XYMAX REIT Investment : Notice Concerning Acquisition of 2 New Assets

Translation Purposes Only

June 25, 2021

For Immediate Release

Real Estate Investment Trust Securities Issuer

1-1-1 Akasaka, Minato-ku, Tokyo

XYMAX REIT Investment Corporation

Representative: Shotaro Kanemitsu, Executive Director

(Securities Code: 3488)

Asset Management Company

XYMAX REAL ESTATE INVESTMENT ADVISORS

Corporation

Representative: Shotaro Kanemitsu,

Representative Director and President

Contact: Tatsuya Nakayama,

Head of Business Planning Division

TEL: [phone]

Notice Concerning Acquisition of Domestic Trust Beneficiary Right in Real Estate and Acquisition of

Domestic Actual Real Estate and Leasing Thereof

("XYMAX Mita Building" and "The Park House Totsuka Front (the Retail Portions of 1st and 2nd

Floors)")

XYMAX REIT Investment Corporation (hereinafter "XYMAX REIT") hereby announces that XYMAX REAL ESTATE INVESTMENT ADVISORS Corporation (hereinafter the "Asset Management Company"), the asset management company to which XYMAX REIT entrusts the management of its assets, decided on June 25, 2021 to acquire the trust beneficiary right in the following property and the actual real estate described in 1.(1) below (hereinafter the "Assets to Be Acquired") and to conduct the leasing thereof.

Because XYMAX Corporation (hereinafter "XYAMAX"), who is the seller of "The Park House Tostuka Front (the Retail Portions of 1st and 2nd Floors)" is the parent company of Asset Management Company and falls under the category of an interested party set forth in Paragraph 1 Article 201 of the Enforcement Order of the Act on Investment Trusts and Investment Corporations (Act No. 198 of 1951, as amended) (hereinafter referred to as the "Investment Trust Act") and Article 123 of the Act on Investment Trust and Investment Corporations (Cabinet Order No. 480 of 2000, as amended thereafter), as well as an interested party set forth in the REIT Stakeholder Transaction Management Rules, which are internal rules of Asset Management Company. Accordingly, in entering into Sales and Purchase Agreement of "The Park House Totsuka Front (the Retail Portions of 1st and 2nd Floors)", Asset Management Company has conducted the required deliberations and resolutions in accordance with the provisions of the Rules on the Management of Transactions of Interested Persons. In accordance with these Rules, Asset Management Company has obtained XYMAX REIT's approval at the Board of Directors meeting of XYMAX REIT held on June 25, 2021, based on its internal rules.

1. Overview of the Acquisition

1. Assets to Be Acquired

	Property			Anticipated	Appraisal	Appraisal	Existence of
Category	Property name	Location	acquisition	value
no.	price	(million	NOI	intermediary:
	(Note 1)			(million yen)	yen)	yield
Office	OF-08	XYMAX Mita	Minato-ku,	(Note 2)	(Note 3)	(Note 4)	None
Building	668	727	5.0%
		(Note5)	Tokyo
Retail	RT-05	The Park House	Yokohama-	540	622	5.5%	None
Totsuka Front	shi,
		(the Retail	Kanagawa

CAUTIONS: This press release is a public statement of the acquisition and leasing of XYMAX REIT and is not intended to solicit investments.

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				Portions of
				1st and 2nd	－						－
				Floors)
		Total	/ Average (2	Properties)		1,208		1,349	5.2%
	(2)	Scheduled purchase and sale agreement date	: June 25, 2021
(3)	Scheduled acquisition date		: July 1, 2021
(4)	Sellers		: See "4. Profile of Seller" below.
(5)	Acquisition Funds		: Borrowings (Note 6) and cash on hand
(6)	Settlement method		: Full payment upon settlement

(Note 1) "Property no." refers to the property codes and numbers according to the type of the asset held by XYMAX REIT. For each code, OF represents Office, RT represents Retail, HT represents Hotel, and OT represents Other. The same shall apply hereinafter.

(Note 2) "Anticipated acquisition price" is the purchase price of the Assets to Be Acquired as set forth in the respective purchase and sale agreement. The purchase price does not include national and local consumption taxes nor acquisition costs and is rounded down to the nearest million yen. The same shall apply hereinafter.

(Note 3) "Appraisal value" represents the appraised value as stated in the real estate appraisal report dated May 31, 2021, as appraisal date. The appraisals were prepared by the Japan Real Estate Institute for the XYMAX Mita Building and by the Tanizawa Sogo Appraisal Co., Ltd. for The Park House Totsuka Front (the Retail Portions of 1st and 2nd Floor).

