For Immediate Release€¦ · Building and Aoyama Suncrest Building (Additional Acquisition)) ... Japan’s real estate trading market, and the expected yield for all property types

Disclaimer: This document is not an offer to sell or a solicitation of any offer to buy the securities of OJR (the “Investment

Corporation”) in the United States or elsewhere.

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For Immediate Release

REIT Issuer: ORIX JREIT Inc. (TSE: 8954)

Teruo Ozaki

Executive Director

Asset Management Company:

ORIX Asset Management

Corporation

Yoshitaka Kamemoto

President and CEO

Inquiries:

Junko Kanazawa

Director, Corporate Senior Vice

President

TEL：+81 3 5418 4858

ORIX JREIT Announces Property Acquisitions

“ORIX Yodoyabashi Bldg. and Hamamatsu Act Tower”

and Change in Subsidiary Company of Asset Management Company

TOKYO, March 1, 2016 — ORIX JREIT Inc. (“OJR”) announced that our asset management company, ORIX

Asset Management Corporation (“OAM”), passed a resolution on the property acquisitions and change in

subsidiary company of OAM as described below.

1. Summary of Properties to be acquired

Notes:

1. “Properties to be acquired” refers to the each property or collectively to all the properties indicated above.

2. “6 Central Tokyo Wards” refers to Chiyoda, Chuo, Minato, Shinjuku, Shibuya and Shinagawa wards and “Remaining

Tokyo Wards” refers to the remaining Tokyo wards other than the “6 Central Tokyo Wards.” “Other Parts of the Greater

Tokyo Area” refers to parts of Tokyo other than the “6 Central Tokyo Wards” and “Remaining Tokyo Wards,” Kanagawa,

Saitama and Chiba Prefectures. “Other areas” refers to areas other than the “6 Central Tokyo Wards,” “Remaining Tokyo

Wards” and “Other Parts of the Greater Tokyo Area”.

3. As to the Seller, “Sponsor” indicates “ORIX Group.” “ORIX Group” refers to ORIX Corporation and its group companies.

4. The "NOI Yield” of Properties to be acquired is calculated by using the formula: “Net Revenue” in the direct capitalization

method recorded in the appraisal reports at the time of decision to acquire / Scheduled acquisition price; the figures are

rounded to the first decimal place.

5. The "Yield after Depreciation” of Properties to be acquired is calculated by using the formula: (“Net revenue” in the direct

capitalization method recorded in the appraisal reports at the time of decision to acquire – “estimated depreciation”

assumed by OAM) / Scheduled acquisition price; the figures are rounded to the first decimal place.

6. “Existing Portfolio” refers to the properties owned as of August 31, 2015 added by the nine properties (DUPLEX GINZA

16,812 17,820 7.9 5.8

5.0 3.8

5,220 5.0 4.1

Total

ORIX Yodoyabashi Bldg. OfficeOther Areas

(Osaka-shi)Sponsor 5,012

Existing Portfolio(Note 6) -

NOI Yield

(%)(Note 4)

Yield after

Depreciation

(%)(Note 5)

Hamamatsu Act Tower OfficeOther Areas

(Hamamatsu-shi)Sponsor 11,800 12,600 9.1 6.5

Property TypeArea

(Note 2)

Seller(Note 3)

Acquisition

Price

(million yen)

Appraisal

Value

(million yen)



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TOWER 2/11, VIA INN SHINSAIBASHI BLDG., HOTEL KEIHAN SAPPORO, Richmond Hotel Yamagata Ekimae,

ARK Hills South Tower, KONAMI SPORTS CLUB KORIEN, KANDA MATSUNAGACHO BUILDING, Kita Aoyama

Building and Aoyama Suncrest Building (Additional Acquisition)) acquired in/after the 28th fiscal period ending February

29, 2016 and deducted by the two properties (The Kitahama PLAZA and Park Axis Azabu Stage). “NOI Yield” and “Yield

after Depreciation” of existing portfolio are calculated based on the annualized actual figures for properties owned as of

August 31, 2015 and the figures for the nine properties acquired after in/after the 28th fiscal period ending February 29,

2016 are calculated based on the figures in appraisal reports at the time of acquisition.

2. Purpose of the Acquisition

The current Japanese economy is beginning to show signs of recovery in terms of corporate performance

and personal consumption, supported by the government’s economic measures. Meanwhile, while the global

economy is undergoing an improving trend overall, it is still stagnant, and inherent risks of downturn remain.

Under such backdrop, competition to acquire properties is intensifying regardless of property types in

Japan’s real estate trading market, and the expected yield for all property types is continuing to compress. In

the leasing market, vacancy rates of offices are declining, and rents are on the rise. These trends are also

beginning to spread in regional cities. On the other hand, the timing and scale of full-fledged increase in

rents remain difficult to predict as a result of factors such as differences in the improvement status of rental

conditions depending on the individual characteristics of properties.

In such real estate market, OJR will utilize its three strengths (characteristics) of i) being a diversified

REIT, ii) ORIX Synergy(note 1)

and iii) operational strength to respond flexibly to environmental changes and

implement an ongoing external growth strategy based on the following investment policy.

Invest selectively regardless of property types by utilizing the strength as a diversified REIT,

extensive pipelines of the ORIX Group and expertise backed by ORIX Synergy while managing risks.

Continue to consider property replacement by grasping the market environment. In addition, for gains

on sales at the time of property replacement, we will work to reduce funding costs through early

repayments and keep a portion as internal reserves to improve the stability of DPU.

Under this backdrop, we will aim for the stable growth of unitholder value by leveraging our operational

strength to effectively combine our external growth strategy, internal growth strategy, and financial strategy

for the stable growth of DPU and NAV(note 2)

in the future.

Based on the above strategy, OJR has decided to acquire an office building in Osaka and a complex

facility consisting mainly of office floors, as well as hotel and retail areas in Hamamatsu by utilizing the

ORIX Group pipeline.

Note: 1. The “ORIX Synergy” refers to the cooperative relationship between ORIX Group companies and OJR.

2. “NAV” (Net Asset Value) is calculated by the formula [unitholder capital + unrealized gain/loss + total internal reserve.]

3. Acquisition Summary

1) ORIX Yodoyabashi Bldg.

Property to be acquired : Real estate trust beneficial interest

Acquisition price : ¥5,012,000,000 (excluding national and local consumption taxes, etc.)

