Ichigo Preserves and Improves Real Estate

August 15, 2016
REIT Issuer
Ichigo Hotel REIT Investment Corporation (3463)
1-1-1 Uchisaiwaicho, Chiyoda-ku, Tokyo
Representative: Osamu Miyashita, Executive Director
www.ichigo-hotel.co.jp/english
Asset Management Company
Ichigo Real Estate Investment Advisors Co., Ltd.
Representative: Wataru Orii, President
Inquiries: Hiroto Tajitsu, Head of Administration
Tel: +81-3-3502-4892

New Loans and Interest Rate Swaps
Ichigo Hotel REIT decided today to borrow funds via new loans and is entering intointerest rate swap agreements to fix and lock-in the low interest rates on the loans.
1. Reason for New Loans
Ichigo Hotel REIT is committed to maximizing shareholder value for Ichigo HotelREIT shareholders by executing upon Ichigo Hotel REIT’s growth strategy and actionplans and taking full advantage of Ichigo’s value-add capabilities.1
Consistent with these action plans, Ichigo Hotel REIT is acquiring ten assets asannounced in the July 22, 2016 release “Acquisition of Ten Hotel Assets” using funds
from the recent public offering, today’s borrowings, and cash-on-hand.
1Growth outcomes may differ from the action plans and are not guaranteed.

2. Loan Details
Term Loan IIILender

Loan Amount
Loan Date
Use of Proceeds
Principal Repayment Date
Principal Repayment Terms
Interest Rate
Interest Payment Date

Collateralized

Sumitomo Mitsui Banking Corporation; Mizuho
Bank, Ltd.; Shinsei Bank, Limited; Resona Bank,Limited; The Bank of Fukuoka; Nishi-Nippon
City Bank, Ltd.
2,000 million yen
August 17, 2016
Asset acquisition and related costs
February 29, 20201
Lump sum repayment on the Principal Repayment
Date
1M JPY TIBOR + 0.55% (p.a.)2
Final business day of each month following theLoan Date (the first payment date will be August31, 2016 and the last payment date will be thesame as the Principal Repayment Date)
No

Disclaimer: This translation is for informational purposes only. If there is any discrepancy between the Japanese version and the English translation, the Japanese version shallprevail. This document is an English translation of a press release for public announcement regarding new loans and interest rate swaps by Ichigo Hotel REIT, andhas not been prepared for the purpose of solicitation of investment. We caution investors to refer to Ichigo Hotel REIT’s prospectus and notice of amendments
thereto, if any, without fail and to undertake investment at their own decision and responsibility.

7
Third party allottee Mizuho Securities Co., Ltd.
Initial use of funds at the time of1

Term Loan IV
LenderLoan Amount
Loan Date
Use of Proceeds
Principal Repayment Date
Principal Repayment Terms
Interest Rate
Interest Payment Date

Collateralized

Sumitomo Mitsui Banking Corporation; Mizuho
Bank, Ltd.; Shinsei Bank, Limited; Resona Bank,Limited; The Bank of Fukuoka; Nishi-Nippon
City Bank, Ltd.
4,500 million yen
August 17, 2016
Asset acquisition and related costs
February 28, 20231
Lump sum repayment on the Principal Repayment
Date
1M JPY TIBOR + 0.75% (p.a.)2
Final business day of each month following theLoan Date (the first payment date will be August
31, 2016 and the last payment date will be thesame as the Principal Repayment Date)
No

Term Loan V
LenderLoan Amount
Loan Date
Use of Proceeds
Principal Repayment Date
Principal Repayment Terms
Interest Rate
Interest Payment Date

Collateralized

Sumitomo Mitsui Banking Corporation; Mizuho
Bank, Ltd.; Shinsei Bank, Limited; Resona Bank,Limited; The Bank of Fukuoka; Nishi-Nippon
City Bank, Ltd.
4,500 million yen
August 17, 2016
Asset acquisition and related costs
August 31, 20231
Lump sum repayment on the Principal Repayment
Date
1M JPY TIBOR + 0.80% (p.a.)2
Final business day of each month following theLoan Date (the first payment date will be August
31, 2016 and the last payment date will be thesame as the Principal Repayment Date)
No1

In the event the date is not a business day, repayment shall be made on the next
business day. If the next business day is the following month, then therepayment shall be made on the previous business day.
2From August 17, 2016 until August 31, 2016, the interest rate of Term Loan III
is 0.56836%, that of Term Loan IV is 0.76836%, and that of Term Loan V is0.81836%. As described in Section 3 below, the interest rates of Term Loan IV
and Term Loan V are fixed as a result of the interest rate swaps.

