For Immediate Release For Translation Purposes Only

Transcription

1 For Immediate Release For Translation Purposes Only Japan Excellent, Inc. (TSE: 8987) Chifumi Toda, Executive Director January 10, 2013 Asset Management Company: Japan Excellent Asset Management Co., Ltd. Representative: Chifumi Toda, President Contact: Toshihiko Sasaki General Manager, Corporate Planning Dept. TEL: Notice Concerning the Acquisition of Investment Assets (AKASAKA INTERCITY (Additional Acquisition of Compartmentalized Ownership), Osaka Kogin Building (Land with Leasehold Interest), Core City Tachikawa, SE Sankyo Building) Japan Excellent, Inc. (hereinafter, JEI or the Investment Corporation ) hereby announces that, JEI has decided today to acquire investment assets as follows: 1. Summary of Acquisition (A) AKASAKA INTERCITY (Additional Acquisition of Compartmentalized Ownership) (1) Property Name AKASAKA INTERCITY (Additional Acquisition of Compartmentalized Ownership) (hereinafter, AKASAKA INTERCITY ) (2) Property to be Acquired Trust beneficiary interest in real estate (3) Acquisition Price 10,289 million (JPY10,289,000,000) (4) Date of Execution of Purchase January 10, 2013 Agreement (5) Scheduled Acquisition Date February 5, 2013 (6) Seller NIPPON STEEL KOWA REAL ESTATE CO., LTD. (7) Funding for Acquisition Proceeds from issuance of new investment units, debt financing or funds on hand (scheduled) (8) Method of Settlement The settlement is planned to be made at once when the acquisition is made. (B) Osaka Kogin Building (Land with Leasehold Interest) (1) Property Name Osaka Kogin Building (Land with Leasehold Interest) 1

2 (2) Property to be Acquired Trust beneficiary interest in real estate (3) Acquisition Price 1,770 million (JPY1,770,000,000) (Note) (4) Date of Execution of Purchase January 10, 2013 Agreement (5) Scheduled Acquisition Date February 5, 2013 (6) Seller NIPPON STEEL KOWA REAL ESTATE CO., LTD. (7) Funding for Acquisition Proceeds from issuance of new investment units, debt financing or funds on hand (scheduled) (8) Method of Settlement The settlement is planned to be made at once when the acquisition is made. (C) Core City Tachikawa (1) Property Name Core City Tachikawa (2) Property to be Acquired Trust beneficiary interest in real estate (3) Acquisition Price 6,500 million (JPY6,500,000,000) (4) Date of Execution of Purchase January 10, 2013 Agreement (5) Scheduled Acquisition Date February 5, 2013 (6) Seller Tachikawa Akebono-cho Capital Specific Purpose Company (7) Funding for Acquisition Proceeds from issuance of new investment units, debt financing or funds on hand (scheduled) (8) Method of Settlement The settlement is planned to be made at once when the acquisition is made. (D) SE Sankyo Building (1) Property Name SE Sankyo Building (2) Property to be Acquired Trust beneficiary interest in real estate (3) Acquisition Price 5,500 million (JPY5,500,000,000) (4) Date of Execution of Purchase January 10, 2013 Agreement (5) Scheduled Acquisition Date March 1, 2013 (6) Seller Polaire LLC (7) Funding for Acquisition Proceeds from issuance of new investment units, debt financing or funds on hand (scheduled) (8) Method of Settlement The settlement is planned to be made at once when the acquisition is made. 2

3 (Note) The acquisition price is calculated as the land purchase price to be specified in the relevant trust beneficiary interest transfer agreement subject to conditions precedent ( 10,100,000,000), less the amount equivalent to the key money pertaining to the leasehold interest in land ( 8,330,000,000), which will be received from the lessee of the land. For the conditions precedent under the purchase agreement, please refer to 3. Details of the Property to be Acquired, (8) Acquisition Schedule, (Note) below. Trust beneficiary interests pertaining to AKASAKA INTERCITY, Osaka Kogin Building (Land with Leasehold Interest), Core City Tachikawa, and SE Sankyo Building are hereinafter collectively or individually referred to as the Property to be Acquired. 2. Background of Acquisition JEI has decided to acquire the Property to be Acquired in order to enhance its portfolio, pursuant to the investment targets and policies of asset management stipulated in the Articles of Incorporation of the Investment Corporation. For the factors JEI has taken into account in reaching the decision to acquire the Property to be Acquired, please refer to the Evaluation of the Property to be Acquired column of each property of the immediately following section titled 3. Details of the Property to be Acquired. 3. Details of the Property to be Acquired (A) AKASAKA INTERCITY (1) Evaluation of the Property to be Acquired A. Location The Akasaka area, where the Property is located, is situated in the northeastern part of Minato-ku and offers excellent access to five different subway stations (Akasaka-mitsuke, Akasaka, Tameike-sanno, Kokkai-gijidomae and Aoyama 1-chome stations), all of which are located either within the Akasaka area or its perimeter, with connections to six different subway lines from these stations. Also, the Akasaka 1-chome, the locale of the Property s address, is located approximately 350 m southeast of the Tameike-sanno (Subway Ginza Line and Namboku Line) station, and on the south side of government office quarter that is home to public agencies, including the Prime Minister s Office, Cabinet Office and other central ministry and agencies. With excellent access to Tokyo s main subway lines and key roadways, the Akasaka area, together with the Toranomon area, has experienced continuous development as a business center, and offers an outstanding environment with a high concentration of business and commercial functions. The Property is very near Tameike-sanno station, and close to the Embassy of the United States and some of Japan s leading hotels. Clearly separated from a nearby major thoroughfare, the neighborhood surrounding the Property is tranquil and expected to undergo further development if the ongoing redevelopment plans for the surrounding area move forward. B. Building Facilities Based on a sogo-sekkei system, a mitigation system of the height and the floor area ratio, construction of the Property was completed in January The standard floor office space consists of 1, m 2 ( tsubo) of regular-shaped open (pillar- and column-free) space, with a ceiling height of 2,900 mm, and 100 mm of space for wires and cables for computers and other office equipment. With floor widths of m, offices are easily laid out, and floors are bright and spacious. The building incorporates a cogeneration system, a water recycling system, natural ventilation, sunshade louvers, rooftop vegetation, and other high energy saving measures, as well as a district heating and cooling sub-plant located below ground level and advanced emergency systems. In addition, the building is surrounded by requisite open space, has a garden on the south side of the lot, and features other assets making for an urban space with excellent amenities, resulting in both comfort and energy efficiency. 3

