Securities Code 3487

Supplementary Explanation Material Concerning First Capital
Increase by Public Offering and Asset Acquisitions

LogiSquare Kasukabe
The property is in close vicinity to National Route 16 and National Route 4 (Koshigaya-Kasukabe Bypass), which are major
highways, and is located around 1.8 km from the Showa Interchange, where these two highways intersect. The property is(C) more
2019convenient
CRE Logistics
REIT,
Inc.extension
All Rights
expected toCopyrightbecome evenwith theplannedof Reserved.
National Route 4 (Higashi-Saitama Road).

June 27, 2019

CRE REIT Advisers, Inc.

Disclaimer• This material reorganizes the information contained in the announcements made today entitled “Notice Concerning Issuance of New Investment Units andSecondary Offering of Investment Units,” “Notice Concerning Revision of Forecast for Performance in the Fiscal Period Ending December 31, 2019 and Forecast
for Performance in the Fiscal Period Ending June 30, 2020,” “Notice Concerning Acquisition and Leasing of Domestic Trust Beneficial Interests in Real Estate” and“Notice of Borrowing of Funds (New Borrowing and Refinancing)” and other additional information incidental thereto.

• The purpose of this material is to provide information and not to solicit investment products. When you make an investment, please do so at your own discretion
and responsibility after reading the prospectus on the issuance of new investment units and the secondary offering of investment units and any corrections thereto
prepared by CRE Logistics REIT, Inc. (hereinafter “CRE REIT”).

• Although we take great caution regarding the information presented in this material, its accuracy and integrity are not guaranteed. In addition, please note that thecontent may be changed or discontinued without notice.

• This material contains the current analyses, judgments and other views of CRE REIT and CRE REIT Advisors, Inc. (hereinafter the “Asset Management
Company”). There is a possibility that other views exist and that CRE REIT and the Asset Management Company may change their views in the future.

• This material contains current plans, goals, estimates and other forward-looking statements regarding the performance of the Issuer. These statements do notnecessarily foresee the future performance completely, and there are risks and uncertain factors which might affect future performance of the CRE REIT. Actual
results may differ from these statements due to various factors.

• The property photographs featured in this material include some property photographs of assets held by CRE REIT and assets that CRE REIT plans to acquire asof June 27, 2019. However, CRE REIT may sell the assets that it holds or the assets that it plans to acquire to third parties or otherwise dispose of them in the
future and may not necessarily continue to hold them. Moreover, CRE REIT may not necessarily be able to purchase the assets it plans to acquire.

• This material may not be reproduced or duplicated without the prior permission of CRE REIT and the Asset Management Company.

Copyright (C) 2019 CRE Logistics REIT, Inc. All Rights Reserved.

1

Summary of First Capital Increase by Public Offering and Asset Acquisitions
Acquire properties at appropriate price from Sponsor
M-8 LogiSquare Kasukabe

Number of properties

Planned acquisition
price

Average appraisal
NOI yield(Note 1)

2 properties

6,390 million yen

5.0%

Averageproperty age(Note 2)

Occupancy rate(Note 3)

Average remaining leaseterm(Note 4)

1.1 years

100.0%

9.1 years(Ended December 2018)

Increase in borrowing

9 properties(Planned) acquisition price

47,725 million yen

54,115 million yen

Average appraisal NOI yield

4.9%

4.9%

(Note 6)After the Borrowing

Forecast for June 30, 2019

Estimate for June 30, 2020

47.9%

47.9%

May 31, 2019

Plan for July 31, 2019100.0%

100.0%

July 31, 2019

Plan for July 31, 2019

2.1 years

3.1 years

3,166 million yen (including consumption tax loan of 267 million yen)

Before the Issue

NAV(Note 10) per unit

Distributions per unit
Average property age

2.4 years

2.3 years

Occupancy rate

100.0%

100.0%

Average remaining lease term

6.7 years

7.0 years

Number of new investment
units to be issued

Tokyo Metropolitan Area(Note 7)

94.0%

94.7%

Total issue value (forecast)

After the Issue

December 31, 2018(Note 11)

After the Issuance(Note 12)

117,317 yen

118,541 yen (+1.0%)

Previous estimate for
period ending December
2019(Note 13)

2,940 yen

Current estimate for period
ending December 2019 (Note14)

2,990 yen (+1.7%)
Estimate for period ending
June 2020(Note 14)

3,029 yen (+3.0%)

Form of offering

Copyright (C) 2019 CRE Logistics REIT, Inc. All Rights Reserved.

