May 27, 2002

JAPAN REAL ESTATE INVESTMENT CORPORATIONANNOUNCEMENT OF FIRST FISCAL PERIOD RESULTS

1. Summary of Financial Results
On May 27, 2002, Japan Real Estate Investment Corporation (“JRE”, TSE: 8952) has
announced financial results of its first fiscal period ended March 31, 2002.
For the first fiscal period, JRE reported gross revenues of 6,492 million yen, operating
profits of 2,961 million yen, recurring profits of 2,405 million yen and net income of 2,403
million yen, or 14,983 yen per unit.
As of March 31, 2002, JRE’s total asset balance was 161,809 million yen and its net worth
was 83,663 million yen, or 521,591 yen per unit. On its balance sheet, JRE held real estate
assets of 145,580 million yen and bore interest bearing debt of 64,000 million yen.
Although JRE’s first fiscal reporting period was technically from May 11, 2001, when JRE
was established, to March 31, 2002 (325 days), it actually began its business operations asa publicly-listed real estate investment trust on September 10, 2001 when it was listed on
the Tokyo Stock Exchange. Therefore, its practical investment period was from September
10, 2001 to March 31, 2002 (203 days).
2. First Fiscal Period Highlights
Establishment: On May 11, 2001, JRE was established by Japan Real Estate AssetManagement Co., Ltd. (“J-Rea”), a licensed asset management company whose
shareholders are Mitsubishi Estate Co., Ltd. (40%), The Tokio Marine and Fire InsuranceCo., Ltd. (30%) and The Dai-ichi Mutual Life Insurance Company (30%). JRE’s initialunitholders’ capital was 200 million yen.
Initial Public Offering: On September 10, 2001, JRE was listed on the Tokyo Stock
Exchange as one of the first real estate investment trusts in Japan (so-called “J-REITs”).
Through this initial public offering of 160,000 units, JRE raised equity capital of 81,060
million yen.
Initial Portfolio: Following the IPO, JRE acquired 20 office buildings mainly from
Mitsubishi Estate Co., Ltd., Tokio Marine and Fire Insurance Co., Ltd. and Dai-ichi MutualLife Insurance Company, utilizing the IPO proceeds, as well as 24,000 million yen in bankloans. These 20 assets have formed the basis of JRE’s well diversified portfolio(diversified in terms of geographic locations and tenancy). In addition, JRE subsequently
increased its ownership stake in Urawa Dai-ichi Seimei Dowa Kasai Building (on October11, 2001) and Midosuji Daiwa Building (February 28, 2002) to 100% (fee simple) atpurchase prices of 1,342 million yen and 7,380 million yen, respectively.

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Additionally Acquired Properties: During the first fiscal period, JRE aggressively
explored external growth opportunities, acquiring four additional office buildings; Shibuya
Cross Tower for 34,600 million yen (acquired on November 30, 2001), Kyoto ShijoKawaramachi Building for 2,650 million yen (December 20, 2001), Ericsson ShinYokohama Building for 3,000 million yen (January 28, 2002) and co-ownership of55.12762% of Kanazawa Park Building for 2,880 million yen (February 28, 2002).
Fiscal Year-end Portfolio Profile: As a result of these external growth activities, as ofMarch 31, 2002, JRE’s real estate portfolio has grown to 24 properties from 20 at anaggregate acquisition cost of 144,697 million yen, with an aggregate net rentable area of201,884 ㎡. The total number of tenants in the portfolio has reached 328. In addition, as aresult of J-Rea’s continuous leasing management efforts, the portfolio’s occupancy rates
have been maintained at approximately 94% throughout the fiscal period (as of March 31,2002, the occupancy rate of the portfolio was 94.0%).
Debt Financing: JRE’s acquisitions have been partially financed through bank borrowings.
JRE has successfully achieved competitive pricing of these bank loans through negotiations
with several financial institutions. As of March 31, 2002, JRE’s balance of borrowings was64,000 million yen, of which 24,000 million yen consisted of long-term bank loans and theremaining 40,000 million yen consisted of short-term loans.
Credit Rating: JRE obtained the first issuer credit ratings as a J-REIT, which is believed tohelp JRE diversify its sources of debt financing in the future:
Agency Name
Standard & Poor’s
Moody’sDate of Rating
February 14, 2002
March 15, 2002

Rating Summary
Long-term: A+, Short-term: A-1, Outlook: Stable
Rating: A2, Outlook: Stable

