January 29, 2018
For Translation Purpose Only
Investment Corporation
MCUBS MidCity Investment Corporation
Representative: Katsuhiro Tsuchiya, Executive Director

TSE Code: 3227, LEI Code: 353800WZPKHG2SQS1P32
URL: http://www.midcity-reit.com/en/

Asset Management Company
MCUBS MidC ity Inc.
Representative: Toyota Watanabe, President & CEO
Inquiries:
Naoki Suzuki, Deputy President

TEL: +81-3-5293-4150

Notice Regarding Acquisition and Leasing of Trust Beneficiary Interests in
Domestic Real Estates (Acquisition of Four Office Buildings)
MCUBS MidCity Investment Corporation (hereafter “MCUBS MidCity”) announces that, its asset
management company, MCUBS MidCity Inc. (hereafter the “Asset Management Company”), decided today toacquire and lease properties, as detailed below (the acquisition will be hereafter referred to as the“Acquisition”).
1.

Overview of Acquisition
Property Name
Type of Specified Asset
Location
Planned Acquisition Price(Note 1)
(A)
Appraisal Value (Note 2) (B)
Difference between
Planned Acquisition Priceand Appraisal Value (B-A)
NOI Yield (Note 3)
NOI Yield after
Depreciation (Note 4)
Agreement Execution
Date
Planned Acquisition Date
SellerYoshiyasu Kanda Bldg.

SSP Bldg.

M-City Akasaka
1-chome Bldg.

(Note 5)

Trust beneficiaryinterest in real estate

Trust beneficiaryinterest in real estate

Trust beneficiaryinterest in real estate

Koto-ku, Tokyo

Chiyoda-ku, Tokyo

Chuo-ku, Tokyo

Minato-ku, Tokyo¥5,800 million¥4,000 million¥9,200 million¥4,205 million¥6,070 million¥4,260 million¥10,200 million¥4,280 million¥270 million¥260 million¥1,000 million¥75 million

4.6%

4.2%

4.4%

3.8%

4.0%

3.9%

3.6%

3.6%

January 29, 2018

January 29, 2018

January 29, 2018 (Note 6)

January 29, 2018

February 16, 2018
A domestic
non-financial
corporation (Note 7)

February 16, 2018
A domestic
non-financial
corporation (Note 7)

March 1, 2018
YB Hamacho
Kaihatsu Tokutei
Mokuteki Kaisha

March 1, 2018

USC Bldg.
Trust beneficiaryinterest in real estate

Godo Kaisha Mac

Notes:
1.
“Planned Acquisition Price” indicates the sale price of respective trust beneficiary interest in real estate stated in the trust beneficiary interest transfer agreement(excluding acquisition expenses, property taxes, city planning taxes and consumption taxes, etc.). The same shall apply hereinafter.
2.
“Appraisal Value” indicates the appraisal value as of December 1, 2017.
3.
“NOI Yield” indicates the ratio of the appraisal NOI (under the direct capitalization method) to the Planned Acquisition Price of respective assets to be acquired and is
obtained by using the following formula. The same shall apply hereinafter.
NOI Yield = Appraisal NOI* ÷ Planned Acquisition Price*Appraisal NOI is the net operating income under the direct capitalization method stated in the appraisal reports of respective assets to be acquired, the record date ofwhich is December 1, 2017. The same shall apply hereinafter.
4.
“NOI Yield after Depreciation” indicates the ratio of NOI (under the direct capitalization method) after depreciation to the Planned Acquisition Price of respective assets tobe acquired and is obtained by using the following formula. “NOI after Depreciation” is calculated by deducting depreciation and amortization costs from Appraisal NOI.
NOI Yield after Depreciation = (Appraisal NOI - depreciation*) ÷ Planned Acquisition Price*Depreciation for the Assets to be Acquired is calculated by using the depreciation rates in proportion to the useful life under the straight-line method, as is the case forthe other assets owned by MCUBS MidCity. The same shall apply hereinafter.
5.
MCUBS MidCity will additionally acquire quasi co-ownership interest of trust beneficiary interest in this property (ownership ratio: 58/108 (approx. 54%)). MCUBSMidCity acquired approx. 46% quasi co-ownership interest of this property on April 6, 2017. Thus, following the Acquisition, MCUBS MidCity will hold 100% ownership of
the property.
6.
MCUBS MidCity and a domestic corporation (the “Status Transferor”) executed the status transfer agreement with regard to SSP Bldg. (the “Status Transfer Agreement”),
under which MCUBS MidCity shall take over, as of February 28, 2018, the status of a purchaser under the trust beneficiary interest transfer agreement regarding SSP Bldg.
(the “Sale and Purchase Agreement (SSP Bldg.)”) that had been executed between the current owner and the Status Transferor. The Agreement Execution Date for SSP
Bldg. indicates the date on which such Status Transfer Agreement was executed. The Status Transferor is a third party with no special interest in MCUBS MidCity or the
Asset Management Company.
Note: This press release provides information regarding MCUBS MidCity’s acquisition and leasing of trust beneficiary interests in domestic real estates and is not prepared as
an inducement or invitation for investment. All readers are advised to consult their own investment advisors before investing in MCUBS MidCity. Investors are advised to read
Prospectus Concerning the Issue and Sale of New Investment Units and its corrections (if prepared) before making investment decisions, which are investors’ sole discretion
and responsibility and are made at their own risk. MCUBS MidCity and its affiliates disclaim any responsibility or liability for the consequence of investment in MCUBSMidCity.

1

7.

2.

The names of the sellers of USC Bldg. and Yoshiyasu Kanda Bldg. are not disclosed because the sellers' approval has not been obtained. Neither of the sellers has any
special interest in MCUBS MidCity or the Asset Management Company.

Reason for Acquisition and Leasing
MCUBS MidCity is committed to managing assets from a medium- to long-term perspective toassure stable revenues and steady growth of assets under management and emphasizes investment in
the three major metropolitan areas (the Tokyo metropolitan area (Note 1), the Osaka metropolitan area
(Note1)and the Nagoya metropolitan area (Note 1)).

After the Acquisition totaling 23.2 billion yen, the size of the portfolio (on a basis of (Planned)
Acquisition Prices) will expand to 261.3 billion yen, and the ratio of properties located in Tokyo
metropolitan area to the overall portfolio (on a basis of (Planned) Acquisition Prices) will increase to49.6%, in contrast to 16.6% as at the end of the fiscal period ended December 2014 which was before
the change of our main sponsor. In addition, our portfolio will become more diversified as Ratio of
OBP (Note 1) will be reduced to 37.8%, in contrast to 62.4% as at the end of the fiscal period ended
December 2014, and the ratio of the largest tenant (Note 1) will be reduced to 12.8%, in contrast to 21.2% as
at the end of the fiscal period ended December 2014. Moreover, MCUBS MidCity has considered that
the Acquisition would contribute to reinforcing earnings capacity of the portfolio with an increase in
the average NOI Yield after Depreciation and to enhancing the unitholder value, which is represented
by distribution per unit, over a medium- to long-term. Thus, MCUBS MidCity decided to conduct theAcquisition.
Furthermore, MCUBS MidCity judges that the tenants of the Assets to be Acquired satisfy thecriteria for the selection of tenants stated in the “Report on the Management Structure and System of
the Issuer of Real Estate Investment Trust Units and Related Parties” filed on September 28, 2017.
For details of the individual Assets to be acquired, please refer to "3. Details of Assets to be Acquired”
below (Note 2).

