for immediate release for translation purposes only · the property is a five-minute walk from...

Note: This document is prepared as a press release for public announcement concerning the acquisition of assets by JEI and not intended for investment solicitation. In making an

investment, investors are advised to make their own investment decisions at their own judgment and responsibility after reading carefully the registration prospectus for the

issuance of new investment units and the secondary offering of investment units prepared by JEI and any amendments thereto.

1

For Immediate Release

For Translation Purposes Only

January 8, 2014 Japan Excellent, Inc. (TSE: 8987) Hidehiko Ogawa, Executive Director Asset Management Company: Japan Excellent Asset Management Co., Ltd.

Representative: Chifumi Toda, President

Contact: Wataru Hasegawa

General Manager, Corporate Planning Dept. TEL: +81-3-5412-7911

Notice Concerning the Acquisition of Investment Assets

(HAMARIKYU INTERCITY (Additional Acquisition of Compartmentalized Ownership),

Aoba-dori Plaza, Daiwa Minami-morimachi Building)

Japan Excellent, Inc. (hereinafter “JEI”) hereby announces that it decided today to acquire investment

assets, as described below.

1. Summary of Acquisition (A) HAMARIKYU INTERCITY (Additional Acquisition of Compartmentalized Ownership)

(1) Property Name: HAMARIKYU INTERCITY (Additional Acquisition of Compartmentalized

Ownership) (hereinafter, “HAMARIKYU INTERCITY”) (2) Property to be Acquired: Trust beneficiary interest in real estate

(3) Acquisition Price: ¥12,000 million (JPY12,000,000,000)

(4) Date of Execution of Purchase Agreement: January 8, 2014

(5) Scheduled Acquisition Date: February 4, 2014

(6) Seller: NIPPON STEEL KOWA REAL ESTATE CO., LTD..

(7) Funding for Acquisition: Proceeds from issuance of new investment units, debt financing or funds

on hand (scheduled)

(8) Method of Settlement: The settlement is planned to be made at once when the acquisition is made.

(Note) JEI will acquire the co-ownership interest for all site area and the whole building ownership (ownership ratio of 60/100).

Since JEI already has the co-ownership interest for all site area and the whole building with 40/100 ratio, acquisition this

time completes the entire acquisition of the property.

(B) Aoba-dori Plaza

(1) Property Name: Aoba-dori Plaza (2) Property to be Acquired: Trust beneficiary interest in real estate

(3) Acquisition Price: ¥2,120 million (JPY 2,120,000,000)



(6) Seller: Bois Vert LLC

(7) Funding for Acquisition: Proceeds from issuance of new investment units, debt financing or funds on

hand (scheduled)





2

(C) Daiwa Minami-morimachi Building

(1) Property Name: Daiwa Minami-morimachi Building

(2) Property to be Acquired: Trust beneficiary interest in real estate

(3) Acquisition Price: ¥4,410 million (JPY4,410,000,000)



(6) Seller: Bois Vert LLC

(7) Funding for Acquisition: Proceeds from issuance of new investment units, debt financing or funds on

hand (scheduled)


Trust beneficiary interests pertaining to HAMARIKYU INTERCITY, Aoba-dori Plaza and Daiwa

Minami-morimachi Building are hereinafter collectively or individually referred to as the “Property to

be Acquired.”

2. Background of Acquisition

JEI has decided to acquire the Property to be Acquired in order to enhance its portfolio, pursuant to

the investment targets and policies of asset management stipulated in the Articles of Incorporation of

JEI. For the factors JEI has taken into account in reaching the decision to acquire the Property to be

Acquired, please refer to the “Evaluation of the Property to be Acquired” column of each property of

the immediately following section titled “3. Details of the Property to be Acquired.”

3. Details of the Property to be Acquired

(A) HAMARIKYU INTERCITY

(1) Evaluation of the Property to be Acquired

A. Location

The property is a five-minute walk from Hamamatsucho Station on the JR and Tokyo Monorail Line,

and is accessible to three stations on six lines including the Daimon subway station on the Tokyo

Metro Line and Takeshiba Station on Yurikamome Line. In addition to its direct connection to major

business centers such as Tokyo, Shinagawa and Shinjuku, its location boasts excellent accessibility to

places such as Shinkansen stations and Haneda Airport.

In the surrounding area are Hamarikyu Garden, Kyu Shiba Rikyu Garden, theaters and hotels, etc.

facing the waterfront area offering scenic beauties. This is a location blessed with a rare combination

of the convenience of central Tokyo and an abundance of nature.

B. Building Facilities

The property is a mix-use development property completed in March 2011 with office spaces from the

3rd

to 11th

floors and residential units from the 13th

to 25th

floors. It has adopted state-of-the-art

technologies and facilities including a hybrid vibration control structure, sophisticated anti-seismic

design that is also expected to withstand long-period earthquake ground motion, a power backup

system using remote substations, district heating and cooling, photovoltaic power generation, etc. that

enable the building to be more resilient in an emergency situation and more environmentally

friendly.

