June 28, 2024

For Immediate Release
Real Estate Investment Trust Securities Issuer:
Advance Residence Investment Corporation(Securities Code：3269)
1-105 Kanda-Jinbocho, Chiyoda-ku, Tokyo
Representative: Wataru Higuchi, Executive Director
Asset Management Company:
ITOCHU REIT Management Co., Ltd.
Representative: Junichi Shoji, Representative Director,President & CEO
Inquiries:
Isao Kudo, Executive Officer(TEL. +81-3-6821-5483)
Notice Concerning Acquisition of Real Estate Trust Beneficiary Interest in Japan(RESIDIA Kunitachi)
ITOCHU REIT Management Co., Ltd. (IRM), the asset management company to which Advance
Residence Investment Corporation (ADR) entrusts the management of its assets, announced its decision today
to have ADR acquire an asset located in Japan (hereafter, the “Acquisition”) as detailed below as part of ADR`sgrowth strategy. In addition, the seller of the Acquisition falls under the category of an interested party, etc. asdefined in the Investment Trust and Investment Corporations Act (Act No.198 of 1951; as amended, the“Investment Trusts Act”), and also falls under the category of an interested party under the internal rules ofIRM, and therefore, IRM has obtained the prior consent of ADR based on the approval of its Board ofDirectors.
1. Summary of the Acquisition
Property Name
(Type of asset)
Acquisition Price (Note 1)(Price / Appraisal ratio)
Appraisal Value (Note 2)
NOI Yield (Note 3)
Yield after Depreciation (Note 4)
Building Age (Note 5)
SellerBroker Availability
Scheduled Contract Date
Scheduled Acquisition Date
Acquisition Financing(Payment Method)

RESIDIA Kunitachi(Beneficiary Interests in Trust)
1,260 million yen(93.3%)

1,350 million yen
4.3%
3.5%
6.8yearsITOCHU Corporation

None
June 28, 2024
December 4, 2024
ora date to be separately agreed upon with the seller
Borrowings and cash on hand
(Lump-sum payment on delivery)(Note 1)“Acquisition Price” refers to the purchase price written in the beneficiary transfer agreements for the asset-to-be-acquired and does not include various
expenses needed for the acquisition such as taxes and public dues.

(Note 2)

“Appraisal Value” of the asset-to-be-acquired is as of May 31, 2024.

(Note 3)“NOI Yield” is calculated as follows: annualized NOI written in the appraisal document at the time of the acquisition of the asset-to-be acquired and calculatedusing direct capitalization method / acquisition price x 100. The calculated yield is rounded at the second decimal point.

(Note 4)

“Yield after Deprecation” is calculated as follows: (annualized NOI written in the appraisal document at the time of the acquisition of the asset-to-be-acquiredand calculated using direct capitalization method – annual depreciation cost) / acquisition price x 100. The calculated yield is rounded at the second decimalpoint. As in the case with the existing portfolio of ADR, the depreciation cost of the assets-to-be-acquired is calculated by ADR, using the straight-line method
under certain assumptions and estimated at 10,119 thousand yen a year.

(Note 5)

“Building Age” is the age of the building as of the date of this document and is rounded at the second decimal point.

12. Reason for the Acquisition
IRM decided on the following acquisition pursuant to the target and policy of asset management as stipulated in
the Articles of Incorporation of ADR, for steady increase in asset size and diversification and enhancement of theportfolio. The decision to acquire this property was based on an evaluation of Features of the Property, etc., as statedin “3. Summary of the Asset-To-Be-Acquired”.
In the real estate trading market, the supply of new, high-quality rental housing in good locations is limited, andthe trading prices of properties in central metropolitan areas, where stable rental demand can be expected, continue toremain high, creating a difficult acquisition environment.
In this environment, ADR has decided to acquire the property developed by IRM's sponsors, ITOCHU Corporation.
The Building Age of the Asset-To-Be-Acquired is 6.8 years, which is much lower than the average Building Age ofthe entire portfolio of 17.0 years (Note6) as of the fiscal period ended January 31, 2024.
(Note 6)The Average Building Age for the entire portfolio is the weighted average Building Age of the properties in the portfolio, weighted
by Acquisition Price and rounded to the second decimal place.

