[For Information Purpose Only.
The Japanese language press release should be referred to as the original.]
July 19, 2023
To All Concerned Parties
Name of REIT Issuer:
Invincible Investment Corporation
Naoki Fukuda, Executive Director(Securities code: 8963)
Asset manager:
Consonant Investment Management Co., Ltd.
Naoki Fukuda, President & CEO
Contact: Jun Komo
General Manager of Planning Department(Tel. +81-3-5411-2731)

Notice concerning Acquisition and Lease of Domestic Trust Beneficiary Interests
Invincible Investment Corporation (“INV”) announced the decision to acquire trust beneficiary interests (the“Acquisition”) in six domestic hotel properties (the “Six Hotel Properties” or “Assets to be Acquired”) and enter
into relevant leasing contracts with respect to each of the Six Hotel Properties as decided on July 19, 2023 byConsonant Investment Management Co., Ltd. (“CIM”), the asset manager of INV.
1.

Overview of Acquisition

Property
Number

Property Name

AnticipatedAcquisition Price(million yen)
(Note 1)

Appraisal
Value(million yen)
(Note 2)

Seller(Note 3)

D84

Fusaki Beach Resort
Hotel & Villas

40,29340,700

Sheffield Asset Tokutei
Mokuteki Kaisha

D85

Tateshina Grand HotelTakinoyu

8,365

8,450

Heijo Tokutei Mokuteki
KaishaD86

Hotel MyStays Okayama

2,613

2,640

Nippori Tokutei Mokuteki
KaishaD87

Hotel MyStays Aomori
Station

2,445

2,470

Shiretoko Tokutei
Mokuteki Kaisha

D88

Hotel MyStays Soga

2,039

2,060

Nippori Tokutei Mokuteki
KaishaD89

Tazawako Lake Resort &
Onsen

1,475

1,490

Heijo Tokutei Mokuteki
KaishaTotal

57,23057,810-

AnticipatedAcquisition Date
(Note 4)

August 1, 2023-

This English language notice is a translation of the Japanese-language notice released on July 19, 2023 and was prepared solely for the convenience of, and reference by,
non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on their own
investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties or assurances are
given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

1

(Note 1) Anticipated Acquisition Prices show purchase prices set forth in the purchase and sale agreements for the trust
beneficiary interests of each property and do not include adjustments for property taxes, city planning taxes, or nationalor local consumption taxes.
(Note 2) Appraisal Value is based on appraisal value stated in the appraisal report by the Japan Real Estate Institute, JLL Morii
Valuation & Advisory K.K., The Tanizawa Sōgō Appraisal Co., Ltd. or Daiwa Real Estate Appraisal Co., Ltd. on thevaluation date of June 1, 2023. For details, please refer to “(1) Details of the Six Hotel Properties” of “4. Details of theSix Hotel Properties” as described below.
(Note 3) For an overview of the sellers, please refer to “5. Overview of Sellers” as described below.
(Note 4) (A) The purchase and sale agreements for all of the Assets to be Acquired provide that, in case where the offer price forthe issuance of new investment units as set out in (Note 5) has not been determined on or prior to July 25, 2023, INV
may postpone the closing date to any business day from August 2 to August 15, 2023 designated by INV. In such case,
INV will exercise the postponement right pursuant to the purchase and sale agreements. (B) In addition, the purchaseand sale agreements also provide that, in the event that the funds are not sufficient to make payment of the AnticipatedAcquisition Price on the closing date (or on the postponed closing date in case of (A) above), INV may defer, on aninterest-free basis, the payment of the shortfall as stipulated in the purchase and sale agreements to a date separately
agreed with the seller. If there is any shortage in the proceeds, INV will exercise the payment deferral right.
(Note 5) For issuance of new investment units, please refer to “Notice concerning Issuance of New Investment Units andSecondary Offering of Investment Units” dated July 19, 2023.
(Note 6) Brokerage is not applicable in connection with the Acquisition.
(Note 7) Amounts are rounded down to the nearest unit. The same shall apply hereinafter.

2.

Reasons for Acquisition and Lease
INV decided to acquire the Six Hotel Properties at an average 5.9% appraisal NOI yield (Note 1) and at
an average 6.0% simulated NOI yield (Note 2) which are expected to contribute to growth and stability ofrevenue of the portfolio. The Acquisition is from affiliates of the Sponsor, Fortress Investment Group LLC(“FIG”), and will be funded using funds raised through the issuance of new investment units and new
borrowings (Note 3).
The acquisition of the Six Hotel Properties comes with INV’s eighth public equity offering over the last ten
years, further promoting INV’s external growth strategy backed by the Sponsor’s strong support. Following
the Acquisition, INV’s AUM (Note 4) is expected to grow to JPY 548.6 billion, and the composition of hotel
properties in the portfolio is expected to be JPY 507.8 billion (92 hotels, 16,624 guest rooms). INV’s hotel
portfolio is the largest hotel portfolio amongst all J-REITs (Note 5), including J-REITs specializing in hotels
and accommodations.
The Six Hotel Properties are located in Okinawa (Ishigaki Island), Nagano, Okayama, Aomori, Chiba, andAkita, and INV believes that they are all high-quality hotels (Note 6) with great facilities that are close totraffic hubs or major tourism areas.
The number of Japanese hotel guests has recovered to the 2019 level (Note 7) from January to May in2023, and the total number of domestic tourists in 2023 is estimated to increase by 8.6% on a year-onyear basis (Note 8). Even though the number of visitors from China, which accounted for 26.6% (thelargest) of inbound visitors in the first five months in 2019, remains 10.6% of that of the same period of2019 level, demand from inbound visitors is picking up as the number of inbound tourists in the five months
in 2023 has reached 62.8% of the same period of 2019 level (Note 9). The number of Chinese domestic
tourists from January to March (the first quarter) in 2023 was approximately 70% of that of the same
This English language notice is a translation of the Japanese-language notice released on July 19, 2023 and was prepared solely for the convenience of, and reference by,
non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on their own
investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties or assurances are
given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

2period of 2019 (Note 10), showing a recovery trend. Especially, the number of domestic tourists during
the Labor Day Holidays in China in May 2023 exceeded the 2019 level (Note 10), and INV expects thatthe number of inbound tourists from China will increase strongly once the issuance of outbound visas by
the Chinese government returns to normal and the group tour restriction is lifted. In addition, in a survey
conducted by the Development Bank of Japan and the Japan Travel Bureau Foundation, Japan was themost popular answer when residents of Asia, Europe, the US and Australia were asked where they would
like to go for their next overseas trip (Note 11). INV expects that such a recovery trend in demand frominbound visitors will drive a recovery of the Japanese hotel market and support INV’s further growth in
RevPAR in the portfolio.
The number of hotels in Japan in 2022 decreased by 2.4% as compared to that of 2021, especially inresort hotels, which showed an 8.1% decrease (Note 12). Based on survey data from HOTERES, thetotal number of new rooms in hotels with 40 or more rooms planned to be supplied in 2023 through 2025
is 31,927, which would be lower than the 35,631 rooms (Note 13) newly supplied in 2022. INV believes
that the acquisition of high-quality hotels in the Japanese hotel market with a declining supply of newrooms will lead to the enhancement of unitholder value of INV.
Fusaki Beach Resort Hotel & Villas, a flagship property which is expected to be the largest properties onan (Anticipated) Acquisition Price basis in INV’s portfolio following the acquisition of the Six Hotel
Properties, is located in Ishigaki Island in Okinawa, one of the leading beach resort areas in Japan andenjoys the benefits of strong domestic leisure demand. The total number of tourists to Ishigaki Island by
air from January to May 2023 was approximately the same level of that in the same period of 2019 (Note14) which has started to recover since the fall 2022 when the COVID-19 began to calm down, and thenumber of flights to Ishigaki Island, 217 per week in June 2023, increased approximately 10% compared
to 196 flights per week in the same month in 2019 (Note 15). The hotel is characterized by approximately
one-kilometer of beach in front of the hotel (Note 16), three connecting infinity pools, the largest indoor
pool (length 25.3m x width 12.0m) on the island, and the Wellness center with new spa, having a free bus
available from the airport, being located an approximately 25-minute drive from New Ishigaki Airport andtaken less than 3 hours from Haneda Airport to New Ishigaki Airport by direct flight, and being in close
proximity to Southeast Asia as well as a number of direct flights available from major cities in Japan. In
addition, there are attractive amenities and plentiful activities such as a spa, marine sports activities, akids’ water park, a hot bath and a sauna as well as direct access to a beach, which resulted the hotel to
win the GOLD award from JTB as the best-selling hotel for the large hotel sector in Japan for 2023.
Tateshina Grand Hotel Takinoyu, a resort hotel with excellent access from Tokyo and Nagoya(approximately 3 hours by car or train from Tokyo and Nagoya) allows guests to enjoy the rich nature andhot springs. Tazawako Lake Resort & Onsen is located in the vicinity of scenic Mount Akita Komagatakeand Lake Tazawa, a great drive-to-leisure destination and starting point for excellent northern Japansightseeing. INV believes that both properties will broaden the diversity of the portfolio and will increase
INV’s domestic resort and leisure investments.
INV will also acquire three limited service hotels (Note 17) (Hotel MyStays Okayama, Hotel MyStays
This English language notice is a translation of the Japanese-language notice released on July 19, 2023 and was prepared solely for the convenience of, and reference by,
non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on their own
investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties or assurances are
given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

3Aomori Station, and Hotel MyStays Soga), all of which are expected to show continued growth, driven bystrong marketing capabilities of their operator, MYSTAYS HOTEL MANAGEMENT Co., Ltd., (hereinafter“MHM”) as well as demand from inbound visitors expected to recover further in the future.
For details, please refer to “(1) Details of the Six Hotel Properties” of “4. Details of the Six Hotel Properties”
described below.
INV has a well-balanced nationwide diversified portfolio with hotel properties including hotels such as
Sheraton Grande Tokyo Bay Hotel (full service hotel) and The Westin Grand Cayman Seven Mile Beach
Resort & Spa (resort hotel). The Acquisition further expands the portfolio and increases both geographicaland hotel type diversification. By adding the Six Hotel Properties to the existing portfolio (Note 18), INV
expects both an improvement in profitability and stability of the portfolio.
INV will consider making additional selective investments in properties that are considered highly
competitive in terms of locations and facilities, with the aim to improve the performance of the entire
portfolio in terms of revenue growth and stability.

(Note 1) Average appraisal NOI yield is calculated for reference by the following formula;(the sum of appraisal NOI of the Six Hotel Properties) ÷ (the sum of Anticipated Acquisition Price for the Six Hotel
Properties)
Appraisal NOI of the Six Hotel Properties is the sum of net operating income calculated by DCF method indicated on
appraisal report as of June 1, 2023. The same shall apply hereinafter.
(Note 2) Average simulated NOI yield is calculated for reference by the following formula;(the sum of simulated NOI of the Six Hotel Properties) ÷ (the sum of Anticipated Acquisition Price for the Six Hotel
Properties)
Simulated NOI of the Six Hotel Properties is calculated by combining the actual monthly performance from January to
May 2023 and anticipated monthly performance from June to December 2023 estimated by INV. Pre-acquisition
performance is based on actual results provided by sellers and adjusted to reflect trust fees and insurance premiums
assuming the properties had been held by INV through 2023. Anticipated monthly performance is calculated based on
the assumptions set out in Appendix 1 “Operating Revenues” of “Notice concerning Revision of Forecast of Financial
Results and Distribution for the 40th Fiscal Period Ended June 2023 and the 41st Fiscal Period Ending December 2023
as well as Forecast of Financial Results and Distribution for the 42nd Fiscal Period Ending June 2024”, which may besignificantly deviate from actual results. The same shall apply hereinafter.
(Note 3) For the new borrowings, please refer to “Notice concerning Debt Financing” dated July 19, 2023.
(Note 4) Based on the (Anticipated) Acquisition Price. The Acquisition Price of the preferred equity interest backed by Sheraton
Grande Tokyo Bay (the “Preferred Equity Interest”) is based on the investment amount for the Preferred Equity Interest.
In September, 2018, for the first time as a J-REIT, INV acquired a TK interest pursuant to a TK agreement with Seven
Mile Resort Holdings Ltd., a Cayman Islands SPC that acquired leasehold interests in the underlying land and buildingsof the Westin Grand Cayman Resort and Sunshine Suites Resort (the “Cayman Islands hotels”), two resort hotel
properties located in the Cayman Islands, as well as ownership of the furniture, fixtures and equipment of the two hotel
properties. On May 9, 2019 (Cayman Islands local time), INV restructured its investment in the Cayman Islands hotels
by terminating the TK arrangement and directly acquiring the leasehold interests and related assets (furniture, fixturesand equipment) with respect to the two Cayman Islands hotels. The Acquisition Price of the Cayman Islands hotels is
the estimated book value of the Cayman Islands hotels recorded by the Cayman Islands SPC as of May 9, 2019
(Cayman Islands local time) and has been translated into Japanese yen at the rate of ¥110.45 = $1.00 for convenience
purposes based on the foreign exchange forward implemented in connection with the TK investment in the Cayman
SPC (contract thereof was entered into on July 26, 2018 and implemented on September 26, 2018). The amount isrounded down to the nearest unit. The same shall apply hereinafter. The estimated book value of the Cayman Islands
hotels is an estimated value as of today, and the actual book value may differ from such estimated value.
This English language notice is a translation of the Japanese-language notice released on July 19, 2023 and was prepared solely for the convenience of, and reference by,
non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on their own
investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties or assurances are
given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

4

(Note 5) “Largest hotel portfolio amongst all J-REITs” is based on INV’s total (Anticipated) Acquisition Price of all 92 hotel
properties after the Anticipated Acquisition compared with other listed J-REITs’ total (Anticipated) Acquisition Price of
hotel properties (including ryokan and other accommodation; the same shall apply hereinafter in this (Note 4)) acquired
as of June 30, 2023 and the hotel properties to be acquired announced as of June 30, 2023.
(Note 6) “High-quality hotels” are indicated based on INV’s discretion that properties have competitiveness in terms of location,
appearance, interior, spec, annex facilities and equipment.
(Note 7) Source: Ministry of Land, Infrastructure, Transport and Tourism(Note 8) Source: JTB Corp. “Prospective Travel Trends in 2023 (Jan. through Dec.)” Note that Prospective Travel Trends in 2023
(Jan. through Dec.) is a forecast by JTB Corp. as of January 2023, and achievement is not guaranteed and can actually
vary significantly.
(Note 9) Source: Japan National Tourism Organization (JNTO)(Note 10) Source: Ministry of Culture and Tourism of the People’s Republic of China, China Tourism Academy(Note 11) Source: Survey conducted by Development Bank of Japan Inc. and Japan Travel Bureau Foundation(Note 12) Source: Ministry of Land, Infrastructure, Transport and Tourism(Note 13) Source: HOTERES.
(Note 14) Source: Ishigaki City “Inbound Tourism Estimate”(Note 15) Source: New Ishigaki Airport, MYSTAYS HOTEL MANAGEMENT Co., Ltd. (only flights from major places of departureare counted)(Note 16) The approximate one-kilometer of beach in front of “Fusaki Beach Resort Hotel & Villas” is not exclusive for hotel guests
and can be accessed by others.
(Note 17) Hotels are classified into the following categories, and the same shall apply hereinafter:“Full service hotels” are hotels those have both restaurant facilities providing breakfast, lunch and dinner (including
meals provided by reservation) and meeting facilities that can be used for banquet services.
“Limited service hotels” are hotels other than full service hotels.
“Resort hotels” are hotels located in areas where a substantial number of guests stay for sightseeing or recreational
purposes and include both full service hotels and limited service hotels.
(Note 18) “Existing Portfolio” refers to the real estate, trust beneficial interest (real estate in trust) and preferred equity interest heldby INV as of today. The same shall apply hereinafter.

