Kenedix Residential Next Investment : Notice Concerning Acquisition of Property (Tsukui Sunshine Adachi)

June 17, 2022

To All Concerned Parties

REIT Issuer:

Kenedix Residential Next Investment Corporation

Representative: Tetsu Kawashima, Executive Director

(Securities Code Number: 3278)

Asset Management Company

Kenedix Real Estate Fund Management, Inc.

Representative: Masahiko Tajima, President & CEO

Contact: Shin Yamamoto, Head of Strategic Planning,

Residential REIT Department

TEL: [phone]

Notice Concerning Acquisition of Property (Tsukui Sun-shine Adachi)

Kenedix Residential Next Investment Corporation (the "Investment Corporation") today announced that Kenedix Real Estate Fund Management, Inc. (the "Asset Management Company"), the asset management company for the Investment Corporation, has decided to acquire the following property (the "Acquisition"). The details are provided as follows.

1. Overview of the Acquisition

(1) To-be acquired asset:	As follows:
			To-be acquired asset shall hereafter be referred to as the "Property".
					(in thousands of yen)
	Property		Property Name	Type of Asset	Acquisition Price
	Number		(Note 1)
	H-32	Tsukui Sun-shine Adachi	Real estate	830,000

1. Date of contract：June 17, 2022
2. Scheduled date of the Acquisition：September 16, 2022
3. Seller：Please refer to 5. "Seller's Profile"
4. Funds for the Acquisition：Debt financing (Note 2) and Cash on hand.
5. Settlement method：Payment in full on the date of the Acquisition

（Note 1）"Acquisition Price" is the sales amount of the real estate (excluding acquisition costs, settlement of property tax and city planning tax or consumption tax, etc.) indicated in the real estate sales contract concerning the to-be acquired asset and is rounded down to the nearest thousand yen. The same shall apply hereafter.

（Note 2）The details of debt financing to acquire the Property will be announced as soon as it is determined.

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1. Reason for the Acquisition
   The Investment Corporation expands assets under management through aggressive new acquisitions and improves its portfolio quality by reshuffling, in accordance with the Investment Corporation's investment targets and practices within its Articles of Incorporation, in order to ensure stable returns while expanding and diversifying the portfolio. The Property is a healthcare facility managed by well-known leading operator with long track record and located in Tokyo metropolitan area which contribute to geographically diversify the healthcare portfolio. The Investment Corporation decided to acquire because to conclude long-term contract to lease the Property to a single operator contribute to improve stability in its profitability.
2. Overview of the To-be Acquired Asset (H-32) Tsukui Sun-shine Adachi

Property name	Tsukui Sun-shine Adachi
Type of asset	Real estate
Location (Address) (Note1)	6-10-3, Hanahata, Adachi, Tokyo
		Type of ownership	Proprietary ownership
		Site area	1,740.95 m2
Land		Use districts	Category 1 medium-to-high-rise exclusive residential districts
		Building coverage ratio (Note2)	60%
		Floor area ratio (Note2)	200%
		Type of ownership	Proprietary ownership
		Total floor area	2,204.45 m2
		Construction completion date	December 2005
Building		Usage	Private senior home
		Structure / Number of stories	Steel structure with flat roof / three-story building
		Number of Rooms /	54 rooms / 54 people
		Resident capacity
Architect			Daiwa House Industry Co., Ltd.
Constructor	Daiwa House Industry Co., Ltd.
Building permit agency	Ehomes
Probable maximum loss	3.40% (i)
Appraisal value	¥ 894,000 thousand (ii)
Appraiser			DAIWA REAL ESTATE APPRAISAL CO., LTD.
Details of tenant	(As of May 31, 2022)
		Total number of tenants	1
		Tenant	TSUKUI HOLDINGS CORPORATION
		Total rental income (Note4)	Not disclosed as the tenant' consent has not been obtained
		Security and guarantee	Not disclosed as the tenant' consent has not been obtained
		deposit (Note5)
		Total leased area (Note6)	2,204.45 m2
		Total leasable area (Note7)	2,204.45 m2
		Occupancy ratio (Note8)	100.0%
Existence of security	None
Property management company (Note9)	Global Community Co., Ltd. (Planned)
Master lease company (Note10)	None
Type of master lease (Note11)	-
Master lease term	-
Other special considerations	None
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Overview of contract with tenant (Note12)

Contract format: Regular lease contract

Contract period: February 1, 2006 through January 31, 2046

Rent revisions:

Rent shall not be revised for the first ten years from the lease commencement month of the Property. For the first revision, which shall take place in 11th year, the base rent shall be that of the previous month and the rent shall be subject to revision every five years. However, rent revision will be implemented in the event of remarkable fluctuation in land and building prices, changes in tax and public dues and other remarkable changes in surrounding rent market and other economic conditions.