Before the Borrowing

Realize external growth that contributes to improvement in
distributions per unit and NAV per unit

After acquisition ofassets planned for
acquisition(Note 8)

7 properties

Number of properties

Ratio of long-term debt
Average life of interestbearing debt

Maintain high quality portfolio through investment in LogiSquare(Note5)
End of 5th Period

LTV(Note 9)

Net assets

AssetsLiabilities

M-7 LogiSquare Kawagoe

Pursue appropriate LTV control and long-term debt

28,100 units(12.2% of total issued and outstanding investment units)

3,039 million yen
Domestic offering

2Realization of external growth that contributes to improvement in distributions per unit and NAV per unit

Enhance unitholder value through external growth that contributes to improvementin DPU and NAV per unit
Effect of increasing DPU

Effect of increasing NAV per unit
DPU

(Note1)

+3.0%
3,500

NAV per unit
+1.0%

130,000

+1.7%

3,000

2,940

2,940

3,029

2,990

120,000(Note2)

372

118,541

114,936EPU

372

117,317365

365110,000

2,500

100,000
2,000

2,664

2,568 2,625

2,568

90,0001,500
80,000

1,000
(yen)

Previous
第６期
estimate

Previous
Current
第７期
estimate estimate（2019年6（2019年126th
period月期）(ended June 2019)

7th period
月期）(ending December 2019)

第８期（2020年6Current
estimate

70,000(yen)

End of 4th Period(ended June 2018)

End of 5th Period(ended December 2018)

After the Issue

8th period(ending June 2020)月期）

Distributions per unit (excluding surplus distributions)Surplus distributions per unit

Copyright (C) 2019 CRE Logistics REIT, Inc. All Rights Reserved.

3

Acquire properties at appropriate price from Sponsor

Acquisition at an appropriate price of properties ; average appraisal NOI yield (5%) ishigher than CRE REIT implied cap rate
Acquisition at appropriate price through strong sponsor support
Average appraisal NOI yield ofassets planned for acquisition

5.0%

＞

CRE REIT implied cap rate(Note 1) (Note 2)

Level of cap rate inTokyo Metropolitan Area(Note 3)

4.6%

4.5%

Appraisal NOI yield of each asset planned for acquisition(Note 4)

M-7
LogiSquare Kawagoe

M-8
LogiSquare KasukabeAppraisal NOI yield

5.0%

5.1%

Discount rate(Note 5)

-5.1%

-7.5%

5.00%

4.50%

4.00%
Kawagoe area

Kasukabe area

3.50%
Appraisal NOI yield of each asset planned for acquisition

Copyright (C) 2019 CRE Logistics REIT, Inc. All Rights Reserved.

NOI yield level of properties owned by other REITs (Note 6)4

Promote appropriate LTV control and long-term debt

Promote stable financial operations through financing from new lenders,long-term borrowing and distribution of repayment dates
Plan to start borrowing from Sumitomo Mitsui Trust
Bank, Limited

Pursue long-term debt
After theBorrowing(Note 1)(May 31, 2019)(July 31, 2019)

Forecast for
June 30, 2019

Estimate forJune 30, 2020

47.9%

47.9 %

23,820 million yen

26,986 million yen

LTVInterest-bearing debt

Bank formation before the borrowing(Note 4) (Note 5)
Difference
The Nishi-NIippon
City Bank, Ltd.
8.5%―%
Development Bankof Japan Inc.
12.0%

+3,166 million yen
Resona Bank,
Limited
14.6%

Ratio of long-termdebt(Note 2)

100.0%

Average life ofinterest-bearing debt

Sumitomo Mitsui
Banking
Corporation 25.3%

100.0%―%

Mizuho Bank, Ltd.
20.4%

Sumitomo Mitsui Trust
Bank, Limited

Before the
Borrowing

MUFG Bank, Ltd.
19.2%

2.1 years

3.1 years+1.0 years(Note 3)

Promote distribution of repayment dates
In addition to borrowing associated with property acquisitions, CRE REIT plans to implement
refinancing in July 2019.
Plan to implement refinancing on July 31, 2019

8,000

Existing loans payable

6,680

Approach to liabilities•

CRE REIT aims to reduce LTV to the 45% level and theupper limit of LTV is 50%, in principle.

•

The above level is slightly higher than that of other listed
logistics REITs but CRE REIT has chosen to made effective
use of borrowing given that its cash flow is stable due tolong-term leasing contracts.

