Make The World
More Sustainable[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.

March 16, 2023
IssuerIchigo Hotel REIT Investment Corporation (“Ichigo Hotel,” 3463)
1-1-1 Uchisaiwaicho, Chiyoda-ku, Tokyo
Representative: Eriko Ishii, Executive Director
www.ichigo-hotel.co.jp/en
Asset Management Company
Ichigo Investment Advisors Co., Ltd.
Representative: Hiroshi Iwai, President
Inquiries: Hidehito Iwasaka, Head of Ichigo Hotel
Tel: +81-3-3502-4892

Acquisition of Five Hotel Assets
Ichigo Hotel decided today to acquire five hotel assets.
Of the five hotel assets, because the seller of the four, HOTEL THE KNOTYOKOHAMA, Quintessa Hotel Ise Shima, Quintessa Hotel Ogaki, and THE KNOTSAPPORO is a related party as defined under the Investment Trust and Investment
Corporation Law (1951 Law, Act No. 198, including subsequent revisions), Ichigo
Hotel received approval for the acquisition of these four hotels at today’s Board of
Directors meeting. Hakata Hotels, the hotel operator of THE KNOT SAPPORO, is arelated party as defined in the Investment Trust and Investment Corporation Law (withlimited impact on the assets of registered investment corporation defined in the
Enforcement Ordinance of the Investment Trust and Investment Corporation Law
Article 245-2), and the lease contract with Hakata Hotels is a related party transaction as
defined in Ichigo Investment Advisor (“IIA”)’s internal rules, Ichigo Hotel received
approval at the Board of Directors meeting.
1. Acquisition Summary(Total Appraisal Value: JPY 16,353,000,000; Total Acquisition Price: JPY 15,080,000,000)
Hotel No.
Hotel Name
Hotel Type
Date Built
Form ofOwnership
Appraisal
Value2029
Comfort Hotel
Osaka Shinsaibashi(Ichigo Shinsaibashi
Building)
September 2002

030

031

032

033

HOTEL
THE KNOTYOKOHAMA

Quintessa Hotel
Ise Shima

Quintessa Hotel
Ogaki

THE KNOTSAPPORO

June 1989

February 2020

Lodging-focused1
January 1984
February 1998

Trust beneficiary interest in real estate (juekiken)
JPY 3,860,000,000

JPY 5,520,000,000 JPY 633,000,000 JPY 1,130,000,000 JPY 5,210,000,000

Disclaimer: This press release has been prepared for the purpose of announcing to the public certain matters relating to the acquisition of five hotel assets, and is not an offer to sell or asolicitation of any offer to buy Ichigo Hotel shares in the United States or elsewhere. Any investment decision should be made based upon your own judgment. Ichigo Hotel shares
may not be offered or sold in the United States without registration or an exemption from registration under the United States Securities Act of 1933, as amended (the “SecuritiesAct”). Ichigo Hotel will not undertake a public offering and sale of shares in the United States, and the shares have not been and will not be registered under the Securities Act.

1

Acquisition
Price3SellerContract Date
Closing Date
Financing
MethodSettlement
MethodJPY 3,700,000,000

JPY 4,800,000,000 JPY 610,000,000 JPY 1,070,000,000 JPY 4,900,000,000

GK Shinsaibashi Jisho
Tokumei Kumiai

Ichigo Estate
March 16, 2023
April 3, 2023

Proceeds from new share issuance (Public Offering)4, Loan5, Cash-on hand (Expected)
Lump-sum payment

1

Lodging-focused hotels are hotels specialized in lodging with a limited or minimum
amount of related facilities located near train stations, airports, tourist sites, businessand commercial districts, and other key transport infrastructure such as major train
stations and highway interchanges.
2
Appraisal Value is calculated by Tanizawa Sogo Appraisal as of January 1, 2023, andis in compliance with the appraisal guidelines of IIA as well as the rules of theInvestment Trusts Association of Japan.
3
Acquisition Price excludes incidental expenses such as fees and property, city
planning, and consumption taxes. The assets to be acquired may include personal
property.
4
For further details, please refer to today’s release “Issuance of New Shares andSecondary Share Offering.”
5
For further details of the new loan, please refer to today’s release “New Loan.”
2. Acquisition Rationale
Ichigo Hotel continues to execute on its strategy to build a stable, diversified portfolio
and drive shareholder value. As part of this strategy, Ichigo Hotel acquired the Comfort
Hotel Nagano in May 2022, later renaming the hotel to Smile Hotel Nagano andchanging the hotel operator in December 2022, and acquired the Hotel Sunshine
Utsunomiya in September 2022 from a third-party seller via IIA’s sourcing network.
Since October 2022, the hotel market has been recovering on the back of increased
domestic tourism demand due to a domestic travel subsidy program by the Japanese
government, as well as a recovery in inbound tourism demand due to the lifting ofoverseas travel restrictions and a weak yen.
Ichigo Hotel has decided to grow its portfolio and take full advantage of Ichigo’ssponsor support in order to maximize shareholder value via further diversification of its
portfolio and driving income stability and earnings growth.
Ichigo Hotel will acquire the five hotels using proceeds from the new share issuanceannounced in today’s release, “Issuance of New Shares and Secondary Share Offering,”
a new syndicated loan from partner banks, and cash-on-hand. Today’s acquisitions willgrow Ichigo Hotel’s portfolio to 30 hotels and JPY 69.8 billion, and contribute toincreasing liquidity.
Ichigo Hotel’s variable rent leases with the hotel operators of the five hotels will drivestability, and the variable rent component will increase the potential for upside earnings
growth due to increased inbound and domestic hotel demand.
The average appraisal NOI yield and average post-depreciation NOI yield of the five
Disclaimer: This press release has been prepared for the purpose of announcing to the public certain matters relating to the acquisition of five hotel assets, and is not an offer to sell or asolicitation of any offer to buy Ichigo Hotel shares in the United States or elsewhere. Any investment decision should be made based upon your own judgment. Ichigo Hotel shares
may not be offered or sold in the United States without registration or an exemption from registration under the United States Securities Act of 1933, as amended (the “SecuritiesAct”). Ichigo Hotel will not undertake a public offering and sale of shares in the United States, and the shares have not been and will not be registered under the Securities Act.

2

hotels are 5.7% and 4.8% respectively.
Ichigo, Ichigo Hotel’s sponsor, is strengthening its commitment to drive further growthand shareholder value for its two TSE-listed REITs and a solar power producer. Ichigo
Hotel will continue execute on its strategies for acquisition-driven growth and organic
growth to maximize shareholder value on the back of further hotel demand growth.
Note 1: Average appraisal NOI yield is equal to the total appraisal NOI of the five hotels
divided by the total acquisition price of the five hotels. Average appraisal NOI yield,
calculated by IIA based on the real estate appraisal report, is not the actual number inthe report and may not reflect the actual post-acquisition NOI yield.
Note 2: Average post-depreciation NOI yield is calculated as appraisal NOI minus
depreciation divided by the total acquisition price of the five hotels, where depreciation
is an estimated value calculated by IIA using the straight-line method. Average postdepreciation NOI yield, calculated by IIA based on the real estate appraisal report, is not
the actual number in the report, and may not reflect the actual post-acquisition postdepreciation NOI yield.
3. Hotel Lease Status(1) Lessees
Hotel
No.

Hotel Name

029

Comfort Hotel Osaka Shinsaibashi(Ichigo Shinsaibashi Building)030

HOTEL THE KNOT YOKOHAMA K.K. Hospitality Operations

031

Quintessa Hotel Ise Shima

Core Global Management Co., Ltd.

032

Quintessa Hotel Ogaki

Core Global Management Co., Ltd.

033

THE KNOT SAPPORO

Hakata Hotels Inc.

LesseeGreens Co., Ltd.

(2) Date of Change in Lease Contract
April 3, 2023 (Expected)(3) For details on the lease terms, please refer to 4. Acquisition Details below.
(4) Lessees meet Ichigo Hotel’s selection criteria.
(Note: If Ichigo Hotel is the lessee under a master lease contract, then the tenantrefers to the sub-lessee.)
4. Acquisition Details
Notes to Acquisition Details
・ The location and description of each hotel are based on information obtained by IIA
via real estate appraisal reports, building evaluation reports, market reports, andpublicly available information on the builders’ websites.
・ Legal Form of Asset is a type of specified real estate asset.
・ Trustee refers to the trustee as of today or the expected trustee.
Disclaimer: This press release has been prepared for the purpose of announcing to the public certain matters relating to the acquisition of five hotel assets, and is not an offer to sell or asolicitation of any offer to buy Ichigo Hotel shares in the United States or elsewhere. Any investment decision should be made based upon your own judgment. Ichigo Hotel shares
may not be offered or sold in the United States without registration or an exemption from registration under the United States Securities Act of 1933, as amended (the “SecuritiesAct”). Ichigo Hotel will not undertake a public offering and sale of shares in the United States, and the shares have not been and will not be registered under the Securities Act.