This English language notice is a translation of the Japanese-language notice released on July 19, 2023 and was prepared solely for the convenience of, and reference by,
non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on their own
investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties or assurances are
given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

5

The summary of the existing portfolio as of June 30, 2023, the Six Hotel Properties and the PostAcquisition portfolio, inclusive of the Preferred Equity Interest and Cayman Islands hotels are as follows;
Existing Portfolio

Six Hotel

Post-Acquisition

Properties(Note 1)128 (86)6 (6)134 (92)

491,416

57,230548,646

as of June 30, 2023
(Note 1)
Number of Properties(Hotel Properties)
Total (Anticipated) Acquisition Price(million yen) (Note 2)(Note 1) The figures described in the column of “Existing Portfolio as of June 30, 2023” and “Post-Acquisition” are inclusive of
the Preferred Equity Interest and Cayman Islands hotels. Number of properties is based on the underlying assets (i.e.
one property for the preferred equity interest) and the Preferred Equity Interest is classified as a hotel based on the
category of the underlying asset.
(Note 2) The figures described in the row of “Total (Anticipated) Acquisition Price” are rounded to the nearest unit.

The summary of the existing portfolio as of June 30, 2023, the Six Hotel Properties and the PostAcquisition portfolio (including Cayman Islands hotels), exclusive of Preferred Equity Interest are as
follows;
Existing Portfolio
as of June 30, 2023
(Note 1)

Six Hotel
Properties

Post-Acquisition(Note 1)

Number of Properties(Hotel Properties)

127 (85)6 (6)133 (91)

Total (Anticipated) Acquisition Price(million yen) (Note 2)

473,570

57,230530,800

Total Appraisal Value (million yen)
(Note 2) (Note 3)

537,608

57,810595,418

Appraisal NOI Yield (Note 4)

6.2%

5.9%

6.2%

After Depreciation NOI Yield (Note 4)

4.7%

4.0%

4.6%

(Note 1) The figures for each item do not include the Preferred Equity Interest.
(Note 2) The figures for “Total (Anticipated) Acquisition Price” and “Total Appraisal Value” are rounded down to the nearest units.
(Note 3) “Total Appraisal Value” is based on the appraisal value stated in the appraisal report on the valuation date of December
31, 2022 for properties owned as of June 30, 2023, and on the valuation date of June 1, 2023 for the Six Hotel Properties.
The appraisal value of Cayman Islands hotels is translated into USD1 = JPY144.99 according to the foreign exchange
rate as of the end of the 40th Fiscal Period Ended June 2023 (June 30, 2023).
(Note 4) “Appraisal NOI Yield” and “After Depreciation NOI Yield” are calculated by dividing the total NOI derived from the direct
capitalization method stated in the appraisal reports mentioned at (Note 3) above (and deducting depreciation for After
Depreciation NOI Yield) by the total of (Anticipated) Acquisition Price, and rounded to one decimal place. The appraisal
NOI of the Cayman Islands hotels includes the amount of FF&E reserve in accordance with the calculation of appraisal
NOI of the existing portfolio as of June 30, 2023 and the Six Hotel Properties.

This English language notice is a translation of the Japanese-language notice released on July 19, 2023 and was prepared solely for the convenience of, and reference by,
non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on their own
investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties or assurances are
given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

6Portfolio Composition by Asset Type (based on (Anticipated) Acquisition Price)(Note 1)
Residential
7.8%

Commertial Facility
0.5%

Resort17.4%

Residential
7.0%
Resort24.7%

LimitedService44.3%

Full Service
30.1%

Commertial
Facility
0.4%
LimitedService40.9%

Full Service
26.9%

Hotel
91.7%

As of the end ofJune 2023

Hotel
92.6%

Post-Acquisition(Note 1) The ratio figures are rounded to one decimal place; the same shall apply hereinafter.

Portfolio Composition by Geography (based on (Anticipated) Acquisition Price)(Note 1)

As of the end ofJune 2023

Post- Acquisition(Note 1) The definitions of areas used in the circle charts are as follows;
Greater Tokyo (excluding Tokyo 23 wards): Tokyo Metropolis (excluding Tokyo 23 wards), Kanagawa, Chiba andSaitama prefectures.
Kansai: Osaka, Hyogo, Kyoto, Shiga, Wakayama and Nara prefectures.
Chubu: Aichi, Gifu, Mie, Shizuoka, Nagano, Yamanashi, Niigata, Toyama, Ishikawa and Fukui prefectures.
Kyushu: Fukuoka, Kumamoto, Kagoshima, Nagasaki, Oita, Miyazaki, Saga and Okinawa prefectures.

This English language notice is a translation of the Japanese-language notice released on July 19, 2023 and was prepared solely for the convenience of, and reference by,
non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on their own
investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties or assurances are
given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

7Location of the Six Hotel Properties

This English language notice is a translation of the Japanese-language notice released on July 19, 2023 and was prepared solely for the convenience of, and reference by,
non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on their own
investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties or assurances are
given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

8

3.

Execution of Lease Agreement
In regard to the Six Hotel Properties, INV will enter into lease agreements with MHM based on the
combination of fixed rents and variable rents linked to Gross Operating Profit (GOP) (Note 1). Out of the
90 domestic hotel properties (Note 2) in INV’s portfolio after the Anticipated Acquisition, 79 hotels employ
a variable rent scheme described above (Note 3). MHM, an experienced hotel operator, or its subsidiarycompany conduct comprehensive revenue management for all of those hotels under the variable rent
scheme and seek to maximize revenue by increasing accommodation demand. These initiatives uniquely
position MyStays Hotels and therefore INV to directly benefit from an increase in revenue from hotels
through the variable rent scheme. In addition, in the event of a downward trend in GOP, the income fromthe embedded fixed-rent works as a buffer.
INV believes that the tenants for the Six Hotel Properties conform to the standard for selection of tenants
described in the Report on the Management Structure and System of the Issuer of Real Estate Investment
Trust Units and Related Parties (Japanese only) filed on March 28, 2023.
(Note 1) Gross Operating Profit is a rent which is the amount remaining after deducting operating expenses such as personnel
expenses, cost of utilities, and advertising expenses, as well as management fee for operators (if any) from the hotel’srevenues.
(Note 2) Including the Sheraton Grande Tokyo Bay Hotel which is the underlying asset of the Preferred Equity Interest.
(Note 3) There are three other hotels out of the hotels in Japan held by INV that are under variable rent contracts. The variable
rent scheme applicable to these three hotels is different from that described above.

<Overview of Tenant and Operator>
An overview of the tenants and operators for the Six Hotel Properties is as follows;
The tenant and operator for Hotel MyStays Okayama, Hotel MyStays Aomori Station, and Hotel MyStays Soga,and Tazawako Lake Resort & Onsen and the operator for Fusaki Beach Resort Hotel & Villas, Tateshina Grand
Hotel Takinoyu, and Tazawako Lake Resort & Onsen
(i)

Name

MYSTAYS HOTEL MANAGEMENT Co., Ltd.

(ii)

Location

Roppongi Hills North Tower 14th Floor, 6-2-31 Roppongi, Minato-ku,
Tokyo, Japan

(iii)

Title

and

name

of

President and CEO, Ryoichi Shirota

representative officer(iv)

Business

Hotel and Ryokan (Japanese inn) operation and management(v)

CapitalJPY 100 million (as of the end of April 2023)(vi)

Date of establishment

July 8, 1999

(vii)

Relationship between INV/CIM and the Tenant/Operator
Capital relationships

While there are no capital relationships that should be noted between
INV/CIM and MHM, the parent company of MHM is indirectly held by afund operated by affiliate of FIG. FIG indirectly holds 100% of CIM’s
outstanding shares.

Personal relationships

While there are no personal relationships that should be noted between
INV/CIM and MHM, as of today, among the directors of INV and theofficers and employees of CIM, Executive Director of INV and President

This English language notice is a translation of the Japanese-language notice released on July 19, 2023 and was prepared solely for the convenience of, and reference by,
non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on their own
investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties or assurances are
given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

9

& CEO of CIM, Naoki Fukuda, the Executive Director of CIM, Naoto Ichiki,
the Managing Director of CIM, Taku Iwasaki and a part-time director of
CIM, Christopher Reed, are seconded from Fortress Investment Group
Japan GK, a subsidiary of FIG.
Transactional

As of today, INV has entered into lease agreements with MHM withrelationships

respect to 73 hotel properties (Note 1).

Whether the Operator

MHM is not a related party of INV/CIM. Further, related persons andis a related party

affiliates of MHM are not related parties of INV/CIM. Furthermore, MHM
is not an interested party, etc. of CIM as provided in the Act on Investment
Trusts and Investment Corporations (the “Investment Trust Act”).

(Note 1) Agreements with MHM subsidiaries and management contracts between MHM and tenants are included.

The tenant for Fusaki Beach Resort Hotel & Villas
(i)

Name

Island Co., Ltd.

(ii)

Location

C/O Akasaka International TAX&CO., 2-10-5, Akasaka, Minato-ku, Tokyo

(iii)

Title

and

name

of

President and CEO, Shunsuke Yamamoto

representative officer(iv)

Business

1. Entrustment and outsourcing of operations related to hotel businessand hotel operation
2. Restaurant, café, wedding venue, and spa operation and management
3. Management in marine sports business(v)

CapitalJPY 50.1 million (as of the end of April 2023)(vi)

Date of establishment

June 1, 2007

(vii)

Relationship between INV/CIM and the Tenant/Operator
Capital relationships

While there are no capital relationships that should be noted between
INV/CIM and tenant, the parent company of tenant is indirectly held by afund operated by affiliate of FIG. FIG indirectly holds 100% of CIM’s
outstanding shares.

Personal relationships

While there are no personal relationships that should be noted between
INV/CIM and Island Co., Ltd., as of today, among the directors of INV andthe officers and employees of CIM, Executive Director of INV and
President & CEO of CIM, Naoki Fukuda, the Executive Director of CIM,
Naoto Ichiki, the Managing Director of CIM, Taku Iwasaki and a part-time
director of CIM, Christopher Reed, are seconded from Fortress
Investment Group Japan Godo Kaisha, a subsidiary of FIG.

Transactional

There are no transactional relationships that should be noted between

relationships

INV/CIM and the tenant.

Whether the Operator

The tenant is not a related party of INV/CIM. Further, related persons andis a related party

affiliates of the tenant are not related parties of INV/CIM. Furthermore, thetenant is not an interested party, etc. of CIM as provided in the Investment
Trust Act.

This English language notice is a translation of the Japanese-language notice released on July 19, 2023 and was prepared solely for the convenience of, and reference by,
non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on their own
investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties or assurances are
given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

10The tenant for Tateshina Grand Hotel Takinoyu
(i)

Name

Tateshina Takinoyu Godo Kaisha(ii)

Location

C/O EP Consulting Services Corporation, 1-1-1 Nishi-Shimbashi, Minatoku, Tokyo

(iii)
(iv)

Title

and

name

of

Heijo General Incorporated Association Functional Manager, Shunsuke

representative officer

Yamamoto

Business

1. Acquisition, holding, management, and disposal of monetary claims,
securities (including deemed securities), shares of various corporations,investment interests, specified investments under the Act on the
Liquidation of Assets, and other investment assets
2. Acquisition, holding, management, and disposal of real estate
3. Acquisition, holding, management, and disposal of real estate trust
beneficiary interests
4. Hotel management(v)

Capital

JPY 0.1 million (as of the end of April 2023)(vi)

Date of establishment

July 18, 2018(vii)

Relationship between INV/CIM and the Tenant/Operator
Capital relationships

While there are no capital relationships that should be noted between
INV/CIM and tenant, the parent company of tenant is indirectly held by afund operated by affiliate of FIG. FIG indirectly holds 100% of CIM’s
outstanding shares.

Personal relationships

While there are no personal relationships that should be noted between
INV/CIM and Island Co., Ltd., as of today, among the directors of INV andthe officers and employees of CIM, Executive Director of INV and Presient& CEO of CIM, Naoki Fukuda, the Executive Director of CIM, Naoto Ichiki,
the Managing Director of CIM, Taku Iwasaki and a part-time director of
CIM, Christopher Reed, are seconded from Fortress Investment Group
Japan Godo Kaisha, a subsidiary of FIG.

Transactional

There are no transactional relationships that should be noted between

relationships

INV/CIM and the tenant.

Whether the Operator

The tenant is not a related party of INV/CIM. Further, related persons andis a related party

affiliates of tenant are not related parties of INV/CIM. Furthermore, tenant
is not an interested party, etc. of CIM as provided in the Investment TrustAct.

The tenant for Tazawako Lake Resort & Onsen
(i)

Name

Hotel Higashinihon Co., Ltd.

(ii)

Location

3-3-18 Odori, Morioka-shi, Iwate

(iii)

Title

and

name

of

President and CEO, Shunsuke Yamamoto

representative officer(iv)

Business

1. Management of hotel
2. Management of restaurant

This English language notice is a translation of the Japanese-language notice released on July 19, 2023 and was prepared solely for the convenience of, and reference by,
non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on their own
investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties or assurances are
given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

11

3. Leases and management of real estate(v)

CapitalJPY 50 million (as of the end of April 2023)(vi)

Date of establishment

April 1, 1980

(vii)

Relationship between INV/CIM and the Tenant/Operator
Capital relationships

While there are no capital relationships that should be noted between
INV/CIM and tenant, the parent company of tenant is indirectly held by afund operated by affiliate of FIG. FIG indirectly holds 100% of CIM’s
outstanding shares.

Personal relationships

While there are no personal relationships that should be noted between
INV/CIM and Island Co., Ltd., as of today, among the directors of INV andthe officers and employees of CIM, Executive Director of INV and
President & CEO of CIM, Naoki Fukuda, the Executive Director of CIM,
Naoto Ichiki, the Managing Director of CIM, Taku Iwasaki and a part-time
director of CIM, Christopher Reed, are seconded from Fortress
Investment Group Japan Godo Kaisha, a subsidiary of FIG.

Transactional

As of today, INV has a lease agreement with the tenant concerning therelationships

Art Hotel Morioka, one of INV’s asset.

Whether the Operator

The tenant is not a related party of INV/CIM. Further, related persons andis a related party

affiliates of tenant are not related parties of INV/CIM. Furthermore, tenant
is not an interested party, etc. of CIM as provided in the Investment Trust
Act.

4.

Details of the Six Hotel Properties(1) Details of the Six Hotel Properties
Details, profit and loss status and outline of appraisal reports of the Six Hotel Properties are as
follows:<Explanation of details of the Six Hotel Properties>a.

