[For Information Purpose Only]
May 21, 2014
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: Akiko Watanabe, Manager(Tel. +81-3-5411-2731)
Notice concerning Acquisition and Sale of Assets, Entering into and Termination of Leasing Contract andCommencement of Management of New Class of Assets
Invincible Investment Corporation (“INV”) announced today the decision made by Consonant
Investment Management Co., Ltd. (“CIM”), the asset manager of INV, regarding the acquisition (twohotels, or the “Two Acquisition Properties”) and sale (seven senior housing properties, or the “Seven
Senior Housing Properties”) of assets. In connection with the acquisition of the Two Acquisition
Properties, INV will enter into a new leasing contract with respect to the Two Acquisition Properties andterminate the leasing contract with respect to the Seven Senior Housing Properties and commence
management of a new class of assets (hotels).
1. Overview of Acquisition and Sale
(1) Overview of Acquisition

Use

Property
number

Property
name

Anticipatedacquisition
price(millionyen)

Location

Appraisalvalue(millionyen)

Seller (Note 2)

Categoryof specified
assetsTrustbeneficiaryinterest
Trust
beneficiaryinterest(Note 1)D1

Hotel
MyStays
Kanda

D2

Hotel
MyStays
Asakusa

Hotel

Chiyoda-ku,
Tokyo

Sumida-ku,
Tokyo

Total

1

2,851

2,880

Zephyrus
Tokutei
Mokuteki
Kaisha

2,584

2,610

Nishi Tokutei
Mokuteki
Kaisha

5,435

5,490

・Purchase and sale agreement
execution date:・Anticipated acquisition date:・Acquisition funds:

May 21, 2014
May 23, 2014
New loan and funds on hand, including a
portion of the sales proceeds of the assets
described in “(2) Overview of Sale” below.
Lump-sum payment at time of delivery

・Settlement method(Note 1)
(Note 2)
(Note 3)

Anticipated acquisition prices do not include adjustments for fixed asset taxes or city planning taxes, or
national or local consumption taxes; hereinafter the same.
For an overview of the sellers, please refer below to “4. Overview of sellers and transferee.”Amounts are rounded down to the nearest million yen; hereinafter the same.

(2) Overview of Sale

Use

Seniorhousing
property

Property
number

Property nameAcquisition
price(millionyen)Book value(millionyen)(as ofDecember31, 2013)

Anticipatedsales price(million yen)
(Note 1)

Difference
betweenanticipatedsales priceand book
value(Note 2)C21

Bon Séjour
Chitose-Funaba
shi

685

659

830

170

C22

Bon Séjour
Yotsugi

652

624

776

151

C23

Bon Séjour
Hino

574

553

729

175

C24

Bon Séjour
Musashi-Shinjo

486

469

586

116

C25

Bon Séjour
Komaki

1,050

989

1,275

285

C26

Bon Séjour
Hadano-Shibus
awa

681

636

733

96

C27

Bon Séjour
Itami

480

452

471

18

4,608

4,385

5,400

1,014

Total

・Transferee:・Purchase and sale agreement execution date:・Anticipated transfer date:・Transfer method:・Settlement method:

2Type ofspecified
asset

Real
property

A Japanese Special Purpose Company (Note 3)
May 21, 2014
May 22, 2014
Transfer to the above purchaser of the real property
as trust assets
Lump-sum payment at time of delivery

(Note 1)(Note 2)

(Note 3)

Anticipated transfer prices do not include adjustments fixed asset taxes or city planning taxes, or
national or local consumption taxes; hereinafter the same.
The difference between anticipated transfer price and book value indicates reference numbers
calculated using the book values as of December 31, 2013; these numbers will differ from the numbers
at the time of transfer. INV estimates to recognize a gain on sales of JPY984 million in the fiscal period
ending June 2014,
For an overview of the transferee, please refer below to “4. Overview of sellers and transferee.”

2. Reasons for Acquisitions and Sale
Based on INV’s investment target and policies stipulated in its articles of incorporation, INV has
examined the need for a strategic portfolio repositioning in response to shifting real estate market trends
and predictions of future income and asset value growth and decline. As a result, INV has decided toacquire two new hotels that provide both stability and growth potential, while selling its seven senior
housing properties with limited growth potential.
(1) Acquisition of new properties to realize stability and growth
Reflecting increased demand from domestic and foreign tourists, the limited service, extended
stay hotels that INV plans to acquire comprise the fastest growing segment in the hospitality
market. Tokyo and Osaka area hotel occupancy levels are also at ten-year highs. Hence, INV
believes that such hotels are assets that can provide growth going forward.
The points evaluated and the characteristics of the two hotels INV plans to acquire are as
follows:【Points evaluated】
i. ADR, RevPAR, guest room occupancy rates and NOI are at high levels and have shown continued
growth over the last three years. (See Diagram 1 below)
ii. These hotels are characterized by their flexibility to sell rooms for daily, weekly, or monthly stays,
thereby serving a wider variety of market demands and leading to greater stability. (See Diagram 2
below)
iii. INV plans to employ a leasing arrangement with a fixed rent component and a variable rent
component, the latter of which reflects the gross operating revenue (“GOP”) of hotel operation by
the tenant. Therefore, INV expects to enjoy high GOP margins through low cost operation of thehotels, and expects to realize improvement of revenue going forward. (See Diagram 2 below)(Note 1) “ADR” means average daily rate, and is calculated by dividing total room sales for a period by the aggregate
number of days per room for which each room was occupied during the same period.
(Note 2) “RevPAR” means revenue per available room per day, and is calculated by dividing total room sales for a period
by total number of rooms available (number of rooms × number of days) during the same period, and is thesame as the figure obtained by multiplying occupancy rates by ADR.
(Note 3) “Occupancy rates” is calculated in accordance with the following formula:(Occupancy rates) = (the total number of occupied rooms during a certain period) / (the total number of rooms
available during the same period × total operating days during the same period)(Note 4) ADR, RevPAR and Occupancy rates from 2010 to March 2014 in the charts in Diagram 1 are historical dataobtained from the current tenant.

Please note that ADR, RevPAR and Occupancy rates from April 2014 in thecharts in the Diagram 1 are forecasts made by INV based on currently available information and certain
assumptions.(Note 5) The tenant of the Two Acquisition Properties is Flexstay Hotel Management Co., Ltd.
(“FHM” or the “Tenant”), which has a solid record of increasing the value of hotels by its high operating
capability.
(Note 5) “GOP”, Gross Operating Profit, is the amount equivalent to gross revenue of hotel minus staff cost, cost of
materials and utilities, advertisement cost and other expenses. “GOP margin” is calculated in accordance with3

the following formula:
GOP margin= GOP / gross revenue

Diagram 1<D1 Hotel MyStays Kanda>
Changes in ADR / RevPAR / Occupancy(Unit: JPY)
8,000

6,381

4,000

6,212

6,120

5,481

6,000

5,206

85.9%

6,607

6,537

6,061

5,535

92.7%

91.7%

95%

200
90%

89.1%

85.1%

Changes of NOI(Unit: JPY mn)

7,056

85%

2,000

150

145

121

112

123

2010

2011

2012

164

100
50

‐

80%
2010

2011

2012
ADR

2013

RevPAR0

2014 Estimate

2013

2014 Estimate

Occupancy<D2 Hotel MyStays Asakusa>
Changes in ADR / RevPAR / Occupancy(Unit: JPY)
6,000
4,000
2,000