3

・ Period of Trust Contract refers to the trust period specified under the trust contract
as of Ichigo Hotel’s acquisition date.
・ Location refers to the postal address (or the location in the real estate registry (ifmultiple locations are available, one of the multiple locations) if a postal address is
not available) of the hotel.
・ Land and Building Property Rights refer to the type of right to be acquired by
Ichigo Hotel or the trustee. If Ichigo Hotel or the trustee is acquiring ownership of abuilding unit with a land right, the land right ratio in the real estate registry is
included in parentheses.
・ Land Area is the land area in the real estate registry.
・ Zoning is the type of zoning stipulated in the City Planning Act Article 8, Clause 1,
Item 1.
・ Coverage Ratio is the ratio of the building to the land stipulated in the BuildingStandards Act Article 53, Clause 1, and is determined for each zone for city
planning purposes. An asset may have more than one coverage ratio.
・ Floor Area Ratio is the ratio of the building area to the land area stipulated in the
Building Standards Act Article 52, and is determined for each zone for city
planning purposes. An asset may have more than one floor area ratio.
・ Building Use refers to the main use included in the real estate registry.
・ Building Structure refers to the structure mentioned in the real estate registry. The
following abbreviations are used with regards to structure: RC stands for reinforced
concrete; SRC for steel-reinforced concrete; F for number of floors; and B for
basement.
・ Total Floor Area refers to the total floor area in the real estate registry, and does notinclude the area of attached buildings.
・ Date Built refers to the date built in the real estate registry.
・ Appraiser refers to the author of the real estate appraisal report・ Appraisal Value, Appraisal Date, and Value by Direct Capitalization Method are
based on the real estate appraisal report from the Appraiser.
・ Names of the architect, builder, structural designer, and inspection agency are those
as of when the building was built.
・ Collateral refers to whether there is collateral after Ichigo Hotel’s acquisition.
・ Lease Details refer to the tenant lease contracts for each hotel, excluding the
Number of Tenants.
・ Number of Tenants, Rental Income, Deposit, Leasable Area, and Leased Area are
based on the lease contract and any other relevant memoranda of understanding
effective as of each hotel’s acquisition date.
・ Property Management Company refers to the property management companies
appointed to provide property management services for each hotel as of each
hotel’s acquisition date.
・ Master Lease Company refers to the master lease companies appointed to provide
master lease services for each hotel as of each hotel’s acquisition date.
・ Master Lease Type refers to the main type of master lease contract. Pass-throughrefers to when the rent amount paid by the tenant to the master lease company isequal to the rent paid by the master lease company, and Rent Guarantee refers towhen the master lease company pays a guaranteed rent, both under a master lease
contract effective as of each hotel’s acquisition date.
・ Appraisal NOI Yield = Appraisal NOI (Net Operating Income) in the real estateappraisal report divided by the Acquisition Price. This figure is independently
calculated by IIA based upon the above data, and is therefore not in the real estateappraisal report itself and may differ from the actual NOI Yield.
・ Post-Depreciation NOI Yield = Appraisal NOI in the real estate appraisal report
Disclaimer: This press release has been prepared for the purpose of announcing to the public certain matters relating to the acquisition of five hotel assets, and is not an offer to sell or asolicitation of any offer to buy Ichigo Hotel shares in the United States or elsewhere. Any investment decision should be made based upon your own judgment. Ichigo Hotel shares
may not be offered or sold in the United States without registration or an exemption from registration under the United States Securities Act of 1933, as amended (the “SecuritiesAct”). Ichigo Hotel will not undertake a public offering and sale of shares in the United States, and the shares have not been and will not be registered under the Securities Act.

4

minus Depreciation, divided by the Acquisition Price. Depreciation is
independently calculated by IIA using the straight-line method, and the PostDepreciation NOI Yield is calculated by IIA based upon the above data and are
therefore not in the real estate appraisal report itself, and may differ from the actual
post-depreciation NOI Yield.
・ Special Items include items that significantly impact real estate rights and use,value, earnings, and disposal.

Disclaimer: This press release has been prepared for the purpose of announcing to the public certain matters relating to the acquisition of five hotel assets, and is not an offer to sell or asolicitation of any offer to buy Ichigo Hotel shares in the United States or elsewhere. Any investment decision should be made based upon your own judgment. Ichigo Hotel shares
may not be offered or sold in the United States without registration or an exemption from registration under the United States Securities Act of 1933, as amended (the “SecuritiesAct”). Ichigo Hotel will not undertake a public offering and sale of shares in the United States, and the shares have not been and will not be registered under the Securities Act.

5

(1) Description and Location of the Comfort Hotel Osaka Shinsaibashi (Ichigo
Shinsaibashi Building)
The Comfort Hotel Osaka Shinsaibashi is a lodging-focused hotel with retail spacelocated within a five-minute walk from Shinsaibashi Station on the Osaka Metro
Midosuji and Nagahori Tsurumi-ryokuchi Lines, a five-minute walk from
Nagahoribashi Station on the Osaka Metro Sakaisuji and Nagahori Tsurumi-ryokuchi
Lines, and a ten-minute walk from the Kintetsu Nipponbashi Station on the Kintetsu
Nara Line.
One of Osaka City’s main retail districts, the Shinsaibashi area is home to large retailfacilities and restaurants, including department stores and flagship stores of high-end
fashion brands located along Midosuji Street, and fast fashion stores and pharmacies
located along Shinsaibashisuji Shopping Street.
The hotel offers convenient access to Osaka City’s major tourist attractions such as
Universal Studios Japan and Kyocera Dome Osaka, thus allowing it to capture businessdemand as well as domestic and inbound leisure demand.

Disclaimer: This press release has been prepared for the purpose of announcing to the public certain matters relating to the acquisition of five hotel assets, and is not an offer to sell or asolicitation of any offer to buy Ichigo Hotel shares in the United States or elsewhere. Any investment decision should be made based upon your own judgment. Ichigo Hotel shares
may not be offered or sold in the United States without registration or an exemption from registration under the United States Securities Act of 1933, as amended (the “SecuritiesAct”). Ichigo Hotel will not undertake a public offering and sale of shares in the United States, and the shares have not been and will not be registered under the Securities Act.

6

Legal Form of Asset
Trustee
Period of Trust Contract
Location
Property Right
Area
Land
ZoningCoverage Ratio
Floor Area Ratio
Property Right
Use
Building Structure
Total Floor Area
Date Built
Appraiser
Appraisal Value

Hotel Details
Trust beneficiary interest in real estate (juekiken)
Mizuho Trust & Banking Co., Ltd.
April 27, 2005 – April 30, 2033 (Expected)
1-15-15 Higashi Shinsaibashi, Chuo-ku, Osaka
Freehold
1,276.87m2
Commercial
80%500%
Freehold
Hotel, Retail
Steel/RC, B1/11F
6,114.29m2
September 6, 2002
Tanizawa Sogo Appraisal Co., Ltd.
JPY 3,860,000,000
January 1, 2023

Appraisal Date
Value by Direct Capitalization
JPY 3,990,000,000
MethodNumber of Guest Rooms
214
Konoike Construction Co., Ltd., Osaka Branch, First-Class
Architect
Registered Architects Office
Builder
Konoike Construction Co., Ltd., Osaka Branch
Konoike Construction Co., Ltd., Osaka Branch, First-Class
Structural Designer
Registered Architects OfficeInspection Agency
The Building Center of Japan
PML (Assessor)
2.5% (Sompo Risk Management Inc.)
Collateral
None
Lease Details
Tenant Overview
5
Number of Tenants
The hotel operator did not provide consent to disclose lease
Rental Income
details. Ichigo Hotel has a variable-rent lease with theoperator.
Deposit
Lease deposit: JPY 135,644,160. No guarantee deposit.
Leasable Area
5,760.79m2
Leased Area
5,453.97m2
January
September October November December
2022
2022
2022
2022
2023
Occupancy
94.7%
94.7%
94.7%
94.7%
94.7%
Disclaimer: This press release has been prepared for the purpose of announcing to the public certain matters relating to the acquisition of five hotel assets, and is not an offer to sell or asolicitation of any offer to buy Ichigo Hotel shares in the United States or elsewhere. Any investment decision should be made based upon your own judgment. Ichigo Hotel shares
may not be offered or sold in the United States without registration or an exemption from registration under the United States Securities Act of 1933, as amended (the “SecuritiesAct”). Ichigo Hotel will not undertake a public offering and sale of shares in the United States, and the shares have not been and will not be registered under the Securities Act.

7

Property Management
Company
Master Lease Company
Master Lease TypeAppraisal NOI Yield
Post-Depreciation NOI Yield

Itochu Urban Community Co., Ltd.
Ichigo Hotel
Pass-through
4.7%
4.1%
Special Items

1. A monthly electric transmission and distribution system inspection report indicates thefollowing issue with the building. The seller has agreed to rectify the issue at the seller’s
expense by the acquisition date.
(1) The generator testing function is faulty.

