ratio” is calculated using the following formula:
GOP ratio = GOP ÷ sales figure
・ “Daily / Weekly / Monthly” is the ratio for each classification of length of stay (i.e.,
daily/weekly/monthly), and is calculated by dividing total room sales for the relevant
classification during each operational period by the aggregate room sales for the same
operational period and then multiplying the figure by 100. Daily, weekly and monthly areclassified by the number of days of stays, with daily being 1-6 nights, weekly being 7-29 nights,
and monthly being 30 or more nights.
h. “Summary of Real Estate Appraisal Report” column:
INV has requested real estate appraisal from Morii Appraisal & Investment Consulting, Inc. forthe planned acquisition assets based on the matters for consideration in a real estate appraisal
under the Investment Trust Act, the Act on Real Estate Appraisal (Act No. 152 of 1963, as
amended; the “Act on Real Estate Appraisal”) and the real estate appraisal standards. An
appraisal value of a property is merely an opinion of the real estate appraiser regarding thevalue of the appraised property at the time the appraisal was conducted in accordance with the
Act on Real Estate Appraisal and real estate appraisal standards. A real estate appraisal isneither a guarantee nor a promise that an asset can be sold or purchased at such appraisal
value either now or in the future.

This English language notice is a translation of the Japanese-language notice released on March 10, 2016 and was prepared solely for the convenience of, and referenceby, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on theirown investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties orassurances are given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In theevent of any discrepancy between this translation and the Japanese original, the latter shall prevail in all respects.

12D43: Hotel MyStays Gotanda Station
Type and Location of Specified Assets, etc.
Trust Beneficiary Right
Type of Specified Assets
Date of (Planned) Acquisition

March 31, 2016

(Planned) Purchase Price

JPY 24,674 million

Appraisal Value

JPY 24,800 million

Appraisal Agency

Morii Appraisal & Investment Consulting, Inc.

LocationTransport(Lot Number)

6-1, 2 chome Nishigotanda, Shinagawa-ku, Tokyo(Address)

2-6-8 Nishigotanda, Shinagawa-ku, Tokyo

1 min walk from Gotanda station on JR Yamamote Line, Toei Asakusa Line

Form of Possession
Land
Lot Area (m2)Form of Possession

Ownership (incl. coownership)/ Zoning
Commercial area
Superficies
Building Coverage Ratio/Floor
1,630.40 ㎡
80% / 800%、80% / 700%
Area Ratio
Ownership / Sectional
Purpose of Use
Hotelownership

Total Floor Area (m2)

11,893.00 ㎡

Structure/No. of Stories

Steel concrete structure with flat roof, basement 1 story, 14 stories /Steel concrete structure with flat roof, basement 2 stories, 14stories

Renovation Date

March 2015 – November 2015

Construction Date

August 29, 1984 / March 11, 1974

Building

Trustee

Sumitomo Mitsui Trust Bank, Limited

Trust Period

From: March 31, 2016; Until: March 30, 2026

Creation of Security Interest

None

Lease Overview (Jan 31, 2016)
Total No. of Tenant(s)1Leasable Area(m2)8,752.42 ㎡
100%

Lease Area (m2)

8,752.42 ㎡

JPY 27,300 thousand

GOP (per month)

JPY 54,073 thousand

Occupancy Rate
Security Deposit/Guarantee Money

333 rooms（S276・T46・D11）

Number of Guest Rooms

Overview of Lease Agreement
TenantMyStays Hotel Management Co., Ltd.

Type of Contract

Fixed rent plus variable rent type

Term

From: March 31, 2016 Until: March 30, 2026

Determination of rent of lease
contract

Fixed rent (JPY 484.2million per annum (January – June: JPY 39 million per month / July – December: JPY 41.7 million per month)) plus variable rent based on GOP of hotel operation. (Note)

Management services fee

Not disclosed, as tenant's consent has not been obtained for disclosure.

Security Deposit/Guarantee Money JPY 27,300 thousand
Renewal Upon Expiration

The contract is a Fixed Term Building Lease, therefore the contract will terminate at the expiration of the lease term.

Rent Revision

Rent cannot be revised during the lease term.

Early Termination

Termination prior to the expiration of the lease term is not permitted.

Other Special Matters

None

Overview of Building Conditions Survey ReportCompany Conducting Survey

Tokio Marine & Nichido Risk Consulting Co., Ltd.

February 2016

Short term Repair Costs (within
10.8%
1 year)Probable Maximum Loss (PML)
Replacement Price

Date of Report

JPY 3,140,300 thousand

Long term Repair Costs (in 12－
JPY 128,231 thousand

years)
Area Characteristic
The property is a business hotel located one minute on foot from Gotanda Station on the JR line/the Toei Asakusa Line and three minutes on foot from Gotanda stationon the Tokyu Ikegami Line. It has excellent access to the major business districts such as Tokyo Station and Shinjuku Station in 15 minutes as well as convenient
access to Haneda Airport in approximately 40 minutes. As it is located near Shinagawa Station, which is Shinkansen stop and one of major terminal stations, theproperty can accommodate both of business demands and leisure demands. It completed full renovation which made the property stylish and modern one in November
2015 and achieved 94.5% occupancy in December 2015, right after the renovation. Considering good access to popular areas among foreign tourists such as Ikebukuro,
Shinjuku, Akihabara and Asakusa, further increase of leisure demands can be expected.
Special Instructions
None(Note) Variable rent is the amount of the tenant’s aggregate monthly gross revenue during the three-month variable rent calculation period after deducting the sum of (i) aggregate
gross reimbursements, (ii) management services fee and (iii) fixed rent during the same period. However, when the balance after deduction is zero or negative, variable rent is
zero.

13

D43: Hotel MyStays Gotanda Station
Income and Expenditures, Etc.
Operating Period

1/1/2014 – 12/31/2014

1/1/2015 – 12/31/2015

GOP (= (1) - (2))

JPY 426,911 thousanda. Land Lease Fees

JPY 254,231 thousand--b. Taxes and Public Dues

30,641 thousand

30,641 thousandc. Non life Insurance Premiums

1,126 thousand

1,126 thousandd. Trust Feese. Others

800 thousand

800 thousand

3,681 thousand

3,681 thousand

NOI (= GOP [a. + b. + c. + d. +e.])

390,663 thousand

217,983 thousand(1) Sales

1,085,024 thousand

507,604 thousand

Room Income

930,798 thousand

459,937 thousand

Other Income

154,226 thousand

47,666 thousand

658,113 thousand

253,372 thousand

JPY 8,057

JPY 9,465(2) Operating Costs (not including a. through e. above)(Reference)

ADR
RevPAR

7,545

6,488

Room Occupancy Rates

93.6%

68.5%

GOP Ratio

39.3%
－／

Daily/ Weekly/ Monthly

－／

－

50.1%
100%／

0%／

0%

20.0%
－
Overseas Sales Share(Note) This property was through renovation works from March 2015 to November 2015. It was partially opened on August 24, 2015 before grand opening on November 25, 2015. Ratio of daily / weekly / monthly stay,
ratio of sales from foreign guests, nights, sales from foreign guests are not available. Data of 2015 refers to December 2015, which was after the grand opening.
Summary of Real Estate Appraisal Report
Appraising Organization

Morii Appraisal & Investment Consulting, Inc.

Appraisal Value (Specified Value)

JPY 24,800 million

Time of Valuation

1/1/2016

1. Value of Profits using the Profit Capitalization Method
Contents(1) Direct Capitalization Method(a) Room Rental Income

Overview

JPY 1,211,225 thousand

Based on mid to long term stabilized rents considering current leasing conditions－(b) Common Area Maintenance Fee Income(c) Utility Income－(d) Parking Lot Income－(e) Other Income

1,957 thousand

Based on historical data

1,213,182 thousand(I) Total Potential Revenue = [(a) + (b) + (c) + (d) + (e)](f) Vacant Room Losses－(g) Irrecoverable Debt Losses－
1,213,182 thousand(II) Operating Revenue = [(I) - (f) - (g)](h) Maintenance and Management Costs－(i) Utility Costs－(j) Repair Costs

3,206 thousand

Based on estimates in the engeneering report. 30% of the stabilized amount－(k) Property Management Fee－(l) Tenant Solicitation Expenses(m) Taxes and Public Dues

30,625 thousand

Based on historical data, with consideration of variable rate(n) Non-life Insurance Premiums

1,467 thousand

Based on comparable transactions (0.06% of the restoration costs)(o) Other Costs

3,681 thousand
38,979 thousand(III) Operating Costs (Expense Rate) = [(h) + (i) + (j) + (k) + (l) + (m) + (n) + (o)]1,174,203 thousand(IV) Net Operating Income = [(II) - (III)]－(p) One Time Investment Gains(q) Capital Improvements and Expenses

7,480 thousand(V) Net Income = [(IV) + (p) - (q)]1,166,723 thousand(VI) Capitalization Yield

4.9%(VII) Income Price using Direct Capitalization Method = [(V) ÷ (VI)]

Adjusted the discount rate with risk of change in income and return of capital

23,800,000 thousand(2) DCF Method(I) Total of Current Value of Net Income during Analysis Period

Based on estimates in the engeneering report. 70% of the stabilized amountContents

Overview

JPY 8,893,282 thousand(a) Sale Price

27,368,922 thousand(b) Sale Costs

821,128 thousand(c) Returning Price [(a) - (b)]26,547,794 thousand(II) Returning Price, Current Value

16,771,038 thousand(III) Discount Rate

4.7%

Recognized by making assessments after taking into risks of location, market, property, andresults of due diligence and research(IV) Final Capitalization Yield

5.1%

Taking into consideration of risks such as volatility of rental income, market risks,deterioration of building conditions, liquidity of disposition market(V) Income Price using DCF Method = [(I) + (2)]25,700,000 thousand(3) Income Price using Income Capitalization Method

24,800,000 thousand

2. Estimated Price using Cost Method
Contents(i) Land Price

JPY 6,700,000 thousand
504,000 thousand(ii) Building Price

530,000 thousand(iii) Furnishings/Appliances/Equipment/Upholstery Price(v) Maketability Correction Ratio for Land and Building as a Whole

7,734,000 thousand
150%(vi) Estimated Price using Cost Method = [(iv) × (v)]

11,600,000 thousand(iv) Total Price of Land, Building, and Furnishings/Appliances/Equipment/Upholstery = [(i) + (ii) + (iii)]

Other Points to be Noted for Appraisal by Apprising Organization－

14

Overview

D44: Hotel Epinard Nasu
Type and Location of Specified Assets, etc.
Type of Specified Assets

Trust Beneficiary Right

Date of (Planned) Acquisition

March 31, 2016

(Planned) Purchase Price

JPY 20,981million

Appraisal Value

JPY 21,300 million

Appraisal Agency

Morii Appraisal & Investment Consulting, Inc.