The office floors are not only highly functional but also have excellent views and lighting including

an over 300 tsubo floor space and 2,900mm ceiling height without pillars as well as outdoor terraces

that are directly accessible from the offices. Residential floors are also equipped with sufficient

amenities including a reception area, lounge, and athletic gym for the exclusive use of the residents.




3

The office floors are expected to attract a demand from tenants who value high building specifications

as well as the excellent access to Shinkansen stations and airports. The residential floors are expected

to have a stable demand mainly from single and DINKS households for their excellent convenience

for transportation and living, facility specifications, and views.

(2) Overview of the Property to be Acquired

Property Name HAMARIKYU INTERCITY

Type of Specified Asset1 Trust beneficiary interest in real estate

Trustee2

Mizuho Trust & Banking Co., Ltd. (scheduled)

Trust Establishment Date2

February 4, 2014 (scheduled)

Maturity Date of Trust2

February 29, 2024 (scheduled)

Location Lot Number

3 1-21-2 Kaigan, Minato-ku, Tokyo

Address4

1-9-1 and 1-15, Kaigan, Minato-ku, Tokyo

Use3, 13

Apartments, offices, parking

Site Area Land

5, 6 3,843.34m

2

Building7 35,555.87m

2

Structure3 S/SRC, Flat-roofed, B2/25F

Completion Date3 March 7, 2011

Building Engineer Nihon Sekkei, Inc.

Constructor Shimizu Corporation

Building Inspection Agency The Building Center of Japan

Type of

Ownership8

Land Ownership (co-ownership)

Building Ownership (co-ownership)

Appraisal Value9

¥12,000 million (JPY12,000,000,000)

Appraisal Date November 30, 2013

Appraiser Japan Real Estate Institute

PML10

2.26%

(Based upon the Building Survey Report on PML

Assessment produced by Sompo Japan Nipponkoa Risk

Management, Inc.)

Collateral None11

Property Management Company12

NIPPON STEEL KOWA REAL ESTATE CO., LTD..

Master Lease Company12

Tokyu Community Corp.

Other Relevant Information None

Notes

1. The type of asset to be acquired by JEI.

2. JEI, seller and the trustee will enter into a real estate management/disposition trust agreement to establish a trust whose trust

property primarily consists of the property by the scheduled acquisition date.

3. The descriptions of “Lot Number,” “Structure,” and “Completion Date” are based on information in the land registry. If such

building or building in trust is an exclusive ownership interest in a compartmentalized ownership building, this column

describes the structure including the number of floors of the entire building rather than the exclusive ownership interest held.

The descriptions of “Use” are based on information in the land registry or completion drawing.

4. Specifically, 1-9-1 and 1-9-15 correspond to the office component and the residential component, respectively.

5. Land area (land area of whole land) in the land registry is indicated.

6. The actual site area is 3,857.48m2.

7. The sum of site area of floors of the building written in the land registry is indicated here.

8. JEI will acquire the co-ownership interest for all site area and the whole building ownership (ownership ratio of 60/100).

Since JEI already has the co-ownership interest for all site area and the whole building with 40/100 ratio, acquisition this

time completes the entire acquisition of the property.

9. The appraisal value represents the value of the 60% co-ownership interest to be acquired.




4

10. “PML (Probable Maximum Loss)”is the percentage of losses which will not exceed 90% against building replacement price,

should the greatest earthquake that has a 10% probability occurring within the average useful life of a building of 50 years

occur.

11. The collateral will be released as of the scheduled date of acquisition by JEI.

12. Property Management Company as of the date of this document and Master Lease Company for the residential part of the

property as of the date of this document are indicated here. After this additional acquisition, JEI will conclude new contract

with NIPPON STEEL KOWA REAL ESTATE CO., LTD.. as both Property Management Company and Master Lease

Company and will entrust property management for all of the property and lease the building of the property in its entirety.

Also NIPPON STEEL KOWA REAL ESTATE CO., LTD.. will sublease the residential part to the Master Lease Company as

of the date of this document, and it will be sub-subleased from the company to an end tenant.

13. The property is classified as “residential property” in accordance with the Asset Management Guidelines (Note) prescribed

by Japan Excellent Asset Management Co., Ltd. (hereinafter “JEAM” or the “Asset Management Company”), which is the

asset management company retained by JEI as more than half of the total leasable floor space of the property is for the

residential use.

(Note) The Investment Regulations of JEI provide that JEI shall mainly invest in office properties and may also invest in properties for

other uses (Article 26, Paragraph 2 of the Investment Regulations). The aforementioned Asset Management Guidelines further provide that the proportion of the properties for uses other than office in the total portfolio shall not exceed 10%. The proportion

of the Property to be Acquired and properties already held by JEI in the total portfolio will be 7.2% after the acquisition.