•

CRE REIT will implement financial operations with anemphasis on long-term stability through long-term, fixed rateloans.

•

CRE REIT will first examine using funds in hand to acquire
properties, etc. and will then examine repaying loans
payable to expand its financial capabilities and reduce thecost of borrowing.

The Borrowing

6,000

3,967
267

4,000
2,000

3,574 3,680

3,680
2,400

2,900

3,680

3,105

3,700

0
(million yen)

2019/122020/62020/122021/62021/122022/62022/122023/6

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2023/122024/62024/125

Maintain high quality portfolio through investment in LogiSquare

Ensure same high quality as that of existing portfolio

Assets planned for
acquisition

5th period(2018/12)

After acquisition of assets
planned for acquisition

7 properties

2 properties

9 properties(Planned) acquisition price

47,725 million yen

6,390 million yen

54,115 million yen

Appraisal value (Estimated value)

50,480 million yen

6,870 million yen

57,350 million yen

Unrealized gains(Note 1)

3,173 million yen

480 million yen

3,653 million yen

Average appraisal NOI yield

4.9%

5.0%

4.9%

Average appraisal NOI yield
after depreciation(Note 2)

3.7%

Average property age

2.4 years

1.1 years

2.3 years

Occupancy rate

100.0%

100.0%

100.0%

Average lease term(Note 3)

8.9 years

10.0 years

9.0 years

Average remaining lease term

6.7 years

9.1 years

7.0 years

10

2

12

100.0%

100.0%

100.0%

Number of properties

Number of tenants(Note 4)
Ratio of properties developed by
CRE(Note 5)

Copyright (C) 2019 CRE Logistics REIT, Inc. All Rights Reserved.

+

4.1%

=

3.7%

6

Maintain high quality portfolio through investment in LogiSquare

Ensure same high quality as that of existing portfolio

Assets planned
for acquisition

No.

Property nameLocation(Planned)
Appraisalacquisition pricevalue(million yen)(million yen)Appraisal
NOI yield(%)

Total floorarea(Note 1)(m2)

Age(Note 2) Number(years) of tenants

BTS(Note 3)

Occupancy
ratio
(%)

Developer(Note 4)

M-1

LogiSquare Kuki

Kuki-shi,
Saitama

9,759

10,3004.8

40,907.13

3.0

1 BTS

100.0

CRE

M-2

LogiSquare Hanyu

Hanyu-shi,
Saitama

6,830

7,060

4.9

33,999.61

2.9

1 BTS

100.0

CRE

M-3

LogiSquare Kuki II

Kuki-shi,
Saitama

2,079

2,170

5.1

11,511.22

2.3

1 BTS

100.0

CRE

M-4

LogiSquare Urawa Misono

Saitama-shi,
Saitama

13,06013,900

4.7

48,738.29

2.3

3

―

100.0

CRE

M-5

LogiSquare Niiza

Niiza-shi,
Saitama

6,960

7,270

4.8

25,355.82

2.2

1

―

100.0

CRE

M-6

LogiSquare Moriya

Moriya-shi,
Ibaraki

6,157

6,630

5.1

32,904.90

2.1

2

―

100.0

CRE

M-7

LogiSquare Kawagoe

Kawagoe-shi,
Saitama

1,490

1,570

5.0

7,542.56

1.3

1

―

100.0

CRE

M-8

LogiSquare Kasukabe

Kasukabe-shi,
Saitama

4,900

5,300

5.1

21,315.54

1.0

1 BTS

100.0

CRE

O-1

LogiSquare Tosu

Tosu-shi,
Saga

2,880

3,150

5.2

16,739.40

1.3

1 BTS

100.0

CRE

54,11557,3504.9

239,014.47

2.3

12

―

100.0

―

Total/Average

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7

Asset Planned for Acquisition (1)M-7 LogiSquare Kawagoe

Box-type

SingleTokyo
Metropolitan
Area

LogiSquare property located in an industrial park, enabling tenants to operate 24 hours

Ken-O Expressway, Kan-etsu
Expressway, National Route 254,
National Route 16

BELS
★★★★

Location

2-8-45 Yoshinodai,
Kawagoe-shi, Saitama

AccessApproximately 6.9 km from
Kawajima interchange on
Ken-O Expressway, andapproximately 10 km from
Kawagoe interchange on
Kan-etsu Expressway