4 (2) Overview of the Property to be Acquired Property Name AKASAKA INTERCITY Type of Specified Asset 1 Trust beneficiary interest in real estate Trustee [Interest held] (1) Mizuho Trust & Banking Co., Ltd. [Additional acquisition] (2) Mizuho Trust & Banking Co., Ltd. (scheduled) Trust Establishment Date [Interest held] (1) October 26, 2007 [Additional acquisition] (2) February 5, 2013 (scheduled) Maturity Date of Trust [Interest held] (1) October 31, 2017 [Additional acquisition] (2) February 28, 2023 (scheduled) Lot Number , etc., Akasaka, Minato-ku, Tokyo Location Address Akasaka, Minato-ku, Tokyo Use 2 Offices Land 3, 4 8, m 2 Site Area Building 5 73, m 2 Structure 2 S/SRC, Flat-roofed, B3/29F Completion Date 2 January 28, 2005 Building Engineer Nihon Sekkei, Inc. Constructor Joint venture between Kajima Corporation and Obayashi Corporation Building Inspection Agency The Building Center of Japan Land Surface rights (quasi co-ownership)/ownership Type of (co-ownership) Ownership 6 Building Compartmentalized ownership (co-ownership) Appraisal Value [Interest held] (1) 12,500 million (JPY12,500,000,000) [Additional acquisition] (2) 12,000 million (JPY12,000,000,000) Appraisal Date [Interest held] (1) June 30, 2012 [Additional acquisition] (2) November 30, 2012 Appraiser Japan Real Estate Institute PML 7 9.2% (Based upon the Building Survey Report on PML Assessment produced by Takenaka Corporation) Collateral None Property Management Company 8 Master Lease Company NIPPON STEEL KOWA REAL ESTATE CO., LTD. 4

5 Other Relevant Information 1. The lot for the Property is subject to land substitution in connection with the Akasaka 1-chome Land Readjustment Project. An affected party requested that a land substitution inspection be performed, but that request was rejected. The same party has requested that the initial rejection be reconsidered, but this request was withdrawn on February 17, A portion of the boundary of the Property s lot has yet to be confirmed. 3. Pursuant to the terms of the surface rights agreement concerning part of the land of the Property and the memorandum concluded between the party holding the surface rights and the seller, if JEI intends to transfer the Property or the trust beneficiary interest in the Property, it is required to negotiate a sale with the party holding the surface rights on a first refusal basis for a maximum period of 3 months. 4. As of the date of this release, JEI already holds a trust beneficiary interest in part of the Property (i.e., the one described under (1) in the table above). The one described under (2) in the table above is the Property to be Acquired for which a separate trust is established. Accordingly, JEI will hold two trust beneficiary interests in the Property. Notes 1. The type of the property to be acquired by JEI. The same shall apply to other Property to be Acquired. 2. The descriptions of Lot Number, Strcture, and Completion Date are based on information in the land registry. If such building or building in trust is an exclusive ownership interest in a compartmentalized ownership building, this column describes the structure including the number of floors of the entire building rather than the exclusive ownership interest held. The descriptions of Use are based on information in the land registry or completion drawing. The same shall apply to other Property to be Acquired. 3. The Site Area figure for the land is based on the land registry and indicates the entire area of the site even when JEI is to acquire part of the site of a compartmentalized ownership building or co-ownership interest in land. The same shall apply to other Property to be Acquired. 4. The site of the Property consists of two parcels of land. JEI will acquire quasi co-ownership of the surface rights (self leasehold interest in land) of the entire site as a leasehold interest in land and co-ownership of one of the two parcels. JEI s current quasi co-ownership interest ratio in the surface rights of the entire site, which is already owned by JEI, is 130,263/727,172 and JEI s current co-ownership interest ratio in the land subject to co-ownership (6, m 2 ) is 130,263/665,950. JEI s additional quasi co-ownership interest ratio in the surface rights of the entire site, which will be acquired by JEI through the current transaction, will be 12,505,248/72,717,200 and JEI s additional co-ownership interest ratio in the land subject to co-ownership will be 12,505,248/66,595,000. In total, JEI s quasi co-ownership interest ratio in the surface rights will be 25,531,548/72,717,200 and JEI s co-ownership interest ratio in the land will be 25,531,548/66,595, The Site Area figure for the building indicates the entire floor space of the building or building in trust (excluding attached buildings) indicated in the land registry. If such building or building in trust is an exclusive ownership interest in a compartmentalized ownership building, the Site Area figure for the building indicates the floor space of the entire building. The same shall apply to other Property to be Acquired. 6. The exclusive ownership interest that JEI will acquire through the trustee is in the 3 rd and 2 nd basement floors and the office space on the 1 st through 15 th floors (32, m 2 ), representing an interest ratio of 24/100. Together with the units that are already held, JEI will hold an interest ratio of 49/ Probable Maximum Loss ( PML ) indicates the ratio of (a) the estimated total cost associated with fully restoring a property after damage by an earthquake, to (b) the total reconstruction cost of the property, on the assumption that such an earthquake is a maximum-scale earthquake for that area (a large scale earthquake expected to occur once every 475 years with a 10% probability of occurrence every 50 years). The same shall apply to other Property to be Acquired. 8 Property Management Company indicates the name of the property management company with whom JEI entrusts property management services as of the date of this release and further intends to entrust property management services for the Property to be Acquired after the additional acquisition by JEI. (3) Tenant Summary 5