Therefore, the requirements of the Asset Management Guidelines will still be satisfied. The use of each real estate related asset is determined based on the most prominent use of the asset provided that the leasable

floor space in such use is more than half of the total leasable floor space of the asset. The full amount of the acquisition price of

an asset whose use is determined in this manner is included in the calculation of the total acquisition price by use.

(3) Tenant Summary

Leasable Floor Space1 19,718.11m

2 (11,830.87m

2)

Leased Floor Space1 19,674.40m

2 (11,804.64 m

2)

Number of Tenants 62

Monthly Rent ¥67,141 thousand3

Leaseholds and Security Deposits ¥427,415 thousand4

Occupancy Rate

December

31, 2011

December

31, 2012

October

31, 2013 - -

87.2% 98.2% 99.8% - -

Notes:

1. “Leasable Floor Space” and “Leased Floor Space” indicate the respective space for the entire property followed by the space for the 60% co-ownership interest to be acquired by JEI in parentheses.. The Leased Floor Space data are as of October 31,

2013.

2. “Number of Tenants” is as of October 31, 2013. Mizuho Trust & Banking Co., Ltd. granted the seller, who is also the co-owner, the authority to lease the residential space of the property in its sole discretion and the seller retains the current

master lease agreement with the master lease company, under which the master lease company is entitled to sublease the property to third-party tenants (“Master Lease Agreement”). Therefore, the number of tenants for the residential space is

counted as 1, whereas the number of tenants for the office space represents the number of end tenants. The figure in the

Number of Tenants column indicates the total of these numbers. 3. The figure for “Monthly Rent” is the total (not including consumption and other taxes) of monthly rents (including common

area expenses, but excluding fees for use of parking and other attached facilities), as of October 31, 2013, set forth in the

lease agreements concluded with tenants. Fractions less than one thousand yen are rounded down. The resulting amount represents 60% of the total amount for the entire office space.

4. The figure for “Leaseholds and Security Deposits” shows the balance, as of October 31, 2013, of leaseholds and security

deposits deposited by tenants (not including those pertaining to parking and other attached facilities and the amount which

the lessor is not obligated to return). Fractions less than one thousand yen are rounded down. The resulting amount represents

60% of the total amount for the entire office space.

(4) Details of the Seller

Company Name NIPPON STEEL KOWA REAL ESTATE CO., LTD...

Location of

Headquarters

1-15-5 Minami-Aoyama, Minato-ku, Tokyo




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Representative Tetsuo Narukawa, President

Capital

(as of March 31, 2012)

¥19.8 billion

Total Assets


¥110,038 million

Net Assets


¥620,711 million

Major Shareholders

(as of March 31, 2012) NIPPON STEEL & SUMITOMO METAL CORPORATION

The Dai-ichi Life Insurance Company, Limited

Nippon Life Insurance Company

Jowa Holdings Company, Limited

Main Business Real estate business

Relationship with

JEI/JEAM

Capital

Relationship

As of January 8, 2014, the Seller holds 6.4% (71,560 units) of the total number of JEI’s outstanding investment units, and also holds 45% (4,050 units) of the total number of the Asset Management Company(JEAM)’s outstanding shares. The Seller does not fall under the category of a “related party” as defined in the Law Concerning Investment Trusts and Investment Corporations (the “Investment Trust Law”). However, the Seller is a sponsor company under voluntary internal regulations for transactions with sponsor companies (the “Regulations for Transactions with Sponsor Companies”) formulated by JEAM with the aim of eliminating potential conflicts of interest and thereby enabling it to perform efficient asset management for JEI.

Personnel

Relationship As of January 8, 2014, the Seller dispatches 11

officers and employees to JEAM.

Business

Relationship During the Fifteenth Fiscal Period (July 1, 2013 to

December 31, 2013), there was no asset acquisition

or sale transaction between the Seller and JEI or

JEAM.

Status as Related

Party

The Seller is not a related party of JEI or JEAM.

(5) Status of Previous Owners

Former Owner Beforehand Owner

Company Name NIPPON STEEL KOWA REAL

ESTATE CO., LTD..

None

Relationship with JEI/JEAM Please refer to “(4) Details of the

Seller” above.。

-

Background/Reasons for

Acquisition

Acquired for development purposes -

Date of Acquisition Acquired land in September and

November 2006 for development

purposes

-

Acquisition Price - -




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(6) Details of Brokerage

Not applicable.

