Financial Results (140120260226569519)

This English language notice is a translation of the Japanese-language notice released on February 26, 2026 and was prepared solely for the convenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on their own investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties or assurances are given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy between this translation and the Japanese original, the latter shall prevail in all respects.

1. Operating Conditions

   1. Operating Conditions

      1. Overview of the Fiscal Period Ended December 31, 2025

         1. Main Trends of INV

            INV was established in January 2002 in accordance with the Investment Trust and Investment Corporation Act (Act No. 198 of 1951, as amended). In May 2004, INV was listed on the Osaka Securities Exchange (application for delisting was made in August 2007), and in August 2006 was listed on the Real Estate Investment and Trust Securities Section of the Tokyo Stock Exchange (Ticker Code: 8963).

            After the absorption-type merger with LCP Investment Corporation ("LCP") was implemented on February 1, 2010, INV issued new investment units through a third-party allotment on July 29, 2011 and refinanced its debt. Calliope Godo Kaisha ("Calliope"), an affiliate of the Fortress Investment Group LLC ("FIG" and together with Calliope and other affiliates of FIG, collectively the "Fortress Group") was the main allottee, and the sponsor changed to the Fortress Group.

            Ever since the commencement of sponsorship from the Fortress Group (Note 1), INV has been focusing its efforts on improving the profitability of its portfolio and establishing a revenue base in order to secure stable distributions, and has strengthened the lender formation through new borrowings and the refinancing of existing bank borrowings, thereby creating a financial base for external growth. With this platform as a base, in June 2014, Consonant Investment Management Co., Ltd., the asset manager to which INV entrusts the management of its assets ("CIM") revised the Investment Guidelines for INV, positioned hotels as a core asset class alongside residential properties with a view towards expanding investments in the hotel sector in which demand is forecasted to rise going forward, and has expanded its portfolio.

            In the Fiscal Period ended December 31, 2025 ("Reporting Period"), INV acquired 10 domestic hotels with borrowings and cash on hand on August 27, 2025. As a result, INV's portfolio at the end of the Reporting Period is comprised of 156 properties (114 hotels (Note 2) (Note 3), 41 residential properties and one retail facility) with a total acquisition price of JPY 687,350 million (Note 4). INV's hotel portfolio has the largest asset size (Note 5) of JPY 646,565 million (114 properties, 19,817 rooms) among all J-REITs (real estate investment corporations which are listed on the Tokyo Stock Exchange Real Estate Investment Trust Securities Market, hereinafter the same shall apply) hotel portfolios including Hotel J-REITs (Note 6) with continuous acquisition of assets through sponsor support.

            (Note 1) Calliope transferred 80.0% of issued shares to Fortress CIM Holdings L.P., a subsidiary of SoftBank Group and 20.0% to SoftBank Group Corp. ("SoftBank Group") on March 29, 2018, but the SoftBank Group transferred its issued shares of CIM to Fortress CIM Holdings L.P on May 23, 2023. Further, on May 15, 2024, the SoftBank Group transferred its interest in the indirect parent company of Fortress CIM Holdings L.P. to Mubadala Capital, a wholly-owned subsidiary of Mubadala Investment Company, an Abu Dhabi sovereign wealth fund. As a result, the SoftBank Group no longer falls under the parent company and specified related corporation of CIM.

            (Note 2) The preferred equity interest held by INV is counted as one property. Such preferred equity interest issued by a special purpose company (tokutei mokuteki kaisha) refers to the preferred equity interest issued by Kingdom Special Purpose Company (equivalent to 49.0% of the outstanding preferred equity interest), which owns the trust beneficiary interest of the Sheraton Grande Tokyo Bay Hotel as an underlying asset. The property is classified as a hotel, based on the use of Sheraton Grande Tokyo Bay Hotel, the underlying asset of the preferred equity interest, and INV's investment amount of the preferred equity interest is used as the acquisition price of the preferred equity interest, unless otherwise stated. The "underlying asset" refers to the real estate or the real estate related assets owned by a TK operator of TK interest or a TMK relating to the preferred equity interest which INV owns, thus the real estate or the real estate related assets which will be the revenue source of INV. Hereinafter the same shall apply.

            (Note 3) From September 28, 2018 (Cayman Island local time; September 29, 2018 in Japan local time), INV owned 100% of the TK interest in Seven Mile Resort Holdings Ltd. (the "Cayman SPC"), a Cayman Islands special purpose company that holds leasehold interests in Westin Grand Cayman Seven Mile

            Beach Resort & Spa and The Sunshine Hotel & Suites (collectively, the "Cayman Hotels") and ancillary assets as underlying assets. However, INV implemented the investment structure change (the "Structure Change" in some cases hereinafter) regarding the Cayman Hotels on May 9, 2019 (Cayman Island local time; May 10, 2019 in Japan local time) and has directly held the Leasehold Interests, etc. of the Cayman Hotels thereafter. Both TK interest and the Cayman Hotels are counted as two properties before and after the Structure Change. In addition, the "Leasehold Interests, etc." means leasehold interests (rights equivalent to long-term real estate leases on land and buildings under the British Cayman laws) and furniture, fixtures, equipment, ornaments, kitchen instrument, and other assets required for hotel operations. Sunshine Suites Resort changed its name to "The Sunshine Hotel & Suites" on December 10, 2025. Hereinafter the same shall apply.

            (Note 4) Due to the Structure Change, the book value of the leasehold interests of the Cayman Hotels recorded by the Cayman SPC as of May 9, 2019 (Cayman Island local time; May 10, 2019 in Japan local time), when INV succeeded the leasehold interests of the Cayman Hotels from the Cayman SPC via distribution in kind in connection with the termination of TK agreement, is deemed as the acquisition price of the Cayman Hotels. The book value is converted into JPY amount via exchange rate of USD 1=JPY 110.45 based on the foreign exchange forward contracts executed on July 26, 2018 and implemented on September 26, 2018 in connection with the investment in the TK interest by INV. Hereinafter the same shall apply.

            (Note 5) Hotel J-REIT is defined as the J-REIT whose majority part of portfolio consists of hotel assets.

