Contents. Corporate Profile

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2 Corporate Profile Established on September 4, 200, Japan Prime Realty Investment Corporation (JPR or the Company) is a closed-end corporate fund that focuses on a diverse investment portfolio of office and retail properties. Through its investment activities, JPR has been awarded high credit ratings from rating agencies, reflecting the Company's high-quality portfolio, earnings stability and sound financial standing. As of December 3, 200, JPR had an investment portfolio totaling billion yen on an acquisition basis, 479 tenants and 56 properties, and is recognized as one of the top diversified REITs in Japan. Contents Investment Highlights Message to Our Unitholders Account Highlights Investment Unit Status New Acquisitions during the 8th Fiscal Period Portfolio Topics Property Portfolio Overview of Portfolio Properties Characteristics and Corporate History Overview of the Asset Manager Overview of Asset Management Overview of the Investment Corporation Status of JPR's Assets under Management Capital Expenditures of Owned Real Estate Expenses and Liabilities Acquisitions and Sales during the 8th Fiscal Period Overview of Accounting Overview of Investment Trust Beneficiary Certificates of JPR Other Balance Sheets Statements of Income and Retained Earnings Statements of Unitholders' Equity Notes to Financial Statements Report of Independent Auditors Statements of Cash Flows (Information Only) JPR Investment Policies Investor Information

3 Investment Highlights Portfolio Overview Top-ranked diversified J-REIT Focusing on high-quality office buildings and high-profile retail properties Sponsored by major real estate developers, a general contractor, financial institutions Providing support in property pipeline and financial aspects through expertise in real estate, construction and finance Growth Strategies Investing with emphasis on properties with strong potential using diversified acquisition methods Maintaining high occupancy level through reinforcing the competitiveness of the properties Maintaining conservative financial operations and maintaining a stable financial foundation Targets Asset size exceeding 500 billion yen Raise cash distribution per unit

4 Message to Our Unitholders We are delighted to have this opportunity to provide an overview of the asset management and financial results of Japan Prime Realty Investment Corporation (JPR) for its 8th fiscal period (July, December 3, 200). During the fiscal period, JPR acquired two properties BYGS Shinjuku Building (additional ownership) and Tokyo Tatemono Yokohama Building for a total of 0.3 billion yen (on an acquisition price basis). The acquisition of additional co-ownership in BYGS Shinjuku Building allowed JPR to gain entire ownership of the property. As a result, JPR s portfolio expanded to 56 properties, or 34.5 billion yen on an acquisition price basis, as of the end of the 8th fiscal period. In financing, JPR has continued to secure a stable financial standing through such measures as refinancing of borrowings to long-term, fixed-rate borrowings in an aim to avoid the risk of interest rate fluctuations, while paying attention to the diversification of repayment and redemption dates and other factors. As for the financial results of the 8th fiscal period, JPR recorded,870 million yen in operating revenue, 4,039 million yen in ordinary income and 4,039 million yen in net income. On top of contributions of the full-period operation of properties acquired in the previous fiscal period and partial-period operation of properties acquired in the 8th fiscal period, the occupancy rates of existing properties dropped due to the impact of the stagnant real estate rental market while requests from tenants for reduced rents and other factors caused earnings to decrease. With regard to the cash distribution for the 8th fiscal period, JPR decided to use the retained earnings brought forward that had been internally reserved through the 7th fiscal period. As a result, the cash distribution per unit came to 5,680 yen. JPR will continue working with Tokyo Realty Investment Management, Inc., our asset management company, to realize stable growth of our portfolio over the medium to long term by conducting prudent and careful asset management. With these efforts and commitment, we are dedicated to meet the expectations of our unitholders. We ask for your continued understanding and support of our operations. Hirohito Kaneko Executive r Japan Prime Realty Investment Corporation 2

5 Account Highlights (All amounts in millions of yen unless otherwise stated) 4th Fiscal Period ended December th Fiscal Period ended June th Fiscal Period ended December th Fiscal Period ended June 200 8th Fiscal Period ended December 200 Operating revenues,7 4,330,493 2,34,870 Ordinary income 4,433 5,572 4,333 4,964 4,039 Net income 4,432 2,33 4,332 4,963 4,039 Total cash distributions 4,432 2,33 4,333 4,840 4,06 Total assets 309, ,63 332, , ,904 Total unitholders' equity 6,58 59,057 6,058 76,303 75,502 Equity ratio (%) Unitholders' equity per unit (yen) 257, , , , ,458 Cash distribution per unit (yen) 7,092 3,73 6,933 6,770 5,680 Operating Revenues and Net Income Total Assets and Total Unitholders' Equity Cash Distribution per Unit 3

6 Investment Unit Status Historical Unit Price Trading Volume 32,000 28,000 24,000 20,000 As of February 4, 20 Market capitalization: 57.5 billion High: 564,000 (May 7, 2007) Low: 30,300 (October 28, 2008) Unit price at end of 8th Fiscal Period: 250,000 ( December 30, 200 ) PO Offering: 449,820 Trading Volume (units) Unit Price (yen) Unit Price 580, , , ,000 6, ,000 2,000 8,000 4,000 ListedTokyo Stock Exchange Offering: 200,000 PO Offering: 237,60 PO Offering: 272,440 PO Offering: 68,0 280, ,000 60,000 July Jan. 6, 2003 July June 4, July Jan. 4, 2009 July Jan. 4, 2008 July Jan. 4, 2007 July Jan. 4, 2006 July Jan. 4, 2005 July Jan. 5, 2004 July Jan. 4, ,000 Feb. 4, 20 (Note) Unit prices are based on closing prices. Breakdown of Unitholders at End of Period Units 700,000 75,000 units 7.56% 54,073 units 75,000 units 7.44% 53,25 units Number of Unitholders 28, , ,000 units 625,000 units 7.26% 45,46 units 7.72% 48,270 units 625,000 units 8.08% 50,560 units.58% 82,846 units.55% 82,627 units 24, % 75,986 units 2.33% 77,00 units 2.35% 77,207 units 500,000 20, % 60,245 units 24.86% 55,403 units 26.43% 65,224 units 28.8% 206,09 units 27.97% 200,030 units 400,000 6, ,000 2, , % 343,353 units 55.07% 344,227 units 53.2% 332,009 units 52.03% 372,062 units 53.0% 379,092 units 8,000 00,000 4, th Fiscal Period 5th Fiscal Period 6th Fiscal Period 7th Fiscal Period 8th Fiscal Period 0 Financial Institutions (including securities firms) Foreign Investors Other Domestic Corporations Individuals Number of Individual Investors 4 (Note) The composition ratio is rounded to two decimal places.

