Ichigo Preserves and Improves Real Estate[Provisional Translation Only]
This English translation of the original Japanese document is provided solely for information purposes.
Should there be any discrepancies between this translation and the Japanese original, the latter shall prevail.

September 23, 2016
REIT Issuer
Ichigo Office REIT Investment Corporation (8975)
1-1-1 Uchisaiwaicho, Chiyoda-ku, Tokyo
Representative: Yoshihiro Takatsuka, Executive Director
www.ichigo-office.co.jp/english
Asset Management Company
Ichigo Investment Advisors Co., Ltd.
Representative: Wataru Orii, President
Inquiries: Hiroto Tajitsu, Head of Administration
Tel: +81-3-3502-4891

Sale of Portfolio Asset(Ichigo Yokosuka Building)
Ichigo Investment Advisors (IIA), the asset management company of Ichigo Office
REIT, today contracted to sell Ichigo Yokosuka Building.
1. Sale Overview
Asset Name
Asset Type/Asset No.
Building Completion
Date
Legal Form of Asset
Acquisition Date

Ichigo Yokosuka Building
Office/O-25
December 7, 1981

Real estate
November 1, 2011 (Ichigo Office REIT merger)(Original acquisition date: May 16, 2006)
1Sale Price (A)JPY 1,000,000,000
2Book Value (B)JPY 962,524,710
Difference (A) – (B)JPY 37,475,290
Appraisal Value3
JPY 982,000,000 (as of April 30, 2016)
Contract Date
September 23, 2016
Transfer Date
September 30, 2016
Settlement Date
September 30, 2016
Transaction Method
Real estate sale
1
Sale price excludes incidental expenses such as fees and property, city planning, andconsumption taxes.
2Book Value is an estimate based upon the most recent book value (April 2016 fiscalperiod), adjusted for capital expenditures and depreciation through Settlement Date.
3
Appraisal Value was calculated by the Tanizawa Sogo Appraisal Co., Ltd. as of April
30, 2016, and is in compliance with the appraisal guidelines of IIA as well as therules of The Investment Trusts Association of Japan.

12. Sale Rationale
Ichigo Office REIT continues to execute on its strategy to drive sustainable dividend
growth (Stage V, Growth Strategy Roadmap) and “increase portfolio size and scale andbe smart in portfolio restructuring.”
Ichigo Office REIT regularly reviews its portfolio for profitability and determines
whether it is in the best interest of shareholders to continue to own each asset based
upon its maintenance needs and competitiveness with nearby assets. In this case, Ichigo
Office REIT concluded that selling the asset would increase portfolio profitability andquality.
3. Asset Overview
Details of Ichigo Yokosuka Building
Asset Name
Ichigo Yokosuka Building
Legal Form of Asset
Real estate
Address
1-21-10 Wakamatsucho, Yokosuka City, Kanagawa
Legal Form of Asset
Real estateArea
800.32 m2
ZoningLand
Commercial
Coverage Ratio
80%
Floor Area Ratio
600%
Property Right
Ownership
UseOffice, retail
2Structure
Building
SRC & RC 7 Floors plus 1 Basement Floor
Total Floor Area
3,310.85 m2
Construction Date
December 7, 1981 (extension on April 14, 1982)
Number of Tenants
12 (as of September 23, 2016)
1
Monthly Rent
JPY 8,258,000 (as of September 23, 2016)
Tenant Security Deposits1
JPY 86,027,000 (as of September 23, 2016)
Leasable Area
2,187.44 m2 (as of September 23, 2016)
Leased Area
2,187.44 m2 (as of September 23, 2016)
Occupancy
100% (as of September 23, 2016)
Acquisition Price
JPY 971 million
Appraiser
The Tanizawa Sogo Appraisal Co., Ltd.
Appraisal Date
April 30, 2016
Value
JPY 982 million
1Monthly Rent (including cost of utilities) and Tenant Security Deposits refer to thosestated in the rental contract.
2
SRC = Steel-Reinforced Concrete, RC = Reinforced Concrete2

4. Appraisal Overview
Asset Name
Appraisal Value
Appraiser
Appraisal Date
Appraisal Value
Value by Direct
Capitalization Method
IncomeMaximum
Obtainable
Rental Income
Vacancy Loss
Expenses