            (Note 6) "The largest asset size … among all J-REIT hotel portfolios" refers to the total acquisition price of 114 hotels owned by INV as compared with the total acquisition price of hotels (including inns and other accommodation facilities) owned by listed investment corporations other than INV as of December 31, 2025.

         2. Operational Performance

            The portfolio NOI (Note 1) increased by 10.0% or JPY 2,348 million compared to the same period in the previous year (the December 2024 fiscal period) to JPY 25,800 million. Of which, the hotel portfolio NOI increased by JPY 2,329 million and the residential and retail portfolio NOI increased by JPY 19 million.

            Commentary on hotel and residential performance is as described below.

            As for the domestic hotel portfolio, all key performance indicators showed growth for the Reporting Period, supported by solid domestic demand, robust and continued growth in inbound demand, along with the increase in demand in the Osaka area toward the latter half of the Expo 2025 Osaka. Although inbound demand experienced a decline for some markets due to unfounded rumors suggesting a major disaster would occur in Japan on July 5, 2025, which had no scientific basis, and the deterioration of Japan-China relations stemming from the statement in the Diet in November, the overall performance remained strong. Among the 102 domestic hotels owned by INV at the beginning of the Reporting Period (including Sheraton Grande Tokyo Bay Hotel, the underlying asset of the preferred equity interest of TMK owned by INV), the gross revenue of the 91 domestic hotels (Note 2) operated by the major tenant for the Reporting Period increased by 7.8% compared to the same period in the previous year and recorded an occupancy rate (Note 3) of 85.9%, ADR (Note 4) of JPY 15,612, and RevPAR (Note 5) of JPY 13,406.

            The Cayman Hotels recorded an average occupancy rate of 46.3%, ADR of USD 530, and RevPAR of USD 245 for the Reporting Period. Although demand for The Westin Grand Cayman Seven Mile Beach Resort & Spa remained steady throughout the Period, the large-scale renovation work at The Sunshine Hotel & Suites took longer than expected. As a result, occupancy rate and RevPAR fell compared to the same period last year. During the Reporting Period, although travel demand declined due to the passage of a Category 5 hurricane "Melissa" through the Caribbean in late October 2025, and personal financial uncertainty due to the U.S. federal government shutdown, it recovered strongly during the Christmas holiday season in December 2025, resulting in an increase in ADR and robust gross revenues compared to the same period last year.

            Regarding the residential portfolio (Note 7), the occupancy rate (Note 8) of 41 residential properties decreased by 1.1 points to 96.5% at the end of the Reporting Period from 97.6% at the end of the previous period. The average occupancy rate (Note 8) increased by 0.2 points YoY to 97.0%, driven by strong rental demand. The NOI (Note 9) for the Reporting Period increased by 1.7% YoY.

            In the Reporting Period, INV realized a rent increase for 76.9% (based on the number of contracts) of the new residential lease contracts, and the new rent increased by 3.8% compared to the previous rent across all new leases (Note 10). INV achieved a rent increase for 56.8% (based on the number of contracts) of contract renewals with an average rent increase of 1.8% compared to the previous rent across all renewal leases, while maintaining a high contract renewal rate (Note 11) of 79.5%. Combined, new lease and renewal lease rents were signed at 2.5% higher than the previous leases. The average rent per tsubo per month (Note 12) for the Reporting Period increased by 1.0% YoY to JPY 9,386.

            The total appraisal value of 155 properties was JPY 831,061 million (one out of the 156 properties owned by INV at the end of the Reporting Period is excluded from the appraisal calculation: Sheraton Grande Tokyo Bay Hotel (preferred equity interest) for which the appraisal value of such interest is not available). The portfolio has an unrealized gain of JPY 201,382 million (Note 13) and an unrealized gain ratio of 32.0% (Note 13). The total appraisal value of the 145 properties which were owned throughout the Reporting Period increased by 2.7% from JPY 775,647 million at the end of the June 2025 fiscal period to JPY 796,350 million at the end of the Reporting Period.

            Key Performance Indicators of 91 Domestic Hotel Properties (Note 2)

            	December 2025 fiscal period	Year-on-year change
            Occupancy Rate (Note 3)	85.9％	+1.0pt
            ADR (JPY) (Note 4)	15,612	+7.0%
            RevPAR (JPY) (Note 5)	13,406	+8.2%
            Gross Revenue (JPY million)	55,147	+7.8%
            Room Revenue (JPY million)	38,949	+8.3%
            Non-Room Revenue (JPY million)	16,198	+6.5%
            GOP (JPY million) (Note 6)	21,707	+8.9%

            Key Performance Indicators of Cayman Hotels

            	December 2025 fiscal period	Year-on-year change
            Occupancy Rate (Note 3)	46.3%	-6.4pt
            ADR (USD) (Note 4)	530	+21.0%
            RevPAR (USD) (Note 5)	245	+6.3%
            Gross Revenue (USD thousand)	39,109	+7.5%
            Room Revenue (USD thousand)	21,388	+6.3%
            Non-Room Revenue (USD thousand)	17,720	+8.9%
            GOP (USD thousand) (Note 6)	11,560	+8.3%

            Key Performance Indicators of 41 Residential Properties (Note 7)

            	December 2025 fiscal period	Year-on-year change
            Average Occupancy Rate (Note 8)	97.0％	+0.2pt
            Average Rent per Tsubo per Month (JPY) (Note 12)	9,386	+1.0%
            NOI (JPY million) (Note 9)	1,160	+1.7%

            (Note 1) "NOI" for the hotel properties is calculated in accordance with the following formula:

            NOI＝ Rental Revenues - Property Related Expenses + Depreciation Expenses + Dividend on the

            preferred equity interest (TMK dividend) + (Management Contract Revenue of the Cayman Hotels-Management Contract Expense)

            (Note 2) Of the 102 domestic hotel properties (including Sheraton Grande Tokyo Bay Hotel, the underlying asset of preferred equity interest held by INV) held as of the beginning of the December 2025 fiscal period, this refers to 91 hotels operated by Iconia Hospitality K.K. (MyStays Hotel Management changed its company name to Iconia Hospitality K.K. on July 1, 2025. Hereinafter "ICN") and its subsidiary. In addition, the figures for the properties acquired after January 2024 are calculated on the assumption INV had acquired those properties on January 1, 2024, using the actual figures provided by the sellers of such properties for the period before the acquisition. Hereinafter the same shall apply.