Contract date : March 1, 2016

Scheduled acquisition date : May 2, 2016(Note 1)

Current owner and seller : ORIX Corporation

Funding method :

Proceeds from the issuance of new investment units through public offering,

borrowings (Note 2)

and cash on hand

Payment term : 100% on delivery



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2) Hamamatsu Act Tower

Property to be acquired : Real estate trust beneficial interest

Acquisition price : ¥11,800,000,000 (excluding national and local consumption taxes, etc.)

Contract date : March 1, 2016

Scheduled acquisition date : April 15, 2016(Note 1)

Current owner and seller : Act City Investment Yugen Kaisha

Funding method :

Proceeds from the issuance of new investment units through public offering

borrowings (Note 2)

and cash on hand

Payment term : 100% on delivery

Notes:

1. The trust beneficial interest sale and purchase agreement for Properties to be acquired (the “Purchase and Sales

Agreements”) fall under the category of Forward Commitment, etc. as provided in the Comprehensive Guideline for

Supervision of Financial Instruments Business Operators, etc. set by the Financial Services Agency as they are postdated

Purchase and Sales Agreements where the settlement and delivery of the properties are to take place one month or more

after the conclusion of agreement and such.

Financial Impact on OJR in the Event that it Fails to Fulfill the Forward Commitment, Etc. In this regard, the Purchase and Sales Agreements have cancellation provisions that set forth the following

conditions. i. When either the seller or the buyer breaches the provisions of the Purchase and Sales Agreement (such a party

referred to as the “Breaching Party”), the counterparty shall set a certain period and demand the Breaching Party to meet its obligations within the period. If the Breaching Party fails to correct its violations within that period, the counterparty shall be able to cancel the Purchase and Sales Agreement.

ii. When either the seller or the buyer breaches the provisions of the Purchase and Sales Agreement, the Breaching Party shall be obliged to compensate or indemnify for the resulting damages, etc. of the counterparty within the scope of an equivalent cause-and-effect relationship.

iii. After the conclusion of the Purchase and Sales Agreements, the seller confirms that the buyer is scheduled to acquire funds for the properties to be acquired by issuing additional investment units (the “Acquisition Funds”) and if it is the case that the Acquisition Funds for the whole purchase price cannot be reached by the scheduled acquisition date (including cases where the buyer deems the issuance of investment units is unreasonable such as due to the fluctuation of the investment unit price or where it is reasonably assumed that it will not be reached), the buyer may unconditionally terminate the Purchase and Sales Agreements.

2. For details, please refer to the press release “ORIX JREIT Announces Issue of New Investment Units and Secondary

Offering of Units” to be announced at a later date. The details of the borrowings shall be announced at a later date, as

soon as it is determined.

4. Summary of Properties to be acquired

(1) ORIX Yodoyabashi Bldg.

Specified asset category Real estate trust beneficiary interest

Trustee Mitsubishi UFJ Trust and Banking Corporation

Term of trust agreement June 25, 2014 to May 1, 2026 (Scheduled)

Scheduled acquisition date May 2, 2016

Acquisition price ¥5,012,000,000 (excluding national and local consumption taxes, etc.)

Appraisal value ¥5,220,000,000

Date of Appraisal February 1, 2016

Appraiser Chuo Real Estate Appraisal Co., Ltd.

Address 3-5-22 Kitahama, Chuo-ku, Osaka-shi, Osaka

Public transit access Approx. 1-minute walk from “Yodoyabashi” Station on Osaka Subway

Midosuji Line and Keihan Main Line

Land

Registered Area 1,150.59 m2 including leasehold of 37.42m

2

Usage restrictions Commercial zone

Type of ownership Fee simple ownership and Leasehold

Building Registered usage Office, Retail, Parking, Storage



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Registered

completion date

March 1991

June 2006 (Extension)

Type of ownership

Compartmentalized ownership section and co-ownership of

compartmentalized ownership section

(co-ownership interests : 96,040 of 100,000)

Registered Area

Total floor area of whole building: 8,787.77m2

Exclusive area: 6,753.12 m2 including 214.05 m

2 of co-ownership

interests for parking, co-ownership interests of 96,040 of 100,000 (Note) The property is compartmentalized ownership and co-ownership of

compartmentalized ownership section that comprises part of a building (the

“Compartmentalized ownership building”) and OJR will acquire an exclusive area of

6,753.12m2 out of 6,889.55 m2 of the Compartmentalized ownership building.

Registered

construction

Steel-frame, reinforced concrete, Reinforced concrete flat roof, 9 floors

with 2 underground floors

Architect Murano Mori Architecs Office

ASAI KEN Architectural Research Inc. (Extension)

Structural engineer Murano Mori Architecs Office

ASAI KEN Architectural Research Inc. (Extension)

General contractor OBAYASHI CORPORATION

Building

inspection agency

Osaka City

The Building Center of Japan (Extension)

Main facilities and

specifications

Elevator: 4

Parking: 23 vehicles

Earthquake

resistance (with or

without earthquake

insurance)

PML(Note 1)

10% (without)

(based on Sompo Japan Nipponkoa Risk Management, Inc. report) (Note 1)

Previous owner (beneficiary) ORIX Corporation

Scheduled Property Manager ANA FACILITIES CO.,LTD. (Scheduled)

Collateral None

Special notes

<Arrangements, etc.>

For the building , an agreement was signed between the landowners and

unit building owners that jointly own the site (both include the trustee)

stipulating that in the event of a transfer of exclusively owned space and

the site ownership rights, etc. concerning the existing building, a

preferential purchase right would be granted to other landowners and

unit building owners concerning the building. In addition, the

management regulations by the unit building owners stipulate that if a

unit building owner of the Property’s building transfers exclusively

owned space, a preferential negotiation right shall be granted to other

unit building owners.

<Boundary check, cross-border structure, etc.>

For the Property’s jointly owned site, boundary finalization between

the portion acquired by OJR and the portion owned by third parties

has not been conducted.

<Other>

While unit ownership registration has been conducted that makes

the trustee and other unit owners each independent owners, the

dividing walls in the 7th floor leased office of the existing building

that demarcate exclusively owned space have been removed.

Special features of the property

The office is favorably located approximately one minute-walk

from “Yodoyabashi” Station on the Osaka Municipal Subway

Midosuji Line and the Keihan Main Line, and is also within a

walking distance from “Kitahama” Station on the Osaka Municipal



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Subway Sakaisuji Line and “Ooebashi” Station on the Keihan

Nakanoshima Line.

