February 14, 2017

For Translation Purpose Only
MCUBS MidCity Investment Corporation
2-7-3, Marunouchi, Chiyoda-ku, Tokyo
Katsura Matsuo
Executive Director(Securities Code: 3227)
URL: http://www.midcity-reit.com/en/
MCUBS MidCity Inc.
2-7-3, Marunouchi, Chiyoda-ku, Tokyo
Katsura Matsuo
President & CEO & Representative Director
Naoki Suzuki
Deputy President & Representative Director
TEL. +81-3-5293-4150
E-mail: midcity-3227.ir@mcubs-midcity.com

Notice Regarding Acquisition and Disposition of Trust Beneficiary Interests in Domestic Real Estates(Acquisition of Two Office Buildings and Disposition of One Office Building)
MCUBS MidCity Investment Corporation (hereafter “MCUBS MidCity”) announces that, its asset managementcompany, MCUBS MidCity Inc. (hereafter the “Asset Management Company”), decided today to acquire
properties and dispose a property, as detailed below (hereafter referred to as the “Acquisition” and the“Disposition” respectively and the “Transactions” collectively).
1. Overview of Transactions(1) Overview of Acquisition (Assets to be Acquired)
Property name
Type of Specified Asset
Location

Sasazuka Center Bldg.
Trust beneficiary interest in real estate
Shibuya-ku, Tokyo

USC Bldg.
Trust beneficiary interest in real estate(Note 6)

Koto-ku, Tokyo

Planned acquisition price (Note 1)¥8,700 million¥5,000 million

Appraisal value (Note 2)¥9,160 million¥5,190 million▲¥460 million▲¥190 million

4.0%

4.5%

Difference between planned
acquisition price and appraisal value
NOI yield (Note 3)
NOI yield after depreciation (Note 4)

3.5%

3.9%

Contracted date (Note 5)

February 14, 2017

February 14, 2017

Planned acquisition date

March 22, 2017
A domestic non-financial corporation

April 6, 2017

Seller(Note 7)

Japan Private REIT, INC.

(2) Overview of Disposition (Asset to be Disposed)
Property name

MID Midosujikawaramachi Bldg.

Type of Specified Asset

Trust beneficiary interest in real estate

Location

Chuo-ku, Osaka

Planned disposition price (Note 8)¥1,700 million

Assumed book value (Note 9)¥1,903 million

Note: This press release provides information regarding MCUBS MidCity’s acquisition and disposition of trust beneficiary interest in domestic real estate, and is notprepared as an inducement or invitation for investment. All readers are advised to consult their own investment advisors before investing in MCUBS MidCity.
Investors are advised to read Prospectus Concerning the Issue and Sale of New Investment Units and its corrections (if prepared) before making investment decisions,which are investors’ sole discretion and responsibility and are made at their own risk. MCUBS MidCity and its affiliates disclaim any responsibility or liability for theconsequence of investment in MCUBS MidCity.

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Difference between planned
disposition price and assumed bookvalue(Note 10)▲¥203 million

Appraisal value (Note 11)¥1,490 million

NOI yield (Note 12)

4.1%

NOI yield after depreciation (Note 13)

2.8%

Contracted dateFebruary 16, 2017

Disposition date

March 27, 2017

Purchaser
A domestic SPC(Note 7)
Notes:
1. A “Planned Acquisition Price” indicates the sale price of respective beneficiary interest stated in the trust beneficiaryinterest agreement (excluding acquisition expenses, property taxes, city planning taxes and consumption taxes, etc.). The
same shall apply hereinafter.
2. “Appraisal Value” is based on the appraisal reports as of January 1, 2017.
3. “NOI Yield” indicates the ratio of the appraisal NOI to the Planned Acquisition Price of respective assets to beacquired and is obtained by using the following formula:
NOI Yield = Appraisal NOI* ÷ Planned Acquisition Price*Unless otherwise noted, appraisal NOI is calculated by using the net operating income under the DCF method for the
initial fiscal year (or the second year if there are special factors in the initial fiscal year) stated in the appraisal reports ofrespective assets to be acquired, the record date of which was set on January 1, 2017. The same shall apply hereinafter.
4. “NOI Yield after depreciation” indicates the ratio of NOI after depreciation to the Planned Acquisition Price ofrespective assets to be acquired and is obtained by using the following formula. “NOI after depreciation” is calculated
by deducting depreciation and amortization costs from appraisal NOI.
NOI Yield after depreciation = (Appraisal NOI - depreciation*) ÷ Planned Acquisition Price*Depreciation is calculated by using the depreciation rates in proportion to the useful life under the straight-line method,
as is the case for other assets owned by MCUBS MidCity. The same shall apply hereinafter.
5. “MCUBS MidCity has executed the status transfer agreement as of February 14, 2017 with regard to Sasazuka Center
Bldg. and USC Bldg., respectively, (collectively, the “Respective Status Transfer Agreements”) specifying MCUBSMidCity shall take over, as of March 7, 2017, a status of a purchaser, as prescribed in the trust beneficiary interest
transfer agreement regarding Sasazuka Center Bldg. (the “Sale and Purchase Agreement (Sasazuka Center Bldg.)”) andthe agreement on transfer of quasi co-ownership of trust beneficiary interest in real estate (USC Bldg. 50/108) (the“Sale and Purchase Agreement (USC Bldg.)”) (collectively, the “Respective Sale and Purchase Agreements”) that are
executed between the current beneficiary and a domestic corporation (collectively, the “Respective Status Transferors”).
The Contract Date indicates the date when such Respective Status Transfer Agreements were executed with theRespective Status Transferors, i.e., February 14, 2017.
6. MCUBS MidCity is scheduled to acquire quasi co-ownership interest of trust beneficiary interest in the land andbuilding of this property as entrusted assets (ownership ratio: 50/108).
7. The names of the seller of Sasazuka Center Bldg. and the purchaser of MID Midosujikawaramachi Bldg. are notdisclosed as no consent from these parties is obtained.
8. “Planned Disposition Price” indicates the disposition price of the Asset to be Disposed stated in the trust beneficiaryinterest transfer agreement or the basic agreement (not including any adjustment on property taxes or city planningtaxes, or consumption taxes, etc.). The same shall apply hereinafter.
9. “Assumed Book Value as of Disposition” indicates assumed book value as of the scheduled date of disposition.
10. “Difference between planned disposition price and assumed book value” is difference from planned disposition price toestimated book value. The same shall apply hereinafter.
11. “Appraisal Value” is based on the appraisal reports as of December 31, 2016. The same shall apply hereinafter.
12. “Actual NOI Yield” indicates the ratio of actual NOI of the Asset to be Disposed for the 21st fiscal period ended on
December 2016 to the acquisition price and is obtained by using the following formula. The same shall apply
hereinafter.
Actual NOI yield= (Actual NOI for the 21st fiscal period/actual operating days of 184 days) ÷ acquisition price13. “Actual NOI Yield after depreciation” indicates the ratio of Actual NOI after depreciation of the Asset to be Disposedto the Planned Acquisition Price and is obtained by using the following formula. “Actual NOI after Depreciation” iscalculated by deducting depreciation and amortization costs from the actual NOI for the 21st fiscal period. The same
shall apply hereinafter.
Actual NOI Yield after depreciation = (Actual NOI after depreciation for the 21st fiscal period/actual operating daysof 184 days) ÷ acquisition priceNote: This press release provides information regarding MCUBS MidCity’s acquisition and disposition of trust beneficiary interest in domestic real estate, and is notprepared as an inducement or invitation for investment. All readers are advised to consult their own investment advisors before investing in MCUBS MidCity.
Investors are advised to read Prospectus Concerning the Issue and Sale of New Investment Units and its corrections (if prepared) before making investment decisions,which are investors’ sole discretion and responsibility and are made at their own risk. MCUBS MidCity and its affiliates disclaim any responsibility or liability for theconsequence of investment in MCUBS MidCity.