            (Note 3) "Occupancy rate" for the hotel properties is calculated in accordance with the following formula: Occupancy rate = total number of occupied rooms during a certain period ÷ total number of rooms available during the same period (number of rooms x number of days)

            Hereinafter the same shall apply.

            (Note 4) "ADR" means average daily rate, and is calculated by dividing total room sales (excluding service fees) for a certain period by the total number of days per room for which each room was occupied during the same period. Hereinafter the same shall apply.

            (Note 5) "RevPAR" means revenues per available room per day, and is calculated by dividing total room sales for a certain period by total number of rooms available (number of rooms x number of days) during the same period, and is the same as the figure obtained by multiplying ADR by occupancy rates. Hereinafter the same shall apply.

            (Note 6) "GOP" means the gross operating profit, and is the amount remaining after deducting costs of hotel operations (the personnel, utility and advertising expenses and other expenses) and the management services fee to operators (if any) from the hotel's revenues. In addition, GOP for the Sheraton Grande Tokyo Bay Hotel has been multiplied by 49%, or INV's ownership ratio of the preferred equity interest. Hereinafter the same shall apply.

            (Note 7) Based on the 41 residential properties owned as of the end of December 2025. Hereinafter the same shall apply.

            (Note 8) "Occupancy Rate" and "Average Occupancy Rate" for the portfolio or the residential properties are calculated by dividing the sum of total leased area by the sum of total leasable area at the end of each month during the relevant period. Hereinafter the same shall apply.

            (Note 9) For the comparison of NOI for the residential properties, one-off insurance-related revenues and expenses are excluded. Hereinafter the same shall apply.

            (Note 10) Increase or decrease in the sum of monthly rents on new or renewal contracts, or the total of both, compared with the sum of previous rents. Hereinafter the same shall apply.

            (Note 11) Renewal rate is calculated by the number of renewed contracts during the relevant period divided by the number of contracts due up for renewal during the relevant period.

            (Note 12) "Average Rent per Tsubo per Month" is calculated by dividing the total rental revenue (including common area charges) for each month by the sum of total leased area (tsubo) at the end of each month during the relevant period.

            (Note 13) The unrealized gain is calculated using the following formula: the appraisal value as of the end of the Reporting Period - book value as of the end of the Reporting Period.

            The unrealized gain ratio is calculated using the following formula: the unrealized gain ÷ book value as of the end of the Reporting Period.

         3. Overview of Fund Raising

            As a result of the measures described below, INV's interest-bearing debt outstanding balance was JPY 348,654 million and the Interest-Bearing Debt ratio (Note 1) and LTV (appraisal value basis) (Note 2) were 49.2% and 42.4%, respectively, as of the end of the Reporting Period, with an average interest rate (Note 3) of 1.30%.

            (Note 1) Interest-Bearing Debt ratio uses the calculation formula below:

            Interest-Bearing Debt ratio = total outstanding interest-bearing debt (excluding short-term consumption tax loan) / total assets x 100

            Short-term consumption tax loan is a loan which is to be repaid before maturity date with

            refund of consumption taxes and regional consumption taxes on an acquisition of a property. (Note 2) LTV (appraisal value basis) uses the calculation formula below:

            LTV = total outstanding interest-bearing debt (excluding short-term consumption tax loan)

            / total appraisal value (*) x 100

            (*) Since the appraisal value for Sheraton Grande Tokyo Bay Hotel (preferred equity interest) is not available, the acquisition price of the preferred equity interest (JPY 17,845 million) is deemed as the appraisal value of Sheraton Grande Tokyo Bay Hotel (preferred equity interest). For the appraisal value of the Cayman Hotels, USD is converted into JPY amount via the forward exchange rate of USD 1=JPY 110.45 based on the foreign exchange forward contract entered into on July 26, 2018, and executed on September 26, 2018.

            (Note 3) The average interest rate (annual rate) is calculated by the weighted average based on the outstanding balance of borrowings and rounded to two decimal places.

            (i) Borrowing of Funds

            INV borrowed New Syndicate Loan (018) (total amount borrowed: JPY 12,037 million; interest rate: floating interest rate of 1-month JPY TIBOR plus 0.60000% for a duration of six years, floating interest rate of 1-month JPY TIBOR plus 0.60000% for a duration of six years, floating interest rate of 1-month JPY TIBOR plus 0.50000% for a duration of five years, floating interest rate of 1-month JPY TIBOR plus 0.40000% for a duration of four years), which was arranged by Mizuho Bank, Ltd. on July 16, 2025 and July 22, 2025 in order to repay New Syndicate Loan (L) in the amount of JPY 4,942 million, New Syndicate Loan (M) in the amount of JPY 5,795 million and Term Loan (L) in the amount of JPY 700 million due on July 16, 2025, as well as Term Loan (005) in the amount of JPY 600 million due on July 20, 2025.

            Moreover, INV borrowed New Syndicate Loan (019) on August 27, 2025 (total amount borrowed: JPY 30,200 million; interest rate: floating interest rate of 1-month JPY TIBOR plus 0.50000% for a duration of five years, floating interest rate of 1-month JPY TIBOR plus 0.45000% (by the interest swap agreement on August 25, 2025, it is fixed, in effect, at 1.75900%) for a duration of 4.5 years, floating interest rate of 1-month JPY TIBOR plus 0.45000% for a duration of 4.5 years, 1.74900% for a duration of 4.5 years, floating interest rate of 1-month JPY TIBOR plus 0.40000% (by the interest swap agreement on August 25, 2025, it is fixed, in effect, at 1.66400%) for a duration of four years, 1.65400% for a duration of four years), which was arranged by Mizuho Bank, Ltd. in order to pay a portion of the acquisition price and related expenses for the acquisition of the 10 domestic hotels described in "(d) Overview of Acquisition of Assets"

            Furthermore, INV borrowed Term Loan (026) (amount borrowed: JPY 500 million; interest rate: floating interest rate of 1-month JPY TIBOR plus 0.45000% for a duration of 4.5 years) from MUFG Bank, Ltd. and Term Loan

            (027) (amount borrowed: JPY 500 million; interest rate: floating interest rate of 1-month JPY TIBOR plus 0.45000% for a duration of 4.5 years) from Sumitomo Mitsui Banking Corporation on October 15, 2025 in order to repay New Syndicate Loan (O) in the amount of JPY 1,000 million due on October 15, 2025.

