Comforia Residential REIT : Notice Concerning Acquisition of Investment Asset (COMFORIA KITAZAWA)

March 15, 2022

For Immediate Release

Real Estate Investment Trust Securities Issuer:

Comforia Residential REIT, Inc

21-1 Dogenzaka 1-chome,Shibuya-ku,Tokyo

Takehiro Izawa

Executive Director

(Code: 3282)

Asset Management Company:

TLC REIT Management Inc.

Masaoki Kanematsu

President & CEO

Inquiries:

Daisuke Kawauchi

General Manager of Strategy Department

Comforia Management Division

(TEL: +81-3-6455-3388)

Notice Concerning Acquisition of Investment Asset (COMFORIA KITAZAWA)

Comforia Residential REIT, Inc ("CRR") announces that TLC REIT Management Inc. ("TRM"), to which CRR entrusts management of its assets decided today for CRR to acquire the investment asset as shown below.

1. Summary of the Acquisition

(Note 1) "Acquisition Price" denotes the amount exclusive of the various expenses required in the acquisition of the concerned asset, etc. (brokerage commission, taxes and public dues, etc.) (the amount of real estate or beneficial interest in real estate trust specified in the Agreement on Purchase and Sale).

(Note 2) Since "COMFORIA KITAZAWA" is an uncompleted property scheduled to be completed in June 2022, the (scheduled) name after the acquisition is indicated. The same applies below.

2. Reason for the Acquisition

TRM decided to acquire the investment asset based on asset management class and policy described in bylaws to ensure stable earnings and steady growth of the portfolio. On deciding to acquire the investment assets, TRM evaluated the features of the property, etc. of the asset stated in "3. Summary of the Asset to be Acquired."

3. Summary of the Asset to be Acquired

(1) Details of the Acquisition

- 1 -

- 2 -

(Note 1) "Location" is based on the residential address. However, for properties that have no residential address, the building address on the registry is indicated. In addition, "Area" of "Land," "Completion Date," "Structure / Number of Floors," "Gross Floor Area" and "Use" of building are based on information in the real estate registry and may not necessarily be identical with the actual figures. "Gross Floor Area" of building denotes the area of the entire building (excepting annexes).

However, since "COMFORIA KITAZAWA" is an uncompleted property and is yet to be registered, "Location" indicates lot number of the land, and "Completion date" indicates planned completion period, while "Structure / Number of Floors", "Gross Floor Area", and "Use" of building indicate the figures, etc. based on the building permit.

(Note 2) "Property Management Company" is the company that has provided or is scheduled to provide property management service for each property.

(Note 3) "Master Leasing Company" is the lessee that has conducted or is scheduled to conclude a master lease agreement with the titleholder of each property.

(Note 4) "Special affairs" are matters recognized as important, regarding the right and use, etc. of the asset, as well as consideration of the degree of impact on the appraised value, profitability, and appropriation. They include the following matters:

1. Significant limitation or restriction by laws, regulations and rules
2. Significant burdens or limitations on rights, etc.
3. Significant cases where there are architectural structures crossing the boundaries of the concerned property, etc. and cases where there are issues with boundary confirmation, etc., and related arrangements, etc.
4. Significant agreements, arrangements, etc. concluded with co-owners / sectional owners.

(Note 5) Explanation of "Summary of Rental Status"

1. 1. "Rentable Area" is the total rentable floor area of residences and retail stores, etc. of the asset (if the common area, etc. is leased, the concerned area is also included)."Rentable Area" for Non-Pass-through type master lease agreements (master lease agreements (defined in ii below) other than Pass-through type master lease agreements (defined in ii below)) is the rentable area based on the lease agreement concluded between CRR or Trustee of Beneficial Trust and the Master Leasing Company. The Rentable Area is not based on the real estate registry, but the floor area stated in the lease agreement or the floor area calculated from the building as-built drawing, etc., and may not necessarily be identical to the floor area written in the real estate registry.
   2. In the following cases, "Rented Area" means the floor area (based on the floor area in the lease agreement; however, limited to the floor area of residences and retail stores, etc. (when all units are leased in bulk, the floor area of the entire leased units) and excluding the leased area of parking lots) that is actually leased and a lease agreement is executed with the end-tenant. Cases where all or some units are leased in bulk, based on the lease agreement ("Master Lease Agreement"), and the Master Leasing Company in Master Lease Agreement subleases end-tenants, besides there is an agreement under which the rent of Master Lease Agreement is in accordance with the rent, etc. that end-tenants paid (hereafter this type of Master Lease Agreement is referred to as "Pass-through type Master Lease Agreement"). "Rented Area" for Non-Pass-through type master lease agreements is the rented area based on the lease agreement concluded between CRR or Trustee of Beneficial Trust and the Master Leasing Company.
2. "Occupancy Rate" is the rate of rented area to rentable area.
3. "Rentable Units" is the number of rentable units (including the number of stores, if any). "Rentable Units" for Non-Pass- through type master lease agreements are the number of units that the Master Leasing Company can sublease. "Number of rooms" indicates the number of rooms described in the Important Matters.
4. "Rented Units" is the number of rented units (which includes the number of stores, if any) that is actually leased and a lease agreement is executed with the end-tenant. "Rented Units" for Non-Pass-through type master lease agreements is the number of units leased to the Master Leasing Company.
5. "Total Number of Tenants" is the number of tenants with which CRR or Trustee of Beneficial Trust has a direct rental contract relationship (including a direct rental contract relationship to be concluded). Therefore, when CRR or Trustee of Beneficial Trust leases comprehensively to the Master Leasing Company all units of the acquired property, and the Master Leasing Company subleases each unit to end-tenants, the Total Number of Tenants is 1; that is, the end-tenants of the sublease agreements are excluded. With regard to the properties to be acquired, a master lease agreement is scheduled to be concluded with Tokyu Housing Lease Corporation as the master leasing company on the acquisition date of the properties. The "total number of tenants" above is therefore the number of tenants after such a master lease agreement is concluded.
6. When the Master Leasing type is a Pass-Through type Master Lease Agreement, "Total Monthly Rent" means the total monthly rent (including the common area expense, but not fees for incidental facilities such as parking lot or trunk room)
7. • 3 -