7 New Acquisitions during the 8th Fiscal Period Properties acquired in the 8th Fiscal Period A 2 BYGS Shinjuku Bldg. (additional ownership) Tokyo Tatemono Yokohama Bldg. 2 B Location Shinjuku Ward, Tokyo Acquisition Date July 3, 200 3,300 million Location Yokohama City, Kanagawa Acquisition Date December 27, 200 7,000 million 2 3,522.46m 2,0.28m 2 25,733.0m 2 8,772.5m Structure SRC Floors B2/4F Structure SRC Floors B/9F April 985 May 98 JPR owned 75% of the co-ownership of BYGS Shinjuku Bldg. and with the acquisition of an additional 25% co-ownership JPR now holds the entire ownership. 5

8 Portfolio Topics Portfolio Growth Occupancy rate (%) 90.0 Total acquisition price (billion yen) 320 Total acquisition price Total leasable floor space End of Nov. 200 End of Jun End of Dec End of Jun End of Dec End of Jun End of Dec End of Jun End of Dec End of Jun Total acquisition price (billion yen) Total leasable 2 floor space (m ) 94, , , , , , , , , ,56.84 Occupancy rate (%) Properties Total number of tenants (Note ) (Note 2) When a single tenant leases multiple rooms in the same property, the tenant is counted as one. If the leased rooms are in multiple buildings, the tenant is counted in plural Each sectional owner of Shinjuku Square Tower leases its portions to Shinjuku Square Tower Management Co., Ltd. collectively, and the firm subleases them to sub-lessees. Accordingly, the leasable floor space of the building as it relates to JPR's ownership is calculated by multiplying the total contracted areas of offices, shops and warehouses the management company can sublease to sub-lessees by the rent allocation ratio of JPR ( % up to the end of June 2008 and with the additional acquisition in September 2008, % from the end of December 2008) to arrive at the rent allocated to JPR. The subleased areas used to calculate the occupancy rate are the subleased areas to sub-lessees multiplied by the rent allocation ratio. Each figure has been rounded to the second decimal point. The number of sub-lessees of the Shinjuku Square Tower is also regarded as the number of tenants Portfolio Diversification by Region Tokyo CBDs Greater Tokyo Other Cities Value breakdown by acquisition price Value breakdown by monthly rental revenue at period end Value breakdown by leased floor space at period end Other Cities Tokyo CBDs 7.0% 48.9% ( 58,227 million) ( 67,26 million) Greater Tokyo 34.0% ( 6,23 million) Other Cities 7.3% ( 32 million) Greater Tokyo 40.2% ( 748 million) Tokyo CBDs 42.5% ( 792 million) Other Cities 25.6% 2 (0, m ) Tokyo CBDs 30.3% (20, m 2 ) Greater Tokyo 44.% (75, m 2 ) Portfolio Diversification by Asset Class buildings Retail properties Value breakdown by acquisition price Value breakdown by monthly rental revenue at period end Value breakdown by leased floor space at period end Retail properties 27.9% ( 95,200 million) buildings 72.% ( 246,384 million) Retail properties 26.% ( 485 million) buildings 73.9% (,376 million) Retail properties 40.3% (59,790.6 m 2) buildings 59.7% (236, m 2 ) 6

9 Total leasable floor space (m 2 ) 400, , , , ,000 50,000 00,000 50,000 End of Dec End of Jun End of Dec End of Jun End of Dec End of Jun End of Dec End of Jun. 200 End of Dec , , , , , , , , , (Note 3) (Note 4) The tenants of Shinjuku Center Building, Rise Arena Bldg. and Kawasaki Dice Building have sublet space to a sub-lessee and a lease agreement has been executed where the rent paid by the tenant fluctuates in accordance with the lease conditions of the sub-lessee. Therefore, the total leasable floor space, total leased floor space and occupancy rate entered for these buildings are the figures concerning the sub-lessee of the tenant and the number of sub-lessees is deemed to be the number of tenants. In the event that the contracted area and the area based on which the rent is calculated differ, the situation was handled by making the latter the leased floor space through the fiscal period ended December Since the period ended June 2007, the contracted area has been made the leased area. Major Tenants Tenant Name of Property ABC Development Corporation The Seiyu, Ltd. Tokyo Tatemono Co., Ltd. Ito-Yokado Co., Ltd. The Loft Co., Ltd. Shinjuku Square Tower Management Co., Ltd. Olympic Corporation Tower Records Japan, Inc. Sompo Japan Insurance Inc. Housing Design Center Kobe Tanashi ASTA Shinjuku Center Building, Arca East, Kawasaki Dice Bldg. JPR Musashikosugi Bldg. JPR Umeda Loft Bldg. Shinjuku Square Tower Musashiurawa Shopping Square JPR Shibuya Tower Records Bldg. Kawaguchi Center Bldg., Yume-ooka Tower, Sompo Japan Sendai Bldg., Sompo Japan Wakayama Bldg. Leased floor area at period end (m 2 ) 35, ,2.7 22, , ,586.97, , , ,254.2 (As of December 3, 200) Percentage of total leased floor area at period end 8.9% 7.8% 5.6% 5.0% 4.7% 2.8% 2.4% 2.0%.8% Yuraku Real Estate Co., Ltd. Rise Arena Bldg. 6, % (Note) The areas of co-owned buildings corresponding to the portions owned by JPR are indicated. 7