“Type and Location of Specified Assets, etc.” column:
・ “Type of Specified Assets” indicates the type (the legal form) of specified assets.
・ “Date of Planned Acquisition” indicates the date when an acquisition is executed, which is
specified in the purchase agreement or the trust beneficiary right sales agreement.
・ “Planned Purchase Price” indicates a purchase price of the Six Hotel Properties which is
specified in the purchase agreement or the trust beneficiary right sales agreement;
Consumption tax is not included, and rounded down to the nearest million yen.
・ “Appraisal Value” indicates reported price by appraisal firm for anticipated acquisitions.
・ The details in “Location” (excluding address), “Lot Area” of the “Land” and, “Total Floor Area”,“Structure/No. of Stories”, “Purpose of Use”, and “Completion Date” of the “Building” are, unlessotherwise specified, as shown in the property register. The “Total Floor Area” is the gross floorarea (if no annotation in the context, an annex building would not be included), and with respect
to “Purpose of Use,” the primary ones of the purposes shown in the property register is listed.
Further, the “Completion Date” lists the time at which the building was newly constructed, asThis English language notice is a translation of the Japanese-language notice released on July 19, 2023 and was prepared solely for the convenience of, and reference by,
non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on their own
investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties or assurances are
given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

12shown in the property register.
・ “Transport” indicates the time to walk to the nearest station based on the description in the Real
Estate Appraisal Report (in case there is no description of time distance in the Real EstateAppraisal Report, “Transport” is calculated by assuming walking time on the road distance of
80 meters per minute in accordance with the Fair Competition Code on the Real Estate
Representations (Fair Trade Commission Notification No.2 of 2003, including subsequent
revisions) (hereinafter, referred to as the “Fair Competition Code”) and the Ordinance for
Enforcement of the Fair Competition Code). If unidentified, it is based on the description in othermaterials.
・ In “Zoning” regarding land, the class of zoning under the respective items of Article 8(1) of theCity Planning Act (Act No.100 of 1968, as amended; the “City Planning Act”) is listed.
・ In “Building Coverage Ratio” regarding land, the ratio of a building’s area with regard to the landarea as set forth under Article 53 of the Building Standards Act (Act No. 201 of 1950, as
amended; the “Building Standards Act”) is listed.
・ In “Floor Area Ratio” regarding land, the ratio of a building’s floor area with regard to the landarea as set forth under Article 52 of the Building Standards Act is listed.
・ In “Trustee”, the planned trustee at the time of INV’s acquisition of the assets for anticipatedacquisitions is listed.
・ In “Trust Period”, the planned trust period at the time of INV’s acquisition of the assets for
anticipated acquisitions is listed.
b.

“Lease Overview” column:

・ Based on lease agreements with tenants effective as of May 31, 2023 or anticipated leaseagreements which will be entered into upon acquisition of the Six Hotel Properties.
・ “Total No. of Tenant(s)” is calculated by counting a lessee who has directly concluded a leaseagreement or is expected to conclude a lease agreement at the time of INV’s acquisition of theassets for each property as one tenant, and a tenant who has rented two or more rooms in asingle property is calculated as one tenant.
・ In “Leasable Area”, the total leasable floor are for guest room, residential, office, retail andothers for the area of each real property or trusted real property to be owned by INV is listed.
・ In “Lease Area”, the total sum of the leased area with respect to which a lease agreement with
end-tenant have actually been entered into and which are leased to the end-tenant or will beleased to the end-tenant after acquisitions (the area specified in the lease agreement) is listed.
However, in the case where a master lease agreement is concluded, the area leased by master
lessee is listed.
・ In “Occupancy Rate”, the ratio of the leased area to the leasable area is shown, rounded to thenearest first decimal place.
・ In “Number of Guest Rooms”, indicates the number of guest rooms their tenant(s) can sublease.
“(S/T/D/O)” indicates the breakdown of the number of guest rooms categorized as(Single/Twin/Double/Other).
・ In “Security Deposit/Guarantee”, the security deposit and guarantee after amortization as
specified in the lease agreements executed or to be executed after the acquisition is stated.
・ “GOP”, or the gross operating profit which is the amount remaining after deducting theThis English language notice is a translation of the Japanese-language notice released on July 19, 2023 and was prepared solely for the convenience of, and reference by,
non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on their own
investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties or assurances are
given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

13personnel, utilities and advertising expenses as well as the management service fees for the
hotel operations from the hotel operation’s revenues of the tenant, and are recognized as therental revenues received as rent, is listed.
c.

“Overview of Lease Agreement” column:

・ Based on the lease agreements with tenants effective as of May 31, 2023 or anticipated leaseagreements which will be entered into upon acquisition of the Six Hotel Properties.
・ “Type of Contract” is the type of rent received from the relevant operator (either a fixed rent ora fixed rent plus variable rent) is indicated. “Fixed rent” is defined as an agreement under which
INV or the trustee shall receive a specified rent, regardless of the operational results of therelevant hotel. “Fixed rent plus variable rent” is defined as an agreement under which INV or
the trustee shall receive rent that varies based on the GOP (Gross Operating Profit), in addition
to a fixed rent.
・ In “Determination of rent of lease contract,” monthly rent amount is rounded down to nearest
ten thousand yen, and annual rent is rounded down to the nearest million yen.
・ The “Management Services Fee” is a commission fee payable to the tenant from landlord inaccordance with the provisions of the lease agreement as a compensation for operational
service provided by a tenant under the agreement. The Management Services Fee is notdisclosed, as tentative consent has not been obtained for disclosure. However, for MHM, anamount of the management services fee to be received is, in principle the sum of (i) an amountequal to 2% of monthly sales, (ii) an amount equal to 0-6% of monthly sales from direct bookings
made through the MHM’s marketing department or website, and (iii) an amount equal to 4-6%of the monthly GOP (pre-fees) after deducting the amounts of (i) and (ii) above.
・ In “Security Deposit/Guarantee Money,” the amount of the security deposit/guarantee money
after amortization pursuant to the lease agreement is listed.
d.

“Overview of Building Conditions Survey Report” column:
For the Six Hotel Properties, INV has received a report from Tokio Marine dR Co., Ltd. onbuilding deterioration survey, short- and long-term repair plan decision, a condition survey incompliance with the Building Standards Act, a survey of dangerous substances contained in abuilding, and soil survey, amongst others, and has provided an overview of the report in thiscolumn.

・ “Short term Repair Costs” indicates the repair and/or replacement costs for items which, at thetime of the survey, are below minimum maintenance level due to deterioration or items which
are in violation of law or regulations, etc. and which can be judged as best to be repaired or
replaced within one year.
・ “Long term Repair Costs” consist of capital expenditures and repair costs. Capital expendituresmeans, of the anticipated improvement costs necessary to maintain the building at the set
building functionality level, the costs to extend the use period of the building’s equipment or to
replace it entirely. Repair costs means, of the anticipated improvement costs necessary tomaintain the building at the set building functionality level, costs other than capital expenditures.
・ “Replacement Price” means the total amount of the appropriate costs needed in the event thatthe appraised building is to be rebuilt at the time of the survey.
e.

About the section of “Overview of PML Report”
For the Six Hotel Properties, INV has received a seismic risk assessment from Tokio Marine dR

This English language notice is a translation of the Japanese-language notice released on July 19, 2023 and was prepared solely for the convenience of, and reference by,
non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on their own
investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties or assurances are
given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

14

Co., Ltd. The summary of the report is described in this section.
・ “Probable Maximum Loss (PML)” is a term that means the value of the largest loss that could
result from an earthquake, used for a specific property and for an overall portfolio as well. As
there is not a universal definition for PML in the strict sense, this press release uses the term
under the definition of “a loss (damage) estimate expressed as a percentage of the total
replacement cost of real property,” assuming an earthquake of the largest magnitude in the 50year period of a property’s expected lifetime, or a mega-quake of recurrence interval (return
period) of 475 years, which translates into a probability of recurrence 10% in 50 years.
f.

Descriptions in the “Area Characteristics”:
Descriptions in the “Area Characteristics” field are an abstract or summary of descriptions in theReal Estate Appraisal Report on each real property or trusted real property, prepared byappraisal firms or market report, or created by referring to such descriptions.

g.

Descriptions in the “Special Notes”:
Descriptions in the “Special Notes” fields are matters that are deemed important in considerationof their impact on rights, appraisal value, profitability and disposability of each real property ortrusted real property.

h.

“Income and Expenditures, Etc.” column:

・Based on the information provided from the sellers for each operating period from January 1,
2021 to December 31, 2022. This is not a guarantee of future income and expenditures.

・Amounts are rounded down to the nearest unit. Therefore, the figures may not necessarily
match the total value when added together. Unless otherwise specifically noted, the amounts
do not include consumption tax, etc.

・“Land Lease Fees” is based on the land lease fees applicable under a relevant lease agreement.

・“Taxes and Public Dues,” include property tax and city planning tax, which are generally
imposed on the owner on January 1 of each year. For property tax and city planning tax thatwere borne by the current owner at the time of acquisition of the real estate related properties
INV will acquire, the estimated amount is included in the acquisition cost, and is therefore notincluded in “Taxes and Public Dues.”

・“Non-life Insurance Premiums” is the total amount of paid insurance premiums distributed
proportionally over the relevant period.

・“Trust Fees” is based on real estate management and trust agreements which INV will enter
into and recorded per relevant period.

・“NOI” (Net Operating Income), which refers to an amount calculated by deducting operating
expenses (excluding depreciation expenses) from operating revenue, lists in principle the actual
figures as provided by the seller. With respect to the trust fees, administration fees, depreciationand insurance premiums, the figure following the adjustments assuming the asset is held by
INV is listed.

・“Room Income” includes room use fees and lease fees.

・“Other Income” includes items such as parking lot use fees, laundry fees, vending machinetransaction fees, etc. which do not fall under “Room Income”.

・“ADR,” or Average Daily Rate, is the value of the total room sales for a certain period (excluding
service fees) divided by the total number of sold rooms for the same period.

This English language notice is a translation of the Japanese-language notice released on July 19, 2023 and was prepared solely for the convenience of, and reference by,
non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on their own
investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties or assurances are
given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

15

・“RevPAR”, or Revenues Per Available Room per day, is calculated by dividing the total sales fora certain period by the aggregate number of rooms for the same period (rooms x number ofdays), and is the same figure as that of a product of room occupancy rate and ADR.

・“Room Occupancy Rate” is calculated using the following formula:
Room Occupancy Rate = the aggregate number of days per room for which each room was
occupied divided by the number of available rooms (aggregate number of rooms during therelevant period x number of business days during target period) during the relevant period

・“GOP Ratio” is calculated using the following formula:
GOP ratio = GOP ÷ sales figure
GOP is the amount remaining after deducting operating expenses such as personnel expenses,
cost of utilities, and advertising expenses, as well as management fee for operators (if any) fromthe hotel’s revenues.

・“Daily / Weekly / Monthly” is the ratio for each classification of length of stay (i.e.,
daily/weekly/monthly), and is calculated by dividing total room sales for the relevant
classification during each operational period by the aggregate room sales for the same
operational period and then multiplying the figure by 100. Daily, weekly and monthly areclassified by the number of days of stays, with daily being 1-6 nights, weekly being 7-29 nights,
and monthly being 30 or more nights.

・“Overseas Sales Share” is the sales amount via overseas web agents, who operate a business
managing application from abroad, to room sales. Therefore, the overseas sales share includes
revenues from domestic customers.

i.

“Summary of Real Estate Appraisal Report” column:
INV has requested real estate appraisals from Japan Real Estate Institute, The Tanizawa Sōgō
Appraisal Co., Ltd, Daiwa Real Estate Appraisal Co., Ltd., and JLL Morii Valuation & Advisory
K.K. for the Six Hotel Properties based on the matters for consideration in a real estate appraisal
under the Investment Trust Act, the Act on Real Estate Appraisal (Act No. 152 of 1963, as
amended; the “Act on Real Estate Appraisal”) and the real estate appraisal standards.
An appraisal value of a property is merely an opinion of the real estate appraiser regarding thevalue of the appraised property at the time the appraisal was conducted in accordance with the
Act on Real Estate Appraisal and real estate appraisal standards, etc.
A real estate appraisal is neither a guarantee nor a promise that an asset can be sold orpurchased at such appraisal value either now or in the future.

This English language notice is a translation of the Japanese-language notice released on July 19, 2023 and was prepared solely for the convenience of, and reference by,
non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on their own
investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties or assurances are
given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

16D84: Fusaki Beach Resort Hotel & Villas
Type and Location of Specified Assets, etc.
Type of Specified Assets

Trust Beneficiary Right

Date of Planned Acquisition

August 1, 2023

Planned Purchase Price

JPY 40,293 million

Appraisal Value

JPY 40,700 million

Appraisal Firm

Japan Real Estate Institute(Lot Number)

1625-6 Arakawa Fusaki, Ishigaki-shi, Okinawa, and sixty other lots

(Address)-

LocationTransport

Approximately 25 minutes by car from New Ishigaki Airport, and approximately 4-hour flight from Haneda airport(Note 1)
Form of Possession

Ownership /ZoningLand Lease

Unspecified

Land
Building

Coverage

Lot Area

108,968.39 m2

Form of Possession

Ownership

Purpose of Use

Hotel (Note 2)

Total Floor Area

23,573.57 m2

Construction Date (Note 2)

Garden Villas: June 11, 1982
North Wing: June 19, 2019
Wellness Center: March 31, 2020

Structure/No. of

Garden Villas: Reinforced concrete block construction layered tile concrete roof, 1 story
North Wing: Reinforced concrete construction layered tile concrete roof, 3 stories
Wellness Center: Reinforced concrete construction layered tile flat concrete roof, 2 stories

Stories (Note 2)
Building

Renovation Date
(Note 3)

Ratio/Floor Area Ratio

30% / 60%

April 2005: HANARÉMarch 2006, April 2018, February 2023: BEACHSIDE GRILL KACHIBAIMay 2015: Garden Terrace
April 2018: Beach Activity Bldg. etc.
December 2018: Central Village
June 2019: North Wing
March 2020: Wellness Center
July 2020: South Wing

Trustee

SMBC Trust Bank Ltd.

Trust Period

From: July 12, 2023; Until: July 31, 2033

Creation of Security Interest

None

Lease Overview (as of May 31, 2023)
Total No. of Tenant (s)1Number of Guest Rooms

Leasable Area

23,573.57 m2

Lease Area

23,573.57 m2

Occupancy Rate

398 rooms(T336・D2・O60)

Security Deposit/Guarantee

-

Money

100.0%GOP (per month)

JPY 202,793 thousand

Overview of Lease Agreement
TenantIsland Co., Ltd.

Type of Contract

Fixed rent plus variable rent type

Term

From: August 1, 2023 Until: July 31, 2033

Determination of rent of lease
contract

Fixed rent (JPY 681.2 million per annum (January: JPY 12.6 million per month / February: JPY 10.8 million permonth / March: JPY 59.7 million per month / April: JPY 49.7 million per month / May: JPY 62.4 million per month/
June: JPY 58.3 million per month/ July: JPY 127.3 million per month/ August: JPY 165.0 million per month/This English language notice is a translation of the Japanese-language notice released on July 19, 2023 and was prepared solely for the convenience of, and reference by,
non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on their own
investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties or assurances are
given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

17September: JPY 56.9 million per month/ October: JPY 47.7 million per month/ November: JPY 13.7 million permonth/ December: JPY 17.1 million per month)) plus variable rent based on GOP of hotel operation. (Note 4)
Management Services Fee
Security Deposit/Guarantee
Money
Renewal Upon Expiration

Not disclosed, as tenant's consent has not been obtained for disclosure.
The contract is a Fixed Term Building Lease, therefore the contract will terminate at the expiration of thelease term.

Rent Revision

Rent cannot be revised during the lease term.

Early Termination

Termination prior to the expiration of the lease term is not permitted.

Other Special Matters-

Overview of Building Conditions Survey ReportCompany Conducting Survey

Tokio Marine dR Co., Ltd.

Date of Report

Short term Repair Costs (within-

1 year)Long term Repair Costs (in 12

Replacement Price

June 2023
JPY 9,492,800 thousand

JPY 746,130 thousand

years)
Overview of PML reportCompany Conducting Survey

Tokio Marine dR Co., Ltd.