         4. Overview of Acquisition of Assets

            CIM decided on the acquisition of trust beneficiary interests in 10 domestic hotels as follows on August 25, 2025, and the acquisition of the assets was closed on August 27, 2025.

            Property Number	Property Name	Acquisition Price (JPY million) (Note 1)	Appraisal Value (JPY million) (Note 2)	Seller
            D102	Irago Ocean Resort	6,900	6,970	Nippori Tokutei Mokuteki Kaisha
            D103	Kirishima Kokusai Hotel	6,534	6,600	Heijo Tokutei Mokuteki Kaisha
            D104	Kamenoi Hotel Toba	4,732	4,780	Yakushima Tokutei Mokuteki Kaisha
            D105	Kamenoi Hotel Kusatsu Yubatake	4,682	4,730	Baika Tokutei Mokuteki Kaisha

            D106	Atagawa Ocean Resort	4,187	4,230	BaikaTokutei Mokuteki Kaisha
            D107	Hotel MyStays Atsugi	3,177	3,210	Nippori Tokutei Mokuteki Kaisha
            D108	Kamenoi Hotel Tsukubasan	2,999	3,030	Albula Tokutei Mokuteki Kaisha
            D109	Kamenoi Hotel Kochi	446	451	Yakushima Tokutei Mokuteki Kaisha
            D110	Kamenoi Hotel Chitamihama	372	376	Yakushima Tokutei Mokuteki Kaisha
            D111	Kamenoi Hotel Yanagawa	255	258	Yakushima Tokutei Mokuteki Kaisha
            Total		34,284	34,635

            (Note 1) "Acquisition Price" does not include adjustments for property taxes, city planning taxes, or national or local consumption taxes. Hereinafter the same shall apply.

            (Note 2) "Appraisal Value" is based on appraisal value stated in the appraisal report by the Japan Real Estate Institute., JLL Morii Valuation & Advisory K.K., The Tanizawa Sōgō Appraisal Co., Ltd. or Daiwa Real Estate Appraisal Co., Ltd. on the valuation date of June 1, 2025.

         5. Results of Operations and Distributions

         As a result of the operations mentioned above, operating revenues for the Reporting Period increased by JPY 3,483 million from the previous period (+13.9 %) to JPY 28,591 million, resulting in a net income of JPY 16,688 million, an increase of JPY 2,322 million from the previous period (+16.2%). Unappropriated retained earnings including the retained earnings carried forward from the preceding fiscal period (JPY 8,486 million) is JPY 25,175 million. INV has decided to set the distribution per unit (excluding excess profit distribution) of JPY 2,186, which is the net income per unit (JPY 2,182) plus the reversal of retained earnings (JPY 4 per unit).

      2. Outlook for the Fiscal Period Ending June 30, 2026

         The Japanese economy has been gradually recovering despite some effects from U.S. trade policies. The recovery is expected to be supported by steady growth in personal consumption and capital investment driven by improvements in the employment and income environment, as well as the effects of various government policies. On the other hand, there are various uncertainties such as the direction of U.S. trade and diplomatic policies, deterioration of Japan-China relations, concerns about heightened geopolitical risks including escalated tensions in the Middle East and Ukraine. If negative factors such as the slowdown in overseas economies becoming apparent and the deterioration of the export environment worsen, companies may restrain capital investment, potentially creating downward pressure on the overall economy.

         In the hotel market, although there are concerns about declining demand from China due to deteriorating Japan-China relations, demand from other countries and regions remains strong. Consequently, coupled with solid domestic demand, demand for both leisure and business remain solid across all segments and is expected to continue performing steadily.

         In the rental housing market, the supply of new properties has been significantly restricted due to the steep rise of construction costs and labor shortages. At the same time, urban migration trends are driving demand recovery, and the supply-demand balance is expected to continue titling strongly in favor of demand. Additionally, increased demand for rentals is anticipated due to more people abandoning home purchases driven by soaring housing prices, further fueling the rental market. In the Tokyo metropolitan area, the market remains solid with continued lease signings despite rising rents. However, some regional areas are experiencing sluggish rental demand and rising vacancies, so close monitoring of the supply-demand conditions remains necessary.

         In Japan, there has been a significant rise in insurance premiums, and an increase in insurance premiums is also expected for INV's domestic portfolio regardless of asset type.

         1. Future operational policy and issues to be addressed

            Since July 2011, INV has focused on improving the profitability of its portfolio and strengthening its financial

            base in order to enhance unitholder value with the Fortress Group as its sponsor. In addition to access to Fortress' global real estate expertise, INV will actively promote efforts to acquire new demand under the environment where inbound demand becomes more sophisticated (i.e. inbound tourists seeking more experiential and higher-value travel experiences) and flexibly respond to changes in the external environment while emphasizing customer safety and security. Going forward, INV will continue to implement various strategies for further growth and financial stability, including the following measures.

            • Further external growth utilizing sponsor support

            • Asset recycling: property acquisitions using the proceeds from sales

            • Internal growth at hotels through reducing costs, stimulating existing demand and creating new demand by collaborating with hotel operators

            • Further internal growth at residential properties

            • Response to the risk of rising interest rates

         Details of the future growth strategy are as follows.

         1. External growth strategy New Property Acquisitions

            As its basic strategy, INV had moved forward with the acquisition of new properties focusing on hotels, where continued growth in portfolio revenues would be anticipated, and residential properties, especially where rental growth could be achieved, to build a portfolio with a good balance between growth and stability.