The Yodoyabashi area is one of Osaka’s representative business

areas where major companies including financial institutions and

public facilities are concentrated. This area enjoys stable office

demand thanks to its name recognition as a traditional business area,

and its excellent access to a broad region.Yodoyabashi Station is

located one station away with approx. 3-minute ride from “Umeda”

Station (“Osaka” Station), and four stations away with approx.

10-minute ride from “Shin-Osaka” Station via the Midosuji Line.

This is a property developed through the acquisition of the

adjoining land and the extension of the original building by the

ORIX Group. The common areas and air conditioning equipment in

the original building have been renewed.

Efforts have been made to diversify the 30 tenants for the office

section, which include tenants such as trading companies and IT

companies, and stable operation can be expected in the future.

The property also houses retail tenants including restaurants and a

office supplies store at the lower floors, thanks to the bustling

atmosphere due to its location over a station and the high level of

visibility facing Tosabori Dori Street.

Summary of the Engineering Report

Reporting Company Tokio Marine & Nichido Risk Consulting Co., Ltd.

Date of inspection November 27, 2015

January 20, 2016

Maintenance Cost ¥248 million (Total amount of 12 years from the date of inspection)

(Note

2)

Replacement Cost ¥2,583 million (Note 2)

Summary of Rental status (as of December 31, 2015)

Number of tenants 32

Gross rental income ¥25 million per month (Note 2)

Security deposits ¥232 million (Note 2)

Total rent space 6,260.16 m2

Total rentable space 6,593.97 m2

Occupancy rate 94.9%

Assumed net operating

income (NOI)

¥242 million per annum (Note2)

(Note) The net operating income (NOI) represents the assumed revenue/expenditure

balance under stabilized occupancy, based on the terms of the lease contract,

etc. at the scheduled acquisition date, but excluding extraordinary factors that

may occur during the first year of acquisition. The preconditions are as

below; these figures are not what OJR expects for the current fiscal year.

1) Occupancy rate: 96.5%

2) Taxes: Taxes are calculated on the standard tax amount for fiscal 2015.

Notes:

1. PML (Probable Maximum Loss) shows the ratio (%) of cost of recovering a building after it is damaged to its state before

the damage occurred against replacement cost, when assuming an earthquake that may occur once in 475 years in average

in probability statistics (recurrence interval of 475 years). The earthquake risk of a building is evaluated based on the

event risk curve that shows the relationship of amount of expected loss (horizontal axis) and probability for the loss to

exceed the year (vertical axis). However, the risk curve has variability because loss evaluation comes with uncertainties in

earthquake resistance performance of the building, behavior of earthquake vibration, etc. Accordingly, the above PML

figures use the risk curve with credibility level of 90%, and are rounded to the nearest whole number.

2. Figures are rounded down to the nearest million yen.



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Photo and map



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(2) Hamamatsu Act Tower

Specified asset category Real estate trust beneficiary interest

Trustee Mizuho Trust and Banking Co., Ltd.

Term of trust agreement September 18, 2003 to April 30, 2026 (Scheduled)

Scheduled acquisition date April 15, 2016

Acquisition price ¥11,800,000,000 (excluding national and local consumption taxes, etc.)

Appraisal value ¥12,600,000,000

Date of Appraisal February 1, 2016

Appraiser Japan Real Estate Institute

Address 111-2 Itaya-cho, Naka-ku, Hamamatsu-shi, Shizuoka

Public transit access Approx. 5-minute walk from the “Hamamatsu” Station on JR Tokaido

Shinkansen (Bullet Train) and JR Tokaido Main Line

Land

Registered Area 12,334.88 m2

Usage restrictions Commercial zone

Type of ownership Fee simple ownership

Building

Registered usage Office, Hotel, Retail, Parking

Registered

completion date

August 1994

April 1999 (Extension)

Type of ownership Fee simple ownership

Registered Area 142,511.21 m2

Registered

construction

Steel-frame, Steel frame reinforced concrete, flat froof, with flat roof, 47

floors with 2 underground floors

Architect NIHON SEKKEI INC., MITSUBISHI ESTATE CO., LTD.

KAJIMA CORPORATION (Extension)

Structural engineer NIHON SEKKEI INC., MITSUBISHI ESTATE CO., LTD.


General contractor Act City Construction Joint Venture


Building

inspection agency Hamamatsu City

Main facilities and

specifications

Elevator: 30

Parking: 530 vehicles (partially mechanical parking / whole of act City

Hamamatsu : 933 vehicles)

Office leased Area (Standard floor area): Approx. 1,980㎡(Approx. 600

tsubo)

Hotel guest rooms: 99 Single rooms, 38 Double rooms, 178 twin rooms,

7 Suite rooms

Earthquake

resistance (with or

without earthquake

insurance)

PML(Note 1)

2% (without)

(based on Sompo Japan Nipponkoa Risk Management, Inc. report) (Note 1)

Previous owner (beneficiary) Act City Investment Yugen Kaisha

Scheduled Property Manager MITSUI FUDOSAN BUILDING MANAGEMENT CO., LTD

Collateral None

Special notes

<Arrangements>

This trust agreement for the Property stipulates that in the event of

transferring trust beneficiary interest, the beneficiary must submit

proof of the result of consultation with Hamamatsu City to the

trustee and gain approval.

The Hamamatsu Station East Block Development Project



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Agreement entered between Hamamatsu City, the initial trustee,

Hotel Okura Co., Ltd., ITOCHU Corporation, UG Toshi-Kenchiku

Co., Ltd., Nihon Sekkei, Inc., Kajima Corporation, Shimizu

Corporation, and Takenaka Corporation related to development of

Act City including the Property stipulates that if the Property is all

collectively leased to a third party, the approval of Hamamatsu City

must be obtained, and this arrangement shall be succeeded to OJR

and the trustee.

The pedestrian deck and connection bridge connected to the

Building are owned and managed by Hamamatsu City, based on the

“Act City Management Agreement” and “Agreement on

Management, etc. of Sidewalk Around Act City and the External

Area on the First Floor” that was entered between the initial trustee

and Hamamatsu City.

＜Boundary check, cross-border structure＞

The carriage entrance eave on the land to the west side of the

Property crosses the border of the Land.