Structure

Steel-framed, alloy plated
steel sheet roof 2F

Total floor area

7,542.56 m2

Total leasable area

7,542.56 m2

Planned acquisition
price1,490 million yen

Appraisal value

1,570 million yen

Appraisal NOI yield

5.0%

Completion dateFebruary 2018

Occupancy rate

100.0%

Lease term
Property Features• The property has a good location, approximately 6.9 km from Kawajima
interchange on Ken-O Expressway and approximately 10 km from Kawagoe
interchange on Kan-etsu Expressway. It is also in close vicinity to National
Route 254 and National Route 16, which are major highways, and offers
excellent access to Route 17 Shin-Omiya Ageo Road. Convenience will be
improved still further through the opening of the Kawagoe Northern Circular
Route.
• Located in the exclusive industrial zone in Kawagoe Industrial Park, theproperty is surrounded by many warehouses and factories, enabling tenants tooperate 24 hours.
• The property is equipped with earthquake early warning system and AED,
which are fitted as standard in LogiSquare facilities. In addition, the fire alarmsystem has an isolator to prevent fire shutters from short-circuiting andmalfunctioning in the event of a fire and to prevent the fire from spreading.

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10.0 years
Tokyo Logistics Factory Co.,Ltd.

TenantBasic specifications
Berth depth
Effective ceilingheight13.5m or more

1F 6.15 m, 2F 6.0 m

Pillar span

10.0 m × 8.8 m

Floor loading

1.5 t/m2

Sandwich panels〇

8Asset Planned for Acquisition (2)M-8 LogiSquare Kasukabe
LogiSquare facility in an excellent location for securing labor,situated within walking distance of station

Box-type

SingleTokyo
Metropolitan
Area

Tohoku Expressway,
National Route 16,
National Route 4

CASBEE
SaitamaPrefecture
A ranking

BELS
★★★★★

Location

2126 Mukai-dori, Naganuma,
Kasukabe-shi, Saitama

AccessApproximately 15 km from
Iwatsuki Interchange on
Tohoku Expressway

Structure

Reinforced concrete, alloy
plated steel sheet roof 3F

Total floor area

21,315.54 m2

Total leasable area

21,315.54 m2

Planned acquisition
price

4,900 million yen

Appraisal value

5,300 million yen

Appraisal NOI yield

5.1%

Completion dateJune 2018

Occupancy rate

100.0%

Lease term

10.0 years
Koizumi Logistics Service
Corporation

TenantBasic specifications

Property Features• The property is in close vicinity to National Route 16 and National Route 4(Koshigaya-Kasukabe Bypass), which are major highways, and is locatedaround 1.8 km from the Showa Interchange, where these two highways
intersect. The property is expected to become even more convenient with theplanned extension of National Route 4 (Higashi-Saitama Road).
• The property is also in an excellent location for securing labor as it is withinwalking distance (approximately 1.1 km) from Minami-Sakurai Station on the
Tobu Urban Park Line.
• The facility has truck berths on two sides (the northeast side and northwestside) of the first floor, with 26 truck berths in total. To prevent congestion andaccidents, the facility is designed to have the traffic flow in one direction andis equipped with an entry-only gate and an exit-only gate.

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Berth depth
Effective ceilingheight13.4 m + eaves 4.0 m
6.0 m

Pillar span

10.7 m (10.8 m in parts)×10.5 m

Floor loading

1.5 t/m2

Sandwich panels〇

9Location of Assets Held, Assets for Planned Acquisition and Assets in the Pipeline

