ORIX JREIT REPORT 16th period

orixjreit.com

ORIX JREIT REPORT 16th period

ORIX JREIT REPORT

Taking a new path toward a new stage of growth

ORIX JREIT REPORT 16th period

From: September 1, 2009 To: February 28, 2010

4-1, Hamamatsucho 2-chome, Minato-ku, Tokyo 105-6135, Japan

http://www.orixjreit.com/english/


Profile

On June 12, 2002, ORIX JREIT Inc. (OJR) was listed on the Tokyo

Stock Exchange as a diversified REIT, the first such listing in Japan.

OJR invests in a wide variety of real estate properties, centered on

office buildings, and also including logistics facilities, retail facilities,

hotels, and other properties.

Contents

1

2

4

6

13

14

16

18

20

23

24

25

41

54

55

OJR´s Investment Policy

16th Period Highlights

Message from the Management

Special Topics: Toward Sustainable Growth

Financial Status

Investment Performance

The Portfolio of OJR

Portfolio Map

Main Properties in the Greater Tokyo Area

Unit Information

Outline of OJR and its Asset Management Company

Performance Report

Financial Statements

Corporate Data

About Our Website


OJR´s Investment Policy

A Diversified REIT Focused on Office Buildings and Greater Tokyo

In order to diversify risk and deliver stable distributions to

unitholders, OJR invests with particular focus on the following four

considerations: property use diversification, regional diversification,

property size, and portfolio management.

Offices

Others

Others

No less than 80%

Greater Tokyo Area

Tokyo, Kanagawa, Saitama and Chiba

1 Use

Generally speaking, we will invest in office buildings with a value of no less than 80% (on an acquisition price basis) of our total portfolio. Also

through investing in wide variety of real estate properties, including logistics facilities, retail facilities, hotels, and other properties, we aim to

construct a portfolio based on an integrated model as we expect such use diversification will reduce our exposure to risk. Our investment targets will

be restricted to properties that do not have a primary use of a residential property (excluding properties acquired on or before May 29, 2008).

2 Region

We will invest no less than 80% of the total portfolio (on an acquisition price basis) in the Greater Tokyo Area (Tokyo, Kanagawa, Saitama and

Chiba). In order to improve profitability in total portfolio, we invest in candidates based on set criteria outside Greater Tokyo.

3 Property Size

Our general rule for investment is to focus on medium-sized office buildings* or larger, but at the same time, reduce the investment risk

concentrated in each specific property. Our investment focus for office building properties in Greater Tokyo will be on properties valued at no less

than five billion yen.

* The term ‘‘medium-sized office building” here refers to an office building with a total floor area of between 3,000 and 15,000 m 2 .

4 Portfolio Management

To enable us to respond effectively to changes in the business environment by adjusting our portfolio accordingly, we employ a flexible policy

allowing us to make swift decisions on acquiring, holding, and selling properties.

ORIX JREIT REPORT 16th Period

1


16th Period Highlights

Realized external growth leveraging our fund-raising ability and the

strength of our diversified REIT.

Acquired six properties (office buildings, a logistics facility and retail facilities) which offer

excellent stability and profitability by leveraging funds raised through the issuance of

investment corporation bonds, with the aim of maintaining and improving the level of

distributions.

February 1, 2010 •

February 25, 2010 •

March 5, 2010 •

Topics

Rating outlook revised by Rating and Investment Information, Inc. (R&I)

Rating: Unchanged (Issuer rating: A+)

Outlook: Revised to stable from positive

Issued the 1st Series of Unsecured Investment Corporation Bonds (total issue amount: ¥12 billion)

Acquired Kobe Momoyamadai Shopping Center (site) (acquisition price: ¥3,260 million)

March 10, 2010 •

March 26, 2010 •

Acquired aune Kohoku (acquisition price: ¥4,000 million) and aune Makuhari (acquisition price:

¥3,600 million)

• Sold the ORIX Jimbo-cho Building (sales price: ¥4,150 million)

Sold the ORIX Shinjuku Building (sales price: ¥9,000 million)

March 29, 2010 •

March 30, 2010 •

Acquired the OX Tamachi Building (acquisition price: ¥6,730 million) and the Omiya Shimocho

1-chome Building (acquisition price: ¥3,750 million)

Acquired the Sakai Logistics Center North Building (acquisition price: ¥10,200 million)

Five-Period Financial Summary

Millions of yen

16th period

Sept. 2009-Feb. 2010

115th period

Mar. 2009-Aug. 2009

14th period

Sept. 2008-Feb. 2009

13th period

Mar. 2008-Aug. 2008

12th period

Sept. 2007-Feb. 2008

Operating revenues 9,790 11,465 10,522 10,053 9,975

Operating income 4,502 5,839 5,039 4,714 4,926

Net income 3,344 4,761 4,016 3,818 4,085

NOI from property leasing activity 7,357 7,592 7,705 7,320 6,899

Distribution per unit (Yen) 13,290 18,922 15,963 15,174 16,233

Total assets 297,279 287,727 286,282 280,411 248,759

Net assets 141,158 142,575 141,831 141,632 141,899

Net assets per unit (Yen) 560,993 566,625 563,666 562,878 563,936

Unitholders´ capital 137,814 137,814 137,814 137,814 137,814

Total number of units issued (Units) 251,622 251,622 251,622 251,622 251,622

2 ORIX JREIT REPORT 16th Period


Operating revenues / Operating income

Millions of yen

Operating revenues

Operating income

9,975

10,053

10,522

11,465

9,790

Net income / Distribution per unit

Millions of yen / Yen

Net income

Distribution per unit

16,233

15,963

15,174

18,922

4,761

4,926

4,714

NOI from property leasing activity

Total assets

6,899

7,320

7,705

7,592

Net assets / Net assets per unit

Unitholders´ capital / Total number of units issued

563,936 562,878 563,666

566,625

251,622 251,622 251,622 251,622

141,899

141,632

141,831

142,575

137,814

137,814

137,814

5,039

137,814

248,759

5,839

280,411

4,502

286,282

4,085

287,727

3,818

4,016

13,290

3,344

12th

period

13th

period

14th

period

15th

period

16th

period

12th

period

13th

period

14th

period

15th

period

16th

period

Millions of yen

Millions of yen

7,357

297,279

12th

period

13th

period

14th

period

15th

period

16th

period

12th

period

13th

period

14th

period

15th

period

16th

period

Millions of yen / Yen

Millions of yen / Units

Net assets

Net assets per unit

Unitholders´ capital

Total number of units issued

560,993

251,622

141,158

137,814

12th

period

13th

period

14th

period

15th

period

16th

period

12th

period

13th

period

14th

period

15th

period

16th

period

ORIX JREIT REPORT 16th Period

3


Message from the Management

Takeshi Sato*

Executive Director of ORIX JREIT Inc.

Mitsuo Sato

Representative Director and President of

ORIX Asset Management Corporation

* Takeshi Sato was appointed Executive Director

of OJR in accordance with a resolution at the

unitholders’ meeting held on May 28, 2010.


We, ORIX JREIT Inc. (OJR) and its asset management

company, ORIX Asset Management Corporation

(OAM), are pleased to report the business performance

of OJR for the 16th period to our unitholders.

While the Japanese economy has begun to show signs of recovery with corporate earnings improving

and the level of capital investment no longer falling, its self-sustaining momentum remains weak and

severe conditions including a high unemployment rate persisted during the 16th period.

The office building leasing market continues to face a rising vacancy ratio and rent-level adjustments.

It will take some time for the market to pick up. The real estate sales market also remained lackluster

due to financing difficulties for real estate investments although transaction volume has started to

pick up, mainly in urban areas.

Under such an environment, OJR focused on leasing to new tenants and reducing costs in the 16th

period and generated ¥9,790 million in operating revenues, ¥4,502 million in operating income and

¥3,344 million in net income. The distribution per unit was ¥13,290, which exceeded our original

projection. We also started preparations to achieve external growth as we consider we need to shift

our focus to external growth from internal growth in order to maintain and increase distributions

going forward.

During the 17th period, in March 2010, OJR sold two office buildings located in the Greater Tokyo

Area considering the impact on asset value and distributions going forward. With the proceeds from

these sales and the funds raised through the issuance of investment corporation bonds, we acquired a

total of six properties, including two office buildings in the Greater Tokyo Area, a logistics facility, retail

facilities and sokochi (leasehold land) (total acquisition price: ¥31,540 million). This was aimed at

boosting the stability and profitability of our overall portfolio by: 1) making very selective investments

in properties which offer stable cash flow and profitability (logistics facilities, retail facilities and

sokochi) and 2) enhancing stability and profitability through replacing some of the office buildings in

the Greater Tokyo Area, which are the core assets in our portfolio.

As of the announcement date of the financial results for the 16th period (April 16, 2010), OJR holds a

portfolio of 53 properties with a total acquisition price of ¥296,620 million, built through external

growth leveraging our fund-raising capability and strength as a diversified REIT. In addition, in the

17th period, we expect to pay out a cash distribution larger than the one paid out in the 16th period.

OJR intends to achieve further growth by flexibly and promptly responding to changes in the business

environment and aims to achieve ‘‘stable distributions” and an ‘‘increase in the asset value of our

portfolio” over the medium-to-long term.

We thank all our unitholders and look forward to your continued support and encouragement.

Takeshi Sato

Executive Director of ORIX JREIT Inc.

Mitsuo Sato

Representative Director and President of ORIX Asset Management

Corporation

ORIX JREIT REPORT 16th Period

5


Special Topics

Toward Sustainable Growth

Taking a new path toward a new stage of growth

We recognize that now is the time to shift our focus from

internal growth to external growth.

6 ORIX JREIT REPORT 16th Period


OJR will work to build a portfolio which can ensure stable distributions over the medium-to-long term by flexibly and

promptly responding to changes in the business environment through implementing a strategy of external growth that

leverages our strength as a diversified REIT.

Recognition of the Environment

We have been achieving higher revenues from our portfolio by raising occupancy rates and obtaining higher rents

through the revision of contracts (internal growth) against the backdrop of a strong office building leasing market

and capitalizing on the strength of our portfolio focused on ‘‘office buildings” and ‘‘properties in the Greater

Tokyo Area” which warrant high growth.

At present, however, it is difficult to pursue internal growth due to the deteriorating office building leasing

market triggered by the turmoil in global financial markets. It is our understanding that we need to shift our focus

from internal growth to external growth in order to achieve sustainable growth and to maintain and improve the

level of distributions into the future. Accordingly, we consider that now is the time for us to boost the stability and

profitability of our portfolio by acquiring excellent properties.

Growth Strategy

We will invest in properties that can offer greater stability and profitability after stringent screening covering

multiple types of properties, leveraging our strength as a diversified REIT while maintaining our policy of building

a portfolio centered on ‘‘office buildings” and ‘‘properties in the Greater Tokyo Area.”

Action 1

We have invested in assets that offer stable cash flow and profitability (a logistics facility,

retail facilities and sokochi, etc.) after a stringent screening process.

In March 2010, we acquired a logistics facility, two retail facilities and the sokochi of a retail facility. We can expect a stable

income stream from all four properties as they are situated in advantageous locations and have excellent tenants with whom

lease agreements have been secured over the medium-to-long term. At the same time, they offer relatively higher

profitability compared to the office buildings that meet OJR’s investment criteria.

Action 2

We have replaced properties with the aim of enhancing the stability and profitability of

our ‘‘office buildings in the Greater Tokyo Area” portfolio, which are our core assets.

In March 2010, we sold two properties considering the impact on asset value and distributions going forward. We then

acquired two new properties, which we can expect to provide stability and profitability over the medium-to-long term, with

the proceeds from the sale of the properties. In addition, to strengthen our financial standing, we intend to internally reserve

a part of gains on sale of real estate properties by applying the special measures introduced by the 2009 tax reform.*

* We plan to apply the special measures concerning capital gains tax rollover in relation to land acquired in 2009 and 2010, to allow tax deferral of a part of the profit

gained from the sale of land and internally reserve the part of the profit by appropriation of retained earnings.

ORIX JREIT REPORT 16th Period

7


Special Topics

Toward Sustainable Growth

Action 1: New Acquisitions (Logistics, Retail)

New Acquisitions

Logistics

Sakai Logistics Center North Building

This property is located in the Osaka Bay area where a number of large logistics facilities have been developed in recent years. The area is

conveniently located with excellent transportation access to the major consumption base centered on Osaka, as it is situated behind Osaka Bay, and

has a well developed transportation infrastructure. It is expected to generate strong demand into the future as a logistics base. The property is located

approximately two kilometers from the Sanbo Interchange of Hanshin Expressway No. 4 Wangan Line and is convenient for the delivery of goods to

Osaka City including the central districts of Osaka, as well as to Kobe, Kansai International Airport, and the south of Osaka. It offers convenient

transportation access because of the proximity to the central parts of Osaka. Completed in July 2009, the property is a large logistics facility with a

total floor area of roughly 20,000 tsubo (approx. 64,001 m 2 ). It is a highly versatile logistics facility with its specifications meeting the needs of its

tenants. At present, the entire building is leased out to Nippon Express Co., Ltd., one of the leading logistics companies in Japan under a long

fixed-term contract.

Location : Sakai City, Osaka

Completion : July 2009

Number of Floors : 4 floors

Land : 34,088.70 m 2

Total Floor Area :

Acquisition Date :

Acquisition Price :

64,001.09 m 2

March 30, 2010

¥10,200 million

8 ORIX JREIT REPORT 16th Period


New Acquisitions

Retail

aune Kohoku

This property is located in Kohoku New Town in Yokohama City. With only a one-minute walk from

Center Minami Station of Yokohama Municipal Subway which is the major means of transportation in

Kohoku New Town, and its highly visible location facing the station square, it offers superb advantages

in terms of location for a retail facility. Under the concept of a community contact style retail facility, the

facility houses restaurants and banks and part of the ground floor and upper floors are leased out as

office space. A stable cash flow stream can be expected from this property as long-term lease

agreements of 10 to 15 years have been concluded with retail tenants.

Location :

Completion :

Number of Floors :

Land :

Total Floor Area :

Acquisition Date :

Acquisition Price :

Yokohama City, Kanagawa

March 2008

7 floors with 2 underground floors

1,267.47 m 2

8,207.99 m 2

March 10, 2010

¥4,000 million

New Acquisitions

Retail

aune Makuhari

This property is located in Makuhari New City in Chiba City, which continues to grow as a city in the new

era serving the multiple functions of ‘‘business, residence, study and entertainment” with properties such

as business research buildings, office buildings, retail facilities, hotels, residences and schools. With only a

one-minute walk from JR Kaihimmakuhari Station, and a highly visible location facing the station square, it

offers superb advantages in terms of location for a retail facility. Under the concept of ‘‘daily use of

communication spot,” cafes, restaurants, a beauty salon, and retail outlets such as a cellular phone shop

are presently in operation. A stable cash flow stream can be expected from this property into the future as

long-term lease agreements of mainly 10 to 15 years have been concluded with the tenants.