LocationTransport(Lot Number)

1-10 and other 59 lots, Takaku-hei, Nasu-machi, Nasu-gun, Tochigi(Address)

Nasu-gun (address numbers not available in Nasu-gu)

10 min by car from Nasu IC on Tohoku Highway
30 min by car from Nasushiobara station on JR Tohoku Main Line and Tohoku Shinkansen
Form of Possession

Land

Lot Area (m2)

126,403.51 ㎡

Form of Possession

Ownership
2

Structure/No. of Stories

Building

N/A
Coverage

Ratio/Floor Area Ratio
Purpose of Use

37,702.33 ㎡ Construction Date

Total Floor Area (m )Building

Renovation Date

ZoningOwnership / Land lease

60%／200%
Hotel
February 28, 1992 / June 20, 1995

Steel concrete structure with flat roof, 13 stories /Steel concrete structure with flat roof, 14 stories
April 2014 – June 2014; January 2015 – April 2015

Trustee

Sumitomo Mitsui Trust Bank, Limited

Trust Period

From: August 29, 2014; Until: March 31, 2026

Creation of Security Interest

None

Lease Overview (Jan 31, 2016)
Total No. of Tenant(s)1Leasable Area(m2)37,702.33 ㎡

Occupancy Rate

310 rooms

Number of Guest Rooms(T42・O268)

100.0% Lease Area (m2)

37,702.33 ㎡－ GOP (per month)

34,460 thousand

Security Deposit/Guarantee Money
Overview of Lease Agreement
TenantNaqua Hotels and Resorts Co., Ltd.

Type of Contract

Fixed rent plus variable rent type

Term

From: March 31, 2016 Until: March 30, 2026

Determination of rent of lease
contract

Fixed rent (JPY 771 million per annum (January – March: JPY 10 million per month / April – June: JPY 54 million / July –September: JPY 153 million / October - December: JPY 40 million per month)) plus variable rent based on GOP of hotel
operation. (Note)

Management services fee

Not disclosed, as tenant's consent has not been obtained for disclosure.

Security Deposit/Guarantee Money －Renewal Upon Expiration

The contract is a Fixed Term Building Lease, therefore the contract will terminate at the expiration of the lease term.

Rent Revision

Rent cannot be revised during the lease term.

Early Termination

Termination prior to the expiration of the lease term is not permitted.

Other Special Matters

None

Overview of Building Conditions Survey ReportCompany Conducting Survey

Tokio Marine & Nichido Risk Consulting Co., Ltd.

Probable Maximum Loss (PML)
Replacement Price

2.4%
JPY 10,349,000 thousand

Date of Report
Short term Repair Costs (within
1 year)Long term Repair Costs (in 12
years)

February 2016
JPY 200 thousand
JPY 1,199,504 thousand

Area Characteristic
The property is a resort hotel located 10 minutes’ drive from Tohoku highway Nasu IC, or one hour 40 minutes away from Tokyo Station by Shinkansen and free
shuttle bus. Capacity of all rooms are more than two and it has various facilities such as hot spring, banquet hall, wedding hall, and convenient for activities such as
golfing, tennis, kayaking, horseback riding, trekking and skiing, which enable it to accommodate a variety of family/senior demands all year around. Growing retiree
population (age of 60 to 80) is a key customer base for the property with 26% of rooms sold in 2015. It was awarded as “Certificate of Excellence” from Trip Advisor
citing its strong popularity and excellent word-of-mouth reputation, and further increase in leisure demands can be expected going forward.

Special Instructions
A part of land and buildings are on lease hold. According to the lease contracts for subject land and building, transfer of the trust beneficiary rights, or subleasing of
subject land and building may need the approval from respective owners.
A part of boundary is not confirmed with owner of neighboring land in written form.
A part of land is with co-ownership.
A part of land (3,371 ㎡, 404-100 and 404-125) bears expenses of private roads.
There are limits on future developments based agreement with neighboring land owners(Note) Variable rent is the amount of the tenant’s aggregate monthly gross revenue during the three-month variable rent calculation period after deducting the sum of (i) aggregate
gross reimbursements, (ii) management services fee and (iii) fixed rent during the same period. However, when the balance after deduction is zero or negative, variable rent is
zero.

15

D44: Hotel Epinard Nasu
Income and Expenditures, Etc.
Operating Period

1/1/2014 – 12/31/2014

1/1/2015 – 12/31/2015
JPY 1,122,416 thousand

JPY 1,387,936 thousanda. Land Lease Fees

19,320 thousand

19,320 thousandb. Taxes and Public Dues

56,122 thousand

56,122 thousandc. Non life Insurance Premiums

3,378 thousand

3,378 thousand

GOP (= (1) - (2))

800 thousand

800 thousand

1,042,795 thousand

1,308,316 thousandd. Trust FeesNOI (= GOP [a. + b. + c. + d.])(1) Sales
Room Income
Other Income(2) Operating Costs (not including a. through e. above)(Reference)

5,741,570 thousand

6,116,745 thousand

1,845,118 thousand

2,067,033 thousand

3,896,451 thousand

4,049,712 thousand

4,619,154 thousand

4,728,808 thousand

ADR

JPY 19,834

JPY 21,207

RevPAR

17,064

18,447

Room Occupancy Rates

86.0%

87.0%

GOP Ratio

19.5%

22.7%

－／

Daily/ Weekly/ Monthly

－／

－

－／

－／

－

－

Overseas Sales Share－(Note) Ratio of daily / weekly / monthly stay, ratio of sales from foreign guests, nights, sales from foreign guests are not available.
Appraisal Value (Specified Value)

JPY 21,300 million

Time of Valuation

1/31/2016

Summary of Real Estate Appraisal Report
Appraising Organization

Morii Appraisal & Investment Consulting, Inc.

Appraisal Value (Normal Value)

JPY 21,300 million

Time of Valuation

1/31/2016

1. Value of Profits using the Profit Capitalization Method(1) Direct Capitalization Method

Contents(a) Room Rental Income

Overview
Based on mid to long term stabilized rents considering current leasing conditions

JPY 1,534,182 thousand(b) Common Area Maintenance Fee Income－(c) Utility Income－(d) Parking Lot Income－(e) Other Income－(I) Total Potential Revenue = [(a) + (b) + (c) + (d) + (e)]1,534,182 thousand(f) Vacant Room Losses－(g) Irrecoverable Debt Losses－(II) Operating Revenue = [(I) - (f) - (g)]1,534,182 thousand－(h) Maintenance and Management Costs(i) Utility Costs－(j) Repair Costs

29,988 thousand

Based on estimates in the engeneering report. 30% of the stabilized amount－(k) Property Management Fee－(l) Tenant Solicitation Expenses(m) Taxes and Public Dues

45,124 thousand

Based on historical data, with consideration of variable rate into account(n) Non-life Insurance Premiums

3,324 thousand

Based on comparable transactions (0.03% of the restoration costs)

38,525 thousand(o) Other Costs(III) Operating Costs (Expense Rate) = [(h) + (i) + (j) + (k) + (l) + (m) + (n) + (o)]116,961 thousand(IV) Net Operating Income = [(II) - (III)]

1,417,221 thousand(p) One Time Investment Gains

400 thousand(q) Capital Improvements and Expenses

69,971 thousand(V) Net Income = [(IV) + (p) - (q)]Based on estimates in the engeneering report. 70% of the stabilized amount

1,346,850 thousand(VI) Capitalization Yield

6.3%(VII) Income Price using Direct Capitalization Method = [(V) ÷ (VI)]

Adjusted the discount rate with risk of change in income and return of capital

21,400,000 thousand(2) DCF Method

Contents

Overview

9,494,780 thousand(I) Total of Current Value of Net Income during Analysis Period

21,736,646 thousand(a) Sale Price

652,159 thousand(b) Sale Costs

21,084,487 thousand(c) Returning Price [(a) - (b)](II) Returning Price, Current Value

11,662,884 thousand(III) Discount Rate

6.1%

Recognized by making assessments after taking into risks of location, market,
property, and results of due diligence and research(IV) Final Capitalization Yield

6.5%

Taking into consideration of risks such as volatility of rental income, market
risks, deterioration of building conditions, liquidity of disposition market(V) Income Price using DCF Method = [(I) + (2)]21,200,000 thousand(3) Income Price using Income Capitalization Method

21,300,000 thousand

2. Estimated Price using Cost Method
Contents(i) Land Price

Overview

821,600 thousand(ii) Building Price

2,780,000 thousand(iii) Furnishings/Appliances/Equipment/Upholstery Price

750,000 thousand(iv) Total Price of Land, Building, and Furnishings/Appliances/Equipment/Upholstery = [(i) + (ii) + (iii)]

4,351,600 thousand(v) Maketability Correction Ratio for Land and Building as a Whole

150%(vi) Estimated Price using Cost Method = [(iv) × (v)]

6,530,000 thousand

Other Points to be Noted for Appraisal by Apprising Organization－

16D45: Hotel MyStays Fukuoka Tenjin
Type and Location of Specified Assets, etc.
Type of Specified Assets

Trust Beneficiary Right

Date of (Planned) Acquisition

March 31, 2016

(Planned) Purchase Price

JPY 8,059 million

Appraisal Value

JPY 8,100 million

Appraisal Agency

Morii Appraisal & Investment Consulting, Inc.
(Lot Number)

90 and other 4 lots, 3 chome Tenjin, Chuo-ku, Fukuoka City, Fukuoka(Address)

3-5-7 Tenjin, Chuo-ku, Fukuoka City, Fukuoka

Location

3 min walk from Tenjin station on subway Airport Line
6 min walk from Nishi Tetsu Fukuoka station on Nishi Tetsu Omuta Line

Transport

OwnershipForm of Possession
Land

Zoning1,243.44 ㎡

Lot Area (m2)

OwnershipForm of Possession

Building Coverage Ratio/Floor Area
Ratio
Purpose of Use

Total Floor Area (m )5,083.06 ㎡ Construction Date

Structure/No. of Stories

Steel concrete structure with flat roof, 7 stories

Renovation Date-

2

Commercial area
80%/400%
Hotel
August 19, 2008

Building

Trustee

Sumitomo Mitsui Trust Bank, Limited

Trust Period

From: August 29, 2014; Until: August 29, 2024

Creation of Security Interest

None

Lease Overview (Jan 31, 2016)1

Total No. of Tenant(s)5,083.06 ㎡

2

Leasable Area(m )Money

217 rooms(D204・T12・O1)

100% Lease Area (m2)

5,083.06 ㎡

JPY 1,500 thousand GOP (per month)

JPY 19,069 thousand

Occupancy Rate
Security Deposit/Guarantee

Number of Guest Rooms

Overview of Lease Agreement
TenantMyStays Hotel Management Co., Ltd.