            In regard to hotels, INV will take into consideration demands of business and leisure customers in nearby areas, and leasing contract types when making investment decisions, with the aim of acquiring properties where growth and stability of GOP and rental revenue are forecasted to increase.

            In regard to residential properties, INV will analyze occupancy rates, rental market trends, the presence of competing properties among other factors, and consider acquiring properties with strong competitiveness, in which it believes it can achieve increases in rent.

            Properties Acquired from affiliates of the Fortress Group (as of the date of this document)

            Year	Properties acquired	Total acquisition price
            2012	24 residential properties (Note 1)	JPY 14,043 million (Note 1)
            2014	20 hotels	JPY 45,373 million
            2015	14 hotels and three residential properties (Note 2)	JPY 45,238 million (Note 2)
            2016	11 hotels and two residential properties	JPY 92,804 million
            2017	six hotels and two residential properties (Note 3)	JPY 90,006 million (Note 3)
            2018	12 hotels (Note 4)	JPY 104,280 million (Note 4)
            2019	18 hotels	JPY 82,646 million
            2020	Two hotels	JPY 16,236 million
            2023	Six hotels	JPY 57,230 million
            2024	12 hotels	JPY 104,420 million
            2025	10 hotels	JPY 34,284 million
            Total	142 properties (of which 111 are hotels and 31 are residential properties)	JPY 686,562 million (of which hotels: JPY 634,924 million; residential: JPY 51,638 million)

            (Note 1) Of the properties acquired from affiliates of the Fortress Group, 15 residential properties have been sold.

            (Note 2) Of the properties acquired from affiliates of the Fortress Group, one residential property has been

            sold.

            (Note 3) Of the properties acquired from affiliates of the Fortress Group, one residential property has been sold. Sheraton Grande Tokyo Bay Hotel was acquired through a special purpose company, of which INV owns the preferred equity interest, and is counted as one property and INV's investment amount of the preferred equity interest is counted as the acquisition price of the preferred equity interest.

            (Note 4) The Cayman Hotels were acquired by the Cayman SPC, of which INV owns the TK interest, are counted as two properties and INV's investment amount of the TK interest is used as the acquisition price of the TK interest. After the Structure Change, INV currently has direct ownership of the Leasehold of the Cayman Hotels.

            Property Sales

            INV considers the possibility of portfolio optimization upon consideration of the portfolio sector composition, geographic distribution, and competitiveness of each property as appropriate.

         2. Strategy for internal growth (Hotels)

            Of the 112 domestic hotels (Note 1) owned by INV as of the end of the Reporting Period, 104 hotels use a variable rent scheme. In the variable rent scheme, in principle, INV receives all of the GOP after deducting payment of management fees for the hotel operator as rents. For 101 hotels of the 104 hotels, ICN and subsidiaries of ICN (hereinafter collectively "ICN Group") have implemented sophisticated revenue management initiatives seeking to maximize revenue through effectively capturing accommodation demand. As a result, INV can directly enjoy the hotel revenue upside through this variable rent scheme.

            ICN is one of Japan's leading hotel operators, managing a wide range of properties across the country -including limited-service, full-service, and resort-type hotels-under numerous brands such as "Hotel MyStays", "Flexstay Inn", "Art Hotel", and "Kamenoi Hotel", among others. With a large membership base, ICN has established itself as a major player in the domestic hospitality sector. In May 2025, leveraging its scale and aiming to enhance member convenience, ICN launched a loyalty program called "GoTo Pass", which allows members to earn and redeem points at all facilities operated by the group. This loyalty program is also expected to contribute to increased sales at hotels owned by INV and operated by ICN, thereby potentially boosting rental income for INV.

            The ICN Group has reviewed its operational strategy and made efforts to reduce hotel operating expenses and improve profitability. ICN will continue to strive to minimize the impact of rising costs such as labor costs, utility costs and food supplies by means of a thorough review of staffing and work shifts, continuous efforts to reduce fixed costs, and strategies to maximize GOPPAR (GOP per the number of rooms available for sale). As a part of such initiatives, ICN is gradually introducing systems tailored to the operational status of each hotel, such as automated check-in kiosks, mobile check-in systems, and a system for streamlining luggage storage at the reception desk.

            For hotels, renovation of rooms and replacement of fixtures and fittings are indispensable to maintain and increase revenues and operate stably in a planned manner.

            (Note 1) Including Sheraton Grande Tokyo Bay Hotel (the preferred equity interest).

            (Residential properties and others)

            INV will continue to strengthen its collaborative ties with property managers and brokers to further boost occupancy rates and earning capabilities of its properties. With respect to INV's residential properties, INV will focus on increasing the occupancy rates and rents for both new lease contracts and lease renewals for all its properties as well as formulating net leasing cost reduction policies in order to continue maximizing profits.

            Further, the implementation of appropriate maintenance and repair plans is of the utmost importance in maintaining and enhancing the competitiveness and market value of the properties as well as ensuring

            high tenant satisfaction. Therefore, INV will continue to monitor current strategic plans with flexible implementation as it sees fit.

         3. Financial strategy

            INV will continue to diversify the loan maturity dates and diversify financing measures while paying attention to fund procurement costs, as well as maintaining an appropriate average interest-bearing debt repayment periods and fixed interest rate ratio to mitigate the risk of rising interest rates.

            By implementing these measures, INV will seek to improve the credit rating (the long-term issuer rating

            "A+" (Outlook: Positive)) obtained from Japan Credit Rating Agency, Ltd. (JCR).

         4. Compliance risk management

            While the executive director of INV concurrently serves as the representative director at CIM, two supervisory directors (an external attorney and an external certified public account) oversee the execution of the executive director's duties via the Board of Directors of INV.

            CIM has a compliance officer who is responsible for compliance with laws, regulations and other relevant matters as well as overall management of transactions with sponsor related parties. Moreover, it has in place a compliance committee which, chaired by such compliance officer, is in charge of deliberating on compliance with laws, regulations and other relevant matters as well as transactions with sponsor related parties. Compliance committee meetings are attended by an outside expert (an attorney) who, sitting in as a compliance committee member, conducts rigorous deliberations on the existence of conflicts of interest in transactions with sponsor related parties as well as strict examinations with respect to INV's compliance with laws and regulations. No resolution will be adopted unless the outside expert agrees.