Location : Chiba City, Chiba

Completion : February 2008

Number of Floors : 6 floors with 1 underground floor

Land : 2,029.06 m 2

Total Floor Area :

Acquisition Date :

Acquisition Price :

7,852.95 m 2

March 10, 2010

¥3,600 million

ORIX JREIT REPORT 16th Period

9


Suwa-Tamon Highway

Special Topics

Toward Sustainable Growth

Action 1: New Acquisitions (Logistics, Retail)

New Acquisitions

Retail

Kobe Momoyamadai Shopping Center (site)

This property is located in the north of Tarumi Ward in Kobe City, which has about 15 percent

(approx. 220,000) of the population of Kobe City. The surrounding area is a new town with a

number of detached homes, creating a substantial trading area. At present, many of the tenants

are retailers selling household goods to local residents. Twenty-year fixed business lease

agreements are in place with creditworthy tenants including Cainz Home, a major DIY center

chain; and Yamada Denki, a leading home electronics retail chain store; a Kansai area drug store

chain; a supermarket. Stable cash flow can be expected from the property well into the future.

This is the first acquisition of sokochi (fixed-term business-use leasehold land) for OJR.

Location :

Completion :

Number of Floors :

Land :

Total Floor Area :

Acquisition Date :

Acquisition Price :

Kobe City, Hyogo



59,940.76 m 2


March 5, 2010

¥3,260 million

5

4

3

2

1

2

1

What is sokochi (site)

Sokochi refers to ownership of land with a leasehold

interest. No building depreciation expenses are

incurred because no building is owned. Accordingly,

when a site is acquired as sokochi, a higher ratio of

rental business revenues is allowed for dividend

distribution resources than when the site is acquired

together with a building.

3

4 5

10 ORIX JREIT REPORT 16th Period


Action 2: New Acquisitions (Office in the Greater Tokyo area)

New Acquisitions

Office

OX Tamachi Building

This property is located in the Shiba/Mita area,

one of the leading business districts in Tokyo

where major company headquarters are

concentrated. The area enjoys easy

transportation access by trains in Tokyo as

multiple train lines including JR and

metropolitan subways are available. In addition,

it offers easy access to Haneda Airport. The

property is located only a one-minute walk

from the Metropolitan Subway Mita Station

and a three-minute walk from JR Tamachi

Station. Furthermore, facing the national road

Daiichi Keihin, it is highly visible.

Location : Minato Ward, Tokyo

Completion : January 1986

Number of Floors : 10 floors

Land : 1,061.21 m 2

Total Floor Area :

Acquisition Date :

Acquisition Price :

7,544.10 m 2

March 29, 2010

¥6,730 million

ORIX JREIT REPORT 16th Period

11


Special Topics

Toward Sustainable Growth

Action 2: New Acquisitions (Office in the Greater Tokyo area)

New Acquisitions

Office

Omiya Shimocho 1-chome Building

This property is located in the Omiya Ward of Saitama City, which is developing as a key transportation junction centered on Omiya Station, one of

the leading terminal stations within the Greater Tokyo Area. In addition to the railway network spreading from Omiya Station, the Omiya area is

conveniently located with easy access by highways including the Tohokudo, Kanetsudo, and Tokyo Gaikan Expressways. It is an area that enables

business deployment encompassing the Greater Tokyo Area, Kitakanto, Joshinetsu, and Tohoku area. Completed in August 2009, the property is a

new building characterized by a bright airy entrance with a spacious glass façade and an open ceiling space. It is located within a six-minute walk of

the East Exit of Omiya Station where 12 train lines including five Shinkansen lines are available. Located along the Kyu-Nakasendo route, the property

is highly convenient in terms of transportation access and it is also highly visible.

Location : Saitama City, Saitama

Completion : August 2009

Number of Floors : 8 floors

Land : 1,635.15 m 2

Total Floor Area :

Acquisition Date :

Acquisition Price :

6,844.39 m 2

March 29, 2010

¥3,750 million

12 ORIX JREIT REPORT 16th Period


Financial Status

OJR has been promoting a financial policy by paying attention to maintaining well-balanced liabilities and assets, (1) ensuring

financial soundness by increasing unsecured borrowings, fixing interest rates of debt on a long-term basis and dispersing repayment

dates, (2) improving the financial flexibility through diversification of financing methods, and (3) developing and implementing a

sound and efficient capitalization policy.

In the 16th period, OJR issued unsecured investment corporation bonds for the first time, as a way of diversifying its fund raising.

Rating agency and details of ratings

Rating agency Details of ratings Rating outlook

Standard & Poor´s

Long-term corporate credit rating: A–

Short-term corporate credit rating: A–2

Stable

Rating and Investment Information, Inc.

Issuer rating: A+

Stable

Overview of borrowings

Debts outstanding

and interest-bearing debt ratio

Long-term debt ratio

and fixed-interest debt ratio

Debts outstanding

Interest-bearing debt ratio

Long-term debt ratio (excluding debts payable within a year)

Fixed-interest debt ratio

(Billions of yen)

150.0 46.7

120.0

120.7

90.0

60.0

47.9 47.9 50.1

126.5 126.5

138.4

50.3

139.4

(%)

50.0

40.0

30.0

(%)

100.0

80.0

60.0

40.0

85.9

78.7

84.2

72.3

84.2

61.3

83.4

70.2

83.5

80.4

30.0

20.0

0

End of

13th period

End of

14th period

End of

15th period

End of

16th period

As of

Apr. 16, 2010

0

End of

13th period

End of

14th period

End of

15th period

End of

16th period

As of

Apr. 16, 2010

Average years to debt repayment dates

and average interest rate on funding

Debts outstanding by repayment term

(as of April 16, 2010)

Average years to debt repayment dates

Average interest rate on funding

(Year)

3.5

3.0

2.5

2.0

1.5

1.0

0.5

0

1.63

2.1

End of

13th period

1.63 1.64 1.72

1.9

End of

14th period

1.5 1.6

End of

15th period

End of

16th period

1.74

1.8

As of

Apr. 16, 2010

(%)

2.00

1.75

1.50

1.25

1.00

(Billions of yen)

40.0

30.0

20.0

10.0

0

38.8 37.3

32.3

27.2

3.9

2010 2011 2012 2013 2014

Notes:

1.‘‘Interest-bearing debt ratio” is obtained by dividing interest-bearing debts outstanding by the total amount of interest-bearing debts outstanding and unitholders´ capital. Figures are rounded to the first decimal place.

2.‘‘Long-term debt ratio” is obtained by dividing outstanding long-term interest-bearing debts (excluding debts payable within a year) by outstanding interest-bearing debts. Figures are rounded to the first decimal place.

3.‘‘Fixed-interest debt ratio” is obtained by dividing outstanding fixed-rate interest-bearing debts by outstanding interest-bearing debts. Figures are rounded to the first decimal place.

4.‘‘Average interest rate on funding” represents the weighted-average interest rate (annual rate). Figures are rounded to the second decimal place. With regard to the average interest rate on the portion of borrowings

for which the company concluded interest-rate swap agreements to hedge against interest rate fluctuation risk, the company used weighted-average interest rates adjusted for the effect of relevant interest-rate

swaps.

5. ‘‘Debts outstanding by repayment term” indicates the distribution of OJR´s debts as of April 16, 2010 that will decrease due to repayments at the end of the years listed above.

ORIX JREIT REPORT 16th Period

13


Investment Performance

Record of OJR´s Steady Growth

Occupancy rate (%)

100.0%

95.0%

90.0%

85.0%

80.0%

75.0%

70.0%

1st

period

(02/8)

2nd

period

(03/2)

3rd

period

(03/8)

4th

period

(04/2)

5th

period

(04/8)

6th

period

(05/2)

7th

period

(05/8)

8th

period

(06/2)

9th

period

(06/8)

10th

period

(07/2)

11th

period

(07/8)

12th

period

(08/2)

13th

period

(08/8)

14th

period

(09/2)

15th

period

(09/8)

16th

period

(10/2)

Offices

91.7

94.2

95.0

96.5

96.9

97.2

94.6

94.7

95.6

97.8

97.8

97.3

96.7

95.8

93.7

94.5

Logistics Facilities









100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

Retail Facilities

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

Hotels

100.0

98.8

100.0

98.4

98.4

98.4

97.3

100.0

99.7

100.0

100.0

100.0

100.0

99.7

99.7

99.7

Others

98.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

Overall

93.9

95.6

96.3

97.0

97.4

97.6

95.2

95.7

96.5

98.3

98.3

97.8

97.7

97.4

96.1

96.6

Total acquisition price (Billions of yen)

Properties acquired after IPO

Properties held at the time of IPO

300.0

250.0

200.0

141.5 153.3 149.0

49

99.6 104.9 114.5 Properties

46

46

150.0

Properties

41

39 40 Properties

Properties

Properties

100.0

Properties

176.8 174.9

47

Properties

39

Properties

198.0 209.0 44

Properties

43

235.6 231.1

41

Properties

40

Properties

Properties

262.4

47

Properties

269.6

277.6

48

Properties

49

Properties

277.6

49

Properties

296.6

53

Properties

50.0

0

1st

period

(02/8)

2nd

period

(03/2)

3rd

period

(03/8)

4th

period

(04/2)

5th

period

(04/8)

6th

period

(05/2)

7th

period

(05/8)

8th

period

(06/2)

9th

period

(06/8)

10th

period

(07/2)

11th

period

(07/8)

12th

period

(08/2)

13th

period

(08/8)

14th

period

(09/2)

15th

period

(09/8)

16th

period

(10/2)

As of

Apr. 16,

2010

Distribution per unit (Yen)

22,472 15,501 15,246 14,156 14,772 14,068 16,437 15,274 16,261 14,850 14,572 16,233 15,174 15,963 18,922 13,290

14 ORIX JREIT REPORT 16th Period


Portfolio Data Based on Acquisition Price

(As of April 16, 2010)

Use

Property size (Total floor area)

c

d

e

c

a

b

a

b

a

b

c

d

e






Offices ... 77.4%

Logistics Facilities ... 10.8%

Retail Facilities ... 5.3%

Hotels ... 5.1%

Others ... 1.4%

a

b

c

Over 15,000 m 2 ... 28.2%

3,000 to 15,000 m 2 ... 62.6%

Under 3,000 m 2 ... 9.3%

Average 23,475 m 2

Area

Building age

d

a

a

b

e

c

c

b

d

a

b

c

d





3 Central Tokyo Wards ... 32.7%

Remaining Tokyo Wards ... 32.4%

Other Parts of the Greater Tokyo Area ... 19.9%

Other Areas ... 15.0%

a

b

c

d

e






Over 20y. ... 9.5%

15-20y. ... 18.3%

10-15y. ... 9.6%

5-10y. ... 25.5%

Under 5y. ... 37.2%

Average 9.7y.

Notes:

1. Percentage figures in the above graphs are rounded to the first decimal place. Total amounts do not necessarily come to 100% due to rounding.

2. The weighted averages for property size and building age are described based on the acquisition price of each property respectively. Figures for property size are rounded to the nearest full number. Figures for

building age are rounded to the nearest first decimal place.

3. The above “acquisition prices” refer to acquisition prices shown on the purchase contracts (consumption tax is not included in the acquisition prices).

4. The above “property size (total floor area)” refers to the total floor space of the buildings, regardless of the equity stake of the company in the property.

5. Kobe Momoyamadai Shopping Center (site) is not included in “Property size” and “Building age.”

ORIX JREIT REPORT 16th Period

15


The Portfolio of OJR

As of March 31, 2010

Use / Area

Property

Acquisition

Price

(¥ million)

Share in Total

Acquisition Price

(%)

Completion

Total Rentable

Area

(m 2 )

Occupancy

Rate

(%)

Offices

3 Central Tokyo Wards Aoyama Suncrest Building 3,356 1.1 September 1979 2,768.55 95.5

Round-Cross Ichi-bancho 3,900 1.3 March 1994 3,300.66 94.4

Beside Shirogane 1,301 0.4 September 1989 2,073.92 96.8

Round-Cross Akasaka Mitsuke 1,650 0.6 February 1988 1,324.27 88.7

Nihonbashi East Building 1,720 0.6 October 1989 2,244.77 100.0

Round-Cross Minami Azabu 1,394 0.5 May 1992 3,170.48 100.0

Round-Cross Akasaka 2,624 0.9 October 1978 2,787.18 90.3

Round-Cross Mita 1,748 0.6 May 1990 2,296.61 98.0

Shiba Daimon Building 2,195 0.7 October 1988 2,588.50 100.0

Round-Cross Tsukiji 3,378 1.1 May 1992 3,997.45 97.3

ORIX Shiba 2-chome Building 7,500 2.5 January 2003 6,753.13 100.0

Aoyama 246 Building 5,200 1.8 November 1990 2,406.22 100.0

ORIX Akasaka 2-chome Building 21,860 7.4 November 2004 10,296.05 96.5

Nihonbashi Honcho 1-chome Building 10,500 3.5 March 2006 5,099.70 100.0

ORIX Suidobashi Building 3,000 1.0 October 2005 2,087.65 100.0

ORIX Shinagawa Building 15,200 5.1 June 2006 5,618.88 100.0

OX Tamachi Building 6,730 2.3 January 1986 6,166.99 77.9

Remaining Tokyo Wards Carrot Tower 5,479 1.8 November 1996 6,937.21 100.0

Toyo MK Building 5,270 1.8 April 1997 9,814.79 98.2

Round-Cross Moto Yoyogi 5,091 1.7 April 1992 7,723.68 100.0

Round-Cross Nishi Shinjuku 2,650 0.9 June 1999 1,227.94 100.0

Beside Kiba 2,450 0.8 August 1991 4,804.28 87.2

DT Gaien 2,430 0.8 February 1990 2,571.39 100.0

Yoyogi Forest Building 1,473 0.5 June 1987 1,909.54 99.4

ORIX Ikebukuro Building 9,577 3.2 July 2002 5,539.92 100.0

Round-Cross Shinjuku 8,020 2.7 October 2005 4,736.18 83.0

Seafort Square Center Building 18,000 6.1 June 1992 22,024.93 90.6

Round-Cross Kamata 5,640 1.9 February 1994 7,855.74 96.2

Round-Cross Shinjuku 5-chome 4,500 1.5 October 2006 3,089.29 81.1

KN Jiyugaoka Plaza 3,110 1.0 December 2001 1,231.44 100.0

ST WORLD Building 3,500 1.2 March 2007 1,550.86 100.0

ORIX Real Estate Nishi Shinjuku Building 13,600 4.6 April 2007 7,059.20 100.0

Other parts of the Greater

Tokyo Area

Neo City Mitaka 2,200 0.7 September 1993 4,621.59 100.0

Round-Cross Kawasaki 4,130 1.4 January 1993 5,519.29 100.0

Omiya Miyacho Building 4,400 1.5 September 2008 4,062.92 100.0

Omiya Shimocho 1-chome Building 3,750 1.3 August 2009 4,912.79 96.0

16 ORIX JREIT REPORT 16th Period


As of March 31, 2010

Use / Area

Property

Acquisition

Price

(¥ million)

Share in Total

Acquisition Price

(%)

Completion

Total Rentable

Area

(m 2 )

Occupancy

Rate

(%)

Offices

Other Area Nagoya Itochu Building 4,500 1.5 February 1981 11,213.33 98.1

ORIX Koraibashi Building 5,560 1.9 July 2004 6,861.91 93.2

Lunar Sendai 8,500 2.9 February 1998 9,954.78 86.0

ORIX Nagoya Nishiki Building 12,500 4.2 January 2007 10,260.13 66.0

Offices Total 229,586 77.4 — 210,464.14 93.8

Logistics Facilities

Other parts of the Greater

Tokyo Area

Koshigaya Logistics Center 4,000 1.3 January 2006 19,200.00 100.0

Toda Logistics Center 9,600 3.2 March 2005 36,158.60 100.0

Ichikawa Logistics Center 8,300 2.8 June 2008 37,456.96 100.0

Other Area Sakai Logistics Center North Building 10,200 3.4 July 2009 64,004.80 100.0

Logistics Facilities Total 32,100 10.8 — 156,820.36 100.0

Retail Facilities

3 Central Tokyo Wards Nihon Jisho Minami Aoyama Building 2,548 0.9 November 1997 985.36 100.0

Remaining Tokyo Wards CUBE Daikanyama 2,435 0.8 January 2003 899.82 100.0

Other parts of the Greater

Tokyo Area

aune Kohoku 4,000 1.3 March 2008 5,706.25 97.5

aune Makuhari 3,600 1.2 February 2008 5,749.05 100.0

Other Areas Kobe Momoyamadai Shopping Center (site) 3,260 1.1 — 42,123.17 100.0

Hotels

Retail Facilities Total 15,843 5.3 — 55,463.65 99.7

Other parts of the Greater

Tokyo Area

Cross Gate 15,040 5.1 September 2000 25,940.73 99.7

Hotels Total 15,040 5.1 — 25,940.73 99.7

Others

3 Central Tokyo Wards Park Axis Nishi Azabu Stage 1,219 0.4 April 2000 1,337.31 100.0

Remaining Tokyo Wards Grand Maison Hakusan 455 0.2 May 1993 1,160.17 100.0

Sonet Kami Ikebukuro 2,377 0.8 February 1997 5,853.00 100.0

Others Total 4,051 1.4 — 8,350.48 100.0

Grand Total 296,620 100.0 — 457,039.36 97.1

Notes:

1. Share in total acquisition price and occupancy rate are rounded to the first decimal place, and may not necessarily add up to totals due to rounding.