Probable Maximum Loss (PML)

Date of Report

June 2023

3.2%

Area Characteristic
The property is a resort hotel, located approximately a 25-minute drive from New Ishigaki Airport and an approximately 4-hour flight from Haneda Airport(Note 1). As one of Japan’s leading beach resorts, with 10.8 hectares of beach in front of the hotel, extensive renovations have made it one of Ishigaki
Island’s most spacious, private resort hotels, offering a variety of guest rooms and facilities, as well as activities throughout the year. Of the 398 rooms, 260(80.4% of the current total floor area) have been newly built after 2015, with North Wing (151 rooms) opening in 2019 and South Wing (65 rooms) opening
in 2020. In 2022, six of the 138 rooms of Garden Villas were renovated to offer luxurious spaces, including a private pool, BBQ terrace and fire pit; the
RevPAR per square meter of two renovated rooms has increased by 40.8% over the 11-month cumulative period through May 2023 compared to the similar
Villas (132 rooms) that have not been renovated. Ishigaki Island, where the property is located, offers spectacular beaches, excellent snorkeling locations,and is well known as the gateway to the Yaeyama Islands. Ishigaki Island has direct flights from major cities in Japan, and is in close proximity to Southeast
Asia, giving it an advantage in accessibility.
Special Notes
Some part of its boundary of the property has not been determined in writing yet.
The property is a partly leased property, and the lessee shall obtain the prior written approval of the owner or pay a certain fee for approval in the event ofa transfer of the lease right in accordance with the transfer of the building or sublease of the land to third parties, etc.
A part of the land is subject to the Urban Planning Park (8.6.1 Kannondo Historical Park).
(Note 1) Approximately 3 hours fright from Haneda Airport and approximately 25-minute drive from New Ishigaki Airport to the property (not considering checkin and baggage claim time).
(Note 2) Applies to the major buildings within the properties located in the area.
(Note 3) The year and month in which extension works for each building were implemented are stated.
(Note 4) Variable rent is the amount of difference between (i) GOP during the three-month variable rent calculation period and (ii) the sum of fixed rent during
the same period. However, when the balance is zero or negative, variable rent will be deemed to be zero.

This English language notice is a translation of the Japanese-language notice released on July 19, 2023 and was prepared solely for the convenience of, and reference by,
non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on their own
investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties or assurances are
given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

18D84: Fusaki Beach Resort Hotel & Villas
Income and Expenditures, Etc.
January 1, 2021 – December 31, 2021

January 1, 2022 – December 31, 2022

JPY 689,090 thousand

JPY 2,002,288 thousand

JPY 1,033 thousand

JPY 1,033 thousand

JPY 98,724 thousand

JPY 98,724 thousand

JPY 2,159 thousand

JPY 2,159 thousand

JPY 700 thousand

JPY 700 thousand

JPY 586,473 thousand

JPY 1,899,671 thousand

JPY 3,287,082 thousand

JPY 5,765,616 thousand

Room Income

JPY 2,076,905 thousand

JPY 3,910,058 thousand

Other Income

JPY 1,210,176 thousand

JPY 1,855,557 thousand

JPY 2,597,991 thousand

JPY 3,763,327 thousand

ADR

JPY 37,487

JPY 40,916

RevPARJPY 14,297

JPY 26,916

Room Occupancy Rate

38.1%

65.8%

GOP Ratio

21.0%

34.7%

Operating Period
GOP (= (1) - (2))
a. Land Lease Fees
b. Taxes and Public Duesc. Non-life Insurance Premiumsd. Trust FeesNOI (= GOP - [a. + b. + c. + d.])(1) Sales(2) Operating Costs (not including a.
through d. above)(Reference)

Daily/ Weekly/ Monthly

100.0%/

0.0%/

Overseas Sales Share

0.0%

100.0%/

0.0%/

0.0%

9.2%

6.7%

＜Hotel KPI＞
Appraisal (Note 3)

ActualRoom Occupancy Rate (Note 1)

76.8%

Room Occupancy Rate

82.0%

ADR (Note 1)

JPY 39,788

ADR

JPY 41,500

RevPAR (Note 1)

JPY 30,569

RevPAR

JPY 34,030

NOI (Note 2)

JPY 2,246MMNOI

JPY 2,252MM(Note 1) Average of recent 12 months as of May 31, 2023 (from June 1, 2022 to May 31, 2023)(Note 2) NOI is the net operating income (actual) for recent 12 months as of May 31, 2023 (from June 1, 2022 to May 31, 2023)(Note 3) Numbers are from appraisal report as of June 1, 2023. They are assumed numbers for the normal year (every year after three years from therecovery from the COVID-19 pandemic; the same shall apply hereinafter) assessed by each appraisal firm under certain preconditions, and it is notguaranteed to be achieved in the future, and it may actually change significantly.

This English language notice is a translation of the Japanese-language notice released on July 19, 2023 and was prepared solely for the convenience of, and reference by,
non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on their own
investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties or assurances are
given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

19D84: Fusaki Beach Resort Hotel & Villas
Summary of Real Estate Appraisal Report
Appraisal Value

JPY 40,700 million

Appraisal Firm

Japan Real Estate InstituteTime of Valuation

June 1, 2023
Item

1. Value of Profits using the Profit Capitalization Method(1) Direct Capitalization Method

Contents

Overview(JPY thousand)
40,700,000
41,100,000(I) Operating Revenue [(a)-(b)]2,372,189(a) Total Potential Revenue

2,372,189

Room Rental Income and Common Area Maintenance Fee are
estimated based on anticipated lease agreement, historical data,comparable assets and project medium- to long-term rents(b) Vacant Room Losses, etc.
(II) Operating Costs (Expense Rate)[(c)+(d)+(e)+(f)+(g)+(h)+(i)+(j)]120,115(c) Maintenance and Management Costs-(d) Utility Costs-(e) Repair Costs

18,653(f) Property Management Fee-(g) Tenant Solicitation Expenses-(h) Taxes and Public Dues

98,725(i) Non-life Insurance Premiums

1,704(j) Other Costs

1,033(III) Net Operating Income [(I)-(II)](k) One-time Investment Gains

Based on comparable assets and average annual estimate in theengineering report

Based on standard taxable value as stated in the documents
relating to tax rate adjustments

Rent

2,259,074
Assessed in consideration of the level of capital expenditures,(l) Capital Improvements and Expenses

43,525(m) FF&E Reserve

110,387

building age and annual average of repair costs in the engineering
report of comparable assets(IV) Net Income [(III)+(k)-(l)-(m)]Capitalization Yield(2) DCF Method

Based on comparable assets as well as repair and maintenance plan

2,098,162
5.1%

Assessed in consideration of future uncertainties and comparable
assets’ transaction yields, etc.

40,200,000
Assessed in consideration of local standard yields of respective

Discount Rate

4.9%

regions based on analyses of real estate investors’ surveys, as wellas the property’s individual characteristics
Assessed based on comprehensive consideration of future trends,

Final Capitalization Yield

5.3%

risks unique to the property and general forecasts of future economic
growth rates, etc., by reference to comparable assets’ transaction
yields, etc.

2. Estimated Price using Cost Method

20,800,000

Land Ratio

45.3%

Building Ratio

53.0%

FF&E Ratio

1.7%
Judged that income approach value truly replicates the price formation process from an

Other Points to be Noted for Appraisal by Appraisal Firm

income perspective, is more persuasive and adopted the Income Price, with the cost
approach value as a reference.

This English language notice is a translation of the Japanese-language notice released on July 19, 2023 and was prepared solely for the convenience of, and reference by,
non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on their own
investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties or assurances are
given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

20

D85: Tateshina Grand Hotel Takinoyu
Type and Location of Specified Assets, etc.
Type of Specified Assets

Trust Beneficiary Right

Date of Planned Acquisition

August 1, 2023

Planned Purchase Price

JPY 8,365 million

Appraisal Value

JPY 8,450 million

Appraisal Firm

Tanizawa Sōgō Appraisal Co., Ltd.
(Lot Number)

Location(Address)
Transport

4035-187 Minamiyama Kuridaira yori Mimuro Oogaya made, Kitayama, Chino-shi, Nagano,and sixteen other lots-

Approximately 25-minute by car from JR Chino Station on the JR Chuo Main Line
Form of Possession

Ownership /ZoningLand leaseNot specified areaLand
Lot Area

123,283.04 m2

Form of Possession

Ownership

Total Floor Area

Building

Structure/No. of
Stories (Note 2)

Renovation Date

Building

Coverage Ratio/Floor

Area Ratio

20,577.41 m2(Note 1)30% / 50%

Purpose of Use

Hotel (Note 1) (Note 2)

Construction Date (Note 2)

August 20, 1966
July 31, 1967
July 31, 1988

Steel frame, reinforced concrete structure with galvanized steel, 1 basement, 8 stories
Steel frame, reinforced concrete structure with galvanized steel, 3 stories
Wood, reinforced concrete structure with alloy plated steel, one story
January – April 2020, January – May 2022

Trustee

SMBC Trust Bank Ltd.

Trust Period

From: April 22, 2019; Until: July 31, 2033

Creation of Security Interest

None

Lease Overview (as of May 31, 2023)
Total No. of Tenant (s)1Number of Guest Rooms

Leasable Area

20,577.41 m2

Lease Area

20,577.41 m2

Occupancy Rate

160 rooms(T14・D6・O140)

Security Deposit/Guarantee

-

Money

100.0%GOP (per month)

JPY 44,692 thousand

Overview of Lease Agreement
TenantTateshina Takinoyu Godo Kaisha

Type of Contract

Fixed rent plus variable rent type

Term

From: August 1, 2023 Until: July 31, 2033
Fixed rent (JPY 166.8 million per annum (January: JPY 4.5 million per month / February: JPY 2.6 million per month /Determination of rent of lease
contract

March: JPY 10.5 million per month / April: JPY 2.8 million per month / May: JPY 14.6 million per month/ June: JPY
7.4 million per month/ July: JPY 14.8 million per month/ August: JPY 42.0 million per month/ September: JPY 19.4
million per month/ October: JPY 23.0 million per month/ November: JPY 19.3 million per month/ December: JPY 5.9
million per month)) plus variable rent based on GOP of hotel operation. (Note 3)

Management Services Fee

Not disclosed, as tenant's consent has not been obtained for disclosure.

This English language notice is a translation of the Japanese-language notice released on July 19, 2023 and was prepared solely for the convenience of, and reference by,
non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on their own
investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties or assurances are
given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

21Security Deposit/Guarantee
Money
Renewal Upon Expiration

The contract is a Fixed Term Building Lease, therefore the contract will terminate at the expiration of thelease term.

Rent Revision

Rent cannot be revised during the lease term.

Early Termination

Termination prior to the expiration of the lease term is not permitted.

Other Special Matters-

Overview of Building Conditions Survey ReportCompany Conducting Survey

Tokio Marine dR Co., Ltd.

Short term Repair Costs (within

Date of Report-

1 year)Long term Repair Costs (in 12

Replacement Price

June 2023
JPY 6,583,000 thousand

JPY 1,226,322 thousand

years)
Overview of PML reportCompany Conducting Survey

Tokio Marine dR Co., Ltd.

Probable Maximum Loss (PML)

Date of Report

June 2023

16.2%

Area Characteristic
Tateshina Grand Hotel Takinoyu is a resort hotel with an abundance of natural beauty and hot springs, located a 25-minute drive from JR Chino Station on
the JR Chuo Main Line and it has a shuttle bus available (reservation required). The surrounding area provides year-round activities including golf, skiing,
hiking and one of the most scenic drives on the Venus Line. As all the guest rooms are for two or more, the hotel is intended to attract families and groupsof three generations, equipped with amenities such as karaoke, table tennis and game arcade, sauna, lounge area, reading area, relaxation area and kids’
park area, and a variety of hot springs (2 open-air baths, 2 large baths and 3 private open-air baths). Nagano prefecture attracts multinational tourists and islikely to boost further inbound demand as well as stable domestic tourism demand. Tateshina has various attractions as an all-season resort, which will help
draw many tourists during the recovery phase for inbound tourism.
Special Notes
Some part of its boundary of the property has not been determined in writing yet. The property is a partly leased property, and the lessee shall obtain theprior written approval of the owner or pay certain fee for approval in the event of transfer the lease right in accordance with the transfer of the building or
sublease of the land to third parties, etc.
(Note 1) There is a machinery room and corridor (total of 164.38m2) as annex buildings.
(Note 2) Applies to the major buildings within the eight properties located in the area.
(Note 3) Variable rent is the amount of difference between (i) GOP during the three-month variable rent calculation period and (ii) the sum of fixed rent during
the same period. However, when the balance is zero or negative, variable rent will be deemed to be zero.

This English language notice is a translation of the Japanese-language notice released on July 19, 2023 and was prepared solely for the convenience of, and reference by,
non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on their own
investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties or assurances are
given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

22D85: Tateshina Grand Hotel Takinoyu
Income and Expenditures, Etc.
January 1, 2021 – December 31, 2021

January 1, 2022 – December 31, 2022

GOP (= (1) - (2))

JPY 204,084 thousand

JPY 476,507 thousanda. Land Lease Fees

JPY 17,189 thousand

JPY 17,189 thousandb. Taxes and Public Dues

JPY 13,360 thousand

JPY 13,360 thousand

JPY 1,319 thousand

JPY 1,319 thousandd. Trust Fees

JPY 700 thousand

JPY 700 thousande. Other Costs

JPY 118 thousand

JPY 118 thousand

NOI (= GOP - [a. + b. + c. + d. + e.])JPY 171,396 thousand

JPY 443,820 thousand(1) Sales

JPY 1,335,200 thousand

JPY 2,010,896 thousand

Room Income

JPY 626,097 thousand

JPY 1,104,613 thousand

Other Income

JPY 709,103 thousand

JPY 906,282 thousand

JPY 1,131,116 thousand

JPY 1,534,388 thousand

ADR

JPY 20,274

JPY 26,593

RevPARJPY 10,396

JPY 18,725

Room Occupancy Rate

51.3%

70.4%

GOP Ratio

15.3%

23.7%

Operating Periodc. Non-life Insurance Premiums(2) Operating Costs (not including a.
through d. above)(Reference)

Daily/ Weekly/ Monthly

100.0%/

0.0%/

Overseas Sales Share

0.0%

100.0%/

0.0%/

2.2%

1.6%

＜Hotel KPI＞
ActualAppraisal (Note 3)

Room Occupancy Rate (Note 1)

79.7%

Room Occupancy Rate

82.3%

ADR (Note 1)

JPY 27,013

ADR

JPY 27,000

RevPAR (Note 1)

JPY 21,527

RevPARJPY 22,221

NOI (Note 2)

JPY 561MMNOI

JPY 600MM(Note 1) Average of recent 12 months as of May 31, 2023 (from June 1, 2022 to May 31, 2023)(Note 2) NOI is the net operating income (actual) for recent 12 months as of May 31, 2023 (from June 1, 2022 to May 31, 2023)(Note 3) Numbers are from appraisal report as of June 1, 2023. They are assumed numbers for the normal year assessed by each appraisal firm undercertain preconditions, and it is not guaranteed to be achieved in the future, and it may actually change significantly.

This English language notice is a translation of the Japanese-language notice released on July 19, 2023 and was prepared solely for the convenience of, and reference by,
non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on their own
investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties or assurances are
given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

23

0.0%

D85: Tateshina Grand Hotel Takinoyu
Summary of Real Estate Appraisal Report
Appraisal Value

JPY 8,450 million

Appraisal Firm

Tanizawa Sōgō Appraisal Co., Ltd.

Time of Valuation

June 1, 2023
Item

1. Value of Profits using the Profit Capitalization Method(1) Direct Capitalization Method

Contents

Overview(JPY thousand)
8,450,000
8,500,000(I) Operating Revenue [(a)-(b)]666,738(a) Total Potential Revenue

666,738

Room Rental Income and Common Area Maintenance Fee are
estimated based on anticipated lease agreement, historical data,comparable assets and project medium- to long-term rents(b) Vacant Room Losses, etc.
(II) Operating Costs (Expense Rate)[(c)+(d)+(e)+(f)+(g)+(h)+(i)+(j)]65,813(c) Maintenance and Management Costs-(d) Utility Costs

Assessed based on comprehensive consideration of future trends,(e) Repair Costs

32,325risks unique to the property and general forecasts of future
economic growth rates, etc., by reference to comparable assets’transaction yields, etc.