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2. Reason for Transactions
MCUBS MidCity is committed to managing assets from a medium- to long-term perspective to assure stablerevenues and steady growth of assets under management and emphasizes investment in the three major
metropolitan areas (the Tokyo metropolitan area (Note 1), the Osaka metropolitan area (Note1) and the
Nagoya metropolitan area (Note 1)).
After these Transactions, the ratio of properties located in Tokyo metropolitan area to the overall portfolio
will increase by 3.7%, from 41.0% to 44.7%, on a basis of (Planned) Acquisition Prices. MCUBS MidCity
determined to conduct these Transactions because it would contribute to reinforcing earnings capacity of theportfolio with an increase in NOI Yield after Depreciation and to enhancing the unitholder value, which isrepresented by distribution per unit, over a medium- to long-term. For details of the individual Assets to be
Acquired and Asset to be Disposed, please refer to 3. Details of Transactions as below. The same shall apply
hereinafter.
Notes:
1. The “Tokyo metropolitan area” represents Tokyo, Kanagawa, Chiba and Saitama; the “Osaka metropolitan area”
represents Osaka, Kyoto and Hyogo; the “Nagoya metropolitan area” represents Aichi.
2. Explanations of the descriptions in each column for the overview of the respective assets to be acquired, described in 3.
Details of Transactions as below are as follows:
Out of the descriptions about the Assets to be Acquired and Asset to be Disposed, “Land (Site Area),”, “Building(Structure/Floors)”, “Building (Total Floor Area),” “Building (Use),” and “Building (Completion Date)” are based onwhat is stated in the registry. “Land (Site Area)” indicates the value regarding the land of the Property to be Acquired.
“Land (Floor-Area Ratio)” represents the ratio of the total floor area to the site area of a building, as stipulated in
Article 52 of the Building Standards Act as amended, and indicates the figure specified in city planning in accordancewith the zoning, etc. “Land (Building-to-Land Ratio)” represents the ratio of the building area to the site area of abuilding, as stipulated in Article 53 of the Building Standards Act, and indicates the figure specified in city planning inaccordance with the zoning, etc. With regard to the “Overview of Building Condition Evaluation (PML),” PML(Probable Maximum Loss) is defined as “probable loss for a building with a recurrence interval of 475 years” based on
the risk curve showing the relationship between loss and annual exceedance probability as calculated by Engineering and
Risk Services Corporation and OYO RMS Corporation. The probable loss for a building with a recurrence interval of
475 years represents “loss of 10% of exceedance probability over 50 years”“Overview of Leasing” indicates the content of the lease agreement effective as of the end of December 2016 for the
Assets to be Acquired based on the figures and information provided by the sellers of each asset, and the actual figures
as of the end of December 2016 for the Asset to be Disposed. “Overview of Leasing (Rentable Area)” indicates therentable area of the building of the real estate in trust for each of the Assets to be Acquired and the Asset to be
Disposed (or total rentable area of respective buildings in the case where there are multiple buildings for each property;
areas of warehouses, halls and parking lots, etc. are not included). “Overview of Leasing (Rental Area)” indicates thetotal area presented in the lease agreements, etc. with end tenants (limited to the rental spaces, and not including theareas of warehouses, halls and parking lots, etc.). “Overview of Leasing (Total Tenants)” does not include end tenants
that leases parking lots, etc. only in the calculation. “Overview of Leasing (Total Annual Rent)” and “Overview ofLeasing (Security Deposit/Guarantee, Etc.)” indicate the total amount of the monthly rent, common area charge,
parking lot fee, warehouse rent and facility usage fee, etc. stated in the lease agreements executed with end tenants thatare effective as of the end of December 2016, multiplied by 12, and the balance of security deposits and guarantees(including those for the rental spaces, parking lots and warehouse lots, etc.), with amounts less than thousand yen
rounded down, respectively.

Note: This press release provides information regarding MCUBS MidCity’s acquisition and disposition of trust beneficiary interest in domestic real estate, and is notprepared as an inducement or invitation for investment. All readers are advised to consult their own investment advisors before investing in MCUBS MidCity.
Investors are advised to read Prospectus Concerning the Issue and Sale of New Investment Units and its corrections (if prepared) before making investment decisions,which are investors’ sole discretion and responsibility and are made at their own risk. MCUBS MidCity and its affiliates disclaim any responsibility or liability for theconsequence of investment in MCUBS MidCity.