Disclaimer: This translation is for informational purposes only. If there is any discrepancy between the Japanese version and the English translation, the Japanese version shallprevail. This document is an English translation of a press release for public announcement regarding new loans and interest rate swaps by Ichigo Hotel REIT, andhas not been prepared for the purpose of solicitation of investment. We caution investors to refer to Ichigo Hotel REIT’s prospectus and notice of amendments
thereto, if any, without fail and to undertake investment at their own decision and responsibility.

7
Third party allottee Mizuho Securities Co., Ltd.
Initial use of funds at the time of2

3. Interest Rate Swap(a) Reason
To fix the interest payment amount of Term Loan IV and Term Loan V and hedge
against a rise in interest rates.
(b) Swap Details
Term Loan IVCounterparty
Notional Principal
Contract Date
Commencement Date
Termination Date
Interest Rate
Interest Payment Date

Mizuho Bank, Ltd.
4,500 million yen
August 15, 2016
August 17, 2016
February 28, 20231
Fixed Interest Rate: 0.90750%2
Floating Interest Rate: 1M JPY TIBOR + 0.75%
Final business day of each month following theLoan Date (the first payment date will be August31, 2016 and the last payment date will be thesame as the Principal Repayment Date)Term Loan VCounterparty
Notional Principal
Contract Date
Commencement Date
Termination Date
Interest Rate
Interest Payment Date

Sumitomo Mitsui Banking Corporation
4,500 million yen
August 15, 2016
August 17, 2016
August 31, 20231
Fixed Interest Rate: 0.98500%2
Floating Interest Rate: 1M JPY TIBOR + 0.80%
Final business day of each month following theLoan Date (the first payment date will be August
31, 2016 and the last payment date will be thesame as the Principal Repayment Date)

1In the event the date is not a business day, repayment shall be made on the next
business day. If the next business day is the following month, then therepayment shall be made on the immediate previous business day.
2As a result of the interest rate swaps, the interest rate of Term Loan IV is0.90750% and that of Term Loan V is fixed at 0.98500%.
4. Earnings Outlook
The impact of the new loans on Ichigo Hotel REIT’s earnings and dividend forecasts forthe January 2017 and July 2017 fiscal periods is minimal. Therefore, Ichigo Hotel
REIT’s earnings and dividend forecast announced on July 22, 2016 remains unchanged.
5. OtherRisks related to this loan have no material impact on the “Investment Risks” describedin “Chapter 3 Investment Risks, Section 1 Situation of the Fund, Part 2 FundInformation” of the latest Securities Report submitted on July 22, 2016.
Disclaimer: This translation is for informational purposes only. If there is any discrepancy between the Japanese version and the English translation, the Japanese version shallprevail. This document is an English translation of a press release for public announcement regarding new loans and interest rate swaps by Ichigo Hotel REIT, andhas not been prepared for the purpose of solicitation of investment. We caution investors to refer to Ichigo Hotel REIT’s prospectus and notice of amendments
thereto, if any, without fail and to undertake investment at their own decision and responsibility.

7
Third party allottee Mizuho Securities Co., Ltd.
Initial use of funds at the time of3

Reference: Ichigo Hotel REIT Loan Details
Outstanding Loan Balance(million yen)
BeforeToday’s
Transactions

After Today’s
Transactions

Short-term bank borrowings

000

Long-term bank borrowings(due within one year)000

Long-term bank borrowings

8,500

19,50011,000

Total bank borrowings

8,500

19,50011,000000

8,500

19,50011,000000

8,500

19,50011,000Bond issuanceTotal bank borrowings andbond issuance
Other interest-bearing
liabilities
Total interest-bearing
liabilities

ChangeLender Distribution (as of August 17, 2016)

Bank of Fukuoka
3%

Nishi-Nippon
City Bank
3%

Resona Bank
11%

SMBC
39%

Shinsei Bank
12%

Mizuho Bank
33%

Disclaimer: This translation is for informational purposes only. If there is any discrepancy between the Japanese version and the English translation, the Japanese version shallprevail. This document is an English translation of a press release for public announcement regarding new loans and interest rate swaps by Ichigo Hotel REIT, andhas not been prepared for the purpose of solicitation of investment. We caution investors to refer to Ichigo Hotel REIT’s prospectus and notice of amendments
thereto, if any, without fail and to undertake investment at their own decision and responsibility.