(f) Property Management Fee-(g) Tenant Solicitation Expenses

Based on standard taxable value as stated in the documents(h) Taxes and Public Dues

14,194

relating to taxes and public dues, tax rate adjustments and detailsof renovation works(i) Non-life Insurance Premiums

1,319(j) Other Costs

17,974(III) Net Operating Income [(I)-(II)](k) One-time Investment Gains

Based on insurance premiums of insurance policy as well ascomparable assets
Other expenses including land rent paid and fees for roadoccupancy and use

600,924-24
Assessed figures based on ER and comparable cases, by reference(l) Capital Improvements and Expenses

74,546to the Basic Directive on the Corporation Tax Act, etc. (1.05% ofbuilding replacement cost)(m) FF&E Reserve(IV) Net Income［(III)+(k)-(l)-(m)]24,630Recorded 1.0% of the gross sales, by reference to comparable
cases

501,723
Based on comparing multiple transaction yield in the neighboring

Capitalization Yield

5.9%

areas or similar areas with the same supply and demand taking into
consideration of the future changes in revenues(2) DCF Method

8,430,000

Discount Rate

5.9%

Final Capitalization Yield

6.1%

2. Estimated Price using Cost Method

Based on transaction yield of comparable assets and characteristicsof the property
Based on transaction yield of comparable assets taking into
consideration of future prediction uncertainty

7,460,000

Land Ratio

37.2%

Building Ratio

58.3%

FF&E Ratio

4.5%

This English language notice is a translation of the Japanese-language notice released on July 19, 2023 and was prepared solely for the convenience of, and reference by,
non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on their own
investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties or assurances are
given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

24Adopted the appraisal value determined using the income capitalization method, after
Other Points to be Noted for Appraisal by Appraisal Firm

considering recent economic environment, especially real estate market trend andappropriateness of using data, pricing rule, relationship between unit price and gross price,with the cost approach value as a referenceThis English language notice is a translation of the Japanese-language notice released on July 19, 2023 and was prepared solely for the convenience of, and reference by,
non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on their own
investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties or assurances are
given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

25

D86: Hotel MyStays Okayama
Type and Location of Specified Assets, etc.
Type of Specified Assets

Trust Beneficiary Right

Date of Planned Acquisition

August 1, 2023

Planned Purchase Price

JPY 2,613 million

Appraisal Value

JPY 2,640 million

Appraisal Firm

Japan Real Estate Institute(Lot Number)

9-107, Honmachi, Kita-ku, Okayama-shi, Okayama(Address)

9-16, Honmachi, Kita-ku, Okayama-shi, Okayama

LocationTransport

Approximately 7-minute walk from JR Okayama Station
Form of Possession

Ownership

Lot Area

768.63 m2

Form of Possession

Ownership

ZoningLand

Total Floor Area
Building

Structure/No. of
StoriesRenovation Date

Building

Commercial area
Coverage

Ratio/Floor Area Ratio

3,023.27 m2(Note 1)80% / 500%

Purpose of Use

Hotel (Note 1)

Construction Date

March 17, 1986

Steel framed reinforced concrete structure with flat roof, 9 stories

August – October 2021

Trustee

SMBC Trust Bank Ltd.

Trust Period

From: May 31, 2021; Until: July 31, 2033

Creation of Security Interest

None

Lease Overview (as of May 31, 2023)
Total No. of Tenant (s)1Number of Guest Rooms

Leasable Area

3,023.27 m2

Lease Area

3,023.27 m2

Occupancy Rate

145 rooms(T14・D127・O4)

Security Deposit/Guarantee

-

Money

100.0%GOP (per month)

JPY 15,775 thousand

Overview of Lease Agreement
TenantMYSTAYS HOTEL MANAGEMENT Co., Ltd.

Type of Contract

Fixed rent plus variable rent type

Term

From: August 1, 2023 Until: July 31, 2033
Fixed rent (JPY 39.8 million per annum (January: JPY 1.3 million per month / February: JPY 2.3 million per month /Determination of rent of lease
contract

March: JPY 4.1 million per month / April: JPY 2.5 million per month / May: JPY 4.8 million per month/ June: JPY 2.9
million per month/ July: JPY 3.1 million per month/ August: JPY 4.3 million per month/ September: JPY 3.3 million
per month/ October: JPY 4.6 million per month/ November: JPY 4.4 million per month/ December: JPY 2.2 million
per month)) plus variable rent based on GOP of hotel operation. (Note 2)

Management Services Fee
Security Deposit/Guarantee
Money
Renewal Upon Expiration

Not disclosed, as tenant's consent has not been obtained for disclosure.
The contract is a Fixed Term Building Lease, therefore the contract will terminate at the expiration of theThis English language notice is a translation of the Japanese-language notice released on July 19, 2023 and was prepared solely for the convenience of, and reference by,
non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on their own
investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties or assurances are
given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

26

lease term.
Rent Revision

Rent cannot be revised during the lease term.

Early Termination

Termination prior to the expiration of the lease term is not permitted.

Other Special Matters-

Overview of Building Conditions Survey ReportCompany Conducting Survey

Tokio Marine dR Co., Ltd.

Short term Repair Costs (within-

1 year)Long term Repair Costs (in 12
years)

Date of Report
Replacement Price

June 2023
JPY 1,066,600 thousand

JPY 104,009 thousand

Overview of PML reportCompany Conducting Survey

Tokio Marine dR Co., Ltd.

Probable Maximum Loss (PML)

Date of Report

June 2023

3.4%

Area Characteristic
Hotel MyStays Okayama is a business hotel located an approximately 7 minutes on foot from JR Okayama Station, 15 minutes by car from Okayama IC
and 30 minutes by car from Okayama Airport, which is a bullet train station close to the “corridor of green”, the 2.4 km stretch of the Nishigawa Canal Walk.
Located near the Okayama Prefectural Government Office and Omotecho shopping street, Okayama City Hall and other governmental agencies, the hotel
caters to both business and tourism demand and will maintain a stable occupancy rate as a gateway to Shikoku. Haré Baré Burger, a newly opened
restaurant on the first floor, offers buffet-style breakfast, as well as lunch and dinner.
Special Notes
None(Note 1) There is a garage (32.64m2) as an annex building.
(Note 2) Variable rent is the amount of difference between (i) GOP during the three-month variable rent calculation period and (ii) the sum of fixed rent during
the same period. However, when the balance is zero or negative, variable rent will be deemed to be zero.

This English language notice is a translation of the Japanese-language notice released on July 19, 2023 and was prepared solely for the convenience of, and reference by,
non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on their own
investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties or assurances are
given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

27

D86: Hotel MyStays Okayama
Income and Expenditures, Etc.
September 1, 2021 – December 31, 2021

Operating Period

January 1, 2022 – December 31, 2022

(Note 1)

GOP (= (1) - (2))

JPY 22,112 thousand

JPY 90,744 thousand--

JPY 1,805 thousand

JPY 6,084 thousandc. Non-life Insurance Premiums

JPY 73 thousand

JPY 221 thousandd. Trust Fees

JPY 233 thousand

JPY 700 thousand

JPY 20,001 thousand

JPY 83,739 thousand

JPY 74,553 thousand

JPY 268,641 thousand

Room Income

JPY 67,331 thousand

JPY 244,196 thousand

Other Income

JPY 7,221 thousand

JPY 24,444 thousand

JPY 52,440 thousand

JPY 177,897 thousand

ADR

JPY 4,999

JPY 5,887

RevPAR

JPY 3,806

JPY 4,614

Room Occupancy Rate

76.1%

78.4%

GOP Ratio

29.7%

33.8%

a. Land Lease Fees
b. Taxes and Public DuesNOI (= GOP - [a. + b. + c. + d.])(1) Sales(2) Operating Costs (not including a.
through d. above)(Reference)

Daily/ Weekly/ Monthly

100.0%/

0.0%/

Overseas Sales Share

0.0%

100.0%/

0.0%/

0.0%

8.9%

12.2%

(Note 1) Data after September 1, 2021 are indicated, as the hotel was rebranded and reopened on September 1, 2021.

＜Hotel KPI＞
ActualAppraisal (Note 3)

Room Occupancy Rate (Note 1)

83.3%

Room Occupancy Rate

88.0%

ADR (Note 1)

JPY 6,830

ADR

JPY 7,600

RevPAR (Note 1)

JPY 5,692

RevPARJPY 6,688

NOI (Note 2)

JPY 113MMNOI

JPY 152MM(Note 1) Average of recent 12 months as of May 31, 2023 (from June 1, 2022 to May 31, 2023)(Note 2) NOI is the net operating income (actual) for recent 12 months as of May 31, 2023 (from June 1, 2022 to May 31, 2023)(Note 3) Numbers are from appraisal report as of June 1, 2023. They are assumed numbers for the normal year assessed by each appraisal firm undercertain preconditions, and it is not guaranteed to be achieved in the future, and it may actually change significantly.

This English language notice is a translation of the Japanese-language notice released on July 19, 2023 and was prepared solely for the convenience of, and reference by,
non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on their own
investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties or assurances are
given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

28

D86: Hotel MyStays Okayama
Summary of Real Estate Appraisal Report
Appraisal Value

JPY 2,640 million

Appraisal Firm

Japan Real Estate InstituteTime of Valuation

June 1, 2023
Item

1. Value of Profits using the Profit Capitalization Method(1) Direct Capitalization Method

Contents

Overview(JPY thousand)
2,640,000
2,660,000(I) Operating Revenue [(a)-(b)]162,020(a) Total Potential Revenue

162,020

Room Rental Income and Common Area Maintenance Fee are
estimated based on anticipated lease agreement, historical data,comparable assets and project medium- to long-term rents(b) Vacant Room Losses, etc.
(II) Operating Costs (Expense Rate)[(c)+(d)+(e)+(f)+(g)+(h)+(i)+(j)]9,172(c) Maintenance and Management Costs-

Not expected since it is included in hotel operation cost(d) Utility Costs-

Not expected since it is included in hotel operation cost(e) Repair Costs

2,600(f) Property Management Fee-(g) Tenant Solicitation Expenses-

Based on comparable assets and average annual estimate in theengineering report

Based on standard taxable value as stated in the documents(h) Taxes and Public Dues

6,381

relating to taxes and public dues, tax rate adjustments and detailsof renovation works(i) Non-life Insurance Premiums(j) Other Costs(III) Net Operating Income [(I)-(II)](k) One-time Investment Gains

191

Based on insurance premiums of insurance policy as well ascomparable assets

152,848
Assessed in consideration of the level of capital expenditures,(l) Capital Improvements and Expenses

6,067(m) FF&E Reserve

8,678

building age and annual average of repair costs in the engineering
report of comparable assets(IV) Net Income［(III)+(k)-(l)-(m)]Based on comparable assets as well as repair and maintenance plan

138,103
Assessed in consideration of future uncertainties and comparable

Capitalization Yield

5.2%

assets’ transaction yields, etc., as well as risk factors including costs
related to anti-asbestos measures(2) DCF Method

2,620,000
Assessed in consideration of local standard yields of respective

Discount Rate

4.9%

regions based on analyses of real estate investors’ surveys, as wellas the property’s individual characteristics
Assessed based on comprehensive consideration of future trends,

Final Capitalization Yield

5.3%

risks unique to the property and general forecasts of future economic
growth rates, etc., by reference to comparable assets’ transaction
yields, etc.

2. Estimated Price using Cost Method

1,090,000

Land Ratio

72.7%

Building Ratio

21.0%

FF&E Ratio

6.3%

This English language notice is a translation of the Japanese-language notice released on July 19, 2023 and was prepared solely for the convenience of, and reference by,
non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on their own
investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties or assurances are
given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

29Judged that income approach value truly replicates the price formation process from an
Other Points to be Noted for Appraisal by Appraisal Firm

income perspective, is more persuasive and adopted the Income Price, with the cost
approach value as a reference.

This English language notice is a translation of the Japanese-language notice released on July 19, 2023 and was prepared solely for the convenience of, and reference by,
non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on their own
investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties or assurances are
given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

30

D87: Hotel MyStays Aomori Station
Type and Location of Specified Assets, etc.
Type of Specified Assets

Trust Beneficiary Right

Date of Planned Acquisition

August 1, 2023

Planned Purchase Price

JPY 2,445 million

Appraisal Value

JPY 2,470 million

Appraisal Firm

JLL Morii Valuation & Advisory K.K.
(Lot Number)

1-chōme-8-10, 11, 21 Shinmachi, Aomori City, Aomori(Address)

1-chōme-8-6 Shinmachi, Aomori City, Aomori

LocationTransport

Approximately 5-minute walk from JR Aomori Station (Ou Main Line)
Form of Possession

Ownership /ZoningLand Lease

Commercial areaLand
Lot Area

654.43 m2

Form of Possession

Ownership

Total Floor Area
Building

Structure/No. of
StoriesRenovation Date

Building

Coverage

Ratio/Floor Area Ratio

3,963.86 m2(Note 1)80% / 600%

Purpose of Use

Hotel, Commercial

Construction Date

June 12, 2007

Steel framed reinforced concrete structure with flat roof, 11 stories

May – December 2019

Trustee

SMBC Trust Bank Ltd.

Trust Period

From: March 29, 2019; Until: July 31, 2033

Creation of Security Interest

None

Lease Overview (as of May 31,2023)
Total No. of Tenant (s)1Number of Guest Rooms

Leasable Area

3,963.86 m2

Lease Area

3,963.86 m2

Occupancy Rate

132 rooms(T18・D112・O2)

Security Deposit/Guarantee

-

Money

100.0%GOP (per month)

JPY 18,801 thousand

Overview of Lease Agreement
TenantMYSTAYS HOTEL MANAGEMENT Co., Ltd.

Type of Contract

Fixed rent plus variable rent type

Term

From: August 1, 2023 Until: July 31, 2033
Fixed rent (JPY 51.5 million per annum (January: JPY 1.1 million per month / February: JPY 2.0 million per month /Determination of rent of lease
contract

March: JPY 3.2 million per month / April: JPY 7.0 million per month / May: JPY 5.2 million per month/ June: JPY 4.3
million per month/ July: JPY 4.4 million per month/ August: JPY 10.4 million per month/ September: JPY 4.0 million
per month/ October: JPY 5.8 million per month/ November: JPY 3.1 million per month/ December: JPY 1.0 million
per month)) plus variable rent based on GOP of hotel operation. (Note 2)

Management Services Fee
Security Deposit/Guarantee
Money

Not disclosed, as tenant's consent has not been obtained for disclosure.
-This English language notice is a translation of the Japanese-language notice released on July 19, 2023 and was prepared solely for the convenience of, and reference by,
non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on their own
investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties or assurances are
given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

31Renewal Upon Expiration

The contract is a Fixed Term Building Lease, therefore the contract will terminate at the expiration of thelease term.

Rent Revision

Rent cannot be revised during the lease term.

Early Termination

Termination prior to the expiration of the lease term is not permitted.

Other Special Matters-

Overview of Building Conditions Survey ReportCompany Conducting Survey
Short term Repair Costs (within
1 year)Long term Repair Costs (in 12
years)

Tokio Marine dR Co., Ltd.

Date of Report

JPY 50 thousand

Replacement Price

June 2023
JPY 1,177,800 thousand

JPY 119,081 thousand

Overview of PML reportCompany Conducting Survey

Tokio Marine dR Co., Ltd.