(7) Conflicts of Interest of JEAM Relating to the Property to be Acquired

The Seller (NIPPON STEEL KOWA REAL ESTATE CO., LTD..), which will also serve as the property

management company, is “sponsor company” under the “Regulations for Transactions with Sponsor

Companies,” which are voluntary internal regulations formulated by JEAM. Accordingly, in concluding

the abovementioned trust beneficiary interest transfer agreement with said sponsor company, JEAM, in

compliance with the aforementioned regulations, has completed the following procedures (hereinafter,

“Procedure pursuant to the Regulations for Transactions with Sponsor Companies”): (i) obtained

approval at a meeting of its Compliance Committee, which includes outside experts; (ii) obtained

approval at a meeting of its Investment Committee, and (iii) presented the transaction for deliberation

and approval at a meeting of its Board of Directors. In addition, it has been decided that Mizuho Trust &

Banking Co., Ltd., the trustee of the property, will appoint NIPPON STEEL KOWA REAL ESTATE

CO., LTD.. as the property management company for the property. In making this decision, JEAM has

completed Procedure pursuant to the Regulations for Transactions with Sponsor Companies in the same

manner.

(8) Acquisition Schedule

January 8, 2014 Decision within JEI to acquire asset

January 8, 2014 Execution of the purchase agreement subject to conditions precedent(Note)

February 4, 2014 Handover date (scheduled)

(Note) The execution of the agreement is subject to the conditions precedent that funds necessary for the acquisition of the trust

beneficiary interest have been or can be secured through the issuance of new investment units or debt financing. If said

conditions are not met by the execution date of the purchase agreement, the agreement will lose its effect definitively. The

transferor and the transferee may not claim compensation from the other party for any damage, loss, or cost (including legal

fees) arising in relation to the execution or lapse of the agreement. The same shall apply to other Property to be Acquired.

(B) Aoba-dori Plaza


A. Location

The property faces to the entrance/exit to the underpass of Sendai Station and allows access to the station

via the underpass within one minute (to subway lines) to five minutes (to JR lines). This provides great

convenience to companies with employees often taking Shinkansen to other prefectures in the Tohoku

region or to Tokyo. It also has a high level of visibility as it stands along the Aoba-dori, the main street

from Sendai Station, therefore very recognizable as well.




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B．Building Facilities

The property is a co-ownership interest of exclusive sections (retail and office spaces from the 1st basement

floor to the 14th

floor above ground) of the compartmentalized ownership building with 15 floors above

ground and one below. Other exclusive sections (part of the 1st basement floor to part of the 2

nd basement

floor) are used as a shops and offices of financial institutions. The standard office floor consists of a

regular-shaped space of approximately 353 tsubos with a ceiling height of 2,700mm (plus 100mm for OA

floor), individually controlled air conditioning, an automated security system that allows 24-hour access, six

elevators, a parking space for 130 vehicles, 82 bicycles and 81 motorcycles. Since it can be divided into 11

smaller spaces of approximately 27 tsubos to meet various needs of tenants.

The property has high level of earthquake-proof safety (earthquake-resistance safety confirmation obtained,

PML of 0.89%) with CFT structure and vibration damping device. In addition, many disaster prevention

measures found in recently built buildings are incorporated, such as two emergency-use power-receiving

facilities and in-building warehouse to stock emergency supplies.


Property Name Aoba-dori Plaza

Type of Specified Asset1 Trust beneficiary interest in real estate

Trustee Mizuho Trust & Banking Co., Ltd.

Trust Establishment Date August 29, 2013

Maturity Date of Trust February 29, 2024 (scheduled) 2

Location Lot Number

3 3-2-1 Chuo, Aoba-ku, Sendai-shi, Miyagi and other 6 sites

Address 3-2-1 Chuo, Aoba-ku, Sendai-shi, Miyagi

Use3

Offices, store, bank, parking

Site Area3,4

Land5

2,908.56m2

Building6

22,737.38m2

Structure3, 7

S/SRC, Flat-roofed, B1/15F

Completion Date3

July 26, 1996

Building Engineer Shimizu Corporation

Constructor Shimizu Corporation

Building Inspection Agency Sendai City

Type of

Ownership8

Land Ownership

Building Compartmentalized ownership (co-ownership)

Appraisal Value ¥2,560 million (JPY2,560,000,000)




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Appraisal Date August 1, 2013


PML 9

0.89% (Based upon the Building Survey Report on PML


Management, Inc.)

Collateral None10


The Dai-ichi Building Co., Ltd.

Master Lease Company None

Other Relevant Information

1. The management regulations for the property stipulate that, if

a compartmentalized owner of the property intends to transfer

its exclusive section (or co-ownership interest), the other

compartmentalized owners may preferentially acquire the

right, and also with regard to land that if certain rights

originate the approval of all of the building’s owners is

required.

2. While the building of the property was constructed with an

easing of floor area ratio with permission based on the proviso

of Article 59-2 Paragraph 1 of the Building Standards Act,

approval for the change of permission was obtained from

Sendai City’s mayor and work for the change of floor area

subject to the floor area ratio, such as converting the garbage

storage to a disaster prevention warehouse, was conducted.