Total/
Average■

PlannedAcquisition Prices

Appraisal Value¥23,205 million¥24,810 million

Ratio of Unrealized
Gain (Note 3)＋6.9%(Note 4)

Average NOI Yield
after Depreciation

4.3%

3.7%

Average NOI Yield(Note 5)

Asset size (Note 6)

Note: This press release provides information regarding MCUBS MidCity’s acquisition and leasing of trust beneficiary interests in domestic real estates and is not prepared as
an inducement or invitation for investment. All readers are advised to consult their own investment advisors before investing in MCUBS MidCity. Investors are advised to read
Prospectus Concerning the Issue and Sale of New Investment Units and its corrections (if prepared) before making investment decisions, which are investors’ sole discretion
and responsibility and are made at their own risk. MCUBS MidCity and its affiliates disclaim any responsibility or liability for the consequence of investment in MCUBSMidCity.

2

Notes:1.
The “Tokyo metropolitan area” represents Tokyo, Kanagawa, Chiba and Saitama; the “Osaka metropolitan area” represents Osaka, Kyoto and Hyogo; and the “Nagoya
metropolitan area” represents Aichi. The same shall apply hereinafter. Also, the “Ratio of the largest tenant” indicates the ratio of rents and common-area fees received
from a specific tenant which have the largest share to that of the overall portfolio, while the “Ratio of OBP” indicates the ratio of rents and common-area fees of Twin 21
and Matsushita IMP Bldg. to that of the overall portfolio.
2.
Explanations of the descriptions in each column for the overview of the respective assets to be acquired, described in "3. Details of Assets to be Acquired” below are as
follows:
Among the descriptions about the Assets to be Acquired, “Land (Site Area),”, “Building (Structure/Floors)”, “Building (Total Floor Area),” “Building (Use),” and “Building(Completion Date)” are based on what is indicated in the registry. “Land (Floor-Area Ratio)” represents the ratio of the total floor area of a building to the site area, as
stipulated in Article 52 of the Building Standards Act (Law No. 201 of 1950, as amended) (the "Building Standards Act"), and indicates the figure specified in city planningin accordance with the zoning, etc. “Land (Building-to-Land Ratio)” represents the ratio of the building area to the site area, as stipulated in Article 53 of the BuildingStandards Act, and indicates the figure applicable for each individual real estate in trust in accordance with the zoning, etc. (known as Standard Building Coverage Ratio).
With regard to the “Overview of Building Condition Evaluation (PML),” PML (Probable Maximum Loss) is defined as “probable loss for a building with a recurrence
interval of 475 years” based on the risk curve showing the relationship between loss and annual exceedance probability as calculated by Engineering and Risk Services
Corporation and OYO RMS Corporation. The probable loss for a building with a recurrence interval of 475 years represents “loss of 10% of exceedance probability over 50
years” under the BELCA's guidelines.
“Overview of Leasing” indicates the content of the lease agreement effective as of the end of November 2017 regarding the real estate in trust for each of the Assets to be
Acquired, based on the figures and information provided by the sellers of each asset. “Overview of Leasing (Rentable Area)” indicates the rentable area of the building of
the real estate in trust for each of the Assets to be Acquired (or total rentable area of respective buildings in the case where there are multiple buildings for each property;
limited to the rental spaces, and not including the areas of warehouses, halls and parking lots, etc. However, it includes the area of the common area and parking lot areaetc, if such area is leased.). “Overview of Leasing (Rental Area)” indicates the total area presented in the lease agreements, etc. with end tenants that are effective as of theend of November 2017 (limited to the rental spaces, and not including the areas of warehouses, halls and parking lots, etc. However, it includes the area of the common
area and parking lot area etc., if such area is leased). “Overview of Leasing (Total Tenants)” does not include the number of the end tenants that leases warehouses, halls,
and parking lots, etc. only in the calculation. “Overview of Leasing (Total Annual Rent)” and “Overview of Leasing (Security Deposit/Guarantee, Etc.)” indicate the total
amount of the monthly rent, monthly common area charge, parking lot usage fee, warehouse rent and facility usage fee, etc. stated in the lease agreements executed withend tenants that are effective as of the end of November 2017, multiplied by 12, and the balance of security deposits and guarantees (including those for the rental spaces,
parking lots and warehouse lots, etc.), with amounts less than thousand yen rounded down, respectively.
3.
“Ratio of Unrealized Gain” indicates a ratio of the difference between the appraisal value of the Assets to be Acquired and the Planned Acquisition Price to the Planned
Acquisition Price.
4.
“Average NOI Yield” indicates the weighted average of NOI Yield of each of the Assets to be Acquired based on the Planned Acquisition Prices.
5.
“Average NOI Yield after Depreciation” indicates the weighted average of NOI Yield after Depreciation of each of the Assets to be Acquired based on the Planned
Acquisition Prices.
6.
The Asset Size is based on the (Planned) Acquisition Prices, and includes silent partnership interests. The statement “additional acquisition of 1 property” in the above
chart means that there was an additional acquisition of quasi co-ownership interest of a property, of which some quasi co-ownership interest had already been held by
MCUBS MidCity (and thus this property is not newly counted in the aggregate number of properties in the portfolio after the acquisition in the above chart).

Note: This press release provides information regarding MCUBS MidCity’s acquisition and leasing of trust beneficiary interests in domestic real estates and is not prepared as
an inducement or invitation for investment. All readers are advised to consult their own investment advisors before investing in MCUBS MidCity. Investors are advised to read
Prospectus Concerning the Issue and Sale of New Investment Units and its corrections (if prepared) before making investment decisions, which are investors’ sole discretion
and responsibility and are made at their own risk. MCUBS MidCity and its affiliates disclaim any responsibility or liability for the consequence of investment in MCUBSMidCity.

3

3.

Details of Assets to be Acquired[USC Bldg.]
Type of Specified Asset

Location (Indicated for
Residence)Land(Note 1)

ZoningCommercial zone, category II
Residential zone

Total Floor Area
(Note 2)Type ofOwnership
UseCompletion Date
Property Management
Consignee
Building Management
Consignee
TrusteeSpecial Notations

Planned Acquisition Date

4-11-38, Toyo, Koto-ku, Tokyo
4,565.21 ㎡

Structure/ Floors

Planned Acquisition PriceAppraisal Value

Site Area (Note 2)

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

Building

Quasi co-ownership interest of trust
beneficiary interest in real estate

Date ofPreparation ofReportOverview of
Building
Condition
Evaluation

500%/100%, 300%/70%
Main Building: S/SRC with flat roof,
B1/8F
Annex: RC with galvanized steel
sheet roof, single-storied
18,506.16 ㎡(including the annex building)(Note 2)February 16, 2018
¥6,070,000 thousand
The Tanizawa Sōgō
Appraisal Co., Ltd.

Appraiser

Fee simple¥5,800,000 thousand

Evaluation
Company

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

Short-term
Repair Cost

¥0Long-term
Repair Cost

¥367,888 thousand

PML

Fee simple

4.8%
12,489.08 ㎡

Rentable Area

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

Overview ofLeasing

Rental Area

12,489.08 ㎡

Occupancy Rate

100.0% (Note 4)(Note 2)

Total Tenants

8 (Note 4)

Total Annual¥596,740 thousand
Rent
Mitsubishi UFJ Trust and Banking
Security Deposit¥354,819 thousand
Corporation/ Guarantee, Etc.
Non-functioning emergency electric light was found as a result of the regular inspection of building
equipment. The finding will be repaired without delay.
Sun Frontier Fudousan Co., Ltd.

