Kenedix Realty Investment : Notice Concerning Sale of Propertis (KDX Roppongi 228 Building・KDX Kanda Misaki-cho Building・KDX Gobancho Building)

Translation of Japanese Original

To All Concerned Parties

January 31, 2017

REIT Issuer: Kenedix Office Investment Corporation Naokatsu Uchida, Executive Director

(Securities Code: 8972)

Asset Management Company: Kenedix Real Estate Fund Management, Inc. Ryosuke Homma, CEO and President

Inquiries: Hikaru Teramoto

General Manager of Planning Department

Office REIT Division TEL: [phone]

Notice Concerning Sale of Properties (KDX Roppongi 228 Building･ KDX Kanda Misaki-cho Building･ KDX Gobancho Building)

Kenedix Office Investment Corporation ("the Investment Corporation") has announced today, that Kenedix Real Estate Fund Management, Inc. ("the Asset Management Company"), the asset management company for the Investment Corporation, decided to sell the following properties.

1. Outline of the Sale

   (1)

   Properties to be Sold

   :

   Trust beneficiary interest in real estate (Note 1)

   (Unit: Million Yen)

   Property Name	Anticipated Sale Price (Note 2) (Note 3)	Assumed Book Value (Note 4)	Difference between Anticipated Sale Price and Assumed Book Value (Note 3) (Note 5)	Appraisal Value (Note 6)
   KDX Roppongi 228 Building	5,070	3,396	-1,564	2,120
   KDX Kanda Misaki-cho Building		1,340		961
   KDX Gobancho Building		1,897		1,420
   Total	5,070	6,634	-1,564	4,501

   Note 1: The Investment Corporation palns to put into real estate trust (trust transfer to Mizuho Trust & Banking Co., Ltd.) on scheduled date of sale.

   Note 2: Transfer costs, adjustment of property tax and city-planning tax, and consumption tax, etc. are excluded.

   Note 3: The aforementioned properties are sold to the single buyer with single agreement. Anticipated sale price of each property is not disclosed because the buyer has not given consent. Therefore each difference between anticipated sale price and assumed book value is also not disclosed.

   Note 4: Each assumed book value is as of scheduled date of sale, truncated to the nearest million yen.

   Note 5: Figure is referential amount, calculated as a difference between anticipated sale price and assumed book value, and different from profit or loss on sale, truncated to the nearest million yen.

   Note 6: The base date for appraisal is October 31, 2016.

   (2)	Buyer	:	Hulic Co., Ltd. Please refer to "4. Buyer's Profile" for the details.
   (3)	Date of Contract	:	February 1, 2017
   (4)	Scheduled Date of Sale	:	February 1, 2017
   (5)	Use of Proceeds	:	The proceeds from the Sale are scheduled to be allocated as cash on hand and used as a portion of funds for future acquisition of specified assets and related expenses, redemption of investment corporation bonds or repayment of borrowings.
   (6)	Settlement Method	:	Payment in full on settlement
   (7)	Method of Buyer Selection	The buyer was selected from several interested buyers after verifying the prices and conditions of the Sale and other factors.

   The aforementioned properties shall hereinafter be referred to as "the Three Properties".

2. Reason for the Sale

   The Investment Corporation decided to sell the Three Properties based on the asset reshuffle strategy in line with its management policy by comprehensively considering the Investment Corporation's current and future portfolio development policy and characteristics of each property, etc. In a favorable real estate transaction market, the Investment Corporation believes the sale of the Three Properties with relatively high ratio of appraisal loss (Note 1) and low profitability enhances the portfolio quality.

   Although the total anticipated sale price of the Three Properties falls below the total assumed book value as of the scheduled date of sale, it exceeds the total amount of the most recent appraisal value, and is judged as the appropriate price level based on actual market price considering the change in leasing with tenants, leasing market trends in the surrounding area and future cash flow.

   With the sale of the Three Properties, loss on sale of real estate, etc. is expected to occur in the fiscal period ending April 2017 (November 1, 2016 to April 30, 2017) but the distribution level is stabilized as gain on sale of real estate (¥1,660 million) is expected to occur through the sales of BUREX Toranomon and KDX Nihonbashi Kabutocho Building (Note 2) in the said fiscal period. For the details, please refer to the outlook in the "Financial Report for the Fiscal Period Ended October 31, 2016 (REIT)" dated December 14, 2016.

   Note 1: The ratio of difference between appraisal value and book value to book value. Note 2: For the respective details of the Sale, please refer to the followings.

   BUREX Toranomon	Dated December 1, 2016	Notice Concerning Acquisition of Property (ARK Mori Building) and Sale of Property (BUREX Toranomon)
   KDX Nihonbashi Kabutocho Building	Dated November 1, 2016	Notice Concerning Acquisition of Property (Nishi-Shinbashi TS Building) and Sale of Property (KDX Nihonbashi Kabutocho Building)
   	Dated November 7, 2016	(Update Information) Notice Concerning Acquisition of Property (Nishi-Shinbashi TS Building) and Sale of Property (KDX Nihonbashi Kabutocho Building)