Disclaimer: This press release has been prepared for the purpose of announcing to the public certain matters relating to the acquisition of five hotel assets, and is not an offer to sell or asolicitation of any offer to buy Ichigo Hotel shares in the United States or elsewhere. Any investment decision should be made based upon your own judgment. Ichigo Hotel shares
may not be offered or sold in the United States without registration or an exemption from registration under the United States Securities Act of 1933, as amended (the “SecuritiesAct”). Ichigo Hotel will not undertake a public offering and sale of shares in the United States, and the shares have not been and will not be registered under the Securities Act.

8

Hotel Name
Appraisal Value
Appraiser
Appraisal Date

Appraisal Value
Value by Direct
Capitalization Method
IncomeMaximum
Obtainable Rental
IncomeVacancy Loss
Expenses
Administrative &MaintenanceExpensesUtility Expenses

Appraisal Details
Comfort Hotel Osaka Shinsaibashi(Ichigo Shinsaibashi Building )JPY 3,860,000,000
Tanizawa Sogo Appraisal Co., Ltd.
January 1, 2023
AmountNote
Calculated using a DCF valuation
JPY 3,860,000,000 derived from expected net profit as abasis
JPY 3,990,000,000
JPY 252,210,149
JPY 256,110,169
JPY 3,900,020
JPY 78,186,445
JPY 15,692,392 Based on actual amounts
JPY 28,204,828 Based on actual amounts

Repair Expenses

JPY 5,625,000

PM FeeJPY 2,722,794

Leasing
Brokerage Fees
Taxes
Insurance
Premiums

JPY 22,527,600

Other Expenses

JPY 1,765,471

Net Operating
Income (NOI)
Income on
Investment of
Deposits Received
CapitalExpenditure

Based on expected income andreference to similar assets

JPY 523,360

Based on engineering reports, reference
to similar assets, and a 3:7 (Repair
Expenses: Capital Expenditure)
allocation based on the Corporate Tax
Law Basic Interpretive Regulations
Based on documents submitted by
Ichigo Hotel
Based on a 10% p.a. turnover rate
(retail section)
Based on FY2022 tax reports

JPY 1,125,000 Based on insurance documents
Based on actual amounts and reference
to similar assets

JPY 174,023,704
JPY 1,951,562

Based on 1.0% investment yield fordeposits

Based on engineering reports, reference
to similar assets, and a 3:7 (Repair
JPY 12,375,000 Expenses: Capital Expenditure)
allocation based on the Corporate Tax
Law Basic Interpretive Regulations

Disclaimer: This press release has been prepared for the purpose of announcing to the public certain matters relating to the acquisition of five hotel assets, and is not an offer to sell or asolicitation of any offer to buy Ichigo Hotel shares in the United States or elsewhere. Any investment decision should be made based upon your own judgment. Ichigo Hotel shares
may not be offered or sold in the United States without registration or an exemption from registration under the United States Securities Act of 1933, as amended (the “SecuritiesAct”). Ichigo Hotel will not undertake a public offering and sale of shares in the United States, and the shares have not been and will not be registered under the Securities Act.

9

FF&E Reserve
Net Profit– Borne by tenant
JPY 163,600,266
Based on transactions of similar assets
4.1% located in nearby areas and similar
locations

Cap Rate
Value via DCF Method

JPY 3,800,000,000
Base rate adjusted for individual risks
assuming a holding period of ten years

Discount Rate

4.2%

Terminal Cap Rate

4.3% Cap rate adjusted for uncertainties

Value via Cost Approach
Ratio of Land
Ratio of Building

JPY 4,330,000,000
Land value divided by total land andbuilding value
Building value divided by total land and
15.8%
building value
Notes
84.2%

None

Disclaimer: This press release has been prepared for the purpose of announcing to the public certain matters relating to the acquisition of five hotel assets, and is not an offer to sell or asolicitation of any offer to buy Ichigo Hotel shares in the United States or elsewhere. Any investment decision should be made based upon your own judgment. Ichigo Hotel shares
may not be offered or sold in the United States without registration or an exemption from registration under the United States Securities Act of 1933, as amended (the “SecuritiesAct”). Ichigo Hotel will not undertake a public offering and sale of shares in the United States, and the shares have not been and will not be registered under the Securities Act.

10

(2) Location and Description of HOTEL THE KNOT YOKOHAMAThe hotel is a boutique hotel located within a five-minute walk from the JR Yokohama
Station.
The area around Yokohama Station West Exit is a busy retail district home to various
retail facilities including JR Yokohama Tower, a Yokohama landmark, the Takashimaya
department store, large-scale retail stores such as Yodobashi Camera electronic store,
and various stores located along the main street, Palnade Dori. The adjacent Yokohama
Minami Saiwai District is currently undergoing development, with Aeon Mall, the main
tenant, scheduled to open in fall 2023.
The hotel’s convenient location and passenger ship-inspired single-bed rooms and twinbed rooms allow it to capture both tourism and business demand.

Disclaimer: This press release has been prepared for the purpose of announcing to the public certain matters relating to the acquisition of five hotel assets, and is not an offer to sell or asolicitation of any offer to buy Ichigo Hotel shares in the United States or elsewhere. Any investment decision should be made based upon your own judgment. Ichigo Hotel shares
may not be offered or sold in the United States without registration or an exemption from registration under the United States Securities Act of 1933, as amended (the “SecuritiesAct”). Ichigo Hotel will not undertake a public offering and sale of shares in the United States, and the shares have not been and will not be registered under the Securities Act.

11

Legal Form of Asset
Trustee
Period of Trust Contract
Location
Property Right
Area
Land
ZoningCoverage Ratio
Floor Area Ratio
Property Right
Use
Building Structure
Total Floor Area
Date Built
Appraiser
Appraisal Value
Appraisal Date
Value by Direct Capitalization
MethodNumber of Guest Rooms
Architect
Builder
Structural Designer
Inspection Agency
PML (Assessor)
Collateral
Tenant Overview
Number of Tenants

Rental Income

Deposit1
Leasable Area
Leased Area

Hotel Details
Trust beneficiary interest in real estate (juekiken)
Mitsubishi UFG Trust and Bank Corporation
March 31, 2016 – April 30, 2033 (Expected)
2-16-28 Minami-Saiwai, Nishi-ku, Yokohama, Kanagawa
Freehold
854.06m2
Commercial
80%700%
Freehold
Hotel
SRC 10F
5,794.75m2
January 20, 1984
Tanizawa Sogo Appraisal Co., Ltd.
JPY 5,520,000,000
January 1, 2023
JPY 5,720,000,000
145
Honda Sekkei
Nara Construction Co., Ltd.
Honda Sekkei
Yokohama City
10.8% (Sompo Risk Management Inc.)
None
Lease Details
2
Minimum Guaranteed Rent*: JPY 98,921,800 p.a.
Variable Rent: Monthly GOP (Gross Operating Profit) –(Monthly Minimum Guaranteed Rent + Percentage ofMonthly Revenue + Percentage of Monthly GOP)
*Minimum Guaranteed Rent from March 1, 2022 to February
28, 2023
No lease or guarantee deposit.
5,794.75m2
5,794.75m2

Disclaimer: This press release has been prepared for the purpose of announcing to the public certain matters relating to the acquisition of five hotel assets, and is not an offer to sell or asolicitation of any offer to buy Ichigo Hotel shares in the United States or elsewhere. Any investment decision should be made based upon your own judgment. Ichigo Hotel shares
may not be offered or sold in the United States without registration or an exemption from registration under the United States Securities Act of 1933, as amended (the “SecuritiesAct”). Ichigo Hotel will not undertake a public offering and sale of shares in the United States, and the shares have not been and will not be registered under the Securities Act.

12

Occupancy
Property Management
Company
Master Lease Company
Master Lease TypeAppraisal NOI Yield
Post-Depreciation NOI Yield

September
2022
100%

October
2022
100%

November
2022
100%

December
2022
100%

January
2023
100%

Shimizu Comprehensive Development Corporation
Ichigo Hotel
Pass-through
5.6%
4.9%
Special Items

1. Although the hotel does not have the number of parking spaces required under Yokohama
City’s parking lot regulations, the lessee has secured hourly parking spaces via contracts
with nearby parking lots, and received confirmation from Yokohama City that the City will
not formally order the hotel to rectify the situation.
2. A building evaluation report indicates the following issues with the building. The seller has
agreed to rectify them at the seller’s expense by the acquisition date.
(1) Although the third-floor lobby was designed as a single lobby and hallway space underthe building plans, it is currently divided into the lobby hallway, office, storage room, andsmoking room, and it cannot be confirmed whether there is sufficient natural smoke
ventilation.
(2) The door of the first-floor break room, which is a smoke prevention section similar to thelobby hall, has been removed. Although fire-fighting equipment was installed near thesmoke exhaust window indicated in the renovation plans, the window is not properly
functioning, and it cannot be confirmed whether there is sufficient smoke ventilation.
1

The lease details include the rent, lease deposit, and guarantee deposit under the hotel
lease contract. There is a separate lease contract for the retail space of the hotel.