The arcade roof of the commercial complex portion of the Property

crosses the border of the adjacent land to the northwest.

The arcade roof on the building to the northwest of the Property

crosses the border of the Land.

Special features of the property

The Property is a high-rise building directly connected to JR

“Hamamatsu” Station that has 47floors above ground with a height

of 212m, and is equipped with damping devices. As such, it has

become a landmark of Hamamatsu city. It comprises office, hotel

and commercial sections, and it has a track record of being managed

utilizing the operational know-how of the ORIX Group in a wide

range of property types.

Hamamatsu city has a population of approx.. 810,000 people and is

a government-designated city with a population second only to

Nagoya-city in “Chubu region”. It has developed as a

manufacturing city and has a concentration of head offices, plants,

and R&D bases in the transportation equipment, textile, musical

instrument, and advanced technology industries. It is located

between Tokyo and Osaka, and is connected with the major

metropolitan areas by the Tokaido Shinkansen, and the Tomei

Expressway and Shin-Tomei Expressway.

The Property is the tower building that serves as the core of the

large complex Act City Hamamatsu that is directly connected to

“Hamamatsu” Station. Act City Hamamatsu is a facility jointly

developed by Hamamatsu City and private companies, and is

composed of Act Tower, as well as a main hall, a concert hall, a

congress center, an exhibition event hall, a seminar & exchange

center, and a museum of musical instruments that are owned by

Hamamatsu City. Synergies that are made uniquely possible by the

various functions of a complex can be expected.

In accordance with the acquisition of the Property, OAM will

acquire 76% of the shares of the building management company

who works as a facility manager of the whole of Act City

Hamamatsu in order to manage the facility smoothly. (Hamamatsu

City owns 24% of the shares.) For details of the building

management company, please see “6. Profile of Subsidiary company

of OAM.”

<Overview of office and commercial facilities>

The office section on the intermediate floors consists of roomy spaces of approx. 600 tsubo or 1,980m

2, per floor (half floors have

approx. 300 tsubo of space with no pillars) . Flexible office layouts



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are possible as one floor can be subdivided into up to 20 sections

with a minimum size of approximately 22 tsubo. An annex provides

abundant parking, making it suitable for broad sales activities based

from Hamamatsu. Flexible leasing incorporating a variety of tenant

needs is possible.

The property has excellent views as it is possible to view

Hamamatsu city and Mt. Fuji from the floors. As the building has

the largest scale and best location in Hamamatsu City and the status

as a landmark, its scarcity value is high as an office that can

improve tenants’ corporate image and effectiveness for recruiting

employees.

Approx. 140 office tenant companies are diversified in various

sectors including finance, manufacturing, service, and IT, and stable

high occupancy has been achieved. The majority of these are listed

companies or their group companies, and some of the tenants are

public institutions. Companies from outside the prefecture including

foreign-affiliated companies account for 70% of tenants, making it a

building that is used as a business base in Hamamatsu.

The commercial area on the lower floors houses tenants such as

restaurants, a culture center, language schools, as well as tenants

catering daily needs such as convenience stores, a post office, and

clinics. The stable occupancy of the office sector has led to

improvement in the utilization of these tenants.

<Overview of the hotel>

Okura Act City Hotel Hamamatsu is located on the upper floors.

The lessee, hotel management company, is Okura Act City Hotel

Hamamatsu Co., Ltd. managed by ORIX Group.

The property has high competitive advantages as a hotel thanks to

its direct connection with a station where the Shinkansen (bullet

train) stops, and being located within a complex. As a result,

accommodation demand for events including weddings, academic

conferences, and meetings can be expected. Business demand is

high and inbound demand is also increasing. The hotel features

roomy accommodations, even with single rooms that are

approximately 23 m2 or larger. Partially variable rent is going to be

set as the rent in the contract. Internal growth can be expected

through improvements in the room occupancy rate and average

daily rate, or ADR.

Hamamatsu city is located in the middle of the so-called “golden

route” for foreign visitors between Tokyo, Osaka, and Mt. Fuji, and

the total number of foreign guests has grown significantly.

Summary of the Engineering Report

Reporting Company Tokio Marine & Nichido Risk Consulting Co., Ltd.

Date of inspection December 15, 2014, February 24, 2015 and December 16, 2015

Maintenance Cost ¥3,944 million

(Note 2) (Total amount of 12 years from the date of

inspection)

Replacement Cost ¥48,593 million (Note 2)

Summary of Rental status

Number of tenants

(as of December 31, 2015)

Office 138

Hotel 1

Retail 26



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Gross rental income

Office 148 million yen / month(Note2)

(As of December 31, 2015)

Hotel

Fixed rent 22million yen /month (As of December 31, 2015)

<After the acquisition> (Note a)

A:Fixed rent + B:Variable rent

-Break down-

[A: Fixed rent] 279 million yen/year

[B: Variable rent (Note b)

] GOP multiplied by 82% - fixed rent

279 million yen / year – other rent besides the hotel section 27

million yen / year (Note c)

Notes

a. 5-year fixed lease agreement will be concluded between

OJR and the lessee, hotel management company, upon

acquisition.

b. OJR will monthly receive 1/12 of the variable rent

calculated by the above formula, based on GOP for

previous financial year from April 1 to March 31. The

variable rent for April through June will be paid in a lump

sum in every June. “GOP” stands for Gross Operating

Profit, indicating the amount deducting expenses relating

to the hotel operations (personnel, utilities, advertising

and other miscellaneous costs) from the amount of sales

of the hotel.

c. The lessee, hotel management company, has been renting

a part of the office and retail in Hamamatsu Act Tower.

Therefore, the valuable rent is calculated as deduction of

the rents of a part of the office and retail.

Retail 17 million yen / month(Note2)

(As of December 31, 2015)

Security deposits

(as of December 31, 2015) Total 1,884 million yen

(Note2)

Total rent space


Office 41,402.92 m2

Hotel 36,420.30 m2

Retail 5,618.25 m2

Storage 160.30 m2

Total 83,601.77 m2

Total rentable space


Office 42,007.90 m2

Hotel 36,420.30 m2

Retail 5,868.53 m2

Storage 160.30 m2

Total 84,457.03 m2

Occupancy rate


Office 98.6%

Hotel 100%

(Note)

(Note) The figure does not indicate room occupancy rate.