Type of Contract

Fixed rent plus variable rent type

Term

From: March 31, 2016 Until: March 30, 2026

Determination of rent of lease Fixed rent (JPY 201million per annum (January – June: JPY 14.7 million per month / July – December: JPY 18.8 million
contract

per month)) plus variable rent based on GOP of hotel operation. (Note)

Management services fee

Not disclosed, as tenant's consent has not been obtained for disclosure.

Security

Deposit/Guarantee

Money

JPY 1,500 thousand

Renewal Upon Expiration

The contract is a Fixed Term Building Lease, therefore the contract will terminate at the expiration of the lease term.

Rent Revision

Rent cannot be revised during the lease term.

Early Termination

Termination prior to the expiration of the lease term is not permitted.

Other Special Matters

None

Overview of Building Conditions Survey ReportCompany Conducting Survey

Tokyo Building-Tech Center Co., Ltd.

Date of Report

6.8% Short term Repair Costs (within 1 year)

Probable Maximum Loss (PML)
Replacement Price

February 2016

JPY 1,101,000 thousand Long term Repair Costs (in 12 years)

JPY 96,000 thousand

Area Characteristic
The property is a relatively new business hotel completed in 2008. The property is located three minutes on foot from Tenjin Station on the Fukuoka City Subway
Kuko Line and 6 minutes on foot from the station on the Nishitetsu Tenjin Omuta Line. It has a good access to the terminal station such as Hakata Station in six
minutes by train and Fukuoka Airport in 11 minutes by train. It can accommodate both of business and leisure demands and domestic and foreign guests can be
expected. Additionally, it also has a good access to popular tourism destinations such as Canal City Hakata, Yafuoku Dome, MarineMesse Fukuoka, Dazaifu
Tenmangu etc.
Facilities are suitable for both leisure and business guests and stable performance throughout the year because of high demand can be seen.
Special Instructions

None(Note) Variable rent is the amount of the tenant’s aggregate monthly gross revenue during the three-month variable rent calculation period after deducting the sum of (i) aggregate
gross reimbursements, (ii) management services fee and (iii) fixed rent during the same period. However, when the balance after deduction is zero or negative, variable rent is
zero.

17

D45: Hotel MyStays Fukuoka Tenjin
Income and Expenditures, Etc.
Operating Period

1/1/2014 – 12/31/2014

1/1/2015 – 12/31/2015

JPY 256,991 thousand

GOP (= (1) - (2))
b. Taxes and Public DuesJPY 325,351 thousand--

14,081 thousand

14,081 thousanda. Land Lease Feesc. Non life Insurance Premiums

344 thousand

344 thousandd. Trust Fees

800 thousand

800 thousand

241,766 thousand

310,125 thousand

NOI (= GOP [a. + b. + c. + d.])(1) Sales
Room Income
Other Income(2) Operating Costs (not including a. through e. above)(Reference)

440,627 thousand

574,027 thousand

415,803 thousand

555,591 thousand

24,823 thousand

18,436 thousand

183,635 thousand

248,676 thousand

JPY 6,481

JPY 7,274

ADR
RevPAR

5,250

7,015

Room Occupancy Rates

81.0%

96.4%

GOP Ratio

58.3%

Daily/ Weekly/ Monthly

98.8%／

1.1%／

0.0%

Overseas Sales Share

56.7%
99.7%／

0.2%／

0.0%

7.1%

30.6%

Summary of Real Estate Appraisal Report
Appraising Organization
Appraisal Value (Normal Value)Morii Appraisal & Investment Consulting, Inc.

Time of Valuation

1/1/2016

JPY 8,100million

1. Value of Profits using the Profit Capitalization Method(1) Direct Capitalization Method

Contents(a) Room Rental Income

Overview

JPY 426,471 thousand(b) Common Area Maintenance Fee Income－(c) Utility Income－(d) Parking Lot Income－－(e) Other Income(I) Total Potential Revenue = [(a) + (b) + (c) + (d) + (e)]426,471 thousand－(f) Vacant Room Losses－(g) Irrecoverable Debt Losses

426,471 thousand(II) Operating Revenue = [(I) - (f) - (g)]－(h) Maintenance and Management Costs(i) Utility Costs－(j) Repair Costs

2,400 thousand

Based on estimates in the engeneering report. 30% of the stabilized amount－(k) Property Management Fee－(l) Tenant Solicitation Expenses

12,428 thousand(m) Taxes and Public Dues(n) Non-life Insurance Premiums

660 thousand

Based on historical data, with consideration of variable rate into accountBased on comparable transactions (0.06% of the restoration costs)－(o) Other Costs(III) Operating Costs (Expense Rate) = [(h) + (i) + (j) + (k) + (l) + (m) + (n) + (o)]15,488 thousand(IV) Net Operating Income = [(II) - (III)]410,983 thousand－(p) One Time Investment Gains(q) Capital Improvements and Expenses

5,600 thousand(V) Net Income = [(IV) + (p) - (q)]Based on estimates in the engeneering report. 70% of the stabilized amount

405,383 thousand
5.0%(VI) Capitalization Yield

Adjusted the discount rate with risk of change in income and return of capital

8,110,000 thousand(VII) Income Price using Direct Capitalization Method = [(V) ÷ (VI)]Contents(2) DCF Method(I) Total of Current Value of Net Income during Analysis Period

Based on mid to long term stabilized rents considering current leasing conditions

Overview

JPY 3,075,164 thousand
8,269,808 thousand(a) Sale Price

248,154 thousand(b) Sale Costs

8,021,654 thousand(c) Returning Price [(a) - (b)](II) Returning Price, Current Value

5,019,390 thousand(III) Discount Rate

4.8%

Recognized by making assessments after taking into risks of location, market,
property, and results of due diligence and research(IV) Final Capitalization Yield

5.2%

Taking into consideration of risks such as volatility of rental income, market risks,deterioration of building conditions, liquidity of disposition market(V) Income Price using DCF Method = [(I) + (2)]8,090,000 thousand(3) Income Price using Income Capitalization Method

8,100,000 thousand

2. Estimated Price using Cost Method
Contents

Overview

JPY 898,000 thousand(i) Land Price

652,000 thousand(ii) Building Price

261,000 thousand(iii) Furnishings/Appliances/Equipment/Upholstery Price

1,811,000 thousand(iv) Total Price of Land, Building, and Furnishings/Appliances/Equipment/Upholstery = [(i) + (ii) + (iii)]

150%(v) Maketability Correction Ratio for Land and Building as a Whole

2,720,000 thousand(vi) Estimated Price using Cost Method = [(iv) × (v)]Other Points to be Noted for Appraisal by Apprising Organization－

18

D46: Hotel MyStays Hamamatsucho
Type and Location of Specified Assets, etc.
Type of Specified Assets

Trust Beneficiary Right

Date of (Planned) Acquisition

March 31, 2016

(Planned) Purchase Price

JPY 7,959million

Appraisal Value

JPY 8,000million

Appraisal Agency

Morii Appraisal & Investment Consulting, Inc.
(Lot Number)

101-6 and other 1 lot, 1 chome Hamamatsucho, Minato-ku, Tokyo(Address)

1-18-14 Hamamatsucho, Minato-ku, Tokyo

Location

6 min walk from Hamamatsucho Station on JR Yamanote Line
2 min walk from Daimon Station on Toei Asakusa Line and Toei Oedo Line

Transport

Form of Possession
Land

ZoningOwnership

Building Coverage273.86 ㎡ Ratio/Floor Area Ratio

2

Lot Area (m )Form of Possession

Purpose of Use

Ownership

1,951.90 ㎡ Construction Date2

Total Floor Area (m )Commercial area

80%/700%
Hotel

October 16, 2008

Building
Structure/No. of Stories

Steel structure with flat roof, 14 stories

Renovation Date-

Trustee

Sumitomo Mitsui Trust Bank, Limited

Trust Period

From: August 29, 2014; Until: March 30, 2026

Creation of Security Interest

None

Lease Overview (Jan 31, 2016)1

Total No. of Tenant(s)1,951.90 ㎡

2

Leasable Area(m )Occupancy Rate

105 rooms（D105）

Number of Guest Rooms

100% Lease Area (m2)

1,951.90 ㎡- GOP (per month)

JPY 17,456 thousand

Security Deposit/Guarantee Money
Overview of Lease Agreement
TenantMyStays Hotel Management Co., Ltd.

Type of Contract

Fixed rent plus variable rent type

Term

From: March 31, 2016 Until: March 30, 2026

Determination of rent of lease

Fixed rent (JPY 164.4 million per annum (JPY 13.7 million per month) plus variable rent based on GOP of hotel operation. (Note)contract
Management services fee

Not disclosed, as tenant's consent has not been obtained for disclosure.

Security Deposit/Guarantee
Money

-

Renewal Upon Expiration

The contract is a Fixed Term Building Lease, therefore the contract will terminate at the expiration of the lease term.

Rent Revision

Rent cannot be revised during the lease term.

Early Termination

Termination prior to the expiration of the lease term is not permitted.