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3. Details of Transactions(1) Overview of the Property to be Acquired[Sasazuka Center Bldg.]
Type of Specified Asset
Location (Indicated for
Residence)
Site Area
ZoningType ofLand
Ownership
Floor-Area Ratio/
Building-to-Land
Ratio(Note 1)

Trust beneficiary interest in real estate

Planned Acquisition Price¥8,700,000 thousand

2-1-6, Sasazuka, Shibuya-ku, Tokyo

Planned Acquisition Date

March 22, 2017

Evaluation Date

3,032.26㎡
Semi-industrial zone

Evaluation
Company

Fee simple

Overview of
Building
Short-term
Condition
Repair Cost
Evaluation
Long-term
Repair Cost

400%/70%, 300%/70%

February 2017
Tokio Marine &Nichido Risk
Consulting Co., Ltd.
¥0¥411,192 thousand

Structure/ Floors

S/SRC with flat roof, B2/8F

Total Floor Area

11,973.11㎡

PML

Fee simple

Rentable Area

8,221.34㎡

Use

Office, parking lot

Rental Area

8,221.34㎡

Completion Date

March 2, 1995

Building Type ofOwnership

Property Management
Consignee
Building Management
Consignee
TrusteeSpecial Notations

Overview of Occupancy Rate
Leasing
Total Tenants

To be determined

4.1%

100.0%
7(Note 2)

To be determined

Total Annual Rent

¥536,071 thousand

Security Deposit¥381,814 thousand/ Guarantee, Etc.
 Polychlorinated Biphenyl (PCB) waste is stored within the Property; however, it has been agreed
with the seller that the seller will remove such waste at its own responsibility and burden of
expenses, by the time the Property is acquired by MCUBS MidCity.
To be determined

Notes:
1. The building-to-land ratio applied to the Property, which should originally be 60%, is 70% because the Property is
located on the corner.
2. The Overview of Leasing is based on the information as of the end of December 2016; however, as it is expected thattenants will exit from the Property according to the notices of cancellation that were already received, the number oftenants and occupancy rate as of April 1, 2017 after the acquisition will be 6 and 64.3%, respectively.

On the process to the decision to acquire this property, the following aspects were appreciated.
(Regional Characteristics)
The Property stands at a location with traffic convenience, a five-minute walk from Sasazuka Stationon the Keio Line, which is one station or about five minutes away from the terminal station, Shinjuku.
In the Sasazuka area, located in the northwest of Shibuya Ward, back offices of a construction company
and corporations headquartered in Shinjuku, as well as head offices and research centers, etc. of IT
companies, are concentrated because of its proximity to Shinjuku. This Property features high visibility
and is easy to reach by car, as it faces the Nakano St. and is located near the Hatagaya Ramp of theMetropolitan Expressway.
(Property Characteristics)
This Property can be distinguished from other buildings in the area for its size, as it is an eight-story
building with two stories underground, the total floor area of approximately 3,600 tsubo and thestandard floor area of approximately 300 tsubo. U-shaped office floors with few pillars allow a variety
of floor layouts and enhance use efficiency. Independent spaces which can be used as a conference
room or a refresh room, etc. are offered at each floor. The impression of high-grade, as represented by
the sublime appearance and textured and well-lit entrance hall, is also well-received.
Note: This press release provides information regarding MCUBS MidCity’s acquisition and disposition of trust beneficiary interest in domestic real estate, and is notprepared as an inducement or invitation for investment. All readers are advised to consult their own investment advisors before investing in MCUBS MidCity.
Investors are advised to read Prospectus Concerning the Issue and Sale of New Investment Units and its corrections (if prepared) before making investment decisions,which are investors’ sole discretion and responsibility and are made at their own risk. MCUBS MidCity and its affiliates disclaim any responsibility or liability for theconsequence of investment in MCUBS MidCity.

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[USC Bldg.]
Type of Specified Asset
Location (Indicated for
Residence)
Site Area(Note 2)
ZoningLand

Building

Type of Ownership

Quasi co-ownership interest of trust
beneficiary interest in real estate(Note 1)

Planned Acquisition Price¥5,000,000 thousand

4-11-38, Toyo, Koto-ku, Tokyo

Planned Acquisition Date

April 6, 2017

Evaluation Date

4,565.21㎡
Commercial zone, category II
residential zone
Fee simple

Evaluation
Company

Floor-Area Ratio/
Building-to-Land
Ratio(Note 3)

500%/100%、300%/70%

Structure/ Floors

Main Building: S/SRC with flat roof,
B1/8F
Annex: RC with galvanized steel sheet
roof, single-storied

Total Floor
Area(Note 2)

Overview of Short-term
Building
Repair Cost
Condition
Evaluation Long-term
Repair Cost

Completion Date
Property Management
Consignee
Building Management
Consignee
TrusteeSpecial Notations¥0¥170,318 thousand(Note 4)

18,475.98㎡

PML

Type of Ownership Fee simple
Use

December 2016
Tokio Marine &Nichido Risk
Consulting Co., Ltd.

Main Building: Office, parking lot
Annex: Garbage room
January 31, 1990
Expansion of building:January 12, 2007
Sun Frontier Fudousan Co., Ltd.
Sun Frontier Fudousan Co., Ltd.

4.8%

Rentable Area

12,489.08㎡

Rental Area

12,489.08㎡

Overview of Occupancy Rate
Leasing(Note 2)100.0%

Total Tenants
Total Annual Rent

9¥276,207 thousand

Mitsubishi UFJ Trust and Banking
Security Deposit¥163,816 thousand
Corporation/ Guarantee, Etc.
 The agreement was executed among quasi co-owners of the trust beneficiary interest in the Property
and any disposition to any third party, provision of collateral or any other disposal of co-ownership
held by each co-owner shall be prohibited, unless prior written consent is obtained from anotherco-owner. Decisions on important matters concerning asset management shall be made upon
unanimous consent from all the co-owners, in principle.
 The electricity meter installed in this Property is scheduled to be renewed, at the burden of expense of
the seller, by the time the Property is acquired by MCUBS MidCity.

Note: This press release provides information regarding MCUBS MidCity’s acquisition and disposition of trust beneficiary interest in domestic real estate, and is notprepared as an inducement or invitation for investment. All readers are advised to consult their own investment advisors before investing in MCUBS MidCity.
Investors are advised to read Prospectus Concerning the Issue and Sale of New Investment Units and its corrections (if prepared) before making investment decisions,which are investors’ sole discretion and responsibility and are made at their own risk. MCUBS MidCity and its affiliates disclaim any responsibility or liability for theconsequence of investment in MCUBS MidCity.