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10NotesIn this material, amounts are rounded off to the unit and ratios are rounded to the nearest one decimal place, unless otherwi se noted.
Page 2
Note 1:“Average appraisal NOI yield” of the assets planned for acquisition refers to the ratio of the sum total of the appraisal NOI (refers to Net Operating Income based on the appraisal report found by deducting operating expenses from operating
income and refers to income before deduction of depreciation; it is different from NCF (Net Cash Flow),which is found by deducting management gains such as security deposits and capital expenditures from NOI; the same applies
hereinafter) of each asset planned for acquisition to the sum total of the planned acquisition prices of each asset planned for acquisition expressed in the form of a percentage rounded to one decimal place. The average appraisal NOI yield isa figure calculated by the Asset Management Company and is not a figure stated in the appraisal report. This figure may differ from the actual average appraisal NOI yield after CRE REIT’s acquisition of the assets planned for acquisition. The
same applies hereinafter.
Note 2: “Average property age” indicates the weighted average (rounded to one decimal place) of the ages (refers to number of years from date of registration of new construction of each property in real property register to May 31, 2019. The same
applies hereinafter.) of the assets held by or planned for acquisition by CRE REIT as of each time point, weighted based on the (planned) acquisition price. The same applies hereinafter.
Note 3: “Occupancy rate” indicates the weighted average of the ratio of the sum total of the leased area of assets held by and assets planned for acquisition by CRE REIT as of each time point to the sum total of the leasable area pertaining to said
properties as of May 31, 2019, weighted based on the (planned) acquisition price and expressed in the form of a percentage rounded to one decimal place. The same applies hereinafter.
Note 4: “Average remaining lease term” indicates the weighted average of the remaining lease terms (refers to term from June 27, 2019 to the date of expiry of the lease agreement specified in the lease agreement (lease agreement concluded withend tenant in the case where a passthrough type master lease agreement has been concluded) concluded with respect to such properties as of May 31, 2019; the same applies hereinafter) of the assets held by or planned for acquisition by
CRE REIT as of each time point, weighted based on the planned purchase price and rounded to one decimal place. The same appli es hereinafter.
Note 5: “LogiSquare” is the name used to denote a high-quality logistics-related facility (refers to a single facility whereby the building that makes up the real estate is configured solely for use as a facility used in B2B logistics services and sales
logistics services, which consists of each of the functions of transportation/delivery, storage, stockpiling, loading, packing, sorting and distribution processing of goods and the provision of related information respectively (hereinafter “logistics
facility use”); a complex facility whereby the majority of the floor area of the building that makes up the real estate is for logistics facility use; a single facility whereby the building that makes up the real estate is configured solely for the use ofstorage of goods pursuant to deposit contract with consumers (hereinafter “deposit and storage use”); or a complex facility whereby the majority of the floor area of the building that makes up the real estate is for deposit and storage use, andincludes any equipment and business premises incidental thereto; the same applies hereinafter) that meets tenant needs and that is developed by CRE, Inc. (“CRE” or sometimes CRE as sponsor is referred to as the “Sponsor”; the same
applies hereinafter). The same applies hereinafter.
Note 6: “Average appraisal NOI yield” is the ratio of the sum total of the appraisal NOI of each asset held or each asset planned for acquisition as of each time point (refers to appraisal NOI based on the appraisal report with December 31, 2018 as thedate of the value opinion in the case of each asset held and appraisal NOI based on the appraisal report with May 31, 2018 as the date of the value opinion in the case of assets planned for acquisition; the same applies hereinafter) to the sum
total of the (planned) acquisition prices of each asset held or each asset planned for acquisition, expressed in the form of a percentage rounded to one decimal place. The average appraisal NOI yield is a figure calculated by the AssetManagement Company and is not a figure stated in the appraisal report. The same applies hereinafter.
Note 7: “Tokyo Metropolitan Area ratio” is calculated for the assets held or assets planned for acquisition by CRE REIT as of each time point and is the ratio of the (planned) acquisition price of assets held or assets planned for acquisition that arelocated in the Tokyo Metropolitan area (denotes Tokyo, Kanagawa Prefecture, Chiba Prefecture, Saitama Prefecture, Ibaraki Prefecture, Tochigi Prefecture, Gunma Prefecture and Yamanashi Prefecture; the same applies hereinafter) to thetotal (planned) acquisition price of such properties as of May 31, 2019. The ratio is rounded to one decimal place.