7
Third party allottee Mizuho Securities Co., Ltd.
Initial use of funds at the time of4

Loan Repayment Date Distribution
Before Today’s Transactions (as of July 31, 2016)(million yen)
10,000

Average Remaining Term 3.6 years

5,250
5,000

3,2500July
2016

January
2017

July
2017

January
2018

July
2018

January
2019

July
2019

January
2020

July
2020

January
2021

July
2021

January
2022

July
2022

January
2023

July
2023

January2024

After Today’s Transactions (expected as of August 17, 2016)(million yen)
10,000

Average Remaining Term 5.0 years

5,250

5,000

4,500 4,500
3,250
2,0000July
2016

January
2017

July
2017

January
2018

July
2018

January
2019

July
2019

January
2020

July
2020

January
2021

July
2021

January
2022

July
2022

January
2023

July
2023

January2024(Note) Average Remaining Term is the weighted average remaining term for Ichigo
Hotel REIT’s borrowings, rounded to the nearest decimal place.

Disclaimer: This translation is for informational purposes only. If there is any discrepancy between the Japanese version and the English translation, the Japanese version shallprevail. This document is an English translation of a press release for public announcement regarding new loans and interest rate swaps by Ichigo Hotel REIT, andhas not been prepared for the purpose of solicitation of investment. We caution investors to refer to Ichigo Hotel REIT’s prospectus and notice of amendments
thereto, if any, without fail and to undertake investment at their own decision and responsibility.

7
Third party allottee Mizuho Securities Co., Ltd.
Initial use of funds at the time of5

Ichigo Hotel REIT Growth Strategy Roadmap
Stage I

Stage II

Continuous Dividend Growth via External Growth, Organic Growth, and Strong Financial Base

ExternalGrowth• Construct a diversified portfolio to pursue both income
stability and earnings growth• Acquire prime-location full-service hotels and resort hotels inaddition to stay-only hotels• Increase portfolio size and generate scale efficiencies via
acquisitions of newly built hotels in addition to value-add ofexisting hotels• Quickly achieve JPY100B total asset size by taking fulladvantage of Ichigo’s sponsor support• Invest primarily in stay-only hotels• Acquisition of conversion-feasible assets and lodging
facilities such as serviced apartments• Asset acquisitions via SPCs

Organic
Growth••Improve operational efficiency by monitoring operations and providing advice to partner hotel operators
Carry out value-add capex to drive higher rents

Financing• Minimize expenses via collaboration with operators• Further increase earnings via more favorable lease terms,rebranding, etc.

• Maintain a strong lender base
• Control LTV• Manage interest rate risk
• Prepare to acquire credit rating• Prepare to enter global REIT indices• Acquire credit rating• Diversify financing• Continue to control LTV and manage interest rate risk
• Enter global REIT indices

Lay Foundation for Growth via Increased
Portfolio Scale

Pursue Portfolio Diversification,Stability, and Growth(Note) Ichigo Hotel REIT seeks to be strategic and cost-effective in its capex (capitalexpenditures), and its capex is thus generally expected to be less than or equal
to depreciation in each period.

Disclaimer: This translation is for informational purposes only. If there is any discrepancy between the Japanese version and the English translation, the Japanese version shallprevail. This document is an English translation of a press release for public announcement regarding new loans and interest rate swaps by Ichigo Hotel REIT, andhas not been prepared for the purpose of solicitation of investment. We caution investors to refer to Ichigo Hotel REIT’s prospectus and notice of amendments
thereto, if any, without fail and to undertake investment at their own decision and responsibility.

7
Third party allottee Mizuho Securities Co., Ltd.
Initial use of funds at the time of6