4,848
3,701

3,128

3,576

3,858
2,887

3,230

5,160
4,290

4,667

88.5%

90.4%

95%

200

90%

150

148
104

89

100
85%

83.7%

84.5%

Changes of NOI(Unit: JPY mn)

8,000

162

104

50

80.7%
‐

80%
2010

2011

2012

ADR

RevPAR2013

02014 Estimate

2010

2011

2012

2013

2014 Estimate

Occupancy(Note 1) The information for 2010-2013 is based on historical figures provided by the seller. The 2014 estimates are based on (i)historical figures provided by the seller from January through March 2014 and (ii) INV’s forecasted figures for the rest of the year
(in the case of the period from the date of acquisition to June 30, 2014, such figures are consistent with the assumptions used to
calculate the 1H/2014 forecast).
(Note 2) The NOI for 2010-2013 is based on historical figures provided by the seller (as adjusted to reflect an expected change intrust fees, management fees and insurance expenses upon the acquisition by INV). The 2014 normalized NOI forecast assumesa hypothetical acquisition of the two hotels by INV prior to the beginning of 1H/2014, and is based on (i) historical figures provided
by the seller for the two properties from January through March 2014 (as adjusted to reflect an expected change in trust fees,
management fees and insurance expenses upon the acquisition by INV), (ii) INV’s forecasted figures for the rest of the year (inthe case of the period from the date of acquisition to June 30, 2014, such figures are consistent with the assumptions used to
calculate the 1H/2014 forecast) and (iii) treating initial property-related taxes for the two hotels as if they were expensed and not
capitalized.

Hereinafter the same.

Diagram 2: Breakdown of types of accommodations and GOP margins
Property nameDaily

WeeklyMonthly

GOP margins

D1

Hotel MyStays Kanda

71.5％

9.5％

19.0％

54.3％

D2

Hotel MyStays Asakusa

54.8％

13.4％

31.8％

58.3％

(Note) The figures above are based on data from January 2013 to December 2013.

The portion of each type of accommodation

is calculated by dividing the total amount of room revenue of each type of accommodations by total amount of room revenue ofthe relevant hotel during the same period and multiplying by 100.

4

【Characteristics of Property】
i. Characteristics of Property
Property
Property
Characteristics of Property
numbernameThis property is a business hotel located in central Tokyo and isD1
Hotela six-minute walk from Kanda Station on the JR Yamanote Line
MyStaysand the Tokyo Metro Ginza Line. It is also within walking distance
Kanda
from Shin-Nihonbashi Station on the JR Sobu Line andKodenmacho Station on the Tokyo Metro Hibiya Line. The hotel’saccessibility and diverse transit options connecting throughout
Tokyo make it an ideal location for business and leisure guests.
The surrounding area is an office district, populated withrestaurants, shops and convenience stores nearby, making theproperty extremely convenient for the guests.
There are a total of 126 guest rooms comprised of 100 single
rooms with semi-double beds and 26 single rooms with double
beds. 98 of the rooms are equipped with a kitchen that enable
guests to do simple cooking, and therefore appeal to mid tolong-term guests such as those on company training
assignments. These and other hospitable features described
below are supporting reasons why the hotel maintains stable
occupancy and that stable demand, mainly from businesscustomers on long-term projects in Tokyo, is expected
throughout the year. The hotel guest rooms have standard
furnishings and beds made by FranceBed to provide a
comfortable lodging environment. Further, in addition to being
equipped with coin-operated washing machines, all rooms havefree Wi-Fi connection (wired LAN is also available), microwaves(only in the 98 rooms with a kitchen), washlets, trouser pressers,
cooking utensils, and irons. Air-purifiers can also be rented toaccommodate a variety of guests including short to mid-longterm guests.
The breakdown of the classification of length of stay (fromJanuary 1, 2013 to December 31, 2013) shows daily guests(71.5%), weekly guests (9.5%), and monthly guests (19.0%).
The hotel achieves a very high GOP margin (54.3%) via
low-cost, high-quality operations, and going forward stable
growth is projected due to the upward trend in the ADR (January
2013 to February 2014 performance).
Additionally, 39.0% of sales for January to February of 2013
resulted from utilizing the Tenant’s extensive corporate customer
network, which shows strong corporate sales capabilities of the
Tenant.
This property is a business hotel located a four-minute walk from
D2
Hotel
Kuramae Station on the Toei Oedo Line and an eight-minute
MyStays
walk from Kuramae Station on the Toei Asakusa Line. It is also
Asakusawithin walking distance from Ryogoku Station of the JR Sobu
Line and Asakusa Station of the Tokyo Metro Ginza Line andTobu Isezaki Line. Further, the property is located in Asakusa, amajor sightseeing destination in Tokyo, and is very accessible toother popular tourist attractions such as the Tokyo Sky Tree (1.8km), Sensoji Temple (1.4 km), Ryogoku Kokugi-kan (1.0 km) and
Edo Tokyo Museum (1.0 km). Convenient access to both Narita
airport and Haneda airport are beneficial to leading businesses

5Property
number

Property
nameCharacteristics of Property
in the area and an increase in foreign visitors. The Narita Sky
Access Limited Express started direct operation to Narita Airport
from 2010 and compliments the direct route from Kuramae
Station to Haneda Airport on the Toei Asakusa Line. A 24-hour
supermarket has opened in the nearby area, making it very
convenient for guests.
Hotel room and common area renovations along with arebranding of the property were completed in January 2013 torenew the image of the property and capitalize on the increase ofboth domestic and foreign tourism demand in the Asakusa area.
There are a total of 160 guest rooms, of which 153 single rooms
have semi-double beds and seven triple rooms have three single
beds. All rooms have kitchens that enable a guest to do simple
cooking, making the hotel appealing to long-term users. The
guest rooms have standard furnishings with beds made bySimmons. Further, there are coin-operated washing machines
and all rooms have free Wi-Fi connection (wired LAN is alsoavailable), microwaves, washlets, cooking utensils and irons.
Air-purifiers and trouser pressers can also be rented.
Guest rooms on the east side have a view of the Tokyo Sky Tree,and rooms on the west side have a bird’s eye view of thesummer Sumida River Firework Festival.
The composition and specifications of the guest rooms do not
only accommodate business use by business travelers
participating in long-term projects, but also domestic andoverseas leisure travelers, and therefore stable demand is
expected throughout the year. The breakdown of theclassification of length of stay (from January 1, 2013 to
December 31, 2013) shows daily (54.8%), weekly (13.4%), andmonthly guests (31.8%). The hotel achieves a very high GOP
margin (58.3%) through a combination of low-cost andhigh-quality operations.
In particular, after the renovation and rebranding in 2013,
performance significantly improved with occupancy rates up
7.7% (88.5%), ADR up 35.6% (4,848 yen), and RevPAR up
48.6% (4,290 yen) compared to the previous year. Stable growthis forecasted due to trend of further improvements of ADR.

ii.

Execution of the lease contract
INV, who will become the owner after the acquisition, plans to lease the acquired hotels by entering
into building lease contracts with FHM, which has a solid record in hotel operation, as the Tenant.
Based on the lease contract, INV will receive a variable rent based on the operating revenue of hotel
operation by the Tenant in addition to a fixed rent. In accordance with the contract, INV receives,
through the Tenant and then the trustee, revenues from hotel operation by the Tenant after
deducting costs, and a certain amount reserved by the Tenant. Therefore, when such hotel’soperating revenues increase, INV will be able to directly and immediately receive such result of
increase. On the other hand, even when hotel operating revenues decrease, INV will be able toreceive at least the fixed rent determined by the contract.