Appraisal Details
Ichigo Yokosuka Building
JPY 982,000,000
The Tanizawa Sogo Appraisal Co., Ltd.
April 30, 2016
Amount (JPY)
Notes
on a DCF valuation, and verified982,000,000 Basedusing a direct capitalization valuation
971,000,000
118,711,966
Based on rental income, common area
124,774,754 service income, parking lot income, andother income
6,062,788 Based on mid- to long-term vacancy rate
48,176,284

Administrativeand MaintenanceExpenseson similar assets and past actual
9,528,489 Basedamounts

Utility Expenses

on similar assets and past actual
20,658,183 Basedamounts
on engineering reports and similar
7,276,500 Basedassetson similar assets and past actual
2,861,365 Basedamounts
on the expected turnover rate and811,473 Basedtenant acquisition costs for similar assets
6,664,000 Based on FY2015 actual amounts
on similar assets and past actual
138,850 Basedamounts
237,424

Repair Expenses
PM Fees
Leasing
Brokerage Fees
Taxes
Insurance
Premiums
Other Expenses
Net Operating
Income (NOI)
Income on
Investment ofDeposits
Received
CapitalExpenditures
Net Profit
Cap Rate
Value via DCF
MethodDiscount Rate
Terminal Cap Rate

70,535,682
1,766,761 Based on a 2.0% investment yieldon engineering reports and similar
16,978,500 Basedassets
55,323,943
Based on transactions of similar assets andcomprehensive assessment of the asset’s
5.7 % alocation,
its individual characteristics, andmarket trends.
987,000,000
Based on transactions of similar assets and
5.6 % the yields of financial assets with the asset’s
individual characteristics taken into account
5.9 % Based on risk-adjusted NOI

3

Value via Cost Approach
Land
Building

Amount (JPY)
904,000,000
66.8 %
33.2 %
Notes

Notes

None

5. Buyer Profile
NameThe buyer is a domestic operating company, but did not giveconsent to disclose its name.

Relationship withIchigo Office REIT or IIA

The buyer does not have any capital, personnel, or business
relationship of note with Ichigo Office REIT or IIA. In
addition, the seller is not an interested party as defined in theEnforcement Ordinance of the Investment Trust andInvestment Corporation Law or the internal rules of theAsset Management Company.

6. Broker Profile
Name
Address
Representative
Principal Businesses
CapitalEstablishment Date
Relationship withIchigo Office REIT or IIA
Brokerage Fee

Nomura Real Estate Development Co., Ltd.
1-26-2 Nishi-Shinjuku, Shinjuku-ku, Tokyo
Seiichi Miyajima, President
Real estate
JPY 2 billion (as of April 1, 2016)
April 15, 1957
The broker does not have any capital, personnel, or business
relationship of note with Ichigo Office REIT/IIA. In
addition, the seller is not an interested party as defined in
the Enforcement Ordinance of the Investment Trust andInvestment Corporation Law or the internal rules of theAsset Management Company.
The broker did not give consent to disclose the fee.

7. Settlement Method
Lump-sum payment.
8. Use of Sale Proceeds
Ichigo Office REIT will allocate part of the sale proceeds towards prepayment ofexisting loans and the rest will be retained as cash-on-hand for future strategic use
including asset acquisitions. Details of the loan prepayment will be announced as soon
as they are determined.
9. Earnings Outlook
The impact of the sale on Ichigo Office REIT’s earnings and dividend forecasts for theOctober 2016 and April 2017 fiscal periods is minimal, and therefore the forecasts areunchanged. The gain on sale will be allocated to the dividend reserve to maintain thestability of future dividends.

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Portfolio Reference Information
1. Post-Sale Portfolio
Before Sale (A)After Sale (B)Difference(B – A)No change

Occupancy
96.9%1
96.9%
Geographic Diversification:
79.0% / 21.0% 78.9% / 21.1% -0.1% / +0.1%
Greater Tokyo Area/OtherAreas2
1
Occupancy Before Sale is as of August 31, 2016.
2
Greater Tokyo Area refers to Central Tokyo and the Tokyo Metropolitan Area. OtherAreas refer to the Four Major Regional Cities and Other Regional Cities. GeographicDiversification percentage is based upon acquisition prices.
2. Post-Sale Portfolio Assets
No.