Notes:
1.
The ratio of quasi co-ownership interest to be acquired by MCUBS MidCity: 58/108 (approx. 54%). MCUBS MidCity will hold 100% ownership of the trust beneficiaryinterest in this property, combined with its quasi co-ownership interest (quasi co-ownership ratio: 50/108, approx. 46%) which has been acquired prior to this additional
acquisition.
2.
“Site Area,” “Total Floor Area,” “Overview of Building Condition Evaluation” and “Overview of Leasing” indicate the figures for the entire land and building of theproperty.
3.
While the original building-to-land ratio applicable to land located within an area that is zoned for commercial use is 80%, the ratio of 100% is applied to the land of thisproperty because the building of the property is a fire-resistant building located within a fire protection district. In addition, while the original building-to-land ratio
applicable to land located within category II residential zones is 60%, the ratio of 70% is applied to the land of this property because the building of the property is afire-resistant building located within a fire protection district.
4.
The information as of November 30, 2017 is stated in the table. The occupancy rate and total tenants as of March 1, 2018, after the Acquisition, will be 83.3% and 7,
respectively, as a result of the scheduled tenant exit according to the cancellation notice that has been received and the scheduled new tenant occupation according to theapplication form that has also been received.

In the decision-making process to acquire this property, the following aspects were appreciated.
(Regional Characteristics)
The Toyocho area, where this property is located, is accessible by the Tokyo Metro Tozai Line,
which provides good access to the Marunouchi / Otemachi area and Yaesu / Nihombashi area. The
Toyocho office area cater to the demands of financial institutions and IT companies for use as backoffices and to the needs for branches and offices covering the eastern part of Tokyo 23 wards, owing to
its cheaper rent than that in central Tokyo.

Note: This press release provides information regarding MCUBS MidCity’s acquisition and leasing of trust beneficiary interests in domestic real estates and is not prepared as
an inducement or invitation for investment. All readers are advised to consult their own investment advisors before investing in MCUBS MidCity. Investors are advised to read
Prospectus Concerning the Issue and Sale of New Investment Units and its corrections (if prepared) before making investment decisions, which are investors’ sole discretion
and responsibility and are made at their own risk. MCUBS MidCity and its affiliates disclaim any responsibility or liability for the consequence of investment in MCUBSMidCity.

4

(Property Characteristics)
This property, which is about seven minutes' walk from Toyocho Station on the Tokyo Metro Tozailine, is an office building located along the Yotsume-Dori which can be found easily. This property canbe differentiated in terms of its size from other buildings in this area, many of which are mid- andsmall-sized buildings with a floor area of less than 3,000 tsubo, with the total floor area ofapproximately 5,600 tsubo and the standard floor area of approximately 600 tsubo. The property is alsocharacterized by the high-grade specifications at the entrance hall and common use spaces. This is anenvironmentally-friendly building equipped with facilities useful in BCP (Business Continuity
Planning), such as a rooftop biotope, solar power generation system and emergency generators fortenants. Potential tenants that attach importance to the convenience of vehicle use may also be
attracted to this property since it secures 107 parking lots.
＜Backgrounds Leading to Acquisition＞

MCUBS MidCity acquired approximately 46% of quasi co-ownership interest of trust beneficiaryinterest in USC Bldg. in association with the 2nd public offering in February 2017, and a preferential
negotiation right over acquisition of the remaining approximately 54% of quasi co-ownership interest,
as a pipeline property to be acquired, was granted by the seller. MCUBS MidCity will exercise thepreferential negotiation right and gain ownership of the entire USC Bldg. by acquiring the remaining
approximately 54% of quasi co-ownership interest through a negotiation transaction.

Note: This press release provides information regarding MCUBS MidCity’s acquisition and leasing of trust beneficiary interests in domestic real estates and is not prepared as
an inducement or invitation for investment. All readers are advised to consult their own investment advisors before investing in MCUBS MidCity. Investors are advised to read
Prospectus Concerning the Issue and Sale of New Investment Units and its corrections (if prepared) before making investment decisions, which are investors’ sole discretion
and responsibility and are made at their own risk. MCUBS MidCity and its affiliates disclaim any responsibility or liability for the consequence of investment in MCUBSMidCity.

5

[Yoshiyasu Kanda Bldg.]
Type of Specified Asset

Trust beneficiary interest in real estate

Location (Indicated for
Residence)

2-1-15, Iwamotocho, Chiyoda-ku, Tokyo

Site Area

Land

Building¥4,000,000 thousand
February 16, 2018

Appraisal Value

Commercial zone

Structure/ Floors

S/SRC with steel flat roof, 9F

Total Floor Area

4,554.00 ㎡

Date of Preparationof Report
Evaluation
Overview of Company
Building
Short-term
Condition
Repair Cost
Evaluation

Fee simple
600% / 100%

Use

Office, parking lot

Rental Area

Completion Date

May 9, 1989
Partial demolition of building: August
11, 2008

Special Notations

Sompo Risk
Management & HealthCare Inc.
¥0¥124,670 thousand

PML
Rentable Area

Trustee

September 2017

Long-term
Repair Cost

Fee simple

Property Management
Consignee
Building Management
Consignee¥4,260,000 thousand
Daiwa Real EstateAppraisal Co., Ltd.

Appraiser

715.69 ㎡

ZoningType ofOwnership
Floor-Area Ratio/
Building-to-Land
Ratio(Note)

Type ofOwnership

Planned Acquisition Price
Planned Acquisition Date

Jones Lang LaSalle K.K.

Overview ofLeasing

Jones Lang LaSalle K.K.

8.7%
3,149.30 ㎡
3,149.30 ㎡

Occupancy Rate

100.0%

Total Tenants
Total Annual Rent

6¥203,375 thousand

Mitsubishi UFJ Trust and Banking
Security Deposit¥119,908 thousand
Corporation/ Guarantee, Etc.
Non-functioning emergency electric light was found as a result of the regular inspection of building
equipment. MCUBS MidCity agreed with the seller that such defect should be corrected at the
responsibility and expense of the seller.

Note:
While the original building-to-land ratio applicable to land located within an area that is zoned for commercial use is 80%, the ratio of 100% is applied to the land of thisproperty because the building of the property is a fire-resistant building located within a fire protection district.

In the decision-making process to acquire this property, the following aspects were appreciated.
(Regional Characteristics)
The Iwamotocho / Higashi-Kanda / Sotokanda area, in which this property is located, is accessibleby the Tokyo Metro Ginza Line, which boasts convenience as a business line and provides superior
access to central Tokyo. The vacancy rate of office buildings located in the Iwamotocho /Higashi-Kanda / Sotokanda area has been on the decline since 2014 and is at 1.8% in 1Q 2017, which islower than the rate of Tokyo 23 wards overall.
(Property Characteristics)
This property, located in a convenient area of Chiyoda-ku, Tokyo, where relatively older
mid-to-high-rise retail stores and office buildings line side-by-side, is accessible from four stations ofseven railway and subway lines, such as a seven minutes’ walk from Kanda Station on the JR/Tokyo
Metro Ginza Line, a four minutes’ walk from Kodemmacho Station on the Tokyo Metro Hibiya Line, afive minutes’ walk from Iwamotocho Station on the Toei Subway Shinjuku Line, and a six minutes’ walkfrom Shin-Nihombashi Station on the JR Line. This property also offers car users good access, as it islocated near the Showa-Dori. The building with the standard floor area of nearly 140 tsubo achieves
higher usage efficiency of pillar-free spaces and enables flexible office layout. Some renovation works
were already implemented including the repair work of the rooftop and parking lots in 2008 andrenewal of the entrance and other common use spaces in 2012.
Note: This press release provides information regarding MCUBS MidCity’s acquisition and leasing of trust beneficiary interests in domestic real estates and is not prepared as
an inducement or invitation for investment. All readers are advised to consult their own investment advisors before investing in MCUBS MidCity. Investors are advised to read
Prospectus Concerning the Issue and Sale of New Investment Units and its corrections (if prepared) before making investment decisions, which are investors’ sole discretion
and responsibility and are made at their own risk. MCUBS MidCity and its affiliates disclaim any responsibility or liability for the consequence of investment in MCUBSMidCity.