6 Leasable Floor Space 1 [Interest held] (1) 5, m 2 [Additional acquisition] (2) 5, m 2 [Interest held] (1) 5, m 2 Leased Floor Space 1 [Additional acquisition] (2) 5, m 2 Number of Tenants 12 2 Monthly Rent 95,259 thousand 3 Leaseholds and Security Deposits 721,895 thousand 4 Occupancy Rate (recent 5 years) December 31, 2008 December 31, 2009 December 31, 2010 December 31, 2011 October 31, % 100.0% 91.9% 100.0% 98.6% Notes 1. The figure was calculated as of October 31, 2012 by multiplying the leasable and leased floor space in which JEI will acquire an exclusive ownership interest by the ratio of co-ownership interest acquired or to be acquired by JEI. In total of (1) and (2), the leasable floor space is 11, m 2 and the leased floor space is 10, m 2. In the table above, (1) indicates numerical values pertaining to the beneficiary interest already held by JEI and (2) indicates numerical values pertaining to the Property to be Acquired. 2. The number of tenants who entered into lease agreements with the seller as of October 31, The figure for Monthly Rent is the total (not including consumption and other taxes) of monthly rents (including common area expenses, but excluding fees for use of parking and other attached facilities), as of October 31, 2012, set forth in the lease agreements concluded with tenants. Fractions less than one thousand yen are rounded down. The resulting amount represents 49% of the total amount for the entire office space. 4. The figure for Leaseholds and Security Deposits shows the balance, as of October 31, 2012, of leaseholds and security deposits deposited by tenants (not including those pertaining to parking and other attached facilities and the amount which the lessor is not obligated to return). Fractions less than one thousand yen are rounded down. The resulting amount represents 49% of the total amount for the entire office space. (4) Details of the Seller Company Name Location of Headquarters Representative Capital (as of October 1, 2012) Major Shareholders (as of October 1, 2012) Main Business Relationship with JEI/JEAM NIPPON STEEL KOWA REAL ESTATE CO., LTD Minami-Aoyama, Minato-ku, Tokyo Tetsuo Narukawa, President 19.8 billion NIPPON STEEL & SUMITOMO METAL CORPORATION The Dai-ichi Life Insurance Company, Limited Nippon Life Insurance Company Jowa Holdings Company, Limited Real estate business Capital As of January 10, 2013, the Seller holds 7.6% (14,312 Relationship units) of the total number of JEI s outstanding investment units, and also holds 45% (4,050 units) of the total number of the Asset Management Company 6

7 Personnel Relationship Business Relationship Status as Related Party (JEAM) s outstanding shares. The Seller does not fall under the category of a related party as defined in the Law Concerning Investment Trusts and Investment Corporations (the Investment Trust Law ). However, the Seller is a sponsor company under voluntary internal regulations for transactions with sponsor companies (the Regulations for Transactions with Sponsor Companies ) formulated by JEAM with the aim of eliminating potential conflicts of interest and thereby enabling it to perform efficient asset management for JEI. As of January 10, 2013, the Seller dispatches 9 officers and employees to JEAM. During the Thirteenth Fiscal Period (July 1, 2012 to December 31, 2012), there was no asset acquisition or sale transaction between the Seller and JEI or JEAM. The Seller is not a related party of JEI or JEAM. (5) Status of Previous Owners Current Owner/Beneficiary Company Name NIPPON STEEL KOWA REAL ESTATE CO., LTD. Relationship with JEI/JEAM Please refer to (4) Details of the Seller above. Background/Reasons for Acquisition Acquired for investment management purposes Date of Acquisition Newly built on January 28, 2005 Acquisition Price Omitted because the current owner has owned the property for more than one year. (6) Details of Brokerage Not applicable. (7) Conflicts of Interest of JEAM Relating to the Property to be Acquired The Seller (NIPPON STEEL KOWA REAL ESTATE CO., LTD.), which will also serve as the property management company, is sponsor company under the Regulations for Transactions with Sponsor Companies, which are voluntary internal regulations formulated by JEAM. Accordingly, in concluding the abovementioned trust beneficiary interest transfer agreement with said sponsor company, JEAM, in compliance with the aforementioned regulations, has completed the following procedures (hereinafter, Procedure pursuant to the Regulations for Transactions with Sponsor Companies ): (i) obtained approval at a meeting of its Compliance Committee, which includes 7