Note 8: “After acquisition of assets planned for acquisition” refers to the time when the acquisition of the assets planned for acqui sition is completed. Each of the figures relating to the portfolio after acquisition of the assets planned for acquisition arecalculated by simply adding together each of the figures pertaining to the assets held and assets planned for acquisition over the given period based on certain assumptions and may not necessarily be consistent with actual figures after
acquisition of the assets for acquisition. The same applies hereinafter.
Note 9: The LTV forecast for June 30, 2019 is the forecast as of June 27, 2019 and may not necessarily be consistent with actual LTV on June 30, 2019. For details of the assumptions of the LTV forecast for June 30, 2020, please refer “NoticeConcerning Revision of Forecast for Performance in the Fiscal Period Ending December 31, 2019 and Forecast for Performance in the Fiscal Period Ending June 30, 2020” released today. The same applies hereinafter.
Note 10: “NAV” indicates Net Asset Value based on the appraisal value of the assets held by CRE REIT (refers to assets held by CRE REIT as of June 27, 2019; the same applies hereinafter) and the assets planned for acquisition. The same applies
hereinafter.
Note 11: “NAV per unit” as of the end of each period is calculated by the following equation. The same applied hereinafter.
“NAV per unit” as of the end of each period = (Net assets recorded on balance sheet at end of period in question + Total appraisal value of assets held at end of period in question – Total closing carrying amount of assets held at end of period
in question － Total distributions at end of period in question) ÷ Total number of investment units issued and outstanding of CRE REIT at end of period in question
Note 12: “NAV per unit” after the Issue is calculated using the following equation.
NAV per unit after the Issue = (Net assets on the balance sheet at the end of the 5th period (ended December 2018) + Total forecast issue value of the Issue* + Total appraisal value of assets held at end of 5th period (ended December2018)** －Total closing carrying amount of assets held at end of 5th period (ended December 2018) + Total appraisal value of asset planned for acquisition**－Total planned acquisition price of assets planned for acquisition***－Total
distributions at end of 5th period (ended December 2018) ) ÷ Total number of investment units issued and outstanding of CRE REIT after the Issue* Total forecast issue value of the Issue is 3,039,000,000 yen. This forecast was calculated on the assumption of an issue price of 108,155 yen per unit of the Investment Units based on the closing price (118,000 yen) of the Investment
Units in ordinary trading on Tokyo Stock Exchange, Inc. (hereinafter “TSE”) as of June 7, 2019 (Friday). Accordingly, if the actual issue price in the Issue is lower than the above assumed price, the total issue value of the Issue will be lessthan the above amount and actual NAV per unit after acquisition of the assets planned for acquisition may be lower than described above. Conversely, if the actual issue price is higher than the above assumed price, the total issue value ofthe Issue will be more than the above amount and actual NAV per unit after acquisition of the assets planned for acquisition may be higher than described above.
** Real estate appraisal of each asset held and each asset planned for acquisition is entrusted to Japan Real Estate Institute and The Tanizawa Sōgō Appraisal Co., Ltd. and “appraisal value” is calculated based on the real estate appraisal
value stated in each real estate appraisal report with December 31, 2018 as the date of the value opinion in the case of assets held and May 31, 2019 as the date of the value opinion in the case of assets planned for acquisition. The same
applied hereinafter.
*** “Planned acquisition price” means the sales price of each beneficial interest in trust stated in the transfer agreement of beneficial interest in trust pertaining to each asset planned for acquisition. “Acquisition price” means the sales price ofeach beneficial interest in trust stated in the transfer agreement of beneficial interest in trust pertaining to each asset held. The acquisition price and the planned acquisition price are referred to as the “(planned) acquisition price.” Suchsales price does not include consumption tax, local consumption tax, sales commission and other expenses. The same applies hereinafter.
NAV per unit after the Issue is forecast NAV as of June 27, 2019 calculated based on the above assumptions and will not necessarily be consistent with actual NAV per unit after the Issue.
Note 13: Previous DPU estimates for each period are based on “Financial Results for the 5th Period Ended December 2018” announced on February 18, 2019. The same applies hereinafter.
Note 14: For details of the assumptions of the current estimates for each period and the DPU estimate for the period ending June 2020, please refer to “Notice Concerning Revision of Forecast for Performance in the Fiscal Period Ending December 31,
2019 and Forecast for Performance in the Fiscal Period Ending June 30, 2020” released today.
Page 3Note 1:
Note 2:“DPU” means distributions per unit (including surplus distributions).
“EPU” means earnings per unit.

