Risk Factors

as of September 26,2017

This section describes major issues that may become risks factors with respect to investment in JPR.The following is not an exhaustive list, however, and there are risks other than those described below.These descriptions include forward-looking statements. Unless otherwise noted, such statements are based on the current judgment made by JPR.

Risks Regarding Products Features of the Investment Securities or Investment Corporation Bonds

  1. Risk regarding market price fluctuations for the Investment Securities
  2. Risk regarding cash distributions
  3. Risk regarding fluctuation in revenues, expenditures and cash flows
  4. Risk regarding dilution of the value per unit upon issuance of investment units via offering
  5. Risk regarding redemption and interest payment of the Investment Corporation Bonds
  6. Risk regarding market transactions of the Investment Securities

Risks Regarding Management Policy of JPR

  1. Risk regarding disproportionate geographical spread of investment properties
  2. Risk that JPR cannot acquire or dispose real estate
  3. Risk regarding concentration on certain tenants
  4. Risk regarding funding through issuance of new investment units, borrowings and issuance of investment corporation bonds
  5. Risk that JPR's external growth strategy utilizing the sponsor support does not function as assumed

Risks Regarding JPR's Related Parties and Structure

  1. Risk regarding dependency on related parties of JPR and conflicts of interest with them
  2. Risk regarding dependence on TRIM's sponsors and conflicts of interest with them
  3. Risk regarding amendments to JPR's investment policies
  4. Risk that JPR goes bankrupt or its registration is cancelled
  5. Risk regarding tenant leasehold and security deposits

Risks Regarding Real Estate and Beneficiary Interests in Trust

  1. Risk regarding faults or defects of real estate
  2. Risk regarding lease agreements
  3. Risk of real estate being damaged, destroyed or deteriorated due to natural disasters
  4. Risk regarding owner responsibility and repair and maintenance costs for real estate
  5. Risk regarding administrative regulations and prefectural or municipal ordinances for real estate
  6. Risk regarding establishment of or amendments to laws and regulations
  7. Risk of being impacted by the seller's' insolvency, etc.
  8. Risk regarding sublease
  9. Risk regarding status of use and management of real estate by tenants
  10. Risk regarding co-owned properties
  11. Risk regarding sectionally-owned buildings
  12. Risk regarding properties on leased lands
  13. Risk regarding properties leased to JPR
  14. Risk regarding land with leasehold interest
  15. Risk regarding development properties
  16. Risk regarding hazardous materials
  17. Risk specific to real estate owned as beneficiary interests in trust
  18. Risk regarding quasi co-ownership of beneficiary interests in trust, etc.
  19. Risk regarding forward commitment, etc.

Taxation Risks

  1. Risk regarding satisfaction of conduit requirements
  2. Risk that conduit requirements are not satisfied retrospectively due to corrections ordered as a result of tax investigations, etc.
  3. Risk of tax reduction system not applied for acquiring real estate
  4. Risk regarding general amendments to the taxation system

Miscellaneous Risks

  1. Risk regarding reports by professionals, etc.
  2. Risk associated with application of fixed asset impairment accounting
  3. Risk regarding investment in preferred securities issued by special purpose companies