8 outside experts; (ii) obtained approval at a meeting of its Investment Committee, and (iii) presented the transaction for deliberation and approval at a meeting of its Board of Directors. In addition, it has been decided that Mizuho Trust & Banking Co., Ltd., the trustee of the Property, will appoint NIPPON STEEL KOWA REAL ESTATE CO., LTD. as the property management company for the Property. In making this decision, JEAM has completed Procedure pursuant to the Regulations for Transactions with Sponsor Companies in the same manner. (8) Acquisition Schedule January 10, 2013 January 10, 2013 February 5, 2013 (Note) Decision within JEI to acquire asset Execution of the purchase agreement subject to conditions precedent (Note) Handover date (scheduled) The execution of the agreement is subject to the conditions precedent that funds necessary for the acquisition of the trust beneficiary interest have been or can be secured through the issuance of new investment units or debt financing. If said conditions are not met by the execution date of the purchase agreement, the agreement will lose its effect definitively. The transferor and the transferee may not claim compensation from the other party for any damage, loss, or cost (including legal fees) arising in relation to the execution or lapse of the agreement. The same shall apply to other Property to be Acquired. (B) Osaka Kogin Building (Land with Leasehold Interest) (1) Evaluation of the Property to be Acquired The Property is a parcel of land located in a street corner of Midosuji, the main street in Osaka City, with a sufficient land area of 3, m 2 ( tsubo). The Property can be conveniently accessed with a 1-minute walk from Yodoyabashi Station on the subway line and property in such a good location is considered to be scarce. (2) Overview of the Property to be Acquired Property Name Type of Specified Asset 1 Trustee Osaka Kogin Building (Land with Leasehold Interest) Trust beneficiary interest in real estate Mizuho Trust & Banking Co., Ltd. Trust Establishment Date October 29, 2004 Location Maturity Date of Trust February 4, 2023 Lot Number Address Site Area 3, m 2 Type of Ownership Appraisal Value 4-1-1, etc., Koraibashi, Chuo-ku, Osaka-shi Koraibashi, Chuo-ku, Osaka-shi Full ownership 1,770 million (JPY1,770,000,000) Appraisal Date November 30, 2012 Appraiser Collateral Leasehold Interest Holder Type of Agreement Japan Real Estate Institute None Area Leased 3, m 2 Term of Lease Mizuho Trust & Banking Co., Ltd. Ordinary leasehold interest in land (right of lease) From February 5, 2013 to February 4, 2043 (30 years) 8

9 Monthly Rent (Fixed) 2 6,733,333 Early Cancellation Permitted on or after February 5, 2023 by giving notice in writing (with one-year notice period) Leaseholds and Security Deposits Renewal Charges None None Key Money 3 Other Relevant Information 8,330 million (JPY8,330,000,000) 1. The Property includes a portion that is deemed to be a road pursuant to the provisions of Paragraph 5 of the Supplementary Provisions of the Building Standards Act (attached at the time of initial promulgation) and Article 42(1)(v) of the Building Standards Act. The area of said portion is approximately 264 m 2 according to a provisional calculation by the appraiser. 2. Pursuant to the terms of the agreement with the Seller, if JEI intends to transfer the Property or the trust beneficiary interest in the Property, it is required to notify the Seller of the intention and negotiate a sale with the Seller on a first refusal basis for a maximum period of 3 months if the Seller desires to purchase the Property. 3. If the building on the Property is demolished and a new building is constructed by the Seller for sale, the Seller is required to notify JEI of the intention and negotiate a sale with JEI on a first refusal basis for a maximum period of 3 months if JEI desires to purchase the building. Notes 1. The Property and the building on the Property currently belong to the same trust, which will be split into one whose trust property is the Property and the other whose trust property is the building on the Property. JEI will acquire the beneficiary interest in the former. After such split of trust, a lease agreement for the Property will be concluded between the beneficiary of the trust pertaining to the Property and the beneficiary of the trust pertaining to the building on the Property. 2. In addition to the fixed rent stated in the above table, the total rent includes a variable portion (that corresponds to the sum of fixed property tax, city planning tax, and other taxes and public charges on the Property). 3. Upon acquisition of the trust beneficiary interest in the Property, JEI will receive 8,330,000,000 as a key money based on the lease agreement for the Property, out of the purchase price of the Property under the trust beneficiary interest transfer agreement ( 10,100,000,000). (3) Details of the Seller Please refer to 3. Details of the Property to be Acquired, (A) AKASAKA INTERCITY, (4) Details of the Seller above. (4) Status of Previous Owners Company Name Relationship with JEI/JEAM Current Owner/Beneficiary NIPPON STEEL KOWA REAL ESTATE CO., LTD. Please refer to 3. Details of the Property to be Acquired, (A) ASAKAKA INTERCITY, (4) Details of the Seller above. Previous Owner/Beneficiary A non-related party 9