6

Note: This press release provides information regarding MCUBS MidCity’s acquisition and leasing of trust beneficiary interests in domestic real estates and is not prepared as
an inducement or invitation for investment. All readers are advised to consult their own investment advisors before investing in MCUBS MidCity. Investors are advised to read
Prospectus Concerning the Issue and Sale of New Investment Units and its corrections (if prepared) before making investment decisions, which are investors’ sole discretion
and responsibility and are made at their own risk. MCUBS MidCity and its affiliates disclaim any responsibility or liability for the consequence of investment in MCUBSMidCity.

7

[SSP Bldg.]
Type of Specified Asset

Trust beneficiary interest in real estate

Location (Indicated for
Residence)

2-12-4, Nihombashi Hamacho,
Chuo-ku, Tokyo

Site Area

Land

Building

1,135.18 ㎡

ZoningType ofOwnership
Floor-Area Ratio/
Building-to-Land
Ratio

Commercial zone

Structure/ Floors

S with flat roof, 10F

Total Floor Area

8,123.17 ㎡

Type ofOwnership

Planned Acquisition Price¥9,200,000 thousand

Planned Acquisition Date

March 1, 2018

Appraisal Value¥10,200,000 thousand

Appraiser

Daiwa Real EstateAppraisal Co., Ltd.
Date of Preparationof Report

Evaluation
Overview of Company
Building
Short-term
Condition
RepairCost
Evaluation

Fee simple
700% / 80%

Long-term
Repair Cost

Sompo Risk
Management & HealthCare Inc.
¥10 thousand¥201,330 thousand

PML

Fee simple

Rentable Area

Use

Office, shop

Rental Area

Completion Date

January 29, 2008

Property Management
Consignee
Building Management
Consignee

April 2017

5.1%
6,123.81 ㎡

6,123.81 ㎡

Occupancy Rate
Overview ofLeasing
Total Tenants

XYMAX ALPHA Corporation

100.0%1XYMAX ALPHA Corporation

Total Annual Rent

¥532,281 thousand

Trustee

Sumitomo Mitsui Trust Bank, Limited

Security Deposit/ Guarantee, Etc.

¥444,566 thousand

Special Notations

N/A

In the decision-making process to acquire this property, the following aspects were appreciated.
(Regional Characteristics)
The Ningyocho / Kakigaracho area, in which this property is located, is a relatively later developed
office market in Tokyo built around major arterial roads such as the Kiyosubashi Dori, and creates
demand among companies that want to have an office in Chuo-ku but to avoid heavy burdens ofexpensive rent. The vacancy rate of office buildings located in the Ningyocho / Kakigaracho area hasremained lower than that of Tokyo 23 wards overall since 2015 and is at 1.0% in 1Q 2017, as there has
been no supply of office buildings since 2013 (as at the end of 1Q 2017).
(Property Characteristics)
This property is located within walking distance of stations of several railway and subway lines,
such as a three minutes’ walk from Hamacho Station on the Toei Subway Shinjuku Line, a five minutes’
walk from Ningyocho Station on the Tokyo Metro Hibiya Line and Toei Subway Asakusa Line and aseven minutes’ walk from Bakurocho Station on the JR Line. It is located near Tokyo City Air Terminaland easily accessible to airports. This office building, which is highly visible and well-lit, isconveniently situated for office workers at the corner of the Kiyosubashi-Dori and Kinza-Dori, andsurrounded by a number of restaurants and convenience stores. The property can be differentiatedfrom other buildings in this area, many of which are small- and mid-sized buildings completed in the
1980s and 1990s, with its total floor area of approximately 2,600 tsubo and standard floor area ofapproximately 200 tsubo, in terms of its size and younger age of nine years. Its specifications lend thisproperty a high-grade feel, as represented by the exterior covered with glass curtain walls and atextured and well-lit entrance hall with a sophisticatedly-designed façade. Leasable spaces are

Note: This press release provides information regarding MCUBS MidCity’s acquisition and leasing of trust beneficiary interests in domestic real estates and is not prepared as
an inducement or invitation for investment. All readers are advised to consult their own investment advisors before investing in MCUBS MidCity. Investors are advised to read
Prospectus Concerning the Issue and Sale of New Investment Units and its corrections (if prepared) before making investment decisions, which are investors’ sole discretion
and responsibility and are made at their own risk. MCUBS MidCity and its affiliates disclaim any responsibility or liability for the consequence of investment in MCUBSMidCity.

8

rectangle-shaped and free of pillars, which enhances versatility and usage efficiency, and also enables
flexible layout. All these specifications boost the property’s competitiveness in this area.
＜Efforts Leading to Acquisition＞①

CRE proposal to the seller

Through the sponsor network, MCUBS MidCity made a CRE proposal to the seller.

②

Built a leasing structure to control risks



Built a structure of rent-guaranteed master lease (ML) considering risks associated with exit oftenants, following the notice of cancellation received from the current tenant.



XYMAX Corporation, a ML contract counterparty, started end-tenant leasing and entered into afixed long-term leasing agreement with Toyota Mobility Service Co. Ltd. (currently known as
Toyota Tokyo Rental & Leasing Co., Ltd.)③



Secured stability in profitability
Upon the acquisition of the property by MCUBS MidCity, tenant-related risks will be eliminatedand stability in profitability will be ensured based on the rent-guaranteed ML agreement withXYMAX Corporation.

A new tenant is scheduled to move in as an end tenant, without downtime.

④

Upside potential after the termination of ML agreement

Upside in profitability is expected after the termination of the two-year ML agreement, byswitching to a direct contract with the end tenant.

Note: This press release provides information regarding MCUBS MidCity’s acquisition and leasing of trust beneficiary interests in domestic real estates and is not prepared as
an inducement or invitation for investment. All readers are advised to consult their own investment advisors before investing in MCUBS MidCity. Investors are advised to read
Prospectus Concerning the Issue and Sale of New Investment Units and its corrections (if prepared) before making investment decisions, which are investors’ sole discretion
and responsibility and are made at their own risk. MCUBS MidCity and its affiliates disclaim any responsibility or liability for the consequence of investment in MCUBSMidCity.

9Note: This press release provides information regarding MCUBS MidCity’s acquisition and leasing of trust beneficiary interests in domestic real estates and is not prepared as
an inducement or invitation for investment. All readers are advised to consult their own investment advisors before investing in MCUBS MidCity. Investors are advised to read
Prospectus Concerning the Issue and Sale of New Investment Units and its corrections (if prepared) before making investment decisions, which are investors’ sole discretion
and responsibility and are made at their own risk. MCUBS MidCity and its affiliates disclaim any responsibility or liability for the consequence of investment in MCUBSMidCity.

10

[M-City Akasaka 1-chome Bldg.]
Type of Specified Asset

Trust beneficiary interest in real estate

Location (Indicated for
Residence)

1-11-28, Akasaka, Minato-ku, Tokyo

Site Area

Land

Building

510.22 ㎡

ZoningType ofOwnership
Floor-Area Ratio/
Building-to-Land
Ratio(Note 1)

Commercial zone

Structure/ Floors

SRC with flat roof, 10F

Total Floor Area

3,308.20 ㎡

Type ofOwnership

Planned Acquisition Price
Planned Acquisition Date

¥4,205,000 thousand
March 1, 2018

Appraisal Value¥4,280,000 thousand
Japan Real Estate
Institute

Appraiser
Date of Preparationof Report
Evaluation
Overview of Company
Building
Short-term
Condition
Repair Cost
Evaluation

Fee simple
700% / 100%

Long-term
Repair Cost

August 2017
Tokio Marine &Nichido Risk
Consulting Co., Ltd.
¥0¥111,457 thousand

PML

Fee simple

Rentable Area

Use

OfficeRental Area

Completion Date

March 1, 1985

Property Management
Consignee
Building Management
Consignee

Kanden Property Management Co.,Ltd.
Kanden Property Management Co.,Ltd.