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Notes:1. The ratio of quasi co-ownership ratio to be acquired by MCUBS MidCity (50/108).
2. The “Site Area,” “Total Floor Area” and “Overview of Leasing” (excluding Total Annual Rent and Security
Deposit/Guarantee, Etc.) indicate figures for the entire land and building of the Property.
3. While the original building-to-land ratio applicable to land located within an area that is zoned for commercial use is 80%,
the ratio of 100% is applied to the land of this Property because the building of the Property is a fire-resistant building
located within a fire protection district. In addition, while the original building-to-land ratio applicable to land locatedwithin Category II residential zones is 60%, the ratio of 70% is applied to the land of this Property because the buildingof the Property is a fire-resistant building located within a fire protection district.
4. The figure has been obtained by multiplying the figure (¥367,888 thousand) calculated for the entire property by ratio ofquasi co-ownership ratio to be acquired by MCUBS MidCity (50/108).

On the process to the decision to acquire this property, the following aspects were appreciated.
(Regional Characteristics)
The Toyocho area, in which this Property is located, is accessible by the Tokyo Metro Tozai Line, the line
connecting several business districts, and is expected to create demand for use as back offices fromfinancial institutions and IT companies and needs for branches and offices covering the eastern part ofTokyo’s 23 wards, owing to its superior access to central Tokyo. This Property, about a seven-minute walkfrom Toyocho Station on the Tokyo Metro Tozai line, is an office building located along the
Yotsume-Dori street and featuring high visibility.
(Property Characteristics)
This Property can be differentiated from other buildings, many of which in this area are mid- andsmall-sized buildings with a floor area of 3,000 tsubo or less, in terms of its size with the total floor areaof approximately 5,600 tsubo and the standard floor area of approximately 600 tsubo. The Property isalso characterized by the high-grade specifications at the entrance hall and common use spaces. This is anenvironmentally-friendly building equipped with facilities useful in BCP (Business Continuity Planning),such as a rooftop biotope, solar power generation system and emergency generators for tenants. Potential
tenants that attach importance to convenience in vehicle use may be attracted to this Property that has
more than 100 parking lots are secured.

Note: This press release provides information regarding MCUBS MidCity’s acquisition and disposition of trust beneficiary interest in domestic real estate, and is notprepared as an inducement or invitation for investment. All readers are advised to consult their own investment advisors before investing in MCUBS MidCity.
Investors are advised to read Prospectus Concerning the Issue and Sale of New Investment Units and its corrections (if prepared) before making investment decisions,which are investors’ sole discretion and responsibility and are made at their own risk. MCUBS MidCity and its affiliates disclaim any responsibility or liability for theconsequence of investment in MCUBS MidCity.

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(2) Overview of the Property to be Disposed[MID Midosujikawaramachi Bldg.]
Type of Specified Asset
Location (Indicated for
Residence)
Site Area
ZoningType ofOwnershipLand
Floor-Area Ratio/
Building-to-Land
Ratio(Note 1)
Structure/ Floors
Total Floor Area
Type of
Building Ownership

Trustee

Trust beneficiary interest in real estate

Planned Disposition Price¥1,700,000 thousand

4-3-7, Kawaramachi, Chuo-ku, Osaka

Planned Disposition Date

March 27, 2017

Rentable Area
Rental Area

934.79㎡
Commercial zone

3,110.49㎡
3,110.49㎡

Fee simple

End of Dec. 2014

85.4%

600%/100%End of Jun. 201587.4%

End of Dec. 2015

87.6%

Occupancy Rate

S/SRC with flat roof, 6F
Overview ofLeasing

3,945.88㎡

End of Jun. 2016 100.0%

Fee simple

Use

OfficeCompletion Date

March 2, 1998

End of Dec. 2016 100.0%
Total Tenants

Sumitomo Mitsui Trust Bank, Limited

Total Annual
Rent(Note 2)
Security Deposit/Guarantee, Etc.

13
¥57,528 thousand¥96,684 thousand(Note 2)

Special Notations
 Not applicable
Note:
1. While the original building-to-land ratio applicable to the land of the Property, which is located within an area that iszoned for commercial use, is 80%, the ratio of 100% is applied because the building of the Property is a fire-resistantbuilding located within a fire protection district.
2. “Total Annual Rent” and “Security Deposit/Guarantee, Etc.” are actual figures for the 21st fiscal perioda.

Reason of disposition
As a result of considering the overall asset structure of the portfolio and mid- and long-term growthpotential of cash flow, etc. in a comprehensive manner in order to determine how to manage theportfolio in the future, MCUBS MidCity has decided to dispose of the Asset to be Disposed. It is
expected that such disposal will contribute to an improvement in the quality of the portfolio partly
because of a probable decline in the unrealized losses built in the portfolio. The Planned Disposition
Price of the Asset to be Disposed is below the book value, but exceeds the appraisal value, as ofDecember 31, 2016, respectively. MCUBS MidCity determined that the disposition under the terms
and conditions offered by the purchaser is the best and appropriate option in view of the current realestate market conditions, after examining several proposals on prices and other conditions frompotential purchasers.
It is expected that potential loss from disposition of 213 million yen (the Assumed Difference as of
Disposition (between the Planned Disposition Price and the Assumed Book Value as of Disposition) disposition expenses, etc.) from the Disposition and potential gains on disposition of 626 million yen(the Assumed Difference as of Disposition (between the Planned Disposition Price and the Assumed
Book Value as of Disposition) - disposition expenses, etc.) from the disposition of Midosuji MID
Bldg. scheduled on March 27, 2017, will be recorded for the 22nd fiscal period.

Note: This press release provides information regarding MCUBS MidCity’s acquisition and disposition of trust beneficiary interest in domestic real estate, and is notprepared as an inducement or invitation for investment. All readers are advised to consult their own investment advisors before investing in MCUBS MidCity.
Investors are advised to read Prospectus Concerning the Issue and Sale of New Investment Units and its corrections (if prepared) before making investment decisions,which are investors’ sole discretion and responsibility and are made at their own risk. MCUBS MidCity and its affiliates disclaim any responsibility or liability for theconsequence of investment in MCUBS MidCity.

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<Reference>
MID Midosujikawaramachi Bldg.

Midosuji MID Bldg.