Asset

O-02
O-03
O-04
O-05
O-06

Ichigo Nishisando Building
Ichigo Mita Building
Ichigo Nanpeidai Building
Ichigo Hanzomon Building
Ichigo Hijirizaka Building
Ichigo Shibuya KamiyamachoBuilding
Ichigo Akasaka 5 Chome Building
Ichigo Shibakoen Building
Ichigo Ebisu Nishi Building
Ichigo Ginza 612 Building
Ichigo Uchikanda Building
Ichigo Yotsuya 4 Chome Building
Ichigo Tameike Building
Ichigo Jimbocho Building
Ichigo Hakozaki Building
Ichigo Kudan 2 Chome Building
Ichigo Kudan 3 Chome Building
Ichigo Gotanda Building
Ichigo Shin Yokohama Building
Ichigo Minami Ikebukuro Building
Ichigo Nakano North Building
Ichigo Eitai Building
Ichigo Ikejiri Building
Ichigo Nishi Ikebukuro Building
Ichigo Nishi Gotanda Building
Ichigo Kichijoji Building

O-07
O-08
O-09
O-10
O-11
O-12
O-14
O-15
O-16
O-17
O-18
O-19
O-20
O-21
O-22
O-23
O-24
O-26
O-27
O-28
O-29

Acquisition
Price2(mm yen)

% ofPortfolio3

Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo

3,254
2,740
1,920
1,550
1,200

1.7 %
1.4 %
1.0 %
0.8 %
0.6 %

Central Tokyo

1,505

0.8 %

Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central TokyoCentral Tokyo
Central Tokyo
Central Tokyo
Tokyo Metropolitan Area
Tokyo Metropolitan Area
Tokyo Metropolitan Area
Tokyo Metropolitan Area
Tokyo Metropolitan Area
Tokyo Metropolitan Area
Central Tokyo
Tokyo Metropolitan Area

735
1,100
1,917
1,773
1,140
550
580
1,820
1,150
763
844
5,060
1,816
1,460
764
1,490
2,030
639
765
2,160

0.4 %
0.6 %
1.0 %
0.9 %
0.6 %
0.3 %
0.3 %
1.0 %
0.6 %
0.4 %
0.4 %
2.6 %
1.0 %
0.8 %
0.4 %
0.8 %
1.1 %
0.3 %
0.4 %
1.1 %

Area15No.

Asset

Area1

O-34
O-37O-38
O-39
O-42
O-46
O-47
O-48
O-49
O-50
O-51
O-52
O-53
O-54
O-55
O-56
O-57
O-58
O-59
O-60
O-61
O-62
O-63
O-64
O-65
O-66
O-67
O-68
O-69
O-70
O-71
O-72
O-73
O-74
O-75
O-76
O-77
O-78
O-79
O-80

Ichigo Sakae Building
Ichigo Marunouchi Building
Ichigo Toyamaeki Nishi Building
Ichigo Mirai Shinkin Building
Ichigo Takamatsu Building
Ichigo Kanda Nishikicho Building
Ichigo Akihabara North Building
Ichigo Sakaisuji Honmachi Building
Ichigo Kanda Ogawamachi Building
Ichigo Hatchobori Building
Ebisu Green Glass
Ichigo Omori Building
Ichigo Takadanobaba Building
Ichigo Omiya Building
Ichigo Sagamihara Building
Ichigo Ofuna Building
Ichigo Sendai East Building
Ichigo Kumamoto Building
Ichigo Jingumae Building
Ichigo Shibuya Dogenzaka Building
Ichigo Hiroo Building
Ichigo Sasazuka Building
Ichigo Nihonbashi East Building
Ichigo Sakurabashi Building
Ichigo Shinkawa Building
Ichigo Kudan Building
Ichigo Higashi Gotanda Building
Axior Mita
Ichigo Higashi Ikebukuro Building
Koriyama Big-i (Office Section)
Ichigo Kawasaki Building
Ichigo Shibuya East Building
Ichigo Ningyocho Building
Ichigo Nishi Honmachi Building
Ichigo Hakata Building
Nishiki First Building
Ichigo Ikenohata Building
Ichigo Ikebukuro East Building
Ichigo Motoazabu Building
Ichigo Otsuka Building

Four Major Regional Cities
Four Major Regional Cities
Other Regional Cities
Other Regional Cities
Other Regional Cities
Central Tokyo
Central Tokyo
Four Major Regional Cities
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Tokyo Metropolitan Area
Tokyo Metropolitan Area
Tokyo Metropolitan Area
Other Regional Cities
Other Regional Cities
Central Tokyo
Central Tokyo
Central Tokyo
Central TokyoCentral Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Tokyo Metropolitan Area
Other Regional Cities
Tokyo Metropolitan Area
Central Tokyo
Central Tokyo
Other Regional Cities
Other Regional Cities
Other Regional Cities
Other Regional Cities
Tokyo Metropolitan Area
Central Tokyo
Tokyo Metropolitan Area
6Acquisition
Price2(mm yen)