6

<Overview of Tenant>

①

Name

Flexstay Hotel Management Co., Ltd.

Location

Leaf Square Hongo Building 5F, 1-24-1 Hongo, Bunkyo-ku,
Tokyo, Japan③

Title and name ofrepresentative officer

Atsuki Asano, President and CEO④

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

②

⑤
⑥
⑦

Hotel and ryokan operation and management
JPY 100 million
July 8, 1999

Relationship between Investment Corporation/Asset Management Company and the Tenant
While there are no capital relationships that should be noted
between INV/CIM and the Tenant, the parent company of the
Tenant is an affiliate of Fortress Investment Group LLC (“FIG”),
which is an affiliate of Calliope Godo Kaisha (“Calliope”). As of
Capital relationships
the end of December 2013, Calliope holds 609,942 investment
units issued by INV (38.77% stake). Further, as of the date ofthis notice, Calliope is the parent company of CIM, holding 100%of its outstanding shares.
As of the date of this notice, among the employees of CIM, one
Personal relationships
employee is seconded from the Tenant.
Transactional
relationships

Whether the Operator is arelated party

In the period ended December 2013, there was no transactional
relationship that should be noted between INV/CIM and theTenant. Further there are no transactional relationships thatshould be noted between the related persons or affiliates of
INV/CIM and the Tenant or its related persons or affiliates.
The Tenant is not a related party of INV or CIM. Further, related
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 andInvestment Corporations (“Investment Trust Act”).

(2) Sale of existing properties with limited growth going forward
The Seven Senior Housing Properties are managed by a quality tenant with high occupancy andoperating income, but, while stable, their long-term (20 years), fixed-rent lease rents do not changeeven if end tenant payments increase, and thus upside potential is limited.
In addition, given the demand for health care facilities such as residences with services for seniors
and private nursing homes, the Seven Senior Housing Properties are expected to generate
substantial profits on sale; thus it has been determined that the sale of these properties at this time
would be in the medium- to long-term interests of INV’s investors.

7(3) Results and overview of portfolio changes
Going forward, INV will strive to achieve its medium-term goal of “asset expansion and growth indistributions”, with the aim of further growth by increasing its portfolio’s profitability and stability andstrengthening its financial foundation.
Forecast for End of the
22nd Period (dated
February 26, 2014)
Asset size
(Acquisition
Price Basis)
Appraisal
Values of
Properties

Sale of Existing
Properties

Acquisition of New
Properties

Forecast for End of
the 22nd Period (after
Property Change)

JPY 77,161mn

JPY 4,608 mn

JPY5,435mn

JPY77,984 mn

JPY 75,429mn

JPY 4,821mn

JPY 5,490 mn

JPY 75,098 mn

78

7

2

73

(Note 1)

Number of
Properties
Loans (Note 2)

JPY 41,208 mn

JPY 41,046 mn

Interest Expense(Annual basis)

JPY 396 mn

JPY375mn

Net Income

JPY 731 mn

JPY 1,218 mn

DPU (JPY)

JPY 464

JPY 550

LTV
Total Unitholders’Capital Basis

53.8%

53.7%

LTV
Appraisal Value
Basis

54.6%

53.9%

Acquisition
Price BasisNOI Yield (Note

5.2%

6.7%

6.0%

5.1%

5.3%

5.7%

6.0%

5.2%

4)

Current Price
Basis NOI
Yield (Note 4)(Note 1) Appraisal Values of Properties for the forecast for the end of 22nd period are based on the appraisal value as of the end of
December 2013 for properties held as of that date (seventy one properties excluding seven senior housing properties to besold) and the appraisal value as of the end of March 2014 for the two new properties.
(Note 2) The loan amount at the end of the 22ndperiod (after property changes) is based on the figure after the refinancing and partial

repayment before maturity as of May 23, 2014.

The loan amount as of May 23, 2014 is expected to be 41,046 million yen.

For details of the loan, please refer to the “Notice concerning Debt Financing and Prepayment of Existing Borrowings” as oftoday.
(Note 3) Any amount less than one million yen is disregarded; the ratio is rounded to one decimal place.
(Note 4) Each of NOI yield is calculated in accordance with the following formula.
Acquisition Price Basis NOI yield (%) = ((leasing business income - leasing business expenses + depreciation expenses) /number of days of operation (days) x 365 days) / acquisition price
Current Price Basis NOI yield (%) = ((leasing business income - leasing business expenses + depreciation expenses) / numberof days of operation (days) x 365 days) / appraisal values of properties (provided that, sale price in regard to existing properties
and acquisition price (after deduction of fixed property tax) for new properties are used)
6.0% of the NOI yield on the two new properties is based on the normalized NOI from January 1, 2014 to December 31, 2014
related to the two new properties as of May 21, 2014 divided by the acquisition price.

8

＜Investment Ratio by Property Type＞
End of 21st Period(As of December 31, 2013)

Senior, 6.0%

After Rebalance(As of May 23, 2014)

Parking,
0.1%

Retail, 7.3%

Parking,
0.1%

Hotel, 7.0%
Retail, 7.2%

Office,
11.4%

Office,11.2%
Residential,
75.3%

Residential,
74.5%

3. Details of Two Acquisition Properties and Seven Senior Housing Properties(1) Details of the Two Acquisition Properties[D1 Hotel MyStays Kanda]
Category of specified assets, location, etc.
Category of
specified assets
Location
AccessReal property trust beneficiary interest(Lot number)

1-45-1 Iwamoto-cho, Chiyoda-ku, Tokyo(Address)

1-2-2 Iwamoto-cho, Chiyoda-ku, Tokyo

Six-minute walk from JR Yamanote Line Kanda Station
Ownership

ZoningCommercial
district

Land area

348.12 m2

Building
coverage ratio
and floor area
ratio

80%/800%、
80%/600%

Form of possession

Ownership

Use

Hotel

Total floor area

2,585.72 m2

Date ofcompletion

December 9, 2005

Structure andnumber of stories

Reinforced concrete structure with flat roof, ten stories

Form of possession
Land

Building

TrusteeMizuho Trust & Banking Co., Ltd.

Trust period

From May 23, 2014 until May 22, 2024

Acquisition price

2,851 million yen

9Appraisal value

2,880 million yen (appraisal date: March 31, 2014)

Appraiser

Japan Real Estate InstituteSecurity interests

Yes

Overview of leasing status (March 31, 2014)
Number of tenants

1

Leasable area

2,585.72 m

Occupancy rate (areabasis)

100.0%

2

Number of guest rooms

126 rooms

Leased area

2,585.72 m2

GOP (monthly)

16,251 thousandyen

Overview of Lease Contract
TenantFlexstay Hotel Management Co., Ltd.

Form of agreement

Fixed rent plus variable rent type (Note 1)

Agreement term

From May 23, 2014 until May 22, 2024

Determination of rent of lease contract

Fixed rent (JPY72mn per annum / JPY 6mn permonth)plus variable rent based on GOP of hotel
operation (Note 1)

2)

Details are not disclosed as consent fordisclosure cannot be obtained from the Tenant

Security deposit/guarantee money

None

Renewal upon expiration of term

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

Revision of rent

Rent cannot be revised during the lease term.