10 Property Portfolio A Tokyo CBDs Ueno B-7 A-4 A- Shibuya Ward A- Shinjuku Ward Shinjuku A-2 A-4 Harajuku A-3 A-8 Shibuya A-2 A-2 Gotanda Ohsaki Shinagawa Ward Ichigaya A-9 A-7 A-4 Minato Ward A-5 Tamachi A-6 Shinagawa A-6 A-7 A-0 Chiyoda Ward Tokyo A-5 A-20 A-3 A-3 A-8 A- A-9 A-2 A-5Chuo Ward B- Kinshicho A- Kanematsu Bldg. A-2 Kanematsu Bldg. Annex A-3 JPR Ningyo-cho Bldg. A-4 Shin-Kojimachi Bldg. A-5 JPR Crest Takebashi Bldg. A-6 MS Shibaura Bldg. A-7 Gotanda First Bldg. A-8 Fukuoka Bldg. A-9 JPR Ichigaya Bldg. A-0Oval Court Ohsaki Mark West A-Shinjuku Square Tower A-2 BYGS Shinjuku Bldg. A-3Across Shinkawa Bldg. Annex A-4 Shinjuku Center Bldg. (Note) Property names were changed from Ryoshin Harajuku Building to JPR Harajuku Building on March, 20 and from TK Horidome Building to JPR Nihonbashi-horidome Building on January, 20, respectively. B- A-5 A-6 A-7 A-8 A-9 A-20 A-2 A- A-2 A-3 A-4 A-5 Minami Azabu Bldg. Shinagawa Canal Bldg. Rokubancho Bldg. JPR Harajuku Bldg. (Note) Tokyo Tatemono Kyobashi Bldg. JPR Nihonbashi-horidome Bldg. (Note) JPR Sendagaya Bldg. JPR Shibuya Tower Records Bldg. JPR Daikanyama JPR Jingumae 432 Shinjuku Sanchome East Bldg. Yurakucho Ekimae Bldg. (Yurakucho Itocia) B Greater Tokyo B-5 Musashiurawa SAITAMA Minamiurawa Kawaguchi B-6 B-3 CHIBA B-8 Tachikawa TOKYO Tanashi B- Ikebukuro Shinjuku B-9 Ueno B-7 B- B- Kinshicho Tok Shibuya Shinagawa Chiba B-2 Musashikosugi KANAGAWA B-0 B-4 B-5 B-2 Kawasaki okohama Yokohama Nihon-Odori B-3 Kamiooka Musashikosugi (New Stati B-6 B- B-2 B-3 B-5 B-6 B-7 B-8 B-9 B-0 Arca East JPR Chiba Bldg. JPR Yokohama Nihon Odori Bldg. Shinyokohama 2nd Center Bldg. Kawaguchi Center Bldg. JPR Ueno East Bldg. B- B- B-3 B-4 B-5 B-6 Olinas Tower Tanashi ASTA Cupo-la Main Bldg. JPR Musashikosugi Bldg. Musashiurawa Shopping Square Kawasaki Dice Bldg. Tachikawa Business Center Bldg. 8th Fiscal Period Acquisition Rise Arena Bldg. B-2 Tokyo Tatemono Yokohama Bldg. Yume-ooka Tower 8

11 C Other Cities C- Niigata Ekinan Center Bldg. C-7 JPR Hakata Bldg. C-9 JPR Naha Bldg. C-2 Sompo Japan Sendai Bldg. C-3 Sompo Japan Wakayama Bldg. C-4 Tenjin 2 Bldg. C-8 JPR Hakata-chuo Bldg. C-9 JPR Nagoya Fushimi Bldg. (Note) C-4 Housing Design Center Kobe NIIGATA C- SENDAI C-2 OSAKA See below KOBE C-4 FUKUOKA C-7 C-4 C-8 NAGOYA C-9 NAHA WAKAYAMA C-3 C-9 (Note) Mitsubishi UFJ Lease & Finance Nagoya Head Building was renamed to JPR Nagoya Fushimi Building on October, 200. The property is referred to by the new name throughout this Business Report. C Other Cities (Osaka City) Hankyu-Umeda Osaka C-7 C- C-5 Tokyo CBDs Chiyoda Ward Chuo Ward Minato Ward Shinjuku Ward Shinagawa Ward Shibuya Ward Yodoyabashi Kitahama All other areas of Tokyo C-4 Greater Tokyo and Chiba, Kanagawa and Saitama Prefectures Honmachi C-4 Tokyo Tatemono Honmachi Bldg. C-3 C-7 JPR Dojima Bldg. C- JPR Umeda Loft Bldg. C-3 Benetton Shinsaibashi Bldg. C-5 JPR Chayamachi Bldg. Shinsaibashi Nanba Other Cities All other areas in Japan 9

12 Location Category Asset Class No. Property Name Location Acquired A- Kanematsu Bldg. Chuo Ward, Tokyo A-2 Kanematsu Bldg. Annex Chuo Ward, Tokyo A-3 JPR Ningyo-cho Bldg. Chuo Ward, Tokyo A-4 Shin-Kojimachi Bldg. Chiyoda Ward, Tokyo A-5 JPR Crest Takebashi Bldg. Chiyoda Ward, Tokyo A-6 MS Shibaura Bldg. Minato Ward, Tokyo A-7 Gotanda First Bldg. Shinagawa Ward, Tokyo A-8 Fukuoka Bldg. Chuo Ward, Tokyo A-9 JPR Ichigaya Bldg. Chiyoda Ward, Tokyo A-0 Oval Court Ohsaki Mark West Shinagawa Ward, Tokyo A- Shinjuku Square Tower Shinjuku Ward, Tokyo Tokyo CBDs A-2 BYGS Shinjuku Bldg. Shinjuku Ward, Tokyo A-3 Across Shinkawa Bldg. Annex Chuo Ward, Tokyo A-4 Shinjuku Center Bldg. Shinjuku Ward, Tokyo A-5 Minami Azabu Bldg. Minato Ward, Tokyo A-6 Shinagawa Canal Bldg. Minato Ward, Tokyo A-7 Rokubancho Bldg. Chiyoda Ward, Tokyo A-8 JPR Harajuku Bldg. Shibuya Ward, Tokyo A-9 Tokyo Tatemono Kyobashi Bldg. Chuo Ward, Tokyo A-20 JPR Nihonbashi-horidome Bldg. Chuo Ward, Tokyo A-2 JPR Sendagaya Bldg. Shibuya Ward, Tokyo Retail A- JPR Shibuya Tower Records Bldg. Shibuya Ward, Tokyo Retail A-2 JPR Daikanyama Shibuya Ward, Tokyo Retail A-3 JPR Jingumae 432 Shibuya Ward, Tokyo Retail A-4 Shinjuku Sanchome East Bldg. Shinjuku Ward, Tokyo Retail A-5 Yurakucho Ekimae Bldg. (Yurakucho Itocia) Chiyoda Ward, Tokyo Subtotal (26 Properties) Notes: () Acquisition price does not include miscellaneous expenses of acquisition (real estate transaction brokerage fee and consumption tax). (2) Percentages and ratios are rounded to the first decimal point. (3) Ownership indicates the ratio of proprietary ownership of JPR to the total proprietary ownership stipulated in the management regulations, etc. As for cases that proprietary ownership includes parking lots, figure in parentheses indicates ratio calculated excluding parking lots. In addition, ratio for Rise Arena Bldg., Olinas Tower and Tanashi ASTA do not include the residential portion and ratio for Yume-ooka Tower is that of for the business tower only. 0