Disclaimer: This press release has been prepared for the purpose of announcing to the public certain matters relating to the acquisition of five hotel assets, and is not an offer to sell or asolicitation of any offer to buy Ichigo Hotel shares in the United States or elsewhere. Any investment decision should be made based upon your own judgment. Ichigo Hotel shares
may not be offered or sold in the United States without registration or an exemption from registration under the United States Securities Act of 1933, as amended (the “SecuritiesAct”). Ichigo Hotel will not undertake a public offering and sale of shares in the United States, and the shares have not been and will not be registered under the Securities Act.

13

Hotel Name
Appraisal Value
Appraiser
Appraisal Date

Appraisal Value
Value by Direct
Capitalization Method
IncomeMaximum
Obtainable Rental
IncomeVacancy Loss
Expenses
Administrative &MaintenanceExpensesUtility Expenses

Repair Expenses

PM FeeLeasing
Brokerage Fees
Taxes
Insurance
Premiums
Other Expenses
Net Operating
Income (NOI)
Income on
Investment of
Deposits Received
CapitalExpenditure

Appraisal Details
HOTEL THE KNOT YOKOHAMA
JPY 5,520,000,000
Tanizawa Sogo Appraisal Co., Ltd.
January 1, 2023
AmountNote
Calculated using a DCF valuation
JPY 5,520,000,000 derived from expected net profit as abasis
JPY 5,720,000,000
JPY 304,784,304

Based on income forecasts andreference to similar assets

JPY 304,784,304–
JPY 34,022,722– Borne by tenant– Borne by tenant
Based on engineering reports, reference
to similar assets, and a 3:7 (Repair
JPY 9,900,000 Expenses: Capital Expenditure)
allocation based on the Corporate Tax
Law Basic Interpretive Regulations
JPY 1,440,000 Based on property management reports–
JPY 20,168,800 Based on FY2022 tax reports
JPY 990,000 Based on reference to similar assets
JPY 1,523,922 Based on reference to similar assets
JPY 270,761,582–
Based on engineering reports, reference
to similar assets, and a 3:7 (Repair
JPY 21,780,000 Expenses: Capital Expenditure)
allocation based on the Corporate Tax
Law Basic Interpretive Regulations

Disclaimer: This press release has been prepared for the purpose of announcing to the public certain matters relating to the acquisition of five hotel assets, and is not an offer to sell or asolicitation of any offer to buy Ichigo Hotel shares in the United States or elsewhere. Any investment decision should be made based upon your own judgment. Ichigo Hotel shares
may not be offered or sold in the United States without registration or an exemption from registration under the United States Securities Act of 1933, as amended (the “SecuritiesAct”). Ichigo Hotel will not undertake a public offering and sale of shares in the United States, and the shares have not been and will not be registered under the Securities Act.

14

FF&E Reserve
Net Profit

JPY 8,700,000 Based on reference to similar assets
JPY 240,281,582
Based on transactions of similar assets
4.2% located in nearby areas and similar
locations

Cap Rate
Value via DCF Method

JPY 5,430,000,000
Base rate adjusted for individual risks
assuming a holding period of ten years

Discount Rate

4.3%

Terminal Cap Rate

4.4% Cap rate adjusted for uncertainties

Value via Cost Approach
Ratio of Land
Ratio of Building

JPY 5,440,000,000
Land value divided by total land andbuilding value
Building value divided by total land and9.6%
building value
Notes
90.4%

None

Disclaimer: This press release has been prepared for the purpose of announcing to the public certain matters relating to the acquisition of five hotel assets, and is not an offer to sell or asolicitation of any offer to buy Ichigo Hotel shares in the United States or elsewhere. Any investment decision should be made based upon your own judgment. Ichigo Hotel shares
may not be offered or sold in the United States without registration or an exemption from registration under the United States Securities Act of 1933, as amended (the “SecuritiesAct”). Ichigo Hotel will not undertake a public offering and sale of shares in the United States, and the shares have not been and will not be registered under the Securities Act.

15

(3) Location and Description of the Quintessa Hotel Ise Shima
The hotel is a lodging-focused hotel located within a three-minute walk from Shima
Yokoyama Station on the Kintetsu Shima Line and a ten-minute walk from Ugata
Station on the Kintetsu Shima Line.
Part of the Ise-Shima National Park, Ise City is an area filled with nature and anarchipelago where the 2016 G7 Ise Shima Summit was held. There are many Japanesestyle inns, hotels, and recreational facilities in Ise, which is known for its beautiful
scenery overlooking Ago Bay and its proximity to Kashiko Island, one of Mie
Prefecture’s major tourist attractions.
The hotel offers convenient access to surrounding areas including Toba and Ise Cities
via train and car, allowing it to flexibly accommodate the diverse needs of travelers,
including tourists, students on school trips, and business travelers.

Disclaimer: This press release has been prepared for the purpose of announcing to the public certain matters relating to the acquisition of five hotel assets, and is not an offer to sell or asolicitation of any offer to buy Ichigo Hotel shares in the United States or elsewhere. Any investment decision should be made based upon your own judgment. Ichigo Hotel shares
may not be offered or sold in the United States without registration or an exemption from registration under the United States Securities Act of 1933, as amended (the “SecuritiesAct”). Ichigo Hotel will not undertake a public offering and sale of shares in the United States, and the shares have not been and will not be registered under the Securities Act.

16

Legal Form of Asset
Trustee
Period of Trust Contract
Location
Property Right
Area
Land
ZoningCoverage Ratio
Floor Area Ratio
Property Right
Use
Building Structure
Total Floor Area
Date Built
Appraiser
Appraisal Value

Hotel Details
Trust beneficiary interest in real estate (juekiken)
Mitsubishi UFJ Trust and Banking Corporation
January 20, 2017 – April 30, 2033 (Expected)
1210-1, Ugata, Agocho, Ise City, Mie
Freehold
4,341.37m2
Not designated60%
200%
Freehold
Hotel
Steel B1F/9F
11,523.25m2
February 10, 1998
Tanizawa Sogo Appraisal Co., Ltd.
JPY 633,000,000
January 1, 2023

Appraisal Date
Value by Direct Capitalization
JPY 612,000,000
MethodNumber of Guest Rooms
150
Penta-Ocean Construction Co., Ltd., Nagoya Branch, FirstArchitectClass Registered Architects Office
Builder
Penta-Ocean Construction Co., Ltd., Nagoya Branch
Structural Designer
Penta-Ocean Construction Co., Ltd.
Inspection Agency
AgochoPML (Assessor)
8.8% (Sompo Risk Management Inc.)
Collateral
None
Lease Details
Tenant Overview
1
Number of Tenants
Minimum Guaranteed Rent*: JPY 41,089,489 p.a.
Variable Rent: Monthly GOP (Gross Operating Profit) –(Monthly Minimum Guaranteed Rent + Percentage ofRental Income
Monthly Revenue + Percentage of Monthly GOP)
*Minimum Guaranteed Rent from March 1, 2022 to February
28, 2023
DepositNo lease or guarantee deposit.
Leasable Area
11,523.25m2
Leased Area
11,523.25m2

Disclaimer: This press release has been prepared for the purpose of announcing to the public certain matters relating to the acquisition of five hotel assets, and is not an offer to sell or asolicitation of any offer to buy Ichigo Hotel shares in the United States or elsewhere. Any investment decision should be made based upon your own judgment. Ichigo Hotel shares
may not be offered or sold in the United States without registration or an exemption from registration under the United States Securities Act of 1933, as amended (the “SecuritiesAct”). Ichigo Hotel will not undertake a public offering and sale of shares in the United States, and the shares have not been and will not be registered under the Securities Act.

17

Occupancy
Property Management
Company
Master Lease Company
Master Lease TypeAppraisal NOI Yield
Post-Depreciation NOI Yield

September
2022
100%

October
2022
100%

November
2022
100%

December
2022
100%

January
2023
100%

Shimizu Comprehensive Development Corporation
Ichigo Hotel
Pass-through
11.7%
8.6%
Special Items

1. The building was built prior to the revised building regulations, and the building’s floor area
ratio exceeds the floor area ratio limit stipulated in the current regulations.
2. A building evaluation report indicates the following issue with the building. The seller has
agreed to rectify the issue at the seller’s expense by the acquisition date.
(1) A vent in one of the walls of the B1F garbage area and parking lot is left open.

Disclaimer: This press release has been prepared for the purpose of announcing to the public certain matters relating to the acquisition of five hotel assets, and is not an offer to sell or asolicitation of any offer to buy Ichigo Hotel shares in the United States or elsewhere. Any investment decision should be made based upon your own judgment. Ichigo Hotel shares
may not be offered or sold in the United States without registration or an exemption from registration under the United States Securities Act of 1933, as amended (the “SecuritiesAct”). Ichigo Hotel will not undertake a public offering and sale of shares in the United States, and the shares have not been and will not be registered under the Securities Act.