2. Properties newly acquired during the 17th period are presented in red. OJR acquired Kobe Momoyamadai Shopping Center (site) on March 5, 2010, aune Kohoku and aune Makuhari on March 10, 2010, the

Omiya Shimocho 1-chome Building and the OX Tamachi Building on March 29, 2010, and the Sakai Logistics Center North Building on March 30, 2010.

3. OJR sold the ORIX Jimbo-cho Building on March 10, 2010 and the ORIX Shinjuku Building on March 26, 2010.

ORIX JREIT REPORT 16th Period

17


Portfolio Map

Other Areas

Remaining Tokyo Wards and Other Parts of the Greater Tokyo Area

Lunar Sendai

ORIX Nagoya Nishiki Building

Omiya Miyacho Building

Omiya Shimocho 1-chome Building

Kobe Momoyamadai

Shopping Ceter (site)

Remaining Tokyo Wards

and Other Parts of the

Greater Tokyo Area

Koshigaya Logistics Center

JR Musashino Line



Toda Logistics Center

Nagoya Itochu Building

JR Saikyo Line

JR Joban Line

ORIX Koraibashi Building

Sakai Logistics Center North Building

Sonet Kami Ikebukuro

ORIX Ikebukuro Building


Grand Maison Hakusan JR Yamanote Line

JR Chuo Line, Sobu Line

JR Sobu Line

Neo City Mitaka


Round-Cross

Round-Cross Shinjuku 5-chome

Nishi Shinjuku


ORIX Real Estate Nishi Shinjuku Building

Ichikawa Logistics Center

Yoyogi Forest Building

Round-Cross Shinjuku

Beside Kiba

Round-Cross Moto Yoyogi


Toyo MK Building


ST WORLD Building DT Gaien

CUBE Daikanyama

Carrot Tower

JR Keiyo Line

Seafort Square

Center Building

3 Central Tokyo Wards

KN Jiyugaoka Plaza

aune Makuhari



Offices

Logistics Facilities

Round-Cross Kamata



Retail Facilities

Hotels

aune Kohoku

JR Tokaido Line,

Keihin Tohoku Line


Others

Round-Cross Kawasaki

JR Lines

Subway Tozai Line

Cross Gate

Subway Chiyoda Line

Subway Ginza Line

Subway Hibiya Line

Subway Nanboku Line

Subway Mita Line

Subway Asakusa Line

Subway Oedo Line

Private Line Tokyu Denentoshi Line

Private Line Tokyu Tōyoko Line

18 ORIX JREIT REPORT 16th Period


3 Central Tokyo Wards

JR Yamanote Line

ORIX Suidobashi Building

Nihonbashi East Building

Round-Cross Ichi-bancho

Nihonbashi Honcho 1-chome Building

JR Chuo Line, Sobu Line

Chiyoda ward

Chuo ward

Round-Cross Akasaka Mitsuke

Aoyama Suncrest

Building

ORIX Akasaka 2-chome

Building

Round-Cross Akasaka

Round-Cross Tsukiji

Aoyama 246 Building

Nihon Jisho Minami Aoyama Building

Park Axis Nishi Azabu Stage

Shiba Daimon Building

Minato ward

ORIX Shiba 2-chome

Building

Round-Cross Minami Azabu

Round-Cross Mita

Beside Shirogane

OX Tamachi Building

ORIX Shinagawa Building

ORIX JREIT REPORT 16th Period

19


Main Properties in the Greater Tokyo Area

ORIX Akasaka 2-chome Building

Seafort Square Center Building

ORIX Shinagawa Building

20 ORIX JREIT REPORT 16th Period


ORIX Real Estate Nishi Shinjuku Building

Nihonbashi Honcho 1-chome Building

Toda Logistics Center

ORIX JREIT REPORT 16th Period

21


Main Properties in the Greater Tokyo Area

ORIX Ikebukuro Building

Round-Cross Shinjuku

ORIX Shiba 2-chome Building

Carrot Tower

Round-Cross Shinjuku 5-chome

Aoyama Suncrest Building

22 ORIX JREIT REPORT 16th Period


Unit Information

The changes of unit price and transaction volume on the Tokyo Stock Exchange from

September 1, 2009 to February 26, 2010 (the last trading day during the period) are as follows.

Unit price

(Yen)

500,000

450,000

400,000

350,000

300,000

Sept. 1, 2009 Oct. 1, 2009

Nov. 2, 2009 Dec. 1, 2009 Jan. 4, 2010 Feb. 1, 2010 Feb. 26, 2010

Transaction volume

(Unit)

2,000

1,500

1,000

500

0

Sept. 1, 2009 Oct. 1, 2009

Nov. 2, 2009 Dec. 1, 2009 Jan. 4, 2010 Feb. 1, 2010 Feb. 26, 2010

Number of units by unitholder type

(As of February 28, 2010)

Number of unitholders by unitholder type

(As of February 28, 2010)

d

a

b c d

a

c

b

Total 251,622 units

Total 15,818 unitholders

a


Individuals and Others ... 41,133 units ... 16.35%

a


Individuals and Others ... 15,292 unitholders ... 96.67%

b


Financial Institutions (including securities brokers) ... 130,805 units ... 51.98%

b


Financial Institutions (including securities brokers) ... 95 unitholders ... 0.60%

c


Other Corporate ... 6,376 units ... 2.53%

c


Other Corporate ... 223 unitholders ... 1.41%

d


Overseas Investors ... 73,308 units ... 29.13%

d


Overseas Investors ... 208 unitholders ... 1.31%

Note: Percentages in the above graphs are rounded to the second decimal place. Total amounts do not necessarily come to 100% due to rounding.

ORIX JREIT REPORT 16th Period

23


Outline of OJR and its Asset Management Company

Structure

Japanese real estate investment trusts, so called J-REITs, are closed-end investment funds that

primarily invest in real estate or real-estate-backed securities and deliver distribution to unitholders

from rental income and capital gains from asset sales, etc. The Law Concerning Investment Trusts

and Investment Corporation requires J-REITs to be managed by an external entity.

Real Estate

Investment

Income

Real Estate

Investment Trust

ORIX JREIT Inc.

(OJR)

Investment

Distribution

Investors

Entrustment

Entrustment

Asset Custodian

Asset Management

Company

General Affairs Trustee

ORIX

Asset Management

Corporation

(OAM)

Organization of OAM

(As of April 16, 2010)

Shareholders’ Meeting

*1

Independent Public Accountants

Board of Directors

Corporate Auditor

Risk Management and Compliance Department

[Major Assignments]

1. Risk management and compliance

2. Legal affairs

3. Property assessment

Risk Management

and Compliance Committee

Representative Director

and President

Executive Officer

*2

Internal Audit Department

[Major Assignments]

1. Conducting of internal audits

2. Formulation of audit plans

*3

Risk Management

and Compliance Department

*1

Investment and Asset Management Department

[Major Assignments]

1. Strategy planning

2. Acquisition and disposition of properties

3. Property management

4. Real estate market research

Executive Officer

Executive Officer

Internal Audit Department

*2

*4

Finance and Accounting Department

[Major Assignments]

1. Accounting and tax

2. Proposals regarding debt finance

3. Accounting, tax, general affairs and personnel

affairs of OAM

Investment

and Asset Management Department

Finance and Accounting Department

Corporate Planning Department

*3 *4 *5

*5

Corporate Planning Department

[Major Assignments]

1. Corporate planning

2. Support for committees, etc.

3. Investor relations

4. Proposals regarding equity finance

24 ORIX JREIT REPORT 16th Period


Performance Report

Investment Performance Overview

1. Financial Highlights

2. Performance Review for Current Period

Fund Overview

1. Capitalization

2. Major Unitholders

3. Unitholder Type

Portfolio Overview

1. Portfolio Summary

2. Selected Property Data

3. Selected Financial Data by Property

4. Major Tenants

Capital Expenditure

1. Projects – 17 th Period Onward

2. Results – 16 th Period

3. Cash Reserve for Capital Improvements

Administrative Expenses

Transaction Activities during Current Period

1. Real Estate and Real Estate Held in Trust

2. Other Assets

3. Transactions with Related Parties and Major Shareholders of Asset Management

Company

ORIX JREIT REPORT 16th Period

25


Investment Performance Overview

1. Financial Highlights

15th Period

From March 1, 2009

to August 31, 2009

16th Period

From September 1, 2009

to February 28, 2010

(In millions of yen, except otherwise indicated)

Operating revenues 11,465 9,790

Rental revenues 9,142 8,748

Other operating revenues 1,182 1,042

Gains on sale of real estate properties 1,141

Operating expenses 5,626 5,288

Property-related expenses 4,716 4,403

Operating income 5,839 4,502

Ordinary income 4,762 3,345

Net income 4,761 3,344

Total assets (a) 287,727 297,279

Net assets (b) 142,575 141,158

Unitholders’ capital 137,814 137,814

Total number of units issued (units) (c) 251,622 251,622

Net assets per unit (¥) (b)(c) 566,625 560,993

Total cash distribution (d) 4,761 3,344

Distribution per unit (¥) (d)(c) 18,922 13,290

Distribution of retained earnings per unit (¥) 18,922 13,290

Distribution in excess of retained earnings per unit (¥)

ROA (%) (1) 1.7(3.3) 1.1(2.3)

ROE (%) (1) 3.3(6.7) 2.4(4.7)

Equity ratio (%) (b)(a) 49.6 47.5

Payout ratio (%) (1) (4) 100.0 100.0

Supplemental Information

Number of real estate properties 49 49

Number of tenants (3) 327 333

Total rentable area (m²) (3) 337,728.38 337,673.98

Occupancy rate (%) (3) (5) 96.1 96.6

Depreciation 1,910 1,896

Capital expenditures 273 83

NOI from property leasing activity (1) (2) 7,592 7,357

FFO (1) (2) 6,746 5,314

Notes:

1. These indicators are calculated according to the following formulas.

ROA = Ordinary income divided by average total assets

ROE = Net income divided by average net assets

Payout ratio = Distribution per unit divided by Net income per unit

*Net income per unit = Net income divided by the weighted average numbers of units outstanding

NOI (Net Operating Income) from property leasing activity =

Rental revenues + Other operating revenues + Depreciation – Property-related expenses

FFO (Funds From Operation)=Net income + Depreciation

Financial data included in the field has been prepared on a 6-month basis.

However, the ratios in brackets represent annualized data.

2. Rental revenues and property-related expenses include revenues from finance lease of property and cost of finance

lease of property, respectively. NOI from property leasing activity and FFO are computed after adding the cost of

finance lease of property.

3. The number of tenants, the total rentable area, and the occupancy rate are computed, including properties

recorded as investment in finance lease.

4. The payout ratio is rounded down to the first decimal place.

5. The occupancy rate is the proportion of rented space to the total rentable space at each period-end.

6. Accounting data does not include consumption taxes.

26 ORIX JREIT REPORT 16th Period


2. Performance Review for Current Period

Major changes in the fund

During the 16th fiscal period, OJR did not sell any existing properties or acquire any new properties. As a

result, OJR’s portfolio included 49 properties as of February 28, 2010 (40 office buildings, 3 logistics centers,

2 retail facilities, 1 hotel and 3 residential properties), with 337,673.98 m 2 of total rentable floor space, 333

tenants and an occupancy rate of 96.6%. The invested amount (total of acquisition prices) was ¥277,557

million. Its book value and calculated price (appraisal value based on the evaluation by 6 appraisers) as of

February 28, 2010 were ¥266,969 million and ¥262,243 million, respectively.

During the 17th fiscal period, OJR has sold the ORIX Jimbocho Building (sale price: ¥4,150 million) and the ORIX

Shinjuku Building (sale price: ¥9,000 million); and acquired Kobe Momoyamadai Shopping Center (site) (acquisition

price: ¥3,260 million), aune Kohoku (acquisition price: ¥4,000 million), aune Makuhari (acquisition price: ¥3,600

million), the OX Tamachi Building (acquisition price: ¥6,730 million), the Omiya Shimocho 1-chome Building

(acquisition price: ¥3,750 million) and the Sakai Logistics Center North Building (acquisition price: ¥10,200 million).

These sales and acquisitions brought the total number of properties to 53 and the invested amount (total of acquisition

prices) to ¥296,620 million.

In the 16th Period, operating revenues were ¥9,790 million, net income was ¥3,344 million, total cash

distribution was ¥3,344 million, the distribution per unit was ¥13,290 (compared to our estimated distribution

per unit of ¥12,382, a 7.3% increase), and the distribution payout ratio was 100.0%.

As of the end of the 16th Period, total assets were ¥297,279 million, total interest-bearing liabilities were

¥138,438 million (long-term debt excluding investment corporation bonds: ¥106,938 million, short-term debt:

¥19,500 million, investment corporation bonds: ¥12,000 million), net assets were ¥141,158 million, and net

assets per unit were ¥560,993.

Business environment and fund performance

Japanese economy

The monthly economic report of April 16, 2010 issued by the Japanese government stated that although the

economy had been picking up steadily, it was only weakly self-sustaining and remained in a difficult situation

due to factors such as a high unemployment rate. Specifically, the government reported (i) a moderate increase

in exports and rising industrial production, (ii) improving corporate profits with business investment starting

to level off, (iii) overall business sentiment improvement despite a dismal view of small and medium-sized

enterprises, (iv) continued severe employment situation with a slight sign of recovery, (v) improvement in

private consumption, (vi) recent price developments showing the Japanese economy entering a mild

deflationary phase. As for short-term prospects, the same report stated that although some severe aspects

remained in the employment situation, the economy was expected to pick up as corporate profits improved,

reflecting improvement in overseas economies and the effects of policy measures including the Emergency

Economic Measures. On the other hand, the risks remain that the economy is depressed by a possible

slowdown in overseas economies and the influence of deflation. In addition, there is still concern that the

employment situation could deteriorate.