13 (As of December 3, 200) Acquisition Price () (millions of yen) Percentage of Total (2) Ownership (3) (%) (m ) Total Leasable Floor Space (m ) (JPR's portion) Occupancy Rate (2) No. of Tenants Rental Revenue (thousands of yen) 6, ,75.3 7, ,57 2, ,29.3 9,650 2, , ,034 2, , , ,255 20,642 3,079 4, , ,47, , , ,66 2, ,55.9 4, ,834 2, ,302.7, , ,356 38,973 5,00.5, , ,068 3, , , ,659 0, , , , ,423 3,479 5, , , , , ,025 2, ,97. 8, ,220 3, , (Note 5), , ,025 2, , (Note 5) 8, , , ,624 5, , (Note 5) 5, , ,584 5, , , ,983 2, , , ,576 2, ,636 4, , ,290 2, , , ,400 3, ,808.2,0.92 (Note 5) 67, ,740.2 Notes: (4) Site area and total leasable floor space indicate the entire site area and entire floor space including portions of other sectional owners, etc. except for the following properties: MS Shibaura Building: The above site area indicates the area of the property and Trinity Shibaura that has been developed in an integrated manner. Shinjuku Square Tower : The above site area and total leasable floor space indicate the area of the entire redevelopment project. Rise Arena Building: The above site area and total leasable floor space indicate the site area and floor space of the entire redevelopment project including the residential tower. Olinas Tower: The above site area and total leasable floor space indicate the area including the commercial building and the residential building. Cupo-la Main Bldg.: The above site area indicates the area of the entire redevelopment project. (5) The portion owned by JPR are leased to single tenants. JPR was unable to obtain the tenants' approval to disclose rental information.

14 Location Category Asset Class No. Property Name Location Acquired B- Arca East Sumida Ward, Tokyo B-2 JPR Chiba Bldg. Chiba City, Chiba B-3 JPR Yokohama Nihon Odori Bldg. Yokohama City, Kanagawa B-5 Shinyokohama 2nd Center Bldg. Yokohama City, Kanagawa B-6 Kawaguchi Center Bldg. Kawaguchi City, Saitama B-7 JPR Ueno East Bldg. Taito Ward, Tokyo Greater Tokyo B-8 Tachikawa Business Center Bldg. Tachikawa City, Tokyo B-9 Rise Arena Bldg. Toshi Ward, Tokyo B-0 Yume-ooka Tower Yokohama City, Kanagawa B- Olinas Tower Sumida Ward, Tokyo B-2 Tokyo Tatemono Yokohama Bldg. Yokohama City, Kanagawa Retail B- Tanashi ASTA Nishitokyo City, Tokyo Retail B-3 Cupo-la Main Bldg. Kawaguchi City, Saitama Retail B-4 JPR Musashikosugi Bldg. Kawasaki City, Kanagawa Retail B-5 Musashiurawa Shopping S Saita City, Saitama Retail B-6 Kawasaki Dice Bldg. Kawasaki City, Kanaga Subtotal (6 Properties) C- Niigata Ekinan Center Bldg. Niigata City, Niigata C-4 Tokyo Tatemono Honmachi Bldg. Osaka City, Osaka C-7 JPR Hakata Bldg. Fukuoka City, Fukuoka C-9 JPR Naha Bldg. Naha City, Okinawa C-2 Sompo Japan Sendai Bldg. Sendai City, Miyagi C-3 Sompo Japan Wakayama Bldg. Wakayama City, Wakayama Other Cities C-4 C-7 Tenjin 2 Bldg. JPR Dojima Bldg. Fukuoka City, Fukuoka Osaka City, Osaka C-8 JPR Hakata-Chuo Bldg. Fukuoka City, Fukuoka C-9 JPR Nagoya Fushimi Bldg. Nagoya City, Aichi Retail C- JPR Umeda Loft Bldg. Osaka City, Osaka Retail C-3 Benetton Shinsaibashi Bldg. Osaka City, Osaka Retail C-4 Housing Design Center Kobe Kobe City, Hyogo Retail C-5 JPR Chayamachi Bldg. Osaka City, Osaka Subtotal (4 Properties) Total (56 Properties) Notes: () Acquisition price does not include miscellaneous expenses of acquisition (real estate transaction brokerage fee and consumption tax). (2) Percentages and ratios are rounded to the first decimal point. (3) Ownership indicates the ratio of proprietary ownership of JPR to the total proprietary ownership stipulated in the management regulations, etc. As for cases that proprietary ownership includes parking lots, figure in parentheses indicates ratio calculated excluding parking lots. In addition, ratio for Rise Arena Bldg., Olinas Tower and Tanashi ASTA do not include the residential portion and ratio for Yume-ooka Tower is that of for the business tower only. 2

15 (As of December 3, 200) Acquisition Price () (millions of yen) Percentage of Total (2) Ownership (3) (%) (m ) Total Leasable Floor Space (m ) (JPR's portion) Occupancy Rate (2) No. of Tenants Rental Revenue (thousands of yen) 5, , , ,49 2, , , ,726 2, , , , , ,75 8, , , ,839 3,250.0, , ,755 3, ,047.22, , , ,767 79,537 5, , , ,93 6, ,0.00 2, ,642 3, , , ,77,602 7, ,0.28 6, ,24 0, , , ,400 2, , , (Note 5) 7, , , (Note 5) 4, , , ,06 5, , , ,90 6, , , , , ,327 4, , , ,985 2, , , ,84, , ,86 3,50 0.9, , ,544, , , ,267 2, , , ,575 2, , ,70, , ,62 4,37.2, , ,297 3, , , ,4 5, , (Note 5) 7, , ,444.3 (Note 5) 6, , ,50 58, , , , ,870,005 Notes: (4) Site area and total leasable floor space indicate the entire site area and entire floor space including portions of other owners, etc. except for the following properties: MS Shibaura Building: Shinjuku Square Tower: Rise Arena Building: Cupo-la Main Bldg.: Olinas Tower: The above site area indicates the area of the property and Trinity Shibaura that has been developed in an integrated manner. The above site area and total leasable floor space indicate the area of the entire redevelopment project. The above site area and total leasable floor space indicate the site area and floor space of the entire redevelopment project including the residential tower. The above site area indicates the area of the entire redevelopment project. The above site area and total floor space indicate the area for the entire property including retail and residential towers. (5) The portion owned by JPR is leased to a single tenant. JPR was unable to obtain the tenants' approval to disclose rental information. (6) For JPR Hakata Bldg. the upper figures are for the office building portion and the lower figures are for the parking lot portion. In addition, the acquisition price does not include the acquisition of the parking lot portion. 3