18

Hotel Name
Appraisal Value
Appraiser
Appraisal Date

Appraisal Value
Value by Direct
Capitalization Method
IncomeMaximum
Obtainable Rental
IncomeVacancy Loss
Expenses
Administrative &MaintenanceExpensesUtility Expenses

Repair Expenses

PM FeeLeasing
Brokerage Fees
Taxes
Insurance
Premiums
Other Expenses
Net Operating
Income (NOI)
Income on
Investment of
Deposits Received
CapitalExpenditure

Appraisal Details
Quintessa Hotel Ise ShimaJPY 633,000,000
Tanizawa Sogo Appraisal Co., Ltd.
January 1, 2023
AmountNote
Calculated using a DCF valuation
JPY 633,000,000 derived from expected net profit as a
basis
JPY 612,000,000
JPY 99,569,304

Based on expected income andreference to similar assets

JPY 99,569,304–
JPY 28,240,424– Borne by tenant– Borne by tenant
Based on engineering reports, reference
to similar assets, and a 3:7 (Repair
JPY 14,364,000 Expenses: Capital Expenditure)
allocation based on the Corporate Tax
Law Basic Interpretive Regulations
Based on Ichigo Hotel interviews and
JPY 1,680,000
reference to similar assets–
JPY 9,704,300 Based on FY2022 tax reports
JPY 1,596,000 Based on reference to similar assets
JPY 896,124 Based on reference to similar assets
JPY 71,328,880–
Based on engineering reports, reference
to similar assets, and a 3:7 (Repair
JPY 33,516,000 Expenses: Capital Expenditure)
allocation based on the Corporate Tax
Law Basic Interpretive Regulations

Disclaimer: This press release has been prepared for the purpose of announcing to the public certain matters relating to the acquisition of five hotel assets, and is not an offer to sell or asolicitation of any offer to buy Ichigo Hotel shares in the United States or elsewhere. Any investment decision should be made based upon your own judgment. Ichigo Hotel shares
may not be offered or sold in the United States without registration or an exemption from registration under the United States Securities Act of 1933, as amended (the “SecuritiesAct”). Ichigo Hotel will not undertake a public offering and sale of shares in the United States, and the shares have not been and will not be registered under the Securities Act.

19

FF&E Reserve
Net Profit

JPY 6,000,000
JPY 31,812,880

Based on transactions of similar assets
5.2% located in nearby areas and similar
locations

Cap Rate
Value via DCF Method

JPY 642,000,000
Base rate adjusted for individual risks
assuming a holding period of ten years
5.4% Cap rate adjusted for uncertainties

Discount Rate

5.3%

Terminal Cap Rate
Value via Cost Approach
Ratio of Land
Ratio of Building

Based on repair expenses and capital
expenditure

JPY 666,000,000
Land value divided by total land andbuilding value
Building value divided by total land and87.1%
building value
Notes
12.9%

None

Disclaimer: This press release has been prepared for the purpose of announcing to the public certain matters relating to the acquisition of five hotel assets, and is not an offer to sell or asolicitation of any offer to buy Ichigo Hotel shares in the United States or elsewhere. Any investment decision should be made based upon your own judgment. Ichigo Hotel shares
may not be offered or sold in the United States without registration or an exemption from registration under the United States Securities Act of 1933, as amended (the “SecuritiesAct”). Ichigo Hotel will not undertake a public offering and sale of shares in the United States, and the shares have not been and will not be registered under the Securities Act.

20

(4) Location and Description of the Quintessa Hotel Ogaki
The Quintessa Hotel Ogaki is a lodging-focused hotel located within a five-minute walkfrom Ogaki Station on the JR Tokaido Line, Yoro Railway Yoro Line, and Tarumi
Railway Tarumi Line.
Ogaki City is located in the center of Japan and is the second most populous city in Gifu
Prefecture, which has historically been a strategic area for east-to-west transport andfacilitating economic and cultural exchange. The JR Tokaido Line and Meishin
Highway run through Ogaki City, offering convenient access to Nagoya and major cities
in the Kanto and Kansai areas.
The hotel’s rooms are at least 20m2 in size, and can be used by both business and leisuretravelers. The hotel also has conference rooms and banquet halls, which are not widely
available in the surrounding area and thus can flexibly accommodate the diverse needsof guests.

Disclaimer: This press release has been prepared for the purpose of announcing to the public certain matters relating to the acquisition of five hotel assets, and is not an offer to sell or asolicitation of any offer to buy Ichigo Hotel shares in the United States or elsewhere. Any investment decision should be made based upon your own judgment. Ichigo Hotel shares
may not be offered or sold in the United States without registration or an exemption from registration under the United States Securities Act of 1933, as amended (the “SecuritiesAct”). Ichigo Hotel will not undertake a public offering and sale of shares in the United States, and the shares have not been and will not be registered under the Securities Act.

21

Legal Form of Asset
Trustee
Period of Trust Contract
Location
Property Right
Area
Land
ZoningCoverage Ratio
Floor Area Ratio
Property Right
Use
Building

Structure
Total Floor Area
Date Built

Appraiser
Appraisal Value
Appraisal Date
Value by Direct Capitalization
MethodNumber of Guest Rooms
Architect
Builder
Structural Designer
Inspection Agency
PML (Assessor)
Collateral
Tenant Overview
Number of Tenants

Rental Income

Deposit
Leasable Area
Leased Area

Hotel Details
Trust beneficiary interest in real estate (juekiken)
Mitsubishi UFJ Trust and Banking Corporation
May 31, 2017 – April 30, 2033 (Expected)
1-13 Miyamachi, Ogaki City, Gifu
Freehold(1) 1,592.95m2 (2) 691.23m2
Commercial
80%500%, 400%
Freehold(1) Hotel (2) Parking lot(1) SRC/RC, B1F/12F(2) Steel 1F(1) 7,798.78m2 (2) 84.51m2
June 22, 1989
Tanizawa Sogo Appraisal Co., Ltd.
JPY 1,130,000,000
January 1, 2023
JPY 1,130,000,000
98
Kume Construction
Takenaka Corporation, Nagoya Branch
Kume Construction
Ogaki City
2.0% (Sompo Risk Management Inc.)
None
Lease Details
1
Minimum Guaranteed Rent*: JPY 30,898,380 p.a.
Variable Rent: Monthly GOP (Gross Operating Profit) –(Monthly Minimum Guaranteed Rent + Percentage ofMonthly Revenue + Percentage of Monthly GOP)
*Minimum Guaranteed Rent from March 1, 2022 to February
28, 2023
No lease or guarantee deposit.
7,883.29m2
7,883.29m2

Disclaimer: This press release has been prepared for the purpose of announcing to the public certain matters relating to the acquisition of five hotel assets, and is not an offer to sell or asolicitation of any offer to buy Ichigo Hotel shares in the United States or elsewhere. Any investment decision should be made based upon your own judgment. Ichigo Hotel shares
may not be offered or sold in the United States without registration or an exemption from registration under the United States Securities Act of 1933, as amended (the “SecuritiesAct”). Ichigo Hotel will not undertake a public offering and sale of shares in the United States, and the shares have not been and will not be registered under the Securities Act.

22

Occupancy
Property Management
Company
Master Lease Company
Master Lease TypeAppraisal NOI Yield
Post-Depreciation NOI Yield

September
2022
100%

October
2022
100%

November
2022
100%

December
2022
100%

January
2023
100%

Shimizu Comprehensive Development Corporation
Ichigo Hotel
Pass-through
9.9%
7.2%
Special Items

1. An elevator inspection report indicates the main control and brake control unit has not been
replaced within the time frame specified by the manufacturer, which the seller has agreed torectify at the seller’s expense by the acquisition date.
2. The building parking lot is currently not in operation, and has not been inspected.

Disclaimer: This press release has been prepared for the purpose of announcing to the public certain matters relating to the acquisition of five hotel assets, and is not an offer to sell or asolicitation of any offer to buy Ichigo Hotel shares in the United States or elsewhere. Any investment decision should be made based upon your own judgment. Ichigo Hotel shares
may not be offered or sold in the United States without registration or an exemption from registration under the United States Securities Act of 1933, as amended (the “SecuritiesAct”). Ichigo Hotel will not undertake a public offering and sale of shares in the United States, and the shares have not been and will not be registered under the Securities Act.