Retail 95.7%

Storage 100%

Total 99.0%

Assumed net operating income (NOI)

¥950million per annum (Note2)

(Note) The net operating income (NOI) represents the assumed revenue/expenditure

balance under stabilized occupancy, based on the terms of the lease contract,



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etc. at the scheduled acquisition date, but excluding extraordinary factors that

may occur during the first year of acquisition. The preconditions are as

below; these figures are not what OJR expects for the current fiscal year.

1) Occupancy rate: Office: 95%, Hotel:100%, Retail:91%

2) Taxes: Taxes are calculated on the standard tax amount for fiscal 2015.

Notes:

1. PML (Probable Maximum Loss) shows the ratio (%) of cost of recovering a building after it is damaged to its state

before the damage occurred against replacement cost, when assuming an earthquake that may occur once in 475 years in

average in probability statistics (recurrence interval of 475 years). The earthquake risk of a building is evaluated based

on the event risk curve that shows the relationship of amount of expected loss (horizontal axis) and probability for the

loss to exceed the year (vertical axis). However, the risk curve has variability because loss evaluation comes with

uncertainties in earthquake resistance performance of the building, behavior of earthquake vibration, etc. Accordingly,

the above PML figures use the risk curve with credibility level of 90%, and are rounded to the nearest whole number.

2. Figures are rounded down to the nearest million yen.



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Photo

Overview of Act City Hamamatsu



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5. Profile of Previous Owner/Seller

1) ORIX Yodoyabashi Bldg. (as of February 10, 2016)

Company name ORIX Corporation (“the Company”)

Address 2-4-1 Hamamatsu-cho, Minato-ku, Tokyo

Representative President and CEO: Makoto Inoue

Primary business Lease, installment sales and other financial services, real estate-related

businesses, etc.

Shareholders’ equity

(as of November 30, 2015) ¥220,469 million

Major shareholders

(as of March 31, 2015) Japan Trustee Services Bank, Ltd. (trust account)

Net Assets

(as of December 31, 2015) ¥2,441,758million yen

Total Assets

(as of December 31, 2015) ¥11,064,619 million yen

Date of establishment March 28, 1950

Relationships with OJR or its asset management company

Capital relationship

There is no capital relationship required for reporting between OJR and the

Company. However, the Company is the parent company of OAM and falls

under “related parties” of OAM as stipulated in the Act on Investment trusts

and Investment Corporations (the “Investment Trusts Act.”)

Personal relationships 63 persons of the officers and employees of OAM are seconded from the

Company as of January 31, 2016.

Business relationships

OJR acquired a property (acquisition price: ¥7,030 million) and preferred

equity securities (acquisition price: ¥9,821 million) in the 27th Fiscal Period

ended August 2015 and three properties (acquisition price: ¥7,950) in the 28th

Fiscal Period ended February 2016 from the Company.

Applicability to

related parties

The Company does not fall under “related party” of OJR. As mentioned

above, the Company falls under “the related parties” of OAM as stipulated in

the Investment Trusts Act.

2) Hamamatsu Act Tower (as of February 4, 2016)

Company name Act City Investment Yugen Kaisha (“the Company”)

Address c/o Tokyo Kyodo Accounting Office

3-1-1 Marunouchi, Chiyoda-ku Tokyo

Representative Executive Director Ryutaro Uchiyama

Primary business Acquisition, holding, disposition, leasing and management of real estate and

real estate beneficiary interests

Shareholders’ equity ¥3 million

Major shareholders Ippan Shadan Hojin Act City

Net Assets

Not-disclosed

*Net Assets are not disclosed as the consent of the Company could not be

obtained.

Total Assets

Not-disclosed

*Total Assets are not disclosed as the consent of the Company could not be

obtained.

Date of establishment September 1, 2003




Company. However, subsidiaries of ORIX Corporation, the parent company

of OAM (a “related party” of OAM as stipulated in the Act on the Investment

Trusts Act) have silent partnership investments in the Company.



14/20

Personal relationships There is no personal relationship required for reporting between OJR or

OAM and the Company

Business relationships There is no business relationship required for reporting between OJR or

OAM and the Company

Applicability to

related parties

The Company does not fall under “related party” of OJR. Furthermore, ORIX

Real Estate Investment Advisors Corporation (a “related party” of OAM as

stipulated in the Investment Trusts Act) is contracted to provide asset

management for the Company.

6. Profile of Subsidiary Company of OAM to be Changed (as of February 4, 2016)

Company name Act City Management Inc. (“the Company”)

Address 111-2 Itaya-cho, Naka-ku, Hamamatsu-shi, Shizuoka

Representative Executive Director Etsuo Hoshino

Primary business Building maintenance and management of Act City

Shareholders’ equity ¥20 million

Major shareholders ORIX Corporation(76%) / Hamamatsu-City(24%)

Net Assets

Not-disclosed

*Net Assets are not disclosed as the consent of the Company could not be

obtained.

Total Assets

Not-disclosed

*Total Assets are not disclosed as the consent of the Company could not be

obtained.

Date of establishment June 1, 1994




Company. However, ORIX Corporation, the parent company of OAM (a

“related party” of OAM as stipulated in the Investment Trusts Act) has an

investment in the Company.

Personal relationships

There is no personal relationship required for reporting between OJR or

OAM and the Company. However, 6 persons are seconded from ORIX

Corporation, the parent company of OAM (a “related party” of OAM as

stipulated in the Act on the Investment Trusts Act,) and subsidiaries of ORIX

Corporation as of January 31, 2016.

Business relationships

There is no business relationship required for reporting between OJR or

OAM and the Company

Applicability to

related parties

The Company does not fall under “related party” of OJR or OAM. The

related person and related company of the Company do not fall under

“related party” of OJR or OAM.

7. Information of previous Ownership


Previous owner Owner before previous owner

Company name ORIX Corporation Not a party having special

relationship of interest

Special relationships

involved

Refer to Section 5 “Profile of

Previous Owner/Seller” above －

Background to and reason for

acquisition Development －

Acquisition date March 17, 1998 －

Acquisition price Omitted, as previous owner held

property for over a year －



15/20


Previous owner Owner before previous owner

Company name Act City Investment Inc. Not a party having special

relationship of interest

Special relationships

involved

Refer to Section 5 “Profile of

Previous Owner/Seller” above －

Background to and reason for

acquisition Investment and management －

Acquisition date September 30, 2003 －

Acquisition price Omitted, as previous owner held

property for over a year －

8. Profile of Intermediary (All Properties)

None

9. Transaction with Related-Party The following transaction has followed procedures in accordance with the Affiliated Company Transaction

Regulations which are internal rules of OAM.