Probable Maximum Loss (PML)

Date of Report

June 2023

3.3%

Area Characteristic
The property is conveniently located within an approximately 5 minutes on foot from JR Aomori Station, 15 minutes by car from Aomori Chuo IC and 30
minutes by bus from Aomori Airport, in the middle of the Station East area, enjoying access to the city’s most commercially popular area, and situated along
Shinmachi street which is famous for the parade route for the Nebuta festival held in August every year. The Aomori Nebuta festival attracts the most touristsof all Nebuta festivals in Japan. The hotel also captures demand from both domestic and inbound guests with rooms that accommodate 3 people.
Special Notes
The property is a partly leased property, and the lessee shall obtain the prior written approval of the owner or pay certain fee for approval in the event oftransfer the lease right in accordance with the transfer of the building or sublease of the land to third parties, etc.
(Note 1) There is a garbage collection area (7.86m2) as an annex building.
(Note 2) Variable rent is the amount of difference between (i) GOP during the three-month variable rent calculation period and (ii) the sum of fixed rent during
the same period. However, when the balance is zero or negative, variable rent will be deemed to be zero.

This English language notice is a translation of the Japanese-language notice released on July 19, 2023 and was prepared solely for the convenience of, and reference by,
non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on their own
investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties or assurances are
given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

32D87: Hotel MyStays Aomori Station
Income and Expenditures, Etc.
January 1, 2021 – December 31, 2021

January 1, 2022 – December 31, 2022

JPY 43,552 thousand

JPY 144,032 thousanda. Land Lease Fees

JPY 7,200 thousand

JPY 7,200 thousandb. Taxes and Public DuesJPY 7,953 thousand

JPY 7,953 thousandc. Non-life Insurance Premiums

JPY 248 thousand

JPY 248 thousandd. Trust Fees

JPY 700 thousand

JPY 700 thousand

JPY 27,451 thousand

JPY 127,930 thousand

JPY 193,421 thousand

JPY 334,404 thousand

Room Income

JPY 150,885 thousand

JPY 289,318 thousand

Other Income

JPY 42,535 thousand

JPY 45,085 thousand

JPY 149,868 thousand

JPY 190,371 thousand

ADR

JPY 5,467

JPY 8,238

RevPAR

JPY 3,132

JPY 6,005

Room Occupancy Rate

57.3%

72.9%

GOP Ratio

22.5%

43.1%

Operating Period
GOP (= (1) - (2))

NOI (= GOP - [a. + b. + c. + d.])(1) Sales(2) Operating Costs (not including a.
through d. above)(Reference)

Daily/ Weekly/ Monthly

100.0%/

0.0%/

Overseas Sales Share

0.0%

100.0%/

0.0%/

4.8%

7.3%

＜Hotel KPI＞
ActualAppraisal (Note 3)

Room Occupancy Rate (Note 1)

79.2%

Room Occupancy Rate

82.1%

ADR (Note 1)

JPY 9,071

ADR

JPY 9,441

RevPAR (Note 1)

JPY 7,188

RevPAR

JPY 7,754

NOI (Note 2)

JPY 171MM

NOI

JPY 157MM(Note 1) Average of recent 12 months as of May 31, 2023 (from June 1, 2022 to May 31, 2023)(Note 2) NOI is the net operating income (actual) for recent 12 months as of May 31, 2023 (from June 1, 2022 to May 31, 2023)(Note 3) Numbers are from appraisal report as of June 1, 2023. They are assumed numbers for the normal year assessed by each appraisal firm undercertain preconditions, and it is not guaranteed to be achieved in the future, and it may actually change significantly.

This English language notice is a translation of the Japanese-language notice released on July 19, 2023 and was prepared solely for the convenience of, and reference by,
non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on their own
investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties or assurances are
given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

33

0.0%

D87: Hotel MyStays Aomori Station
Summary of Real Estate Appraisal Report
Appraisal Value

JPY 2,470 million

Appraisal Firm

JLL Morii Valuation & Advisory K.K.

Time of Valuation

Jun 1, 2023
Item

1. Value of Profits using the Profit Capitalization Method(1) Direct Capitalization Method

Contents

Overview(JPY thousand)
2,470,000
2,500,000(I) Operating Revenue [(a)-(b)]176,717(a) Total Potential Revenue

176,717(b) Vacant Room Losses, etc.
(II) Operating Costs (Expense Rate)[(c)+(d)+(e)+(f)+(g)+(h)+(i)+(j)]18,984-(d) Utility Costs-(e) Repair Costs

2,977(f) Property Management Fee-(g) Tenant Solicitation Expenses-(h) Taxes and Public Dues

6,759(i) Non-life Insurance Premiums

248(j) Other Costs

9,000

6,946

(m) FF&E Reserve

8,434

Based on actual results and taking into account depreciation overtime
Amount equivalent to 0.02% of replacement cost
Land and reserve expenses

70% of the amount deemed reasonable and leveled based on theestimate in the engineering report

142,353
5.7%

Capitalization Yield

2,430,000

Discount Rate

5.5%

Final Capitalization Yield

5.9%

2. Estimated Price using Cost Method

estimate in the engineering report-(l) Capital Improvements and Expenses(2) DCF Method

30% of the amount deemed reasonable and leveled based on the157,733(k) One-time Investment Gains(IV) Net Income［(III)+(k)-(l)-(m)]conditions, etc.

-(c) Maintenance and Management Costs(III) Net Operating Income [(I)-(II)]Stable medium- to long-term rents are estimated based on current

903,000

Land Ratio

18.2%

Building Ratio

74.7%

FF&E Ratio

7.1%
Adopted the value of profits in consideration of the analyses of regional and other individual

Other Points to be Noted for Appraisal by Appraisal Firm

factors, the characteristics of the estimated price and its compatibility with the value of profits,
and based on the relative liability of the materials used in each method, by reference to thecost approachThis English language notice is a translation of the Japanese-language notice released on July 19, 2023 and was prepared solely for the convenience of, and reference by,
non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on their own
investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties or assurances are
given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

34D88: Hotel MyStays Soga
Type and Location of Specified Assets, etc.
Type of Specified Assets

Trust Beneficiary Right

Date of Planned Acquisition

August 1, 2023

Planned Purchase Price

JPY 2,039 million

Appraisal Value

JPY 2,060 million

Appraisal Firm

The Tanizawa Sōgō Appraisal Co., Ltd.
(Lot Number)2-chōme-7-5, 7-4 Minamichō, Chuo Ward, Chiba(Address)2-chōme-7-13 Minamichō, Chuo Ward, Chiba

LocationTransport

Approximately 2-minute walk from JR Soga Station (Keiyo Line, Uchibo Line, Sotobo Line)
Form of Possession

Ownership

Lot Area

853 m2Form of Possession

Ownership

ZoningLand

Total Floor Area
Building

Building

Commercial area
Coverage

Ratio/Floor Area Ratio

3,398.18 m2(Note 1)80% / 400%

Purpose of Use

Hotel (Note 1)

Construction Date

February 24, 1994

Structure/No. of

Steel frame, steel framed reinforced concrete, Reinforced concrete flat roof nine-story

Storiesbuilding

Renovation Date

November 2021 - February 2022

Trustee

SMBC Trust Bank Ltd.

Trust Period

From: October 29, 2021; Until: July 31, 2033

Creation of Security Interest

None

Lease Overview (as of May 31, 2023)
Total No. of Tenant (s)1Number of Guest Rooms

Leasable Area

3,398.18 m2

Lease Area

3,398.18 m2

Occupancy Rate

100.0%

112 rooms(T38・D74)

Security Deposit/Guarantee

-

Money
GOP (per month)

JPY 18,313 thousand

Overview of Lease Agreement
TenantMYSTAYS HOTEL MANAGEMENT Co., Ltd.

Type of Contract

Fixed rent plus variable rent type

Term

From: August 1, 2023 Until: July 31, 2033
Fixed rent (JPY 35.5 million per annum (January: JPY 2.0 million per month / February: JPY 2.3 million per month /Determination of rent of lease
contract

March: JPY 4.6 million per month / April: JPY 3.0 million per month / May: JPY 4.7 million per month/ June: JPY 2.6
million per month/ July: JPY 2.0 million per month/ August: JPY 4.4 million per month/ September: JPY 2.4 million
per month/ October: JPY 2.7 million per month/ November: JPY 2.6 million per month/ December: JPY 2.2 million
per month)) plus variable rent based on GOP of hotel operation. (Note 2)

Management Services Fee
Security Deposit/Guarantee
Money
Renewal Upon Expiration

Not disclosed, as tenant’s consent has not been obtained for disclosure.
The contract is a Fixed Term Building Lease, therefore the contract will terminate at the expiration of theThis English language notice is a translation of the Japanese-language notice released on July 19, 2023 and was prepared solely for the convenience of, and reference by,
non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on their own
investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties or assurances are
given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

35lease term.
Rent Revision

Rent cannot be revised during the lease term.

Early Termination

Termination prior to the expiration of the lease term is not permitted.

Other Special Matters-

Overview of Building Conditions Survey ReportCompany Conducting Survey

Tokio Marine dR Co., Ltd.

Short term Repair Costs (within-

1 year)Long term Repair Costs (in 12
years)

Date of Report
Replacement Price

June 2023
JPY 1,282,800 thousand

JPY 218,880 thousand

Overview of PML reportCompany Conducting Survey

Tokio Marine dR Co., Ltd.

Probable Maximum Loss (PML)

Date of Report

June 2023

2.8%

Area Characteristic
Hotel MyStays Soga is a hotel located a two-minute walk from JR Soga Station, with stable corporate business demand from nearby steel factories, power
stations, a recycling plant, and a 346-bed general hospital. It also offers good access to a range of large-scale sports facilities, including Fukuda Denshi
Arena, the home stadium for JEF United Ichihara Chiba (member of J-League, Japanese professional football league) and Soga Sports Park. Demand
relating to Makuhari Messe and ZOZO Marine Stadium, one of the largest convention centers in Japan, is also expected.
Special Notes
None(Note 1) There is a parking lot (35.20m2) as annex building.
(Note 2) Variable rent is the amount of difference between (i) GOP during the three-month variable rent calculation period and (ii) the sum of fixed rent during
the same period. However, when the balance is zero or negative, variable rent will be deemed to be zero.

This English language notice is a translation of the Japanese-language notice released on July 19, 2023 and was prepared solely for the convenience of, and reference by,
non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on their own
investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties or assurances are
given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

36D88: Hotel MyStays Soga
Income and Expenditures, Etc.
January 1, 2021 – December 31, 2021

Operating Period

February 1, 2022 – December 31, 2022
(Note 1)

GOP (= (1) - (2))-

JPY 75,446 thousanda. Land Lease Fees-

b. Taxes and Public Dues-JPY 5,665 thousandc. Non-life Insurance Premiums-

JPY 256 thousandd. Trust Fees-

JPY 700 thousand

NOI (= GOP - [a. + b. + c. + d.])-JPY 68,825 thousand-

JPY 300,280 thousand

Room Income-

JPY 238,751 thousand

Other Income-

JPY 61,528 thousand-

JPY 224,834 thousand

ADR-

JPY 7,738

RevPAR-JPY 6,382

Room Occupancy Rate

-

82.5%

GOP Ratio

-

25.1%

(1) Sales(2) Operating Costs (not including a.
through d. above)(Reference)

Daily/ Weekly/ Monthly--

Overseas Sales Share-

100.0%/

0.0%/

-

7.4%

(Note 1) Data after February 1, 2022 are indicated, as the hotel was rebranded and reopened on February 1, 2022.

＜Hotel KPI＞
ActualAppraisal (Note 3)

Room Occupancy Rate (Note 1)

86.5%

Room Occupancy Rate

91.5%

ADR (Note 1)

JPY 8,721

ADR

JPY 8,880

RevPAR (Note 1)

JPY 7,547

RevPAR

JPY 8,125

NOI (Note 2)

JPY 116MMNOI

JPY 118MM(Note 1) Average of recent 12 months as of May 31, 2023 (from June 1, 2022 to May 31, 2023)(Note 2) NOI is the net operating income (actual) for recent 12 months as of May 31, 2023 (from June 1, 2022 to May 31, 2023)(Note 3) Numbers are from appraisal report as of June 1, 2023. They are assumed numbers for the normal year assessed by each appraisal firm undercertain preconditions, and it is not guaranteed to be achieved in the future, and it may actually change significantly.

This English language notice is a translation of the Japanese-language notice released on July 19, 2023 and was prepared solely for the convenience of, and reference by,
non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on their own
investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties or assurances are
given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

37

0.0%

D88: Hotel MyStays Soga
Summary of Real Estate Appraisal Report
Appraisal Value

JPY 2,060 million

Appraisal Firm

Tanizawa Sōgō Appraisal Co., Ltd.

Time of Valuation

June 1, 2023
Item

1. Value of Profits using the Profit Capitalization Method(1) Direct Capitalization Method

Contents

Overview(JPY thousand)
2,060,000
2,070,000(I) Operating Revenue [(a)-(b)]131,540(a) Total Potential Revenue

131,540

Room Rental Income and Common Area Maintenance Fee are
estimated based on anticipated lease agreement, historical data,comparable assets and project medium- to long-term rents(b) Vacant Room Losses, etc.
(II) Operating Costs (Expense Rate)[(c)+(d)+(e)+(f)+(g)+(h)+(i)+(j)]12,822(c) Maintenance and Management Costs-(d) Utility Costs-(e) Repair Costs

5,632(f) Property Management Fee-(g) Tenant Solicitation Expenses-(h) Taxes and Public Dues

6,802

Recorded 30% of the amount based on the ER and comparable
cases

Actual results based on documents relating to FY2023 taxes(i) Non-life Insurance Premiums

256

Amount equivalent to 0.02% of replacement cost(j) Other Costs

131

Amount equivalent to 0.1% of operating revenue(III) Net Operating Income [(I)-(II)](k) One-time Investment Gains(l) Capital Improvements and Expenses(m) FF&E Reserve(IV) Net Income［(III)+(k)-(l)-(m)]118,717
13,056

Recorded 70% of the amount based on the ER and comparable
cases

6,335
99,326
Based on comparing multiple transaction yield in the neighboring

Capitalization Yield

4.8%

areas or similar areas with the same supply and demand taking into
consideration of the future changes in revenues(2) DCF Method

2,050,000

Discount Rate

4.9%

Final Capitalization Yield

5.0%

2. Estimated Price using Cost Methodof the property
Based on transaction yield of comparable assets taking into
consideration of future prediction uncertainty

1,850,000

Land Ratio

64.6%

Building Ratio

29.2%

FF&E Ratio

Based on transaction yield of comparable assets and characteristics

6.2%
Adopted the appraisal value determined using the income capitalization method, after

Other Points to be Noted for Appraisal by Appraisal Firm

considering recent economic environment, especially real estate market trend andappropriateness of using data, pricing rule, relationship between unit price and gross price,with the cost approach value as a referenceThis English language notice is a translation of the Japanese-language notice released on July 19, 2023 and was prepared solely for the convenience of, and reference by,
non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on their own
investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties or assurances are
given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

38D89: Tazawako Lake Resort & Onsen
Type and Location of Specified Assets, etc.
Type of Specified Assets

Trust Beneficiary Right

Date of Planned Acquisition

August 1, 2023

Planned Purchase Price

JPY 1,475 million

Appraisal Value

JPY 1,490 million

Appraisal Firm

Daiwa Real Estate Appraisal Co., Ltd.
(Lot Number)

82-117 Shimotakano, Tazawako Obonai, Semboku City, Akita, and forty-one other lots

(Address)-

LocationTransport

About a nine-minute car ride and a 15-minute local bus ride from JR Tazawako Station, and a 60-minute car ridefrom Morioka IC
Form of Possession

Ownership /ZoningLand Lease

Not specified areaLand
Lot Area
Form of Possession
Total Floor Area
Building

224,818.44 m2

Building

Coverage

Ratio/Floor Area Ratio
Ownership
7,289.75 m2

70% / 200%

Purpose of Use

HotelConstruction Date

December 18, 1981
November 28, 1988

Structure/No. ofReinforced concrete structure with flat roof, 5-story Asphalt Shingles

Stories

Steel framed structure with flat roof, 4 stories

Renovation Date

October 2018 – November 2019

Trustee

SMBC Trust Bank Ltd.