Other Special Matters

None

Overview of Building Conditions Survey ReportCompany Conducting Survey

Tokio Marine & Nichido Risk Consulting Co., Ltd.

February 2016

4.3% Short term Repair Costs (within 1 year)

Probable Maximum Loss (PML)
Replacement Price

Date of Report

JPY 515,800 thousand Long term Repair Costs (in 12 years)

JPY 43,151 thousand

Area Characteristic
The property is a relatively new business hotel completed in 2008. The property is located six minutes on foot from Hamamatsucho Station on the JR Line andMonorail Hamamatsucho station (connects to Haneda Airport via the monorail) on the Tokyo Monorail Line, and two minutes on foot from Daimon Station on the Toei
Asakusa Line and Toei Oedo Line. It is adjacent to business districts such as Shiodome, headquarter of ANA, Dentsu and Softbank, and has a convenient access toother major business districts such as Tokyo Station (six minutes by train) as well as Shinagawa Station (five minutes by train). As it has a good access to Haneda
Airport in 19 minutes, the property can accommodate both of business demands and leisure demands. Convenient location in proximity to popular tourism destinations
such as Akihabara and Asakusa can make the performance stable throughout the year because of high demand. Potential of increasing demand from extension ofmonorail or redevelopment in surrounding areas near Hamamatsucho station can be expected.
Special Instructions
None(Note)

Variable rent is the amount of the tenant’s aggregate monthly gross revenue during the three-month variable rent calculation period after deducting the sum of (i)aggregate gross reimbursements, (ii) management services fee and (iii) fixed rent during the same period. However, when the balance after deduction is zero or negative,
variable rent is zero.

19D46: Hotel MyStays Hamamatsucho
Income and Expenditures, Etc.
Operating Period

1/1/2014 – 12/31/2014
JPY 240,117 thousand

GOP (= (1) - (2))

JPY 275,027 thousand--

13,255 thousand

13,255 thousanda. Land Lease Fees
b. Taxes and Public Dues

1/1/2015 – 12/31/2015

c. Non life Insurance Premiums

184 thousand

184 thousandd. Trust Fees

800 thousand

800 thousand

NOI (= GOP [a. + b. + c. + d.])225,878 thousand

260,787 thousand

379,414 thousand

458,020 thousand

Room Income

376,058 thousand

455,513 thousand

Other Income

3,355

2,506 thousand

139,296 thousand

182,993 thousand(1) Sales(2) Operating Costs (not including a. through e. above)(Reference)

ADR

JPY 10,584

JPY 12,426

RevPAR

9,812

11,886

Room Occupancy Rates

92.7%

95.6%

GOP Ratio

63.3%

Daily/ Weekly/ Monthly

97.7%／

2.3%／

0.0%

Overseas Sales Share

60.0%
98.9%／

1.1%／

0.0%

35.2%

59.1%

Summary of Real Estate Appraisal Report
Appraising Organization

Morii Appraisal & Investment Consulting, Inc.

Appraisal Value (Specified Value)

8,000million

Time of Valuation

1/1/2016

1. Value of Profits using the Profit Capitalization Method(1) Direct Capitalization Method

Contents

Overview

JPY 384,820 thousand(a) Room Rental Income(b) Common Area Maintenance Fee Income－(c) Utility Income－(d) Parking Lot Income－－(e) Other Income(I) Total Potential Revenue = [(a) + (b) + (c) + (d) + (e)]384,820 thousand－(f) Vacant Room Losses(g) Irrecoverable Debt Losses－(II) Operating Revenue = [(I) - (f) - (g)]384,820 thousand－(h) Maintenance and Management Costs(i) Utility Costs－(j) Repair Costs

1,079 thousand

Based on estimates in the engeneering report. 30% of the stabilized amount－(k) Property Management Fee－(l) Tenant Solicitation Expenses

11,735 thousand(m) Taxes and Public Dues(n) Non-life Insurance Premiums

309 thousand

Based on historical data, with consideration of variable rate into accountBased on comparable transactions (0.06% of the restoration costs)－(o) Other Costs(III) Operating Costs (Expense Rate) = [(h) + (i) + (j) + (k) + (l) + (m) + (n) + (o)]13,123 thousand(IV) Net Operating Income = [(II) - (III)]371,697 thousand－(p) One Time Investment Gains(q) Capital Improvements and Expenses

2,517 thousand(V) Net Income = [(IV) + (p) - (q)]Based on estimates in the engeneering report. 70% of the stabilized amount

369,180 thousand(VI) Capitalization Yield

4.7%(VII) Income Price using Direct Capitalization Method = [(V) ÷ (VI)]

Adjusted the discount rate with risk of change in income and return of capital

7,850,000 thousand(2) DCF Method(I) Total of Current Value of Net Income during Analysis Period

Based on mid to long term stabilized rents considering current leasing conditions

Contents

Overview

JPY 2,839,031 thousand
8,508,020 thousand(a) Sale Price

255,301 thousand(b) Sale Costs

8,252,719 thousand(c) Returning Price [(a) - (b)](II) Returning Price, Current Value

5,314,173 thousand(III) Discount Rate

4.5%

(IV) Final Capitalization Yield

4.9%

Recognized by making assessments after taking into risks of location, market,
property, and results of due diligence and research
Taking into consideration of risks such as volatility of rental income, market risks,deterioration of building conditions, liquidity of disposition market(V) Income Price using DCF Method = [(I) + (2)]8,150,000 thousand(3) Income Price using Income Capitalization Method

8,000,000 thousand

2. Estimated Price using Cost Method
Contents(i) Land Price

Overview

JPY 1,160,000 thousand(ii) Building Price309,000 thousand(iii) Furnishings/Appliances/Equipment/Upholstery Price

262,000 thousand(iv) Total Price of Land, Building, and Furnishings/Appliances/Equipment/Upholstery = [(i) + (ii) +(iii)]

1,731,000 thousand(v) Maketability Correction Ratio for Land and Building as a Whole

150%
2,600,000 thousand(vi) Estimated Price using Cost Method = [(iv) × (v)]Other Points to be Noted for Appraisal by Apprising Organization－

20

A104: Royal Parks Shinden
Type and Location of Specified Assets, etc.
Type of Specified Assets

Trust Beneficiary Right

Date of (Planned) Acquisition

March 31, 2016

(Planned) Purchase Price

JPY 5,024 million

Appraisal Value

JPY 5,100 million

Appraisal Agency

Morii Appraisal & Investment Consulting, Inc.
(Lot Number)

19-39, 3 chome Shinden, Adachi-ku, Tokyo(Address)

3-35-20 Shinden, Adachi-ku, Tokyo

Location
17 minutes walk from Oji-kamiya station on Tokyo Metro Nanboku Line

Transport

Form of Possession

Land lease

ZoningCategory I residential area

Lot Area (m2)

9,905.57 ㎡

Building Coverage Ratio/Floor 60% / 300%
Area Ratio

Form of Possession

Ownership

Purpose of Use

Land

2

Building(Note)

Total Floor Area (m )18,368.19 ㎡

Structure/No. of Stories

Steel concrete structure with flat roof, 14 stories

Construction Date

Trustee

Sumitomo Mitsui Trust Bank, Limited

Trust Period

From: July 31, 2007; Until: Until: March 30, 2024

Creation of Security Interest

None

Residential, parking lot, retailand storage
June 12, 2007

Lease Overview (Jan 31, 2016)
5 Rentable units

Total No. of Tenant(s)2Leasable Area (m )Occupancy Rate

248

15,797.29 ㎡ Lease Area (m2)

15,797.29 ㎡

100.0% Rent (per month)

JPY 33,377 thousand－

Security Deposit/Guarantee Money
Master Lease/Properti Management Company
Company Name

Daiwa Living Co., Ltd.

Type of contract

Fixed rental master lease (residential), pass-through master lease (retail)Overview of Building Conditions Survey ReportCompany Conducting Survey

Tokio Marine & Nichido Risk Consulting Co., Ltd.

3.8% Short term Repair Costs (within 1 year)

Probable Maximum Loss (PML)
Replacement Price

Date of Report

JPY 4,988,300 thousand Long term Repair Costs (in 12 years)

November 2015－
JPY 170,653 thousand

Area Characteristic
The property is located approximately 17 minutes on foot from Oji-Kamiya Station on the Tokyo Metro Namboku Line, and one minute from Heart-Island-Minami
Station, which is accessible by metropolitan bus for nine minutes from Oji-Station on the JR Keihin-Tohoku Line and Tokyo Metro Namboku Line.
The property has a multi access to the down town area with 25 minutes train to JR Tokyo Station and is located in popular residential area.
This area is a cluster of residential area which was developed based on the “Shinden Area District Plan” and its neighborhood has parks, supermarkets, convenience
stores, drug stores, hospitals and other facilities within 5 minute-walk distance around this property.
The property is a rental apartment building made up of a total of 243 units with 1 room layouts and floor spaces ranging from 38.00 m2 to 38.44 m2 (18 units), 1K
with floor spaces of 38.00 m2 (10 units), 1LDK with floor spaces of 53.06 m2 to 58.90 m2 (60 units), 2LDK with floor spaces of 60.25 m2 to 97.82m2 (115 units) and
3LDK with floor spaces of 74.18 m2 to 110.52 m2 (40 units), which enable to target a range of tenant segments such as singles, small families including DINKS andfamilies.
The property is master-leased by Daiwa Living, a subsidiary of Daiwa House, which provides a variety of services to tenants such as concierge services.
Special Instructions
Type of Land Leasehold Right: General fixed term leasehold• Purpose: Ownership of building for leasing contract• Land Rent: JPY 48million (JPY 4 million per month)• Lease Period: From August 31, 2005 to August 30, 2065
The Property is a leased property and the permission of the land owner will be required at the time of the transfer of the building accompanying the transfer ofleasehold rights.
Based on the agreement with land owner, it is necessary to obtain approval from land owner before changing master lease contract/property management contract(excludes the case arise from rent revision) with the current tenant, executing new fixed term building lease/property management contract or collateralization.
(Note)

Excluding parking building

21

A104： Royal Parks Shinden
Income and Expenditures, Etc.
Operating Period

1/1/2014-12/31/2014

a. Total revenues
Rent Income

1/1/2015-12/31/2015

JPY 432,803 thousand

JPY 433,822 thousand

399,955 thousand

400,533 thousand

Other income etc.
b. Total expenses

32,847 thousand

33,289 thousand

244,349 thousand

245,176 thousand

Maintenance and management expenses etc.