Early termination

Termination prior to the expiration of the leaseterm is not permitted.

Other remarks

None

Operational services compensation (NoteOverview of building status inspection report
Tokio Marine & Nichido
Risk Consulting Co.,
Inspection company
Ltd.
Short-term repair costs(within one year)

100 thousand yen

Seismic PML

7.5%

Report date

March 2014

Long-term repair costs (forthe upcoming twelve-year
period)97,210 thousandyen

Remarks
None(Note 1)

(Note 2)

Variable rent is the amount obtained by deducting (1) total various expenses during the period, (2)operational services compensation and (3) fixed rent for the three months calculation period forvariable rent from the aggregate of total monthly sales of Tenant for such period. However, when thebalance after deduction is zero or negative, variable rent is zero.
The operational services compensation is a commission fee attributable to the tenant in accordancewith the provisions of the leasing contract as a compensation for operational service provided by atenant under the agreement.

10

[D2 Hotel MyStays Asakusa]
Category of specified assets, location, etc.
Category of
specified assets
Location
AccessReal property trust beneficiary interest(Lot number)

1-7-2 Honjo, Sumida-ku, Tokyo, and three other lots

(Address)

1-21-11 Honjo, Sumida-ku, Tokyo

Four-minute walk from Toei Oedo Line Kuramae Station
Form ofpossession

Ownership

ZoningNeighborhoodcommercial district

Land area

827.53 m2

Building
coverage ratio
and floor area
ratio

80%/400%

Form ofpossession

Ownership

Use

Hotel

Total floor area

3,327.38 m2

Date ofcompletion

January 22, 1990

Structure andnumber ofstories

Steel frame and reinforced concrete structure with flat roof,
ten stories

Land

Building

Trustee

Sumitomo Mitsui Trust Bank, Limited

Trust period

From May 23, 2014 until May 22, 2024

Acquisition price

2,584 million yen

Appraisal value

2,610 million yen (appraisal date: March 31, 2014)

Appraiser

Japan Real Estate InstituteSecurity interests

Yes

Overview of leasing status (March 31, 2014)
Number of tenants

1

Number of guest
rooms

160 rooms

Leasable area

3,327.38 m2

Leased area

3,327.38 m2

Occupancy rate (areabasis)

100.0%GOP (monthly)

17,050 thousand yen

Overview of Lease Contract
TenantFlexstay Hotel Management Co., Ltd.

Form of agreement

Operations services agreement variable rent type

Agreement term

From May 23, 2014 until May 22, 2024

Determination of rent of lease
contract

Fixed rent (JPY 75mn per annum: JPY 6.25 mn per month) plus
variable rent based on GOP of hotel operation (Note 1)

Operational
servicescompensation (Note 2)

Details are not disclosed as consent for disclosure cannot be
obtained from the Tenant

11Security
deposit/guarantee
money

None

Renewal upon expiration ofterm

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

Revision of rent

Rent cannot be revised during the lease term.

Early termination

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

Other remarks

None

Overview of building
inspection report
Inspection company

statusTokio Marine & Nichido
Risk Consulting Co.,Ltd.

Short-term repair costs(within one year)
Seismic PML－

Report date

March 2014

Long-term repair costs(fortheupcoming
twelve-year period)

132,408
thousand yen

7.6%

Remarks
None(Note 1)

(Note 2)

Variable rent is the amount obtained by deducting (1) total various expenses during the period, (2)operational services compensation and (3) fixed rent for the three months calculation period forvariable rent from the aggregate of total monthly sales of Tenant for such period. However, when thebalance after deduction is zero or negative, variable rent is zero.
The operational services compensation is a commission fee attributable to the tenant in accordancewith the provisions of the leasing contract as a compensation for operational service provided by atenant under the agreement.

(2) Matters relating to Seismic Resistance etc. for the Two Acquisition Properties
INV has obtained an opinion from a third party expert, Tokio Marine & Nichido Risk Consulting
Co., Ltd., indicating that, with respect to the buildings of the Two Acquisition Properties, there isno suspicion of falsification of structural calculation sheets through willful misconduct of thedesigners, and that the structural design is judged to be in general conformance with provisions
regarding seismic resistance under the Building Standards Act and its Enforcement Order.
Further, as part of INV’s due diligence (Note) in acquiring the properties, INV has investigatedseismic risk.
(Note) The due diligence carried out in acquiring properties included examination of appraisal values, building
inspection, seismic risk inspection, and investigation into legal matters.

(3) The Seven Senior Housing Properties[C21 Bon Séjour Chitose-Funabashi]
Real property
Category of
specified assets
Location(Lot number) 1-97-13 Funabashi, Setagaya-ku, Tokyo, and one other lot

12(Address) 1-37-3 Funabashi, Setagaya-ku, Tokyo
AccessFive-minute walk from Odakyu Line Chitose-Funabashi Station
Land
Form ofOwnership
ZoningNeighborhood
possessioncommercial district、Category1
medium-to-high-rise
exclusive residential
district
Building
coverage ratio
80%/300%
Land area
1,020.92 m2
and floor area
60%/200%
ratio
Building
Form ofOwnership
Use
Seniorhousing
property
possession
Total
floor 2,342.17 m2
Date of
March 8, 1988
area
completion
Structure and Reinforced concrete structure with flat roof, one basement
numberof level and six stories
stories
Seismic PML
8.7%
Trustee－Acquisition price 685 million yen
Book value
659 million yen (as of the end of December 2013)
Anticipated sales 830 million yen
priceAppraisal value
762 million yen (appraisal date: December 31, 2013)
Appraiser
Japan Real Estate InstituteSecurity interests Yes
Numberof
1 Number ofTenant42
tenants
leasable units
information(Note)
Monthly rent
3,735 Number of42
thousand leased units
yen
Security deposits,
20,597 Leasable area
2,342.17 m2
etc.
thousandyen
Occupancy rate
100.0% Leased area
2,342.17 m2(area basis)(Note)

Tenant information is current as of December 31, 2013.

[C22 Bon Séjour Yotsugi]
Category ofReal property
specified assets
Location(Lot number) 3-149-4 Higashi Yotsugi, Katsushika-ku, Tokyo ,and one
other lot
(Address) 3-1-11 Higashi Yotsugi, Katsushika-ku, Tokyo
AccessNine-minute walk from Keisei Line Yotsugi Station

13

Land

Form ofpossession
Land area

Ownership

Zoning

1,136.46 m

2

Building

Building
coverage ratio
and floor area
ratio
Use

Industrial district

60%/200%

Form ofOwnership
Seniorhousing
property
possession
Total floor
1,962.89 m2
Date of
March 1989
area
completion
Reinforced concrete structure with flat roof, five stories
Structureandnumber ofstories
Seismic PML
10.7%
Trustee－Acquisition price652 million yen
Book value
624 million yen (as of the end of December 2013)
Anticipated sales 776 million yen
priceAppraisal value
703 million yen (appraisal date: December 31, 2013)
Appraiser
Japan Real Estate InstituteSecurity interests Yes
TenantNumber of
1 Number of62
information (Note) tenantsleasable units
Monthly rent
3,735 Number of62
thousand leased units
yen
Security
21,351 Leasable area
1,962.87 m2
deposits, etc.
thousandyen
Occupancy rate
100.0% Leased area
1,962.87 m2(area basis)(Note)

Tenant information is current as of December 31, 2013.