Overview of the real estate market relating to our portfolio

Offices

Lease market:

Toward the summer of 2009, it was believed that the economy had hit bottom and the extremely pessimistic

outlook for the future softened, which helped decelerate the movement toward a decrease in demand by

tenants. However, in the latter half of 2009, some negative movement was observed once again due to

concerns emerging about a possible economic double dip. Decrease in demand and massive supply led the

vacancy ratio to continue to rise while rents fell substantially.

The vacancy ratio has soared in cities such as Sendai, Yokohama, Fukuoka and Nagoya, where the volume

of new supply is relatively high compared with office stock.

The vacancy ratio in Tokyo 23 wards maintains its highest level since the March 2004 quarter, with high

rent areas being particularly affected. While the volume of new supply will not be very large in 2010, it is

expected that demand from tenants in the first half of 2010 will be on a weakening trend, and we will have to

wait until the latter half of 2010 or thereafter for the vacancy ratio to peak and reverse down.

The vacancy ratio in Osaka City is at its highest level since the June 2004 quarter. Given the projected

completion of large-scale and high rent buildings in 2010 in areas such as Umeda, it is anticipated that the

vacancy ratio of new buildings will push up the vacancy ratio for the whole city.

The vacancy ratio in Nagoya City has broken record highs since the December 1996 quarter. As compared

with Tokyo 23 wards and Osaka City, the volume of new supply against office stock in Nagoya is relatively

ORIX JREIT REPORT 16th Period

27


large and the rate of decrease in demand is large. It is expected that the vacancy ratio will continue to rise

while the rent will keep falling.

Sales market:

While most domestic banks accept applications for refinancing, they continue to examine new loans carefully

to identify qualified borrowers, thereby keeping the number of real property purchases and sales at a low level.

With regard to offices, if the target is an excellent property, loan financing is not difficult. However, as the real

estate lease market has shown no sign of future bottoming out, the cap rate continues to rise moderately. In order

for the real estate sales market to become more brisk and for the cap rate to go down, a recovery in the real estate

lease market, especially with regard to demand, will be key.

Logistics Facilities

With regard to the logistics facilities market in general, both international and domestic cargo services have

shown signs of recovery, despite continued slow cargo movement resulting from production adjustments by

recession-hit corporations and sluggish individual consumption.

While it is projected that demand within the overall market will remain weak for some time, large-scale

facilities with high specifications are expected to continue to attract robust demand, as greater significance

will be placed on logistics efficiency, more logistics bases will be integrated, and an increasing number of

shippers will turn to outsourcing. Supply by real estate investors will resume, but it is unlikely to surge, which

will lead to further improvement of the supply-demand balance.

Retail Facilities

In 2008, the floor space of large retailers increased while sales declined due to economic deterioration,

resulting in a significant fall in commercial floor efficiency. The impact of the economic recession was clearly

visible in department stores handling expensive goods, and sales have been significantly decreasing year on

year since the latter half of 2008.

Nevertheless, there have been some signs of recovery in consumption as indicated by real consumption

expenditure in January 2010, which rose for the sixth consecutive month year on year. As to investments in

commercial facilities in the future, it is expected that income can be secured by evaluating the location,

business category and operator, i.e., whether or not the location can attract a stable number of customers, the

business offers consumer-oriented goods and services, and the property has the ability to attract highly

competitive businesses and operators.

Hotels

While the supply of new hotel rooms decelerated slightly as of March 31, 2009, it is expected that the

number of hotels and rooms will continue to increase. It is anticipated that the number of hotel rooms will

trend up moderately into the future, but the growth rate will slow down.

Although the rate of decrease appears to have hit bottom, demand for hotels is facing a weak recovery.

Furthermore, it is therefore likely to require some time before the room unit rate will revert upward due to

continuing intensification of price competition among hotels.

Others; Residential Properties

Apartment rents continue to fall in the Greater Tokyo area. In particular, the decline has been increasingly

apparent in the five wards of central Tokyo. Specifically, the vacancy ratio has been rising for luxurious

apartments since the latter half of 2008, which is putting a downward pressure on rents in general. Meanwhile,

the rate of decrease in rent is smaller in areas of Tokyo other than the five wards where real demand is driven

by stable tenants living in apartments proportionate to their income and the supply of luxurious apartments

was limited.

28 ORIX JREIT REPORT 16th Period


New acquisitions

Kobe Momoyamadai Shopping

Center (site)

aune Kohoku

aune Makuhari

OX Tamachi Building

Acquisition price: ¥3,260 million

Acquisition date: March 5, 2010

As of April 16, 2010

This property is located in the north of Tarumi Ward in Kobe City,

which has about 15 percent (approx. 220,000) of the population of Kobe

City. The surrounding area is a new town with a number of detached

homes, creating a substantial trading area. At present, many of the tenants

are retailers selling household goods to local residents. Twenty-year fixed

business lease agreements are in place with creditworthy tenants

including Cainz Home, a major DIY center chain; and Yamada Denki, a

leading home electronics retail chain store; a Kansai area drug store

chain; a supermarket. Stable cash flow can be expected from the property

well into the future. This is the first acquisition of sokochi (fixed-term

business-use leasehold land) for OJR.

Acquisition price: ¥4,000 million

Acquisition date: March 10, 2010

This property is located in Kohoku New Town in Yokohama City.

With only a one-minute walk from Center Minami Station of Yokohama

Municipal Subway which is the major means of transportation in Kohoku

New Town, and its highly visible location facing the station square, it

offers superb advantages in terms of location for a retail facility. Under

the concept of a community contact style retail facility, the facility houses

restaurants and banks and part of the ground floor and upper floors are

leased out as office space. A stable cash flow stream can be expected

from this property as long-term lease agreements of 10 to 15 years have

been concluded with retail tenants.

Acquisition price: ¥3,600 million

Acquisition date: March 10, 2010

This property is located in Makuhari New City in Chiba City, which

continues to grow as a city in the new era serving the multiple functions

of “business, residence, study and entertainment” with properties such as

business research buildings, office buildings, retail facilities, hotels,

residences and schools. With only a one-minute walk from JR

Kaihimmakuhari Station, and a highly visible location facing the station

square, it offers superb advantages in terms of location for a retail facility.

Under the concept of “daily use of communication spot,” cafes,

restaurants, a beauty salon, and retail outlets such as a cellular phone

shop are presently in operation. A stable cash flow stream can be

expected from this property into the future as long-term lease agreements

of mainly 10 to 15 years have been concluded with the tenants.

Acquisition price: ¥6,730 million

Acquisition date: March 29, 2010

This property is located in the Shiba/Mita area, one of the leading

business districts in Tokyo where major company headquarters are

concentrated. The area enjoys easy transportation access by trains in

Tokyo as multiple train lines including JR and metropolitan subways

are available. In addition, it offers easy access to Haneda Airport.

The property is located only a one-minute walk from the Metropolitan

Subway “Mita Station” and a three-minute walk from JR “Tamachi

Station.” Furthermore, facing the national road Daiichi Keihin, it is

highly visible.

ORIX JREIT REPORT 16th Period

29


Omiya Shimocho 1-chome Building

Sakai Logistics Center North

Building

Acquisition price: ¥3,750 million

Acquisition date: March 29, 2010

This property is located in the Omiya Ward of Saitama City, which is

developing as a key transportation junction centered on Omiya Station,

one of the leading terminal stations within the Greater Tokyo Area. In

addition to the railway network spreading from “Omiya Station,” the

Omiya area is conveniently located with easy access by highways

including the Tohokudo, Kanetsudo, and Tokyo Gaikan Expressways. It is

an area that enables business deployment encompassing the Greater Tokyo

Area, Kitakanto, Joshinetsu, and Tohoku area. Completed in August 2009,

the property is a new building characterized by a bright airy entrance with a

spacious glass façade and an open ceiling space. It is located within a

six-minute walk of the East Exit of “Omiya Station” where 13 train lines

including five Shinkansen lines are available. Located along the

Kyu-Nakasendo route, the property is highly convenient in terms of

transportation access and it is also highly visible.

Acquisition price: ¥10,200 million

Acquisition date: March 30, 2010

This property is located in the Osaka Bay area where a number of large

logistics facilities have been developed in recent years. The area is

conveniently located with excellent transportation access to the major

consumption base centered on Osaka, as it is situated behind Osaka Bay,

and has a well developed transportation infrastructure. It is expected to

generate strong demand into the future as a logistics base. The property is

located approximately 2 kilometers from the Sanbo Interchange of Hanshin

Expressway No. 4 Wangan Line and is convenient for the delivery of

goods to Osaka City including the central districts of Osaka, as well as to

Kobe, Kansai International Airport, and the south of Osaka. It offers

convenient transportation access because of the proximity to the central

parts of Osaka. Completed in July 2009, the property is a large logistics

facility with a total floor area of 20,000 tsubo (approx. 64,001 m2). It is a

highly versatile logistics facility with its specifications meeting the needs of

its tenants. At present, the entire building is leased out to Nippon Express

Co., Ltd., one of the leading logistics companies in Japan under a long

fixed-term contract.

Financing activities

[In the 16th Period]

OJR is aiming for a strategic approach towards unsecured loans, switching to fixed-interest rate loans,

diversifying repayment periods, and reducing fund procurement cost in line with the monetary environment.

As such, the following financing activities were implemented.

Debt Finance:

To provide funds for the refinancing of short term loans, OJR took out a ¥5,000 million long term loan

(fixed rate, unsecured) with the Development Bank of Japan, Inc., on September 18, 2009, and further long

term loans from a number of financial institutions totaling ¥10,500 million (fixed rate and floating rate,

unsecured) on September 24, 2009. OJR renewed and extended the term of the commitment line, including a

reduction in the amount used, resulting in a loan balance standing at ¥19,500 million as of February 28, 2010.

Furthermore, OJR assessed the trends in the investment corporation bond market and submitted a shelf

registration statement on February 9, 2010 to publicly offer up to ¥200,000 million in investment corporation

bonds. OJR issued the first unsecured investment corporation bonds (amount of issue: ¥12,000 million, term:

three years) on February 25, 2010.

As a result, as of February 28, 2010, loans outstanding stood at ¥126,438 million and investment corporation

bonds stood at ¥12,000 million, and interest-bearing debt totaled ¥138,438 million. The interest-bearing debt

ratio was 50.1%, the fixed-rate debt ratio was 83.4%, and the long-term debt (except long term debt due within

one year) ratio was 70.2%.

30 ORIX JREIT REPORT 16th Period


Rating agency and Details of ratings

The credit ratings secured by OJR are shown below as of the date of this publication. During the 16th fiscal

period, Rating and Investment Information, Inc., revised its rating outlook from “Positive” to “Stable.”

OJR’s credit ratings as of April 16, 2010 were as shown below.

Standard & Poor’s

Rating agency

Rating and Investment Information, Inc.

Details of ratings

Long-term corporate credit rating: A-

Short-term corporate credit rating: A-2

Outlook: Stable

Issuer rating: A+

Rating outlook: Stable

[In the 17th Period (ending August 2010)]

Debt Finance:

OJR took out ¥14,000 million in long term loans (fixed rate, unsecured) on March 19, 2010 to provide

funds for the refinancing of long term loans, and ¥1,000 million in long term loans (fixed rate, unsecured) on

March 26, 2010 to procure funds to acquire specified assets. Furthermore, OJR took out ¥19,500 million in

short term loans (floating rate, unsecured) based on the commitment line on March 26, 2010 for the

refinancing of short-term loans coming due on March 26, 2010.

Financial results and distribution

OJR recorded operating revenues of ¥9,790 million and net income of ¥3,344 million for this particular

period ended February 28, 2010.

The distribution per unit was ¥13,290 nearly equal to the unappropriated profits per unit (fractions omitted),

so that the distribution in cash can be tax-deductible under Article 67-15 of the Special Taxation Measures

Law, which requires a payout ratio of more than 90%.

Fund Overview

1. Capitalization

Paid-in capital

During the 16th period (the six months ended February 2010), OJR carried out no capital increase, and there

was thus no change in the number of investment units issued and outstanding, or in the amount of paid-in

capital. The following table shows capital increases carried out in recent five years.

Date

Remarks

Investment Units

Outstanding

Paid-in Capital

(In millions of yen)

Increase Balance Increase Balance

September 14, 2005 Additional Issuance of Units (1) 47,500 222,872 33,287 119,108

October 12, 2005 Third party allotment (2) 2,500 225,372 1,752 120,860

October 3, 2007 Additional Issuance of Units (3) 25,000 250,372 16,147 137,007

October 30, 2007 Third party allotment (4) 1,250 251,622 807 137,814

Notes:

1. Second public equity offering of 47,500 new units at ¥725,200 per unit (issue price per unit was ¥700,780) to acquire

properties and repay debt.

2. Along with the public offering of note 1, additional 2,500 units were allocated through private placement at ¥700,780 per unit.

3. Third public equity offering of 25,000 new units at ¥668,360 per unit (issue price per unit was ¥645,854) to repay debt.

4. Along with the public offering of note 3, additional 1,250 units were allocated through private placement at ¥645,854 per unit.

Market price of OJR units

OJR’s investment units are traded on the TSE JREIT section. The high and low closing prices per unit for

the 15th and 16th periods are shown below in yen:

From March 1, 2009 From September 1, 2009

to August 31, 2009 to February 28, 2010

High 504,000 485,000

Low 285,000 375,000

ORIX JREIT REPORT 16th Period

31


Overview of borrowings

Category

Lender

Balance at

beginning of the period

Balance at

the period end

Average interest

rate 1

Due on

Use of

funds

In millions of yen

Repayment

method

Note

The Sumitomo Trust and Banking Company, Limited 5,926

Short-term debt

(6)

Mitsubishi UFJ Trust and Banking Corporation 5,926

Sumitomo Mitsui Banking Corporation 5,185

Floating rate

1.39375%

(2)

September

4, 2009

(3)

Bullet

payment

Un-Secured,

Non-guaranteed,

Pari passu

Mizuho Corporate Bank, Ltd. 2,963

Subtotal 20,000

The Sumitomo Trust and Banking Company, Limited

Short-term debt

(7)

Mitsubishi UFJ Trust and Banking Corporation

Sumitomo Mitsui Banking Corporation

Floating rate

1.23273%

(2)

October

26, 2009

(3)

Bullet

payment

Un-Secured,

Non-guaranteed,

Pari passu

Mizuho Corporate Bank, Ltd.

Subtotal

The Sumitomo Trust and Banking Company, Limited

Short-term debt

(8)

Mitsubishi UFJ Trust and Banking Corporation

Sumitomo Mitsui Banking Corporation

Floating rate

1.21455%

(2)

November

26, 2009

(3)

Bullet

payment

Un-Secured,

Non-guaranteed,

Pari passu

Mizuho Corporate Bank, Ltd.

Subtotal

The Sumitomo Trust and Banking Company, Limited

Short-term debt

(9)

Mitsubishi UFJ Trust and Banking Corporation

Sumitomo Mitsui Banking Corporation

Floating rate

1.17364%

(2)

January

21, 2010

(3)

Bullet

payment

Un-Secured,

Non-guaranteed,

Pari passu

Mizuho Corporate Bank, Ltd.

Subtotal

The Sumitomo Trust and Banking Company, Limited

Short-term debt

(10)

Mitsubishi UFJ Trust and Banking Corporation

Sumitomo Mitsui Banking Corporation

Floating rate

1.16182%

(2)

February

22, 2010

(3)

Bullet

payment

Un-Secured,

Non-guaranteed,

Pari passu

Mizuho Corporate Bank, Ltd.