Planned disposition price（A）¥1,700 million¥9,000 million

Appraisal value（B）¥1,490 million¥7,310 million

Assumed book value（C）¥1,903 million¥8,348 million

Unrealized gain or loss（B－C）▲¥413 million▲¥1,038 million

Difference between planned
disposition price and assumed bookvalue（A－C）▲¥203 million¥651 million

NOI yield

4.1%

4.0%

NOI yield after depreciation

2.8%

2.5%

March 27, 2017

March 27, 2017

Disposition datePress release dated January 12, 2017:“Notice Regarding Acquisition and Disposition of Trust Beneficiary Interest in Domestic Real Estate(Acquisition of Shibuya Sakuragaoka Square and Disposition of Midosuji MID Bldg.)”
Press release dated February 14, 2017:“Notice Regarding Revision of Business Outlook and Distributions Forecast for the 22nd Period Ending June30, 2017 and Notice Regarding Business Outlook and Distributions Forecast for the 23rd Period Ending
December 31, 2017”
4. Overview of Seller and Purchaser(1) Seller Overview[Sasazuka Center Bldg.]
While the seller is a domestic non-financial corporation, its name and overview, etc. are not disclosed
because the seller’s approval has not been obtained. There are no capital ties to be stated between the seller
and MCUBS MidCity or the Asset Management Company. There are no capital ties to be specified between
the related parties/related companies of MCUBS MidCity or the Asset management Company and therelated parties/related companies of the Seller. Any of the seller or the related parties/related companiesof the seller do not fall under the related party of MCUBS MidCity or the Asset Management Company.
[USC Bldg.]
Name
Japan Private REIT, INC.
Location
6-10-1, Roppongi, Minato-ku, Tokyo
Name and Title ofCorporate officer Ryutaro Uchiyama
Representative
Business
Management business of Real Estate Investment Trust
CapitalNot disclosed because the seller's approval has not been obtained.
Date of Establishment
July 23, 2012
Net Asset
Total Asset
Not disclosed because the seller's approval has not been obtained.
Major unit holder and unit
holding ratio
Relationship with MCUBS MidCity or the Asset Management Company
There are no capital ties to be stated between the seller and MCUBS MidCityor the Asset Management Company. There are no capital ties to be specified
between the related parties/related companies of MCUBS MidCity or the
Capital Ties
Asset Management Company and the related parties/related companies ofthe seller.
Note: This press release provides information regarding MCUBS MidCity’s acquisition and disposition of trust beneficiary interest in domestic real estate, and is notprepared as an inducement or invitation for investment. All readers are advised to consult their own investment advisors before investing in MCUBS MidCity.
Investors are advised to read Prospectus Concerning the Issue and Sale of New Investment Units and its corrections (if prepared) before making investment decisions,which are investors’ sole discretion and responsibility and are made at their own risk. MCUBS MidCity and its affiliates disclaim any responsibility or liability for theconsequence of investment in MCUBS MidCity.

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Personnel Ties

Business Ties

Status of Classification
as Related Party

There are no personnel ties to be stated between the seller and MCUBSMidCity or the Asset Management Company. There are no personnel ties tobe specified between the related parties/related companies of MCUBSMidCity or the Asset Management Company and the related parties/relatedcompanies of the seller.
There are no business ties to be stated between the seller and MCUBSMidCity or the Asset Management Company. There are no business ties to bestated between the related parties/related companies of MCUBS MidCity or
the Asset Management Company and the related parties/related companiesof the seller.
The seller does not fall under the category of a related party of MCUBSMidCity or Asset Management Company. The related parties/relatedcompanies of the seller do not fall under the category of a related party of
MCUBS MidCity or Asset Management Company.

(2) Purchaser Overview[MID Midosujikawaramachi Bldg.]
While the purchaser is a domestic special purpose company, its name and overview, etc. are not disclosed
because the purchaser’s approval has not been obtained. There are no capital ties to be stated between thepurchaser and MCUBS MidCity or the Asset Management Company. There are no capital ties to be
specified between the related parties/related companies of MCUBS MidCity or the Asset management
Company and the related parties/related companies of the Seller. Any of the purchaser or the relatedparties/related companies of the purchaser do not fall under the related party of MCUBS MidCity or the
Asset Management Company.
5. Seller and Purchaser Overview
The acquisition of the asset is not from a party having particular vested interest with MCUBS MidCity or
the Asset Management Company and the disposition of the asset is not to a party having particular vested
interest with MCUBS MidCity or the Asset Management Company.
6. Overview of Brokerage(1) Status of Broker[Sasazuka Center Bldg.]
Broker’s name and overview, etc. are not disclosed because the broker’s approval has not been obtained.
There are no capital ties to be stated between the seller and MCUBS MidCity or the Asset Management
Company. There are no capital ties to be specified between the related parties/related companies of
MCUBS MidCity or the Asset management Company and the related parties/related companies of theSeller. Any of the seller or the related parties/related companies of the seller do not fall under the related
party of MCUBS MidCity or the Asset Management Company.
[USC Bldg.]
Name
Location
Name and Title ofRepresentative
Business

CBRE K.K.
2-1-1 Marunouchi, Chiyoda-ku, Tokyo

Capital¥564 million (As of December 22, 2016)

Date of Establishment

February 21, 1970

Representative Director, President & CEO Eiji Sakaguchi
Comprehensive commercial property service for domestic and foreigncompanies, Brokerage and representation for sale, Real estate strategy andinvestment consulting, real estate appraisal business and Outsourcing
service and analyzing regarding real estate

Relationship with MCUBS MidCity or the Asset Management Company
Note: This press release provides information regarding MCUBS MidCity’s acquisition and disposition of trust beneficiary interest in domestic real estate, and is notprepared as an inducement or invitation for investment. All readers are advised to consult their own investment advisors before investing in MCUBS MidCity.
Investors are advised to read Prospectus Concerning the Issue and Sale of New Investment Units and its corrections (if prepared) before making investment decisions,which are investors’ sole discretion and responsibility and are made at their own risk. MCUBS MidCity and its affiliates disclaim any responsibility or liability for theconsequence of investment in MCUBS MidCity.

9

Capital Ties

Personnel Ties

Business Ties

Status of Classification
as Related Party

There are no capital ties to be stated between the seller and MCUBS MidCityor the Asset Management Company. There are no capital ties to be specified
between the related parties/related companies of MCUBS MidCity or the
Asset Management Company and the related parties/related companies ofthe seller.
There are no personnel ties to be stated between the seller and MCUBSMidCity or the Asset Management Company. There are no personnel ties tobe specified between the related parties/related companies of MCUBSMidCity or the Asset Management Company and the related parties/relatedcompanies of the seller.
There are no business ties to be stated between the seller and MCUBSMidCity or the Asset Management Company. There are no business ties to bestated between the related parties/related companies of MCUBS MidCity or
the Asset Management Company and the related parties/related companiesof the seller.
The seller does not fall under the category of a related party of MCUBSMidCity or Asset Management Company. The related parties/relatedcompanies of the seller do not fall under the category of a related party of
MCUBS MidCity or Asset Management Company.