Additional Equity Offering: On March 29, 2002, JRE launched a secondary offering of65,000 units. This offering was closed on May 8, 2002 and JRE raised 30,892 million yen,which will be utilized to acquire additional assets or partially redeem existing debt.
3. Second Fiscal Period Forecast
Environment: Due to the ongoing corporate restructurings and current economic slump inJapan, demand for office space is expected to be soft for the near-term. At the same time, asignificant supply of new office buildings is expected in the near future, the so-called “Year2003 Problem”. Also, as a result of severe restructuring activities arising from thecorporate sector, a number of office buildings are expected to be up for sale.
Investment Strategies: Under such circumstances, J-Rea intends to manage JRE’sportfolio, as follows:i. Strengthen and expand channels of information of properties for sale, andaggressively acquire good quality assets with attractive yields.
ii. Maintain and improve the current tenancy by strengthening J-Rea’s relationship withcore tenants, satisfying them with the highest quality property management. As forthe currently vacant space, J-Rea is taking various actions to lease-up such space assoon as possible.
2iii. Encourage core tenants to sign long-term/fixed-term lease contracts which willstabilize JRE’s rental revenues over time.
iv. Competitively supervise the in-place property management companies, and review
each property’s management procedures and their cost structure. J-Rea intends toreduce the amount of property management related expenses by 10% within 3 years
from the date of acquisition.
Performance Forecast: For the second fiscal period from April 1, 2002 to September 30,
2002, JRE forecasts gross revenues of 7,700 million yen, recurring profits of 2,800 million
yen and net income of 2,800 million yen, or 12,400 yen per unit. For the third fiscal period
from October 1, 2002 to March 31, 2003, JRE forecasts total revenues of 7,800 million yen,recurring profits of 3,000 million yen and net income of 3,000 million yen, or 13,600 yenper unit.
JRE and J-Rea believe that the above forecast is based on reasonable assumptions of
portfolio operations and the new acquisition of MD Kanda Building (described below), butthese numbers are not a guarantee of JRE’s future performances and are subject tochanges/adjustments which may arise from uncontrollable events in the future.
Mitsui & Co.: On May 27, 2002, J-Rea announced that Mitsui & Co., Ltd. will be thefourth shareholder of J-Rea on May 31, 2002, by purchasing 10% ownership from theexisting shareholders. As a result, J-Rea’s shareholders will be Mitsubishi Estate Co., Ltd.
(36%), Tokio Marine and Fire Insurance Co., Ltd. (27%), Dai-ichi Mutual Life Insurance
Company (27%) and Mitsui & Co., Ltd. (10%).
New Acquisition: On May 27, 2002, JRE announced that it will acquire MD Kanda
Building from Mitsui & Co., Ltd. for 9,520 million yen. This property is a 10-story officebuilding with 6,334 ㎡ net rentable area. Its current occupancy rate is 100%.

Contact Information:
Japan Real Estate Asset Management Co., Ltd.
Planning Department
Takuro Yamanaka+813-3211-7921

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JAPAN REAL ESTATE INVESTMENT CORPORATIONSTATEMENT OF INCOME AND RETAINED EARNINGSFor the Period from May 11, 2001 to March 31, 2002
(In thousands of yen)

I. Operating Revenues and Expenses
Revenues................................................................................................................... 6,492,518Rental revenues ................................................................................................... 6,427,133
Other rental revenues ............................................................................................... 65,384
Operating Expenses ................................................................................................ 3,530,762
Property-related expenses ................................................................................... 2,859,570
Asset management fees .......................................................................................... 389,449
Fees of asset custody consignment........................................................................... 23,123
Fees of outsourcing administrative tasks ............................................................... 123,590
Salaries of directors.................................................................................................... 6,603
Other operating expenses ....................................................................................... 128,425
Operating Profits..................................................................................................... 2,961,756

II. Non-Operating Revenues and Expenses
1. Non-Operating Revenues......................................................................................... 2,848
Interest received ......................................................................................................... 2,035
Other non-operating revenues ....................................................................................... 812
2. Non-Operating Expenses ..................................................................................... 559,567
Interest expenses .................................................................................................... 241,562
New unit-issuance costs ......................................................................................... 121,149
Unit-listing expenses................................................................................................ 74,901
Deferred start-up costs ............................................................................................. 90,497
Other non-operating expenses.................................................................................. 31,456
Recurring Profits........................................................................................................ 2,405,036
Income before Income Taxes..................................................................................... 2,405,036
Taxes................................................................................................................................... 1,738
Deferred Taxes..................................................................................................................... (36)
Net Income .................................................................................................................. 2,403,333
Retained Earnings...................................................................................................... 2,403,333

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JAPAN REAL ESTATE INVESTMENT CORPORATIONBALANCE SHEETAs of March 31, 2002
(In thousands of yen)

ASSETSI.