[C23 Bon Séjour Hino]
Category ofReal property
specified assets
Location(Lot number) 438-1 Ochikawa, Hino-shi, Tokyo ,and six other lots
(Address) 438-1 Ochikawa, Hino-shi, Tokyo
AccessThree-minute walk from Keio Line Mogusaen Station
Land
Form ofOwnership
ZoningCategory 1 low-risepossession
exclusive residential
district
Building
coverage ratio
Land area
2,211.28 m2
40%/80%and floor area
ratio

14

BuildingForm ofOwnership
Use
Seniorhousing
property
possession
Total floor
1,984.17 m2
Date ofMay 2, 1990
area
completion
Reinforced concrete structure with flat roof, three stories
Structureandnumber ofstories
Seismic PML
13.2%
Trustee－Acquisition price574 million yen
Book value
553 million yen (as of the end of December 2013)
Anticipated sales 729 million yen
priceAppraisal value
662 million yen (appraisal date: December 31, 2013)
Appraiser
Japan Real Estate InstituteSecurity interests Yes
TenantNumber of
1 Number of
56
information (Note) tenantsleasable units
Monthly rent
3,555 Number of56
thousand leased units
yen
Security
20,095 Leasable area
1,984.17 m2
deposits, etc.
thousandyen
Occupancy rate
100.0% Leased area
1,984.17 m2(area basis)(Note)

Tenant information is current as of December 31, 2013.

[C24 Bon Séjour Musashi-Shinjo]
Category ofReal property
specified assets
Location(Lot number) 773-2 Kitaura, Chitose, Takatsu-ku, Kawasaki-shi,
Kanagawa-ken(Address)－
AccessThirteen-minute walk from JR Line Musashi-Shinjo Station
Land
Form ofOwnership
ZoningCategory 1 residential
possession
district
Building
coverageLand area
1,233.49 m2
60%/200%
ratio and floorarea ratio
Building
Form ofOwnership
Use
Seniorhousing
property
possession
Total floor
1,710.43 m2
Date ofFebruary 21, 1985
area
completion

15

Reinforced concrete structure with flat roof, four stories
Structureandnumber ofstories
Seismic PML
15.7%
Trustee－Acquisition price 486 million yen
Book value
469 million yen (as of the end of December 2013)
Anticipated sales 586 million yen
priceAppraisal value
561 million yen (appraisal date: December 31, 2013)
Appraiser
Japan Real Estate InstituteSecurity interests Yes
Number of
1 Number ofTenant46
tenants
leasable units
information(Note)
Monthly rent
2,949 Number of46
thousand leased units
yen
Security
16,729 Leasable area
1,710.43 m2
deposits, etc.
thousandyen
Occupancy rate
100.0% Leased area
1,710.43 m2(area basis)(Note)

Tenant information is current as of December 31, 2013.

[C25 Bon Séjour Komaki]
Category ofReal property
specified assets
Location(Lot number) 3-1 Shiroyama, Komaki-shi, Aichi-ken(Address) 3-1 Shiroyama, Komaki-shi, Aichi-ken
Access
JR Line Kasuga Station
Land
Form ofOwnership
ZoningCategory1
possession
medium-rise
exclusive residential
district
Building
coverage ratio
Land area
8,229.85 m2
60%/200%
and floor area
ratio
Building
Form ofOwnership
Use
Seniorhousing
property
possession
Total floor
8,805.49 m2
Date of
March 13, 1991
area
completion
Steel frame/reinforced concrete structure with flat roof, ten
Structure
storiesandnumber ofstories

16

Seismic PML

3.8%
Trustee－Acquisition price
1,050 million yen
Book value
989 million yen (as of the end of December 2013)
Anticipated sales 1,275 million yen
priceAppraisal value
1,060 million yen (appraisal date: December 31, 2013)
Appraiser
Japan Real Estate InstituteSecurity interests Yes
TenantNumber of
1 Number of
information (Note) tenantsleasable units
Monthly rent
7,532 Number of
thousand leased units
yen
Security
40,249 Leasable area
deposits, etc.
thousandyen
Occupancy rate
100.0% Leased area
(area basis)(Note)

123
123

8,858.49 m2
8,858.49 m2

Tenant information is current as of December 31, 2013.

[C26 Bon Séjour Hadano-Shibusawa]
Category ofReal property
specified assets
Location(Lot number) 1-518-2 Shibusawakami, Hadano-shi, Kanagawa-ken ,and
two other lots
(Address) 1-6-60 Shibusawakami, Hadano-shi, Kanagawa-ken
AccessTen-minute walk from Odakyu Line Shibusawa Station
Land
Form ofOwnership
ZoningCategory1
possession
medium-to-high-rise
exclusive
residential district
BuildingLandcoverage ratio
2,588.04 m2
60%/200%
area
and floor area
ratio
Building
Form ofOwnership
Use
Seniorhousing
property
possession
Total floor
3,435.79 m2
Date ofJuly 17, 1991
area
completion
Reinforced concrete structure with flat roof, five stories
Structureandnumber ofstories
Seismic PML
19.3%
Trustee－Acquisition price 681 million yen

17Book value
Anticipated sales
priceAppraisal value
Appraiser
Security interests
Tenantinformation(Note)(Note)

636 million yen (as of the end of December 2013)
733 million yen
634 million yen (appraisal date: December 31, 2013)
Japan Real Estate Institute
Yes
Number of
1 Number oftenants
leasable units
Monthly rent
3,886 Number of
thousand leased units
yen
Security
21,386 Leasable area
deposits, etc.
thousandyen
Occupancy rate
100.0% Leased area
(area basis)

100
100

3,435.79 m2
3,435.79 m2

Tenant information is current as of December 31, 2013.

[C27 Bon Séjour Itami]
Category ofReal property
specified assets
Location(Lot number) 1-5 Chuo, Itami-shi, Hyogo-ken, and one other lot(Address) 1-2-25 Chuo, Itami-shi, Hyogo-ken
AccessTwo-minute walk from Hankyu Railways Itami Line Itami Station
Commercial district
Land
Form ofOwnership(site Zoning
possession rights
interests
approximately
24.92%)
Building
2
coverage ratio
Land area
1,976.11 m
80%/400%
and floor area
ratio
Building
Form ofCompartmentalized Use
Seniorhousing
possession ownership (kubun
property
shoyu-ken)
Total floor
7,579.42 m2
Date of
March 3, 1989
area
completion
Steel frame/reinforced concrete structure with flat roof,
Structure
eleven stories
andnumber ofstories
Seismic PML
8.4%
Trustee－Acquisition price
480 million yen
Book value
452 million yen (as of the end of December 2013)
Anticipatedsales 471 million yen
price

18

Appraisal value
Appraiser
Security interests
Tenant information(Note)(Note)

439 million yen (appraisal date: December 31, 2013)
Japan Real Estate Institute
Yes
Number of
1 Number oftenants
leasable units
Monthly rent
2,661 thousand Number of
yen leased units
Security
14,508 Leasable area
deposits, etc.
thousand yen
Occupancy rate
100.0% Leased area
(area basis)

62
62
2,129.87 m2
2,129.87 m2

Tenant information is current as of December 31, 2013.