Trust Period

From: July 30, 2018; Until: July 31, 2033

Creation of Security Interest

None

Lease Overview (as of May 31, 2023)
Total No. of Tenant (s)1Number of Guest Rooms

Leasable Area

7,289.75m2

Lease Area

7,289.75m2

Occupancy Rate

80 rooms(S3・T14・O 63)

Security Deposit/Guarantee

-

Money

100.0%GOP (per month)

JPY 14,522 thousand

Overview of Lease Agreement
TenantHotel Higashinihon Co., Ltd.

Type of Contract

Fixed rent plus variable rent type

Term

From: August 1, 2023 Until: July 31, 2033
Fixed rent (JPY 35.8 million per annum (January: JPY 1.6 million per month / February: JPY 1.0 million per month /Determination of rent of lease
contract

March: JPY 2.0 million per month / April: JPY 3.1 million per month / May: JPY 3.9 million per month/ June: JPY 2.0
million per month/ July: JPY 2.0 million per month/ August: JPY 7.9 million per month/ September: JPY 2.6 million
per month/ October: JPY 5.6 million per month/ November: JPY 2.7 million per month/ December: JPY 1.4 million
per month)) plus variable rent based on GOP of hotel operation. (Note 1)

Management Services Fee

Not disclosed, as tenant's consent has not been obtained for disclosure.

Security Deposit/Guarantee-

This English language notice is a translation of the Japanese-language notice released on July 19, 2023 and was prepared solely for the convenience of, and reference by,
non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on their own
investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties or assurances are
given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

39MoneyRenewal Upon Expiration

The contract is a Fixed Term Building Lease, therefore the contract will terminate at the expiration of thelease term.

Rent Revision

Rent cannot be revised during the lease term.

Early Termination

Termination prior to the expiration of the lease term is not permitted.

Other Special Matters-

Overview of Building Conditions Survey ReportCompany Conducting Survey

Tokio Marine dR Co., Ltd.

Short term Repair Costs (within

Date of Report
Replacement Price-

1 year)Long term Repair Costs (in 12(Note 4)

June 2023
JPY 2,086,400 thousand

JPY 199,123 thousand

years)
Overview of PML reportCompany Conducting Survey

Tokio Marine dR Co., Ltd.

Probable Maximum Loss (PML)

Date of Report

June 2023

9.1%

Area Characteristic
The property is an approximately nine-minute drive from JR Tazawako Station and is located in the center of Northern Tohoku near the border between Akita
and Iwate prefectures, so it is an excellent location as a tourist base to Akita Komagatake, Kakunodate Bukeyashiki Street, and Towada-Hachimantai National
Park. Domestic demand throughout the seasons with swimming in Lake Tazawa in the summer and skiing in the winter at Tazawako Ski Resort is expected.
In addition to the hot spring facilities (indoor hot springs, open-air baths) and a buffet restaurant, there is also a popular glamping facility to enjoy the natureof Lake Tazawa plateau and rooms to stay with pets.
Special Notes
Some part of its boundary of the property has not been determined in writing yet.
The property is a partly leased property, and the lessee shall obtain the prior written approval of the owner or pay certain fee for approval in the event oftransfer the lease right in accordance with the transfer of the building or sublease of the land to third parties, etc.
(Note 1) Variable rent is the amount of difference between (i) GOP during the three-month variable rent calculation period and (ii) the sum of fixed rent during
the same period. However, when the balance is zero or negative, variable rent will be deemed to be zero.

This English language notice is a translation of the Japanese-language notice released on July 19, 2023 and was prepared solely for the convenience of, and reference by,
non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on their own
investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties or assurances are
given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

40D89: Tazawako Lake Resort & Onsen
Income and Expenditures, Etc.
January 1, 2021 – December 31, 2021

January 1, 2022 – December 31, 2022

JPY 76,675 thousand

JPY 94,443 thousand

JPY 352 thousand

JPY 352 thousand

JPY 9,285 thousand

JPY 9,184 thousandc. Non-life Insurance Premiums

JPY 405 thousand

JPY 405 thousandd. Trust Fees

JPY 700 thousand

JPY 700 thousand

JPY 65,933 thousand

JPY 83,802 thousand

JPY 446,434 thousand

JPY 534,875 thousand

Room Income

JPY 183,943 thousand

JPY 264,968 thousand

Other Income

JPY 262,491 thousand

JPY 269,906 thousand

JPY 369,759 thousand

JPY 440,431 thousand

ADR

JPY 12,843

JPY 14,836

RevPARJPY 6,424

JPY 9,074

Room Occupancy Rate

50.0%

61.2%

GOP Ratio

17.2%

17.7%

Operating Period
GOP (= (1) - (2))
a. Land Lease Fees
b. Taxes and Public DuesNOI (= GOP - [a. + b. + c. + d.])(1) Sales(2) Operating Costs (not including a.
through d. above)(Reference)

Daily/ Weekly/ Monthly

100.0%/

0.0%/

Overseas Sales Share

0.0%

100.0%/

0.0%/

2.5%

4.1%

＜Hotel KPI＞
ActualAppraisal (Note 3)

Room Occupancy Rate (Note 1)

66.8%

Room Occupancy Rate

70.3%

ADR (Note 1)

JPY 15,167

ADR

JPY 15,075

RevPAR (Note 1)

JPY 10,131

RevPARJPY 10,598

NOI (Note 2)

JPY 110MMNOI

JPY 113MM(Note 1) Average of recent 12 months as of May 31, 2023 (from June 1, 2022 to May 31, 2023)(Note 2) NOI is the net operating income (actual) for recent 12 months as of May 31, 2023 (from June 1, 2022 to May 31, 2023)(Note 3) Numbers are from appraisal report as of June 1, 2023. They are assumed numbers for the normal year assessed by each appraisal firm undercertain preconditions, and it is not guaranteed to be achieved in the future, and it may actually change significantly.

This English language notice is a translation of the Japanese-language notice released on July 19, 2023 and was prepared solely for the convenience of, and reference by,
non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on their own
investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties or assurances are
given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

41

0.0%

D89: Tazawako Lake Resort & Onsen
Summary of Real Estate Appraisal Report
Appraisal Value

JPY 1,490 million

Appraisal Firm

Daiwa Real Estate Appraisal Co., Ltd.

Time of Valuation

June 1, 2023
Item

1. Value of Profits using the Profit Capitalization Method(1) Direct Capitalization Method

Contents

Overview(JPY thousand)
1,490,000
1,510,000(I) Operating Revenue [(a)-(b)]124,250(a) Total Potential Revenue

124,250(b) Vacant Room Losses, etc.
(II) Operating Costs (Expense Rate)[(c)+(d)+(e)+(f)+(g)+(h)+(i)+(j)]10,848(c) Maintenance and Management Costs-

Not recorded as it is a burden of the lessee(d) Utility Costs-

Not recorded as it is a burden of the lessee(e) Repair Costs-

Not recorded as it is a burden of the lessee(f) Property Management Fee

360(g) Tenant Solicitation Expenses-(h) Taxes and Public Dues(i) Non-life Insurance Premiums(j) Other Costs(III) Net Operating Income [(I)-(II)](k) One-time Investment Gains

6,130
405
3,952

9,803

(m) FF&E Reserve

9,798

Capitalization Yield(2) DCF Method

Based on actual amounts in 2023 taking into account land pricetrends and burden levels
Based on an estimate received considering it is an appropriate
amountBased on the contracted land and reserve expenses of land leaseagreements

113,401(l) Capital Improvements and Expenses(IV) Net Income［(III)+(k)-(l)-(m)]Based on comparable assets contracts

Not recorded as a lump-sum payment is not expected
Based on an average annual 12-year renewal fee in the engineering
report considering it is an appropriate amount
Based on comparable assets

93,7996.2%

Assessed based on the comparison with transactions of comparable
assets, etc., by reference to hearings from investors, etc.

1,480,000
Assessed based on the comparison with transactions of comparable

Discount Rate

6.0%

assets, etc. taking into account characteristics of the property for theyield of financial asset, by reference to hearings from investors, etc.
Assessed based on the capitalization yield, in consideration of aging

Final Capitalization Yield

6.4%

deterioration of the building, etc., potential increase in capital
expenditures and uncertainties about the hotel market trend

2. Estimated Price using Cost Method

466,000

Land Ratio

45.7%

Building Ratio

51.1%

FF&E Ratio

3.2%
Determined the price of the property based on the value of profits using the profit
capitalization method, upon determination that the current use would be the best effective

Other Points to be Noted for Appraisal by Appraisal Firm

option in consideration of competitiveness of the property within the market area, byreference to the estimated price using the cost method since investors tend to put focus on
profitability of the property and investment returns

This English language notice is a translation of the Japanese-language notice released on July 19, 2023 and was prepared solely for the convenience of, and reference by,
non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on their own
investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties or assurances are
given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

42

(2)

Matters relating to Seismic Resistance etc. for the Six Hotel Properties
Out of the Six Hotel Properties, part of the buildings of Tateshina Grand Hotel Takinoyu and Tazawako
Lake Resort & Onsen were designed under the old seismic code (Note 1). Seismic strengthening workon building(s) at Tateshina Grand Hotel Takinoyu, designed under the old seismic code, was completed
in July 2012, and it was confirmed that it has the required seismic capacity based on evaluation reports
on pre-diagnosis of seismic performance issued by a third-party expert, Tokio Marine dR Co., Ltd. It was
confirmed that building(s) at Tateshina Grand Hotel Takinoyu designed under the new seismic code
(Note 1) satisfy structural requirements specified in the Building Standards Act and its enforcement
orders, based on the evaluation reports on seismic performance-related items in the structural
engineering reports issued by a third-party expert, Tokio Marine dR Co., Ltd. It was confirmed thatbuilding(s) at Tazawako Lake Resort & Onsen designed under the new seismic code (Note 1) satisfy therequired seismic capacity based on the evaluation reports on pre-diagnosis of seismic performanceissued by a third-party expert, Tokio Marine dR Co., Ltd.
All buildings at the other four properties were designed under the new seismic code (Note 1). Withinthese properties, INV has confirmed that all buildings at Fusaki Beach Resort Hotel & Villas, Hotel
MyStays Aomori Station, and Hotel MyStays Soga satisfy structural requirements specified in the
Building Standards Act and its enforcement orders, based on the evaluation reports on seismic
performance-related items in the structural engineering reports issued by a third-party expert, Tokio
Marine dR Co., Ltd. Also, Hotel MyStays Okayama has been confirmed by a third-party expert, Agency
for Supporting-Partners of Concrete Technology that the result of the seismic diagnosis was appropriate.
In addition, INV conducts investigations into seismic risks for all new acquisitions as a part of its due
diligence (Note 2) routine.
(Note 1) New seismic code refers to the seismic resistance standards in regard to building design, which is applied to construction
certificates on and after June 1, 1981, while old seismic code refers to those applied to construction certificates on andbefore May 31, 1981.
(Note 2) The due diligence conducted in connection with acquisition of properties includes examination of appraisal values,
building inspection, seismic risk inspection and legal due diligence.

5.

Overview of Sellers
Overview of sellers of the Six Hotel Properties is as follows;

D84 Fusaki Beach Resort Hotel & Villas
(i)
(ii)

Name

(iii)
(iv)

Title and name ofrepresentative officer
Business(v)

Capital (as of today)

(vi)
(vii)
(viii)

Date of establishment
Net assets
Total assets

Location

Sheffield Asset Tokutei Mokuteki Kaisha (“Sheffield Asset TMK”)
C/O Akasaka International TAX&CO., 2-10-5, Akasaka, Minato-ku,
TokyoDirector, Akio Yamazaki
1.
2.

Asset liquidation business of specified assets
All other business ancillary to the above-mentioned asset
liquidation of specified assets
Specified Capital: JPY100
Preferred Capital: JPY10,554,050,000
July 20, 2006
JPY 7,390,703 thousand (As of August 31, 2022)
JPY 24,262,931 thousand (As of August 31, 2022)

This English language notice is a translation of the Japanese-language notice released on July 19, 2023 and was prepared solely for the convenience of, and reference by,
non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on their own
investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties or assurances are
given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

43

(ix)
(x)

Investor
Niji Holdings Ippan Shadan Hojin
Relationship between INV/Asset Manager and the Seller
While there are no capital relationships that should be noted between
INV/CIM and Sheffield Asset TMK, Sheffield Asset TMK has indirectly
Capital relationships
received investments through funds operated by affiliates of FIG, asubsidiary of CIM’s parent company which indirectly holds 100% of
CIM’s outstanding shares.
While there are no personal relationships that should be noted
between INV/CIM and Sheffield Asset TMK, as of today, among thedirectors of INV and the officers and employees of CIM, Executive
Director of INV and President & CEO of CIM, Naoki Fukuda, thePersonal relationships
Executive Director of CIM, Naoto Ichiki, the Managing Director of CIM,
Taku Iwasaki and a part-time director of CIM, Christopher Reed, areseconded from Fortress Investment Group Japan Godo Kaisha, asubsidiary of FIG.
There are no transactional relationships that should be noted between
INV/CIM and Sheffield Asset TMK. Further there are no transactional
Transactional
relationships that should be noted between the related persons or
relationships
affiliates of INV/CIM and Sheffield Asset TMK or its related persons oraffiliates.
Sheffield Asset TMK is not a related party of INV or CIM. Further, related
Whether the GK is apersons and affiliates of Sheffield Asset TMK are not related parties ofrelated party
INV or CIM. Furthermore, Sheffield Asset TMK is not an interested party,
etc. of CIM as provided in the Investment Trust Act.

D85 Tateshina Grand Hotel Takinoyu and D89 Tazawako Lake Resort & Onsen
(i)
(ii)

Name

(iii)

Title and name ofrepresentative officer
Business

(iv)

(v)
(vi)
(vii)
(viii)(ix)(x)

Location

Heijo Tokutei Mokuteki Kaisha (“Heijo TMK”)
C/O EP Consulting Services Corporation, 1-1-1 Nishi-Shimbashi,
Minato-ku, Tokyo
Director, Masayuki Meguro1.
2.

Asset liquidation business of specified assets
All other business ancillary to the above-mentioned asset
liquidation of specified assets
Capital (as of today)
Specified Capital: JPY100,000
Preferred Capital: JPY3,056 million
Date of establishment
April 11, 2018
Net assets
JPY 1,673,580 thousand (As of September 30, 2022)
Total assets
JPY 4,056,379 thousand (As of September 30, 2022)
Investor
Heijo Ippan Shadan Hojin
Relationship between INV/Asset Manager and the Seller
While there are no capital relationships that should be noted between
INV/CIM and Heijo TMK, Heijo TMK has indirectly received
Capital relationships
investments through funds operated by affiliates of FIG, a subsidiary of
CIM’s parent company which indirectly holds 100% of CIM’s
outstanding shares.
While there are no personal relationships that should be noted
between INV/CIM and Heijo TMK, as of today, among the directors of
Personal relationships
INV and the officers and employees of CIM, Executive Director of INV
and President & CEO of CIM, Naoki Fukuda, the Executive Director ofThis English language notice is a translation of the Japanese-language notice released on July 19, 2023 and was prepared solely for the convenience of, and reference by,
non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on their own
investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties or assurances are
given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

44CIM, Naoto Ichiki, the Managing Director of CIM, Taku Iwasaki and apart-time director of CIM, Christopher Reed, are seconded from
Fortress Investment Group Japan Godo Kaisha, a subsidiary of FIG.
Transactional
relationships

INV acquired Art Hotel Morioka in January 2020.