10 Background/Reasons for Acquired for investment Acquisition management purposes Date of Acquisition October 29, 2004 Acquisition Price Omitted because the current owner has owned the property for more than one year. (5) Details of Brokerage Not applicable. (6) Conflicts of Interest of JEAM Relating to the Property to be Acquired The Seller (NIPPON STEEL KOWA REAL ESTATE CO., LTD.) is sponsor company under the Regulations for Transactions with Sponsor Companies, which are voluntary internal regulations formulated by JEAM. Accordingly, in concluding the abovementioned agreement with said sponsor company, JEAM, in compliance with the aforementioned regulations, has completed the Procedure pursuant to the Regulations for Transactions with Sponsor Companies. (7) Acquisition Schedule January 10, 2013 January 10, 2013 February 5, 2013 Decision within JEI to acquire asset Execution of the purchase agreement subject to conditions precedent Handover date (scheduled) (C) Core City Tachikawa (1) Evaluation of the Property to be Acquired A. Location The Property can be conveniently accessed with a 6-minute walk from Tachikawa Station on the JR line directly through the pedestrian deck and is also accessible from Tachikawa Kita Station on the Tama Monorail line. It is located in the Faret Tachikawa district, which is one of the main office districts in the Tama area. The Faret Tachikawa district was developed as a result of the Category 1 Urban Redevelopment Project at the Former Tachikawa Base Site, with a road of 14 meters wide and a park, trees lining a street, and art works that give the townscape a rich character. B. Building Facilities The Property is an exclusive ownership interest of a compartmentalized ownership building whose 2 nd through 12 th floors are used for office space (part of 3 rd floor and 4 th through 11 th floors). The office elevator hall on the 2 nd floor can be directly accessed from the pedestrian deck that is directly connected to the north entrance of Tachikawa Station. The standard office floor consists of a regular-shaped space of approximately1, m 2 ( tsubo). With the floor plan having the common area in the center of the north side, it can be divided into smaller spaces of approximately 132 m 2 (40 tsubo) for the convenience of smaller tenants. The Property has sufficient specification and facilities that can respond to various needs of tenants including a ceiling height of 2,600mm, an automated security system that allows for 24-hour access, floors with a space for wires and cables for computers and other office equipment, and a parking space for 65 cars in addition to 50 bicycles and motor bikes. (2) Overview of the Property to be Acquired 10

11 Property Name Type of Specified Asset Trustee Core City Tachikawa Trust beneficiary interest in real estate Mizuho Trust & Banking Co., Ltd. Trust Establishment Date September 27, 2005 Maturity Date of Trust September 25, 2018 Location Lot Number Address Akebono-cho, Tachikawa-shi, Tokyo Akebono-cho, Tachikawa-shi, Tokyo Site Area Use Offices Land 2, m 2 Building 1 19, m 2 Structure S/SRC, Flat-roofed, B2/12F Completion Date December 15, 1994 Building Engineer Constructor Building Inspection Agency Type of Land 2 Housing and Urban Development Corporation, Tokyo Branch Joint venture between Konoike Construction and Tokyu Construction Tokyo Metropolitan Government Ownership (co-ownership) Ownership Building Compartmentalized ownership Appraisal Value 6,560 million (JPY6,560,000,000) Appraisal Date November 30, 2012 Appraiser Japan Real Estate Institute 6.7% PML (Based upon the Building Survey Report on PML Assessment produced by Takenaka Corporation) Collateral None 3 Property Management Company 4 XYMAX AXIS Corporation Master Lease Company 5 Tachikawa Lease Management K.K. Pursuant to the Core City Tachikawa Management Contract concluded among the compartmentalized owners of the Property, if a compartmentalized owner or a co-owner of an exclusive ownership interest intends to transfer the whole or part of the exclusive ownership interest to another party, the Other Relevant Information compartmentalized owner or the co-owner is required to notify the chief director of the intention in advance in writing, in which case other compartmentalized owners may propose to purchase the exclusive ownership interest offered for sale on a first refusal basis. Notes 1. The exclusive ownership interest that JEI will acquire through the trustee is in the office space on part of the 3 rd and the 4 th through 11 th floors (9, m 2 ). 2. JEI s interest ratio is %. 11

12 3. The collateral will be released as of the scheduled date of acquisition by JEI. 4. Property Management Company indicates the name of the property management company with whom JEI entrusts property management services as of the date of this release. 5. Master Lease Company indicates the name of the master lease company incumbent as of the date of this release. (3) Tenant Summary Leasable Floor Space 9, m 2 Leased Floor Space 9, m 2 Number of Tenants 4 1 Monthly Rent 43,382 thousand 2 Leaseholds and Security Deposits 320,283 thousand 3 December December December December October Occupancy Rate (recent 5 years) 31, , , , , % 91.4% 89.7% 94.6% 98.5% Notes 1. The figure includes a master lease company. 2. The figure for Monthly Rent is the total (not including consumption and other taxes) of monthly rents (including common area expenses, but excluding fees for use of parking and other attached facilities), as of October 31, 2012, set forth in the lease agreements concluded between the trustee or the master lease company and end-user tenants. Fractions less than one thousand yen are rounded down. 3. The figure for Leaseholds and Security Deposits shows the balance, as of October 31, 2012, of leaseholds and security deposits deposited by end-user tenants (not including those pertaining to parking and other attached facilities and the amount which the lessor is not obligated to return). Fractions less than one thousand yen are rounded down. (4) Details of the Seller Company Name Location Title and Name of Tachikawa Akebono-cho Capital Specific Purpose Company Toranomon, Minato-ku, Tokyo Junichi Naganawa, Director Representative Main Business 1. Business related to the acquisition, management and disposition of specified assets in accordance with the Asset Securitization Plan prepared pursuant to the provisions of the Act on Securitization of Assets 2. Any other businesses incidental to the business described in 1. above. Capital 10,000,000 (as of December 6, 2012) Equity Holder Not disclosed as the consent of the Seller has not been obtained. Date of Incorporation August 5, 2008 Relationship with JEI/JEAM Capital Relationship Personnel Not applicable. Not applicable. 12