Contract renewal:

In case that neither the lessor nor the lessee expresses any written intention at least six months prior to the expiration of the lease term, the lease term shall be continued for another five years. The parties negotiate to determine the term of the lease upon renewal.

Mid-term cancellation:

The parties must give written notice at least 1 year prior to the mid-term cancellation. In case that the lessee requests mid- term cancellation during the contract period, the lessee must pay penalty (total operating expense until the cancellation date divided by the contract period times remining period of contract). However, the penalty shall be waived in case that the lessee finds new lessee, the lessor accepts the termination request from the lessee with notification and the lessee pay the rent until new lessee settles.

Overview of operator and facility (Note13)

(Date of preparing the written explanation of important matter: December 1, 2021)

	Operator	TSUKUI	Opening date	February 1, 2006
	CORPORATION
	Type of facility	Private senior home	Number of Rooms	54
	(with nursing care)	(room)
Condition of rights for	Rights to use	Resident capacity	54
	residence	(people)
Main room area range	18.56~20.24	Number of residents	52
	(m²)	(people)
Entering requirement	Mixed (Excluding self-	Occupancy rate	96
reliant)	(%)
Average required level of	3.0	Average age of	88.0
	nursing care	residents (years old)
Service fee payment method
		Monthly fee basis	One-time entrance fee
		basis
	One-time entrance	-	5,400,000
	fee (yen)
	Monthly service	-	256,400
	fee (yen)
			Staff at nighttime	2 or more care
Staff engaged in nursing care	More than 2.5：1	(number of staff
staff members
			members at minimum)
		Yoseikai Medical Corporation Masuda Clinic
Cooperating medical	Jiseikai Social Medical Corporation Tojun Hospital
	institutions	Yoseikai Medical Corporation Yosei Clinic
		Kikyokai Medical Corporation Hanahata Clinic
Cooperating dental institutions	Takanawakai Medical Corporation Sunflower Matsudo dental clinic
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Characteristics of the property

(Excellent location of secluded area)

The Property is located in a secluded residential enclave in Tokyo Adachi word getting to the Property by public bus from Takenotsuka on Tobu Isesaki line and Rokucho station on Tsukuba express. The Property boats of excellent access to Central Tokyo. The secluded residential enclave is girdled by park and the infrastructure is well developed. These factors contribute to the area's desirability to live.

(High quality facilities with a full range of services)

The Property consists of 54 private rooms each room is from 18.56 to 20.24 m² large. The Property is well equipped to provide wide range of services as a fee-based senior housing with nursing care (Kaigo-tsuki) such as dinning common, rehabilitation gym, kitchen, counseling room and medical bathroom in the common area. The high patient to staff ratio of more than 2.5:1 enable the facility to provide best possible care. Nursing staffs deliver rehabilitation interventions depending on the individual needs of a patient. Various activities such as recreational and club activities are provided.

(Status of operations)

The Property is a fee-based senior housing with nursing care (Kaigo-tsuki), opened in February 2006 and is being operated by TSUKUI CORPORATION. It provides residential care services and operates multiple fee-based senior housings and with long track record. The Investment Corporation believes that the high reliability of the operator, its proven operational track record, its management capability and fixed-rent contract with operator bring operational stability.

1. The figure described in the earthquake PML valuation report (level 2) created by Sompo Risk Management Inc. in May 2022.
2. Appraisal date is May 1, 2022.

（Note1） "Location" is the indication of the residential address. In case there is no indication of the residential address, it is the building address under the lot address or the building location indicated in the registration items certificate (the lot number among such if there are multiple lot addresses). In case of the building is not completed as of today, the lot number is indicated (If there is more than one lot, the lot number of one of them).

（Note2） "Building coverage ratio" and "Floor area ratio" are the designated building-to-land ratio and designated floor-area ratio provided in the city plan.

（Note3） "Total number of tenants" is described the number of end tenants. In the case that there is a master lease contract entered into with a master lease company after the acquisition of the property by the Investment Corporation, "Total number of tenants" is indicated as "1".

（Note4） "Total Rent Income" is the sum of the monthly rent according to the lease agreements actually executed with the end tenants (the sum of rent and common area maintenance charges of the residents etc., provided, however, that in case the adjunct facilities fee such as car parking space usage fees are included in the lease agreements, it includes such fees) in the case that the master lease type is pass-through and is the monthly rent according to the sublease agreements with rent insurance executed with master lease company (the sum of rent and common area maintenance charges of the residents etc., provided, however, that in case the adjunct facilities fee such as car parking space usage fees are included in the lease agreements, it includes such fees) in the case that the master lease type is rent insurance. Furthermore, the figures are rounded down to the nearest thousand yen.