3. Details of the Properties to be Sold

   Property Name		KDX Roppongi 228 Building
   Type of Specified Asset		Trust beneficiary interest in real estate
   Trustee		Mizuho Trust & Banking Co., Ltd.
   Location (Address)		2-2-8 Roppongi, Minato-ku, Tokyo
   Usage		Office, Retail shop
   Type of Structure		Flat-roofed, Steel-framed reinforced concrete structure; one underground and nine aboveground floors
   Site Area	Land	408.86 m2
   	Building (Total Floor Area)	2,235.30 m2
   Type of Ownership	Land	Proprietary ownership
   	Building	Proprietary ownership
   Completion Date		April 28, 1989
   Acquisition Date		January 10, 2008
   Acquisition Price		¥3,300 million
   Appraisal	Appraisal Value	¥2,120 million
   	Base Date for Appraisal	October 31, 2016
   	Appraiser	Japan Real Estate Institute
   	Details	Please refer to "9. Summary of Appraisal Report".
   Details of Tenant		As of December 31, 2016
   Security and Guarantee Deposit	¥85 million (Figure is truncated to the nearest million yen.)
   Number of End Tenants	8

   Total Leasable Area	1,940.06 m2
   Total Leased Area	1,940.06 m2
   Occupancy Rate	100.0%
   Operating Results		The total of the actual amounts for fiscal periods ended April 30, 2016 and October 31, 2016
   Rent Revenue	¥121 million
   Net Operating Income	¥80 million
   Rental Operating Income (Net Operating Income after Depreciation)	¥69 million

   Property Name		KDX Kanda Misaki-cho Building
   Type of Specified Asset		Trust beneficiary interest in real estate
   Trustee		Mizuho Trust & Banking Co., Ltd.
   Location (Address)		3-6-12 Misakicho, Chiyoda-ku, Tokyo
   Usage		Office
   Type of Structure		Flat-roofed, Steel-framed reinforced concrete structure; one underground and seven aboveground floors
   Site Area	Land	314.54 m2
   	Building (Total Floor Area)	1,536.60 m2
   Type of Ownership	Land	Proprietary ownership
   	Building	Proprietary ownership
   Completion Date		October 22, 1992
   Acquisition Date		February 1, 2008
   Acquisition Price		¥1,380 million
   Appraisal	Appraisal Value	¥961 million
   	Base Date for Appraisal	October 31, 2016
   	Appraiser	Japan Real Estate Institute
   	Details	Please refer to "9. Summary of Appraisal Report".
   Details of Tenant		As of December 31, 2016
   Security and Guarantee Deposit	¥40 million (Figure is truncated to the nearest million yen.)
   Number of End Tenants	8
   Total Leasable Area	1,315.96 m2
   Total Leased Area	1,315.96 m2
   Occupancy Rate	100.0%
   Operating Results		The total of the actual amounts for fiscal periods ended April 30, 2016 and October 31, 2016
   Rent Revenue	¥56 million
   Net Operating Income	¥37 million
   Rental Operating Income (Net Operating Income after Depreciation)	¥29 million

   Property Name		KDX Gobancho Building
   Type of Specified Asset		Trust beneficiary interest in real estate
   Trustee		Mizuho Trust & Banking Co., Ltd.
   Location (Address)		5-5-5 Gobancho, Chiyoda-ku, Tokyo
   Usage		Office, Parking
   Type of Structure		Flat-roofed, Steel-framed structure; eight aboveground floors
   Site Area	Land	335.70 m2
   	Building (Total Floor Area)	1,893.11 m2

   Type of Ownership	Land	Proprietary ownership
   	Building	Proprietary ownership
   Completion Date		August 7, 2000
   Acquisition Date		March 31, 2008
   Acquisition Price		¥1,951 million
   Appraisal	Appraisal Value	¥1,420 million
   	Base Date for Appraisal	October 31, 2016
   	Appraiser	Japan Real Estate Institute
   	Details	Please refer to "9. Summary of Appraisal Report".
   Details of Tenant		As of December 31, 2016
   Security and Guarantee Deposit	¥54 million (Figure is truncated to the nearest million yen.)
   Number of End Tenants	7
   Total Leasable Area	1,649.02 m2
   Total Leased Area	1,649.02 m2
   Occupancy Rate	100.0%
   Operating Results		The total of the actual amounts for fiscal periods ended April 30, 2016 and October 31, 2016
   Rent Revenue	¥88 million
   Net Operating Income	¥64 million
   Rental Operating Income (Net Operating Income after Depreciation)	¥46 million

4. Buyer's Profile

Company Name		Hulic Co., Ltd.
Location		7-3 Nihonbashi Odenmacho, Chuo-ku, Tokyo
Title and Name of Representative		Manabu Yoshidome, President, Representative Director
Description of Business		Real estate holding, leasing, sales and brokerage
Amount of Capital		¥62,657 million (as of June 30, 2016)
Date of Incorporation		March 26, 1957
Major Shareholder		Meiji Yasuda Life Insurance Company (7.18%), Sompo Japan Nipponkoa Insurance Inc. (7.17%) and Tokyo Tatemono Co., Ltd. (6.31%) (as of June 30, 2016)
Net Assets		¥319,051 million (as of June 30, 2016)
Total Assets		¥1,121,985 million (as of June 30, 2016)
Relationship with the Investment Corporation or the Asset Management Company
Capital Relationship	There is no special capital relationship between the Investment Corporation or the Asset Management Company.
Personnel Relationship	There is no special personnel relationship between the Investment Corporation or the Asset Management Company.
Business Relationship	There is no special business relationship between the Investment Corporation or the Asset Management Company.
Applicability of Related Party Relationships	The buyer is not a related party, etc. as defined in the Investment Trusts and Investment Corporations Law ("the Investment Trust Law") and not a related party as defined in the Office REIT Division Related-party Transaction Rules of the Asset Management Company.