13 Relationship Business Relationship Status as Related Party During the Thirteenth Fiscal Period (July 1, 2012 to December 31, 2012), there was no asset acquisition or sale transaction between the Seller and JEI or JEAM. The Seller is not a related party of JEI or JEAM. (5) Status of Previous Owners The acquisition of the Property to be Acquired is not a transaction between JEI/JEAM with a special related person. (6) Details of Brokerage Not applicable. (7) Conflicts of Interest of JEAM Relating to the Property to be Acquired Not applicable. (8) Acquisition Schedule January 10, 2013 January 10, 2013 February 5, 2013 Decision within JEI to acquire asset Execution of the purchase agreement subject to conditions precedent Handover date (scheduled) (D) SE Sankyo Building (1) Evaluation of the Property to be Acquired A. Location The Property is located in the central area in Sapporo, to the east of the open space in front of the north entrance of Sapporo Station on the JR line and to the west of Soseigawa Street. The Property can be conveniently accessed with a 2-minute walk from Sapporo Station on the JR line and 1-minute walk from Sapporo Station on the Toho subway line. The Property also has very convenient car access as it has direct access to Soseigawa Street, a highway running through the City of Sapporo from south to north. B. Building Facilities The Property is an exclusive ownership interest in the office space on 1 st through 13 th floors, which is part of a compartmentalized ownership building. The remaining exclusive ownership interest consists of the 1 st through 3 rd basement floors and part of 1 st through 2 nd floors that are used for, among others, the district heating and cooling energy supply plant and related offices. The standard office floor consists of a regular-shaped space of 1, m 2 ( tsubo). With the floor plan centered around the common area and individually controlled air conditioning, it can be divided into smaller spaces of approximately 100 m 2 (30 tsubo) for the convenience of smaller tenants. The Property has sufficient specification and facilities that can respond to various needs of tenants including a ceiling height of 2,700 mm, an automated security system that allows for 24-hour access, floors with a space for wires and cables for computers and other office equipment, a large freight elevator, and a parking space for 160 cars. Stable power supply is secured by power receiving facilities equipped with three special high-voltage cables. The Property was designed after the adoption of the new earthquake-resistance standards. It obtained a structural safety appraisal by the Building Center of Japan to confirm its earthquake-resistance safety and the PML was 4.4%. 13

14 (2) Overview of the Property to be Acquired Property Name Type of Specified Asset Trustee 1 SE Sankyo Building Trust beneficiary interest Mizuho Trust & Banking Co., Ltd. Trust Establishment Date March 26, 2002 Maturity Date of Trust December 21, 2022 Location Lot Number Address 1-1-2, etc., Kitananajonishi, Kita-ku, Sapporo-shi, Hokkaido Kitananajonishi, Kita-ku, Sapporo-shi, Hokkaido Site Area Use Land 2, m 2 Building 23, m 2 Offices, parking space, machine room Structure S/RC/SRC, Flat-roofed, B3/13F Completion Date March 11, 1989 Building Engineer Joint venture between Nissoken Architects/Engineers Inc. and Hokkaido Development Consultant Co., Ltd. Constructor Building Inspection Agency Type of Land 2 Ownership Building 3 Appraisal Value Itogumi Construction Co., Ltd. Sapporo Municipal Government Ownership/leasehold interest in land (sublease rights) Compartmentalized ownership 5,747 million (JPY5,747,000,000) Appraisal Date September 1, 2012 Appraiser Chuo Real Estate Appraisal Co., Ltd. 4.4% PML (Based upon the Building Survey Report on PML Assessment produced by Takenaka Corporation) Collateral None 4 Property Management Company Sankyo Building Management Co., Ltd. 5 Master Lease Company Sankyo Building Management Co., Ltd. 6 Other Relevant Information Not applicable. Notes 1. The trustee was changed from Sumitomo Mitsui Trust Bank, Limited as of December 21, The site of the Property consists of four parcels of land. The trustee has an ownership interest in three of them (2, m 2 ) and a leasehold interest (sublease rights) in the other one parcel ( m 2 ). 3. The exclusive ownership interest that trustee has is in the office space on the 1 st through 13 th floors (15, m 2 ). 4. The collateral will be released as of the scheduled date of acquisition by JEI. 5. Property Management Company indicates the name of the property management company with whom JEI entrusts property management services as of the date of this release. 6. Master Lease Company indicates the name of the master lease company incumbent as of the date of this release. 14

15 (3) Tenant Summary Leasable Floor Space 13, m 2 Leased Floor Space 13, m 2 Number of Tenants 1 1 Monthly Rent 43,408 thousand 2 Leaseholds and Security 217,133 thousand 2 Deposits Occupancy Rate (recent 5 years) December 31, 2008 December 31, 2009 December 31, 2010 December 31, 2011 October 31, % 92.9% 92.6% 94.0% 98.5% Notes 1. The Seller leases the entire building to the master lease company through the trustee for the purpose of subleasing the building. The number of tenants shown above (1) represents the master lease company based on the assumption that the consent of all the existing end-user tenants will be obtained with regard to the use of such master/subleasing arrangement. 2. The figure for Monthly Rent is the total (not including consumption and other taxes) of monthly rents (including common area expenses, but excluding fees for use of parking and other attached facilities), as of October 31, 2012, set forth in the lease agreements concluded between the master lease company and end-user tenants. Fractions less than one thousand yen are rounded down. 3. The figure for Leaseholds and Security Deposits shows the balance, as of October 31, 2012, of leaseholds and security deposits deposited by end-user tenants with the master lease company (not including those pertaining to parking and other attached facilities and the amount which the lessor is not obligated to return). Fractions less than one thousand yen are rounded down. (4) Details of the Seller Company Name Location of Polaire LLC Nihonbashi 1-Chome Building, Nihonbashi, Chuo-ku, Tokyo Headquarters Matters Concerning Members Capital Executive member: Gaia General Incorporated Association Person in charge of execution of duties: Takanori Mishina 100,000 (as of January 10, 2013) Main Business (1) Acquisition, holding, and disposition of trust beneficiary interest in real estate (2) Purchase and sales, leasing, management, acquisition, holding, disposition, and use of real estate (3) Acquisition, holding, and disposition of specified equity interest, etc., in special purpose companies established for the purpose of carrying out a business related to asset securitization (4) Any other businesses incidental or related to the businesses set forth in the preceding items Date of Incorporation August 30,