23

Hotel Name
Appraisal Value
Appraiser
Appraisal Date

Appraisal Value
Value by Direct
Capitalization Method
IncomeMaximum
Obtainable Rental
IncomeVacancy Loss
Expenses
Administrative &MaintenanceExpensesUtility Expenses

Repair Expenses

PM FeeLeasing Brokerage
Fees
Taxes
Insurance
Premiums
Other Expenses
Net Operating
Income (NOI)
Income on
Investment of
Deposits Received
CapitalExpenditure

Appraisal Details
Quintessa Hotel Ogaki
JPY 1,130,000,000
Tanizawa Sogo Appraisal Co., Ltd.
January 1, 2023
AmountNote
Calculated using a DCF valuation
JPY 1,130,000,000 derived from expected net profit as a
basis
JPY 1,130,000,000
JPY 142,338,264

Based on expected income and reference
to similar assets

JPY 142,338,264–
JPY 36,056,730– Borne by tenant– Borne by tenant
Based on engineering reports, reference
to similar assets, and a 3:7 (Repair
JPY 18,980,000 Expenses: Capital Expenditure)
allocation based on the Corporate Tax
Law Basic Interpretive Regulations
Based on conditions provided by Ichigo
JPY 1,440,000
Hotel–
JPY 13,322,700 Based on FY2022 tax reports
JPY 1,460,000 Based on reference to similar assets
JPY 854,030

Based on actual amounts and reference
to similar assets

JPY 106,281,534–
Based on engineering reports, reference
to similar assets, and a 3:7 (Repair
JPY 43,800,000 Expenses: Capital Expenditure)
allocation based on the Corporate Tax
Law Basic Interpretive Regulations

Disclaimer: This press release has been prepared for the purpose of announcing to the public certain matters relating to the acquisition of five hotel assets, and is not an offer to sell or asolicitation of any offer to buy Ichigo Hotel shares in the United States or elsewhere. Any investment decision should be made based upon your own judgment. Ichigo Hotel shares
may not be offered or sold in the United States without registration or an exemption from registration under the United States Securities Act of 1933, as amended (the “SecuritiesAct”). Ichigo Hotel will not undertake a public offering and sale of shares in the United States, and the shares have not been and will not be registered under the Securities Act.

24

FF&E Reserve
Net Profit

JPY 4,900,000
JPY 57,581,534

Based on transactions of similar assets
5.1% located in nearby areas and similar
locations

Cap Rate
Value via DCF Method

Based on repair expenses and capital
expenditure

JPY 1,130,000,000
Base rate adjusted for individual risks
assuming a holding period of ten years

Discount Rate

5.2%

Terminal Cap Rate

5.3% Cap rate adjusted for uncertainties

Value via Cost Approach
Ratio of Land
Ratio of Building

JPY 1,190,000,0000
Land value divided by total land andbuilding value
Building value divided by total land and68.5%
building value
Notes
31.5%

None

Disclaimer: This press release has been prepared for the purpose of announcing to the public certain matters relating to the acquisition of five hotel assets, and is not an offer to sell or asolicitation of any offer to buy Ichigo Hotel shares in the United States or elsewhere. Any investment decision should be made based upon your own judgment. Ichigo Hotel shares
may not be offered or sold in the United States without registration or an exemption from registration under the United States Securities Act of 1933, as amended (the “SecuritiesAct”). Ichigo Hotel will not undertake a public offering and sale of shares in the United States, and the shares have not been and will not be registered under the Securities Act.

25

(5) Location and Description of THE KNOT SAPPOROTHE KNOT SAPPORO is a boutique hotel located within a two-minute walk from
Susukino Station on the Sapporo Municipal Subway Namboku Line.
The hotel is located between Odori Station, where large department stores such as
Mitsukoshi are located, and Susukino Station, where one of Japan’s largest
entertainment districts is located, in a busy area close to the Tanukikoji Shopping Street,a major tourist spot. There are multiple development projects scheduled in thesurrounding areas.
Designed based on the theme of “Modern & Nature,” the hotel’s single-bed rooms andtwin-bed rooms allow it to flexibly accommodate both inbound tourism demand andbusiness demand.

Disclaimer: This press release has been prepared for the purpose of announcing to the public certain matters relating to the acquisition of five hotel assets, and is not an offer to sell or asolicitation of any offer to buy Ichigo Hotel shares in the United States or elsewhere. Any investment decision should be made based upon your own judgment. Ichigo Hotel shares
may not be offered or sold in the United States without registration or an exemption from registration under the United States Securities Act of 1933, as amended (the “SecuritiesAct”). Ichigo Hotel will not undertake a public offering and sale of shares in the United States, and the shares have not been and will not be registered under the Securities Act.

26

Legal Form of Asset
Trustee
Period of Trust Contract
Location
Property Right
Area
Land
ZoningCoverage Ratio
Floor Area Ratio
Property Right
Use
Building Structure
Total Floor Area
Date Built
Appraiser
Appraisal Value
Appraisal Date
Value by Direct Capitalization
MethodNumber of Guest Rooms
Architect
Builder
Structural Designer
Inspection Agency
PML (Assessor)
Collateral
Tenant Overview
Number of Tenants

Rental Income

Deposit1
Leasable Area
Leased Area

Hotel Details
Trust beneficiary interest in real estate (juekiken)
Mitsubishi UFJ Trust and Banking Corporation
April 3, 2023 – April 30, 2033 (Expected)
3-16-2, Minami Sanjo Nishi, Chuo-ku, Sapporo, Hokkaido
Freehold, Leasehold
609.26m2
Commercial
80%800%Freehold
Hotel
Steel/SRC, B1F/13F
5,153.60m2
February 28, 2020
Tanizawa Sogo Appraisal Co., Ltd.
JPY 5,210,000,000
January 1, 2023
JPY 5,360,000,000
140
Iwata Chizaki Inc.
Iwata Chizaki Inc.
Kume Sekkei Co., Ltd.
Japan ERI Co., Ltd.
0.3% (Sompo Risk Management Inc.)
None
Lease Details
3
Minimum Guaranteed Rent*: JPY 50,218,264 p.a.
Variable Rent: Monthly GOP (Gross Operating Profit) –(Monthly Minimum Guaranteed Rent + Percentage ofMonthly Revenue + Percentage of Monthly GOP)
*Minimum Guaranteed Rent from March 1, 2022 toFebruary 28, 2023
No lease or guarantee deposit.
4,828.49m2
4,828.49m2

Disclaimer: This press release has been prepared for the purpose of announcing to the public certain matters relating to the acquisition of five hotel assets, and is not an offer to sell or asolicitation of any offer to buy Ichigo Hotel shares in the United States or elsewhere. Any investment decision should be made based upon your own judgment. Ichigo Hotel shares
may not be offered or sold in the United States without registration or an exemption from registration under the United States Securities Act of 1933, as amended (the “SecuritiesAct”). Ichigo Hotel will not undertake a public offering and sale of shares in the United States, and the shares have not been and will not be registered under the Securities Act.

27

Occupancy
Property Management
Company
Master Lease Company
Master Lease TypeAppraisal NOI Yield
Post-Depreciation NOI Yield

September
2022
100%

October
2022
100%

November
2022
100%

December
2022
100%

January2023
100%

Tokyo Capital Management Co., Ltd.
Ichigo Hotel
Pass-through
4.9%
4.1%
Special Items

1. Land size includes a leasehold. The leased land size is 226.37m2.
2. If the leasehold is transferred to a third party, Ichigo Hotel will pay a consent fee to thelessor and consent to transfer the leasehold will be provided beforehand.
1

The lease details include the rent, lease deposit, and guarantee deposit under the hotel
lease contract. There is a separate lease contract for the retail space of the hotel.

Disclaimer: This press release has been prepared for the purpose of announcing to the public certain matters relating to the acquisition of five hotel assets, and is not an offer to sell or asolicitation of any offer to buy Ichigo Hotel shares in the United States or elsewhere. Any investment decision should be made based upon your own judgment. Ichigo Hotel shares
may not be offered or sold in the United States without registration or an exemption from registration under the United States Securities Act of 1933, as amended (the “SecuritiesAct”). Ichigo Hotel will not undertake a public offering and sale of shares in the United States, and the shares have not been and will not be registered under the Securities Act.

28

Hotel Name
Appraisal Value
Appraiser
Appraisal Date

Appraisal Value
Value by Direct
Capitalization Method
IncomeMaximum
Obtainable Rental
IncomeVacancy Loss
Expenses
Administrative &MaintenanceExpensesUtility Expenses

Repair Expenses

Appraisal Details
THE KNOT SAPPOROJPY 5,210,000,000
Tanizawa Sogo Appraisal Co., Ltd.
January 1, 2023
AmountNote
Calculated using an income approach,
JPY 5,210,000,000 with a DCF valuation derived fromexpected net profit as a basis
JPY 5,360,000,000
JPY 285,569,210

Based on expected income andreference to similar assets

JPY 286,749,360
JPY 1,180,150
JPY 43,493,849– Borne by tenant
1,057,630 Based on actual amounts
Based on engineering reports, reference
to similar assets, and a 3:7 (Repair
JPY 2,280,000 Expenses: Capital Expenditure)
allocation based on the Corporate Tax
Law Basic Interpretive Regulations

PM FeeLeasing
Brokerage Fees
Taxes
Insurance
Premiums

JPY 1,560,000 Based on PM interviews
Based on a 10% p.a. turnover rate
JPY 204,550(retail section)
JPY 25,106,100 Based on FY2022 tax reports

Other Expenses
Net Operating
Income (NOI)
Income on
Investment of
Deposits Received

JPY 12,525,569 Based on reference to similar assets

JPY 760,000 Based on reference to similar assets

JPY 242,075,361
JPY 71,779

Based on a 1.0% investment yield forthe retail section deposit

CapitalExpenditure

Based on engineering reports, reference
to similar assets, and a 3:7 (Repair
JPY 4,560,000 Expenses: Capital Expenditure)
allocation based on the Corporate Tax
Law Basic Interpretive Regulations

FF&E Reserve

JPY 7,000,000 Based on reference to similar assets

Disclaimer: This press release has been prepared for the purpose of announcing to the public certain matters relating to the acquisition of five hotel assets, and is not an offer to sell or asolicitation of any offer to buy Ichigo Hotel shares in the United States or elsewhere. Any investment decision should be made based upon your own judgment. Ichigo Hotel shares
may not be offered or sold in the United States without registration or an exemption from registration under the United States Securities Act of 1933, as amended (the “SecuritiesAct”). Ichigo Hotel will not undertake a public offering and sale of shares in the United States, and the shares have not been and will not be registered under the Securities Act.