16 Overview of Portfolio Properties New acquistions during the 8th Fiscal Period are on page 5 Kanematsu Bldg. A Kanematsu Bldg. Annex A 2 Chuo Ward, Tokyo Chuo Ward, Tokyo 6,276 million,75.3 4, S/RC/SRC B2/3F February 993 2,874 million ,35.46 SRC B/8F February 993 JPR Ningyo-cho Bldg. A 3 Shin-Kojimachi Bldg. A 4 Chuo Ward, Tokyo Chiyoda Ward, Tokyo 2,00 million ,7.70 SRC/RC B/8F December 989 2,420 million ,52.98 SRC B/9F October 984 JPR Crest Takebashi Bldg. A 5 MS Shibaura Bldg. A 6 C Ward, Tokyo Minato Ward, Tokyo 4,000 million , SRC B/9F September 999,200 million 8, ,020.2 SRC/RC/S B2/3F February 988 Gotanda First Bldg. A 7 Fukuoka Bldg. A 8 Shinagawa Ward, Tokyo Chuo Ward, Tokyo 2,920 million,55.9 0, SRC/RC B2/F July 989 2,920 million,302.7, SRC B2/0F May 990 4

17 JPR Ichigaya Bldg. A 9 Oval Court Ohsaki Mark West A 0 Chiyoda Ward, Tokyo Shinagawa Ward, Tokyo 5,00 million, , SRC B/9F March 989 3,500 million 4, , S/SRC B2/7F June 200 Shinjuku Square Tower A BYGS Shinjuku Bldg. A 2 Shinjuku Ward, Tokyo 0,80 million 8, (entire redevelopment project) 78, (entire redevelopment project) S/RC/SRC B4/30F October 994 Shinjuku Ward, Tokyo 5,2 million 3, ,733.0 SRC B2/4F April 985 Across Shinkawa Bldg. Annex A 3 Shinjuku Center Bldg. A 4 Chuo Ward, Tokyo Shinjuku Ward, Tokyo 70 million , S/SRC B2/0F June 994 2,000 million 4,97. 76, SRC/RC/S B5/54F October 979 Minami Azabu Building A 5 Shinagawa Canal Building A 6 Minato Ward, Tokyo Minato Ward, Tokyo 3,760 million , S 9F June 992,870 million ,26.2 S B/8F July

18 Rokubancho Building A 7 JPR Harajuku Building A 8 Chiyoda Ward, Tokyo Shibuya Ward, Tokyo 2,800 million , SRC B3/7F October 99 8,400 million, , SRC B/9F March 989 Tokyo Tatemono Kyobashi Building A 9 JPR Nihonbashi-horidome Building A 20 Chuo Ward, Tokyo Chuo Ward, Tokyo 5,250 million ,49.79 SRC/S B/0F January 98 5,00 million ,90.82 SRC B/9F June 2002 JPR Sendagaya Building A 2 Shibuya Ward, Tokyo JPR Shibuya Tower Records Bldg. (Retail) A Shibuya Ward, Tokyo 5,050 million 2, ,683.9 S 8F May ,000 million, , SRC/S B3/8F February 992 JPR Daikanyama (Retail) A 2 JPR Jingumae 432 (Retail) A 3 Shibuya Ward, Tokyo Shibuya Ward, Tokyo 2,60 million RC B2/2F July ,275 million 98.0,066.8 S/SRC B/7F February Does not include area transferred to Tokyo Metropolitan Government

19 Shinjuku Sanchome East Bldg. (Retail) A 4 Shinjuku Ward, Tokyo Yurakucho Ekimae Building (Yurakucho Itocia)(Retail) A 5 Chiyoda Ward, Tokyo 2,740 million 2, ,67.65 S/SRC/RC B3/4F January ,400 million 6, , S/SRS B4/20F October 2007 Arca East B JPR Chiba Bldg. B 2 Sumida Ward, Tokyo Chiba City, Chiba 5,880 million 3, ,28.86 S/SRC B3/9F March 997 2,350 million, , S/SRC B/3F January 99 JPR Yokohama Nihon Odori Bldg. B 3 Shinyokohama 2nd Center Bldg. B 5 Yokohama City, Kanagawa Yokohama City, Kanagawa 2,927 million, ,46.52 SRC B/F October million ,78.93 S/SRC B2/2F August 99 Kawaguchi Center Bldg. B 6 JPR Ueno East Bldg. B 7 Kawaguchi City, Saitama Taito Ward, Tokyo 8,00 million 4, , S/SRC B2/5F February 994 3,250 million, , S/SRC B/8F October 992 7

20 Tachikawa Business Center Bldg. B 8 Rise Arena Bldg. B 9 Tachikawa City, Tokyo Toshima Ward, Tokyo 3,88 million 2, , S/SRC B/2F December 994 Yume-ooka Tower B 0 Yokohama City, Kanagawa Olinas Tower 5,83 million 9, including residential tower) RC/SRC/S B3/42F 9, entire redevelopment project) January 2007 The commercial tower portion has 2 basement floors and 5 floors above ground. B Sumida Ward, Tokyo 6,50 million 2, , S/SRC/RC B3/27F March 997 3,300 million 27, ,842.4 SRC/RC/S B2/45F February 2006 The office building has 3 floors above ground and 2 floors underground. Tanashi ASTA (Retail) B Cupo-la Main Bldg. (Retail) B 3 Nishitokyo City, Tokyo 0,200 million 2, , SRC B2/7F February 995 Kawaguchi City, Saitama 2,00 million 5, entire redevelopment project) 48,32.96 S/RC/SRC B2/0F January 2006 JPR Musashikosugi Bldg. (Retail) B 4 Kawasaki City, Kanagawa Musashiurawa Shopping Square (Retail) B 5 Saitama City, Saitama 7,260 million 4, , SRC/RC/S B/6F March 983 4,335 million 8, , S B/4F October

21 Kawasaki Dice Bldg. (Retail) B 6 Niigata Ekinan Center Bldg. C Kawasaki City, Kanagawa Niigata City, Niigata 5,080 million 4, ,902.0 S/SRC/RC B2/F August ,40 million 2, , S/SRC B/0F March 996 Tokyo Tatemono Honmachi Bldg. C 4 JPR Hakata Bldg. C 7 Osaka City, Osaka Fukuoka City, Fukuoka 4,50 million, ,69.52 SRC B3/9F February 970 2,900 million, , S/RC B/2F June 985 JPR Naha Bldg. C 9 Sompo Japan Sendai Bldg. C 2 Naha City, Okinawa Sendai City, Miyagi,560 million ,780.7 SRC/S 2F October 99 3,50 million, , SRC B/2F December 997 Sompo Japan Wakayama Bldg. C 3 Tenjin 2 Bldg. C 4 Wakayama City, Wakayama Fukuoka City, Fukuoka,670 million, ,75.07 S 9F July 996 2,80 million, , S/SRC 3F July