stated in the lease agreements executed by the Master Leasing Company, or the owner of each real estate or real estate in real estate trust with end-tenants. In addition, in the case that the master leasing type is a non-pass-through master lease agreement, the monthly fixed rent (common area expense are included (except when the common area expense is not a fixed amount.), except for parking lots, trunk rooms and other ancillary facilities.) based on the lease agreement between CRR or the Trustee of Beneficial Trust and the Master Leasing Company is stated. Amounts are rounded down to the nearest thousand yen. Consumption tax and other taxes are excluded.

1. In the case that the master leasing type is a Pass-Through type Master Lease Agreement, "Security Deposit" is the total amount of balance of Security Deposit, based on lease agreements executed with the end-tenants, rounded down to the nearest thousand yen. However, if all or a part of a Deposits, guarantees does not need to be repaid according to special policy conditions such as the redemption of the deposit in a lease agreement, the amount of such Security Deposit is excluded.
   In addition, in the case that the Master Leasing type is a Non-Pass-Through type Master Lease Agreement, the Security Deposit, guarantees based on the lease agreement between CRR or the Trustee of Beneficial Trust and the Master Leasing Company are stated.

(Note 6) Since "COMFORIA KITAZAWA" is an uncompleted property, "Rentable Area" and "Rentable Units" indicate figures based on information provided by the seller, and "Rented Area", "Occupancy Rate", "Rented Units", "Total Monthly Rent", and "Security Deposit" are not stated.

(Note 7) This section is a summary of the Engineering Report on the acquired asset prepared by the reporting company which is a third party with no special interest in CRR. However, the content of the report is simply the opinion of the reporting company above, and CRR does not guarantee the adequacy and accuracy of the content.

1. "Estimated Amount of Emergency Repair Expenses" is the amount of repair and renewal costs expected to emergently arise, and is stated in the engineering report. Amounts are rounded down to the nearest thousand yen.
2. "Estimated Amount of Short-term Repair Expenses" is the amount of repair and renewal costs that are assumed to be required within one year, and is stated in the engineering report. Amounts are rounded down to the nearest thousand yen.
3. "Estimated Amount of Long-term Repair Expenses" is the amount of repair and renewal costs that are assumed to be required for 12 years, and is stated in the engineering report. Amounts are rounded down to the nearest thousand yen.
4. "Replacement Value" is the estimated money amount provided in the Engineering Report of construction work required if the acquired asset with the same design and the same specifications were to be newly constructed at the time when the report was prepared. However, the content of the report is simply the opinion of the reporting company above, and CRR does not guarantee

the adequacy or accuracy of the content. All amounts are rounded down to the nearest thousand yen.

(Note 8) This section is a summary of the "Earthquake Risk Analysis" report on the acquired asset prepared by the PML reporting company which is a third party with no special interest in CRR. However, the content of the report is simply the opinion of the PML reporting company above, and CRR does not guarantee the adequacy or accuracy of the content. "PML" is the probable maximum loss from an earthquake. There is a PML for individual buildings and for the entire portfolio of buildings. In this document, PML is calculated based on PML3, the definition of PML, an index of earthquake risk assessment by the Architectural Institute of Japan, and are expressed as a percentage (%) of the replacement price of the amount of loss with a 10% probability of exceedance (amount of loss equivalent to a 475-year return period) during the assumed expected period of use (50 years = the useful life of a typical building).

(Note 9) In "Architect/Contractor/Building Permit Agency, etc.," the architect, the contractor, the building permit agency and the investment agency or structural calculation fitness judge, etc. of the asset to be acquired is stated. As a general rule, CRR has asked a specialized third-party organization to make an inspection and received a report stating that there is no wrongful act such as the intentional falsification and forgery of documents related to structural design (structural drawings and structural calculation sheets, etc.). However, the content of the report is simply an opinion of the third-party organization, and CRR does not guarantee the adequacy and accuracy of the content. For properties that have received from the specified structural calculation fitness judgment agency the judgment that the structural calculation is appropriately conducted according to the methods prescribed by the Minister of Land, Infrastructure, Transport and Tourism in accordance with the Building Standards Act revised in June 2007 (Act No. 201 of 1950. Including subsequent revisions), the specified structural calculation fitness judgment agency constitutes a specialized third-party organization.

(Note 10) Includes a portion of private road burden and a setback portion (total approximately 170 m2).

1. Summary of the Appraisal Report

(thousand yen)

- 4 -