Notes


2. According to current trust agreement, August 29, 2023 is set as Maturity Date of Trust. However, on the date of planned acquisition, JEI

intends to conclude change of agreement with the trustee, which will change the maturity date to February 29, 2024

3. The information given for “Lot Number,” “Site Area,” “Structure,” and “Completion Date” is based on information entered

in the land registry for the property. The information given for “Use” is based on “type” information entered in the land

registry or on information presented on the completion drawing.

4. The “Site Area” figures indicate the areas of the entire lot for the land and the entire floor space of the building. The floor

area of parking spaces, storage spaces and warehouse spaces totaling 533.31m2 that are contractual common area are

included in the building’s area above.

5. The property’s site area consists of seven parcels. The trustee has the ownership for three parcels (1,006.17m2). The

remaining four parcels (1,902.39m2) are owned by the co-owners of the building (exclusive section to be acquired by the

trustee).

6. The exclusive section where the trustee has acquired co-ownership interest is the office and shop section (13,981.58m2) in

the basement floor and from the first to 14th floors and the ownership ratio is 39.9789%. The trustee also owns

co-ownership interest (38.1051%) of parking space (415.28m2) which is a separate contractual common area as well as

attached facilities of the contractual common area for parking, storage and warehousing (total of 118.03m2).

7. Structural information for the entire building is presented here.

8. “Type of Ownership” addresses the type of assets to be acquired by the trustee.

9. “PML (Probable Maximum Loss)”is the percentage of losses which will not exceed 90% against building replacement price,




9

should the greatest earthquake that has a 10% probability occurring within the average useful life of a building of 50

years, occur.


11. “Property Management Company” indicates the name of the property management company with whom JEI entrusts property management

services as of the date of this release.

(3) Tenant Summary

Leasable Floor Space 6,302.5m2 1

Leased Floor Space 5,408.80m2 1

Number of Tenants 41 2

Monthly Rent ¥24,186 thousand 3


Occupancy Rate

December

31, 2009

December

31, 2010

December

31, 2011

December

31, 2012

October

31, 2013

75.1% 73.5% 62.5% 77.7% 85.8%

Notes

1. The figures have been calculated by multiplying the leasable floor space of the exclusive spaces to be acquired and the leased floor

space as of October 31, 2013 by the ratio of co-ownership interest (39.9789%) which the trustee owns, respectively.

2. “Number of Tenants” is as of October 31, 2013.

3. The figure for “Monthly Rent” shows the amount obtained by multiplying the total (not including consumption and other taxes) of

monthly rents (including common area expenses but excluding fees for use of parking and other attached facilities) based on the

indicated in the lease agreements concluded with end-user tenants, as of October 31, 2013, by the ratio of the co-ownership interest

(39.9789%) which the trustee owns.

4. The figure for “Leaseholds and Security Deposits” shows the balance (or the amount after deducting the portion not needed to be

returned, if any), as of October 31, 2013, of leaseholds and security deposits collected from end tenants(excluding amounts related

to parking and other attached facilities),multiplied by the ratio of the co-ownership interest (39.9789%) which the trustee owns.


Company Name Bois Vert LLC

Location Nihonbashi 1-Chome Building, 1-4-1 Nihonbashi, Chuo-ku, Tokyo

Matters Concerning

Members

Executive member: Gaia General Incorporated Association

Person in charge of execution of duties: Takanori Mishina

Capital

(as of January 8, 2014)

¥100,000

Total Assets Nondisclosure by a seller's intention

Net Assets Nondisclosure by a seller's intention

Main Business (1) Acquisition, holding, and disposition of trust beneficiary interest in

real estate

(2) Purchase and sales, leasing, management, acquisition, holding,

disposition, and use of real estate

(3) Acquisition, holding, and disposition of specified equity interest, etc.,




10

in special purpose companies established for the purpose of carrying

out a business related to asset securitization

(4) Any other businesses incidental or related to the businesses set forth in

the preceding items

Date of Incorporation July 18, 2013

Equity Holder


Gaia General Incorporated Association (equity holding ratio: 100%)

Relationship with

JEI/JEAM

Capital

Relationship

Not applicable.

Personnel

Relationship

Not applicable.

Business

Relationship

During the Fifteenth Fiscal Period (July 1, 2013 to

December 31, 2013), there was no asset acquisition or

sale transaction between the Seller and JEI or JEAM.

Status as Related

Party Not applicable.


The acquisition of the Property to be Acquired is not a transaction between JEI/JEAM with a special related

person.


Not applicable.


Not applicable.



January 8, 2014 Execution of the purchase agreement subject to conditions precedent


(C) Daiwa Minami-morimachi Building


A. Location




11

The property is directly connected to Minami-Morimachi Station on the Tanimachi and Sakaisuji subway lines,

which is only one stop away (two minutes) from the Umeda area known as the center of Osaka, and is also

connected via underpass to JR Osaka-Temmangu Station. Transportation is excellent as the property allows

extremely easy access to three railway lines.