4. Overview of Sellers and Transferee(1) Overview of Sellers
Overviews of sellers for the Two Acquisition Properties are as follows, respectively.
[D1 Hotel MyStays Kanda]① NameZephyrus Tokutei Mokuteki Kaisha (“Zephyrus TMK”)②

c/o EP Consulting Services Corporation, 1-2-9 Nishishinbashi,
Minato-ku, Tokyo

Location③ Title and name ofrepresentative officer④ Business

Hiroyasu Nakamura, Director(a) Operations relating to liquidation of specified assets(b) All other operations ancillary to the operations relating toliquidation of specified assets⑤ Capital(as of the date of this 100,000 yen
notice)March 1, 2011
⑥ Date of establishment⑦ Relationship between Investment Corporation/Asset Management Company and the TMK
While there are no capital relationships that should be noted
between INV/CIM and the TMK, the TMK has received tokumei
kumiai contributions through funds operated by affiliates of FIG,
an affiliate of Calliope. As of the end of December 2013,
Capital relationships
Calliope holds 609,942 investment units issued by INV (38.77%
stake). Further, as of the date of this notice, Calliope is theparent company of CIM, holding 100% of its outstanding shares.
While there are no personal relationships that should be noted
between INV and the TMK, as of the date of this notice, among
the officers and employees of CIM, representative director andPersonal relationships
president Naoki Fukuda was seconded from Calliope. Further,
part-time director Christopher Reed was seconded from Fortress
Real Estate Asia Godo Kaisha, a subsidiary of FIG.

19

Transactional
relationships

Whether the TMK is arelated party

In the term ended December 2013, there was no transactional
relationship that should be noted between INV/CIM and the TMK.
Further there are no transactional relationships that should be
noted between the related persons or affiliates of INV/CIM andthe TMK or its related persons or affiliates.

The 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. Furthermore, the TMK is not an interested party etc. of
CIM as provided in the Investment Trust Act.

[D2 Hotel MyStays Asakusa]① NameNishi Tokutei Mokuteki Kaisha (“Nishi TMK”)②

c/o EP Consulting Services Corporation, 1-2-9 Nishishinbashi,
Minato-ku, Tokyo

Location③ Title and name ofrepresentative officer④ Business⑤ Capital(as of the date of thisnotice)⑥ Date of establishment

Hideaki Otani, Director(a) Operations relating to the acquisition, management, anddisposal of specified assets in accordance with asset
liquidation plans under the Act on Liquidation of Assets(b) All other operations ancillary or relating to the liquidationof specified assets as specified in the preceding item
100,000 yen
June 3, 2010

⑦ Relationship between Investment Corporation/Asset Management Company and the TMK
While there are no capital relationships that should be noted
between the INV/CIM and the TMK, the TMK has received
tokumei kumiai contributions through funds etc. operated byaffiliates of FIG, an affiliate of Calliope. As of the end of
Capital relationships
December 2013, Calliope holds 609,942 investment units
issued by the INV (38.77% stake). Further, as of the date ofthis notice, Calliope is the parent company of CIM, holding
100% of its outstanding shares.
While there are no personal relationships that should berecorded between the INV and the TMK, as of the date of thisnotice, among the officers and employees of CIM,
representative director and president Naoki Fukuda was
Personal relationships
seconded from Calliope.
Further, part-time director
Christopher Reed was seconded from Fortress Real Estate
Asia Godo Kaisha, a subsidiary of FIG.
In the term ended December 2013, there was no transactional
Transactional
relationship that should be noted between INV/CIM and the
TMK. Further there are no transactional relationships that
relationships
should be noted between the related persons or affiliates of20

INV/CIM and the TMK or its related persons or affiliates.
Whether the TMK is arelated party

The 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. Furthermore, the TMK is not an interested party etc.
of CIM as provided in the Investment Trust Act.

(2) Overview of Transferee
Because consent for disclosure has not been obtained from the transferee (a Japanese special
purpose company) of the Seven Senior Housing Properties, disclosure is not made here.
As of the date of this notice, there are no capital, personal, or transactional relationships thatshould be noted between INV/CIM and the transferee and its equity investors and asset manager.
Further, neither of the transferee, its equity investors and asset manager is a related party of INV or
CIM, and as of the date of this notice, the transferee is not an interested person etc. as provided in
the Investment Trust Act or a sponsor-related person under the voluntary rules specified by CIM as
countermeasures against conflicts of interests in the management of INV’s investments.
5. Transactions with Interested Persons etc.
The sellers of the Two Acquisition Properties, Zephyrus TMK and Nishi TMK, are notsponsor-related persons under the voluntary rules specified by CIM as countermeasures against
conflicts of interests in the management of INV’s investments. However, such sellers havereceived tokumei kumiai contributions through funds etc. operated by affiliates of FIG, an affiliate ofCalliope (please note that Calliope is CIM’s parent company, and thus a sponsor-related person).
Therefore, CIM treats Zephyrus TMK and Nishi TMK as persons equivalent to sponsor-related
persons.
The Two Acquisition Properties are to be acquired at prices not exceeding their appraisal value inaccordance with Sponsor-Related Person Transaction Rules and Sponsor-Related Person
Transaction Management Manual, which are internal rules of CIM, and after deliberation andresolution of the compliance committee meeting held on May 21, 2014 and the investmentcommittee meeting held on the same day, the board of directors of CIM approved the acquisitions at
the meeting held on May 21, 2014, and the board of directors of INV approved the acquisitions at
the meeting held on May 21, 2014.
In addition, the Tenant of the Two Acquisition Properties, FHM, is not a sponsor-related person(Note) under the voluntary rules specified by CIM as countermeasures against conflicts of interests inthe management of INV’s investments. However, the Tenant’s parent company is an affiliate of FIG,
an affiliate of Calliope (Calliope is CIM’s parent company, and thus a sponsor-related person).
Therefore, CIM treats FHM as a person equivalent to a sponsor-related person.
With respect to the fixed term building lease and operational services agreement which is
expected to be executed with FHM, in accordance with Sponsor-Related Person Transaction Rules
and Sponsor-Related Person Transaction Management Manual, which are internal rules of CIM,
on the condition that FHM’s hotel operating capability is confirmed as sufficient through a third party
report and other relevant information, the rent level of each of the Two Acquisition Properties isreasonable considering the market level, and operational services compensation amount andstructure is fair compared with similar properties, and after deliberation and resolution of the21compliance committee meeting held on May 21, 2014 and the investment committee meeting heldon the same day, the board of directors of CIM approved the agreement at a meeting held on May
21, 2014, and the board of directors of INV approved the agreement at the meeting held on May 21,
2014.
Hence, INV considers FHM to meet its standard for selection of tenants.
(Note) A sponsor-related Person is (i) any person who falls under the “Interested Persons, etc.” set forth in theInvestment 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 fallunder (ii) above, or (b) which are invested by or invested in anonymous partnership (tokumei kumiai) by persons who
fall under (ii) above.