TrusteeMizuho Trust & Banking Co., Ltd.

Special Notations

N/A

8.4%
2,636.62 ㎡

2,636.62 ㎡
100.0% (Note 2)

Overview of Occupancy Rate
Leasing
Total Tenants

12 (Note 2)

Total Annual Rent

¥173,348 thousand

Security Deposit/ Guarantee, Etc.

¥145,282 thousand

Notes:
1.
While the original building-to-land ratio applicable to land located within an area that is zoned for commercial use is 80%, the ratio of 100% is applied to the land of thisproperty because the building of the property is a fire-resistant building located within a fire protection district.
2.
The information as of November 30, 2017 is stated in the table. The occupancy rate and total tenants as of May 1, 2018, after the acquisition, will be 90.2% and 11,
respectively, as a result of the scheduled tenant exit according to the cancellation notice that has been received.

In the decision-making process to acquire this property, the following aspects were appreciated.
(Regional Characteristics)
The Akasaka area, where this property is located, has a number of bases of heavy industry
businesses, thanks to its proximity to the bureaucratic district and long history as a business district.
This property is accessible from stations on several subway lines, including the Tokyo Metro GinzaLine and Marunouchi Line, the useful business lines offering convenience. This area is expected toenhance its appealing power as an office district, as more offices concentrate in this area after thecompletion of the large-scale redevelopment projects in the neighborhood of this property.
(Property Characteristics)
This property is a one-minute walk from the convenient Tameike-Sanno Station on the Tokyo Metro
Ginza Line and Namboku Line, which offers good traffic accessibility. Its location at a corner along the
Roppongi-Dori gives high visibility. This property is located in an area suitable for offices, as many
office buildings including large-scale ones are concentrated around there.

Note: This press release provides information regarding MCUBS MidCity’s acquisition and leasing of trust beneficiary interests in domestic real estates and is not prepared as
an inducement or invitation for investment. All readers are advised to consult their own investment advisors before investing in MCUBS MidCity. Investors are advised to read
Prospectus Concerning the Issue and Sale of New Investment Units and its corrections (if prepared) before making investment decisions, which are investors’ sole discretion
and responsibility and are made at their own risk. MCUBS MidCity and its affiliates disclaim any responsibility or liability for the consequence of investment in MCUBSMidCity.

11

Note: This press release provides information regarding MCUBS MidCity’s acquisition and leasing of trust beneficiary interests in domestic real estates and is not prepared as
an inducement or invitation for investment. All readers are advised to consult their own investment advisors before investing in MCUBS MidCity. Investors are advised to read
Prospectus Concerning the Issue and Sale of New Investment Units and its corrections (if prepared) before making investment decisions, which are investors’ sole discretion
and responsibility and are made at their own risk. MCUBS MidCity and its affiliates disclaim any responsibility or liability for the consequence of investment in MCUBSMidCity.

12

4.

Overview of the Sellers[USC Bldg.] and [Yoshiyasu Kanda Bldg.]
While each of the sellers is a domestic non-financial corporation, its name and other details are notdisclosed because the seller’s approval has not been obtained. Neither of the sellers has any special
interest in MCUBS MidCity or the Asset Management Company.
[SSP Bldg.]
Name

YB Hamacho Kaihatsu Tokutei Mokuteki Kaisha

Location

Tokyo Kyodo Accounting Office, 3-1-1, Marunouchi, Chiyoda-ku, Tokyo

Name and Title of Representative

CapitalTakeshi Morita, Director
1.
Transfer, management and disposal of specified assets in accordance with asset
liquidation plans based on the Act on Securitization of Assets; and2.
Other businesses incidental to the aforementioned business related to securitization ofassets.
¥100,000 (amount of specified capital), ¥2.8 billion (amount of preferred capital)

Date of Establishment

April 14, 2006

Business

Net Assets
Total Assets
Not disclosed because the seller's approval has not been obtained.
Major unit holders and unit
holding ratio
Relationship with MCUBS MidCity or the Asset Management Company
There are no ties to be stated between the seller and MCUBS MidCity or the AssetManagement Company. There are no ties to be specified between the related parties/related
Capital Ties, Personal Ties
companies of MCUBS MidCity or the Asset Management Company and the related
and Business Ties
parties/related companies of the seller.
Status of Classification as
Related Party

The seller does not fall under the category of a related party of MCUBS MidCity or the AssetManagement Company. The related parties/related companies of the seller do not fall under
the category of a related party of MCUBS MidCity or the Asset Management Company.

[M-City Akasaka 1-chome Bldg.]
Name

Godo Kaisha Mac

Location

Capital2-7-1, Nihombashi, Chuo-ku, Tokyo
General Incorporated Association Mac, Executive member and Representative
Keisuke Moriyasu, Executor
1.
Acquisition, holding and disposal of, and management of trust beneficiary rights;
2.
Sale and purchase, holding, management and leasing of real estate properties; and3.
Other businesses incidental to each of the above items.
¥100,000

Date of Establishment

June 23, 2017

Name and Title of Representative
Business

Net Assets
Total Assets
Not disclosed because the seller's approval has not been obtained.
Major unit holders and unit
holding ratio
Relationship with MCUBS MidCity or the Asset Management Company
There are no ties to be stated between the seller and MCUBS MidCity or the Asset
Capital Ties, Personal Ties
Management Company. There are no ties to be specified between the related parties/related
and Business Ties
companies of MCUBS MidCity or the Asset Management Company and the relatedparties/related companies of the seller.
The seller does not fall under the category of a related party of MCUBS MidCity or the AssetManagement Company. The related parties/related companies of the seller do not fall under
the category of a related party of MCUBS MidCity or the Asset Management Company.
Status of Classification as
The seller entrusts the asset management business to MCUBS Japan Advisors Inc., a
Related Party
wholly-owned subsidiary of Mitsubishi Corp.-UBS Realty Inc., which is a parent company of
the Asset Management Company, and thus falls under the category of interested parties as
specified in the Asset Management Company’s rules on transactions with interest parties.

Note:
Acquisition of this property falls under the category of transactions with interested parties as specified in the the Asset Management Company’s rules on transactions withinterest parties. Acquisition of this property has been approved by the Compliance Committee, and went through deliberation and determination by the Investment Committee
and the Board of Directors, pursuant to the internal rules of the Asset Management Company.
Note: This press release provides information regarding MCUBS MidCity’s acquisition and leasing of trust beneficiary interests in domestic real estates and is not prepared as
an inducement or invitation for investment. All readers are advised to consult their own investment advisors before investing in MCUBS MidCity. Investors are advised to read
Prospectus Concerning the Issue and Sale of New Investment Units and its corrections (if prepared) before making investment decisions, which are investors’ sole discretion
and responsibility and are made at their own risk. MCUBS MidCity and its affiliates disclaim any responsibility or liability for the consequence of investment in MCUBSMidCity.

13

5.

Status of the Property Owners
The status of owner of M-City Akasaka 1-chome Bldg. is detailed as follows:
Status of Property
Owners, etc.
Name
Relationship with
Parties having
Special Interest

Background andReason for
Acquisition
Acquisition Price
Acquisition Date

6.