[MID Midosujikawaramachi Bldg.]
Not applicable.
(2) Amount and Details of Commission
The information is not disclosed as permission to disclose such information has not been received fromthe broker. The amount of commission is no more than the upper limit (acquisition price × 3% + 60,000
yen, excluding consumption tax and local consumption tax) set by the Building Lots and Buildings
Transaction Law.
7. Settlement Method, etc.
MCUBS MidCity will raise funds for the Acquisition through proceeds from issuing new investment units
and cash reserves. As for the issuance of new investment units, please refer to “Notice Concerning Issuanceof New Investment Units and Secondary Offering of Investment Units” announced today. With regard to
the settlement method, MCUBS MidCity plans to settle the acquisition by making a single payment of theentire amount of the acquisition price upon delivery of each property. Each sale and purchase agreement
regarding the Acquisition falls under the “Forward Commitment, etc. by an Investment Corporation” (Note)stipulated in the “Comprehensive Guidelines for Supervision of Financial Instruments Business Operators,etc.” by the Financial Services Agency.
(Note) Forward Commitment, etc. is defined as “a postdated sales and purchase agreement which provides for the delivery and settlement totake place one month or more from the effective date thereof or any other related agreements.”

8. Financial impact on MCUBS MidCity when the forward commitment, etc. cannot be fulfilled
With regard to Sasazuka Center Bldg., under the Sale and Purchase Agreement (Sasazuka Center Bldg.), if
such Agreement is cancelled for the reason of the seller’s violation to agreements specified therein, the party
cancelling the Agreement may demand 20% of the sale price as penalty fees from the counterparty. With
regard to USC Bldg., under the Sale and Purchase Agreement (USC Bldg.), if such Agreement is cancelled
for the reason of the seller’s violation to any material matter specified therein, the seller shall pay 5% of thesale price with consumption taxes, etc. excluded as penalty fees. However, under the Respective Status
Transfer Agreements, any execution of status transfer shall be subject to MCUBS MidCity’s completion ofraising funds necessary to pay for the sale price provided in the Respective Sale and Purchase Agreements(including, but not limited to, borrowings and capital increases).

Note: This press release provides information regarding MCUBS MidCity’s acquisition and disposition of trust beneficiary interest in domestic real estate, and is notprepared as an inducement or invitation for investment. All readers are advised to consult their own investment advisors before investing in MCUBS MidCity.
Investors are advised to read Prospectus Concerning the Issue and Sale of New Investment Units and its corrections (if prepared) before making investment decisions,which are investors’ sole discretion and responsibility and are made at their own risk. MCUBS MidCity and its affiliates disclaim any responsibility or liability for theconsequence of investment in MCUBS MidCity.

10

9. Schedule for Transactions(1) Schedule for Acquisition
Conclusion of Agreement
Property nameDate(Note)
Sasazuka Center Bldg.
February 14, 2017
USC Bldg.
February 14, 2017

Planned acquisition date

Planned payment date

March 22, 2017
April 6, 2017

March 22, 2017
April 6, 2017

Note:
MCUBS MidCity has executed the Respective Status Transfer Agreements as of February 14, 2017 with regard to Sasazuka
Center Bldg. and USC Bldg., respectively, specifying MCUBS MidCity shall take over, as of March 7, 2017, a status of apurchaser, as prescribed in the Respective Sale and Purchase Agreements that are executed between the current beneficiaryand the Respective Status Transferors. The Contract Date in the above table indicates the date when such Respective Status
Transfer Agreements were executed with the Respective Status Transferors, i.e., February 14, 2017.

(2) Schedule for Disposition
Conclusion of Agreement
Property nameDate(Note)
MID
Midosujikawaramachi
February 16, 2017
Bldg.

Planned disposition date

Planned receipt date

March 27, 2017

March 27, 2017

10. Outlook
As for the outlook of the business results for the fiscal period ending June 2017 (the 22nd fiscal period:
January 1, 2017 to June 30, 2017) and the fiscal period ending December 2017 (23rd fiscal period: July 1,2017 to December 31, 2017) as a result of acquiring the Assets to be Acquired and the Asset to be
Disposed, please refer to “Notice Regarding Revision of Business Results and Distributions Forecast forthe 22nd Period Ending June 30, 2017 and Notice Regarding Business Results and Distributions Forecast
for the 23rd Period Ending December 31, 2017” separately announced today.
11. Overview of Appraisal Report(1) Overview of Appraisal Report of the Property to be Acquired[Sasazuka Center Bldg.]
Appraiser
Daiwa Real Estate Appraisal Co., Ltd.
Final Appraisal Value¥9,160,000 thousand
Appraisal Date
January 1, 2017
Item
Revenue price
Value Calculated Using Direct
Capitalization (DC) Method
Operating revenues
Potential gross revenue

Details(thousand yen)
9,160,000
9,200,000
537,290568,746

Vacancy loss, etc.

31,455

Operating expenses
Maintenance expenses
Utility expenses
Repair expenses

146,856
34,08034,3199,508

PM fees
Tenant solicitation

14,6303,212

Overview, etc.
―――
Assessed by taking into account medium- to long-termcompetitiveness of the property, based on the level of rents under
the current lease agreements, and the level and trend of rents ofsimilar properties in areas within the same supply and demand zone
under new lease contracts
Assessed by taking into account the competitiveness of theproperty, based on the actual vacancy rate of the property andvacancy rate of similar property―
Assessed with reference to estimated maintenance expenses
Assessed based on the actual results of past years
Assessed based on the average annual repair expenses described in
the engineering report
Assessed with reference to PM fees of similar properties
Assessed based on the tenant solicitation expenses, etc. of similar
properties

Note: This press release provides information regarding MCUBS MidCity’s acquisition and disposition of trust beneficiary interest in domestic real estate, and is notprepared as an inducement or invitation for investment. All readers are advised to consult their own investment advisors before investing in MCUBS MidCity.
Investors are advised to read Prospectus Concerning the Issue and Sale of New Investment Units and its corrections (if prepared) before making investment decisions,which are investors’ sole discretion and responsibility and are made at their own risk. MCUBS MidCity and its affiliates disclaim any responsibility or liability for theconsequence of investment in MCUBS MidCity.