            When INV conducts certain transactions such as an asset acquisition from sponsor related parties, prior approvals by the Board of Directors of INV are required to ensure objectivity in deliberation regarding conflicts of interests. In such agenda, only two supervisory directors (a lawyer and a certified public accountant) will participate in the vote, and the executive director who concurrently serves as the representative director of CIM will not participate in the vote as he is a special interested party.

            CIM established on July 1, 2025, the Internal Audit Department in order to strengthen the internal audit system and further enhance governance. INV and CIM intend to continually take steps to strengthen its compliance structure.

         5. Initiatives for Sustainability

         INV and CIM recognize the importance of environmental, social, and governance (ESG) considerations in real estate investment management from the viewpoint of sustainability such as economic and social development and contributing to global environmental conservation, and regard improvement of sustainability as an important management issue. INV and CIM believe that the incorporation of ESG considerations into the real estate investment management business, which is our primary business, is essential to maximizing unitholder value over the medium to long term and contributes to maximizing INV's investment returns.

         Thus, INV and CIM have established a "Sustainability Policy" to set basic policies for sustainability and put them into practice in our daily operations.

         Under this policy, CIM has formulated the "Energy Conservation Policy", the "Greenhouse Gas Emissions Reduction Policy", the "Water Saving Policy" and the "Waste Management Policy" which stipulate efforts to reduce environmental impact as initiatives for the environment. In addition, CIM has established the "Sustainable Procurement Policy" in order to promote initiatives for ESG throughout the value chain of INV's real estate portfolio and concluded the "Green Lease" contract with tenants to collaborate with tenants on measures related to the environmental consideration of real estate, such as proactive introductions of energy-saving equipment such as LED lighting.

         Furthermore, as of the date of this document, INV acquired CASBEE Certification for Buildings (Existing Buildings) for five hotels, and Certification for CASBEE for Real Estate for three hotels and three residential properties. CASBEE is a method that comprehensively assesses the quality of a building, and evaluates features such as interior comfort and scenic aesthetics, in consideration of environment practices including use of materials and equipment that save energy or achieve smaller environmental loads. Also, as of the date of this document, 19 hotels owned by INV acquired the certification of Building-Housing Energy-efficiency Labeling System ("BELS"). In particular, Hotel MyStays Premier Akasaka, Hotel MyStays Fukuoka Tenjin, Hotel MyStays Yokohama Kannai, Hotel MyStays Oita, Hotel MyStays Haneda, and Hotel MyStays Matsuyama have been rated five stars "★★★★★" due to high energy conservation performance. Moreover, INV obtained a DBJ Green Building Certification for six hotels, which was launched by the Development Bank of Japan Inc., for the purpose of supporting the properties which give proper care to the environment and society.

         In addition to the acquisition of environmental certifications for its properties, INV issued JPY 3,500 million in green bonds and refinanced a total of JPY 41,947 million through green loans as of the date of this document to further promote its sustainability initiatives and to strengthen its fund-raising base by expanding the investor base interested in ESG investment.

         As initiatives for society, CIM is working on various measures for tenants, CIM's officers, and employees. CIM conducts the "Tenant Satisfaction Survey" for residents of INV's residential properties to collect opinions and requests of residents and utilize them for asset management and provides sustainability-focused training for all officers and employees at least once a year to help officers and employees acquire knowledge and raise awareness of sustainability considerations in line with business practices. Moreover, as initiatives for CIM's employees, CIM executes various initiatives such as the establishment of a DEI (Diversity, Equity and Inclusion) policy to nourish an inclusive organizational culture and to establish an inclusive value chain, as well as the introduction of a "Qualification Acquisition Support Program" to cover a certain amount of expenses required to acquire and maintain qualifications for employees to develop and maintain competitive human resources and support employees skill and productivity improvement. Furthermore, INV conducts an employee satisfaction survey once every three years with the aim of improving its working environment and provides a full subsidy for a comprehensive medical checkup without age restrictions.

         As a result of other sustainability promotion activities, INV received a "3-Star" rating for the third consecutive year in the 2025 GRESB Real Estate Assessment, an international benchmark assessment that measures ESG integration of real estate companies and funds on a five-level rating scale, and an "A level" in the GRESB Public Disclosure assessment, the highest rating for the fifth consecutive year. Furthermore, INV participated in CDP (Note 1) Climate Change Program Assessment for the first time in 2025 and obtained a "B" rating for climate change.

         INV will continue to recognize its social responsibility to the environment and local communities as a J-REIT with hotels and residences as our core assets and will proactively implement ESG-friendly investment management and sustainability initiatives that take advantage of asset characteristics and carry out social contribution activities.

         (Note 1) CDP is a global non-profit that runs the world's only independent environmental disclosure system for companies, capital markets, cities, states and regions to manage their environmental impact. Scores range from A to D- with eight levels, based on their performance across four key areas: Disclosure, Awareness, Management, and Leadership, reflecting the degree of ambition, goal-setting and concrete action.

      3. Significant Subsequent Events

         Not applicable. Reference information is stated below.

         (Reference Information)

         (a) Partial Redemption of Preferred Equity Interest

         The Kingdom TMK ("TMK") decided on February 13, 2026, to make a partial redemption ("the

         "Redemption") of the preferred equity interest in connection with the preferred equity investment securities backed by the Sheraton Grande Tokyo Bay Hotel, the underlying real estate. The Redemption is scheduled to be made on March 27, 2026, with JPY 6.5 billion as the source of funds, allocated from the additional borrowing of JPY 10.0 billion borrowed at the time of refinancing of its existing loan due on September 2025.

         As a result of the Redemption, INV will receive JPY 3.185 billion (Equivalent to 49.0% of the total JPY 6.5 billion redeemed by the TMK) and its preferred equity investment in the TMK will be reduced from the initial amount of JPY 17.845 billion to JPY 14.660 billion.

      4. Operational Outlook

         The forecasts of financial results for the fiscal periods ending June 30, 2026 (from January 1, 2026 to June 30, 2026) and December 31, 2026 (from July 1, 2026 to December 31, 2026) are as follows.