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11

NotesPage 4Note 1:
Note 2:

Note 3:Note 4:Note 5:Note 6:

Page 5Note 1:

Note 2:
Note 3:Note 4:Note 5:
Page 6Note 1:

Note 2:

Note 3:Note 4:Note 5:“Implied cap rate” is the yield investors expect a property to generate based on investment unit price.
“CRE REIT implied cap rate” is calculated using the following equation and is expressed in the form of a percentage rounded to one decimal place.
Implied cap rate = NOI per year (cruising basis)* ÷ {CRE REIT’s market cap as of June 7, 2019 + Interest-bearing debt at end of 5th period (ended December 2018) + Lease deposits received at end of 5th period (ended December 2018) –(Cash and deposits at end of 5th period (ended December 2018) – restricted deposits at end of 5th period (ended December 2018)}* “NOI per year (cruising basis)” assumes that fixed asset taxes, city planning taxes, etc. pertaining to assets held that were acquired in the 4th period (ended June 2018), namely LogiSquare Kuki II, LogiSquare Urawa Misono, LogiSquare
Niiza, LogiSquare Moriya and LogiSquare Tosu, are expensed, and is calculated by deducting the forecast amount of the abovementioned fixed asset taxes, city planning taxes, etc. from the sum total of the actual NOI of each asset heldat the end of the 5th period (ended December 2018) (refers to actual net operating income (i.e. operating income less operating expenses) annualized based on duration of management in the 5th period (ended December 2018). It is not
the same as NCF (Net Cash Flow), which is calculated by deducting management gains, such as security deposits, and capital expenditures from NOI). The same applies hereinafter.
“Level of cap rate in Tokyo Metropolitan Area” is the simple average of the cap rates of logistics facilities held by listed J-REITs located in the Tokyo Metropolitan Area, which have been extracted from a database (ARES J-REIT Property
Database) published by The Association for Real Estate Securitization (hereinafter “ARES”), calculated by the following formula: Actual NOI of each of the logistics facilities in question for the most recent period x 2 ÷ Appraisal value at end of
the most recent period. The cap rate is expressed in the form of a percentage rounded to one decimal place.
“Appraisal NOI yield” of each asset planned for acquisition is the ratio of appraisal NOI yield of each asset planned for acquisition to the planned acquisition price and is expressed as a percentage rounded to one decimal place. The appraisal
NOI yield is a figure calculated by the Asset Management Company and is not a figure stated in the appraisal report. This figure may differ from the actual appraisal NOI yield after CRE REIT’s acquisition of the assets planned for acquisition.
The same applies hereinafter.
“Discount rate” is calculated by the following equation and is expressed in the form of a percentage rounded to one decimal place.
Discount ratio = (Planned acquisition price－Appraisal value) ÷ Appraisal value
Please note that there is no guarantee that the potential value indicated by such discount rate will actually be realized in the form of capital gains, etc. in the future.
“NOI yield level of properties owned by other REITs” is the NOI yield of logistics facilities held by listed J-REITs located in the Kawagoe Area (denotes Kawagoe-shi, Saitama) or the Kasukabe Area (denotes Kasukabe-shi, Saitama), whichhave been extracted from a database (ARES J-REIT Property Database) published by ARES, calculated by the following formula: Actual NOI of each of the logistics facilities in question for the most recent period x 2 ÷ Appraisal value at endof the most recent period. The NOI yield level is expressed in the form of a percentage rounded to one decimal place.
Each of the figures for “After the Borrowing (July 31, 2019)” are calculated as of July 31, 2019 in light of the borrowing to finance acquisitions of assets planned for acquisition as of June 27, 2019 and the payment of expenses incidental
thereto with July 16, 2019 as the execution date (hereinafter the “Borrowing (1)”) and the borrowing for the partial repaymen t of existing loans with July 31, 2019 as the execution date (hereinafter “the Borrowing (2); referred to collectively with
the Borrowing (1) as the “Borrowing”) and the partial repayment of existing loans through the Borrowing (2) (hereinafter the “Refinance”). The Borrowing (1) is made up of borrowing with a borrowing term of 4.0 years and borrowing with aborrowing term of 1.0 years and, as of June 27, 2019, the former is expected to amount to 2,900 million yen and the latter is expected to amount to 267 million yen, and the figures after the borrowing have been calculated based on thesefigures. (CRE REIT plans to use a consumption tax refund that will be refunded after acquisition of the assets planned for acquisition to repay the latter but this has not been reflected in calculation of each of the figures after the Borrowing(July 31, 2019), except for the estimate of LTV as of June 30, 2020.) Since the amount and conditions of the Borrowing (1) may be changed at the time of execution in light of circumstances such as the proceeds of the Issue and the conditions
pertaining to Borrowing (2) may also be changed before the execution, each of the values after the Borrowing (July 31, 2019) will not necessarily be consistent with each of the actual values as of July 31, 2019. The same applied hereinafter.
“Ratio of long-term debt” refers to the ratio of long-term liabilities (liabilities payable over a term exceeding one year, including the current portion of long-term liabilities) to total interest-bearing liabilities at each time point.
“Average life of interest-bearing debt” is the weighted average of the remaining terms (period from July 31, 2019 to the due date of each interest-bearing liability) of each interest-bearing liability at each time point, weighted based on thebalance of each interest-bearing liability.
The ratio of the principal borrowed from each financial institution to the total amount of interest-bearing debt before the Borrowing (May 31, 2019)
The company names are abbreviated.
“Unrealized gains” at the end of the 5th period (ended December 2018) is the sum total of the appraisal values of each property held at the end of the 5th period (ended December 2018) stated in appraisal reports with December 31, 2018 as
the date of the value opinion less the total carrying amount of the properties in question at the time point in question. “Unrealized gains” on assets planned for acquisition is the sum total of the appraisal values of each asset planned for
acquisition with May 31, 2019 as the date of the value opinion less the sum total of the planned acquisition prices. Please note that there is no guarantee that these unrealized gains will be realized.
“Average appraisal NOI yield after depreciation” is the ratio of the sum total of the appraisal NOI of each asset held and each asset planned for acquisition at each time point less forecast depreciation to the sum total of the (planned)
acquisition price of each asset held and each asset planned for acquisition. It is expressed in the form of a percentage rounded to one decimal place. The average appraisal NOI yield after depreciation is a figure calculated by the AssetManagement Company and is not a figure stated in the appraisal report.
“Average lease term” relates to the assets held and assets planned for acquisition by CRE REIT as of each time point and is the weighted average of the lease terms of the properties in question as of the May 31, 2019, weighted based on(planned) acquisition price. It is expressed in the form of a percentage rounded to one decimal place.
“Number of tenants” indicates the sum total of the number of tenants (if the conclusion of a master lease agreement with a master lease company is planned, the number of tenants is the total number of end tenants in the case of apassthrough-type master lease or the number of tenants taking only such master lease company as the tenant in the case of a fixed rent-type master lease; even if an end tenant allows co-habitation by a third party or sublets a certain section
to a third party, the number of such third parties is not included in the number of tenants; the same applies hereinafter) of assets held and assets planned for acquisition by CRE REIT at each time point.
“Ratio of properties developed by CRE” is the ratio of properties developed by CRE (includes special purpose company (includes special purpose company which has been dissolved and is completing liquidation as of June 27, 2019) in which
CRE invests (includes but is not limited to investment in anonymous association) to assets held and assets planned for acquisition by CRE REIT as of each time point (based on (planned) acquisition price).

