Samty Residential Investment : Notice Concerning Acquisition of Properties

November 15, 2021

For Translation Purposes Only

Real Estate Investment Trust Securities Issuer

Samty Residential Investment Corporation

1-8-3 Marunouchi, Chiyoda-ku, Tokyo

Masafumi Takahashi, Executive Director

(Securities Code: 3459)

Asset Management Company:

Samty Asset Management Co., Ltd.

Masafumi Takahashi, Representative Director

Inquiries: Hidekazu Nizawa

Director

Head of Business Management Division

Phone: + 81-3-5220-3841

Notice Concerning Acquisition of Properties

Samty Residential Investment Corporation ("Samty Residential") announces that Samty Asset Management Co., Ltd. (the "Asset Management Company"), to which Samty Residential entrusts management of its portfolio assets, decided today to acquire the following 3 properties (the "Assets to Be Acquired") (the "Acquisition"). Details are as follows.

As Samty Co., Ltd. ("Samty"), the seller of the Assets to Be Acquired, falls under the category of an interested party, etc. as defined under the Act on Investment Trusts and Investment Corporations (Act No. 198 of 1951, as amended; the "Investment Trusts Act"), the Asset Management Company obtained the consent of Samty Residential based on the approval at Samty Residential's Board of Directors' meeting held on November 15, 2021, pursuant to the Investment Trusts Act.

1. Overview of the Assets to Be Acquired

(Note 1) The current name of property B-45 is as shown in the table below. Samty Residential plans to change the name to the name indicated in the table above as soon as it is acquired.

(Note 2) "Planned acquisition price" is the amount which will be required for the acquisition of the Assets to Be Acquired excluding various costs such as commissions for mediation of transaction, taxes and public dues, etc. (the amount of the price of purchase of the real estate, etc. indicated in the purchase agreement, etc.). Amounts of less than 1 million yen are rounded down.

Disclaimer: This translation is for informational purposes only. Neither Samty Residential Investment Corporation nor Samty Asset Management Co., Ltd. guarantees the accuracy or completeness of the translation. If there is any discrepancy between the Japanese version and the English translation, the Japanese version shall prevail.