3. Summary of the Asset-To-Be-Acquired
Property NameRESIDIA Kunitachi

Property NumberType of asset

Beneficiary Interests in Trust

Trustee

Sumitomo Mitsui Trust Bank, Limited (planned)

Trust Contract Period

From December 4, 2024 to December 31, 2034 (planned)

Address

1-7-10 Higashi, Kunitachi City, Tokyo

S-037

Type of Ownership

Ownership

ZoningCommercial district

Land Area

224.79 ㎡

FAR / Building Coverage
Ratio

600%/80%、500%/80%

Structure / Floors

Reinforced concrete structure with a flat-topped roof; 12 stories

Type of Ownership

Ownership

UseApartment, store

Total Floor Space

1,610.82 ㎡

Construction Completion
Date

September 26, 2017

Building Designer

GODA KOUMUTEN CO., Ltd. First-class Architect's Office

Structural Engineer

CROSS Factory Co., First-class Architect's Office,Construction
Contractor

GODA KOUMUTEN CO., Ltd. Tokyo Head Office

Building Certification
AgencyGood Eyes Building Inspection Organization, Inc.

Building Inspection
AgencyGood Eyes Building Inspection Organization, Inc.

Land

Building

Collateral

None

Appraisal value

1,350,000 thousand yen

Appraiser

Japan Real Estate Institute

Property Management Company

ITOCHU Urban Community Co., Ltd.(planned)

Master Lessee

ITOCHU Urban Community Co., Ltd.
(planned)

Lease Conditions

2Appraisal dateas of May 31, 2024

Master Lease typePass-throughTotal Tenants

1

Leasable Units

54

Leased Units

52

Leasable Floor Area

1,230.92 ㎡

Leased Area

1,188.48 ㎡

Total Monthly Rent

5,623 thousand yen

Deposits, Guarantees, etc.
Number of Units by Type
（Excluding Operated RentalResidence）

16,082 thousand yen

Number of Operated Rental
Residence

Point in Time

As of May 31, 2024

Occupancy Rate (basedon floor area)

96.6%

SingleCompact

Family

Large

Other

53000

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Features of the Property
・This property is conveniently located just a 2-minute walk from Kunitachi Station on the JR Chuo Line, and with access to Kichijoji
Station in 18 minutes and Shinjuku Station in 33 minutes, it is expected to be popular not only with nearby university students andworking adults in the area, but also with single adults working in the city center.
・This property is located along a shopping street lined with a variety of shops, making it a convenient place to live.
Other Relevant Information
A portion of the land (approx. 27.8 ㎡) is located within the area of an urban planning road ((3, 4, 6 Kunitachi Station Higashi Line) with aplanned width of 16m), and the plan was decided on October 5, 1961, but it has not been designated as a priority development route
between fiscal years 2016 and 2025, and its commercialization is undecided. In the future, it is possible that the portion of the building
located on the expropriated land will need to be removed due to expropriation.
Summary of Building Conditions Investigation Report
Investigator

Tokio Marine dR Co., Ltd.

Emergency Repair Costs-Short-term Repair Costs(within 1 year)-Long-term Repair Costs(within 12 years)

28,117 thousand yen

Building Replacement Price

404,000 thousand yenInvestigation Report
Date

June 6, 2024

Investigation Report
Date

June 6, 2024

Summary of Earthquake Risk Analysis
Investigator

Tokio Marine dR Co., Ltd.

Probable Maximum Loss
Ratio（PML)

4.1%

Matters concerning Earthquake Resistance, etc.
This property has been notified of the structural calculation conformity assessment by the designated structural calculation inspection
institute in accordance (Tokyo Bldg-Tech Center Co.,Ltd) with the revision of the Building Standard Act that came into effect in June
2007.
Please refer to “Notes and definitions on items on the tables in the press releases for asset acquisition” on ADR`s website for details on items on the above table.
(https://www.adr-reit.com/en/ir/news/)

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4. Financial Impact on ADR in the Event of Failure to Fulfill Forward Commitment, etc.
Beneficiary Interests in Trust transfer agreements (hereafter, the “Agreement”) for the asset-to-be-acquired
constitutes a forward commitment, etc.(Note) by an investment corporation defined in the Comprehensive Guidelines forSupervision of Financial Instruments Business Operators, etc. published by the Financial Services Agency.
The Agreement provides that if ADR or the seller violates a provision of the Agreement, the counterparty has theright to terminate the Agreement and claim an amount equivalent to 20% of the transaction price of theasset-to-be-acquired as penalty.
However, ADR is not obliged to pay penalties to the seller for the expiration or cancellation of the Agreement except
where ADR is at fault.
(Note) Refers to a postdated sales agreement under which payment and property delivery shall be made at least one month after the conclusion of theagreement, or any other agreement similar thereto.