11

expenses, etc.
Real estate taxes

47,676

Insurance premiums
Other expenses
Net operating income(NOI)
Gain on managementof income fromlump-sum payment
Capital expenditures

1,934
1,495
390,434

Net Cash Flows
Overall Capitalization Rate
Value Calculated Using DiscountCash Flow (DCF) Method
Discount Rate

368,076
4.0%
9,150,000

Terminal Capitalization Rate

4.2%

Cost method value
Ratio of Land Price
Ratio of Building Price
Other items considered by real estateappraisal agent upon appraisal[USC Bldg.]
Appraiser
Final Appraisal Value
Appraisal Date
Item
Revenue price
Value Calculated Using Direct
Capitalization (DC) Method
Operating revenues
Potential gross revenue
Vacancy loss, etc.
Operating expenses
Maintenance expenses

3,085
25,4433.8%

7,770,000
82.8%
17.2%

Assessed based on the actual results, in consideration of the land
price trends and level of burdens
Assessed with reference to premiums of similar properties
Assessed based on the actual results of past years―

Assessed based on comprehensive consideration from perspectivesof both management and procurement aspects
Assessed based on the average annual amount of the replacement
costs described in the engineering report, and by taking into
account the construction management fees―――
Assessed based on the comparison with the discount rates oftransactions of similar properties and with the yields of otherfinancial instruments, etc.
Assessed by taking into account such factors as the marketability ofthe subject property at the end of period in which the capitalization
rate is analyzed―――

Not applicable.

The Tanizawa Sōgō Appraisal Co., Ltd.
¥5,190,000 thousand
January 1, 2017
Details(thousand yen)
5,190,000
5,324,074
313,276
329,122
15,84682,06817,207

Utility expenses

27,753

Repair expenses

4,648

PM fees
Tenant solicitation
expenses, etc.
Real estate taxes

4,362
2,688
24,398Insurance premiums

697

Overview, etc.
―
―
―
―
―
―
Assessed based on the statement of property management andhistorical inflation rates, etc.
Assessed based on the past records, current leasing status andhistorical inflation rates, etc.
Assessed by allocating the figure based on the engineering reportand similar cases to repair expenses (30%) and capital expenditures(70%)
Assessed based on contents of the agreements
Assessed based on the contents of agreements and past records
Assessed based on the 2016 Statements of Fixed Property Tax andCity Planning Tax, and in consideration of historical correction
rates of building age-related deduction and historical inflation rates,
etc.
Assessed based on the size, use and structure, etc. of the subject
property, in consideration of historical inflation rates

Note: This press release provides information regarding MCUBS MidCity’s acquisition and disposition of trust beneficiary interest in domestic real estate, and is notprepared as an inducement or invitation for investment. All readers are advised to consult their own investment advisors before investing in MCUBS MidCity.
Investors are advised to read Prospectus Concerning the Issue and Sale of New Investment Units and its corrections (if prepared) before making investment decisions,which are investors’ sole discretion and responsibility and are made at their own risk. MCUBS MidCity and its affiliates disclaim any responsibility or liability for theconsequence of investment in MCUBS MidCity.

12

Other expenses
Net operating income(NOI)
Gain on managementof income fromlump-sum payment
Capital expenditures

313
231,207

Net Cash Flows
Overall Capitalization Rate

222,665
4.2%

Value Calculated Using DiscountCash Flow (DCF) Method
Discount Rate

5,092,592

Terminal Capitalization Rate

4.4%

Cost method value
Ratio of Land Price
Ratio of Building Price
Other items considered by real estateappraisal agent upon appraisal

Assessed based on the past records
―

1,916

Assessed based on the recent yields of financial assets andeconomic projections, etc.

10,458

Assessed by allocating the figure based on the engineering reportand similar cases to repair expenses (30%) and capital expenditures(70%)―
Assessed by comparing and investigating multiple transaction yields
in neighboring areas or similar areas within the same supply anddemand zone, etc. and by taking into account the forecast of futurefluctuations in net operating income, while giving considerations to
how the discount rate is assessed―

4.3%

4,629,629
78.7%
21.3%

Assessed by setting a base yield of office buildings using
accumulation method, etc. based on yields of financial instruments
and taking into account the individual risks of the subject property
Assessed based on the capitalization rate, in consideration of
uncertainties in future forecasts―――

Not applicable.

Note:
These numbers are calculated for the entire property by ratio of quasi co-ownership ratio to be acquired by MCUBS MidCity(2) Overview of Appraisal Report of the Property to be Disposed[MID Midosujikawaramachi Bldg.]
Appraiser
The Tanizawa Sōgō Appraisal Co., Ltd.
Final Appraisal Value¥1,490,000 thousand
Appraisal Date
December 31, 2016
Item
Revenue price
Value Calculated Using Direct
Capitalization (DC) Method
Operating revenues
Potential gross revenue
Vacancy loss, etc.
Operating expenses
Maintenance expenses

Details(thousand yen)
1,490,000
1,500,000
123,322
130,424
7,101
42,922
10,824

Utility expenses

12,317

Repair expenses

2,420

PM fees

2,920

Tenant solicitation
expenses, etc.

597

Real estate taxes

12,398Overview, etc.
―
―
―
―
―
―
Assessed based on competitiveness of the property, market
circumstances and historical inflation rates, etc.
Assessed based on competitiveness of the property, market
circumstances and historical inflation rates, etc.
Assessed by allocating the figure based on the engineering reportand similar cases to repair expenses (30%) and capital expenditures(70%)
Assessed based on the contents of service agreements,
competitiveness of the subject property and market circumstances,
etc.
Assessed based on the contents of service agreements,
competitiveness of the subject property, market circumstances andpast records, etc.
Assessed based on the 2016 Statements of Fixed Property Tax andCity Planning Tax, and in consideration of historical correction

Note: This press release provides information regarding MCUBS MidCity’s acquisition and disposition of trust beneficiary interest in domestic real estate, and is notprepared as an inducement or invitation for investment. All readers are advised to consult their own investment advisors before investing in MCUBS MidCity.
Investors are advised to read Prospectus Concerning the Issue and Sale of New Investment Units and its corrections (if prepared) before making investment decisions,which are investors’ sole discretion and responsibility and are made at their own risk. MCUBS MidCity and its affiliates disclaim any responsibility or liability for theconsequence of investment in MCUBS MidCity.