Current Assets
Cash and deposits ............................................................................................ 4,542,693
Entrusted cash and deposits........................................................................... 10,781,217
Rental receivables................................................................................................. 59,274
Consumption tax refundable .............................................................................. 714,493
Other current assets .............................................................................................. 64,361
Total current assets ......................................................................... 16,162,039

II. Fixed Assets
1. Property and equipment, at cost
Buildings ....................................................................................................... 21,075,829
Less-Accumulated depreciation ................................................................ (454,129)
Structures............................................................................................................ 156,812
Less-Accumulated depreciation .................................................................... (1,948)
Machinery and equipment .................................................................................. 273,155
Less-Accumulated depreciation .................................................................. (14,591)
Land............................................................................................................... 41,755,392
Entrusted buildings........................................................................................ 24,338,078
Less-Accumulated depreciation ................................................................ (585,548)
Entrusted structures ............................................................................................ 105,777
Less-Accumulated depreciation .................................................................... (1,317)
Entrusted machinery and equipment .................................................................. 671,602
Less-Accumulated depreciation .................................................................. (42,470)
Entrusted land................................................................................................ 57,858,757
Net property and equipment ......................................................... 145,135,400
2. Intangible fixed assets
Entrusted leasehold rights .................................................................................. 444,160
Other intangible fixed assets ..................................................................................... 453
Total intangible fixed assets ................................................................ 444,614
3. Investment and others
Lease deposits..................................................................................................... 14,100
Long-term prepaid expenses............................................................................... 53,684
Total investment and others................................................................... 67,784
Total fixed assets .......................................................................... 145,647,799
Total Assets ............................................................................................................. 161,809,838

5JAPAN REAL ESTATE INVESTMENT CORPORATIONBALANCE SHEETAs of March 31, 2002
(In thousands of yen)

LIABILITIESI.

Current Liabilities
Accounts payable ............................................................................................... 259,616
Short-term borrowings .................................................................................. 40,000,000
Other payable ..................................................................................................... 291,225
Accrued expenses ............................................................................................... 154,556
Accrued taxes ......................................................................................................... 1,331
Rent received in advance.................................................................................... 998,248
Other current liabilities......................................................................................... 23,425
Total current liabilities............................................................................... 41,728,404

II. Long-Term Liabilities
Long-term borrowings................................................................................... 24,000,000
Deposits from tenants.................................................................................... 12,418,100
Total long-term liabilities .......................................................................... 36,418,100
Total Liabilities......................................................................................................... 78,146,504

UNITHOLDERS' EQUITY
I.

Unitholders’ Equity
Unitholders' capital........................................................................................ 81,260,000

II. Surplus
Retained earnings ............................................................................................ 2,403,333
Total surplus .............................................................................................. 2,403,333
Total Unitholders’ Equity........................................................................................ 83,663,333
Total Liabilities and Unitholders’ Equity ............................................................ 161,809,838

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JAPAN REAL ESTATE INVESTMENT CORPORATIONPORTFOLIO SUMMARY
As of March 31, 2002

AreaAcquisition Price % ofNRA（㎡）(MM yen)PortfolioName

Mitsubishi Soken Building
Kodenmacho Shin-Nihonbashi Building
Shiba 2chome Daimon Building
Cosmo Kanasugibashi Building
Takanawadai Building
23 Wards
JTS Building
Tokyo
Omori-Eki Higashiguchi Building
Metropolitan
Otsuka Higashi-Ikebukuro Building
AreaIkebukuro 2chome Building
Shibuya Cross Tower
Urawa Dai-Ichi-Seimei Life Dowa Kasai Building
Excluding
23 Wards Kawasaki Isago Building
Ericsson Shin-Yokohama Building
Sendai Honcho Honma Building
Niigata Ishizuecho Nishi-Bandaibashi Building
Kanazawa Minamicho Building
Kanazawa Park Building
Nagoya Hirokoji Building
Kyoto Shijo Kawaramachi Building
Other Major Cities
Midosuji Daiwa Building
Fukusuke Sakaisujihonmachi Building
Kobe Itomachi Building
Hinode Tenjin Building
Tosei Tenjin Building
24 Properties Total / Average

727,267
3,173
4,859
2,808
2,738
1,362
5,123
3,541
1,728
34,600
1,232
1,342
3,375
3,000
2,924
1,010
1,331
2,880
14,533
2,650
6,934
7,380
2,264
1,436
3,657
1,550
144,697

Occupancy
Rate(%)

18.8%
2.2%
3.4%
1.9%
1.9%
0.9%
3.5%
2.4%
1.2%
23.9%

18,006
3,897
9,622
4,062
4,091
3,383
7,708
7,114
2,475
28,501

97.4%
87.3%
89.3%
87.7%
100.0%
100.0%
95.7%
98.6%
59.2%
95.8%

1.8%

4,510

95.0%

2.3%
2.1%
2.0%
0.7%
0.9%
2.0%
10.0%
1.8%

6,831
6,964
5,829
4,383
3,773
13,03021,6056,800

86.0%
100.0%
100.0%
83.7%
87.0%
91.5%
98.6%
76.3%

9.9%

20,449100.0%

1.6%
1.0%
2.5%
1.1%

5,337
3,478
5,944
4,080
201,884

91.6%
92.3%
100.0%
80.4%
94.0%