22 JPR Dojima Bldg. C 7 JPR Hakata-Chuo Bldg. C 8 Osaka City, Osaka Fukuoka City, Fukuoka 2,40 million ,696.0 SRC B2/9F October 993,920 million ,874.8 SRC 8F February 993 JPR Nagoya Fushimi Building C 9 JPR Umeda Loft Bldg. (Retail) C Nagoya City, Aichi Osaka City, Osaka 4,37 million, ,20.44 SRC B/9F March 99 3,000 million 3, , SRC B/8F April 990 Benetton Shinsaibashi Bldg. (Retail) C 3 Housing Design Center Kobe (Retail) C 4 Osaka City, Osaka Kobe City, Hyogo 5,430 million , S B2/0F February ,220 million 3, ,877.7 SRC/S B2/F June 994 JPR C (Retail) C 5 Osaka City, Osaka 6,000 million ,29.36 S/SRC 9F June

23 Characteristics and Corporate History The Objective and Basic Characteristics of JPR The fundamental investment policy of JPR consists of our investment strategy based on the basic concept of "investing in urban commercial real estate." JPR's investment targets are primarily comprised of superior office buildings (urban work facilities), retail properties located in thriving commercial areas, the land on which they are located and asset-backed securities that have such real estate as their primary investment. JPR makes investments in properties in which we are convinced that the benefits of portfolio management can be demonstrated after carefully considering the risks and returns of the investment. JPR also diversifies its investment geographically by not limiting itself to Tokyo but by also considering assets in other major cities. Corporate History Date Description September 6, 200 The founder (Tokyo Realty Investment Management, Inc.) filed for establishment of the Investment Corporation under the Investment Trust Law September 4, 200 Japan Prime Realty Investment Corporation was established November 6, 200 Started asset management (acquisition of 3 real estate in trust with underlying trust assets of office buildings and 2 commercial properties; 40,730 million in total value) January 22, 2002 Investment unit split (2.5 units for existing unit) June 4, 2002 Listed on the Real Estate Investment Trust Section of the Tokyo Stock Exchange 2

24 Members of the Board (As of December 3, 200) Executive r Hirohito Kaneko Dec. 200 Apr. 979 Apr. 977 Supervising r Sosuke Yasuda Jan. Apr. Jan Oct Jun Jun Sep. 200 Oct. 999 Jul. 993 Feb. 983 Jun. 980 Dec. 975 Apr. 968 Supervising r Masato Denawa Apr Sep Jul Feb Jul Apr Jun Jan. 999 Apr. 99 Apr. 990 Executive r, Japan Prime Realty Investment Corporation Representative Counsel, Hirohito Kaneko Law (currently held position) Bar admission (Tokyo Bar Association), Shigeru Yamada Law Group Representative Partner, Gyosei & Co. (currently held position) CPA and Director, Gyosei Audit Corporation (currently held position) Outside Auditor, Mitsui Sumitomo Insurance Group Holdings, Inc. (currently held position) Group Representative Partner, Gyosei Audit Corporation (Tokyo Hokuto & Co. merged with Serizawa Accounting Firm) CPA and Director, Gyosei Audit Corporation Outside Auditor, Nomura Research Institute, Ltd. (currently held position) Outside Auditor, Mitsui Sumitomo Insurance Company, Limited (currently held position) Supervising r, Japan Prime Realty Investment Corporation Director and Senior Partner, Tokyo Hokuto & Co. (Tokyo Akasaka Audit Co. merged with Hokuto Audit Co. ) (currently held position) Senior Partner, Tokyo Akasaka Audit Co. Representative, Tokyo Akasaka CPA Joint Sosuke Yasuda Tax Accountant (currently held position) Masamitsu Serizawa Accounting Firm Main Store, KK Ohgiya Adjunct proffessor (part-time) at Keio Law School (currently held position) Supervising r of Japan Prime Realty Investment Corporation Director of Advicelink Co., Ltd. (currently held position) Part-time auditor of Ulvex Inc. (currently held position) Partner attorney at Spring Partners (former Okinobu, Ishihara & Sei Law ) (currently held position) Adjunct professor (part-time) at Keio University Faculty of Law (Civil law practice) Part-time auditor of Kinkan Co., Ltd. (currently held position) Partner of Okinobu, Ishihara & Sei Law Okinobu, Ishihara & Sei Law (former Okinobu & Ishihara Law ) Registered with Daiichi Tokyo Bar Association at Okinobu & Ishihara Law 22

25 Overview of the Asset Manager Corporate Profile Name Core Business Capitalization Shareholders History Services Tokyo Realty Investment Management, Inc. (TRIM) Asset management for investment corporation 350 million yen Tokyo Tatemono Co., Ltd. (40%) Taisei Corporation (20%) Yasuda Real Estate Co., Ltd. (20%) Meiji Yasuda Life Insurance Company (0%) Sompo Japan Insurance Inc. (0%) April 28, 2000: October 3, 2000: March 6, 200: June 20, 200: September 30, 2007: Novemb 28, 2007: Founded Approved for real estate transaction service Approved as discretionary transaction agent Approved for asset management of investment corporation Registered as investment management business Applying for and submitting application form regarding Financial Instruments and Exchange Law (investment management business) () Asset management for JPR (including all decision-making in connection with the acquisition/disposition or leasing of properties and acting as an agent or broker of such transactions based on relevant evaluation and judgement) (2) Funding by JPR (3) Reporting to JPR (4) Any other services related to or affiliated with the above Organization Shareholders Meeting Board of Directors Auditors Investment Committee (Invest Subcommittee / Fund Management Subcommittee ) President and CEO Compliance Committee (Compliance Subcommittee ) Compliance Investment Management Division Financial Division Corporate Plannig / Administration Division Research Group Investment Group Asset Management Group Financial Group Investor Relations Group Fund Management Group Corporate Planning Group Accounting / Human Resources Group TRIM's Decision-Making Process of Investment Management TRIM established the Investment Committee to make investment management decisions with Investment Subcommittee (including the Due Diligence Subcommittee) and Fund Management Subcommittee below it. Members of these Committees and Subcommittees include the CEO, CIO, CFO and CAO. However, regarding the Due Diligence Subcommittee, a Compliance General Manager is also included to enhance compliance when conducting due diligence for the targeted investment asset. The Board of Directors is responsible for the targeted investment assets and policies. The Investment Committee formulates management plans, while the Investment Subcommittee is in charge of decisions on issues regarding the acquisition and disposition of individual assets. The Fund Management Subcommittee is responsible for issues regarding the management of individual assets. Procedures for decision-making by the Investment Subcommittee entails following secure procedures that require two steps: a policy decision concerning acquisition or disposition and a final decision on acquisition or disposition. In addition, in regard to the acquisition of an individual asset, a Due Diligence Subcommittee meeting will be held after the acquisition policy is decided to enhance the screening of the details of due diligence. Furthermore, the Board of Directors is given final decision-making power on the acquisition and disposition of individual assets greater than a certain value. Meanwhile, decisions and legal procedures by each committee are screened to confirm that they do not violate laws, regulations, JPR s Articles of Incorporation, internal rules, etc. at the Compliance Subcommittee just before Committee meetings are held. The Compliance General Manager reports on the presence or absence of violations of laws or rules before the screening at each Committee and, in addition, instructs each manager to decide at or report to TRIM s Board of Directors or JPR s Board of Directors in compliance with the rules, etc. 23