Whether the TMK is arelated party

Heijo TMK is not a related party of INV or CIM. Further, related persons
and affiliates of Heijo TMK are not related parties of INV or CIM.
Furthermore, Heijo TMK is not an interested party, etc. of CIM as
provided in the Investment Trust Act.

D86 Hotel MyStays Okayama and D88: Hotel MyStays Soga(i)
Name
Nippori Tokutei Mokuteki Kaisha (“Nippori TMK”)(ii)
C/O EP Consulting Services Corporation, 1-1-1 Nishi-Shimbashi,
Location
Minato-ku, Tokyo(iii)
Title and name of
Director, Masayuki Meguro
representative officer(iv)
Business
1. Asset liquidation business of specified assets
2. All other business ancillary to the above-mentioned asset
liquidation of specified assets(v)
Capital (as of today)
Specified Capital: JPY100,000
Preferred Capital: JPY7,535 million(vi)
Date of establishment
February 5, 2021
(vii)
Net assets
JPY 6,515,047 thousand (As of September 30, 2022)(viii)
Total assets
JPY 6,611,519 thousand (As of September 30, 2022)(ix)
Investor
Nippori Ippan Shadan Hojin(x)
Relationship between INV/Asset Manager and the Seller
While there are no capital relationships that should be noted between
INV/CIM and Nippori TMK, Nippori TMK has indirectly received
Capital relationships
investments through funds operated by affiliates of FIG, a subsidiary of
CIM’s parent company which indirectly holds 100% of CIM’s
outstanding shares.
While there are no personal relationships that should be noted
between INV/CIM and Nippori TMK, as of today, among the directors of
INV and the officers and employees of CIM, Executive Director of INV
Personal relationships
and President & CEO of CIM, Naoki Fukuda, the Executive Director of
CIM, Naoto Ichiki, the Managing Director of CIM, Taku Iwasaki and apart-time director of CIM, Christopher Reed, are seconded from
Fortress Investment Group Japan Godo Kaisha, a subsidiary of FIG.
There are no transactional relationships that should be noted between
INV/CIM and Nippori TMK. Further there are no transactional
Transactional
relationships that should be noted between the related persons or
relationships
affiliates of INV/CIM and Nippori TMK or its related persons oraffiliates.
Nippori TMK is not a related party of INV or CIM. Further, related persons
Whether the TMK is a
and affiliates of Nippori TMK are not related parties of INV or CIM.
related party
Furthermore, Nippori TMK is not an interested party, etc. of CIM as
provided in the Investment Trust Act.

This English language notice is a translation of the Japanese-language notice released on July 19, 2023 and was prepared solely for the convenience of, and reference by,
non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on their own
investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties or assurances are
given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

45

D87 Hotel MyStays Aomori Station
(i)
Name
(ii)
Location
(iii)
(iv)

(v)
(vi)
(vii)
(viii)
(ix)
(x)

6.

Title and name ofrepresentative officer
Business

Shiretoko Tokutei Mokuteki Kaisha (“Shiretoko TMK”)
C/O EP Consulting Services Corporation, 1-1-1 Nishi-Shimbashi,
Minato-ku, Tokyo
Director, Masayuki Meguro1.
2.

Asset liquidation business of specified assets.
All other business ancillary to the above-mentioned asset
liquidation of specified assets.
Capital (as of today)
Specified Capital: JPY100,000
Preferred Capital: JPY4,240 million
Date of establishment
July 25, 2018
Net assets
JPY 2,803,824 thousand (As of March 31, 2023)
Total assets
JPY 7,392,055 thousand (As of March 31, 2023)
Investor
Shiretoko Ippan Shadan Hojin
Relationship between INV/Asset Manager and the Seller
While there are no capital relationships that should be noted between
INV/CIM and Shiretoko TMK, Shiretoko TMK has indirectly received
Capital relationships
investments through funds operated by affiliates of FIG, a subsidiary of
CIM’s parent company which indirectly holds 100% of CIM’s
outstanding shares.
While there are no personal relationships that should be noted
between INV/CIM and Shiretoko TMK, as of today, among the directorsof INV and the officers and employees of CIM, Executive Director of
INV and President & CEO of CIM, Naoki Fukuda, the Executive
Personal relationships
Director of CIM, Naoto Ichiki, the Managing Director of CIM, Taku
Iwasaki and a part-time director of CIM, Christopher Reed, areseconded from Fortress Investment Group Japan Godo Kaisha, asubsidiary of FIG.
There are no transactional relationships that should be noted between
INV/CIM and Shiretoko TMK. Further there are no transactional
Transactional
relationships that should be noted between the related persons or
relationships
affiliates of INV/CIM and Shiretoko TMK or its related persons oraffiliates.
Shiretoko TMK is not a related party of INV or CIM. Further, related
Whether the TMK is apersons and affiliates of Shiretoko TMK are not related parties of INV or
related party
CIM. Furthermore, Shiretoko TMK is not an interested party, etc. of CIM
as provided in the Investment Trust Act.

Transactions with Interested Persons etc.
The sellers of the Six Hotel Properties, namely Sheffield Asset TMK, Heijo TMK, Nippori TMK, andShiretoko TMK are not Sponsor-related Persons (Note 1) under the voluntary rules established by CIM
as countermeasures against conflicts of interests in the management of INV’s investments. However,such sellers have indirectly received investments through funds managed by affiliates of FIG (FIG falls
under a Sponsor-rerated Person as it is a subsidiary of CIM’s parent company which indirectly holds 100%of CIM’s outstanding shares). Therefore, CIM has treated the sellers as equivalent to Sponsor-related
Persons.
This English language notice is a translation of the Japanese-language notice released on July 19, 2023 and was prepared solely for the convenience of, and reference by,
non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on their own
investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties or assurances are
given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

46

The acquisitions are to be acquired at prices not exceeding their appraisal value in accordance withSponsor-Related Person Transaction Rules and Sponsor-Related Person Transaction Management
Manual, which are internal rules of CIM, and after deliberation and resolution of the compliance committee
meeting of CIM and the investment committee meeting of CIM held on July 18, 2023, the board of directorsof CIM approved the acquisitions at the meeting held on July 19, 2023 and the board of directors of INV
approved the acquisitions at the meeting held on the same day.
In addition, MHM, the tenant/operator of the three hotel properties out of the Six Hotel Properties and theoperator of the three properties is not a Sponsor-related Person under the voluntary rules established by
CIM as countermeasures against conflicts of interests in the management of INV’s investments. However,
the tenant/operator or the operator has indirectly received investments through funds operated byaffiliates of FIG. Therefore, CIM has treated MHM as equivalent to a Sponsor-related Person. In addition,
the tenants of Fusaki Beach Resort Hotel & Villas, Tateshina Grand Hotel Takinoyu, and Tazawako Lake
Resort & Onsen also have indirectly received investments through funds operated by affiliates of FIG.
Therefore, CIM has treated these tenants as equivalent to a Sponsor-related Person as well.
In accordance with Sponsor-Related Person Transaction Rules and Sponsor-Related Person Transaction
Management Manual, which are internal rules of CIM, and following the deliberation and resolution of thecompliance committee meeting and the investment committee meeting both held on July 18, 2023, theboards of directors of CIM and INV each approved the relevant lease agreements and managementagreements expected to be entered into with MHM and the tenants of Fusaki Beach Resort Hotel & Villas
and Tateshina Grand Hotel Takinoyu at meetings both held on July 19, 2023, subject to the hotel operating
capability of MHM being confirmed as sufficient through a third-party report and other relevant information,
the rent level of each properties being reasonable considering the market level, and management services
fee amount and structure being fair compared with similar properties.
(Note 1) A Sponsor-related Person is (i) any person who falls under the “Interested Persons, etc.” set forthin the Investment Trust Act and the Orders for Enforcement of the Act on Investment Trust andInvestment Corporations, (ii) all shareholders of CIM and (iii) special purpose companies(tokubetsu mokuteki kaisha) (a) which delegate their management to persons who fall under (ii)above, or (b) which are invested by or invested through anonymous partnership (tokumei kumiai)by persons who fall under (ii) above. Hereinafter the same.

7. Summary of Current and Previous Owners
1. Name; 2. Relationship with Persons Having Special Conflict of Interests Relationships;
3. Detail/reason for Acquisition; 4. Acquisition Price and 5. Acquisition Timing
Property Name

D84 Fusaki Beach Resort Hotel & Villas
Current owner/trust 1. Sheffield Asset TMK
2. The company has received investments through funds operated by affiliates ofbeneficiary
FIG, a subsidiary of the indirect parent company of CIM.
3. Acquisition for investment purposes
4. Omitted because held for longer than one year
5. October 2007-July 2021
Persons having no special conflict of interests relationshipPrecedingThis English language notice is a translation of the Japanese-language notice released on July 19, 2023 and was prepared solely for the convenience of, and reference by,
non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on their own
investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties or assurances are
given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

47

owner/trust
beneficiary
Property Name

D85 Tateshina Grand Hotel Takinoyu
Current owner/trust 1. Heijo TMK
2. The company has received investments through funds operated by affiliates ofbeneficiary
FIG, a subsidiary of the indirect parent company of CIM.
3. Acquisition for investment purposes
4. Omitted because held for longer than one year
5. May 2019
1. Tateshina Takinoyu Godo Kaisha
Preceding
2. The company has received investments through funds operated by affiliates ofowner/trust
FIG, a subsidiary of the indirect parent company of CIM.
beneficiary
3. Unknown
4. Omitted because the current owner has held for longer than one year
5. April 2019
BeforePreceding Persons having no special conflict of interests relationshipowner/trust
beneficiary
Property Name

D86 Hotel MyStays Okayama
Current owner/trust 1. Nippori TMK
2. The company has received investments through funds operated by affiliates ofbeneficiary
FIG, a subsidiary of the indirect parent company of CIM.
3. Acquisition for investment purposes
4. Omitted because held for longer than one year
5. May 2021
Persons having no special conflict of interests relationshipPrecedingowner/trust
beneficiary
Property Name

D87 Hotel MyStays Aomori Station
Current owner/trust 1. Shiretoko TMK
2. The company has received investments through funds operated by affiliates
beneficiaryof FIG, a subsidiary of the indirect parent company of CIM.
3. Acquisition for investment purposes
4. Omitted because held for longer than one year
5. March 2019
BeforePreceding Persons having no special conflict of interests relationshipowner/trust
beneficiary
Property Name

D88 Hotel MyStays Soga
Current owner/trust 1. Nippori TMK
2. The company has received investments through funds operated by affiliates
beneficiaryof FIG, a subsidiary of the indirect parent company of CIM.
3. Acquisition for investment purposes
4. Omitted because held for longer than one year
5. October 2021
This English language notice is a translation of the Japanese-language notice released on July 19, 2023 and was prepared solely for the convenience of, and reference by,
non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on their own
investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties or assurances are
given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

48Preceding

Persons having no special conflict of interests relationshipowner/trust
beneficiary
Property Name

D89 Tazawako Lake Resort & Onsen
1.
Heijo TMK
Current owner/trust
2. The company has received investments through funds operated by affiliates
beneficiaryof FIG, a subsidiary of the indirect parent company of CIM.
3. Acquisition for investment purposes
4. Omitted because held for longer than one year
5. July 2018
Persons having no special conflict of interests relationshipPrecedingowner/trust
beneficiary
8. Schedules
Acquisition decision date:
Agreement execution date:
Anticipated acquisition date:
Anticipated source of acquisition funds:

July 19, 2023
August 1, 2023 (Note 1)
Funds from issuance of new investment units
in Japan and overseas (Note 2) and new
borrowings (Note 3)
Lump-sum payment (Note 1)

Anticipated acquisition proceeds payment method:(Note 1) (A) The purchase and sale agreements for all of the Assets to be Acquired provide that, in case where the offer price forthe issuance of new investment units has not been determined on or prior to July 25, 2023, INV may postpone theclosing date to any business day from August 2 to August 15, 2023 designated by INV. In such case, INV will exercise
the postponement right pursuant to the purchase and sale agreements. (B) In addition, the purchase and saleagreements also provide that, in the event that the proceeds from the issuance of new investment units and the newborrowings are not sufficient to make payment of the Anticipated Acquisition Price on the closing date (or on the
postponed closing date in case of (A) above), INV may defer, on an interest-free basis, the payment of the shortfall as
stipulated in the purchase and sale agreements to a date separately agreed with the seller. If there is any shortage inthe proceeds, INV will exercise the payment deferral right.
(Note 2) For details of the issuance of new investment units, please refer to “Notice concerning Issuance of New Investment
Units and Secondary Offering of Investment Units” dated July 19, 2023.
(Note 3) For details of the new borrowings, please refer to “Notice concerning Debt Financing” dated July 19, 2023.

9. Future Outlook
For information on the revision of INV’s forecasts for financial results and distribution for the fiscal period
ended June 2023 (from January 1, 2023 to June 30, 2023 ) as well as the fiscal period ending December
2023 (from July 1, 2023 to December 31, 2023 ) and for financial results and distribution for the fiscal
period ending June 2024 (from January 1, 2024 to June 30, 2024) in connection with the acquisition of
the Six Hotel properties, please refer to “Notice concerning Revision of Forecast of Financial Results andDistribution for the 40th Fiscal Period Ended June 2023 and the 41st Fiscal Period Ending December
2023 as well as Forecast of Financial Results and Distribution for the 42nd Fiscal Period Ending June2024” dated July 19, 2023.
10. Other Matters that are Necessary for Investors to Properly Understand and Make Judgment on RelevantThis English language notice is a translation of the Japanese-language notice released on July 19, 2023 and was prepared solely for the convenience of, and reference by,
non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on their own
investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties or assurances are
given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

49

Information
With respect to the risks associated with investments in the Six Hotel Properties, please refer to“Investment Risks” in the securities report for the fiscal period ended December 2022 (from July 1, 2022
to December 31, 2022) (available in Japanese only), filed on March 27, 2023, as well as “Part II Reference
Information, II. Supplemental Information to the Reference Documents, 5. Investment Risks” in the
securities registration statement (available in Japanese only) filed on July 19, 2023.

Website of INV: https://www.invincible-inv.co.jp/en/

This English language notice is a translation of the Japanese-language notice released on July 19, 2023 and was prepared solely for the convenience of, and reference by,
non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on their own
investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties or assurances are
given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

50

(Appendix)
Photos and Maps of the Six Hotel Properties
D84 Fusaki Beach Resort Hotel & Villas

D85 Tateshina Grand Hotel Takinoyu

This English language notice is a translation of the Japanese-language notice released on July 19, 2023 and was prepared solely for the convenience of, and reference by,
non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on their own
investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties or assurances are
given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

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D86 Hotel MyStays Okayama

D87 Hotel MyStays Aomori Station

This English language notice is a translation of the Japanese-language notice released on July 19, 2023 and was prepared solely for the convenience of, and reference by,
non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on their own
investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties or assurances are
given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

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D88 Hotel MyStays Soga

D89 Tazawako Lake Resort & Onsen

This English language notice is a translation of the Japanese-language notice released on July 19, 2023 and was prepared solely for the convenience of, and reference by,
non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on their own
investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties or assurances are
given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

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