February 22, 2023
To All Concerned Parties
Investment Corporation
ESCON JAPAN REIT Investment Corporation
Representative:
Atsumu Sasaki, Executive Director(Securities Code: 2971)
Asset Manager
ES-CON ASSET MANAGEMENT Ltd.
Representative:
Wataru Orii
President and Representative Director
Inquiries:
Kennichi Tanaka
General Manager of the Department ofFinance and Control
TEL: +81- 3-6230-9338

Notice Concerning Reduction of Capital and Capital Reserve, and Disposition of Surplus of the Asset Management
Company
ESCON JAPAN REIT Investment Corporation (hereinafter, “ESCON REIT”) hereby announces that the Board of Directorsof ES-CON ASSET MANAGEMENT Ltd. (hereinafter, the “Asset Manager”), the asset management company for ESCON
REIT, was held today and resolved to submit a proposal to the Annual General Meeting of Shareholders scheduled to beheld on March 20, 2023, to reduce its capital and capital reserve (hereinafter, "capital reduction") and to dispose of its
surplus.
1. Purpose of Reduction of Capital and Capital Reserve, and Disposition of Surplus
As announced in the "Notice Concerning ESCON REIT's Response Concerning Liability Claims Against the AssetManager" dated December 16, 2022, the Asset Manager has expressed its intention to compensate ESCON REIT for thefull amount of damages that it has identified by ESCON REIT as having been caused by the Asset Manager's breach of its
fiduciary duty of loyalty, subject to the completion of necessary preparations, including the fund allouance forcompensation payment and confirmation that there are no legal problems.
In order to compensate for the full amount of 666 million yen in damages, on December 27, 2022, the Asset Manager
increased its capital by 433 million yen from 100 million yen and its capital reserve by 333 million yen through capitalincrease by third-party allotment for a total amount of 666 million yen.
Subsequently, since all necessary preparations for the payment of compensation were completed, as announced in the"Notice Concerning the Conclusion of a Compensation Agreement" dated January 16, 2023, an agreement on compensation
was executed with ESCON REIT on the same date, and payment of compensation for the full amount of damages wascompleted on January 17, 2023.
As a result, the full amount of the aforementioned damages was recorded as an extraordinary loss in the Asset Manager's
December 2022 financial statements, resulting in a loss of 456,780 thousand yen in retained earnings brought forward.
Therefore, in order to improve its financial soundness, the Asset Manager will compensate for the amount of the deficit inretained earnings brought forward.
Specifically, the amount of capital and capital reserve will be reduced and transferred to other capital surplus, and theincreased other capital surplus will be transferred to retained earnings brought forward.
This transaction is associated with the transfer of accounts in the net assets section of the balance sheet, so there will be nochange in the total net assets of the Asset Manager. In addition, there will be no change in the total number of shares issued.
2. Details of the Capital Reduction(1) Amount of capital reduction

The total capital of 433 million yen as of December 31, 2022, will be reduced by 333 million yen, resulting in total capitalof 100 million yen.
(2) Method of Capital Reduction
There will be no change in the total number of shares issued. The entire reduction in capital will be transferred to othercapital surplus.
3. Details of the Capital Reserve Reduction(1) Amount of Capital Reserve Reduction
The total capital reserve of 333 million yen as of December 31, 2022, will be reduced by 123,781 thousand yen, resulting
in total capital of 209,219 thousand yen.
(2) Method of Capital Reserve Reduction
The entire reduction in capital reserve will be transferred to other capital surplus.
4. Details of the Disposition of Surplus
The total amount of other capital surplus to be increased by the reduction of capital as described in 2. Details of the Capital
Reduction and the reduction of capital reserve as described in 3. Details of the Capital Reserve Reduction will be transferred
to retained earnings brought forward to compensate for the deficit.
5. Net Assets after Capital Reduction and Disposition of Surplus by the Asset Manager
items
Shareholders Equity
CapitalCapital Surplus
Capital Reserve
Other capital surplus
Retained earnings
Other retained earnings
Retained earnings brought forward
Valuation and translation adjustments
Valuation difference on available-for-sale securities
Total net assets*All amounts are rounded down to the nearest thousand yen.

as of December 31, 2022
309,219
433,000
333,000
333,000－(456,780)(456,780)(456,780)(54)(54)
309,165

6. Schedule for Capital Reduction(1) Date of resolution by the Asset Manager's Board of Directors(2) Date of resolution by the Asset Manager's Annual General Meeting of Shareholders(3) Date of public notice of objection by creditors(4) Final date for submission of objection by creditors(5) Effective date of capital reduction（Unit: thousand yen）
after Capital Reduction
and Disposition of Surplus
309,219
100,000
209,219
209,219
－－－－
(54)
(54)
309,165

February 22, 2023
March 20, 2023(Scheduled)
April 25, 2023(Scheduled)
May 24, 2023(Scheduled)
May 25, 2023(Scheduled)

7. Future Outlook
The capital reduction and disposition of surplus by the Asset Manager will have no impact on ESCON REIT's operatingstatus.
8. OtherSince the amount of capital will change as a result of the capital reduction, notification will be submitted to the Financial
Services Agency in accordance with the Financial Instruments and Exchange Act and to the Ministry of Land,
Infrastructure, Transport, and Tourism in accordance with the Building Lots and Buildings Transaction Business Act,
respectively, and other necessary notifications and other procedures will be carried out in accordance with applicablelaws, regulations, and rules.
【URL of ESCON REIT: https://www.escon-reit.jp/en/index.html】