63,391 thousand

64,626 thousand

Taxes and dues

29,641 thousand

29,234 thousand

Non-life Insurance Premiumsc. Depreciation

1,268 thousand

1,268 thousand

149,248 thousand

149,248 thousand

800 thousand

800 thousand

Profits on lease business [a. - b.]

Other expenses

188,454 thousand

188,645 thousand

NOI [a. - b. + c.]

337,702 thousand

337,893 thousand

Summary of Real Estate Appraisal Report
Appraising Organization

Morii Appraisal & Investment Consulting, Inc.

Appraisal Value (Specified Value)

JPY 5,100 million

Time of Valuation

11/20/2015

1. Value of Profits using the Profit Capitalization Method(1) Direct Capitalization Method(a) Room Rental Income

Contents

Overview

JPY 362,829 thousand(b) Common Area Maintenance Fee Income

Based on mid to long term stabilized rents considering current leasing conditions

1,284 thousand－(c) Utility Income(d) Parking Lot Income

38,130 thousand(e) Other Income

7,620 thousand(I) Total Potential Revenue = [(a) + (b) + (c) + (d) + (e)]Based on current lease and comparable transactions

409,863 thousand(f) Vacant Room Losses

13,811 thousand－(g) Irrecoverable Debt Losses(II) Operating Revenue = [(I) - (f) - (g)]396,052 thousand(h) Maintenance and Management Costs

3,948 thousand

Based on comparable transactions(i) Utility Costs－(j) Repair Costs

4,266 thousand

Based on estimates in the engeneering report. 30% of the stabilized amount(k) Restoration Costs

7,824 thousand

Based on comparable cases and historical lease termination ratio(l) Property Management Fee

3,416 thousand

Based on comparable transactions(m) Tenant Solicitation Expenses

48,012 thousand

Based on historical data, with consideration of variable rate into account(n) Taxes and Public Dues

25,557 thousand

Based on historical data, with consideration of depreciation in value into account(o) Non-life Insurance Premiums

1,268 thousand

Based on comparable transactions

Including management fees－(p) Other Costs(III) Operating Costs (Expense Rate) ＝［(h)＋(i)＋(j)＋(k)＋(l)＋(m)＋(n)＋(o)＋(p)]94,291 thousand(IV) Net Operating Income = [(II) - (III)]

301,761 thousand(p) One Time Investment Gains

7,068 thousand

2.0% yield on deposit amount(q) Capital Improvements and Expenses

9,955 thousand

Based on estimates in the engeneering report. 70% of the stabilized amount(V) Net Income = [(IV) + (p) - (q) - (r)](i) Compound Present Value Rate of Compound Interest Annuity at the End of Rental Income Period

284,738 thousand
18.16872(ii) Demolition costs at the end of land lease571,339 thousand(iii) Compound Present Value Rate

0.08720

Discount rate 5.0%, land lease for 50 years

5,120,000 thousand(VI) Income Price using Direct Capitalization Method =［(V)×(i)－(ii)×(iii)]

Contents(2) DCF Method(I) Total of Current Value of Net Income during Analysis Period

Overview

JPY 2,276,763 thousand(a) Sale Price

4,650,000 thousand(b) Sale Costs

139,560 thousand(c) Returning Price [(a) - (b)]4,510,440 thousand(II) Returning Price, Current Value

2,822,318 thousand(III) Discount Rate

Discount rate 5.0%, rental income for 49 years
Per unit demolition costs multiplied by building areath
Until 10 year

4.8%

After 11th year

5.2%(i) Compound Present Value Rate

16.5677(ii) Demolition costs at the time of sales

75,205 thousand(V) Income Price using DCF Method = [(I) + (2)]5,100,000 thousand(3) Income Price using Income Capitalization Method

5,100,000 thousand

3.0% of sales price + JPY 60 thousand

Recognized by making assessments after taking into various risks
Discount rate 5.2%, rental income for 39 years
Per unit demolition costs multiplied by building area

2. Estimated Price using Cost Method
Contents(i) Land Price

Overview

JPY1,500,000 thousand(ii) Building Price

2,760,000 thousand
468,000 thousand(ⅲ) Related costs(iv) Total Price of Land, Building, and Furnishings/Appliances/Equipment/Upholstery = [(i) + (ii) + (iii)]

4,730,000 thousand

Other Points to be Noted for Appraisal by Apprising Organization
Judged that a value based on the direct capitalization method, which truly replicates the price formation process from an income perspective, is more persuasive and adopted the appraisal value determined using the direct
capitalization method, with the cost approach value as a reference

22

(2)

Matters relating to Seismic Resistance etc. for the Five Properties
With respect to the buildings of Hotel Epinard Nasu and Royal Parks Shinden, INV has obtained an
opinion from a third party expert, Tokio Marine & Nichido Risk Consulting Co., Ltd., indicating that, there
is no suspicion of falsification of structural calculation sheets through willful misconduct of the designers,
and that the structural design is judged to be in general compliance with provisions regarding seismic
resistance under the Building Standards Act and its Enforcement Order. With respect to the building of
Hotel MyStays Fukuoka Tenjin, INV has obtained an opinion from Tokyo Building-Tech Center Co., Ltd,
indicating that, there is no suspicion of falsification of structural calculation sheets and the calculationroute was appropriate; allowable stress design (first design) and possession horizontal proof stresscalculation (second design) have satisfied requirements. With respect to the building of Hotel MyStays
Hamamatsucho, INV has obtained an opinion from SD Network Co., Ltd, indicating that, the design waswith proper standard, there is no suspicion of falsification of structural calculation sheets, and there isno concerns over structural design. With respect to the main building of Hotel MyStays Gotanda Station,
which was designed under the old seismic code (Note 1), seismic reinforcement works were carried out
in August 2015. The annex building of Hotel MyStays Gotanda Station was designed under new seismiccode (Note 2), and INV has obtained an opinion from K.K. Aki Architect, indicating that, there is noconcerns over the seismic resistance functionality.
As a part of due diligence (Note 3) routine, INV conducts investigation on seismic risks for new
acquisitions.
(Note 1) Old seismic code refers to the seismic resistance standards in regard to building design, which
was applied in construction certification till May 31, 1981.
(Note 2) New seismic code refers to the seismic resistance standards in regard to building design, which
was applied in construction certification after May 31, 1981, and in consistency with BuildingStandards Act and its Enforcement Order, implemented in 1981. Within the Five Properties, allbuildings were certified under the new seismic code except for the main building of D43 “Hotel
MyStays Gotanda Station”.
(Note 3) The due diligence conducted includes examination of appraisal values, building inspection,
seismic risk inspection and legal due diligence.

6.

Overview of Sellers of the Five Properties“D43 Hotel MyStays Gotanda Station”
(i)

Name

Tsuki Tokutei Mokuteki Kaisha (“Tsuki TMK”)(ii)

Location

3-22-10-201, Toranomon, Minato-ku, Tokyo(iii)

Title and name ofrepresentative officer(iv)

Business(v)

CapitalKazuhiro Matsuzawa, Director(a)Operations relating to the assignment of specified assets, Asset
Liquidation Plan under the Act on Securitization of Assets, and the
management and disposition thereof.
(b) All other operations ancillary to the operations relating toliquidation of specified assets
Specified Capital: JPY100,000

This English language notice is a translation of the Japanese-language notice released on March 10, 2016 and was prepared solely for the convenience of, andreference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions
based on their own investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, andno warranties or assurances are given regarding the accuracy or completeness of this English translation. Readers are advised to read the original
Japanese-language notice. In the event of any discrepancy between this translation and the Japanese original, the latter shall prevail in all respects.

23

(vi)

(as of the date of thisnotice)Date of establishment

November 7, 2013(vii)

Net assets

Not disclosed (Note)(viii)

Total assets

Not disclosed (Note)(ix)

Investor

Not disclosed (Note)

Preferred Capital: JPY4,433 million(x)

Relationship between INV/Asset Manager and the Tsuki TMKWhile there are no capital relationships that should be noted between
INV/CIM and the Tsuki TMK, the Tsuki TMK has received tokumei
kumiai contributions through funds operated by affiliates of Fortress
Investment Group LLC (“FIG”), an affiliate of Calliope Godo Kaisha
Capital relationships(“Calliope”). As of December 31, 2015, Calliope holds 609,942
investment units issued by INV (19.09% stake). Further, as of the dateof this notice, Calliope is the parent company of CIM, holding 100% of
its outstanding shares.
While there are no capital relationships that should be noted between
INV/CIM and the Tsuki TMK, as of the date of this notice, among theofficers and employees of CIM, representative director and president
Personal relationships
Naoki Fukuda is seconded from Calliope. Further, part-time director
Christopher Reed was seconded from Fortress Investment Group
Japan Godo Kaisha, a subsidiary of FIG.
In the fiscal period ended December 31, 2015, there were notransactional relationships that should be noted between INV/CIM andTransactional
the Tsuki TMK. Further there are no transactional relationships that
relationships
should be noted between the related persons or affiliates of INV/CIM
and the TMK or its related persons or affiliates.
The Tsuki TMK is not a related party of INV or CIM. Further, related
Whether the TMK is apersons and affiliates of the Tsuki TMK are not related parties of INV or
CIM. Furthermore, the Tsuki TMK is not an interested party, etc. of CIM
related party
as provided in the Investment Trust Act.
(Note) Not disclosed because consent has not been obtained.
“D44 Hotel Epinard Nasu”(i)

Septentrio Tokutei Mokuteki Kaisha (“Septentrio TMK”)
Name

Septentrio 2 Tokutei Mokuteki Kaisha (“Septentrio 2 TMK”)
Septentrio 3 Tokutei Mokuteki Kaisha (“Septentrio 3 TMK”)(ii)

Location(iii)

Title and name ofrepresentative officer(iv)

1-2-9, Nishishinbashi, Minato-ku, Tokyo
Masayuki Meguro, Director

Business

Operations relating to the assignment of specified assets, Asset
Liquidation Plan under the Act on Securitization of Assets, and the
management and disposition thereof.
(b) All other operations ancillary to the operations relating toliquidation of specified assets
Specified Capital:

Capital(as of the date of thisnotice)Septentrio TMK

JPY100,000

Septentrio 2 TMK

JPY100,000

Septentrio 3 TMK

JPY100,000

(v)

(a)

This English language notice is a translation of the Japanese-language notice released on March 10, 2016 and was prepared solely for the convenience of, andreference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions
based on their own investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, andno warranties or assurances are given regarding the accuracy or completeness of this English translation. Readers are advised to read the original
Japanese-language notice. In the event of any discrepancy between this translation and the Japanese original, the latter shall prevail in all respects.