5. Summary of the Seller
Name

ITOCHU Corporation

Address

3-1-3 Umeda, Kita-ku, Osaka City, Osaka

Representative

Keita Ishii, President and Chief Operating Officer

Principal business

ITOCHU is involved in domestic trading, import/export, and overseas trading of various
products such as textile, machinery, metals, energy, chemicals, food, general product, realty,information, insurance, logistics, construction, and finance, as well as business investment inJapan and overseas.

Capital253,448 million yen

Data of establishment

December 1, 1949

Total assets

14,489,701 million yen (as of March 31, 2024)

Total capital

5,992,121 million yen (as of March 31, 2024)

Major shareholders andShareholding ratio

The Master Trust Bank of Japan, Ltd. (16.09%) etc. (as of March 31, 2024)

Relationship with ADR and IRM
Capital relations

Personnel relations

Business relations

Relatedparties’ status

As of the end of January 2024, the company owns 2.4% of ADR's outstanding shares. In addition, asof today, the company directly owns 80.0% of the total number of IRM's outstanding shares, andindirectly owns 20.0% of the total number of IRM's outstanding shares through the company's wholly
owned subsidiary, ITOCHU Real Estate Development Co., Ltd
As of today, the following number of IRM's executives and employees have been dispatched orseconded from the company.
1 full-time board member 2 part-time board member 1 seconded employees
The company has entered into an agreement with ADR and IRM concerning preferential negotiationrights.
The following is a summary of specified asset sales transactions, etc. for the fiscal period ended
January 31, 2024.
Bought amount 2,862 million yen, 2 properties /Sold amount 0 yen
Although the company is not a related party of ADR, it is a parent company of IRM and therefore a
related party of IRM under the Regulations for Consolidated Financial Statements.

6. Status of the Seller
Status of Property Owners,etc.
NameSpecial Interests.
Relationship with acertain person
Background and reason
for acquisition, etc.

Previous owner, etc.

The time before last owner, etc.

ITOCHU Corporation

Other than those with a special interest

Interested party as defined in theinternal rules of IRM
Rental residence
development objectives

4--

Acquisition Price

Omitted for development purposes-(Land)Acquisition period

September 2015(Building)-October 2017

7. Transactions with Interested Parties, etc.
ITOCHU Corporation, the seller for the Acquisition, falls under the category of an interested party, etc. as definedin the Investment Trust Act and the internal rules of IRM. Therefore IRM has obtained ADR's prior consent based on
the approval by ADR's Board of Directors.
In addition, ITOCHU Urban Community Co., Ltd., which is scheduled to be the master lease and property
management company for the asset-to-be-acquired, falls under the category of an interested party under the IRM'sinternal rules. Therefore, IRM has gone through the necessary deliberation, resolution and other procedures asstipulated in the internal rules.

8. Broker Profile
Not applicable.

9. Outlook
The impact of this Acquisition on the earnings forecasts for the 28th fiscal period (from February 1, 2024 toJuly 31, 2024) and the 29th fiscal period (from August 1 to January 31, 2025), published in the Brief Summaryof Kessan Tanshin (Financial Report) dated March 14, 2024, will be negligible, and no change will be made tothe forecast.

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10. Summary of the Appraisal Report
Property nameRESIDIA Kunitachi

Appraisal Value

1,350,000 thousand yen

Appraiser

Japan Real Estate Institute

Appraisal dateas of May 31, 2024
（thousand yen）

ItemsValue

Summary
Estimated the income value of the subject property by relating the income value obtained by theDCF method to the income value obtained by the direct capitalization method.

Income Capitalization Approach Value

1,350,000

Direct Capitalization Price ((6)/(7))

1,360,000(1) Total Potential Income

69,267

Total Potential Income

72,023

Rental income

69,959Appraised, taking into account the rent based on the current lease agreement and the rent thatwould be paid if the subject property were newly leased, etc.