・Property Acquisition

OJR will acquire “ORIX Yodoyabashi Bldg.” from ORIX Corporation and “Hamamatsu Act Tower” from

Act Tower Investment Inc. For a summary of these related parties, please see “5. Profile of Previous

Owner/Seller” above.

10. Future Outlook With regard to impact on the financial forecast for the 29

th fiscal period (from March 1, 2016 through

August 31, 2016) and the 30th fiscal period (from September 1, 2016 through February 28, 2017) due to the

property acquisitions, please refer to the press release “ORIX JREIT Announces Revisions of Earnings &

Distributions Forecasts for the 28th Fiscal Period (Ended February 29, 2016) and the 29

th Fiscal Period

(Ending August 31, 2016), and Earnings & Distributions Forecasts for the 30th Fiscal Period (Ending

February 28, 2017)” announced today.



16/20

10. Appraisal Summary

I. Appraisal summary


Name of property

Date of Value

Appraisal Value (In thousands of yen)

Appraiser

(In thousands of yen)

Content Grounds

Capitalization Method 5,220,000

5,440,000

(1) Gross Operating Revenue [(a)-(b)] 379,458

(a) Effective gross revenue 400,374 Assesed based on market standard

(b) Vacancy loss 20,916

(2) Operating Expensed 129,941

Maintenance Expenses 47,477Assesed based on Building Management Agreement and actual

expenses

Utility Expenses 30,191 Assesed in consideration of actual expenses

Repair Expenses 791 Assesed based on the actual expenses of similar real estate

Property Management Fee 5,328 Assesed based on the actual expenses of similar real estate

Tenant Advertisement Cost 3,902 Assesed based on new rents for one month

Tax and Public Dues 37,336 Assesed based on actual amount

Casualty Insurance 941 Assesed based on building price multiplied by 0.1%

Other Expenses 3,975 Recorded cost for leasehold of the building based on actual cost

(3) Net Operating Income [(1)-(2)] 249,518

(4)Profit from Managing Security

Deposit4,546 Assesed based on the rent roll

(5)Capital Expenditure 14,912

Recorded average amount of cumulative amount for 12 years for

renewal costs in the engineering report multiplied by allocation

rate

(6)Net Revenue [(3)+(4)-(5)] 239,152

(7)Cap Rate 4.4%

Assessed in consideration of real estate cap rate, transaction

yield for similar real estate, interviews for investors and

individuality of the subject real estate

DCF Method 5,220,000

Discount Rate 4.2%




Terminal Cap Rate 4.6%




Cost Approach 3,780,000

Ratio of Land 72.8%

Ratio of building 27.2%

Any special considerations made in the

reconciliation of estimated value

Adopted Capitalization Method in reference to Cost Approach as

demand for the subject real estate is considered mainly from

investors who emphasize profitability

ORIX Yodoyabashi Bldg.

February 1, 2016

5,220,000

Chuo Real Estate Appraisal Co., Ltd.

Item

Valuation by the Direct Capitalization



17/20


Name of property

Date of Value

Appraisal Value (In thousands of yen)

Appraiser

(In thousands of yen)

Content Ground

Capitalization Method 12,600,000

Valuation by the Direct Capitalization Method 12,600,000

(1) Gross Operating Revenue [(2)-(g)] 3,207,200

(a) Rent Revenue 2,089,418

Office 1,632,259

Retail 181,408

Hotel (Fixed rent) 123,177

Hotel (Valuable rent) 148,342

Warehouse 4,232

(b)Common Service Fees Revenue 372,075

Office 174,921

Retail 40,352

Hotel 156,802

Warehouse 0

2,461,493

577,000

Electric charges for lighting, other equipment and air conditioning

expenses for rent spaces are included in utility expense income in

the case where the occupancy rate for rent spaces is 100% in

consideration of the occupancy rate for rent spaces based on

actual results in the prior fiscal year.

120,912

Parking space income is recorded based on estimation of unit

price levels for use fees that can be acquired stably over the

medium to long term based on average use fees pursuant to the

current lease agreement and use fees when it is assumed that

parking spaces will be newly leased.

184,000

Hourly parking income, antenna installation income, vending

machine installation income, sign income, and other use fees are

recorded as other income.

(2) Potential Gross Revenue [(c)+(d)+(e)+(f)] 3,343,405

(g) Vacancy loss 136,205

Office Occupancy Rate 95%

Retail Occupancy Rate 95%

Hotel Occupancy Rate 100%

Warehouse Occupancy Rate 95%

Parking Occupancy Rate 85%

Item

(c) [(a)+(b)]

(d) Utility Expense Income

(e) Parking Space Income

(f) Others Revenue

Medium- to long-term occupancy rate levels are estimated based

on occupancy rates and demand trends for similar properties in

alternate competition relationships in similar regions within the

same demand area for each use as well as past occupancy

conditions and future trends relating to the subject property and

vacancy loss is recorded based on those occupancy rate levels.

With regard to other income, income amounts are estimated

based on prospective amounts over the medium to long term, and

consequently, vacancy loss is not recorded.

Hamamatsu Act Tower

February 1, 2016

12,600,000

Japan Real Estate Institute

Recorded the rent revenues including common service fees based

on assessment of unit level of rents, etc. that can stably collected

over the mid- to long-term, which was obtained based on the

average rent calculated from the current lease agreements, rent

levels assumed in the new leasing (both including common

service fees), lease agreement to be concluded regarding hotel

section and occupying end tenants' attributes.



18/20

Reference Materials

・Portfolio summary after acquisition of the properties to be acquired

Notes:

1. This is the English translation of original Japanese documents and is provided solely for information purposes. If there

are any discrepancies between the translation and the Japanese original, the latter shall prevail.

2. The original Japanese version of this announcement is being distributed today to the Kabuto Club, the Ministry of Land,

Infrastructure, Transport and Tourism Press Club, and the Ministry of Land, Infrastructure, Transport and Tourism

Construction Specialty Publication Press Club.