24

(vi)
Date of establishment

Septentrio TMK

December 25, 2015

Septentrio 2 TMKFebruary 5, 2016

Septentrio 3 TMK

February 5, 2016

(Note)(vii)

Net assets

Not disclosed(viii)

Total assets

Not disclosed (Note)(ix)

Investor

Not disclosed (Note)(x)

Relationship between INV/Asset Manager and the TMK
While there are no capital relationships that should be noted between
INV/CIM and these 3 TMKs, these 3 TMKs have received tokumei
kumiai contributions through funds operated by affiliates of Fortress
Investment Group LLC (“FIG”), an affiliate of Calliope Godo Kaisha
Capital relationships(“Calliope”). As of December 31, 2015, Calliope holds 609,942
investment units issued by INV (19.09% stake). Further, as of the dateof this notice, Calliope is the parent company of CIM, holding 100% of
its outstanding shares.
While there are no capital relationships that should be noted between
INV/CIM and thse 3 TMKs, as of the date of this notice, among theofficers and employees of CIM, representative director and president
Personal relationships
Naoki Fukuda is seconded from Calliope. Further, part-time director
Christopher Reed was seconded from Fortress Investment Group
Japan Godo Kaisha, a subsidiary of FIG.
There are no transactional relationships that should be noted between
Transactional
INV/CIM and these 3 TMKs. Further there are no transactional
relationships that should be noted between the related persons or
relationships
affiliates of INV/CIM and these TMKs or its related persons or affiliates.
These TMKs are not a related party of INV or CIM. Further, related
Whether the TMK is apersons and affiliates of these TMKs are not related parties of INV or
CIM. Furthermore, these 3 TMKs are not an interested party, etc. of
related party
CIM as provided in the Investment Trust Act.
(Note) Not disclosed because consent has not been obtained.
“D45 Hotel MyStays Fukuoka Tenjin” and “D46 Hotel MyStays Hamamtsucho
(i)

Name

Navaro Tokutei Mokuteki Kaisha (“Navaro TMK”)(ii)

Location

2-10-5, Akasaka, Minato-ku, Tokyo(iii)

Title and name ofrepresentative officer(iv)

Business

Akio Yamazaki, Director
(a)

(b)

Operations relating to the assignment of specified assets, Asset
Liquidation Plan under the Act on Securitization of Assets, and the
management and disposition thereof.
All other operations ancillary to the operations relating toliquidation of specified assets(vi)

Capital(as of the date of thisnotice)Date of establishment

April 2, 2014(vii)

Net assets

Not disclosed (Note)(viii)

Total assets

Not disclosed (Note)(ix)

Investor

Not disclosed (Note)(v)

Specified Capital: JPY100,000
Preferred Capital: JPY3,530 million

This English language notice is a translation of the Japanese-language notice released on March 10, 2016 and was prepared solely for the convenience of, andreference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions
based on their own investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, andno warranties or assurances are given regarding the accuracy or completeness of this English translation. Readers are advised to read the original
Japanese-language notice. In the event of any discrepancy between this translation and the Japanese original, the latter shall prevail in all respects.

25

(x)

Relationship between INV/Asset Manager and the TMK
While there are no capital relationships that should be noted between
INV/CIM and the Navaro TMK, the Navaro TMK has received tokumei
kumiai contributions through funds operated by affiliates of Fortress
Investment Group LLC (“FIG”), an affiliate of Calliope Godo Kaisha
Capital relationships(“Calliope”). As of December 31, 2015, Calliope holds 609,942
investment units issued by INV (19.09% stake). Further, as of the dateof this notice, Calliope is the parent company of CIM, holding 100% of
its outstanding shares.
While there are no capital relationships that should be noted between
INV/CIM and the Navaro TMK, as of the date of this notice, among theofficers and employees of CIM, representative director and president
Personal relationships
Naoki Fukuda is seconded from Calliope. Further, part-time director
Christopher Reed was seconded from Fortress Investment Group
Japan Godo Kaisha, a subsidiary of FIG.
Transactional
relationships

Whether the TMK is arelated party

INV acquired “Comfort Hotel Kurosaki”, “Comfort Hotel Maebashi”,“Comfort Hotel Tsubamesanjo” and “Comfort Hotel Kitami” as ofJanuary 2015 from the TMK.
The Navaro TMK is not a related party of INV or CIM. Further, related
persons and affiliates of the TMK are not related parties of INV or CIM.
The Navaro TMK is not an interested party, etc. of CIM as provided in
the Investment Trust Act.

(Note) Not disclosed because consent has not been obtained.
"A104 Royal Parks Shinden
(i)

Name

Momo Tokutei Mokuteki Kaisha (“Momo TMK”)(ii)

Location

1-2-9, Nishishinbashi, Minato-ku, Tokyo(iii)

Title and name ofrepresentative officer

Masayuki Meguro, Director(iv)

Business(a) Operations relating to liquidation of specified assets(b) All other operations ancillary to the operations relating to liquidationof specified assets(v)

Specified Capital: JPY100,000(vi)

Capital(as of the date of thisnotice)Date of establishment

March 13, 2014(vii)

Net assets

Not disclosed (Note)(viii)

Total assets

Not disclosed (Note)(ix)

Investor

Not disclosed (Note)(x)

Relationship between INV/Asset Manager and the Momo TMKWhile there are no capital relationships that should be noted between
INV/CIM and the Momo TMK, the Momo TMK has received tokumei
kumiai contributions through funds operated by affiliates of Fortress
Capital relationships
Investment Group LLC (“FIG”), an affiliate of Calliope Godo Kaisha(“Calliope”). As of December 31, 2015, Calliope holds 609,942
investment units issued by INV (19.09% stake). Further, as of the dateof this notice, Calliope is the parent company of CIM, holding 100% ofPreferred Capital: JPY3,740 million

This English language notice is a translation of the Japanese-language notice released on March 10, 2016 and was prepared solely for the convenience of, andreference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions
based on their own investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, andno warranties or assurances are given regarding the accuracy or completeness of this English translation. Readers are advised to read the original
Japanese-language notice. In the event of any discrepancy between this translation and the Japanese original, the latter shall prevail in all respects.

26

its outstanding shares.

Personal relationships

Transactional
relationships

Whether the TMK is arelated party

While there are no capital relationships that should be noted between
INV/CIM and the Momo TMK, as of the date of this notice, among theofficers and employees of CIM, representative director and president
Naoki Fukuda is seconded from Calliope. Further, part-time director
Christopher Reed was seconded from Fortress Investment Group
Japan Godo Kaisha, a subsidiary of FIG.
INV acquired “Royal Parks Momozaka” as of January 2015 from the
TMK.
The Momo TMK is not a related party of INV or CIM. Further, related
persons and affiliates of the TMK are not related parties of INV or CIM.
The Momo TMK is not an interested party, etc. of CIM as provided in theInvestment Trust Act.

(Note) Not disclosed because consent has not been obtained.
7.

Transactions with Interested Persons etc.
The sellers of the Five Properties, namely Tsuki TMK, Septentrio TMK, Septentrio2 TMK, Septentrio3
TMK, Navaro TMK, Boreas TMK and Momo TMK (Navaro TMK is a seller of two properties, and each of
the others is a seller of one property), are not Sponsor-related persons(Note) under the voluntary rules
specified by CIM as countermeasures against conflicts of interests in the management of INV’s
investments. However, such sellers have received tokumei kumiai contributions through funds managed
by affiliates of FIG, an affiliate of Calliope, CIM’s parent company, and thus a Sponsor-related person.
Therefore, CIM treats the sellers as persons equivalent to sponsor-related persons.
The Five Properties are to be acquired at prices not exceeding their appraisal value in accordance withSponsor-Related Person Transaction Rules and Sponsor-Related Person Transaction Management
Manual, which are internal rules of CIM, and after deliberation and resolution of the compliancecommittee meeting held on March 10, 2016 and the investment committee meeting held on the same day,the board of directors of CIM approved the acquisitions at the meeting held on March 10, 2016, and theboard of directors of INV approved the acquisitions at the meeting held on March 10, 2016.
In addition, MHM (including its subsidiary, Naqua), the tenant/operator of the Four Hotel Properties is nota Sponsor-related person(Note) under the voluntary rules specified by CIM as countermeasures against
conflicts of interests in the management of INV’s investments. However, each tenant is an affiliate of FIG,
which is an affiliate of Calliope (Calliope is CIM’s parent company, and thus a Sponsor-related person).
Therefore, CIM treats, MHM (including its subsidiary, Naqua) as a person equivalent to a Sponsor-related
person.
In accordance with Sponsor-Related Person Transaction Rules and Sponsor-Related Person
Transaction Management Manual of CIM and following the deliberation and resolution of the compliancecommittee meeting and the investment committee meeting both held on March 10, 2016, the boards of
directors of CIM and INV each approved the lease agreements expected to be entered into with MHM(including its subsidiary, Naqua) at meeting both held March 10, 2016, subject to hotel operatingThis English language notice is a translation of the Japanese-language notice released on March 10, 2016 and was prepared solely for the convenience of, andreference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions
based on their own investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, andno warranties or assurances are given regarding the accuracy or completeness of this English translation. Readers are advised to read the original
Japanese-language notice. In the event of any discrepancy between this translation and the Japanese original, the latter shall prevail in all respects.