29

Net Profit

JPY 230,587,140
Based on transactions of similar assets
4.3% located in nearby areas and similar
locations

Cap Rate
Value via DCF Method

JPY 5,150,000,000
Base rate adjusted for individual risks
assuming a holding period of ten years

Discount Rate

4.4%

Terminal Cap Rate

4.5% Cap rate adjusted for uncertainties

Value via Cost Approach

JPY 4,890,000,000
Land value divided by total land andbuilding value
Building value divided by total land and33.7%
building value
Notes

Ratio of Land

66.3%

Ratio of Building
None

5. Seller Profiles
Name
Address
Representative

Principal
Businesses

GK Shinsaibashi Jisho Tokumei Kumiai
1-1-1 Uchisaiwaicho, Chiyoda-ku, TokyoManaging Member: Ippan Shadan Hojin IES2Manager: Takehisa Tei
1. Investment in trust beneficiary interests (juekiken)
2. Acquisition, development, holding, disposition, leasing, andmanagement of real estate
3. Acquisition, holding, and disposition of shares and equity interestsof businesses relating to the aforementioned businesses
4. Other businesses relating to the above businesses

CapitalJPY 100,000
Establishment Date March 26, 2010

Relationship with
Ichigo Hotel or IIA

Although the seller is not a related party as defined in the
Enforcement Ordinance of the Investment Trust and Investment
Corporation Law, it is a related party as defined in IIA’s internal rules
because Ichigo, IIA’s 100% shareholder, a related party as defined in
the Enforcement Ordinance of the Investment Trust and Investment
Corporation Law, is a silent partner, and the seller receives asset
management advice from Ichigo Estate, a related party.

Note: Because GK Shinsaibashi Jisho Tokumei Kumiai is a related party as specified
in IIA’s internal rules, Ichigo Hotel fully implemented its related party transaction
procedures and received approval from its Board of Directors. Ichigo is a silent
partner, and 100% shareholder of GK Shinsaibashi Jisho Tokumei Kumiai. Ichigo
Hotel has obtained third-party appraisals on the acquired hotels and has cross-checked
the third-party appraisals with additional third-party second opinion appraisals.
Disclaimer: This press release has been prepared for the purpose of announcing to the public certain matters relating to the acquisition of five hotel assets, and is not an offer to sell or asolicitation of any offer to buy Ichigo Hotel shares in the United States or elsewhere. Any investment decision should be made based upon your own judgment. Ichigo Hotel shares
may not be offered or sold in the United States without registration or an exemption from registration under the United States Securities Act of 1933, as amended (the “SecuritiesAct”). Ichigo Hotel will not undertake a public offering and sale of shares in the United States, and the shares have not been and will not be registered under the Securities Act.

30

Name
Address
Representative
CapitalEstablishment Date
Principal Business
Net Assets
Total Assets

Ichigo Estate
1-1-1 Uchisaiwaicho, Chiyoda-ku, Tokyo
Representative Director & President Yasuhide Hosono
JPY 500 million
November 10, 2005
Sustainable real estate, preserving and improving existing real estate
JPY 14,527 million (as of February 28, 2022)
JPY 79,574 million (as of February 28, 2022)

Major Shareholder
and Shareholding
Ratio

Ichigo 100% (as of February 28, 2022)

Relationship with
Ichigo Hotel or IIA

Ichigo Estate is a related party as defined in the Enforcement
Ordinance of the Investment Trust and Investment Corporation Law
and the internal rules of IIA.

100%

6. Ownership History
Hotel Name
Overview
Name

Relationship to
Ichigo Hotel

Acquisition
Rationale

Comfort Hotel Osaka Shinsaibashi (Ichigo Shinsaibashi Building)Current Owner
Previous Owner
Previous Owner
Ichigo Real Estate
GK Shinsaibashi Jisho
Investment Corporation
Unrelated Party
Tokumei Kumiai(currently, Ichigo Office)Although Ichigo Real Estate
Investment Corporation is
not a related party as
defined in the Enforcement
Please refer to 5. Seller Ordinance of the Investment
Trust and Investment
Profiles above.
Corporation Law, it is arelated party as specified in
IIA’s internal rules because it
receives asset management
advice from IIA.
Investment(Long-term investment
as J-REIT)
Omitted because the asset
was held for more than one
year
October 2005

Investment

Acquisition Price

JPY 2,810,000,000

Acquisition Date

May 2015－－－－

Note: Ichigo Hotel’s acquisition price of the hotel is greater than the acquisition priceof GK Shinsaibashi Jisho Tokumei Kumiai’s acquisition from the previous owner,
Ichigo Real Estate Investment Corporation (currently, Ichigo Office), but is lower than
the appraisal value. Ichigo Hotel has confirmed the reasonableness of the hotel’s
Disclaimer: This press release has been prepared for the purpose of announcing to the public certain matters relating to the acquisition of five hotel assets, and is not an offer to sell or asolicitation of any offer to buy Ichigo Hotel shares in the United States or elsewhere. Any investment decision should be made based upon your own judgment. Ichigo Hotel shares
may not be offered or sold in the United States without registration or an exemption from registration under the United States Securities Act of 1933, as amended (the “SecuritiesAct”). Ichigo Hotel will not undertake a public offering and sale of shares in the United States, and the shares have not been and will not be registered under the Securities Act.

31

acquisition price based on the increase in asset value as a result of increased earnings
due to Ichigo’s value-add, rent increase, and reductions in operating expenses.
Hotel Name
Overview
Name
Relationship to
Ichigo Hotel
Acquisition
Rationale
Acquisition Price
Acquisition Date

HOTEL THE KNOT YOKOHAMA
Current Owner
Previous Owner
Ichigo Estate
Unrelated Party
Please refer to 5. Seller－
Profiles above.
Investment－

JPY 2,289,000,000
March 2016－－

Note: Ichigo Hotel’s acquisition price of the hotel is greater than Ichigo Estate’s
acquisition price, which it acquired via sponsor Ichigo’s sourcing network, but islower than the appraisal value. Ichigo Hotel has confirmed the reasonableness of thehotel’s acquisition price based on the increase in asset value as a result of increased
earnings due to Ichigo’s value-add, rent increase, and reductions in operating
expenses.
Hotel Name
Overview
Name
Relationship to
Ichigo Hotel
Acquisition
Rationale
Acquisition Price
Acquisition Date

Quintessa Hotel Ise Shima
Current Owner
Ichigo Estate
Please refer to 5. Seller
Profiles above.

Previous Owner
Unrelated Party－

Investment－

JPY 541,000,000
January 2017－－

Note: Ichigo Hotel’s acquisition price of the hotel is greater than the acquisition priceof Ichigo Estate’s acquisition, which it acquired via sponsor Ichigo’s sourcing
network, but is lower than the appraisal value. Ichigo Hotel has confirmed thereasonableness of the hotel’s acquisition price based on the increase in asset value asa result of increased earnings due to Ichigo’s value-add, rent increase, and reductionsin operating expenses.
Hotel Name
Overview
Name
Relationship to
Ichigo Hotel
Acquisition
Rationale
Acquisition Price
Acquisition Date

Quintessa Hotel Ogaki
Current Owner
Ichigo Estate
Please refer to 5. Seller
Profiles above.

Previous Owner
Unrelated Party－

Investment－

JPY 1,243,000,000
May 2017－－

Disclaimer: This press release has been prepared for the purpose of announcing to the public certain matters relating to the acquisition of five hotel assets, and is not an offer to sell or asolicitation of any offer to buy Ichigo Hotel shares in the United States or elsewhere. Any investment decision should be made based upon your own judgment. Ichigo Hotel shares
may not be offered or sold in the United States without registration or an exemption from registration under the United States Securities Act of 1933, as amended (the “SecuritiesAct”). Ichigo Hotel will not undertake a public offering and sale of shares in the United States, and the shares have not been and will not be registered under the Securities Act.

32

Hotel Name
Overview
Name
Relationship to
Ichigo Hotel
Acquisition
Rationale
Acquisition Price
Acquisition Date

THE KNOT SAPPORO
Current Owner
Ichigo Estate
Please refer to 5. Seller
Profiles above.