（Note5） "Security and Guarantee Deposit" is the sum of the security and guarantee deposits, etc. of each end tenant based on the lease agreement executed with each end tenant. However, in case there is a part for which returning is unnecessary due to special provision of deduction of security deposits, etc. in each lease agreement, it is the amount after the amount is deduced. In addition, the balance of the security and guarantee deposit, etc. based on the lease agreement with rent insurance executed with a master lease company is displayed in the case that the master lease type is rent insurance. However, it is the sum of pass-through security and guarantee deposits, etc. and rent insurance security and guarantee deposits, etc. in case agreement with a different master lease type has been executed. Furthermore, the figures are rounded down to the nearest thousand yen.

（Note6） "Total Leased Area" is the leased floor area described in the lease agreements which were actually executed with end tenants.

（Note7） "Total Leasable Area" is the floor area described in the lease agreements that is leasable at the to-be acquired asset (in case the to-be acquired asset contains more than one building, the sum of the leasable floor area of such buildings). If the floor is not in operation, the leased floor area under the lease agreement at the most recent time when the floor was leased, or the floor area calculated based on the building completion diagram is stated.

（Note8） "Occupancy Ratio" is the ratio of the "Total Leased Areas" (based on the lease agreements) to the "Total Leasable Area" of the to-be acquired asset rounded to the first decimal place.

（Note9） "Property Management Company" is the property management company scheduled to execute the property management agreement for the to-be acquired asset.

（Note10） "Master Lease Company" is the master lease company scheduled to execute the master lease agreement for the property.

（Note11） "Type of master lease" is described as following; "Pass through structure" in case of the conclusion of the master lease contract without rent guarantee, "Rent guarantee structure" in case of the conclusion of the master lease contract with rent guarantee, and "-" in case that the owner concludes lease contract with end-tenant directly or there's no

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end-tenant.

（Note12） "Overview of contract with tenant" indicates the details of the lease agreement, etc. that has been concluded with the operator.

（Note13） i) "Operator", "Opening date", "Type of facility", "Number of Rooms", "Condition of rights for reside", "Resident capacity", "Room area range (m²)", "Number of residents (people)", "Entering requirement", "Occupancy rate", "Average age of residents (years old)", "Service fee payment method", "Staff engaged in nursing care", "Staff at nighttime (number of staff members at minimum)" are based on the written explanation of important matter or on the information provided by the operator.

1. 1. "Service fee payment method" indicates the content described as the most common and standard plan in the written explanation of important matter or the information provided by the operator as the most common and standard plan.
   2. "Average nursing level" represents the "Total of (A x B)'s" divided by C: A= "No. of residents by nursing level defined by the disclosure statement"; B= "0" for self-reliant, "0.375" for Support Required-1, "1" for Support
      Required-2, or "1-5" respectively for Long-term Care Required-1 to Long-term Care Required-5; and C="Total no. of residents.".
   3. "Cooperating medical institutions" and "Cooperating dental institutions" indicate the cooperating medical institutions, the cooperating dental institutions and the designated medical institutions in the written explanation of important matter.
   4. If there is no description or no applicable item in the written explanation of important matter or if information could not be provided by the operator or consent for disclosure from the operator could not be obtained, it is described as "-".
2. Financial Impact on the Investment Corporation in the Event of Failure to Fulfill the Forward Commitments, etc.
   The real estate sales contract associated with the Property (the "sales contract") fall under the forward commitments, etc. by the Investment Corporation as specified in the Financial Services Agency "Comprehensive Guidelines for Supervision of Financial Instruments Business Operators, etc.".
   In the case a party violates any provisions of the sales contract (including cases in which representations and warranties are not true) and may not achieve the objectives in the sales contract due to such violation, the counterparty may, in principle, cancel the sales contract and require payment of an amount equivalent to 5% of the amount calculated by deducting the amount equivalent to consumption tax and local consumption tax from the transaction price as cancelation penalty. However, the obligation of the Investment Corporation to pay the amount due is effective on the condition of completion of the procurement of funds by the Investment Corporation for the purchase and sale of the Property. In case where the Investment Corporation may be unable to procure the funds required for purchasing the asset to be acquired by the transaction date, there would be no violation of a contractual obligation by the Investment Corporation and no responsibility to pay damages to the seller. Consequently, we believe that even if the Investment Corporation fails to fulfill the forward commitments, etc., as a consequence of fail to complete the funds, it is unlikely to have a significant impact on the financial condition of the Investment Corporation.
3. Seller's Profile
   The seller of the To-be acquired asset is a domestic business company in Japan, but details are not disclosed according to the seller's intention. The seller is not special related party of the Investment Corporation or the
   Asset Management Company.
4. Profile of Property seller, etc.
   The Acquisition is not the transaction with a special related party of the Investment Corporation or the Asset Management Company, therefore the details are omitted.
5. Details of Brokerage
   There is no brokerage related to the Acquisition.

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