26 Directors of Tokyo Realty Investment Management, Inc. President and Chief Executive (CEO) Satoshi Okubo Jun. 200 Mar. 200 Mar. 200 Oct Mar Oct. 998 Jan. 996 Apr. 995 Apr. 994 Apr. 992 Apr. 977 Appointed as President and CEO, Tokyo Realty Investment Management, Inc. Appointed as Advisor, Tokyo Tatemono Co., Ltd. Appointed as Auditor (part time), Tokyo Tatemono Real Estate Sales Co., Ltd. Appointed as Director and Head of Kansai Branch Appointed as Director and Head of Osaka Branch Appointed as General Manager, Residential Management Dept. Appointed as Group Leader, Second Leasing Group, Second Building Leasing Dept. Appointed as Manager, Management Planning, Corporate Planning Division Appointed as Manager, Corporate Planning Division and Manager, International Planning, Corporate Planning Division Appointed as Manager, Corporate Communications and Manager, Corporate Planning Division Joined Tokyo Tatemono Co., Ltd. Director and Chief Administrative r (CAO) Kazuo Kitami Oct. Oct. Jan. Apr. Aug. Apr. Apr. Sep. Apr Appointed as Director and Chief Administrative r, Tokyo Realty Investment Management, Inc. Dispatched to Tokyo Realty Investment Management, Inc. Appointed as member of the council in charge of Affiliated Companies Department, Meiji Yasuda Life Insurance Company Appointed as Manager, Loan Management of the Management and Administration Division Appointed as Manager, Loan General Affairs of the Management and Administration Division Appointed as Manager, Credit Assessment Dept. 2 of the Management and Administration Division Appointed as Manager of Real Estate Development Department of the Real Estate Division Appointed as Manager of Real Estate Development Dept. of the Real Estate Division Joined Yasuda Mutual Life Insurance Company (currently Meiji Yasuda Life Insurance Company) and assigned to Training Institute of the Education Division Director and Chief Investment r (CIO) Seiji Miwa Mar. Oct. Jul. Jan. Jul. Apr. Apr. Apr. Apr. Apr Appointed as Director and Chief Investment r, Tokyo Realty Investment Management, Inc. Appointed as General Manager of Investment Management Division (responsible for Asset Management Group) Dispatched to Tokyo Realty Investment Management, Inc. Appointed as Group Leader of Investment Services Department, Tokyo Tatemono Co., Ltd. Appointed as Manager, Investment Services Department Appointed as Manager, Yokohama Development Department Appointed as Assistant Manager of Yokohama Development Department Appointed Assistant Manager of Development Department Assigned to Development Department Joined Tokyo Tatemono Co., Ltd. and assigned to Design Department Director and Chief Financial r (CFO) Katsuhito Ozawa Jul Jul Nov Mar Oct Apr Apr. 200 Apr. 987 Appointed as Director and Chief Financial r, Tokyo Realty Investment Management, Inc. Dispatched to Tokyo Realty Investment Management, Inc. Appointed as Representative Director of Kachidoki GROWTH TOWN Co., Ltd. Appointed as General Manager of Residential Management Division, Tokyo Tatemono Co., Ltd. Appointed as General Manager of Financial Division (responsible for Financial Group and Investor Relations Group) Dispatched to Tokyo Realty Investment Management, Inc. Appointed as Manager of Investment Services Department Joined Tokyo Tatemono Co., Ltd. Director and Compliance r Shigeyuki Sugawara Jun. Apr. Jul. Oct. Jan. Apr. Apr. Apr Appointed as Director and Compliance r, Tokyo Realty Investment Management, Inc. Appointed as Compliance r, Tokyo Realty Investment Management, Inc. Appointed as Corporate Planning/Administration Division Manager (responsible for Planning Group/Compliance Group) Appointed as Corporate Planning/Administration Division Manager (responsible for Compliance Group) Seconded to Tokyo Realty Investment Management, Inc. (joined Tokyo Realty Investment Management, Inc. in October 2002) Appointed as Manager, Real Estate Section, Real Estate Division, Asahi Jitsugyo Co., Ltd. (seconded from Asahi Mutual Life Insurance Company) Appointed as Deputy Manager, Real Estate Business, Real Estate Division Joined Asahi Mutual Life Insurance Company 24