27

capability of MHM (including its subsidiary, Naqua) being confirmed as sufficient through a third party
report and other relevant information, the rent level of each of the four hotel Properties being reasonableconsidering the market level, and management services fee amount and structure being fair comparedwith similar properties.
Therefore, INV considers MHM (including its subsidiary, Naqua), as conforming to the tenant selection
policy, which was stated in the “Report on Management Structure and System of the Issuer of Real
Estate Investment Trust Units and Related Parties” submitted on March 30, 2015.
(Note) A Sponsor-related Person is (i) any person who falls under the “Interested Persons, etc.” set forthin the Investment Trust Act and the Enforcement Order of the Investment Trust Act, (ii) all shareholders of
CIM and (iii) special purpose companies (tokubetsu mokuteki kaisha) (a) which delegate their
management to persons who fall under (ii) above, or (b) which are invested by or invested in anonymous
partnership (tokumei kumiai) by persons who fall under (ii) above.

This English language notice is a translation of the Japanese-language notice released on March 10, 2016 and was prepared solely for the convenience of, andreference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions
based on their own investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, andno warranties or assurances are given regarding the accuracy or completeness of this English translation. Readers are advised to read the original
Japanese-language notice. In the event of any discrepancy between this translation and the Japanese original, the latter shall prevail in all respects.

28

8. Summary of Current and Previous Owners
1. Name; 2. Relationship with Persons Having Special Conflict of Interests Relationships; 3.
Detail/reason for Acquisition; 4. Acquisition Price, and 5. Acquisition Timing
Property Name
D43
Hotel MyStays
Gotanda Station

D44
Hotel Epinard Nasu

D45
Hotel MyStays
Fukuoka Tenjin

Current owner/trust

Preceding owner/trust

Before the Preceding

beneficiary
1. Tsuki TMK
2. The TMK has received
tokumei kumiai
contributions throughfunds, etc. operated byaffiliates of FIG, an affiliate
of Calliope.
3. Acquisition for investment
purposes
4. Omitted because held for
longer than one year
5. December, 2013
1. Septentrio TMK, Septentrio
2 TMK, Septentrio 3 TMK(Note 1)
2. These 3 TMKs havereceived tokumei kumiai
contributions throughfunds, etc. operated byaffiliates of FIG, an affiliate
of Calliope.
3. Acquisition for investment
purposes
4. 16,890 million
5. March, 2016
1. NavaroTMK
2. The TMK has received
tokumei kumiai
contributions throughfunds, etc. operated byaffiliates of FIG, an affiliate
of Calliope.
3. Acquisition for investment
purposes
4. Omitted because held for
longer than one year
5. August, 2014

beneficiary
Persons having no special
conflict of interests
relationshipowner/trust beneficiary

Boreas TMK
2. The TMK has received
tokumei kumiai
contributions throughfunds, etc. operated byaffiliates of FIG, anaffiliate of Calliope.
3. Acquisition for investment
purposes
4. Omitted because held for
longer than one year
5. August, 2014

Persons having no
special conflict ofinterests relationship(Note 2)

Persons having no special
conflict of interests
relationshipThis English language notice is a translation of the Japanese-language notice released on March 10, 2016 and was prepared solely for the convenience of, andreference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions
based on their own investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, andno warranties or assurances are given regarding the accuracy or completeness of this English translation. Readers are advised to read the original
Japanese-language notice. In the event of any discrepancy between this translation and the Japanese original, the latter shall prevail in all respects.

29

Property Name

Current owner/trust

Preceding owner/trust

Before the Preceding

beneficiary
beneficiaryowner/trust beneficiary
1. Navaro TMK
Persons having no special
2. The TMK has received
conflict of interests
tokumei kumiai
relationshipcontributions throughfunds, etc. operated byaffiliates of FIG, an affiliate
of Calliope.
3. Acquisition for investment
purposes
4. Omitted because held for
longer than one year
5. August, 2014
A104
1. Momo TMK
Persons having no special
Royal Parks Shinden 2. The TMK has received
conflict of interests
tokumei kumiai
relationshipcontributions throughfunds, etc. operated byaffiliates of FIG, an affiliate
of Calliope.
3. Acquisition for investment
purposes
4. Omitted because held for
longer than one year
5. March, 2014
(Note 1) These 3 TMKs acquired the property along with other properties from preceding owner.
D46
Hotel MyStays
Hamamatsucho(Note 2) Naqua Hotels & Resorts Management Co.,Ltd.-This English language notice is a translation of the Japanese-language notice released on March 10, 2016 and was prepared solely for the convenience of, andreference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions
based on their own investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, andno warranties or assurances are given regarding the accuracy or completeness of this English translation. Readers are advised to read the original
Japanese-language notice. In the event of any discrepancy between this translation and the Japanese original, the latter shall prevail in all respects.

30

9.

Overview of Brokerage
Not applicable.

10. Schedules
Acquisition decision date:

March 10, 2016

Agreement execution date:
Anticipated acquisition proceeds payment date
Anticipated acquisition date

March 31, 2016

11. Future Outlook
For information on INV’s forecasts for financial results and distribution for the fiscal period ending June
2016 (January 1, 2016 to June 30, 2016), and the fiscal period ending December 2016 (July 1, 2016 to
December 31, 2016) in connection with the above, please refer to “Notice concerning Revision of
Forecast of Financial Results and Distribution for the 26th Fiscal Period Ending June 2016 and the 27th
Fiscal Period Ending December 2016” dated as of today.

12. Other Matters that are Necessary for Investors to Properly Understand and Make Judgment on Relevant
Information
For risks relating to investments in hotel properties, please refer to the “Investment Risks” (toshi risuku) inthe securities report (yuka shoken hokokusho) of INV for the fiscal period ended June 2015 (January 1,
2015 – June 30, 2015) (available in Japanese only), filed on September 28, 2015, as well as “Section
Two: Supplemental Information, 5. Investment Risks” in the securities registration statement (yuka shoken
todokedesho) of INV filed today (available in Japanese only).

This English language notice is a translation of the Japanese-language notice released on March 10, 2016 and was prepared solely for the convenience of, andreference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions
based on their own investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, andno warranties or assurances are given regarding the accuracy or completeness of this English translation. Readers are advised to read the original
Japanese-language notice. In the event of any discrepancy between this translation and the Japanese original, the latter shall prevail in all respects.

31

(Reference) Portfolio List after the Acquisition
Property
Number(Note 1)

Property Name

Type

Area
(Note 2)Acquisition Priceor AnticipatedAcquisition Price(mn JPY) (Note 3)

Investment
Ratio (%)
(Note 4)

A26

Nisshin Palacestage
Daitabashi

Residential

Greater Tokyo Area

1,251

0.5

A27

Nisshin Palacestage
Higashi-Nagasaki

Residential

Greater Tokyo Area

1,229

0.5

A28

Growth Maison Gotanda

Residential

Greater Tokyo Area

888

0.4

A29

Growth Maison Kameido

Residential

Greater Tokyo Area

1,070

0.4

A30

Emerald House

Residential

Greater Tokyo Area

1,505

0.6

A31

Harmonie Ochanomizu

Residential

Greater Tokyo Area

1,428

0.6

A32

Suncrest Shakujii-Koen

Residential

Greater Tokyo Area

1,088

0.4

A33

Growth Maison ShinYokohama

Residential

Greater Tokyo Area

1,059

0.4

A34

Belle Face UenoOkachimachi

Residential

Greater Tokyo Area

1,023

0.4

A35

Grand Rire Kameido

Residential

Greater Tokyo Area

906

0.4

A36

Growth Maison
Ikebukuro

Residential

Greater Tokyo Area

825

0.3

A37

Growth Maison Yoga

Residential

Greater Tokyo Area

795

0.3

A38

Route Tachikawa

Residential

Greater Tokyo Area

676

0.3

A39

Shibuya-Honmachi
MansionResidential

Greater Tokyo Area

651

0.3

A40

City Heights Kinuta

Residential

Greater Tokyo Area

646

0.3

A41

Acseeds Tower
Kawaguchi

Residential

Greater Tokyo Area

620

0.2

A42

Capital Heights
Kagurazaka

Residential

Greater Tokyo Area

604

0.2

A43

College Square Machida

Residential

Greater Tokyo Area

589

0.2

A44

Belair Meguro

Residential

Greater Tokyo Area

589

0.2

A45

Wacore Tsunashima I

Residential

Greater Tokyo Area

572

0.2

A46

Foros Nakamurabashi

Residential

Greater Tokyo Area

566

0.2

32

Property
Number(Note 1)

Property Name

Type

Area
(Note 2)Acquisition Priceor AnticipatedAcquisition Price(mn JPY) (Note 3)

Investment
Ratio (%)
(Note 4)A47

Growth Maison Kaijin

Residential

Greater Tokyo Area

557

0.2

A48

College Square Machiya

Residential

Greater Tokyo Area

510

0.2

A51

City House Tokyo
Shinbashi

Residential

Greater Tokyo Area

2,520

1.0

A52

Winbell Kagurazaka

Residential

Greater Tokyo Area

3,260

1.3

A53

Nishiwaseda Cresent
MansionResidential

Greater Tokyo Area

1,880

0.8

A54

Lexington Square
Akebonobashi

Residential

Greater Tokyo Area

1,450

0.6

A56

Casa Eremitaggio

Residential

Greater Tokyo Area

1,070

0.4

A59

Towa City Coop
Shinotsuka II

Residential

Greater Tokyo Area

866

0.3

A61

Bichsel Musashiseki

Residential

Greater Tokyo Area

577

0.2

A62

Lexel Mansion Ueno
Matsugaya

Residential

Greater Tokyo Area

970

0.4

A63

Towa City Coop
Sengencho

Residential

Greater Tokyo Area

1,110

0.4

A64

Royal Park Omachi

Residential

Other

415

0.2

A65

Lexington Square
Haginomachi

Residential

Other

330

0.1

A66

Visconti Kakuozan

Residential

Other

255

0.1

A71

Lexington Square
Daitabashi

Residential

Greater Tokyo Area

977

0.4

A72

Lexington Square Honjo
Azumabashi

Residential

Greater Tokyo Area

511

0.2

A73

AMS TOWER Minami 6Jo

Residential

Other

1,180

0.5

A75

Spacia Ebisu

Residential

Greater Tokyo Area

7,010

2.8

A76

Neo Prominence

Residential

Greater Tokyo Area

1,660

0.7

A77

Invoice Shin-Kobe
Residence

Residential

Other

1,260

0.5

A78

Cosmo Court Motomachi

Residential

Other

973

0.4

A79

Revest Honjin

Residential

Other

674

0.3

33

Property
Number(Note 1)