Current Owner / Trust Beneficiary

Previous Owner / Trust Beneficiary

Godo Kaisha Mac

Entity which does not have any special
interest

Current owner/trust beneficiary entrusts
the asset management business to MCUBSJapan Advisors Inc., a wholly-owned
subsidiary of Mitsubishi Corp.-UBS Realty
Inc., which is a parent company of theAsset Management Company (holding a
65% stake)－

For the purpose of investment－－－¥4,160 million
August 30, 2017

Overview of Brokerage
The following property is acquired thorough a broker:[SSP Bldg.](1)

Status of Broker

Name

XYMAX Corporation

Location

1-1-1 Akasaka, Minato-ku, Tokyo

Name and Title of Representative

Representative Director, Kenji Yoshimoto

Business

Operating holding company, and sale and brokerage of real estate

Capital¥2,612 million (As of March 31, 2017)

Date of Establishment

March, 1990

Relationship with MCUBS MidCity or the Asset Management Company
There are no ties to be stated between the broker and MCUBS MidCity or the Asset
Capital Ties, Personal Ties
Management Company. There are no ties to be specified between the related parties/related
and Business Ties
companies of MCUBS MidCity or the Asset Management Company and the relatedparties/related companies of the broker.
The broker does not fall under the category of a related party of MCUBS MidCity or the AssetManagement Company. The related parties/related companies of the broker do not fall under
Status of Classification as
the category of a related party of MCUBS MidCity or the Asset Management Company.
Related Party
A master lease agreement will be executed with the broker on the date of acquisition of thisproperty, and PM and building management operations will be consigned to XYMAX ALPHA
Corporation, a subsidiary of the broker.

(2)

Amount and Details of Commission
The information is not disclosed because disclosure of such information has not been approved by

the broker. The amount of commission does not exceed the upper limit (acquisition price × 3% +¥60,000, excluding consumption tax and local consumption tax) stipulated by the Building Lots andBuildings Transaction Business Act.
7.

Settlement Method, etc.
MCUBS MidCity will cover the cost for the Acquisition by the funds raised through issuance of new
investment units and new borrowings, and by cash reserves. As for the issuance of new investment
units, please refer to “Notice Concerning Issuance of New Investment Units and Secondary Offering ofInvestment Units” announced today. As for the new borrowings, please refer to “Notice Concerning

Note: This press release provides information regarding MCUBS MidCity’s acquisition and leasing of trust beneficiary interests in domestic real estates and is not prepared as
an inducement or invitation for investment. All readers are advised to consult their own investment advisors before investing in MCUBS MidCity. Investors are advised to read
Prospectus Concerning the Issue and Sale of New Investment Units and its corrections (if prepared) before making investment decisions, which are investors’ sole discretion
and responsibility and are made at their own risk. MCUBS MidCity and its affiliates disclaim any responsibility or liability for the consequence of investment in MCUBSMidCity.

14

Debt Financing” announced today. With regard to the settlement method, MCUBS MidCity plans tosettle the Acquisition by making a single payment of the entire amount of the acquisition price upondelivery of each property. Both the Sale and Purchase Agreement (SSP Bldg.), the status of a purchaserof which is to be transferred to MCUBS MidCity, and the sale and purchase agreement of trust
beneficiary interests regarding M-City Akasaka 1-chome Bldg. (hereafter the “Sale and Purchase
Agreement (M-City Akasaka 1-chome Bldg.)”) fall under the “Forward Commitment, etc. by an
Investment Corporation” (Note) stipulated in the “Comprehensive Guidelines for Supervision of Financial
Instruments Business Operators, etc.” issued by the Financial Services Agency.

Note:“Forward Commitment, etc. by an Investment Corporation” is defined as “a postdated sales and purchase agreement which provides for the settlement and delivery to takeplace one month or more after the execution date thereof or any similar agreements.”

8.

Financial impact on MCUBS MidCity when the forward commitment, etc. cannot be fulfilled
With regard to SSP Bldg. and M-City Akasaka 1-chome Bldg., each of the trust beneficiary interest
transfer agreements for these properties provides that, if such agreement is cancelled for the reason of
the purchaser’s violation to agreements specified therein, the seller may demand 10% or 20%,
respectively, of the sale price as penalty fees from the purchaser. However, under the Status Transfer
Agreement, the status transfer shall be subject to MCUBS MidCity’s completion of procurement of thefunds necessary to pay the sale price provided in the Sale and Purchase Agreement (SSP Bldg.)(whether by way of borrowing, capital increase or otherwise). With regard to the Sale and Purchase
Agreement (M-City Akasaka 1-chome Bldg.), closing of the sale and purchase shall be subject to MCUBSMidCity’s completion of procurement of the funds necessary to pay the sale price provided in the Saleand Purchase Agreement (M-City Akasaka 1-chome Bldg.) (whether by way of capital increase orotherwise).

9.

Schedule for Acquisition
Property Name
USC Bldg.
Yoshiyasu Kanda Bldg.
SSP Bldg.
M-City Akasaka 1-chome Bldg.

Agreement Execution Date
January 29, 2018
January 29, 2018
January 29, 2018 (Note)
January 29, 2018

Planned Acquisition Date
February 16, 2018
February 16, 2018
March 1, 2018
March 1, 2018

Planned Payment Date
February 16, 2018
February 16, 2018
March 1, 2018
March 1, 2018

Note:
On January 29, 2018, MCUBS MidCity and the Status Transferor executed the Status Transfer Agreement with regard to SSP Bldg., under which MCUBS MidCity shall take over,as of February 28, 2018, the status of a purchaser under the Sale and Purchase Agreement (SSP Bldg.) that had been executed between the current owner and the Status
Transferor. The Agreement Execution Date for SSP Bldg. in the above table indicates the date of execution of the Status Transfer Agreement.

Note: This press release provides information regarding MCUBS MidCity’s acquisition and leasing of trust beneficiary interests in domestic real estates and is not prepared as
an inducement or invitation for investment. All readers are advised to consult their own investment advisors before investing in MCUBS MidCity. Investors are advised to read
Prospectus Concerning the Issue and Sale of New Investment Units and its corrections (if prepared) before making investment decisions, which are investors’ sole discretion
and responsibility and are made at their own risk. MCUBS MidCity and its affiliates disclaim any responsibility or liability for the consequence of investment in MCUBSMidCity.

15

10. Outlook
As for the outlook of the business results for the fiscal period ending June 2018 (the 24th fiscal
period: from January 1, 2018 to June 30, 2018) and the fiscal period ending December 2018 (25th fiscal
period: from July 1, 2018 to December 31, 2018) as a result of the Acquisition of the Assets to be
Acquired, please refer to “Notice Regarding Revision of Business Outlook and Distributions Forecast forthe 24th Period Ending June 30, 2018 and Notice Regarding Business Outlook and Distributions
Forecast for the 25th Period Ending December 31, 2018” separately announced today.

Note: This press release provides information regarding MCUBS MidCity’s acquisition and leasing of trust beneficiary interests in domestic real estates and is not prepared as
an inducement or invitation for investment. All readers are advised to consult their own investment advisors before investing in MCUBS MidCity. Investors are advised to read
Prospectus Concerning the Issue and Sale of New Investment Units and its corrections (if prepared) before making investment decisions, which are investors’ sole discretion
and responsibility and are made at their own risk. MCUBS MidCity and its affiliates disclaim any responsibility or liability for the consequence of investment in MCUBSMidCity.