Other income

2,064

Renewal fee income is recorded based on an assessment of the average annual turnover rate of
tenants and the average contract period.

Losses from Vacancies, etc.

2,756

Recorded after assessing a stable mid- to long-term Occupancy rate level based on the occupancy
status and supply-demand trends of similar properties, as well as the occupancy status and future
trends for the subject property.

Losses from Delinquencies

0(2) Expenses from rental business

The Company determined that no recording is required, taking into account the situation of thelessee and other factors.

14,5992,646

The amount is recorded in consideration of the individual characteristics of the subject property,
with reference to scheduled contract and the level of similar properties.

Utilities Costs

800

The amount is recorded with reference to the actual results of past fiscal years and taking into
consideration the level of similar properties and the individual characteristics of the subject
property.

Repair Costs

1,313

In addition to the restoration costs based on the level of restoration costs normally incurred andthe lessor's share of such costs, repair and maintenance costs were recorded by taking into
consideration the actual amounts in previous years, the level of similar properties, and the annual
average of repair and renewal costs in engineering reports, etc.

Property Manager Fees

1,230

Recorded with reference to the remuneration rate based on the terms of the scheduled contract,etc., and taking into consideration the remuneration rate for similar properties and the individualcharacteristics of the subject property.

Leasing Expenses

3,467

Administrative fees required when recruiting new tenants, with reference to contract terms andlease terms of similar properties, and advertising expenses, etc., with reference to actual results ofprevious years, and renewal fees, etc., taking into account the average annual replacement rate
and occupancy rate, etc.

Taxes and Public Dues

3,958

Recorded based on tax and public dues related documents, etc.

Insurance Premium

85

Maintenance and Management Fees

Other Expenses

1,100(3) Net Operating Income (NOI, (1)-(2))

Recorded in consideration of premiums based on insurance policies and premium rates forbuildings similar to the subject building.
Internet usage fees, etc. are recorded.

54,668(4) Earnings from Deposits

157

Appraised by multiplying the amount obtained by multiplying the occupancy rate by the numberof months of stable security deposits over the medium to long term, and then by the assumed
investment yield of 1.0%.

(5) Capital Expenditures

1,640

The appraisal was made based on the assumption that the expected future expenditures would beaccumulated on average each period, taking into account the level of Capital Expenditures ofsimilar properties, Building Age, and the average annual amount of repair and renewal expenses
in the engineering report, etc.

(6) Net Cash Flow DCF Price((3)+(4)-(5))

53,185
3.9%(7) Cap Rate
DCF price

Appraised by adding/subtracting the spread resulting from the subject property's location,building conditions, and other conditions to/from the standard yield of each area, and also by
taking into account future uncertainties and transaction yields on similar properties, etc.

1,340,000

Discount Rate

3.7%

Appraised by comprehensively taking into account the individual characteristics of the subject
property, etc., with reference to the investment yields, etc., in transactions with similar properties.

Terminal Cap Rate

4.0%

Appraised by comprehensively considering future trends of investment yields, riskiness of thesubject property as an investment, general forecasts of future economic growth rates, and trends
of real estate prices and rents, etc., with reference to the transaction yields of similar properties.

Cost Approach Value

1,290,000

Land ratio

71.2%

Building Ratio

28.8%

Other items considered by the appraiser in the appraisal

None6Appendix
Appendix 1. Photos of the Asset-To-Be-Acquired

Appendix 2. Map of the Asset-To-Be-Acquired: 1-7-10 Higashi, Kunitachi City, TokyoAbout Advance Residence Investment Corporation
Advance Residence Investment Corporation is the largest J-REIT specializing in residential properties and is managed by ITOCHU REITManagement Co., Ltd. (IRM), the asset management company of the ITOCHU Group, investing in over 280 rental apartments located mostlyin central Tokyo and in other major cities throughout Japan (AUM over 490 billion yen). ADR can be expected have a stable dividend in thelong-term and can be considered as a defensive J-REIT, on back of the stable income from residential assets and with the largest dividend
reserve among J-REITs.
"Advance" is the common brand name of the real estate investment corporation managed by ITOCHU REIT Management Co., Ltd.
ADR’s website: https://www.adr-reit.com/en/
IRM’s website : https://www.itc-rm.co.jp/en/

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