Subtotal

The Sumitomo Trust and Banking Company, Limited 5,778

Mitsubishi UFJ Trust and Banking Corporation

Short-term debt

5,778

Sumitomo Mitsui Banking Corporation 5,056

Floating rate

1.15545%

(2)

March

26, 2010

(3)

Bullet

payment

Un-Secured,

Non-guaranteed,

Pari passu

Mizuho Corporate Bank, Ltd. 2,888

Subtotal 19,500

Short-term debt total

20,000 19,500

The Sumitomo Trust and Banking Company, Limited 4,000

National Mutual Insurance Federation of Agricultural

Cooperatives

3,000

THE BANK OF FUKUOKA, LTD. 3,000

Long-term debt

(term loan 4)

(11)

The Shinkumi Federation Bank 2,000

The Hyakugo Bank, Ltd. 1,000

Aioi Insurance Company, Limited 500

Fixed rate

1.09000%

(2)

September

24, 2009

(5)

(3)

Bullet

payment

(5)

Un-secured,

Non-guaranteed,

Pari passu

The Toho Bank, Ltd. 500

THE DAI-ICHI MUTUAL LIFE INSURANCE

COMPANY

500

NIPPONKOA Insurance Company, Limited 500

Subtotal 15,000

The Sumitomo Trust and Banking Company, Limited 2,500 2,500

Mitsubishi UFJ Trust and Banking Corporation 1,000 1,000

Sumitomo Mitsui Banking Corporation 4,200 4,200

Long-term debt

(term loan 6)

Tokio Marine & Nichido Fire Insurance Co., Ltd. 2,500 2,500

Mizuho Corporate Bank, Ltd. 1,800 1,800

Fixed rate

1.44663%

(2)

March

19, 2010

(5)

(3)

Bullet

payment

(5)

Un-secured,

Non-guaranteed,

Pari passu

Sompo Japan Insurance Inc. 1,000 1,000

The Shinkumi Federation Bank 1,000 1,000

Subtotal 14,000 14,000

Sumitomo Mitsui Banking Corporation 2,000 2,000

Long-term debt

(term loan 10)

Mitsubishi UFJ Trust and Banking Corporation 2,000 2,000

The Sumitomo Trust and Banking Company, Limited 1,500 1,500

Fixed rate

1.54438%

(2)

September

21, 2010

(5)

(3)

Bullet

payment

(5)

Un-Secured,

Non-guaranteed,

Pari passu

Mizuho Corporate Bank, Ltd. 1,000 1,000

Subtotal 6,500 6,500

32 ORIX JREIT REPORT 16th Period


In millions of yen

Category

Lender

Balance at

beginning of the period

Balance at

the period end

Long-term debt THE SHIZUOKA BANK, LTD. 1,000 1,000

Average interest

rate 1

Fixed rate

1.51500%

Due on

November

5, 2010

(5)

Use of

funds

(3)

Repayment

method

Bullet

payment

(5)

Note

Un-Secured,

Non-guaranteed,

Pari passu

The Sumitomo Trust and Banking Company, Limited 4,000 4,000

Sumitomo Mitsui Banking Corporation 3,500 3,500

Resona Bank, Limited. 2,300 2,300

Long-term debt

(term loan 5)

Mitsubishi UFJ Trust and Banking Corporation 1,400 1,400

MITSUI LIFE INSURANCE COMPANY LIMITED 1,400 1,400

The Chiba Bank, Ltd. 1,400 1,400

Fixed rate

1.99541%

(2)

April

27, 2011

(5)

(3)

Bullet

payment

(5)

Un-secured,

Non-guaranteed,

Pari passu

The Hyakugo Bank, Ltd. 1,000 1,000

Aozora Bank, Ltd. 1,000 1,000

TAIYO LIFE INSURANCE COMPANY 1,000 1,000

Subtotal 17,000 17,000

Mitsubishi UFJ Trust and Banking Corporation 4,000 4,000

Long-term debt

(term loan 9)

Sumitomo Mitsui Banking Corporation 4,000 4,000

The Sumitomo Trust and Banking Company, Limited 4,000 4,000

Fixed rate

1.83429%

(2)

June

27, 2011

(5)

(3)

Bullet

payment

(5)

Un-Secured,

Non-guaranteed,

Pari passu

Mizuho Corporate Bank, Ltd. 3,000 3,000

Subtotal 15,000 15,000

Long-term debt

(term loan 7)

The Sumitomo Trust and Banking Company, Limited 6,000 6,000

Mitsubishi UFJ Trust and Banking Corporation 5,500 5,500

Fixed rate

1.78543%

(2)

March

19, 2012

(5)

(3)

Bullet

payment

(5)

Un-secured,

Non-guaranteed,

Pari passu

Subtotal 11,500 11,500

Long-term debt

The Norinchukin Bank 8,500 8,500

(term loan 8)

Fixed rate

1.78543%

March

19, 2012

(5)

(3)

Bullet

payment

(5)

Un-secured,

Non-guaranteed,

Pari passu

Long-term debt

(term loan 11)

Sumitomo Mitsui Banking Corporation 2,000 2,000

Mitsubishi UFJ Trust and Banking Corporation 1,000 1,000

The Sumitomo Trust and Banking Company, Limited 2,000 2,000

Fixed rate

1.84365%

(2)

September

19, 2012

(5)

(3)

Bullet

payment

(5)

Un-Secured,

Non-guaranteed,

Pari passu

Subtotal 5,000 5,000

Long-term debt

(term loan 12)

The Sumitomo Trust and Banking Company, Limited 4,000

THE BANK OF FUKUOKA, LTD. 3,000

Fixed rate

1.71069%

(2)

September

19, 2012

(5)

(3)

Bullet

payment

(5)

Un-secured,

Non-guaranteed,

Pari passu

Subtotal 7,000

Long-term debt

(term loan 13)

The Shinkumi Federation Bank 3,000

The Toho Bank, Ltd. 500

Floating rate

1.36364%

(2)

September

19, 2012

(5)

(3)

Bullet

payment

(5)

Un-secured,

Non-guaranteed,

Pari passu

Subtotal 3,500

National Mutual Insurance Federation of Agricultural

Long-term debt

Cooperatives

3,000 3,000

7,000 7,000

Long-term debt Development Bank of Japan 3,000 3,000

Long-term debt Development Bank of Japan 4,938

Fixed rate

1.39875%

Fixed rate

2.19625%

Fixed rate

1.94223%

Fixed rate

2.01000%

September

20, 2012

(5)

April

26, 2013

(5)

July

31, 2013

(5)

September

18, 2014

(4) (5)

(3)

(3)

(3)

(3)

Bullet

payment

(5)

Bullet

payment

(5)

Bullet

payment

(5)

Installment

payment

(4) (5)

Un-secured,

Non-guaranteed,

Pari passu

Un-secured,

Non-guaranteed,

Pari passu

Un-secured,

Non-guaranteed,

Pari passu

Un-secured,

Non-guaranteed,

Pari passu

Long-term debt total

106,500 106,938

Grand total of short-term and long-term debt

126,500 126,438

Notes:

1. The average interest rate is the weighted-average one based on debt amounts at the end of the period. The average

interest rate relating to the debt hedged by an interest rate swap for the purpose of avoiding interest rate volatility

risk is the weighted-average interest rate after reflecting the effect of the relevant interest rate swap.

2. Same terms and conditions, including interest rates and maturities, apply to each lender of each debt category.

3. All borrowings have been used to finance the acquisitions of real estate and real estate held in trust, or to refinance

other debts.

4. Installment payments of ¥62,500,000 will be made on the 20th day of every third month starting on December 20,

2009, with the remaining payment of ¥3,812,500,000 at maturity on September 18, 2014.

5. The following table shows the total amounts of long-term debt to be repaid for each year:

(In millions of yen)

Long-term

debt

Due within one year

Due after one

to two years

Due after two

to three years

Due after three

to four years

Due after four

to five years

21,750 32,250 38,750 10,250 3,938

6. OJR fully repaid short-term debt of ¥20,000 million on September 4, 2009.

7. OJR fully repaid short-term debt of ¥20,000 million on October 26, 2009.

ORIX JREIT REPORT 16th Period

33


8. OJR fully repaid short-term debt of ¥19,500 million on November 26, 2009.

9. OJR fully repaid short-term debt of ¥19,500 million on January 21, 2010.

10. OJR fully repaid short-term debt of ¥19,500 million on February 22, 2010.

11. OJR fully repaid long-term debt (term loan 4) of ¥15,000 million on September 24, 2009.

Overview of bonds

Bond name

Issue date

Balance at

beginning of

the period

Balance at

the period

end

Coupon

(%)

February 25,

The 1st unsecured bonds

2010

12,000 2.08

Total 12,000

Maturity date Redemption

February 25,

2013

Bullet

payment

Notes:

1. The bonds have been used to finance the acquisitions of real estate and real estate held in trust.

2. The bonds were issued with pari passu conditions among specified investment corporation bonds.

(In millions of yen)

Use of

proceeds

Note

(1) (2)

2. Major unitholders

Name

(As of February 28, 2010)

Number of Units Ownership

Owned

(%)

Japan Trustee Services Bank, Ltd. (Trust accounts) 20,141 8.00

NikkoCiti Trust and Banking Corporation

(Investment accounts)

Trust & Custody Services Bank, Ltd.

(Securities investment trust accounts)

20,045 7.96

15,857 6.30

STATE STREET BANK AND TRUST COMPANY 12,692 5.04

The Master Trust Bank of Japan, Ltd. (Trust accounts) 9,228 3.66

The Nomura Trust and Banking Co., Ltd. (Investment accounts) 9,157 3.63

ORIX Life Insurance Corporation 6,493 2.58

AIG Star Life Insurance Co., Ltd. General account 5,656 2.24

THE BANK OF NEW YORK, TREATY JASDEC ACCOUNT 4,890 1.94

American Life Insurance Company GAL 4,000 1.58

Total 108,159 42.98

Note: Ratio of ownership, rounded down to the second decimal place, may not add up to totals due to

rounding.

34 ORIX JREIT REPORT 16th Period


3. Unitholder Type

(As of February 28, 2010)

Number of

Number of

Unitholder type

%

%

Unitholders

Units

Domestic 15,610 98.69 178,314 70.87

Individuals and Others 15,292 96.67 41,133 16.35

Financial Institutions 95 0.60 130,805 51.98

Bank 21 0.13 20,278 8.06

Trust Bank 11 0.07 75,613 30.05

Life Insurance 9 0.06 18,698 7.43

Fire and Marine Insurance 3 0.02 5,781 2.30

Securities Brokers 26 0.16 2,908 1.16

Other Financial institutions 25 0.16 7,527 2.99

Other Corporate 223 1.41 6,376 2.53

Overseas 208 1.31 73,308 29.13

Total 15,818 100.00 251,622 100.00

Note: Individual ratio, rounded to the second decimal place, may not add up to totals due to rounding.

Portfolio Overview

1. Portfolio Summary

As of February 28, 2010

Asset Type

Area / Type

Amount (1)

Percentage of total

In millions of yen assets (2) (%)

Offices 88,942 29.92

Logistics Facilities

3 Central Tokyo Wards Retail Facilities 2,519 0.85

Hotels

Others 1,118 0.38

Offices 94,491 31.79

Logistics Facilities

Remaining Tokyo Wards Retail Facilities 2,473 0.83

Hotels

Real Estate

Others 2,494 0.84

Offices 10,399 3.50

Logistics Facilities 21,573 7.26

Other Parts of

Retail Facilities

the Greater Tokyo Area

Hotels 12,181 4.10

Others

Offices 30,779 10.35

Logistics Facilities

Other Areas

Retail Facilities

Hotels

Others

Deposits and Other Assets 30,310 10.20

Total Assets 297,279 100.00

Notes:

1. Amounts are the book values as of the end of February 2010, after subtracting the accumulated

depreciation. The amounts include the book value of property accounted for as investment in finance

lease.

2. Percentage of total assets is rounded to the second decimal place. Individual numbers may not add up to

100% due to rounding.

ORIX JREIT REPORT 16th Period

35


36 ORIX JREIT REPORT 16th Period

2. Selected Property Data

Offices

Logistics

Facilities

Retail

Facilities

Hotels

Others

Area

3 Central

Tokyo Wards

Remaining

Tokyo Wards

Other Parts of

the Greater

Tokyo Area

Other Areas

Other Parts of

the Greater

Tokyo Area

3 Central

Tokyo Wards

Remaining

Tokyo Wards

Other Parts of

the Greater

Tokyo Area

3 Central

Tokyo Wards

Remaining

Tokyo Wards

Property Name

Total Rentable

Area ()

Appraisal Value (1)

(In millions of yen)

Share in

Appraisal Value (2)

(%)

(As of February 28, 2010)

Book Value

(In millions of yen)

Share in Book

Value (2)(3) (%)