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NotesPage 7Note 1:
Note 2:

Note 3:Note 4:“Total floor area” indicates the sum total of the floor areas presented in the real estate register for each property. The area of attached buildings is also included. The same applies hereinafter.
“Property age” is the number of years from date of registration of new construction of each property in real property register to May 31, 2019 rounded to one decimal place and “Average property age” indicates the weighted average of theages (refers to number of years from date of registration of new construction of each property in real property register to May 31, 2019) of the assets held by or planned for acquisition by CRE REIT as of each time point, weighted based on the(planned) acquisition price and rounded to one decimal place.
“BTS” stands for built-to-suit and refers to logistics real estate developed for a specific company by incorporating its requirements into the specifications. The same applies hereinafter.
“CRE” in the “Developer” column includes any special purpose company in which CRE invests (including but not limited to investment in an anonymous association).

Page 10Note 1: “Pipeline” refers to (1) properties for which CRE REIT already has first refusal right (hereinafter “first refusal right properties”) in accordance with the Sponsor Support Agreement dated September 26, 2017 concluded between CRE REIT, theAsset Management Company and CRE (including subsequent amendments) (hereinafter the “Sponsor Agreement”) and (2) properties b eing developed by CRE for which the first refusal right will be granted in accordance with said agreementin the future (excludes assets planned for acquisition). Under the Sponsor Support Agreement, CRE REIT or the Asset Management Company will be granted first refusal right for all properties developed and held by the CRE Group (means
CRE and its Group companies; the CRE Group consists of CRE and its subsidiaries and affiliates (7 consolidated subsidiaries, 3 non-consolidated subsidiaries, 3 equity-method affiliates and 3 non-equity method affiliates as of January 31,2019)) and will be given the opportunity to acquire these properties (provided, however, that this shall not apply if any of the grounds for exemption set out in the Sponsor Support Agreement apply), but even if such first refusal right is granted,
CRE REIT is under no obligation to acquire any property for which the first refusal right is granted.
Note 2: There is no guarantee that roads whose opening date has yet to be determined will actually be opened.
Note 3: LogiSquare Kobe Nishi is scheduled for completion in April 2020, the Sayama-Hidaka IC Development Plan (Provisional Name) and LogiSquare Miyoshi are scheduled in June 2020, and LogiSquare Osaka Katano is scheduled in January
2021.
Note 4: As of June 27, 2019, regardless of whether it has the first refusal right, CRE REIT has not held any concrete negotiations with CRE regarding properties held and being developed by CRE other than the assets planned for acquisition norplans to acquire them at the present time, and there is also no guarantee that it will be able to acquire them in the future.

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