(Note 4) "Appraisal NOI yield" is the ratio of appraisal NOI of Assets to Be Acquired to the anticipated acquisition price rounded off to the first decimal place as a percentage. Appraisal NOI refers to net operating income calculated by deducting operating expenses from operating revenue in the appraisal report and refers to revenue before depreciation is deducted. It is different from NCF (net income, i.e. Net Cash Flow), which are calculated by adding investment gains on security deposits and deducting capital expenditures from NOI. Appraisal NOI yield are figures calculated by Asset Management Company and are not figures in the appraisal report. Actual figures may differ from those after the acquisition by XYMAX REIT.

(Note 5) As of today, the name of XYMAX Mita Building is "Dai-ni Futaba Building", but since it is scheduled to be changed to the XYMAX Mita Building after the acquisition by XYMAX REIT, the name after the change is stated in this document.

(Note 6) For more details, please refer to "Notice Concerning Borrowing of Funds" dated June 25, 2021.

2. Reasons for the acquisition and leasing

XYMAX REIT has been growing steadily since the listing, and has adopted a policy of securing stable earnings and realizing steady growth in assets under management from a medium-tolong-term perspective through various growth strategies such as internal growth and external growth.

Regarding external growth, XYMAX REIT will capture opportunities to sell properties by utilizing the customer base and information capabilities of the sponsor, XYMAX Group. At the same time, XYMAX REIT will select properties where stable operations can be expected after acquisition by carefully analyzing the properties based on various knowledge, know-how, and data related to real estate management accumulated by XYMAX Group. XYMAX REIT will also adhere to an acquisition perspective that is conscious of the balance between distribution growth and financial soundness.

The Assets to Be Acquired are properties owned by XYMAX or obtained sales information through XYMAX Group's network, and the acquisitions will be made through privately negotiated transactions utilizing the information capabilities of XYMAX Group in both properties. In addition, XYMAX Mita Building is an acquisition through initiatives that utilize the so-called "bridge scheme" (Note) to realize flexible timing of acquisitions by exercising the preferential negotiation rights held by the Asset Management Company, and have the opportunity to acquire properties after decreasing the acquisition price to a certain extent depending on the timing of acquisition.

XYMAX REIT has determined that the Assets to Be Acquired can be expected to be stably managed over the medium to long term, taking into consideration the following points. XYMAX REIT has decided to acquire these assets because it is believed that the acquisitions will be consistent with the Investment Policy of XYMAX REIT and will contribute to improving the quality of the portfolio and unitholder value.

(NOTE) The "bridge scheme" is a scheme that involves only the acquisition of preferential negotiation rights without the conclusion of sales contracts. It does not fall into the category of forward commitments, etc. (contracts for sale or purchase on the other day

CAUTIONS: This press release is a public statement of the acquisition and leasing of XYMAX REIT and is not intended to solicit investments.

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that are to be settled or delivered for more than 1 month after the conclusion of the contract, or other similar contracts) assumed in the "Comprehensive Guidelines for Supervision of Financial Instruments Business Operators, etc." stipulated by the Financial Services Agency.

• OF-08XYMAX Mita Building (hereinafter "Assets to Be Acquired (1)") Assets to Be Acquired (1) have the following features.
• • This is an Office building located in Minato-ku, Tokyo.
  • This is an office building located 5 minutes on foot from Mita Station of Toei Subway Mita and Asakusa Lines and 7 minutes on foot from Tamachi Station of the JR Yamanote Line and etc.
  • Many office buildings are located along Sakurada-Dori, and several major companies are headquartered in the vicinity of Sakurada-Dori. In addition, the Keio Nakadori Shopping District has enhanced its office supporting functions, such as abundant restaurants. Due to the availability of multiple public transportation services and high accessibility to major business areas, XYMAX REIT considers this location to be a location where solid tenant demand can be expected, including relocations from outside the surrounding area.
  • The typical floor area is approximately 76 ㎡ (approximately 23 tsubo), and the ceiling is 2,400mm high. On the equipment side, it is equipped with an OA floor (raised floor) (100 mm), individual air conditioning, and 1 elevator.
  • During the period held under the bridge scheme, when vacant floors appear, interior renovation work has been implemented to reduce interior and restoration costs when tenants move in and out in the future, and attracts tenants with reduced initial costs such as security deposits through the use of guarantee companies. In this way, Assets to Be Acquired (1) is able to capture a wide range of needs, such as appealing to companies that want to efficiently utilize a small number of people and cash on hand. As a consequence of these efforts, some contracts have been concluded at a higher rent than appraisal unit rent, and the average unit rent has risen by approximately 18.0% since the time of acquisition under the bridge scheme. Even after the acquisition by XYMAX REIT, depending on the circumstances, we will consider the implementation of similar initiatives for vacant floors.
• RT-05The Park House Totsuka Front (the Retail Portions of 1st and 2nd Floors) (hereinafter "Assets to Be Acquired (2)")
• 1. Features of the Assets to Be Acquired (2)
     Assets to Be Acquired (2) have the following features.
  • This is a station-front retail property located 3 minutes on foot from Totsuka Station of JR Tokai-do Line and Yokohama Municipal Subway Blue Line.
  • Assets to Be Acquired (2) is a retail property located on the first and second floors of a residential property (106 units in total) that was developed through a public offering project of Yokohama City (the "Public Offering Project") and completed in May 2018.
  • XYMAX Group is involved in this Public Offering Project together with a Japanese major developer, for example, to engage in activities to attract tenants for the Assets to Be Acquired (2) from the development stage.
  • As of today, the Assets to Be Acquired (2) is 100% occupied by clinics, dispensing pharmacies, ZXY, a satellite office service operated by XYMAX, etc., and the tenant structure is such that even in the Corona crisis, the impact of the decline in sales and other factors is minimal.
  1. Overview of Market Area