Property Name

Type

Area
(Note 2)Acquisition Priceor AnticipatedAcquisition Price(mn JPY) (Note 3)

Investment
Ratio (%)
(Note 4)

A80

Revest Matsubara

Residential

Other

657

0.3

A81

Sun Terrace Minami
Ikebukuro

Residential

Greater Tokyo Area

625

0.2

A82

Alba Noritake Shinmachi

Residential

Other

608

0.2

A83

Revest Meieki Minami

Residential

Other

597

0.2

A84

Revest HeianResidential

Other

595

0.2

A85

Vendir Hamaotsu Ekimae

Residential

Other

581

0.2

A86

Salvo Sala

Residential

Other

544

0.2

A87

Excellente Kagurazaka

Residential

Greater Tokyo Area

543

0.2

A88

Luna Court Edobori

Residential

Other

525

0.2

A89

Winntage Kobe
Motomachi

Residential

Other

512

0.2

A90

Queen’s Court Fukuzumi

Residential

Greater Tokyo Area

456

0.2

A91

Corp Higashinotoin

Residential

Other

446

0.2

A92

Belair Oimachi

Residential

Greater Tokyo Area

412

0.2

A93

Siete Minami-Tsukaguchi

Residential

Other

374

0.1

A94

Prime Life Sannomiya
Isogami Koen

Residential

Other

373

0.1

A95

HERMITAGE NANBA
WEST

Residential

Other

355

0.1

A96

Century Park Shinkawa
1-bankan

Residential

Other

335

0.1

A97

West Avenue

Residential

Greater Tokyo Area

331

0.1

A98

Little River
Honmachibashi

Residential

Other

310

0.1

A99

Prime Life Mikage

Residential

Other

297

0.1

A100

City Court Kitaichijo

Residential

Other

1,782

0.7

A101

Lieto Court Mukojima

Residential

Greater Tokyo Area

1,683

0.7

34

Acquisition Priceor AnticipatedAcquisition Price(mn JPY) (Note 3)

Investment
Ratio (%)
(Note 4)

Greater Tokyo Area

1,634

0.7

Residential

Other

2,910

1.2

Residential

Greater Tokyo Area

5,024

2.0

71,11628.4

Property
Number(Note 1)

Property Name

Type

Area
(Note 2)

A102

Lieto Court Nishi-Ojima

Residential

A103

Royal Parks Momozaka

A104

Royal Parks Shinden

Subtotal of Residential Properties (68 properties)
B8

Kindai Kagakusha
Building

OfficeGreater Tokyo Area

1,301

0.5

B9

Shinjuku Island

OfficeGreater Tokyo Area

715

0.3

B14

Lexington Plaza
Nishigotanda

OfficeGreater Tokyo Area

4,880

1.9

B15

Cross Square NAKANO

OfficeGreater Tokyo Area

1,060

0.4

B16

Ohki Aoba Building

Office

Other

816

0.3

B17

Lexington Plaza
Hachiman

Retail

Other

3,280

1.3

B18

AEON TOWN Sukagawa

Retail

Other

2,320

0.9

Subtotal of Office Buildings and Retail Properties (7 properties)

14,372

5.7

97

0.0

97

0.0

C1

Times Kanda-Sudacho
4thParking

Greater Tokyo Area

Subtotal of Parking Facility (1 property)
D1

Hotel MyStays Kanda

Hotel

Greater Tokyo Area

2,851

1.1

D2

Hotel MyStays Asakusa

HotelGreater Tokyo Area

2,584

1.0

D3

Hotel MyStays KyotoShijo

Hotel

Other

6,024

2.4

D4

MyStays Shin-Urayasu
Conference Center

HotelGreater Tokyo Area

4,930

2.0

D5

Hotel MyStays Maihama

HotelGreater Tokyo Area

4,870

1.9

D6

Hotel Vista Premio
Dojima

Hotel

Other

3,845

1.5

D7

Hotel MyStays NagoyaSakae

Hotel

Other

2,958

1.2

D8

Hotel MyStays SakaisujiHonmachi

Hotel

Other

2,514

1.0

35

Property
Number(Note 1)

Property Name

Area
(Note 2)

Type

Acquisition Priceor AnticipatedAcquisition Price(mn JPY) (Note 3)

Investment
Ratio (%)
(Note 4)

D9

Hotel MyStays
Yokohama

HotelGreater Tokyo Area

2,119

0.8

D10

Hotel MyStays Nippori

HotelGreater Tokyo Area

1,898

0.8

D11

Hotel MyStays FukuokaTenjin-Minami

Hotel

Other

1,570

0.6

D12

Flexstay Inn Iidabashi

HotelGreater Tokyo Area

1,381

0.6

D13

Hotel MyStays Ueno
Inaricho

HotelGreater Tokyo Area

1,331

0.5

D14

Flexstay Inn Shinagawa

HotelGreater Tokyo Area

1,242

0.5

D15

Flexstay Inn Tokiwadai

HotelGreater Tokyo Area

1,242

0.5

D16

Flexstay Inn Sugamo

HotelGreater Tokyo Area

1,192

0.5

D17

Hotel MyStays Otemae

Hotel

Other

1,192

0.5

D18

Flexstay Inn KiyosumiShirakawa

HotelGreater Tokyo Area

749

0.3

D19

Flexstay Inn
Nakanobu P1

HotelGreater Tokyo Area

589

0.2

D20

Flexstay Inn
Nakanobu P2

HotelGreater Tokyo Area

283

0.1

D21

APA Hotel YokohamaKannai

HotelGreater Tokyo Area

8,350

3.3

D22

Hotel Nets Hakodate

Hotel

Other

2,792

1.1

D23

Flexstay Inn Shitokane

HotelGreater Tokyo Area

2,119

0.8

D24

Hotel MyStays Haneda

HotelGreater Tokyo Area

7,801

3.1

Hotel

Greater Tokyo Area

5,594

2.2

Hotel

Greater Tokyo Area

3,821

1.5

D25
D26

Hotel MyStays Kameido
P1
Hotel MyStays Ueno
Iriyaguchi

D27

Hotel MyStays Kameido
P2

Hotel

Greater Tokyo Area

3,742

1.5

D28

Hotel Vista Shimizu

Hotel

Other

2,198

0.9

D29

Super Hotel Shinbashi/
Karasumoriguchi

HotelGreater Tokyo Area

1,624

0.6

Hotel

Greater Tokyo Area

1,277

0.5

D30

Flexstay Inn Higashi-Jujo

36

Property
Number(Note 1)

Property Name

Type

Area
(Note 2)Acquisition Priceor AnticipatedAcquisition Price(mn JPY) (Note 3)

Investment
Ratio (%)
(Note 4)

D31

Hotel MyStays
Utsunomiya

Hotel

Other

1,237

0.5

D32

Flexstay Inn KawasakiKaizuka

HotelGreater Tokyo Area

980

0.4

D33

Comfort Hotel Toyama

Hotel

Other

979

0.4

D34

Flexstay Inn KawasakiOgawacho

HotelGreater Tokyo Area

906

0.4

D35

Flexstay Inn Ekoda

HotelGreater Tokyo Area

5,069

2.0

D36

Super Hotel Tokyo-JR
Tachikawa Kitaguchi

HotelGreater Tokyo Area

1,170

0.5

D37

Super Hotel JR
Uenoiriyaguchi

HotelGreater Tokyo Area

1,130

0.5

D38

Hotel MyStays
Shinsaibashi

Hotel

Other

3,160

1.3

D39

Comfort Hotel Kurosaki

Hotel

Other

1,148

0.5

D40

Comfort Hotel Maebashi

Hotel

Other

1,128

0.5

D41

Comfort Hotel
Tsubamesanjo

Hotel

Other

1,010

0.4

D42

Comfort Hotel Kitami

Hotel

Other

851

0.3

D43

Hotel MyStays
Gotanda Station

HotelGreater Tokyo Area

24,6749.8

D44

Hotel Epinard Nasu

Hotel

Other

20,981

3.2

D45

Hotel MyStays
Fukuoka Tenjin

Hotel

Other

8,059

8.4

D46

Hotel MyStays
Hamamatsucho

HotelGreater Tokyo Area

7,959

3.2

Subtotal of Hotels (46 properties)

165,132

65.9

Total Portfolio (122 properties)

250,719100.0(Note 1)

Properties are classified by the purpose of use; A: Residential, B: Office/Retail, C:
Senior/Parking, D: Hotel. They also are arranged in chronological order and in acquisition priceorder when acquisition date of plural properties is same.

(Note 2)

Greater Tokyo Area indicates Tokyo, Kanagawa, Chiba and Saitama(Note 3)Acquisition price or Anticipated Acquisition Price is as set forth in the relevant purchaseagreement or trust beneficiary transfer agreement as applicable, does not include expenses
such as consumption taxes, and is rounded down to the nearest million.

37

(Note 4)

Investment ratio is calculated as a percentage of the aggregate total acquisition price of our
anticipated portfolio after giving effect to our anticipated acquisitions, and rounded to one
decimal place.

38

Picture and Map of the Five Properties
D43 Hotel MyStays Gotanda Station

D44 Hotel Epinard Nasu

This English language notice is a translation of the Japanese-language notice released on March 10, 2016 and was prepared solely for the convenience of, and referenceby, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on theirown investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties orassurances are given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In theevent of any discrepancy between this translation and the Japanese original, the latter shall prevail in all respects.

39

D45 Hotel MyStays Fukuoka Tenjin

D46 Hotel MyStays Hamamatsucho

This English language notice is a translation of the Japanese-language notice released on March 10, 2016 and was prepared solely for the convenience of, and referenceby, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on theirown investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties orassurances are given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In theevent of any discrepancy between this translation and the Japanese original, the latter shall prevail in all respects.

40

A104 Royal Parks Shinden

This English language notice is a translation of the Japanese-language notice released on March 10, 2016 and was prepared solely for the convenience of, and referenceby, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on theirown investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties orassurances are given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In theevent of any discrepancy between this translation and the Japanese original, the latter shall prevail in all respects.

41