(3)Operating Expenses 2,135,768

Maintenance Expenses 370,000

Estimated by referring to past actual expenses and current cost as

well as cost of similar properties, and considering the specific

characteristics of the subject property

Utility Expenses 956,000Estimated based on past actual expenses and by referring to

occupancy rates of rent spaces

Repair Expenses 98,622

Estimated considering management and operating plan, the level

of such costs of similar properties and an annual average of repair

expenses in the engineering report by referring to past actual

expenses

Property Management Fee 89,738

Estimated considering the rate for similar properties and the

specific characteristics of the subject property by referring fee

rate based on property management agreement

Tenant Advertisement Cost 21,487Estimated based on the average annual amount calculated based

on the anticipated turnover period of the tenant

Tax and Public Dues 428,685 Estimated based on tax and public charge-related materials

Casualty Insurance 13,236Estimated considering insurance rates based on insurance

contract and insurance rates of similar properties

Other Expenses 158,000Parking space sale settlement monies, administrative asset (utility

center) use fees, and so on are recorded as other expenses

(4)Net Operating Incom [(1)-(3)] 1,071,432

(5)Profit from Managing Security Deposit 32,290

Calculated by estimating the medium to long-term stable number

of security deposit months based on current lease conditions and

the number of security deposit months at the time of new

agreement execution and multiplying that number by the

occupancy rate and by the investment yield. Investment yield

considered appropriate for fund management during the deposit

period is assessed as 2.0% with consideration to the interest rate

levels of both fund management and procurement.

(6)Capital Expenditure 234,720

Calculated under an assumption that expected expenditure is

accumulated every term on average, considering the level of

capital expenditure and age of similar properties and an annual

average of renewal costs in the engineering report.

(7)FF&E Reserve 115,212

Calculated under an assumption that expected expenditure is

accumulated every term on average, considering the level of

capital expenditure and age of similar properties and an annual

average of renewal costs in the engineering report.

(8)Net Revenue [(4)+(5)-(6)-(7)] 753,790

(9)Cap Rate 6.0%

Calculated by adding or subtracting a spread derived from the

hotel's competitiveness such as locational, building conditions as

well as other conditions of the property to/from the standard

yield set by the appraiser for each district, also considering

future uncertainties and investment yields for transactions of

similar properties, etc.

DCF Method 12,600,000

Discount Rate 5.8%

Calculated comprehensively considering specific characteristics

of the property by referring to investment yields for transactions

of similar properties, etc.

Terminal Cap Rate 6.2%

Calculated comprehensively considering future trends of

investment yields, risks in the property as an investment target,

general forecasts for economic growth rate and trends in property

prices and rents, etc. by referring to investment yields for

transactions of similar properties, etc.

Cost Approach 14,100,000

Ratio of Land 25.3%

Ratio of building 74.7% Including movable properties

Any special considerations made in the reconciliation of estimated

value

Determined using the Income Approach Value with the Cost Approach Value used

only for reference considering that the Income Approach Value is more convincing

because the price determination process is accurately reproduced with respect to

earnings.



19/20

・Portfolio summary after acquisition of the properties to be acquired

*Properties to be acquired

Date Price (million yen) (Note 1)