6. 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 ⑤: Acquisition timing
Property name

D1
Hotel MyStays
Kanda

D2
Hotel MyStays
Asakusa

Current owner/trust
beneficiaryPreceding owner/trust
beneficiary① Zephyrus TMK① Arno Godo Kaisha② The TMK has② The Godo Kaisha
received tokumei
has received
kumiai contributions
tokumei kumiai
through funds, etc.
contributions
operated by affiliates
through funds etc.
of FIG, an affiliate ofoperated by affiliates
Calliope.
of FIG, an affiliate of③ Acquisition for
Calliope.
investment purposes ③ Acquisition for④ Omitted because
investment purposes
held for longer than ④ one year
⑤ February 2012
⑤ May 2012
① Nishi TMK
Person other than a② The TMK has
person having a
received tokumei
special conflict of
kumiai contributions interests relationshipthrough funds etc.
operated by affiliatesof FIG, an affiliate ofCalliope.
③ Acquisition forinvestment purposes④ Omitted because
held for longer than
one year⑤ January 201122

Owners/trust
beneficiaries
preceding those to theleft
Persons having no
specialconflictofinterests relationship7. Overview of Brokerage(1) The Two Acquisition Properties
Not applicable.
(2)

The Seven Senior Housing Properties
The broker for the Seven Senior Housing Properties is the following.
①

Name

Sumitomo Mitsui Trust Bank, Limited②

Location of head
office1-4-1 Marunouchi, Chiyoda-ku, Tokyo③

Title and name ofrepresentative
officer

Hitoshi Tsunekage, Representative Director
a. Trust operations
b. Bank operations
c. Real estate brokerage, securities brokerage and other concurrent
operations
d. Registered financial institution operations
342 billion yen (as of March 31, 2014)④

Main businesses⑤

Capital⑥Date ofestablishment⑦

Relationship of the Investment Corporation/Asset Management Company with the broker⑧

July 28, 1925

Capitalrelationships・Personal
relationships

As of the date of this notice, there are no capital, personal, ortransactional relationships that should be noted between the INV/CIM
and the broker, and further, such company is not a related party of theINV or CIM.

Transactional
relationshipThe broker has executed an Asset Custody Services Agreement andan Investors Registry Manager Services Agreement with INV.

Whether the broker
is a related party

The broker is not a related party of INV or CIM.
As of the date of this notice, the broker is not an interested party etc.
as provided in the Investment Trust Act or a sponsor-related person
under the voluntary rules specified by CIM as countermeasuresagainst conflicts of interests in the management of INV’s investments.

Broker fee

8. Schedules(1)
Acquisition Schedule
Acquisition decision date
Agreement execution
date
Anticipated acquisition
proceeds receipt date
Anticipatedacquisitiondate:

We cannot disclose the broker fee as consent for disclosure has notbeen obtained.

May 21, 2014

May 23, 2014

23

(2)

Sale Schedule
Sale decision date
Agreement execution
date
AnticipatedSales
proceeds receipt date
Anticipated sales date

May 21, 2014

May 22, 2014

9. Use of Sale Proceeds
A portion of the sale proceeds that INV will obtain through the sale of the 7 properties will beallocated to the acquisition funds for the Two Acquisition Properties, and any remaining amount will
be applied to repayment of existing loans of the company, namely New Syndicated Loan A. For thedetails of such repayment, please refer to “Notice concerning Debt Financing and Prepayment of
Existing Borrowings” as of today.
10. Future Outlook
For forecasts for INV’s operations and distributions in the term ending June 2014 (from January 1,
2014 until June 30, 2014) reflecting the foregoing transactions, please refer to “Notice concerning
Revision of Forecast of Financial Results and Distribution for the 22nd Fiscal Period Ending June2014” as of today.
11. Other Matters that are Necessary for Investors to Properly Understand and Make Judgment on
Relevant Information
Investment in hotels involves certain risks including the following:i.
rent revenue is dependent on hotel revenue of the tenant and may be materially affected by,among other things, the credit, operating capability or reputation of the tenant andtermination of contract with the tenant;ii. hotel revenue is relatively volatile, and will be subject to seasonality due to such factors assightseeing seasons, business needs and events nearby (e.g., conferences), and is also
affected by competition with nearby hotels; andiii. hotels require relatively large costs for renovation and maintenance, while revenue growth
expected from such expenditures may not be realized.
INV intends to mitigate the risks involved in hotels investments through the selection of hotel
tenants by reviewing third party reports and other relevant information, and verifying the projections
by hotel operators, creditworthiness for payment of rent, compliance systems, know-how andhistorical performance, and otherwise striving to manage the hotels through proper administration of
hotel tenants. However, there is no assurance that these measures will be effective in preventing
the above risks from materializing.

24

[For reference]
1. Summary of Real Estate Appraisal(Units: thousands JPY, figures rounded down to a thousands JPY）

No.

D1

Property Name

D2

Hotel MyStays Kanda

Appraisal Values (Specified Values)

Hotel MyStays Asakusa

2,880,000

2,610,000

March 31, 2014

March 31, 2014

118,585
118,585

188,299
188,299--

11,395

11,397

Maintenance cost etc.

2,594

3,514

Taxes and dues

8,801

7,883

Other expenses-

Appraisal date
Operating revenues
Rent income etc.
(Incl. Common area
charges)
Other income
Operating expenses

Net operating income (NOI)

171,344

176,902

Capitalexpenditures etc.

11,591

15,639Net Cash Flow (NCF)

165,599

161,263

5.7%

6.1%

Value under the cost direct capitalization
method

2,910,000

2,640,000

Value under the DCF method

2,850,000
5.4%
5.8%
1,960,000
67.0%
32.8%

2,580,000
5.8%
6.2%
1,580,000
72.1%
24.1%

Cap rate

Discount rate
Terminal cap rate
Value under the cost method
Percentage of land
Percentage of building

1

2.

No.
A26
A27

Portfolio List after the Acquisition as of May23, 2014

Property Name
Nisshin Palacestage
Daitabashi
Nisshin Palacestage
Higashi-Nagasaki

Type

Residential

Growth Maison Gotanda

Residential

A29

Growth Maison Kameido

Residential

A30

Emerald House

Residential

A31

Harmonie Ochanomizu

Residential

A32

Suncrest Shakujii Koen

Residential

A34

Growth Maison ShinYokohama
Belle Face Ueno
Okachimachi

Residential
Residential

A35

Grand Rire Kameido

Residential

A36

Growth Maison
Ikebukuro

Residential

A37

Growth Maison Yoga

Residential

A38

Route Tachikawa

Residential

A39

Shibuya Honmachi
MansionResidential

A40

City Heights Kinuta

Residential

A41
A42

Acseeds Tower
Kawaguchi Namiki
Capital Heights
Kagurazaka

The Greater Tokyo
Area
The Greater Tokyo
Area
The Greater Tokyo
Area
The Greater Tokyo
Area
The Greater Tokyo
Area
The Greater Tokyo
Area
The Greater Tokyo
Area
The Greater Tokyo
Area
The Greater Tokyo
Area
The Greater Tokyo
Area
The Greater Tokyo
Area
The Greater Tokyo
Area
The Greater Tokyo
Area
The Greater Tokyo
Area
The Greater Tokyo
Area
The Greater Tokyo
Area
The Greater Tokyo
Area
The Greater Tokyo
Area
The Greater Tokyo
Area
The Greater Tokyo
Area
The Greater Tokyo
Area
The Greater Tokyo
Area
The Greater Tokyo
Area
The Greater Tokyo
Area

Residential

A28

A33

Area

Residential
Residential

A43

College Square Machida

Residential

A44

Belair Meguro

Residential

A45

Wacore Tsunashima Ⅰ

Residential

A46

Foros Nakamurabashi

Residential

A47

Growth Maison Kaijin

Residential

A48

College Square Machiya

Residential

A51

City House Tokyo
Shinbashi

Residential

2

AcquisitionPrice(mn JPY)

Investment
Ratio
(%)

1,251

1.6

1,229

1.6

888

1.1

1,070

1.4

1,505

1.9

1,428

1.8

1,088

1.4

1,059

1.4

1,023

1.3

906

1.2

825

1.1

795

1.0

676

0.9

651

0.8

646

0.8

620

0.8

604

0.8

589

0.8

589

0.8

572

0.7

566

0.7

557

0.7

510

0.7

2,520

3.2

No.