27 Overview of Asset Management () Operational Performance of JPR Unit 4th Fiscal Period (July, Dec. 3, 2008) 5th Fiscal Period (Jan., June 30, 2009) 6th Fiscal Period (July, Dec. 3, 2009) 7th Fiscal Period (Jan., June 30, 200) 8th Fiscal Period (July., Dec 3, 200) Operating Revenues,7 4,330,493 2,34,870 Real estate rental revenues Million yen,7,030,493,855,870 Gain on sale of real estate 3, Operating Performance Operating Expenses 5,689 7,762 5,665 Real estate rental expenses 5,022 4,96 5,00 Million yen Loss on sale of real estate 4 2,54 5,830 5,44 5,983 5,36 Loss on sale of investment securities 38 Operating Profits Million yen 5,482 6,568 5,827 6,484 5,886 Recurring Profits Million yen 4,433 5,572 4,333 4,964 4,039 Net Income Million yen 4,432 2,33 4,332 4,963 4,039 Total Assets Million yen 309, ,63 332, , ,904 (% Change) % (+.9) (+6.4) (+.0) (+7.8) (+0.7) Assets, etc. Interest-bearing Debt Total Unitholders' Equity Million yen Million yen 29,255 6,58 50,230 59,057 50,872 6,058 6,262 76,303 63,904 75,502 (% Change) % (-0.0) (-.3) (+.3) (+9.5) (-0.5) Unitholders' Capital Million yen 56,725 56,725 56,725 7,339 7,339 Total Cash Distributions Million yen 4,432 2,33 4,333 4,840 4,06 Dividend payment ratio % Cash Distribution per Unit, etc. Number of Units Outstanding Total Unitholders' Equity per Unit Cash Distribution per Unit Units Yen 625, ,853 7, , ,492 3,73 625, ,693 6,933 75, ,578 6,770 75, ,458 5,680 Distribution amount Yen 7,092 3,73 6,993 6,770 5,680 Exceeding profit distribution amount Recurring Profits on Total Assets (Note ) Annualized (Note 0) % Return on Total Unitholders' Equity (Note 2-) Annualized (Note 0) % Total unitholders' equity at beginning of period (Note 2-2) Million yen 6,77 6,58 59,057 6,058 76,303 Unitholders' Equity Ratio at End of Period (Note 3) (Year-on-year increase/decrease) % 52. (-.0) 48.3 (-3.8) 48.5 (+0.) 49.2 (+0.7) 48.6 (-0.6) Financial Indices Interest-Bearing Debt to Total Assets at End of Period (Note 4) % DSCR (Note 5) Net income before interest and amortization Million yen 7,285 7,284 7,604 7,84 7,5 Reference Information Interest paid (Notes 6) NOI from Leasing (Note 7) Annualized NOI yield (Notes 9 and 0) NCF from Leasing (Note 8) Annualized NCF yield (Notes 9 and 0) Properties Owned (Note ) Number of Tenants Total Leasable Floor Space (Note 2) Occupancy Rate Million yen % Million yen % m 2 % (Note ) Recurring profit / (total assets at beginning of period + total assets at end of period) / 2 (Notes 2- and 2-2) Net income / (total unitholders' equity at beginning of period + total unitholders' equity at end of period) / 2 (Note 3) Total unitholders' equity at end of period/total assets at end of period x 00 (Note 4) Interest-bearing debt / total assets at end of period x 00 (Note 5) Net income before interest and amortization (excluding gain or loss on sale of real estate, loss on sales of investment securities and extraordinary loss) / interest paid (Note 6) Interest paid in this table includes interest on corporate bonds (Note 7) (Real estate rental revenues - real estate rental expenses) + depreciation (Note 8) NOI from leasing - capital expenditures (Note 9) Annualized NOI from leasing /purchase price of property (4th fiscal period: billion, 5th fiscal period: 3.9 billion, 6th fiscal period: 30.6 billion, 7th fiscal period: billion and 8th fiscal period: billion) Annualized NCF from leasing /purchase price of property (Note 0) Annualization is based on 365 days for a year and calculated by using the following management days: 4th fiscal period: 84 days, 5th fiscal period: 8 days, 6th fiscal period: 84 days, 7th fiscal period:8 days and 8th fiscal period: 84days. (Note ) Shin-Kojimachi Bldg., Fukuoka Bldg., Shinjuku Square Tower, BYGS Shinjuku Bldg., Shinjuku Sanchome East Bldg., Tachikawa Business Center Bldg. and JPR Umeda Loft Bldg. were acquired at multiple times but are calculated as one property. (Note 2) Total leasable floor space in this table indicates the contracted area. (Note 3) Any ratio indicated on financial indices are rounded to the first decimal point (except for the dividend payment ratio, which is rounded off to the first decimal point).,048 7, , , ,024 7, , , ,420 8, , , ,439 8, , , ,542 8, , ,

28 (2) 8th Fiscal Period Asset Management ) Milestones of JPR Japan Prime Realty Investment Corporation (JPR) was established on September 4, 200 under the Investment Trusts and Investment Corporations Law (hereafter, the Investment Trusts Law), and was listed on the Tokyo Stock Exchange Real Estate Investment Trust Section (securities code: 8955) on June 4, 2002 with 289,600 outstanding investment units. JPR made its fourth additional public offering in February 200, bringing the number of investment units issued and outstanding to 75,000 units. JPR has assigned the asset management of its portfolio to Tokyo Realty Investment Management Inc., through which JPR aims to maximize unitholder value by efficiently managing the portfolio of office buildings and retail properties. 2) Management Environment The Japanese economy entered a stage of leveling off in the fourth quarter (October December) of 200 because of such stimulating policies as tax cuts for eco-friendly cars and the Eco-Point System coming to an end, as well as due to exports stumbling in accordance with some slowdown in the recovery of Western economies. Nevertheless, the strong Asian economies are bolstering overseas demand, likely helping the Japanese economy avoid entering a recession. Expectations are that Japan will come out of the levelingoff situation into a renewed recovery, but there still remains a sense of uncertainty in such factors as the trends of natural resource prices and the foreign exchange levels. Meanwhile, moves for market recovery have been observed in the circumstances surrounding J-REITs since the Bank of Japan decided on comprehensive monetary easing as of October 5, 200. The Building Leasing Market The office market continues to be weak. In Tokyo, however, the market is starting to bottom out as new demand turned to increase after significant rent adjustments. Furthermore, there was a gap in the speed of recovery between highly competitive offices (including class S and class A buildings) and other office buildings. Regional cities continued to see worsening market conditions, with vacancy rates generally staying at high levels. The Retail Property Leasing Market Although there are signs that consumption is recovering, it still lacks dynamism, and in the retail industry, overall sales are continuing to decline. There are cases where some stores in good locations of major cities, such as Ginza and Shinjuku, started to show faint signs of bottoming out as a result of significant rent adjustments. The For-Sale Real Estate Market Fund procurement conditions improved notably, giving sellers enough margins to take their time in conducting sales activities. This led to stagnant transactions of blue-chip properties that allow expectations for improved earnings in the recovery period of the leasing markets. On the other hand, given the regain of willingness to invest by buyers, the for-sale market is presumably entering a turnaround and recovery period prior to the recovery of the leasing markets. 3) Portfolio Management Status New Property Acquisitions Based on the recent changes in market conditions, JPR has been focusing on asset replacement by endeavoring to replace properties in the local area/retail property category with those in the Tokyo/ office building area, with a primary aim of stabilizing portfolio earnings while paying attention to balancing diversification of the portfolio, both in terms of location and asset class. During the 8th fiscal period, JPR acquired BYGS Shinjuku Building (additional ownership; acquisition price: 3.3 billion yen) and Tokyo Tatemono Yokohama Building (acquisition price: 7.0 billion yen). The acquisition of additional equity led to JPR realizing the entire ownership of BYGS Shinjuku Building. As a result, the balance of assets under management now totals 56 properties, or 34.5 billion yen on an 2 acquisition price basis, as of the end of December 200. The total leasable floor space is now 420,544m and the number of tenants is