Previous Owner
None－

Investment－

JPY 3,519,000,000
March 2020－－

Note: Ichigo, Ichigo Hotel’s sponsor, built THE KNOT SAPPORO to sell to Ichigo
Hotel. Ichigo Hotel’s acquisition price of the hotel is greater than Ichigo Estate’s
acquisition price, but is lower than the appraisal value. Ichigo Hotel has confirmed
the reasonableness of the hotel’s acquisition price based on the increase in asset
value as a result of increased earnings due to Ichigo’s value-add, rent increase, andreductions in operating expenses.
7. Broker Profile
N/A
8. Acquisition Schedule
Ichigo Hotel Board Resolution Date
Contract Date
Acquisition and Settlement Date

March 16, 2023
March 16, 2023
April 3, 2023 (Expected)

9. Earnings Impact
Ichigo Hotel’s July 2023 and January 2024 fiscal period earnings forecasts have beenannounced in today’s releases “January 2023 Fiscal Period Earnings Results Versus
Forecast and Earnings Forecast Revision for the July 2023 Fiscal Period” and “January2023 Fiscal Period Earnings,” respectively.

Disclaimer: This press release has been prepared for the purpose of announcing to the public certain matters relating to the acquisition of five hotel assets, and is not an offer to sell or asolicitation of any offer to buy Ichigo Hotel shares in the United States or elsewhere. Any investment decision should be made based upon your own judgment. Ichigo Hotel shares
may not be offered or sold in the United States without registration or an exemption from registration under the United States Securities Act of 1933, as amended (the “SecuritiesAct”). Ichigo Hotel will not undertake a public offering and sale of shares in the United States, and the shares have not been and will not be registered under the Securities Act.

33

Appendix A: Engineering Report Summary
Hotel
No.

Hotel Name

029

Comfort Hotel
Osaka Shinsaibashi(Ichigo Shinsaibashi Building)030

HOTEL THE KNOTYOKOHAMA

031

Quintessa Hotel Ise Shima

032

Quintessa Hotel Ogaki

033

THE KNOT SAPPORO

Inspector NameTokyo Marine dR
Co., Ltd.

Daiwa Real EstateAppraisal Co., Ltd.

Inspection
Date

February2023

Short-Term
RepairExpenses1

Long-Term
RepairExpenses2(JPY
thousand)–

18,408–29,287–41,758–55,108

–

8,332

1

Short-Term Repair Expenses are defined as repair expenses considered necessary
beyond the scope of ordinary maintenance within a year from the time of inspection.
2
Long-Term Repair Expenses are defined as cumulative repair expenses considerednecessary for the maintenance of the hotel within twelve years from the time ofinspection.

Disclaimer: This press release has been prepared for the purpose of announcing to the public certain matters relating to the acquisition of five hotel assets, and is not an offer to sell or asolicitation of any offer to buy Ichigo Hotel shares in the United States or elsewhere. Any investment decision should be made based upon your own judgment. Ichigo Hotel shares
may not be offered or sold in the United States without registration or an exemption from registration under the United States Securities Act of 1933, as amended (the “SecuritiesAct”). Ichigo Hotel will not undertake a public offering and sale of shares in the United States, and the shares have not been and will not be registered under the Securities Act.

34

Appendix B: Post-Acquisition Portfolio
Hotel
No.1
A-1 004
A-2 008
A-3 018
A-4 033
B-1 020B-2 027B-3 028
B-4 030
C-1 012
C-3 016
C-4 025
D-1 006
D-2 003
D-3 011
D-4 019
D-5 031
D-6 032
E-1 001E-3 005
E-4 007
E-5 010E-6 029
F-1 017
F-2 015
F-3 021F-4 022
F-5 024
F-6 026
G-1 009

Hotel Name

Prefecture

Nest Hotel Sapporo Ekimae
Nest Hotel Sapporo Odori
Comfort Hotel Kushiro
THE KNOT SAPPORO
Capsule Plus Yokohama
Smile Hotel Nagano
Hotel Sunshine Utsunomiya
HOTEL THE KNOTYOKOHAMA
Smile Hotel Tokyo Asagaya
Hotel Livemax NihombashiHakozaki
The OneFive Tokyo Shibuya
Comfort Hotel Hamamatsu
Hotel Wing International
NagoyaComfort Hotel Central
International Airport
Comfort Hotel Suzuka
Quintessa Hotel Ise Shima
Quintessa Hotel Ogaki
Smile Hotel Kyoto Shijo
The OneFive Osaka
Sakaisuji
Hotel Wing International
Kobe Shin Nagata Ekimae
Nest Hotel Osaka
Shinsaibashi
Comfort Hotel Osaka
Shinsaibashi (Ichigo
Shinsaibashi Building)
The OneFive Okayama
Nest Hotel Matsuyama
Urbain Hiroshima Executive
The OneFive Garden
Kurashiki
Valie Hotel Hiroshima
Washington Hotel Plaza
Shimonoseki Eki Nishi
The OneFive Fukuoka
TenjinHokkaido
Hokkaido
Hokkaido
Hokkaido
Kanagawa
NaganoTochigi

Fixed Rent
Variable Rent
Variable Rent
Varilable Rent
Fixed Rent

Acquisition
Price2(JPY million)
2,160
1,450
300
4,900
1,490
670
2,200

Kanagawa

Variable Rent

4,800

6.9

Tokyo

Variable Rent

3,910

5.6

Tokyo

Fixed Rent

1,360

1.9

Tokyo
Shizuoka

Variable Rent
Fixed Rent

3,700
1,550

5.3
2.2

Aichi

Variable Rent

2,670

3.8

Aichi

Fixed Rent

5,308

7.6

Mie
Mie
Gifu
Kyoto

Fixed Rent
Variable Rent
Variable Rent
Variable Rent

300
610
1,070
4,480

0.4
0.9
1.5
6.4

Osaka

Variable Rent

1,630

2.3

Hyogo

Variable Rent

1,490

2.1

Osaka

Variable Rent

7,600

10.9

Osaka

Variable Rent

3,700

5.3

Okayama
Ehime
Hiroshima

Variable Rent
Variable Rent
Fixed Rent

1,200
1,610
1,800

1.7
2.3
2.6

Okayama

Variable Rent

1,725

2.5

Hiroshima

Variable Rent

1,500

2.1

Yamaguchi

Fixed Rent

1,080

1.5

Fukuoka

Variable Rent

1,380

2.0

Lease
Terms
Variable Rent
Variable Rent

% ofPortfolio3
3.1
2.1
0.4
7.0
2.1
1.0
3.1

Disclaimer: This press release has been prepared for the purpose of announcing to the public certain matters relating to the acquisition of five hotel assets, and is not an offer to sell or asolicitation of any offer to buy Ichigo Hotel shares in the United States or elsewhere. Any investment decision should be made based upon your own judgment. Ichigo Hotel shares
may not be offered or sold in the United States without registration or an exemption from registration under the United States Securities Act of 1933, as amended (the “SecuritiesAct”). Ichigo Hotel will not undertake a public offering and sale of shares in the United States, and the shares have not been and will not be registered under the Securities Act.

35

HotelNo.1

Hotel Name

G-3 023
1

Prefecture

Kumamoto
Nest Hotel Kumamoto
Total 30 Hotels

Lease
Terms
Variable Rent

Acquisition
Price2(JPY million)
2,220
69,863% ofPortfolio3
3.2
100

The initial letter (A, B, etc.) is a region code which identifies the area in which the hotel is located.

Code
A

RegionHokkaido/Tohoku

B

Kanto

C
D
E
F

Tokyo
Hokuriku/Tokai
Kinki
Chugoku/Shikoku

G

Kyushu/Okinawa

Prefectures
Hokkaido, Aomori, Iwate, Miyagi, Akita, Yamagata, Fukushima
Ibaraki, Tochigi, Gunma, Saitama, Chiba, Kanagawa, Yamanashi,
Nagano, Niigata
Tokyo
Toyama, Ishikawa, Fukui, Gifu, Shizuoka, Aichi, Mie
Osaka, Hyogo, Kyoto, Shiga, Nara, Wakayama
Tottori, Shimane, Okayama, Hiroshima, Yamaguchi, Kagawa,
Tokushima, Kochi, Ehime
Fukuoka, Saga, Nagasaki, Kumamoto, Oita, Miyazaki, Kagoshima,
Okinawa2

Acquisition Price is the price as indicated in the purchase and sales agreement for the hotel(excluding fees and incidental expenses such as property, city planning, and consumption taxes). The
assets to be acquired may include personal property.
3% of Portfolio is the Acquisition Price of each hotel as a percentage of the Total Acquisition Pricefor the portfolio, rounded to the nearest tenth.

Disclaimer: This press release has been prepared for the purpose of announcing to the public certain matters relating to the acquisition of five hotel assets, and is not an offer to sell or asolicitation of any offer to buy Ichigo Hotel shares in the United States or elsewhere. Any investment decision should be made based upon your own judgment. Ichigo Hotel shares
may not be offered or sold in the United States without registration or an exemption from registration under the United States Securities Act of 1933, as amended (the “SecuritiesAct”). Ichigo Hotel will not undertake a public offering and sale of shares in the United States, and the shares have not been and will not be registered under the Securities Act.

36