Property Name

A52

Winbell Kagurazaka

A53
A54

Nishiwaseda Cresent
MansionLexington Square
Akebonobashi

Type

Residential
Residential

Casa Eremitaggio

Residential

A59

Towa City Coop
Shin-otsukaⅡ

Residential

A61

Bichsel Musashiseki

Residential

A63

Lexel Mansion Ueno
Matsugaya
Towa City Coop
Sengencho

The Greater Tokyo
Area
The Greater Tokyo
Area
The Greater Tokyo
Area
The Greater Tokyo
Area
The Greater Tokyo
Area
The Greater Tokyo
Area
The Greater Tokyo
Area
The Greater Tokyo
Area

Residential

A56

A62

Area

Residential
Residential

AcquisitionPrice(mn JPY)

Investment
Ratio
(%)

3,260

4.2

1,880

2.4

1,450

1.9

1,070

1.4

866

1.1

577

0.7

970

1.2

1,110

1.4

A64

Royal Park Omachi

Residential

Main Provincial City

415

0.5

A65

Lexington Square
Haginomachi

Residential

Main Provincial City

330

0.4

A66

Visconti Kakuozan

Residential

Main Provincial City

255

0.3

977

1.3

511

0.7

1,180

1.5

7,010

9.0

1,660

2.1

A71
A72
A73

Lexington Square
Daitabashi
Lexington Square
Honjo-Azumabashi
AMS TOWER Minami
6-Jo

Residential
Residential

A75

Spacia Ebisu

Residential

A76

Neo Prominence

Residential

A77
A78

Invoice Shin-Kobe
Residential
Cosmo Court
Motomachi

The Greater Tokyo
Area
The Greater Tokyo
Area

Residential

Main Provincial City
The Greater Tokyo
Area
The Greater Tokyo
Area

Residential

Main Provincial City

1,260

1.6

Residential

Main Provincial City

973

1.2

A79

Revest Honjin

Residential

Main Provincial City

674

0.9

A80

Revest Matsubara

Residential

Main Provincial City

657

0.8

A81

Sun Terrace Minami
Ikebukuro

Residential

The Greater Tokyo
Area

625

0.8

A82

Alba Noritake Shinmachi

Residential

Main Provincial City

608

0.8

A83

Revest Meieki Minami

Residential

Main Provincial City

597

0.8

A84

Revest HeianResidential

Main Provincial City

595

0.8

A85

Vendir Hamaotsu
EkimaeResidential

Main Provincial City

581

0.7

A86

Salvo Sala

Residential

Main Provincial City

544

0.7

3

AcquisitionPrice(mn JPY)

Investment
Ratio
(%)

The Greater Tokyo
Area

543

0.7

Residential

Main Provincial City

525

0.7

Winntage Kobe
Motomachi

Residential

Main Provincial City

512

0.7

A90

Queen’s Court Fukuzumi

Residential

The Greater Tokyo
Area

456

0.6

A91

Corp Higashinotoin

Residential

Main Provincial City

446

0.6

A92

Belair Oimachi

Residential

The Greater Tokyo
Area

412

0.5

Residential

Main Provincial City

374

0.5

Residential

Main Provincial City

373

0.5

Residential

Main Provincial City

355

0.5

Residential

Main Provincial City

335

0.4

Residential

The Greater Tokyo
Area

331

0.4

Residential

Main Provincial City

310

0.4

Residential

Main Provincial City

297

0.4

58,083

74.5

1,301

1.7

715

0.9

4,880

6.3

1,060

1.4

No.

Property Name

Type

Area

A87

Excellente Kagurazaka

Residential

A88

Luna Court Edobori

A89

A93
A94
A95
A96
A97
A98
A99

Siete
Minami-Tsukaguchi
Prime Life Sannomiya
Isogami Koen
HERMITAGE NANBA
WEST
Century Park Shinkawa
1-bankanWest Avenue
Little River
Honmachibashi
Prime Life Mikage

Subtotal of Residentials (63 properties)
B8

Kindai Kagaku Sha
Building

OfficeB9

Shinjuku Island

Office

B14
B15
B16
B17
B18

Lexington Plaza
Nishigotanda
Cross Square
NAKANOOhki Aoba Building
Lexington Plaza
Hachiman
AEON TOWN
Sukagawa

The Greater Tokyo
Area
The Greater Tokyo
Area
The Greater Tokyo
Area
The Greater Tokyo
Area

OfficeOfficeOfficeMain Provincial City

816

1.0

Commercial

Main Provincial City

3,280

4.2

Commercial

Main Provincial City

2,320

3.0

14,372

18.4

97

0.1

97

0.1

2,851

3.7

2,584

3.3

Subtotal of Offices and Commercial Facilities (7 properties)
C1

Stop Parking
Kanda-Sudacho

The Greater Tokyo
Area

Parking

Subtotal of Parking lot etc. (1 property)
D1

Hotel MyStays Kanda

Hotel

D2

Hotel MyStays
AsakusaHotel

The Greater Tokyo
Area
The Greater Tokyo
Area

4

No.

Investment
Ratio
(%)

Subtotal of Hotel (2 properties)

5,435

7.0

Total of properties (73 properties)

77,988

100.0

Type

Area

Overview of Portfolio List after the Acquisition as of May 23, 2014 (based on acquisition price)

By Geography

The 21st Fiscal Period(as of Dec. 31, 2013)

After repositioning(as of May.23, 2014)

OthersKansai 10.8%
9.1%

Central 5 wardsof Tokyo 26.0%

Chubu 6.2%
Greater Tokyo Area
ExcludingTokyo 23 wards
9.4%

Greater Tokyo Area
ExcludingTokyo 23 wards
7.1%

Tokyo 23 wards
excludingCentral 5 wards
38.5%

Greater Tokyo Area 73.9％(Tokyo 23 wards 64.5%)

By Property Age

3.

AcquisitionPrice(mn JPY)

Property Name

20-years
31.4%

Others10.7%
KansaiCentral 5 wards
8.4%
of Tokyo 29.3%
Chubu 4.8%

Tokyo 23 wards excluding
Central 5 wards 39.7%

Greater Tokyo Area 76.1％(Tokyo 23 wards 69.1%)

20-years
28.5%

5-9 years
46.9%

5-9 years
50.1%

15-19 years
9.5%

15-19 years
9.6%
10-14 years
12.0%
Weighted average age: 13.5 years

5

10-14 years
11.9%
Weighted average age: 13.0 years

4.

Picture and MAP of Two Acquisition Properties
D1 Hotel MyStays Kanda<Reception><Room with double bed and sofa bed (equipped with kitchen)><Appearance><Lobby><Room with semi double bed (equipped with kitchen)>

<MAP>

6

<24 hours coin-operated laundry>D2 Hotel MyStays Asakusa<Reception><Appearance><Modern design entrance><Room with triple beds (all equipped with kitchen)><Room with semi-double bed (all equipped with kitchen)><Tokyo Sky Tree as seenfrom the room on the east side><24 hours coin-operated laundry><MAP><Rental bicycles>7