Moreover, the property is highly visible as it is located on the intersection of National Route 1 and

Tenjinbashi-suji Street. Minami-Morimachi and its surrounding area have strong demand as an office area

adjacent to the Umeda district. Furthermore, stable demand from professional offices such as patent offices

and law offices is expected as the Osaka High Court, the Osaka District Court and Osaka Legal Affairs Bureau

are nearby. The east side of the site is adjacent to Tenjinbashi-suji Street which is said to be the longest

shopping street in Japan, and the location provides a high level of daily convenience for office workers.

B．Building Facilities

The property is a compartmentalized ownership building with offices in the underground floor to the ninth

floor. The standard floor area for offices is approx. 333 tsubos. With individually controlled air-conditioning,

automated security permitting 24-hour access, parking for 60 vehicles, etc., the property has value and

advantage in terms of scale as the majority of buildings in the area are small-to medium-sized buildings. At the

same time, floors can be divided into spaces as small as 40 tsubos, making it also possible to meet the various

needs including relatively small tenants. The main tenant is an FM broadcasting station renting the space ever

since the completion of the building. Stable occupancy of the property can be expected from the fact that its

average occupancy rate is 99.1% over the past five years and it has advantageous location and scale as

mentioned above.


Property Name Daiwa Minami-morimachi Building

Type of Specified Asset1

Trust beneficiary interest in real estate

Trustee Sumitomo Mitsui Trust Bank, Limited.

Trust Establishment Date February 20, 2004

Maturity Date of Trust February 29, 2024 (scheduled) 2

Location Lot Number

3 2-23-5 Tenjinbashi, Kita-ku, Osaka-shi, Osaka

Address 2-6, 2-chome Kita, Tenjinbashi, Kita-ku, Osaka-shi, Osaka

Use3

Office, parking, storage

Site Area3, 4

Land5

1,635.11m2

Building6 12,759.65m

2

Structure3, 7

SRC, Flat-roofed, B1/9F

Completion Date3

January 8, 1990

Building Engineer Taisei Corporation




12

Constructor Taisei Corporation

Building Inspection Agency Osaka City

Type of

Ownership8

Land Ownership (co-ownership)

Building Compartmentalized ownership

Appraisal Value ¥4,520 million (JPY4,520,000,000)



PML9

12.67% (Based upon the Building Survey Report on PML


Management, Inc.)

Collateral None10


Mitsui Fudosan Building Management Co., Ltd.

Master Lease Company None

Other Relevant Information

1. The management regulations for the property stipulate

that, if a party intends to transfer all or part of the

property’s compartmentalized ownership, it shall

preferentially offer the transfer to other

compartmentalized owners before offering to third

parties.

2. It has been agreed with Osaka City that it will be

allowed to use part of the site (approx. 10m2) without

charge for the establishment of a facility for an inlet

duct for the city-owned subway.

Notes


2. While August 31, 2023 is set as the maturity date of trust under the current trust agreement, JEI is scheduled to conclude an

agreement on February 4, 2014 to change the maturity date of trust to February 29, 2024.

3. The information given for “Lot Number,” “Site Area,” “Structure,” and “Completion Date” is based on information entered in the

land registry for the property. The information given for “Use” is based on “type” information entered in the land registry or on

information presented on the completion drawing.

4. The “Site Area” figures indicate the areas of the entire lot for the land and the entire floor space of the building.

5. The site of the property is co-owned together with other compartmentalized owners and the co-ownership interest of the trustee is

65%.

6. The exclusive space owned by the trustee consists of office space (6,762.70m2) on basement 1, floors 1 and 4 through 9.

7. Structural information for the entire building is presented here.

8. “Type of Ownership” addresses the type of assets to be acquired by the trustee.

9. “PML (Probable Maximum Loss)”is the percentage of losses which will not exceed 90% against building replacement price, should

the greatest earthquake that has a 10% probability occurring within the average useful life of a building of 50 years, occur.


11. “Property Management Company” indicates the name of the property management company with whom JEI entrusts property

management services as of the date of this release.




13

(3) Tenant Summary

Leasable Floor Space 6,633.93m2 1

Leased Floor Space 6,484.31m2 1

Number of Tenants 91

Monthly Rent ¥28,093 thousand2


Occupancy Rate

December

31, 2009

December

31, 2010

December

31, 2011

December

31, 2012

October

31, 2013

95.7% 95.1% 100% 100% 97.7%

Notes

1. “Leasable Floor Space”, “Leased Floor Space” and “Number of Tenants” are as of October 31, 2013 for the exclusive spaces owned

by the trustee.

2. The figure for “Monthly Rent” shows the total (not including consumption and other taxes) of monthly rents (including common

area expenses but excluding fees for use of parking and other attached facilities) based on and indicated in the lease agreements

concluded with tenants, as of October 31, 2013.