         June 2026 Fiscal Period (Anticipated)

         December 2026 Fiscal Period (Anticipated)

         Operating Revenues JPY 26,581 million JPY 29,077 million

         Operating Income JPY 17,212 million JPY 19,476 million

         Ordinary Income JPY 14,355 million JPY 16,370 million

         Net Income JPY 14,354 million JPY 16,369 million

         Total Distribution Amount

         (Including excess profit distribution) JPY 14,490 million JPY 16,715 million

         Net Income per Unit JPY 1,877 JPY 2,140

         Distribution per Unit

         (Excluding excess profit distribution) JPY 1,895 JPY 2,186

         Excess Profit Distribution per Unit - -

         Distribution per Unit

         (Including excess profit distribution)

         JPY 1,895 JPY 2,186

         For the assumptions underlying the operational outlook for the fiscal periods ending June 30, 2026 and December 31, 2026, please see "Assumptions Underlying the Forecast of Financial Results and Distribution for the Fiscal Periods ending June 30, 2026 and December 31, 2026" as follows.

         (Cautionary Note regarding Forward Looking Statements)

         Forward looking statements such as the forecasts set forth herein are based on information currently available and certain assumptions that are deemed reasonable. Actual operating performance may vary significantly due to factors not foreseen as of the date of this document, such as the occurrence of gains and losses associated with the sale of properties, repayment of borrowings and a decrease in rent received. Also, this forecast is not a guarantee of distribution amounts.

         < Assumptions Underlying the Forecast of Financial Results and Distribution for the Fiscal Periods ending June 30, 2026 and December 31, 2026 >

         Item	Assumptions
         Fiscal period	The June 2026 Fiscal Period: from January 1, 2026 to June 30, 2026 (181 days) The December 2026 Fiscal Period: from July 1, 2026 to December 31, 2026 (184 days)
         Assets under management	Properties held as of the end of the June 2026 Fiscal Period: 155 properties and preferred equity interests in one TMK Properties held as of the end of the December 2026 Fiscal Period: 155 properties and preferred equity interests in one TMK Based on the properties held as of today (155 properties and preferred equity interests in one TMK), INV assumes that there will be no change in the portfolio through the end of the fiscal period ending December 2026.
         Units outstanding	As of the end of the June 2026 Fiscal Period: 7,646,453 units As of the end of the December 2026 Fiscal Period: 7,646,453 units INV assumes that there will be no change to the current 7,646,453 units issued and outstanding through the end of the fiscal period ending December 2026.
         Interest-bearing liabilities	Balance as of the end of the June 2026 Fiscal Period: JPY 348,654 million (borrowing: JPY 324,554 million, investment corporation bonds: JPY 24,100 million) Balance as of the end of the December 2026 Fiscal Period: JPY 348,654 million (borrowing: JPY 324,554 million, investment corporation bonds: JPY 24,100 million) INV intends to refinance or issue investment corporation bonds of the same amount of loan and investment corporation bonds due through the end of fiscal period ending December 2026. INV assumes no other new loans, issuance of investment corporation bonds or prepayment of loans through the end of the fiscal period ending December 2026.

         Operating revenues

         INV expects to record operating revenues for each fiscal period as follows: With regard to domestic hotel demand, domestic demand is expected to remain stable, although the increase in demand due to the Osaka Expo in 2025 is expected to fade in 2026 for hotels in the Osaka area. As for inbound demand, projections are based on the assumption that the number of foreign visitors to Japan will reach approximately 47 million in 2026. However, this assumption does not factor in the impact of the deterioration in Japan-China relations since mid-November 2025. In addition to the demand forecasts above, INV has taken into account various factors including scheduled conferences, concerts and other events in the vicinity of each hotel, and situations of competitors and price trends, etc., to forecast hotel rents for the period ending June 30, 2026 and thereafter. The reservations for the period from January to April 2026 that have already been made as of the forecast are also taken into account. INV estimates the amount of dividend income from preferred equity interests based on the performance of the underlying asset backing the cash flows and the assumed amount of expenses incurred by the TMK. INV receives revenue and recognizes management contract revenues from Overseas Hotels. The forecast of management contract revenues is based on the estimated performance of the underlying assets and the assumed amount of expenses incurred by the hotel management company. Also, as for the USD based management contract revenue, a large portion is hedged through foreign exchange forward contracts. For more details, please refer to the press releases "Notice concerning Execution of Foreign Exchange Forward" dated May 31, 2024 and June 18, 2025. The management contract revenue for the fiscal periods ending June 2026 and December 2026 is calculated as follows (i) the rate of foreign exchange reserves for the hedged portion, (ii) the exchange rate of USD 1 = JPY 145 for the non-hedged portion. In addition, as the major renovation work at The Sunshine Hotel & Suites has been gradually completed since late November 2025, we are not incorporating any suspension of sales for the Fiscal Period ending June 2026 and onwards. Moreover, while INV is considering the expansion and renovation of the Westin Grand Cayman Seven Miles Beach & Resort, details are yet to be determined. Therefore, INV does not anticipate or incorporate any particular impact of the expansion and renovation for the purpose of this forecast through the end of the Fiscal Period ending December 2026. Rental revenues in the fiscal periods ending June 2026 and ending December 2026 are calculated based on estimates as of today. In addition, INV assumes there will be no delinquencies or non-payment of rent by tenants.