16

11. Overview of Appraisal Report of the Properties to be Acquired[USC Bldg.]
Appraiser
Final Appraisal Value (Note)
Appraisal Date

Item
Revenue price
Value Calculated Using Direct
Capitalization (DC) Method
Operating revenues
Potential gross revenue
Vacancy loss, etc.
Operating expenses
Maintenance expenses
Utility expenses
Repair expenses
PM fees
Tenant solicitation
expenses, etc.
Real estate taxes
Insurance premiums
Other expenses
Net operating income (NOI)
Gain on management of income
from lump-sum payment
Capital expenditures
Net Cash Flows
Overall Capitalization Rate
Value Calculated Using Discount Cash
Flow (DCF) Method
Discount Rate
Terminal Capitalization Rate
Cost method value
Ratio of Land Price
Ratio of Building Price
Other items considered by real estateappraisal agent upon appraisal

The Tanizawa Sōgō Appraisal Co., Ltd.
¥6,070,000 thousand
December 1, 2017
Details(thousand yen)
11,300,000

Overview, etc.

11,600,000
675,352
709,552
34,199180,807
Assessed based on the building management operations
39,865 outsourcing contract and considering actual results of revenue
and expenditure, etc.
Assessed considering actual results of revenue and61,446
expenditure, etc.
Assessed by allocating the figure based on the engineering
10,040 report and similar cases to repair expenses and capital
expenditures
Assessed based on the PM operations outsourcing contract
9,404
and memorandum, etc.
Assessed based on the contents of agreements and past
5,806
records
Amount of taxes for FY2018 is assessed based on a list of
52,916 amounts of payment of property taxes and city planning taxes
for FY2017
653 Based on materials stating premiums
Assessed considering actual results of revenue and675
expenditure, etc.
494,545
4,139
Assessed by allocating the figure based on the engineering
22,590 report and similar cases to repair expenses and capital
expenditures
476,094
4.1%
11,200,000
4.2%
4.3%
10,300,000
80.0%
20.0%
Not applicable.

Note:
These numbers are calculated for the entire property by ratio of quasi co-ownership ratio (approx. 54%) to be acquired by MCUBS MidCity.

Note: This press release provides information regarding MCUBS MidCity’s acquisition and leasing of trust beneficiary interests in domestic real estates and is not prepared as
an inducement or invitation for investment. All readers are advised to consult their own investment advisors before investing in MCUBS MidCity. Investors are advised to read
Prospectus Concerning the Issue and Sale of New Investment Units and its corrections (if prepared) before making investment decisions, which are investors’ sole discretion
and responsibility and are made at their own risk. MCUBS MidCity and its affiliates disclaim any responsibility or liability for the consequence of investment in MCUBSMidCity.

17

[Yoshiyasu Kanda Bldg.]
Appraiser
Final Appraisal Value
Appraisal Date

Item
Revenue price
Value Calculated Using Direct
Capitalization (DC) Method
Operating revenues

Potential gross revenue

Vacancy loss, etc.
Operating expenses
Maintenance expenses
Utility expenses
Repair expenses
PM fees
Tenant solicitation
expenses, etc.
Real estate taxes
Insurance premiums
Other expenses
Net operating income (NOI)
Gain on management of income
from lump-sum payment
Capital expenditures
Net Cash Flows
Overall Capitalization Rate
Value Calculated Using Discount Cash
Flow (DCF) Method
Discount Rate
Terminal Capitalization Rate
Cost method value
Ratio of Land Price
Ratio of Building Price
Other items considered by real estateappraisal agent upon appraisal

Daiwa Real Estate Appraisal Co., Ltd.
¥4,260,000 thousand
December 1, 2017
Details(thousand yen)
4,260,000 -Overview, etc.

4,360,000 221,809 Assessed by taking into account medium-termcompetitiveness of the property, based on the level of rents
231,224 under the current lease agreements, and the level and trend ofrents of similar properties in areas within the same supply anddemand zone under new lease agreements
Assessed by taking into account the competitiveness of the9,415 property, based on the actual vacancy rate of the property andtypical vacancy rate of similar property
54,936 Assessed with reference to actual results of past years and10,260current contract fees
Assessed based on the level of expenses of similar properties
15,560and actual results of past years
Assessed based on the average annual long-term repair
3,788
expenses described in the engineering report
4,286 Assessed with reference to PM fees of similar properties
Assessed with reference to tenant solicitation expenses, etc. of
2,069
similar properties
Assessed based on actual results, in consideration of the land
17,680
price trends and level of burdens
255 Assessed with reference to premiums of similar properties
1,037 Assessed with reference to actual results
166,872 Assessed based on comprehensive consideration from
1,264
perspectives of both management and procurement aspects
Assessed based on the verification considering the level of
6,912 similar properties, with reference to the engineering reportand in consideration of CM fees
161,224 3.7% 4,210,000 Assessed based on discount rates applied to transactions of
3.5% similar properties and the comparison with yields of otherfinancial instruments, etc.
Assessed based on capitalization rate, taking into account of
3.9%
unforeseeable uncertainties
3,440,000 92.0% 8.0% Not applicable.

Note: This press release provides information regarding MCUBS MidCity’s acquisition and leasing of trust beneficiary interests in domestic real estates and is not prepared as
an inducement or invitation for investment. All readers are advised to consult their own investment advisors before investing in MCUBS MidCity. Investors are advised to read
Prospectus Concerning the Issue and Sale of New Investment Units and its corrections (if prepared) before making investment decisions, which are investors’ sole discretion
and responsibility and are made at their own risk. MCUBS MidCity and its affiliates disclaim any responsibility or liability for the consequence of investment in MCUBSMidCity.

18

[SSP Bldg.]
Appraiser
Final Appraisal Value
Appraisal Date

Item
Revenue price
Value Calculated Using Direct
Capitalization (DC) Method
Operating revenues

Potential gross revenue

Vacancy loss, etc.
Operating expenses
Maintenance expenses
Utility expenses
Repair expenses
PM fees
Tenant solicitation
expenses, etc.
Real estate taxes
Insurance premiums
Other expenses
Net operating income (NOI)
Gain on management of income
from lump-sum payment
Capital expenditures
Net Cash Flows
Overall Capitalization Rate
Value Calculated Using Discount Cash
Flow (DCF) Method
Discount Rate
Terminal Capitalization Rate
Cost method value
Ratio of Land Price
Ratio of Building Price
Other items considered by real estateappraisal agent upon appraisal

Daiwa Real Estate Appraisal Co., Ltd.
¥10,200,000 thousand
December 1, 2017
Details(thousand yen)
10,200,000 -Overview, etc.

10,400,000 507,458 Assessed by taking into account medium-termcompetitiveness of the property, based on the level of rents
529,308 under the current lease agreements, and the level and trend ofrents of similar properties in areas within the same supply anddemand zone under new lease agreements
Assessed by taking into account the competitiveness of the
21,849 property, based on the actual vacancy rate of the property andtypical vacancy rate of similar property
104,262 Assessed with reference to actual results of past years and27,000current contract fees
Assessed based on the level of expenses of similar properties
21,117and actual results of past years
Assessed based on the average annual long-term repair
4,776
expenses described in the engineering report
9,765 Assessed with reference to PM fees of similar properties
Assessed with reference to tenant solicitation expenses, etc. of
4,968
similar properties
Assessed based on actual results, in consideration of the land
34,416
price trends and level of burdens
440 Assessed with reference to premiums of similar properties
1,778 Assessed with reference to actual results
403,196 Assessed based on comprehensive consideration from
3,234
perspectives of both management and procurement aspects
Assessed based on the verification considering the level of
12,336 similar properties, with reference to the engineering reportand in consideration of CM fees
394,094 3.8% 10,100,000 Assessed based on discount rates applied to transactions of
3.6% similar properties and the comparison with yields of otherfinancial instruments, etc.
Assessed based on capitalization rate, taking into account of
4.0%
unforeseeable uncertainties
8,300,000 81.1% 18.9% Not applicable.