3. The figure for “Leaseholds and Security Deposits” shows the balance (or the amount after deducting the portion not needed to be

returned, if any), as of October 31, 2013 of leaseholds and security deposits collected from tenants (excluding amounts related to

parking and other attached facilities).


Company Name Bois Vert LLC

Location Nihonbashi 1-Chome Building, 1-4-1 Nihonbashi, Chuo-ku, Tokyo

Matters Concerning

Members

Executive member: Gaia General Incorporated Association

Person in charge of execution of duties: Takanori Mishina

Capital


¥100,000

Total Assets Nondisclosure by a seller's intention

Net Assets Nondisclosure by a seller's intention

Main Business (1) Acquisition, holding, and disposition of trust beneficiary interest in

real estate

(2) Purchase and sales, leasing, management, acquisition, holding,

disposition, and use of real estate

(3) Acquisition, holding, and disposition of specified equity interest, etc.,

in special purpose companies established for the purpose of carrying out a

business related to asset securitization

(4) Any other businesses incidental or related to the businesses set forth in

the preceding items




14

Date of Incorporation July 18, 2013

Equity Holder (as of January 8, 2014)

Gaia General Incorporated Association (equity holding ratio: 100%)

Relationship with

JEI/JEAM

Capital

Relationship Not applicable.

Personnel

Relationship

Not applicable.

Business

Relationship

During the Fifteenth Fiscal Period (July 1, 2013 to

December 31, 2013), there was no asset acquisition or

sale transaction between the Seller and JEI or JEAM.

Status as Related

Party Not applicable.


The acquisition of the Property to be Acquired is not a transaction between JEI/JEAM with a special related

person.


Not applicable.


Not applicable.



January 8, 2014 Execution of the purchase agreement subject to conditions precedent


4. Outlook

For the impact of said acquisition on JEI’s operating results for the Sixteenth Fiscal Period (January 1, 2014 to

June 30, 2014), please refer to the “Notice Concerning Operating Forecasts for the Fiscal Periods Ending June

30, 2014 and December 31, 2014” separately announced today.

(End)

Appendix:

(1) Appraisal Summary

(2) Property Income and Expense Outlook

(3) Portfolio Overview after Acquisition of the Property to be Acquired

(4) External View of the Property to be Acquired

Japan Excellent, Inc. Website: www.excellent-reit.co.jp/eng/

http://www.excellent-reit.co.jp/eng/




15

(Appendix 1) Appraisal Summary

I-12 HAMARIKYU INTERCITY

（Millions of yen 1）

Notes

1. Amounts are rounded to the nearest millions of yen. The figures pertain to the portion of

the additional acquisition.

2. The value reflects the merits brought by being the sole owner, therefore relieved from

restrictions on management, operation, disposition, etc.

3. The value is of the value before reflecting merits mentioned in Note 2.


Appraisal Date November 30, 2013

Appraisal Value 2

12,000

Income Approach Value3

11,800

Direct Capitalization Value 11,900

Operating Revenue 856

Gross Potential Revenue 903

Vacancy Loss 46

Operating Expenses 319

Net Operating Income 536

Interest Income 8

Capital Expenditures 19

Net Cash Flow 525

Cap Rate 4.4%

Discounted Cash Flow Value 3

11,700

Discount Rate 4.1%

Terminal Cap Rate 4.6%

Summation Value 3

12,100

Land Value/Land % 4,186／34.6%

Building Value/Building % 7,913／65.4%




16


IV-5 Aoba-dori Plaza

（Millions of yen(Note)）

(Note) Amounts are rounded to the nearest millions of yen.



Appraisal Value 2,560

Income Approach Value 2,560




Vacancy Loss 36



Interest Income 3


Net Cash Flow 157

Cap Rate 6.1%

Discounted Cash Flow Value 2,540

Discount Rate 5.6%


Summation Value 3,110

Land Value/Land % 1,893/60.9%

Building Value/Building % 1,216/39.1%




17


IV-6 Daiwa Minami-morimachi Building

（Millions of yen(Note)）

(Note) Amounts are rounded to the nearest millions of yen.



Appraisal Value 4,520

Income Approach Value 4,520




Vacancy Loss 16



Interest Income 5


Net Cash Flow 245

Cap Rate 5.4%

Discounted Cash Flow Value 4,470

Discount Rate 5.2%


Summation Value 3,380

Land Value/Land % 2,338／69.2%

Building Value/Building % 1,041／30.8%




18

(Appendix 2) Property Income and Expense Outlook

（Millions of yen）

(1)HAMARIKYU

INTERCITY

(2) Aoba-dori Plaza (3) Daiwa Minami-morimachi

Building

Revenues 889 318 396

Expenses (excluding

depreciation)

305 177 126

NOI (Net Operating

Income) 584 140 270

Assumptions for Income and Expense Outlook

The above figures are annual estimates, excluding special circumstances that may arise during the year with

regard to the acquisition of assets to be acquired (i.e., not forecast for the current fiscal period).