Aoyama Suncrest Building 2,768.55 4,050 1.54 3,520 1.18

Round-Cross Ichi-bancho 3,300.66 4,090 1.56 3,575 1.20

Beside Shirogane 2,073.92 1,350 0.51 1,291 0.43

Round-Cross Akasaka Mitsuke 1,324.27 2,230 0.85 1,661 0.56

Nihonbashi East Building 2,244.77 1,170 0.45 1,608 0.54

Round-Cross Minami Azabu 3,170.48 1,382 0.53 1,286 0.43

Round-Cross Akasaka 2,787.18 2,668 1.02 2,844 0.96

Round-Cross Mita 2,296.61 1,395 0.53 1,701 0.57

Shiba Daimon Building 2,588.50 2,152 0.82 2,182 0.73

Round-Cross Tsukiji 3,997.45 3,660 1.40 3,178 1.07

ORIX Jimbo-cho Building 3,166.84 4,170 1.59 3,990 1.34

ORIX Shiba 2-chome Building 6,753.13 8,217 3.13 6,913 2.33

Aoyama 246 Building 2,406.22 6,951 2.65 5,447 1.83

ORIX Akasaka 2-chome Building 10,296.05 22,180 8.46 21,348 7.18

Nihonbashi Honcho 1-chome Building 5,099.70 8,190 3.12 10,284 3.46

ORIX Suidobashi Building 2,087.65 2,420 0.92 2,973 1.00

ORIX Shinagawa Building 5,618.88 11,100 4.23 15,141 5.09

Subtotal 61,980.86 87,375 33.32 88,942 29.92

Carrot Tower 6,937.21 5,900 2.25 4,548 1.53

Toyo MK Building 9,814.55 5,100 1.94 4,479 1.51

Round-Cross Moto Yoyogi 7,723.68 5,130 1.96 4,477 1.51

Round-Cross Nishi Shinjuku 1,227.94 2,570 0.98 2,544 0.86

Beside Kiba 4,804.28 2,790 1.06 2,240 0.75

DT Gaien 2,571.39 2,100 0.80 2,301 0.77

Yoyogi Forest Building 1,909.54 1,270 0.48 1,453 0.49

ORIX Ikebukuro Building 5,539.92 9,998 3.81 8,913 3.00

ORIX Shinjuku Building 6,130.45 10,160 3.87 7,873 2.65

Round-Cross Shinjuku 4,736.18 8,390 3.20 7,901 2.66

Seafort Square Center Building 22,024.93 16,560 6.31 17,523 5.89

Round-Cross Kamata 7,855.74 5,830 2.22 5,517 1.86

Round-Cross Shinjuku 5-chome 3,089.29 3,520 1.34 4,358 1.47

KN Jiyugaoka Plaza 1,231.44 2,830 1.08 3,166 1.06

ST WORLD Building 1,550.86 2,850 1.09 3,479 1.17

ORIX Real Estate Nishi Shinjuku Building 7,059.20 12,200 4.65 13,719 4.62

Subtotal 94,206.60 97,198 37.06 94,491 31.79

Neo City Mitaka 4,622.21 2,920 1.11 2,004 0.67

Round-Cross Kawasaki 5,519.29 5,074 1.93 4,008 1.35

Omiya Miyacho Building 4,062.92 4,340 1.65 4,387 1.48

Subtotal 14,204.42 12,334 4.70 10,399 3.50

Nagoya Itochu Building 11,213.33 4,780 1.82 5,088 1.71

ORIX Koraibashi Building 6,861.91 5,087 1.94 5,148 1.73

Lunar Sendai 9,954.78 5,060 1.93 8,212 2.76

ORIX Nagoya Nishiki Building 10,260.13 8,300 3.17 12,331 4.15

Subtotal 38,290.15 23,227 8.86 30,779 10.35

Offices Total 208,682.03 220,134 83.94 224,611 75.56

Koshigaya Logistics Center 19,200.00 3,429 1.31 3,827 1.29

Toda Logistics Center 36,158.60 8,710 3.32 9,502 3.20

Ichikawa Logistics Center 37,456.96 7,390 2.82 8,244 2.77

Subtotal 92,815.56 19,529 7.45 21,573 7.26

Logistics Facilities Total 92,815.56 19,529 7.45 21,573 7.26

Nihon Jisho Minami Aoyama Building 985.36 3,340 1.27 2,519 0.85

Subtotal 985.36 3,340 1.27 2,519 0.85

CUBE Daikanyama 899.82 2,472 0.94 2,473 0.83

Subtotal 899.82 2,472 0.94 2,473 0.83

Retail Facilities Total 1,885.18 5,812 2.22 4,992 1.68

Cross Gate 25,940.73 13,500 5.15 12,181 4.10

Subtotal 25,940.73 13,500 5.15 12,181 4.10

Hotels Total 25,940.73 13,500 5.15 12,181 4.10

Park Axis Nishi Azabu Stage 1,337.31 978 0.37 1,118 0.38

Subtotal 1,337.31 978 0.37 1,118 0.38

Grand Maison Hakusan 1,160.17 410 0.16 411 0.14

Sonet Kami Ikebukuro 5,853.00 1,880 0.72 2,083 0.70

Subtotal 7,013.17 2,290 0.87 2,494 0.84

Others Total 8,350.48 3,268 1.25 3,612 1.22

Grand Total 337,673.98 262,243 100.00 266,969 89.80

Notes:

1. Tanizawa Sogo Appraisal Co., Ltd., Chuo Real Estate Appraisal Co., Ltd., Morii Appraisal & Investment Consulting, Inc.,

JAPAN REAL ESTATE INSTITUTE, HIRO & REAS network, Inc. and DAIWA REAL ESTATE APPRAISAL Co., LTD.

conducted appraisals.

2. Share in appraisal value and share in book value is rounded to the second decimal place, and may not add up to total amount due to

rounding.

3. Individual figures for shares in book value do not add up to 100%, since book value represents total assets as of February 28, 2010

(¥297,279 million) which include those other than property.

4. The table shown above includes figures for property accounted for as investment in finance lease. Also, the book value includes

the amount of investment in finance lease recorded on the balance sheet.


3. Selected Financial Data by Property

Offices

Logistics

Facilities

Retail

Facilities

Hotels

Others

3 Central

Tokyo Wards

Remaining

Tokyo Wards

(For the period ended February 28, 2010)

Area

Property Name

Number of Occupancy Revenue

Share in

Tenants (1) Rate (1)(2) (% ) (In millions of yen) Revenue (2) (% )

Aoyama Suncrest Building 4 95.5 154 1.6

Round-Cross Ichi-bancho 5 94.4 158 1.6

Beside Shirogane 15 100.0 56 0.6

Round-Cross Akasaka Mitsuke 9 88.7 72 0.7

Nihonbashi East Building 7 100.0 54 0.6

Round-Cross Minami Azabu 4 100.0 71 0.7

Round-Cross Akasaka 12 90.3 94 1.0

Round-Cross Mita 4 98.0 59 0.6

3 Central Shiba Daimon Building 1 100.0 - (3) - (3)

Tokyo Wards Round-Cross Tsukiji 8 97.3 154 1.6

ORIX Jimbo-cho Building 2 100.0 162 1.7

ORIX Shiba 2-chome Building 3 100.0 310 3.2

Aoyama 246 Building 10 100.0 191 2.0

ORIX Akasaka 2-chome Building 11 96.5 500 5.1

Nihonbashi Honcho 1-chome Building 3 100.0 246 2.5

ORIX Suidobashi Building 1 100.0 - (3) - (3)

ORIX Shinagawa Building 8 100.0 338 3.5

Subtotal 107 98.0 - (3) - (3)

Carrot Tower 8 100.0 272 2.8

Toyo MK Building 10 100.0 254 2.6

Round-Cross Moto Yoyogi 2 100.0 - (3) - (3)

Round-Cross Nishi Shinjuku 9 100.0 81 0.8

Beside Kiba 5 87.2 108 1.1

DT Gaien 3 100.0 83 0.8

Yoyogi Forest Building 11 99.4 53 0.5

ORIX Ikebukuro Building 3 100.0 338 3.5

Remaining

ORIX Shinjuku Building 9 100.0 276 2.8

Tokyo Wards

Round-Cross Shinjuku 6 83.0 217 2.2

Seafort Square Center Building 35 91.7 863 8.8

Round-Cross Kamata 5 92.4 222 2.3

Round-Cross Shinjuku 5-chome 8 81.1 94 1.0

KN Jiyugaoka Plaza 5 100.0 82 0.8

ST W ORLD Building 1 100.0 - (3) - (3)

ORIX Real Estate Nishi Shinjuku Building 1 100.0 - (3) - (3)

Other Parts of

the Greater

Tokyo Area

Subtotal 121 95.3 3,648 37.3

Neo City Mitaka 6 95.5 158 1.6

Round-Cross Kawasaki 10 100.0 221 2.3

Omiya Miyacho Building 2 100.0 - (3) - (3)

Subtotal 18 98.5 - (3) - (3)

Nagoya Itochu Building 8 98.1 269 2.7

ORIX Koraibashi Building 12 93.2 208 2.1

Other Areas Lunar Sendai 32 86.0 284 2.9

ORIX Nagoya Nishiki Building 10 66.0 286 2.9

Subtotal 62 85.5 1,047 10.7

Offices Total 308 94.5 8,038 82.1

Koshigaya Logistics Center 1 100.0 - (3) - (3)

Other Parts of

Toda Logistics Center 1 100.0 - (3) - (3)

the Greater

Ichikawa Logistics Center 1 100.0 - (3) - (3)

Tokyo Area

Subtotal 3 100.0 - (3) - (3)

Logistics Facilities Total 3 100.0 - (3) - (3)

3 Central Nihon Jisho Minami Aoyama Building 1 100.0 - (3) - (3)

Tokyo Wards Subtotal 1 100.0 - (3) - (3)

Remaining CUBE Daikanyama 3 100.0 69 0.7

Tokyo Wards Subtotal 3 100.0 69 0.7

Retail Facilities Total 4 100.0 - (3) - (3)

Other Parts of

Cross Gate

the Greater

15 99.7 825 8.4

Tokyo Area Subtotal 15 99.7 825 8.4

Hotels Total 15 99.7 825 8.4

Park Axis Nishi Azabu Stage 1 100.0 - (3) - (3)

Subtotal 1 100.0 - (3) - (3)

Grand Maison Hakusan 1 100.0 - (3) - (3)

Sonet Kami Ikebukuro 1 100.0 - (3) - (3)

Subtotal 2 100.0 - (3) - (3)

Others Total 3 100.0 143 1.5

Grand Total 333 96.6 9,790 100.0

Notes:

1. Number of tenants and occupancy rate are as of February 28, 2010.

2. Occupancy rate and share in revenue, rounded to the first decimal place, may not add up to totals due to rounding.

3. The number of tenants is either one or two. Alternatively, over 80% of revenue for any relevant property is derived from a

limited number of specific tenants. Because of the confidentiality of the contractual terms, OJR does not disclose the revenue

from operations of these properties unless agreement to such disclosures has been specifically received from the tenant.

ORIX JREIT REPORT 16th Period

37


4. Major Tenants

According to JREIT regulations, OJR is required to disclose information about tenants who lease more than 10%

of total rentable areas of the fund’s portfolio. As of the end of the 16th fiscal period (at the end of February 2010),

SENKO Co., Ltd. and Keiyo Distribution Warehouse Co., Ltd., were the companies subject to this requirement.

Name of Tenant

SENKO Co., Ltd.

Industry

Transportation, warehousing, and international logistics business, etc.

Property

Ichikawa Logistics Center

Contract Rent (1)

Rented Space

37,456.96

Share in Total Rented Space 11.5%

Expiry Date July 31, 2018

Method for Renewal of Rent Fixed term lease agreement for building (covering the period of ten years and

one month). There is no renewal. However, after this agreement expires, if

lessor and lessee agree, both parties can separately conclude a new lease

contract.

Special Note

Revision of the rent shall be discussed every five years from the start of the

lease. In principle, a midterm cancellation shall not be allowed. Senko Co.,

Ltd. can wholly or partially sublease or allow the use of the property by a

third party, subject to a prior written notice to lessor. As of February 28, 2010,

this property is subleased to one tenant. (1)

Name of Tenant

Keiyo Distribution Warehouse Co., Ltd.

Industry

Development and sales of logistics system, warehousing business, and

warehouse leasing.

Property

Toda Logistics Center

Contract Rent (1)

Rented Space

36,158.60

Share in Total Rented Space 11.1%

Expiry Date March 9, 2025

Method for Renewal of Rent Fixed term lease agreement for building (twenty-year term). There is no

renewal. However, after this agreement expires, if lessor and lessee agree,

both parties can separately conclude a new lease contract.

Special Note

Revision of the rent shall be discussed every five years from the start of the

lease. In principle, a midterm cancellation shall not be allowed. Keiyo

Distribution Warehouse Co., Ltd. can sublease this property or allow the

property to be used by a third party at their own responsibility. As of February

28, 2010, this property was not subleased nor used by a third party.

Note 1: OJR does not have the tenant’s approval to disclose its contract rent in this report.

The following list shows the ten largest tenants in terms of rented area as of February 28, 2010. Share in

total rented space is calculated based on the areas that OJR owns.

Name of Tenant Property Expiry Date (1) Rented Space (2)

()

Share in Total

Rented Space (2)

(%)

1 SENKO Co., Ltd. Ichikawa Logistics Center July 31, 2018 37,456.96 11.5

2

Keiyo Distribution

Warehouse Co., Ltd.

Toda Logistics Center March 9, 2025 36,158.60 11.1

3 Fujita Kanko Co., Ltd. Cross Gate September 30, 2020 19,744.39 6.1

4 (3) 19,200.00 5.9

5 ITOCHU Corporation Nagoya Itochu Building March 31, 2011 8,997.58 2.8

6 NIKE JAPAN CORP.

Seafort Square Center

Building

May 31, 2011 8,832.49 2.7

7 (3) 7,387.13 2.3

8 (3) 7,151.63 2.2

9 (3) 6,245.34 1.9

Housing Kosan Co.,

10

Ltd.

(4) Sonet Kami Ikebukuro October 31, 2010 5,853.00 1.8

Total 157,027.12 48.1

38 ORIX JREIT REPORT 16th Period


Notes:

1. In cases where more than one lease contract has been concluded with a tenant, the date shown in expiry

date is for the lease contract with the earliest expiry date.

2. Rented space and total rented space refer to contracted floor area, which is generally the actual floor size,

as opposed to the registered size in the Japanese registry system. Share in total rented space is rounded to

one decimal place. Individual numbers may not add up to total amount due to rounding.

3. OJR does not have the tenant’s approval to disclose its name in this report.

4. Housing Kosan Co., Ltd. is entitled to sublease the property only if sub-lessees use the property for

residential purposes. As a sub-lessor, Housing Kosan Co., Ltd. may determine sublease conditions at its

discretion.

Capital Expenditure

1. Projects – 17 th Period Onward

The following table shows the capital expenditure projects that are currently planned. Estimated amounts include

costs that may be recognized as expenses. OJR intends to continue providing such capital improvements to improve

tenant satisfaction and to enhance its portfolio competitiveness and property value.

Property

Location

Project

Estimated Period

Total

Amount

Estimated Amount

In millions of yen

Payment due

in 16th

period

Already

paid

Amount

DT Gaien

(Shibuya-ku, Tokyo)

Cross Gate

(Yokohama City,

Kanagawa)

Renewal of air

conditioner

Renovation of

escalators

From June 2008

to July 2011

From July 2010

to April 2011

78 35

30

2. Results – 16th Period

Total amount of capital expenditures in the 16th period was ¥83 million and major projects are summarized

below. Combined with the repair costs of ¥91 million, total cost for capital improvements (repair cost and

capital expenditures) during the 16th period is ¥174 million.

Property

Location

Toyo MK Building

(Koto-ku, Tokyo)

Project

Renewal of central monitoring

facility

Period

From November 2009

to February 2010

Amount

In millions of yen

Other Capital Expenditures 54

Grand Total 83

29

3. Cash Reserve for Capital Improvements

Based on its property-specific medium to long-term repair plans, OJR maintains a cash reserve for capital

improvements from its cash flow. The following table shows the summary of cash reserves at the end of the

15th and 16th periods.

In millions of yen

For the period ended

August 31, 2009

Balance at the beginning 1,201 1,294

Amount reserved 0,297 0,297

Amount withdrawn 0,204 0,272

Amount carried forward 1,294 1,319

For the period ended

February 28, 2010

Note:

In addition to the above reserve, OJR set aside ¥491 million as of February 28, 2010 as reserve for repair work

to properties that OJR owns in compartmentalized ownership interests. The amount was included in “Others” of

“Other assets” on the balance sheet as of February 28, 2010. Such reserves are generally required pursuant to the

management regulation of the owners’ associations.

ORIX JREIT REPORT 16th Period

39


Administrative Expenses

The following table shows the breakdown of fees and expenses paid to the asset manager (ORIX Asset

Management Corporation), the asset custodian (The Sumitomo Trust & Banking Co., Ltd.), and others such

as for their administrative services.

In millions of yen

Item

For the period ended

August 31, 2009

Asset management fees 646 643

Asset custody fees 034 031

Agent fees 120 112

Officers’ fees 010 009

Auditors’ fees 013 013

Other expenses 087 077

Total 910 885

For the period ended

February 28, 2010

Note:

Above figures do not include the acquisition fee of ¥90 million for the 15th period and the sale fee of ¥53

million for the 15th period that were paid to ORIX Asset Management. The acquisition fee has been

capitalized as part of acquisition costs and the sale fee was netted against gains on sale of real estate

properties.

Transaction Activities during Current Period

1. Real Estate and Real Estate Held in Trust

There is no acquisition or sale of real estate and real estate held in trust.

2. Other Assets

There is no significant acquisition or sale of other assets. Other major assets consist mostly of ordinary

bank deposits.