• Location and Transportation accesses
• • With 225,000 passengers per day in FY2018, the site is located in front of a station at Totsuka Station, the fourth largest number of passengers in Kanagawa Prefecture, and is a location with residential areas behind it. In addition, it is located at the intersection of National Road No. 1 and Chogo-Kaido Street, and has high visibility.
  • Located on the living lines of neighboring residents who pass through the underpass of Chogo-

CAUTIONS: This press release is a public statement of the acquisition and leasing of XYMAX REIT and is not intended to solicit investments.

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Kaido Street from Totsuka Station, this location is suitable for lifestyle-oriented service formats, targeting mainly residents who use railway stations.

• Overview of the surrounding area
• • According to the 2020 Basic Resident Register, the administrative population of Totsuka-ku is 282,000, an increase of 2.2% over 2015.
  • The percentage of people in their 30s is high in the current commercial area, and the percentage of people in their 20s is also high compared to the average of Kanagawa Prefecture. This is an area that appeals to many younger generations because of its good access to Yokohama Station and central Tokyo.

CAUTIONS: This press release is a public statement of the acquisition and leasing of XYMAX REIT and is not intended to solicit investments.

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3. Summary of Assets to be Acquired

The summary of Assets to Be Acquired is as follows.

Refer to Reference 3 "Explanation of matters stated in Summary of Assets to Be Acquired" for explanations of matters stated in the columns in the table.

• Assets To Be Acquired (1)

Property

XYMAX Mita Building

Category

Office

Name

Property no.

OF‐08

Summary of the

Specified Asset

Expected date of acquisition

July 1, 2021

Type of specified asset

Trust beneficiary right

Anticipated acquisition price

668 Million yen

Outline of

Trustee

Mitsubishi UFJ Trust and

Trust

Trust

Banking Corporation

Appraisal value

727 Million yen

beneficiary

End of June 2031

(appraisal date)

(May 31, 2021)

right

maturity

Location

5-13-11, Shiba, Minato-ku, Tokyo

date

Transportation

5 minutes on foot from Mita Station of Toei Subway Mita and Asakusa Lines

7 minutes on foot from Tamachi

Station of JR Yamanote Line, etc.

㎡

Land

Lot number

5-3-39, Shiba, Minato-ku,

Area

137.02

Building

Tokyo

Floor-area ratio

600%

coverage ratio

80%

Zoning

Commercial area

Type of Ownership

Ownership

Building

Construction

May 31, 1991

Structure and number of

Steel construction, flat roof, ten

date

floors

floors

㎡

Use

Office

Total Floor Area

799.78

Architect

KOKEN ARCHITECTS, INC.

Builder

Tosei Corporation

Construction

District construction

Type of Ownership

Ownership

confirmation

surveyor, Minato-ku

ML company

(planned)

Godo Kaisha ML1

ML type

Pass-through

PM company (planned)

XYMAX ALPHA Corporation

Remarks

Not applicable

Overview of Leasing

Leasable area

741.41 ㎡

Leased area

589.05 ㎡

Occupancy rate

79.5%

Number of tenants

8

Annual rent

30,278 thousand yen

Lease deposits

6,791 thousand yen

Main tenant

Undisclosed (Note)

(NOTE) Since the approval of the

lessee for the disclosure of information has not been obtained, the information has not been disclosed due

to this unavoidable reason

Outline of Engineering Report

Inspection company

Tokio Marine & Nichido Risk

Date of inspection

June 2021

Urgent and short-term repair

Consulting Co., Ltd.

Long-term

repair

5,232 thousand yen

0 yen

expenses

(annual

expenses

Outline of Earthquake

Risk Analysis, etc.

averages)

State of collaterals

Tokio Marine & Nichido Risk

PML

2.6%

Consulting Co., Ltd.

Inspection company

None

CAUTIONS: This press release is a public statement of the acquisition and leasing of XYMAX REIT and is not intended to solicit investments.

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