         	June 2026 Fiscal Period	December 2026 Fiscal Period
         ・Rental revenues (of these, hotel rents)	JPY 21,477 million (JPY 19,137 million)	JPY 26,733 million (JPY 24,437 million)
         (Fixed hotel rents)	(JPY 6,892 million)	(JPY 8,952 million)
         (Variable hotel rents)	(JPY 12,245 million)	(JPY 15,484 million)
         ・Management contract revenue	JPY 4,157 million (USD 29,283 thousand)	JPY 1,821 million (USD 12,966 thousand)
         ・TMK dividend amount	JPY 946 million	JPY 522 million
         Total operating revenues	JPY 26,581 million	JPY 29,077 million

         Operating expenses	INV expects to incur property related expenses and management contract expenses out of operating expenses for each fiscal period as follows: June 2026 December 2026 Fiscal Period Fiscal Period ・Facility management fees JPY 1,239 million JPY 1,161 million (of these, repair costs) (JPY 248 million) (JPY 227 million) ・Taxes and other public charges (Note 1) JPY 850 million JPY 1,137 million ・Insurance expenses JPY 315 million JPY 317 million ・Depreciation expenses JPY 5,893 million JPY 5,942 million ・Other expenses JPY 140 million JPY 114 million Total property related expenses and JPY 8,440 million JPY 8,673 million management contract expenses (Note 1) Property taxes and city planning taxes for the assets acquired in 2025 are calculated on a pro-rata basis between the previous owner and settled at the time of acquisition. The amount equivalent to such settlement will be included in the acquisition cost, and therefore will not be recognized as an expense until the fiscal period ending December of the year of acquisition, and will be recognized as an expense starting from the fiscal period ending June of the following year. For the 10 properties acquired on August 27, 2025, INV expects to record the property taxes and city planning taxes of JPY 28 million as part of the total acquisition cost, and an annual amount of JPY 82 million of such taxes as expenses starting from the fiscal period ending June 2026. INV expects to incur other operating expenses besides the property-related expenses or management contract expenses for each fiscal period as follows: June 2026 December 2026 Fiscal Period Fiscal Period ・Other operating expenses JPY 928 million JPY 926 million (of these, asset management fees) (JPY 650 million) (JPY 650 million)
         NOI	INV expects to record net operating income for each fiscal period as follows:: June 2026 December 2026 Fiscal Period Fiscal Period ・NOI JPY 24,035 million JPY 26,345 million (of these, domestic hotel NOI) (JPY 18,923 million) (JPY 23,569 million) (of these, overseas hotel NOI) (JPY 3,885 million) (JPY 1,543 million) (of these, residential NOI) (JPY 1,148 million) (JPY 1,155 million) NOI calculation method in the above table is as follows NOI＝ Rental Revenues - Property Related Expenses + Depreciation Expenses + Dividends on the preferred equity interest (TMK dividend) + Management Contract Revenue-Management Contract Expense
         Non-operating expenses	INV expects to incur non-operating expenses for each fiscal period as follows: Considering the current trend of interest rates, INV calculates the interest expense of each fiscal period with the estimate of 1-month JPY TIBOR (Base Rate) to be 0.85% and 3-month JPY TIBOR (Base Rate) to be 1.05% for the Fiscal Periods ending June 2026 and December 2026. June 2026 December 2026 Fiscal Period Fiscal Period ・Interest expense JPY 2,118 million JPY 2,392 million ・Finance related costs JPY 611 million JPY 559 million ・Interest for investment corporation bonds JPY 147 million JPY 174 million ・Depreciation of investment corporation bonds issuance expenses JPY 19 million JPY 19 million Total non-operating expenses JPY 2,897 million JPY 3,146 million

         Distribution per unit	The distribution per unit is calculated in accordance with the cash distribution policy as set forth in INV's Articles of Incorporation. With respect to the distribution for the fiscal period ending June 2026, INV expects to distribute an aggregate amount of JPY 14,490 million (distribution per unit: JPY 1,895) from the net income for the fiscal period ending June 2026 (JPY 14,354 million), including a JPY 135 million reversal of retained earnings (internal reserve) in an aim to stabilize the level of DPU so that the amount of DPU will be the same level as that of the fiscal period ended June 2025. With respect to the distribution for the fiscal period ending December 2026, INV expects to distribute an aggregate amount of JPY 16,715 million (distribution per unit: JPY 2,186) from the net income for the fiscal period ending December 2026 (JPY 16,369 million), including a JPY 345 million reversal of retained earnings (internal reserve) in an aim to stabilize the level of DPU so that the amount of DPU will be the same level as that of the fiscal period ended December 2025. Distribution per unit may vary due to various factors, including changes in the assets under management, fluctuation of rent income associated with reasons such as the change of tenants and occurrences of unexpected repairs. Furthermore, should the deterioration of Japan-China relations since mid-November 2025 lead to a decrease in Chinese tourists, resulting in a reduction of variable rent from hotels and potentially causing INV's profit level to fall below forecasts, we plan to distribute retained earnings to maintain and stabilize the level of DPU.
         Excess profit distribution per unit	INV believes maintaining the stability of cash distributions over the medium term is one of the most important factors in determining the amount of distribution for a given fiscal period. Therefore, INV has adopted a policy of making excess profit distribution, etc. in order to stabilize distributions in cases where dilution of investment units or significant expenses are to be recorded in connection with the acquisition of assets or the raising of capital, or other events leading to a temporary decrease in distribution per unit. When determining excess profit distribution, etc., INV takes into consideration the level of distribution per unit assuming such acquisition of assets, capital raising or other event would had contributed for a full fiscal period. INV may also consider making excess profit distribution, etc. for the purpose of decreasing the impact from corporate tax increase arising from different rules in tax and accounting practices, such as treatment on depreciation of fixed term land lease or asset retirement obligation. With respect to the fiscal period ending June 2026, INV plans to pay distributions through reversal of retained earnings (internal reserve) (JPY 19 per unit) as mentioned in "Distribution per unit" above, so that the DPU for the fiscal period ending June 2026 will be the same amount as the DPU for the fiscal period ended June 2025. With respect to the fiscal period ending December 2026, INV plans to pay distributions through reversal of retained earnings (internal reserve) (JPY 46 per unit) as mentioned in "Distribution per unit" above, so that the DPU for the fiscal period ending December 2026 will be the same amount as the DPU for the fiscal period ended December 2025. As mentioned in the preceding section "Distribution per unit", should INV's profit level to fall below forecasts due to the deterioration of Japan-China relations, we plan to distribute retained earnings to maintain and stabilize the level of DPU.
         Other	INV assumes there will be no amendments to applicable laws and regulations, the taxation system, accounting standards and other regulations that would affect the foregoing forecasts.

   2. Investment Risk