% ofPortfolio3

4,705
6,710
1,650
1,158
3,010
2,130
5,500
1,940
2,210
1,905
5,900
3,850
1,580
3,430
1,174
2,000
1,840
1,450
7,200
3,650
3,960
4,780
4,700
2,500
2,360
3,190
3,660
1,800
4,570
1,660
1,750
1,350
1,450
2,190
1,3802,000
5,130
3,010
1,890
2,740

2.5 %
3.5 %
0.9 %
0.6 %
1.6 %
1.1 %
2.9 %
1.0 %
1.2 %
1.0 %
3.1 %
2.0 %
0.8 %
1.8 %
0.6 %
1.0 %
1.0 %
0.8 %
3.8 %
1.9 %
2.1 %
2.5 %
2.5 %
1.3 %
1.2 %
1.7 %
1.9 %
0.9 %
2.4 %
0.9 %
0.9 %
0.7 %
0.8 %
1.1 %
0.7 %
1.0 %
2.7 %
1.6 %
1.0 %
1.4 %

No.

Area1

Asset

O-81
O-82
O-83
O-84

Acquisition
Price2(mm yen)% ofPortfolio3Ichigo Nagoya Building
Central Tokyo
3,420
1.8 %
Ichigo Fushimi Building
Central Tokyo
2,340
1.2 %
Ichigo Nishiki Building
Central Tokyo
1,330
0.7 %
Ichigo Minami Morimachi Building Central Tokyo
1,040
0.5 %
Subtotal – Offices (70 Assets)
167,91787.9 %
Ichigo Serviced Apartments
R-04
Central Tokyo
1,360
0.7 %
Takanawadai
R-06 B-SITE Hamamatsucho
Central Tokyo
701
0.4 %
R-09 Ichigo Serviced Apartments Ginza
Central Tokyo
946
0.5 %
Z-02 Ichigo Fiesta Shibuya
Central Tokyo
1,970
1.0 %
Z-03 Ichigo Burg Omori
Tokyo Metropolitan Area
3,218
1.7 %
Z-04 Ichigo Pagoda Asakusa
Tokyo Metropolitan Area
1,640
0.9 %
Z-05 Ichigo Machida East Building
Tokyo Metropolitan Area
1,3100.7 %Ichigo Sapporo Minami 2 Nishi 3
Z-07
Four Major Regional Cities
558
0.3 %
Building
Z-08 Ichigo Daimyo Balcony
Four Major Regional Cities
638
0.3 %
Z-09 Konami Sports Club Izumi Fuchu
Other Regional Cities
1,210
0.6 %
Ichigo Shibuya Bunkamura Dori
Z-10
Central Tokyo
2,400
1.3 %
Building
Twicere Yokohama Isogo
Z-11
Tokyo Metropolitan Area
1,620
0.8 %
(Retail Section)
Z-12 Lions Square Kawaguchi
Tokyo Metropolitan Area
2,430
1.3 %
Ichigo Shin Yokohama Arena Dori
Z-13
Tokyo Metropolitan Area
1,700
0.9 %
Building
Z-14 Ichigo Kamata Building
Tokyo Metropolitan Area
1,400
0.7 %
Subtotal – Other (15 Assets)
23,101
12.1 %
Grand Total (85 Assets)
191,018 100.0 %1Central Tokyo refers to the Chiyoda, Minato, Chuo, Shinjuku, Shibuya, and Shinagawa Wards.
Tokyo Metropolitan Area refers to Tokyo (excluding the six wards above), Kanagawa, Chiba, andSaitama Prefectures. Four Major Regional Cities refers to Osaka, Nagoya, Fukuoka, andSapporo.
2Acquisition Price excludes incidental expenses such as fees and property, city planning, andconsumption taxes. For the 31 office assets (O-02 through O-42) and 6 non-office assets (Z-02through Z-08) acquired via the REIT merger on November 1, 2011, Acquisition Price is theappraisal value as of October 31, 2011.
3% of Portfolio is the ratio of each asset’s Acquisition Price to the Total Portfolio Acquisition
Price.

7