3. Transactions with Related Parties and Major Shareholders of Asset Management Company

Commissions paid

Item

(A)

Total Amount

(In millions of yen)

Description of Transactions

with Related Parties and Major Shareholders (1)

Paid to

(B)

Amount

(In millions of yen)

(B)/(A)

Property maintenance fees 624

ORIX Corporation 04 0.6%

Seafort Community Co., Inc 40 6.5%

Notes:

1. “Related Parties” and “Major Shareholders” refer to (i) the related parties of asset management

companies under asset management agreement with OJR, as defined in “the Law Concerning Investment

Trust and Investment Corporation, Article 201, Section 1” and “Order for Enforcement of the Law

Concerning Investment Trust and Investment Corporation, Article 123,” and (ii) the major shareholders

of asset management companies as defined in “the Financial Instruments and Exchange Law, Article 29,

Section 4, Paragraph 2.” In the 16th period, they are ORIX Corporation and Seafort Community Co., Inc.

The above is record of payment of commission etc., to them.

2. Amounts paid to related parties other than those listed above such as for utility charges were as follows.

ORIX Corporation¥57 million (utility charges)

THE FUJI FIRE AND MARINE INSURANCE COMPANY, LIMITED¥17 million (Fire and marine

insurance premium)

Tennouzu Area Service Co., Inc.¥87 million (utility charges)

40 ORIX JREIT REPORT 16th Period


Financial Statements

Independent Auditors’ Report

Balance Sheets

Statements of Income

Statements of Changes in Net Assets

Statements of Cash Flows

Notes to Financial Statements

ORIX JREIT REPORT 16th Period

41


42 ORIX JREIT REPORT 16th Period


(In millions of yen)

Assets

Current assets:

Cash and deposits (Note 3)

17,739 28,878

Rental receivables

319 280

Income taxes refundable

5 2

Investment in finance lease (Note 11)

3,641 3,567

Prepaid expenses

64 58

Other current assets (Note 6)

19 17

Less: Allowance for doubtful receivables

(6) (5)

Total current assets 21,781 32,797

Property and equipment, at cost:

Land

172,503 172,503

79,430 79,448

26,924 26,965

2,452 2,457

281,309 281,373

(16,926) (18,814)

Net property and equipment 264,383 262,559

Buildings and structures

Building improvements

Machinery and equipment

Less: Accumulated depreciation

Other assets:

Leasehold interests

843 843

Others 720 1,080

Total assets 287,727 297,279

Liabilities and Net assets

Liabilities

Current liabilities:

Trade and other payables

Short-term debt (Note 4)

941 872

20,000 19,500

Long-term debt due within one year (Note 4)

29,000 21,750

Accrued expenses

409 377

Rents received in advance

1,547 1,537

Consumption tax payable

351 94

Other current liabilities

741 305

Total current liabilities 52,989 44,435

Non-current liabilities:

Long-term debt (Note 4)

Leasehold and security deposits received

ORIX JREIT Inc.

BALANCE SHEETS

As of August 31, 2009 and February 28, 2010

77,500 97,188

14,663 14,498

Total liabilities 145,152 156,121

Net assets (Notes 5, 7)

Unitholders' capital

137,814 137,814

Units authorized: 2,000,000 units

Units issued and outstanding: 251,622 units

Retained earnings

4,761 3,344

Total net assets 142,575 141,158

Total liabilities and net assets 287,727 297,279

The accompanying notes to financial statements are an integral part of these statements.

As of

As of

August 31, 2009 February 28, 2010

ORIX JREIT REPORT 16th Period

43


ORIX JREIT Inc.

STATEMENTS OF INCOME

For the six months ended August 31, 2009 and February 28, 2010

For the six months ended

August 31, 2009 February 28, 2010

(In millions of yen)

Operating revenues:

Rental revenues (Note 9) 9,142 8,748

Other operating revenues (Note 9) 1,182 1,042

Gains on sale of real estate properties (Note 10) 1,141

Total operating revenues 11,465 9,790

Operating expenses:

Property-related expenses (Note 9) 4,716 4,403

Asset management fees 646 643

Administrative service fees 154 143

Other expenses 110 99

Total operating expenses 5,626 5,288

Operating income 5,839 4,502

Interest income 16 8

Interest expense (1,028) (1,058)

Other expenses, net (65) (107)

Ordinary income 4,762 3,345

Income before income taxes 4,762 3,345

Provision for income taxes (Note 6) 1 1

Net income 4,761 3,344

For the six months ended

August 31, 2009 February 28, 2010

Earnings per unit (Note 5)

Net income (In yen) 18,922 13,290

Weighted average number of units outstanding 251,622 251,622

The accompanying notes to financial statements are an integral part of these statements.

44 ORIX JREIT REPORT 16th Period


ORIX JREIT Inc.

STATEMENTS OF CHANGES IN NET ASSETS

For the six months ended August 31, 2009 and February 28, 2010

For the six months ended

August 31, 2009 February 28, 2010

(In millions of yen)

Unitholders' capital:

Balance at the end of the previous period 137,814 137,814

Changes during the period:

Total changes during the period

Balance at the end of the period 137,814 137,814

Retained earnings:

Balance at the end of the previous period 4,017 4,761

Changes during the period:

Cash dividends declared (4,017) (4,761)

Net income 4,761 3,344

Total changes during the period 744 (1,417)

Balance at the end of the period 4,761 3,344

Total net assets: (Notes 5, 7)

Balance at the end of the previous period 141,831 142,575

Changes during the period:

Cash dividends declared (4,017) (4,761)

Net income 4,761 3,344

Total changes during the period 744 (1,417)

Balance at the end of the period 142,575 141,158

For the six months ended

August 31, 2009 February 28, 2010

Number of units:

Balance at the end of the previous period 251,622 251,622

Changes during the period:

Total changes during the period

Balance at the end of the period 251,622 251,622

The accompanying notes to financial statements are an integral part of these statements.

ORIX JREIT REPORT 16th Period

45


Interest income

Interest expense

Loss on disposal of property and equipment

Changes in assets and liabilities:

The accompanying notes to financial statements are an integral part of these statements.

4,762 3,345

1,910 1,896

52 87

(1)

(16) (8)

1,028 1,058

51 11

Rental receivables

8 39

Consumption tax refundable

23

Consumption tax payable

351 (257)

Investment in finance lease

74 74

Prepaid expenses

6

Payments of long-term prepaid expenses

(5) (369)

Decrease in property and equipment due to sale

9,454

Withdrawal from reserve for repairs and maintenance

5

Trade and other payables

186 (111)

Rents received in advance

(37) (10)

Others, net

(121) 2

Subtotal 17,725 5,762

Cash proceeds from interest income

Cash payments of interest expense

Cash refunds of income taxes

Cash payments of income taxes

31 16

(1,013) (1,091)

6 5

(6) (3)

Net cash provided by operating activities 16,743 4,689

Cash Flows from Investing Activities:

Payments for investing in time deposits

(9,294) (1,319)

1,201 9,294

(18,534) (55)

1,912 607

(1,546) (1,213)

(39) (17)

Net cash provided by (used in) investing activities (26,300) 7,297

Proceeds from maturity of time deposits

Purchases of property and equipment

Proceeds from leasehold and security deposits

Repayments of leasehold and security deposits

Others, net

Cash Flows from Financing Activities:

Proceeds from short-term debt

Repayments of short-term debt

Proceeds from long-term debt

Repayments of long-term debt

ORIX JREIT Inc.

STATEMENTS OF CASH FLOWS

For the six months ended August 31, 2009 and February 28, 2010

Cash Flows from Operating Activities:

Income before income taxes

Adjustments to reconcile income before income taxes

to net cash provided by operating activities:

Depreciation

Amortization of long-term prepaid expenses

Allowance for doubtful receivables

60,000 98,000

(60,000) (98,500)

27,500

(15,063)

(53)

(4,014) (4,756)

Net cash provided by (used in) financing activities (4,014) 7,128

Payments for investment corporation bond issuance costs

Payment of dividends

Net change in cash and cash equivalents

Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period (Note 3)

For the six months ended

August 31, 2009 February 28, 2010

(In millions of yen)

(13,571) 19,114

22,016 8,445

8,445 27,559

46 ORIX JREIT REPORT 16th Period


Notes to Financial Statements

For the six months ended August 31, 2009 and February 28, 2010

1. Organization

ORIX JREIT Inc. (“OJR”), a Japanese real estate investment corporation, was established on September 10,

2001, with ¥200 million of capital contribution by ORIX Corporation, under the Law Concerning Investment

Trusts and Investment Corporations of Japan, or the Investment Trust Law. OJR was formed to invest primarily in

real estate in Japan. On June 12, 2002, OJR was listed on the Tokyo Stock Exchange’s JREIT (Real Estate

Investment Trust in Japan) section as the fourth listed JREIT. OJR is the first diversified type listed JREIT that

invests in offices, logistics facilities, retail facilities, hotels and other categories of properties.

In its 16th period, OJR did not sell any existing properties or acquire any new properties. As a result, OJR’s

portfolio included 49 properties as of February 28, 2010 (40 office buildings, 3 logistics centers, 2 retail

facilities, 1 hotel and 3 residential properties). The invested amount (total of acquisition prices) aggregated to

¥277,557 million.

2. Summary of Significant Accounting Policies

(a) Basis of presenting financial statements

The accompanying financial statements have been prepared in accordance with the provisions set forth in

the Financial Instruments and Exchange Law and its related accounting regulations, and in conformity with

accounting principles generally accepted in Japan (the “Japanese GAAP”), which are different in certain

respects as to application and disclosure requirements of International Financial Reporting Standards.

The accompanying financial statements have been restructured and translated into English (with some

reclassifications and expanded descriptions) from the financial statements of OJR prepared in accordance with

Japanese GAAP and filed with the appropriate Local Finance Bureau of the Ministry of Finance as required by the

Financial Instruments and Exchange Law. Some supplementary information included in the statutory Japanese

language financial statements, but not required for fair presentation, is not presented in the accompanying financial

statements. OJR has not prepared consolidated financial statements, as it has no subsidiary.

(b) Property and equipment

Property and equipment are stated at cost. Depreciation of property and equipment is calculated on a

straight-line basis over the estimated useful lives of the assets ranging as stated below:

Buildings and structures …………………………………………………

Building improvements..…………………………………………………

Machinery and equipment………………………………………………..

10-50 years

6-18 years

10-18 years

(c) Investment corporation bond issuance costs

Investment corporation bond issuance costs are amortized using a straight-line method over the respective

terms of the bonds.

(d) Revenue recognition

Revenues from operating lease of property are recognized on a straight-line accrual basis over the life of

the lease. Revenues from finance lease of property and related costs of the finance lease are recognized when

OJR receives the lease payments. The difference between those revenues and costs represents the interest

income equivalent earned during the period.

(e) Taxes on property and equipment

Property and equipment are subject to various taxes, such as property taxes and city planning taxes. An owner of

properties is registered in a record maintained by the local government in each jurisdiction, and the taxes are imposed

on the owner registered in the record as of January 1, based on the assessment made by the local government.

When a property is purchased in a calendar year, these taxes for that calendar year are imposed on the

seller. OJR pays the seller the corresponding amount of the taxes for the period from the property acquisition

date to December 31 of the calendar year and capitalizes these amounts as the acquisition cost of the property,

rather than expensing them in the period of acquisition. Subsequently, every calendar year, OJR recognizes

the taxes imposed on such properties as property-related expenses in a period when the assessment and

decision is notified and paid, if OJR has owned the properties since January 1 of the calendar year.

ORIX JREIT REPORT 16th Period

47


The amount of such taxes included in the costs of real estate acquisition was ¥65 million for the period ended

August 31, 2009. There was no acquisition of real estate properties in the period ended February 28, 2010.

(f) Allowance for doubtful receivables

To prepare for possible losses on uncollectible receivables, the allowance for doubtful receivables is

provided in amounts considered to be appropriate based on individual analysis of collectibility for certain

doubtful receivables and on past credit experiences for other receivables.

(g) Hedge accounting

OJR conducts a derivative transaction in order to hedge risks defined in its Articles of Incorporation based

on its financial policy. OJR uses a derivative financial instrument such as an interest rate swap only for the

purpose of avoiding future risks of interest rate increases relating to a loan, but does not enter into such

transactions for speculative or trading purposes. Since the interest rate swap currently used qualifies for hedge

accounting and meets certain matching criteria, the swap is not recorded at fair value but the differential paid

or received under the swap agreement is recognized and included in interest expense. In addition, assessment

of the hedge effectiveness has been omitted because the swap meets the matching criteria, as permitted under

the Japanese GAAP.

(h) Income taxes

Deferred tax assets and liabilities are recognized based on the difference between the financial statements

and income tax bases of assets and liabilities using the enacted tax rate.

(i) Cash and cash equivalents

Cash and cash equivalents consist of cash on hand, bank deposits which are repayable on demand, and

short-term investments which are readily convertible to cash, with an insignificant risk of price fluctuation

and with original maturity of three months or less.

(j) Rounding of amounts presented in financial statements

The amounts in the financial statements have been rounded down to millions in the financial statements

originally prepared in Japanese and filed with regulatory authorities, whereas the amounts have been rounded

to the nearest millions in the accompanying financial statements in order to present them in a manner that is

more familiar to readers outside Japan.

3. Cash and Cash Equivalents

Cash and cash equivalents were as follows.

(In millions of yen)

As of August 31, 2009 As of February 28, 2010

Cash and deposits…………………………………… ¥ 17,739) ¥ 28,878)

Less: time deposits due over three months………. . (9,294) . (1,319)

Cash and cash equivalents……………………….…. ¥ 08,445) ¥ 27,559)

4. Short-term and Long-term Debt

As of August 31, 2009, OJR had total interest bearing debt of ¥126,500 million comprised of ¥20,000

million of short-term debt and ¥106,500 million of long-term debt (including ¥29,000 million of current

portion of long-term debt).

To provide funds for the refinancing of short term loans, OJR took out a ¥5,000 million long term loan

(fixed rate, unsecured) with the Development Bank of Japan, Inc., on September 18, 2009, and further long

term loans from a number of financial institutions totaling ¥10,500 million (fixed rate and floating rate,

unsecured) on September 24, 2009. OJR renewed and extended the term of the commitment line, including a

reduction in the amount used, resulting in a loan balance standing at ¥19,500 million as of February 28, 2010.

Furthermore, OJR assessed the trends in the investment corporation bond market and submitted a shelf

registration statement on February 9, 2010 to publicly offer up to ¥200,000 million in investment corporation

bonds. As a result, OJR issued the first unsecured investment corporation bonds (amount of issue: ¥12,000

million, term: three years) on February 25, 2010.

48 ORIX JREIT REPORT 16th Period


As of February 28, 2010, total interest bearing debt of OJR amounted to ¥138,438 million comprised of

¥19,500 million of short-term debt and ¥118,938 million of long-term debt (including ¥21,750 million of

current portion of long-term debt).

Breakdown of the outstanding interest bearing debt as of August 31, 2009 and February 28, 2010 were as

follows:

(In millions of yen)

As of

August 31, 2009

As of

February 28, 2010


Floating rate debt unsecured due on September 4, 2009 with interest rate of 1.39% ¥ 20,000 ¥ .