16 Equity Holder (as of January 10, 2013) Relationship with JEI/JEAM Gaia General Incorporated Association (equity holding ratio: 100%) Capital Not applicable. Relationship Personnel Not applicable. Relationship Business During the Thirteenth Fiscal Period (July 1, 2012 to Relationship December 31, 2012), there was no asset acquisition or sale transaction between the Seller and JEI or JEAM. The Seller is the operator of an anonymous association to which JEI made an equity contribution of 200 million (14.2% of the total equity contribution to the Seller under all anonymous associations). In connection with the current acquisition, JEI exercised the first refusal right granted to it at the time of equity contribution. For the details of the equity interest in said anonymous association, please refer to Notice Concerning the Acquisition of Ownership Interests in an Anonymous Association dated September 25, Status as Not applicable. Related Party (5) Status of Previous Owners The acquisition of the Property to be Acquired is not a transaction between JEI/JEAM with a special related person. (6) Details of Brokerage Not applicable. (7) Conflicts of Interest of JEAM Relating to the Property to be Acquired Not applicable. (8) Acquisition Schedule January 10, 2013 January 10, 2013 March 1, 2013 Decision within JEI to acquire asset Execution of the purchase agreement subject to conditions precedent Handover date (scheduled) (9) Financing Impact on JEI in the Event of Failure of Fulfillment of Forward Commitment, etc. The purchase agreement concerning SE Sankyo Building falls under the forward commitment (Note) by 16

17 investment corporations defined in the Comprehensive Guidelines for Supervision of Financial Instruments Business Operators, etc. established by the Financial Services Agency (last amended in December 2012). After the careful examination of the amount required to acquire SE Sankyo Building, the time period from the execution of the purchase agreement to the handover, and the reliability of the method of funding for the acquisition, JEI decided to acquire SE Sankyo Building based on the judgment that the execution of the purchase agreement will contribute to the enhancement of the investor value. The terms of said trust beneficiary interest transfer agreement subject to conditions precedent neither require any penalties regarding the failure to fulfill forward commitment, etc. nor any payment of key money. (Note) This means any postdated purchase agreement under which the payment and the delivery of the target property shall be made after a lapse of one month or more after the execution of such agreement or any other similar agreement. 4. Outlook For the impact of said acquisition on the JEI s expected operating results for the Fourteenth Fiscal Period (January 1, 2013 to June 30, 2013), please refer to the Notice concerning Operating Forecasts for the Fiscal Periods Ending June 30, 2013 and December 31, 2013 dated January 10, Appendix: (1) Appraisal Summary (2) Property Income and Expense Outlook (3) Portfolio Overview after Acquisition of the Property to be Acquired (4) External View of the Property to be Acquired Japan Excellent, Inc. Website: 17

18 (Appendix 1) Appraisal Summary I-8 AKASAKA INTERCITY (Millions of yen) (Note) Appraiser Japan Real Estate Institute Appraisal Date November 30, 2012 Appraisal Value 12,000 Income Approach Value 12,000 Direct Capitalization Value 12,100 Operating Revenue 671 Gross Potential Revenue 698 Vacancy Loss 28 Operating Expenses 189 Net Operating Income 482 Interest Income 10 Capital Expenditures 18 Net Cash Flow 474 Cap Rate 3.9% Discounted Cash Flow Value 11,800 Discount Rate 3.6% Terminal Cap Rate 4.0% Summation Value 12,000 Land Value/Land % 8,064/67.2% Building Value/Building % 3,936/32.8% Note: Amounts are rounded to the nearest millions of yen. The figures pertain to the portion of the additional acquisition. 18

19 (Appendix 1) Appraisal Summary II-3 Osaka Kogin Building (Land with Leasehold Interest) (Millions of yen) (Note) Appraiser Japan Real Estate Institute Appraisal Date November 30, 2012 Appraisal Value 1,770 Income Approach Value 1,770 Direct Capitalization Value 1,800 Operating Revenue 170 Gross Potential Revenue 170 Vacancy Loss 0 Operating Expenses 89 Net Operating Income 81 Interest Income 0 Capital Expenditures 0 Net Cash Flow 81 Cap Rate 4.5% Discounted Cash Flow Value 1,740 Discount Rate 4.3% Terminal Cap Rate 4.7% Value by Ratio of Land with 2,020 Leasehold Interest Vacant Land Value of the Subject 10,100 Site Ratio of Land with Leasehold 20% Interest Note: Amounts are rounded to the nearest millions of yen. 19

20 (Appendix 1) Appraisal Summary III-11 Core City Tachikawa (Millions of yen) (Note) Appraiser Japan Real Estate Institute Appraisal Date November 30, 2012 Appraisal Value 6,560 Income Approach Value 6,560 Direct Capitalization Value 6,590 Operating Revenue 570 Gross Potential Revenue 595 Vacancy Loss 25 Operating Expenses 196 Net Operating Income 375 Interest Income 6 Capital Expenditures 11 Net Cash Flow 369 Cap Rate 5.6% Discounted Cash Flow Value 6,520 Discount Rate 5.3% Terminal Cap Rate 5.8% Summation Value 5,890 Land Value/Land % 3,876/65.8% Building Value/Building % 2,014/34.2% Note: Amounts are rounded to the nearest millions of yen. 20