Offices 6 Central December 1, 2001

Tokyo Wards February 2, 2016

Round-Cross Ichi-bancho December 1, 2001 3,526 0.6

Round-Cross Nishi Shinjuku December 1, 2001 2,650 0.5

DT Gaien December 21, 2001 2,430 0.4

Nihonbashi East Building December 21, 2001 1,720 0.3

Yoyogi Forest Building December 21, 2001 1,406 0.2

Round-Cross Minami Azabu December 21, 2001 1,394 0.2

Round-Cross Akasaka January 10, 2002 2,624 0.5

Round-Cross Mita January 10, 2002 1,748 0.3

Shiba Daimon Building January 10, 2002 2,195 0.4

Round-Cross Tsukiji January 10, 2002 3,378 0.6

ORIX Shiba 2-chome Building September 29, 2003 7,500 1.3

Aoyama 246 Building March 3, 2004 5,200 0.9

Round-Cross Shinjuku April 28, 2006 8,020 1.4

September 30, 2005

April 28, 2006

June 26 . 2006

December 4. 2006

Round-Cross Shinjuku 5-chome April 26, 2007 4,500 0.8

Nihonbashi Honcho 1-chome Building March 28. 2007 10,500 1.8

Round-Cross Shibuya March 28. 2008 3,500 0.6

ORIX Suidobashi Building March 28. 2008 3,000 0.5

ORIX Shinagawa Building June 27, 2008 15,200 2.6

ORIX Real Estate Nishi Shinjuku Building March 27. 2009 13,600 2.4

OX Tamachi Building March 29, 2010 6,730 1.2

MG Shirokanedai Building November 1, 2013 8,500 1.5

SHIBUYA PINE Bldg. March 20, 2014 3,400 0.6

MG Ichigaya Building April 4, 2014 3,100 0.5

DUPLEX GINZA TOWER 2/11 September 30, 2015 5,200 0.9

ARK Hills South Tower October 15, 2015 22,000 3.8

KANDA MATSUNAGACHO BUILDING January 26, 2016 4,202 0.7

Subtotal 197,160 34.3

Remaining Carrot Tower December 1, 2001 5,479 1.0

Tokyo Wards Toyo MK Building December 1, 2001 5,270 0.9

Beside Kiba December 21, 2001 2,450 0.4

ORIX Ikebukuro Building April 18, 2003 9,577 1.7

KN Jiyugaoka Plaza May 30, 2007 3,110 0.5

ORIX Meguro Building July 29, 2010 6,350 1.1

Akihabara Business Center June 1, 2011 5,060 0.9

Subtotal 37,296 6.5

Other Parts of Neo City Mitaka December 1, 2001 2,200 0.4

the Greater Tokyo Area Round-Cross Kawasaki April 27, 2004 4,130 0.7

Omiya Miyacho Building March 27. 2009 4,400 0.8

Omiya Shimocho 1-chome Building March 29, 2010 3,750 0.7

ORE Omiya Building April 15, 2015 7,030 1.2

Subtotal 21,510 3.7

Other Areas Nagoya Itochu Building September 29, 2003 4,500 0.8

ORIX Koraibashi Building April 27, 2005 5,560 1.0

Lunar Sendai June 28. 2007 8,500 1.5

ORIX Nagoya Nishiki Building September 29, 2010 12,500 2.2

ORE Sapporo Building October 1, 2010 4,250 0.7

ORIX Kobe Sannomiya Building September 29, 2011 3,800 0.7

ORE Nishiki 2-chome Bldg. October 1, 2014 10,900 1.9

DOJIMA PLAZA BLDG. December 22, 2014 9,500 1.7

PRIME SQUARE HIROSE-DORI April 1, 2015 7,280 1.3

* Hamamatsu Act Tower April 15 2016 (scheduled) 11,800 2.1

* ORIX Yodoyabashi Bldg. May 2, 2016 (scheduled) 5,012 0.9

Subtotal 83,602 14.5

Offices Total 339,568 59.1

Other Parts of Toda Logistics Center March 28. 2008 9,600 1.7

the Greater Tokyo Area Ichikawa Logistics Center September 29. 2008 8,300 1.4

Iwatsuki Logistics Center October 1, 2014 6,300 1.1

Subtotal 24,200 4.2

Other Areas Sakai Logistics Center North Building March 30, 2010 10,200 1.8

Komaki Logistics Center June 30, 2011 2,700 0.5

Subtotal 12,900 2.2

Logistics Facilities Total 37,100 6.5

Aoyama Suncrest Building 10,076 1.8

ORIX Akasaka 2-chome Building

Logistics

Facilities

21,860 3.8

% of (Note 2)

Total Acquisition PriceProperty

Seafort Square Center Building

Acquisition

18,000 3.1



20/20

Date Price (million yen) (Note 1)

6 Central Nihon Jisho Minami Aoyama Building October 31, 2003 2,548 0.4

Tokyo Wards CUBE Daikanyama March 31, 2004 2,435 0.4

aune Yurakucho April 1, 2013 9,900 1.7

Cross Avenue Harajuku November 1, 2013 4,815 0.8

J-ONE SQUARE January 31, 2014 1,510 0.3

JouLe SHIBUYA April 1, 2014 7,550 1.3

SO-CAL LINK OMOTESANDO October 1, 2014 2,300 0.4

Kita Aoyama Building February 1, 2016 900 0.2

Subtotal 31,958 5.6

Remaining ORE Ikebukuro September 30, 2014 6,410 1.1

Tokyo Wards Subtotal 6,410 1.1

Other Parts of aune Kohoku March 10. 2010 4,000 0.7

the Greater Tokyo Area aune Makuhari March 10. 2010 3,600 0.6

Maruetsu Sagamino March 1. 2011 2,350 0.4

CROSS GARDEN KAWASAKI March 29, 2013 12,950 2.3

Tecc Land Totsuka (Land) April 1, 2013 6,020 1.0

Clio Fujisawaekimae December 20, 2013 3,900 0.7

Subtotal 32,820 5.7

Other Areas Kobe Momoyamadai Shopping Center (Land) March 5. 2010 3,260 0.6

Okayama Kume Retail Facility January 31. 2011 2,750 0.5

Home Center Musashi Sendai Izumi (Land) January 11. 2012 2,350 0.4

aune Sapporo Ekimae June 29. 2012 1,900 0.3

Morioka Minami Shopping Center Sansa July 31. 2012 2,800 0.5

GRAN MART Tegata November 1, 2013 980 0.2

AEON TOWN Sendai-Izumiosawa(Land) November 1, 2013 3,510 0.6

Cross Mall Shimonoseki-Chofu January 10, 2014 2,400 0.4

intervillage OH! MAGARI April 1, 2014 5,100 0.9

Valor Suzuka Shopping Center April 1, 2014 3,200 0.6

aune Sendai June 20, 2014 2,000 0.3

Friend Town Fukaebashi (Land) September 30, 2014 2,400 0.4

KONAMI SPORTS CLUB KORIEN October 30, 2015 1,600 0.3

Subtotal 34,250 6.0

Retail Facilities Total 105,438 18.3

6 Central We Will Hatchobori June 1, 2011 2,370 0.4

Tokyo Wards Shibaura Island Air Tower July 28, 2011 6,030 1.0

Belle Face Togoshi Statio May 9. 2012 2,642 0.5

Belle Face Meguro October 19, 2012 3,330 0.6

Central Crib Roppongi April 1, 2015 7,493 1.3

Subtotal 21,865 3.8

Remaining Belle Face Kamata June 1, 2011 3,550 0.6

Tokyo Wards Belle Face Hongo Yumicho June 1, 2011 3,340 0.6

Belle Face Mishuku March 30, 2012 2,000 0.3

West Park Tower IKEBUKURO April 1, 2014 20,500 3.6

Belle Face Higashijujo April 4, 2014 3,000 0.5

Subtotal 32,390 5.6

Other Parts of R-Styles Musashi-Kosugi October 1, 2014 4,433 0.8

the Greater Tokyo Area Subtotal 4,433 0.8

Other Areas Belle Face Osaka Shinmachi June 1, 2011 3,684 0.6

Belle Face Amagasaki June 1, 2011 3,440 0.6

Belle Face Kanazawa Kohrinbo November 1, 2013 2,410 0.4

Subtotal 9,534 1.7

Residential Properties Total 68,222 11.9

Others Other Parts of Cross Gate January 10, 2002 15,040 2.6

the Greater Tokyo Area GOOD TIME LIVING Shin-urayasu September 6. 2012 1,550 0.3

Subtotal 16,590 2.9

Other Areas VIA INN SHINSAIBASHI BLDG. September 30, 2015 3,100 0.5

HOTEL KEIHAN SAPPORO September 30, 2015 2,550 0.4

Richmond Hotel Yamagata Ekimae September 30, 2015 2,300 0.4

Subtotal 7,950 1.4

Others Total 24,540 4.3

Grand Total 104 properties 574,868 100.0

Residential

Properties

Retail

Facilities

PropertyAcquisition % of

(Note 2)

Total Acquisition Price

Notes:

1. “Acquisition price” above refers to acquisition price (fractions rounded down) specified in the purchase and sale

agreement. Consumption taxes are not included in the price. Acquisition price of Aoyama Suncrest Building refers to the

acquisition price for ownership as of August 31, 2015 added by acquisition price for additional acquisition as of February

2, 2016.

2. Fractions are rounded to two decimal places for the “Percentage of total acquisition price”. Totals for the “Percentage of

total acquisition price” may not tally as a result of this rounding.

Documents

For Immediate Release€¦ · Building and Aoyama Suncrest Building (Additional Acquisition)) ... Japan’s real estate trading market, and the expected yield for all property types