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1. Reason for the Acquisition
   Samty Residential is aiming to build a portfolio that pursues "Stability" (diversified investments in strictly selected residential properties nationwide), "Growth potential" (expansion of the portfolio size by continually investing in new properties centered on major regional cities), and "Profitability" (realization of expected high returns by investing in carefully screened residential properties located in major regional cities) through investment in residences mainly in major regional cities.
   The Acquisition will be made with the intent to expand the asset size steadily and improve the stability and quality of the portfolio by utilizing the sponsor support of Samty, the main sponsor of Samty Residential. The Acquisition will expand the portfolio to 159 properties for a total (planned) acquisition price of 146.3 billion yen. Furthermore, the investment ratio by area after the Acquisition is projected to be 73.1% for regional cities (47.3% for major regional cities and 25.8% for other regional cities) and 26.9% for the greater Tokyo area based on the (planned) acquisition price.
   The Assets to Be Acquired are targeted assets under asset management specified in the Articles of Incorporation of Samty Residential and are properties developed and owned by Samty, the sponsor. Considering that stable cash flows that would contribute to the profitability of the entire portfolio can be expected in comprehensive consideration of the individuality of each property, including the location and building age, Samty Residential deemed that the Acquisition would serve to improve portfolio quality in the medium to long term. For the details of the Assets to Be Acquired and the points assessed, please refer to the following "3. Details of the Assets to Be Acquired." In line with the acquisition of the Assets to Be Acquired, Samty Residential has selected their lessees based on the matters concerning criteria for selecting tenants set forth by Samty Residential (for details of the criteria, please refer to "Report on the Management Structure and System of the Issuer of Real Estate Investment Trust Units and Related Parties" dated November 15, 2021 (Japanese only)).
2. Details of the Assets to Be Acquired
   The details of the Assets to Be Acquired are as shown in the table below. However, the information in "Leased area," "Occupancy rate," "Monthly rental revenue," and "Security and guarantee deposits" are as of the end of October 2021. Furthermore, the following tables may refer to real estate that are the Assets to Be Acquired or real estate that are the trust assets of real estate trust beneficiary interest as the "Property." Please refer to the following terms with regard to the tables.
3. • "Location" is based on the residential address. However, for properties that have no residential address, the building address or building location on the certificate of the registered matters is indicated. In addition, "Site area" of land, and "Use," "Completion date," "Structure and floors," and "Total floor area" of buildings are based on information in the certificate of the registered matters, and may not necessarily be identical with the present state of the said real estate.
   • "Planned acquisition price" is the amount required for the acquisition of the Assets to Be Acquired excluding various costs such as commissions for mediation of transaction, taxes and public dues, etc. (the amount of the price of purchase of the real estate, etc. indicated in the purchase agreement, etc.). Amounts of less than 1 million yen are rounded down.
   • "Trustee" indicates the trustee or planned trustee of trust pertaining to the real estate trust beneficiary interest.
   • "Building coverage ratio" is, in principle, the ratio of the building area of the building designated in Article 53, Paragraph 1 of the Building Standards Act to its site area, and represents the maximum value of the building coverage ratio provided in city plans in accordance with zoning, etc. Such a maximum value of the building coverage ratio may be relaxed, increased, or decreased due to being a fire-resistant building within a fire prevention district and for other reasons, and may be different from the building coverage ratio that is actually applied.
   • "Floor area ratio" is, in principle, the ratio of the total floor area of the building to site area designated in Article 52, Paragraph 1 of the Building Standards Act, and represents the maximum value of the floor area ratio provided in city plans in accordance with zoning, etc. Such a maximum value of the floor area ratio may be relaxed, increased, or decreased due to the width of roads connecting to the site area and for other reasons, and may be different from the floor area ratio that is actually applied.
   • "Zoning" is the type of zoning listed in Article 8, Paragraph 1, Item 1 of the City Planning Act (Act No. 100 of 1968, as amended; the "City Planning Act").
   • "Total floor area" is the floor area for the entire building (excluding that of attached buildings).
   • "Number of leasable units" is the number of units that can be leased as of the end of October 2021 (including number of stores, etc. if any).
   • "Property management company" is the property management company to which property management is entrusted or planned to be entrusted with regard to the real estate.
   • "Master lease company" is the lessee that has concluded or planned to conclude a master lease agreement with the owner of the real estate.
   • "Master lease type" indicates whether a pass-through-type master lease agreement or a fixed-rent-type master lease agreement is concluded.

Disclaimer: This translation is for informational purposes only. Neither Samty Residential Investment Corporation nor Samty Asset Management Co., Ltd. guarantees the accuracy or completeness of the translation. If there is any discrepancy between the Japanese version and the English translation, the Japanese version shall prevail.