Note: This press release provides information regarding MCUBS MidCity’s acquisition and leasing of trust beneficiary interests in domestic real estates and is not prepared as
an inducement or invitation for investment. All readers are advised to consult their own investment advisors before investing in MCUBS MidCity. Investors are advised to read
Prospectus Concerning the Issue and Sale of New Investment Units and its corrections (if prepared) before making investment decisions, which are investors’ sole discretion
and responsibility and are made at their own risk. MCUBS MidCity and its affiliates disclaim any responsibility or liability for the consequence of investment in MCUBSMidCity.

19

[M-City Akasaka 1-chome Bldg.]
Appraiser
Final Appraisal Value
Appraisal Date

Item
Revenue price
Value Calculated Using Direct
Capitalization (DC) Method
Operating revenues
Potential gross revenue
Vacancy loss, etc.
Operating expenses
Maintenance expenses
Utility expenses
Repair expenses
PM fees
Tenant solicitation
expenses, etc.
Real estate taxes
Insurance premiums
Other expenses
Net operating income (NOI)
Gain on management of income
from lump-sum payment
Capital expenditures
Net Cash Flows
Overall Capitalization Rate
Value Calculated Using Discount Cash
Flow (DCF) Method
Discount Rate

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

Japan Real Estate Institute¥4,280,000 thousand
December 1, 2017
Details(thousand yen)
4,280,000 -Overview, etc.

4,390,000 216,816 Estimated revenue that can be stably earned on a medium224,415
and long-term basis
Calculated on the premise that the level of occupancy rates
7,599
will be stable on a medium- and long-term basis
58,167 With reference to actual results of past years and maintenance
10,800expenses of similar properties
Calculated in consideration of actual results of past years and15,100occupancy rates
2,786 With reference to the ER and similar properties, etc.
2,758 With reference to fee ratios of similar properties, etc.
2,016 Assessed based on the estimated tenant turnaround period
Assessed based on standard tax amounts and measures for tax
23,731 burden adjustment described in the materials related to taxes
and public dues
Taking into consideration of premium rates of similar
136
buildings
840 158,649 Assessed by setting a targeted investment return that is
considered as appropriate, based on comprehensive
1,731
consideration on the level of interest rates from perspectivesof both management and procurement aspects
6,640 With reference to the ER and similar properties, etc.
153,740 Assessed in consideration of locational conditions, building
3.5% conditions, future uncertainties and transaction yields ofsimilar properties, etc.
4,170,000 Assessed comprehensively considering individuality of the
3.2% property, etc., with reference to investment returns of similar
properties, etc.
Assessed comprehensively considering cases of transactionsof similar properties, future trends of investment returns,
3.6%
risks related to the property, forecast of economic growth
rates and trends of real estate prices, etc.
4,250,000 95.4% 4.6% Not applicable.

Note: This press release provides information regarding MCUBS MidCity’s acquisition and leasing of trust beneficiary interests in domestic real estates and is not prepared as
an inducement or invitation for investment. All readers are advised to consult their own investment advisors before investing in MCUBS MidCity. Investors are advised to read
Prospectus Concerning the Issue and Sale of New Investment Units and its corrections (if prepared) before making investment decisions, which are investors’ sole discretion
and responsibility and are made at their own risk. MCUBS MidCity and its affiliates disclaim any responsibility or liability for the consequence of investment in MCUBSMidCity.

20

<Attachment>
Assumed NOI and depreciation of Assets to be Acquired
Assumed NOI (Note 1)¥251 million per year
¥166 million per year
¥432 million per year
¥146 million per year
¥996 million per year

Property name
USC Bldg. (Note 3)
Yoshiyasu Kanda Bldg.
SSP Bldg.
M-City Akasaka 1-chome Bldg.
Total

Depreciation (Note 2)¥33 million per year
¥9 million per year
¥76 million per year
¥6 million per year
¥125 million per year

Notes:
1.
Assumed NOI (Net Operating Income) is the estimated amount of property leasing revenue, less property leasing expenses, assuming the burden of property taxes andcity planning taxes for the full year based on the lease agreement terms and conditions, etc. on the planned acquisition date.
2.
MCUBS MidCity’s estimated figures for time of steady stable occupancy.
3.
These numbers are calculated for the entire property by ratio of quasi co-ownership ratio (approx. 54%) to be acquired by MCUBS MidCity.

The figures above are not the forecast figures for the current period or subsequent periods.
Property Portfolio after the Acquisition
Type

RegionAcquisition Price(Planned)(Note 1)(Millions of Yen)

Property Name

Acquisition Date
(Planned)

Investment
Ratio (Note 2)

Office Building

Tokyo
Metropolitan
Area

Sumitomo Fudosan Ueno Bldg. No. 6
G-Square Shibuya Dogenzaka
Shibuya Sakuragaoka Square
Yokohama Creation Square
Cube Kawasaki
Higashi-Nihombashi Green Bldg.
Sasazuka Center Bldg.

7,460
12,22017,1307,080
20,050
2,705
8,700
5,000
5,800
4,000
9,200
4,205
68,70024,6002,300
3,270
10,800
3,550
3,000
5,500

2.9%
4.7%
6.6%
2.7%
7.7%
1.0%
3.3%
1.9%
2.2%
1.5%
3.5%
1.6%
26.3%
9.4%
0.9%
1.3%
4.1%
1.4%
1.1%
2.1%

225,270

86.2%

AEON MALL Tsudanuma

26,10010.0%

August 31, 2006

Konami Sports Club Kyobashi

2,780

1.1%

August 31, 2006

Dormy Inn Hakata Gion
Subtotal (3 properties)

2,280
31,1600.9%
11.9%

September 30, 2013

4,919

1.9%

August 3, 2015

Subtotal (1 asset)

4,919

1.9%

Total (23 properties)

261,349

100.0%USC Bldg.

Osaka
Metropolitan
Area

Other

Yoshiyasu Kanda Bldg.
SSP Bldg.
M-City Akasaka 1-chome Bldg.
Twin 21 (Note 3)
Matsushita IMP Bldg.
MID REIT Kyobashi Bldg.
MID Imabashi Bldg.
Kitahama MID Bldg.
MID Nishihonmachi Bldg.
Higobashi MID Bldg.
Sendai Capital Tower
Subtotal (19 properties)

May 1, 2015
August 3, 2015
August 3, 2015, etc.
August 3, 2015
August 7, 2015
December 21, 2015
March 22, 2017
April 6, 2017
February 16, 2018
February 16, 2018
March 1, 2018
March 1, 2018
August 31, 2006
August 31, 2006
August 31, 2006
April 3, 2007
April 24, 2008
October 30, 2008
June 21, 2013
February 1, 2017

Other than Office Building
Tokyo
Metropolitan
Area
Osaka
Metropolitan
Area
Other

Silent Partnership Interest for Office Building
NagoyaMetropolitan
Area

Nagoya Lucent Tower(Silent partnership interest)

Notes:
1. (Planned) Acquisition Prices are rounded down to the nearest million yen.
2. Investment Ratios are rounded to the nearest first decimal place. Accordingly, the sum of the investment ratio figures may not add up to 100.0%.
3. Data for Twin 21 includes the trust beneficiary interest in Twin 21 and Twin 21 (partial ownership of land with leasehold interest), collectively.

Note: This press release provides information regarding MCUBS MidCity’s acquisition and leasing of trust beneficiary interests in domestic real estates and is not prepared as
an inducement or invitation for investment. All readers are advised to consult their own investment advisors before investing in MCUBS MidCity. Investors are advised to read
Prospectus Concerning the Issue and Sale of New Investment Units and its corrections (if prepared) before making investment decisions, which are investors’ sole discretion
and responsibility and are made at their own risk. MCUBS MidCity and its affiliates disclaim any responsibility or liability for the consequence of investment in MCUBSMidCity.

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