13

Insurance premiums

211

Other expenses

1,233

Net operating income(NOI)
Gain on managementof income fromlump-sum payment
Capital expenditures

80,399Net Cash Flows
Overall Capitalization Rate

75,036
5.0%

Value Calculated Using DiscountCash Flow (DCF) Method
Discount Rate

1,490,000

Terminal Capitalization Rate

5.2%

Cost method value
Ratio of Land Price
Ratio of Building Price
Other items considered by real estateappraisal agent upon appraisal

rates of building age-related deduction and historical inflation rates,
etc.
Assessed based on the amount of premiums, insurance coverageand historical inflation rates, etc.
Assessed based on competitiveness of the subject property, market
circumstances and past records, etc.
―

686

Assessed based on the recent yields of financial assets andeconomic projections, etc.

6,050

Assessed by allocating the figure based on the engineering reportand similar cases to repair expenses (30%) and capital expenditures(70%)―
Assessed by comparing and investigating multiple transaction yields
in similar areas within the same supply and demand zone, etc. andby taking into account the forecast of future fluctuations in net
operating income, while giving considerations to how the discountrate is assessed―

5.1%

1,610,000
67.1%
32.9%

Assessed by setting a base yield of office buildings using
accumulation method, etc. based on yields of financial instruments
and taking into account the individual risks of the subject property
Assessed based on the capitalization rate, in consideration of
uncertainties in future forecasts―――

Not applicable.

<Attachment>
Assumed NOI and depreciation of Assets to be Acquired
Property name
Assumed NOI(Note 1)
Sasazuka Center Bldg.
¥392 million per year
USC Bldg.
¥209 million per year
Total
¥602 million per year

Depreciation¥38 million per year
¥30 million per year
¥68 million per year

Notes:
1. Assumed NOI (Net Operating Income) is the estimated amount of property leasing revenue, less property leasing expenses,
assuming the burden of property taxes and city planning taxes for the full year based on the lease agreement terms andconditions, etc. on the planned acquisition date. Both of the Properties’ occupancy rates at time of steady stable occupancy are
assumed to be 92.0%.
2. MCUBS MidCity’s estimated figures for time of steady stable occupancy

The figures above are not the forecast figures for the current period or subsequent periods.

Note: This press release provides information regarding MCUBS MidCity’s acquisition and disposition of trust beneficiary interest in domestic real estate, and is notprepared as an inducement or invitation for investment. All readers are advised to consult their own investment advisors before investing in MCUBS MidCity.
Investors are advised to read Prospectus Concerning the Issue and Sale of New Investment Units and its corrections (if prepared) before making investment decisions,which are investors’ sole discretion and responsibility and are made at their own risk. MCUBS MidCity and its affiliates disclaim any responsibility or liability for theconsequence of investment in MCUBS MidCity.

14

Type

RegionProperty Portfolio after Transactions
Acquisition Price
Property Name
(Planned)(Millions of Yen)

Investment
Ratio (%)

Acquisition Date
(Planned)

Office Building

Kitahama MID Bldg.
MID Nishihommahi Bldg.
Higobashi MID Bldg.
Other
Sendai Capital Tower
Subtotal (16 properties)
Other than office building
Tokyo
Metropolitan AEON MALL Tsudanuma
Area
Osaka
Metropolitan Konami Sports Club Kyobashi
Area
Other
Dormy Inn Hakata Gion

10,800
3,550
3,000
5,500
202,065

3.1%
May 1, 2015
5.1%
August 3, 2015
7.2% August 3, 2015, etc.
3.0%
August 3, 2015
8.4%
August 7, 2015
1.1% December 21, 2015
3.7%
March 22, 2017
2.1%
April 6, 201728.8%
August 31, 2006
10.3%
August 31, 2006
Disposition date(planned):―
March 27, 2017
1.0%
August 31, 2006
1.4%
April 3, 2007
Disposition date(planned):―
March 27, 2017
4.5%
April 24, 2008
1.5% October 30, 2008
1.3%
June 21, 2013
2.3% February 1, 201784.8%

26,10011.0%

August 31, 2006

2,780

1.2%

August 31, 2006

2,280

1.0% September 30, 2013

Subtotal (3 properties)

31,160

13.1%

4,919

2.1%

4,919
238,1442.1%
100.0%

Tokyo
Metropolitan
Area

Sumitomo Fudosan Ueno Bldg. No. 6
G-Square Shibuya Dogenzaka
Shibuya Sakuragaoka Square
Yokohama Creation Square
Cube Kawasaki
Higashi-Nihombashi Green Bldg.
Sasazuka Center Bldg.
USC Bldg.
Twin 21 (Note 3)
Matsushita IMP Bldg.
Midosuji MID Bldg.

Osaka
Metropolitan
Area

7,460
12,22017,1307,080
20,050
2,705
8,700
5,000
68,70024,600―

MID REIT Kyobashi Bldg.
MID Imabashi Bldg.

2,300
3,270

MID Midosujikawaramachi Bldg.

―

Silent Partnership Interest for Office Building
NagoyaNagoya Lucent Tower
Metropolitan(Silent partnership interest)
Area
Subtotal (1 Asset)
Total (20 properties)

August 3, 2015

Notes:
1. (Planned) Acquisition Prices are rounded down to the nearest million yen.
2. Investment ratios are rounded to the nearest first decimal place. Accordingly, the sum of the investment ratio figures may not
add up to 100.0%.
3. Data for Twin 21 includes the trust beneficiary interest of Twin 21 and Twin 21 (partial ownership of land with leaseholdinterest), collectively.
Note: This press release provides information regarding MCUBS MidCity’s acquisition and disposition of trust beneficiary interest in domestic real estate, and is notprepared as an inducement or invitation for investment. All readers are advised to consult their own investment advisors before investing in MCUBS MidCity.
Investors are advised to read Prospectus Concerning the Issue and Sale of New Investment Units and its corrections (if prepared) before making investment decisions,which are investors’ sole discretion and responsibility and are made at their own risk. MCUBS MidCity and its affiliates disclaim any responsibility or liability for theconsequence of investment in MCUBS MidCity.

15