21 (Appendix 1) Appraisal Summary IV-4 SE Sankyo Building (Millions of yen) (Note) Appraiser Chuo Real Estate Appraisal Co., Ltd. Appraisal Date September 1, 2012 Appraisal Value 5,747 Income Approach Value 5,747 Direct Capitalization Value 5,693 Operating Revenue 686 Gross Potential Revenue 727 Vacancy Loss 41 Operating Expenses 292 Net Operating Income 394 Interest Income 3 Capital Expenditures 39 Net Cash Flow 359 Cap Rate 6.3% Discounted Cash Flow Value 5,747 Discount Rate 6.0% Terminal Cap Rate 6.6% Summation Value 3,235 Land Value/Land % 1,417/43.8% Building Value/Building % 1,818/56.2% Note: Amounts are rounded to the nearest millions of yen. 21

22 (Appendix 2) Property Income and Expense Outlook (Millions of yen) (1) AKASAKA INTERCITY (2) Osaka Kogin Building (Land with (3) Core City Tachikawa (4) SE Sankyo Building Leasehold Interest) Revenues Expenses (excluding depreciation) Net Operating Income (NOI) Assumptions for Income and Expense Outlook The above figures for (1) AKASAKA INTERCITY are the average of annual estimates for the first 5 years for the additional interest in the Property to be acquired by JEI excluding special circumstances that may arise during the year of the acquisition (i.e., not forecast for the current fiscal period). The above figures for (2) Osaka Kogin Building (Land with Leasehold Interest), (3) Core City Tachikawa, and (4) SE Sankyo Building are annual estimates for the Property to be Acquired excluding special circumstances that may arise during the year of the acquisition (i.e., not forecast for the current fiscal period). 22

23 (Appendix 3) Portfolio Overview after Acquisition of the Property to be Acquired Area Property # Property Name Date of Acquisition Acquisition Price 1 (mn yen) Investment Ratio 2 (% of total portfolio) Investment Ratio by Area 2 (%) Area I Tokyo s 6 Central Wards 3 Area II Central Osaka, Central Nagoya, Central Fukuoka 4 Area III Tokyo (excl. Area I) and areas surrounding Tokyo (Kanagawa, Saitama and Chiba prefectures) Area IV Osaka, Nagoya and Fukuoka (excl. Area II) and other government-decreed cities, etc. I-1 Omori Bellport D June 29, , I-2 Shiba 2-Chome Building June 29, , I-3 JEI Hamamatsucho Building June 29, , June 27, , I-4 No. 32 Kowa Building October 29, , Total 7, I-7 Akasaka Garden City March 28, , October 26, , I-8 AKASAKA INTERCITY Due on February 5, , Total 28, I-9 Kowa Shirokanedai Building December 24, , I-10 Daiba Garden City Building February 4, , I-11 No. 35 Kowa Building November 25, , I-12 HAMARIKYU INTERCITY December 20, , I-13 Shintomicho Building March 28, , II-1 NHK Nagoya Housou Center Building June 27, , II-2 JEI Nishi-Honmachi Building March 28, , II-3 Osaka Kogin Building (Land with Leasehold Interest) Due on February 5, , III-1 Musashikosugi Tower Place June 27, , III-2 Kowa Kawasaki Higashiguchi Building June 27, , III-3 JEI Hongo Building June 29, , June 27, , III-5 Kawasaki Nisshincho Building November 30, October 17, Total 4, III-6 No. 44 Kowa Building June 27, , III-7 JEI Ryogoku Building June 27, , III-8 Ebina Prime Tower March 29, , III-9 Kowa Kawasaki Nishiguchi Building October 26, , III-10 Pacific Square Sengoku December 20, , III-11 Core City Tachikawa Due on February 5, , IV-2 JEI Kyobashi Building September 1, , IV-3 Hiroshima Hacchobori Dai-ichi Seimei Building May 22, , IV-4 SE Sankyo Building Due on March 1, , Total 241, Notes 1. Acquisition Price is the acquisition value on the purchase agreement, excluding consumption tax, etc. However, for Osaka Kogin Building (Land with Leasehold Interest), the acquisition price ( 1,770,000,000) is calculated as the land purchase price to be specified in the relevant trust beneficiary interest transfer agreement subject to conditions precedent ( 10,100,000,000), less the amount equivalent to the key money pertaining to the leasehold interest in land ( 8,330,000,000), which will be received from the lessee of the land. Amounts are rounded to the nearest millions of yen. 2. Investment Ratio and Investment Ratio by Area are rounded to the first decimal place. 3. Tokyo s 6 Central Wards is Chiyoda, Chuo, Minato, Shinjuku, Shinagawa, and Shibuya Wards. 4. Central Osaka is the Umeda, Dojima, Nakanoshima, Yodoyabashi, and Honmachi districts, Central Nagoya is the Meieki, Fushimi, Sakae districts, and Central Fukuoka is the Tenjin and Hakata Terminal Peripheral districts. 23

24 (Appendix 4) External View of the Property to be Acquired I-8 AKASAKA INTERCITY The Property 地図データ 2012Google, ZENRIN 24

25 II-3 Osaka Kogin Building (Land with Leasehold Interest) The Property 地図データ 2012Google, ZENRIN 25

26 III-11 Core City Tachikawa The Property 地図データ 2012Google, ZENRIN 26

27 IV-4 SE Sankyo Building The Property 地図データ 2012Google, ZENRIN 27