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• "Probable maximum loss (PML value)" is the value calculated in the evaluation of seismic risk analysis conducted by Tokio Marine dR Co., Ltd. as requested as part of due diligence upon acquisition of the real estate trust beneficiary interest by Samty Residential. Furthermore, "Probable maximum loss (PML value)" refers to the extent of the damage that would be incurred due to the largest earthquake (a large earthquake with the likelihood of occurring once in 475 years = a large earthquake with a 10% likelihood of occurring once in 50 years) foreseen during the assumed useful life (50 years being the useful life of an ordinary building) as a ratio
• 1. of the replacement value for the foreseeable restoration costs of the damage.
• "Total leasable area" is the total floor area of residences and shops, etc. that is practically leasable to end tenants (if the common area, etc. is leased, the concerned area is also included). Total leasable area is not based on the real estate registry, but by 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.
• "Leased area" is the area (the area indicated in lease agreements) for which lease agreements are actually concluded with end tenants, and a lease is conducted if the type of master lease as of the end of October 2021 is a pass-through-type master lease agreement. However, the indicated figure includes only the area of residences and shops, etc. (or the area of the entire units if all the units are leased in a lump-sum), and excludes the leased area of parking lots, etc.
• "Occupancy rate" is the rate of leased area to leasable area, rounded to the first decimal place.
• "Number of tenants" is the number of tenants with which Samty Residential or the trustee has a direct rental contract relationship. Therefore, when the master lease company subleases each unit to end tenants due to the introduction of a master lease, the total number of tenants is shown as 1; that is, the number of end tenants of the sublease is excluded. Furthermore, even if the managed asset is leased by the master lease company, when there are end tenants who do not accept the master lease, the end tenants and Samty Residential or the trustee have a direct rental contract relationship. In those cases, however, the number of end tenants in question is not included in the number of tenants either.
• When the type of master lease is a pass-through-type master lease agreement, "Monthly rental revenue" is the total monthly rent as of the end of October 2021 (including common area expenses, but not fees for incidental facilities such as parking lots or trunk rooms) stated in the lease agreement concluded by the master lease company, or the owners of each real estate or trust real estate, with end tenants. Amounts are rounded down to the nearest thousand yen. Consumption tax and other taxes are excluded.
• "Security and guarantee deposits" is the total amount of balance of security and guarantee deposits remaining as of the end of October 2021 based on lease agreements concluded with end tenants, rounded down to the nearest thousand yen. However, if such does not need to be refunded based on special policy conditions such as deductions from deposits and non-refundable deposit in a lease agreement, such an amount is excluded.
• "Characteristics of the property" are the basic nature, characteristics, etc. of the real estate with reference to the real estate appraisal report and considering the results of surveys independently conducted by the Asset Management Company.
• "Special remarks" are matters recognized as important as of the end of October 2021 in terms of the rights and use, etc. of the real estate, including the following matters, as well as consideration of the degree of impact on the appraisal value, profitability, and disposition of real estate.
• 1. Significant limitation or restriction by laws, ordinances, rules, and regulations
  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. made with co-owners or sectional owners
• Unless otherwise stated, percentage figures in the abovementioned sections are rounded to the first decimal place. As such, figures may not necessarily add up to 100%.
• Regarding monetary amounts in the abovementioned sections, planned acquisition prices and appraisal values are rounded down to the nearest million yen and other amounts are rounded down to the nearest thousand yen.

Disclaimer: This translation is for informational purposes only. Neither Samty Residential Investment Corporation nor Samty Asset Management Co., Ltd. guarantees the accuracy or completeness of the translation. If there is any discrepancy between the Japanese version and the English translation, the Japanese version shall prevail.

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"A-84S-RESIDENCE Joshin II"

(Note 1) The site area includes a portion of private road burden (about 0.37 m2) based on Article 42, Paragraph 1, Item 1 of the Building Standards Act.

Disclaimer: This translation is for informational purposes only. Neither Samty Residential Investment Corporation nor Samty Asset Management Co., Ltd. guarantees the accuracy or completeness of the translation. If there is any discrepancy between the Japanese version and the English translation, the Japanese version shall prevail.

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(Note 2) The property was handed over to Samty by a construction company on September 30, 2021 after completion, and is currently being leased. Concerning the property, effective as of November 30, 2021, a pass-through master lease agreement between the trustee and Samty Property Management Co., Ltd., and a lease agreement between Samty Property Management Co., Ltd. and Samty, the seller of the property, are scheduled to be concluded. The agreement stipulates that Samty guarantees lease as the end tenant until November 29, 2023, in principle, with the number of vacancies as of November 30, 2021 as the upper limit, and units that are occupied as of November 30, 2021 or become newly vacant after the conclusion of the agreement are not subject to Samty's lease.

Overview of the rental unit lease agreement

conditions as the concerned rental unit lease agreement and a new lease agreement is concluded between Samty Property Management Co., Ltd. and the new end tenant, Samty may have the rental unit lease agreement with Samty Property Management Co., Ltd. canceled, effective the day preceding the date of commencement of the concerned new lease agreement, limited to the residential units subject thereto.

(Note 3) The monthly rent payable by Samty will decrease if the rental unit lease agreement is partially canceled based on the provisions of cancellation stated above.

Disclaimer: This translation is for informational purposes only. Neither Samty Residential Investment Corporation nor Samty Asset Management Co., Ltd. guarantees the accuracy or completeness of the translation. If there is any discrepancy between the Japanese version and the English translation, the Japanese version shall prevail.

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