19

(Appendix 3) Portfolio Overview after Acquisition of the Property to be Acquired

Area Property # Property Name Date of Acquisition

Acquisition

Price1

(mn yen)

Investment

Ratio2 (% of total

portfolio)

Investment

Ratio by Area2

（%）

Area I Tokyo’s 6 Central Wards

3

I-1 Omori Bellport D June 29, 2006 22,552 8.5

56.0

I-2 Shiba 2-Chome Building June 29, 2006 9,450 3.6

I-3 JEI Hamamatsucho Building June 29, 2006 8,350 3.2

I-4 No. 32 Kowa Building

June 27, 2006 5,040 1.9

October 29, 2010 2,390 0.9

Total 7,430 2.8

I-7 Akasaka Garden City March 28, 2007 23,300 8.8

I-8 AKASAKA INTERCITY

October 26, 2007 17,857 6.8

February 5, 2013 10,289 3.9

Total 28,146 10.7

I-9 Kowa Shirokanedai Building December 24, 2010 4,705 1.8

I-10 Daiba Garden City Building February 4, 2011 11,000 4.2

I-11 No. 35 Kowa Building November 25, 2011 8,280 3.1

I-12 HAMARIKYU INTERCITY

December 20, 2011 7,080 2.7

Due on February 4, 2014 12,000 4.5

Total 19,080 7.2

I-13 Shintomicho Building March 28, 2012 1,750 0.7

I-14 Kowa Nishi-Shimbashi Building March 28, 2013 3,931 1.5

Area II Central Osaka, Central

Nagoya, Central Fukuoka4

II-1 NHK Nagoya Housou Center Building

June 27, 2006 4,300 1.6

4.8 II-2 JEI Nishi-Honmachi Building March 28, 2007 6,673 2.5

II-3 Osaka Kogin Building (Land with Leasehold Interest)

February 5, 2013 1,770 0.7

Area III Tokyo (excl. Area I) and

areas surrounding Tokyo

(Kanagawa, Saitama and

Chiba prefectures)

III-1 Musashikosugi Tower Place June 27, 2006 13,890 5.3

32.3

III-2 Kowa Kawasaki Higashiguchi Building

June 27, 2006 10,976 4.2

III-3 JEI Hongo Building June 29, 2006 5,400 2.0

III-5 Kawasaki Nisshincho Building

June 27, 2006 3,775 1.4

November 30, 2006 130 0.0

October 17, 2008 300 0.1

April 17, 2013 520 0.2

Total 4,725 1.8

III-6 No. 44 Kowa Building June 27, 2006 1,150 0.4

III-7 JEI Ryogoku Building June 27, 2006 2,550 1.0

III-8 Ebina Prime Tower March 29, 2007 6,470 2.4

III-9 Kowa Kawasaki Nishiguchi Building

October 26, 2007 32,000 12.1

III-10 Pacific Square Sengoku December 20, 2011 1,620 0.6

III-11 Core City Tachikawa February 5, 2013 6,500 2.5

Area IV Osaka, Nagoya and Fukuoka

(excl. Area II) and other

government-decreed cities,

etc.

IV-2 JEI Kyobashi Building September 1, 2011 3,308 1.3

6.9

IV-3 JEI Hiroshima Hacchobori Dai-ichi

Seimei Building May 22, 2012 2,760 1.0

IV-4 SE Sankyo Building March 1, 2013 5,500 2.1

IV-5 Aoba-dori Plaza Due on February 4, 2014 2,120 0.8




20

IV-6 Daiwa Minami-morimachi Building Due on February 4, 2014 4,410 1.7

Total 264,097 100.0 100.0

Notes

1. “Acquisition Price” is the acquisition value on the purchase agreement, excluding consumption tax, etc. Figures are rounded to the nearest

unit.

2. “Investment Ratio” and “Investment Ratio by Area” are rounded to the first decimal place.

3. “Tokyo’s 6 Central Wards” is Chiyoda, Chuo, Minato, Shinjuku, Shinagawa, and Shibuya Wards.

4. “Central Osaka” is the Umeda, Dojima, Nakanoshima, Yodoyabashi, and Honmachi districts, ”Central Nagoya” is the Meieki, Fushimi, Sakae

districts, and “Central Fukuoka” is the Tenjin and Hakata Terminal Peripheral districts.




21

Office Lobby

Residence Entrance

Residence

(Appendix 4) External View of the Property to be Acquired

I－12 HAMARIKYU INTERCITY

This Property

Hamamatsucho Sta.




22

IV－5 Aoba-dori Plaza

This Property

Sendai Sta.

Aoba-dori Sta.




23

IV－6 Daiwa Minami-morimachi Building

This Property

Minami-Morimachi Sta.

Osaka-Temmangu Sta.

for immediate release for translation purposes only · the property is a five-minute walk from...

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