Floating rate debt unsecured due on March 26, 2010 with interest rate of 1.16% ¥ . ¥ 19,500

Total………………………………………………………………………………… ¥ 20,000 ¥ 19,500


Fixed rate debt unsecured due on September 24, 2009 with interest rate of 1.09% 15,000

Fixed rate debt unsecured due on March 19, 2010 with interest rate of 1.45% 14,000 14,000

Fixed rate debt unsecured due on September 21, 2010 with interest rate of 1.54% 6,500 6,500

Fixed rate debt unsecured due on November 5, 2010 with interest rate of 1.52% 1,000 1,000

Fixed rate debt unsecured due on April 27, 2011 with interest rate of 2.00% 17,000 17,000

Fixed rate debt unsecured due on June 27, 2011 with interest rate of 1.83% 15,000 15,000

Fixed rate debt unsecured due on March 19, 2012 with interest rate of 1.79% 20,000 20,000

Fixed rate debt unsecured due on September 19, 2012 with interest rate of 1.84% 5,000 5,000

Fixed rate debt unsecured due on September 19, 2012 with interest rate of 1.71% 7,000

Floating rate debt unsecured due on September 19, 2012 with interest rate of 1.36% 3,500

Fixed rate debt unsecured due on September 20, 2012 with interest rate of 1.40% 3,000 3,000

Unsecured bonds due on February 25, 2013 with interest rate of 2.08% (*1) 12,000

Fixed rate debt unsecured due on April 26, 2013 with interest rate of 2.20% 7,000 7,000

Fixed rate debt unsecured due on July 31, 2013 with interest rate of 1.94% 3,000 3,000

Fixed rate debt unsecured due by installments through September 18, 2014 with

interest rate of 2.01% (*2) . 4,938

Total……………………………………………………………………………………. . .106,500 . .118,938

Grand total of short-term and long-term debt …………………………………………. ¥ 126,500 ¥ 138,438

Notes:

(*1) The bonds were issued with pari passu conditions among specified investment corporation bonds.

(*2) The loan is payable by quarterly installments of ¥63 million per quarter, with the remaining balance of

¥3,813 million due on September 18, 2014.

In the above table, the interest rate relating to the debt hedged by an interest rate swap for the purpose of

avoiding interest rate volatility risk is the interest rate after reflecting the effect of the relevant interest rate

swap.

The annual maturities of long-term debt as of February 28, 2010 were as follows.

(In millions of yen)

Due within one year ……………… ¥21,750

Due after one to two years ……………… 32,250

Due after two to three years ……………… 50,750

Due after three to four years ……………… 10,250

Due after four to five years ……………… 3,938

OJR currently has a commitment line contract of ¥27,000 million with certain financial institutions. The

unused amount of such commitment line was ¥7,500 million as of February 28, 2010.

5. Per Unit Information

Net asset values per unit as of August 31, 2009 and February 28, 2010 were ¥566,625 and ¥560,993,

respectively. Net income per unit was ¥18,922 for the six months ended August 31, 2009, and ¥13,290 for the

six months ended February 28, 2010.

ORIX JREIT REPORT 16th Period

49


The weighted average numbers of units outstanding that were used for the computation of the amounts of

net income per unit for the six months ended August 31, 2009 and February 28, 2010 were 251,622.

6. Income Taxes

As of August 31, 2009 and February 28, 2010, OJR recorded deferred tax assets as follows:

(In millions of yen)

As of August 31, 2009 As of February 28, 2010

Business facility tax payable not qualifying for deduction on

tax returns ¥ 1 ¥ 1

Allowance for doubtful receivables not qualifying for

deduction on tax returns ¥ 2 ¥ 2

Total deferred tax assets ¥ 3 ¥ 3

Net deferred tax assets ¥ 3 ¥ 3

The reconciliation of tax rate difference between the statutory tax rate and the effective tax rate was as

follows:

For the six months ended

August 31, 2009 February 28, 2010

Statutory tax rate……………………………………………… 39.33% 39.33%

Estimated allowable dividend distribution (*)…..……………. (39.32) (39.32)

Other………………………………….………………………. 0.01% 0.02%

Effective tax rate……………………………………………… 0.02% 0.03%

*OJR follows a policy of making dividend distributions in excess of 90% of earnings available for

dividends for a period to meet conditions set forth in the Special Taxation Measures Law of Japan to deduct

dividend distributions for income tax purposes. Based on this particular policy, OJR calculated the amounts

of the dividend distributions as amounts nearly equal to the retained earnings. The dividend distributions as of

August 31, 2009 and February 28, 2010 were ¥4,761 million and ¥3,344 million, respectively, and OJR

treated them as tax-deductible dividend distributions as defined under the Special Taxation Measures Law of

Japan.

7. Net Assets

OJR shall maintain its net assets at least ¥50 million as required by the Investment Trust Law of Japan.

OJR may make distributions to unitholders out of, or even more than, its accounting profits calculated by

deducting the sum of its unitholders’ contribution from its net asset; provided, however, that such an aggregate

distribution amount shall not exceed the amount remaining after deducting ¥100 million from its net asset amount.

Cash dividends are declared by the Board of Directors after the end of each period. Such dividends are payable

to unitholders of record at the end of each period. On April 16, 2010, the Board of Directors of OJR declared a cash

dividend (¥13,290 per unit) totaling ¥3,344 million, which will be paid to unitholders of record as of February 28,

2010. The declaration of this dividend has not been reflected in the financial statements as of February 28, 2010.

8. Related-Party Transactions

There were no related-party transactions that are required to be disclosed under Article 8 of regulations

concerning financial statements for the six months ended August 31, 2009 and February 28, 2010,

respectively.

50 ORIX JREIT REPORT 16th Period


9. Breakdown of Rental and Other Operating Revenues, and Property-Related Expenses

Rental and other operating revenues and property-related expenses for the six months ended August 31,

2009 and February 28, 2010 consisted of the following:

(In millions of yen)

For the six months ended

Rental and other operating revenues: August 31, 2009 February 28, 2010

Rentals:

Rental revenues…………………………………………… ¥.... 8,076 ¥.... 7,750

Common-area charges.…………………………………… 872 805

Revenues from finance lease of property 194 193

Subtotal………………………………………………… , 9,142 , 8,748

Others:

Parking lots…………………………………………….… 191 191

Cancellation penalty received……………………………. 48 41

Miscellaneous…………………..………………………… 943 810

Subtotal………………………………………….….…. . 1,182 . 1,042

Total rental and other operating revenues………………….. ¥, .10,324 ¥, .09,790

Property-related expenses:

Property management fees……………………………….. 963 839

Depreciation……………………………………………… 1,910 1,896

Utility charges……………………………....…………… 800 715

Property and other taxes…………………………………. 757 744

Cost of finance lease of property 74 74

Others……………………………………………………. 212 135

Total property-related expenses……………………………. ¥, 4,716 ¥, 4,403

10. Breakdown of Gains on Sale of Real Estate Properties

There was no sale of real estate properties in the period ended February 28, 2010. Gains on sale of real

estate property during the period ended August 31, 2009 were as follows:

(In millions of yen)

For the six months ended August 31, 2009

ORE Nagoya Fushimi Building

Revenue from sale of real estate properties ¥ 10,680

Cost of real estate properties 9,454

Other sales expenses ¥ 00,085

Gains on sale of real estate properties ¥ 01,141

11. Leases

OJR, as a lessor, operates its properties that are rented to tenants on lease terms of two years generally,

with monthly payments due in advance. For operating leases that include non-cancelable lease term, the

minimum future rentals on such non-cancelable operating leases as of August 31, 2009 and February 28,

2010 were as follows:

(In millions of yen)

As of August 31, 2009 As of February 28, 2010

Due within one year ¥ 3,029 ¥ 3,298

Due after one year 11,715 10,926

Total ¥ 14,744 ¥ 14,224

In addition, OJR, as a lessor, leases its properties to customers under finance lease arrangements in which

the ownership of the leased property is not deemed to be transferred to the lessee. The following provides

certain information for those lease transactions:

ORIX JREIT REPORT 16th Period

51


(a) Breakdown of investment in finance lease

(In millions of yen)

As of August 31, 2009 As of February 28, 2010

Minimum lease payments receivable ¥ 5,407) ¥ 5,232)

Estimated residual value 1,354) 1,354)

Unearned interest income equivalents ¥ ..(3,120) ¥ ..(3,019)

Investment in finance lease ¥ 3,641) ¥ 3,567)

(b) Amounts to be collected of minimum lease payments receivable related to investment in finance lease

(In millions of yen)

As of August 31, 2009 As of February 28, 2010

Due within one year ¥ 0,350) ¥ 0,350)

Due after one to two years ¥ 0,350) ¥ 0,350)

Due after two to three years ¥ 0,350) ¥ 0,350)

Due after three to four years ¥ 0,350) ¥ 0,350)

Due after four to five years ¥ 0,350) ¥ 0,350)

Over five years ¥ 3,657) ¥ 3,482)

Total ¥ 5,407) ¥ 5,232)

(c) As for finance lease transactions entered into during the fiscal periods started before April 1, 2008 that do

not transfer ownership of the leased property to the lessee, their proper book value as fixed assets (net of

accumulated depreciation) recorded at the end of August 2008 was transferred from property and equipment

to investment in finance lease as the initial recorded amount of the investment in finance lease at the

beginning of the fiscal period started on September 1, 2008, as permitted by the Japanese GAAP.

The interest income equivalents of those finance lease transactions are taken into income over the

remaining lease term based on a straight-line method.

Consequently, income before income taxes for the period ended August 31, 2009 and February 28, 2010

is ¥31 million less and ¥29 million less, respectively, than the amount that would have been recorded had

those finance lease transactions been retrospectively accounted for as financing by using the interest

method.

12. Derivative Transaction

OJR uses a derivative transaction in order to hedge risks defined in its Articles of Incorporation based on

its financial policy. OJR uses a derivative financial instrument such as an interest rate swap only for the

purpose of avoiding future risks of interest rate increases relating to a loan, but does not enter into such

transactions for speculative or trading purposes.

The derivative transactions as of August 31, 2009 and February 28, 2010 were as follows:

Notional amount

(In millions of yen)

Notional amount

exceeding one year

Estimated fair value

Unrealized gain (loss)


Interest-rate swap:

Fixed rate payable and floating rate receivable ¥ 8,500 ¥ 8,500 ¥ (157)


Interest-rate swap:

Fixed rate payable and floating rate receivable ¥ 8,500 ¥ 8,500 ¥ (153)

The fair value of the interest rate swap is estimated using a price that is calculated by the counterparty

based on current market interest rate and other relevant information.

Since the above interest rate swap qualifies for hedge accounting and meets certain matching criteria, the swap is

not recorded at fair value on the accompanying balance sheets, as described in the summary of significant

accounting policies.

52 ORIX JREIT REPORT 16th Period


13. Subsequent Events

(a) Cash Distribution Declared

On April 16, 2010, the Board of Directors of OJR resolved to distribute cash payment of ¥13,290 per

unit, aggregating to ¥3,344 million, to its unitholders of record as of February 28, 2010.

(b) Sale of properties

OJR sold the ORIX Jimbo-cho Building and the ORIX Shinjuku Building after the end of the 16 th

period, and outline of the transactions was as follows. These were done in accordance with OJR’s asset

management policy stipulated in the Articles of Incorporation.

ORIX Jimbo-cho Building

ORIX Shinjuku Building

1. Sales price ¥4,150 million ¥9,000 million

2. Assets to be transferred Real estate Real estate

3. Contract date March 3, 2010 March 25, 2010

4. Delivery date March 10, 2010 March 26, 2010

5. Buyer DA Office Investment Corporation TOKYU REIT, Inc.

6. Estimated impact of sale

Approximately ¥127 million of gain on

sale of real estate property will be

recorded.

Approximately ¥945 million of gain on

sale of real estate property will be

recorded.

Note: Sales price represents a price agreed in the sales agreement, and does not reflect transaction expenses such as

the broker’s commission, taxes and public dues and so on.

ORIX JREIT REPORT 16th Period

53


Corporate Data

Corporate Office

4-1, Hamamatsucho 2-chome, Minato-ku, Tokyo, 105-6135, Japan

PHONE + 81-3-3435-3286

FAX +81-3-3435-3275

Date of Incorporation

September 10, 2001

Capital (as of February 28, 2010)

¥137,814 million

251,622 units

Number of Unitholders (as of February 28, 2010)

15,818

Transfer Agent

The Sumitomo Trust and Banking Company, Limited.

5-33, Kitahama 4-chome, Chuo-ku, Osaka, 540-8639, Japan

Independent Auditors

KPMG AZSA & Co.

1-2, Tsukudo-cho, Shinjuku-ku, Tokyo, 162-8551, Japan

Investor Relations

For further information, please contact our asset management company or visit our web site.

(http://www.orixjreit.com/english/index.htm)

ORIX Asset Management Corporation

World Trade Center Bldg., 4-1, Hamamatsucho 2-chome, Minato-ku, Tokyo, 105-6135, Japan

PHONE + 81-3-3435-3285

FAX +81-3-3435-3275

54 ORIX JREIT REPORT 16th Period


About Our Website

Top Page

ORIX JREIT´s website has been redesigned.

Key points in website redesign

The website has been redesigned with focus on ‘‘Ease of Use,” ‘‘Abundance of Information,”

and ‘‘Ease of Understandability” from the viewpoint of unitholders.

http://www.orixjreit.com/english/

Details of Properties

•Details of Properties

1

With the introduction of Google Maps, information on the surrounding areas of

respective properties can now be obtained in more detail.

2

It is now easier to gather information on properties with related news releases

supplementing other information related to properties.

1

2

•Properties

Properties

3

Searches specific to ‘‘Use,” ‘‘Area,” ‘‘Property Size,” and ‘‘Acquisition Price” can

now be made, in addition to sorting functions by ‘‘Completion,” ‘‘Total Floor Area,”

and ‘‘Acquisition Price.”

3

•News Releases

News Releases

4

News Releases are now easy to search for, as they are identified under seven

categories, including ‘‘Properties,” ‘‘Borrowings,” ‘‘Financial Results,” ‘‘PO,” and

‘‘Others,” in addition to classification by year.

4

Disclaimer

This report includes translations of certain Japanese documents originally filed under the Financial Instruments and Exchange Law of Japan and related accounting regulations. This report was prepared in English solely

as a reference for the convenience of readers outside Japan and is not intended to constitute a disclosure statement.

English terms for Japanese legal, accounting, tax, and business concepts used herein may not be precisely identical to the concepts of the equivalent Japanese terms. With respect to all terms herein, including

without limitation, the financial statements, the original Japanese documents shall govern in meaning and interpretation for any discrepancies between the original Japanese documents and the corresponding English

statements.

None of ORIX JREIT Inc. (OJR), ORIX Asset Management Corporation (OAM), or any of their respective directors, officers, employees, partners, shareholders, agents, or affiliates shall be responsible or liable for the

completeness, appropriateness, or accuracy of the English translations or the selection of any portion of any document translated into English.

The financial statements of OJR have been prepared in accordance with accounting principles generally accepted in Japan (the ‘‘Japanese GAAP”), which are different in certain respects to the application and

disclosure requirements of International Financial Reporting Standards.

This report contains forward-looking statements, including forecasts of financial position, results of operations, and business-related matters, as well as statements related to the plans and goals of the management

of OAM. However, there are a number of known and unknown risks and uncertainties that can cause actual results or OJR performance to differ materially from any explicit or implicit forecasts persented herein. These

forward-looking statements also rest on a number of assumptions with regard to OJR´s present and future management strategies, as well as the political and economical environments in which OJR will conduct its

future business operations.

ORIX JREIT REPORT 16th Period 55

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