Amendment to Performance Forecasts for the Seventh Fiscal Period by s42gs6

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									                                                                                                           October 23, 2009
For Immediate Release
                                                          REIT Issuer
                                                            JAPAN OFFICE Investment Corporation
                                                            1-10, Nanpeidai-cho, Shibuya-ku, Tokyo
                                                            Name of representative: Executive Director Hirotomo Tasaki
                                                                                                     (Code number: 8983)
                                                          Asset Management Company
                                                            J A PA N O F F I C E A D V I S O R S , I n c .
                                                            Name of representative:         President Hirotomo Tasaki
                                                            Contact:                    GM, Finance Hisayoshi Towata
                                                                                                      (Tel: 03-6416-1287)


          Amendment to Performance Forecasts for the Seventh Fiscal Period (Ending October 2009)


  JAPAN OFFICE Investment Corporation (the “Investment Corporation”) announces that, based on its decision
on the disposal of properties, it today amended its performance forecasts, announced on June 16, 2009, for the
Seventh Fiscal Period (May 1, 2009 – October 31, 2009) as follows.

1. Amendment to Performance Forecasts for the Seventh Fiscal Period (May 1, 2009 – October 31, 2009)

                                                                                                                  Dividend in
                       Operating        Operating           Current             Net           Dividend
                                                                                                                   Excess of
                       Revenue           Income             Income            Income          per Unit          Earnings per Unit
                    (Millions of yen) (Millions of yen) (Millions of yen) (Millions of yen)     (Yen)                 (Yen)
   Previous
  Announced              4,466             1,753              447               524             3,100                  -
  Forecast (A)
Current Amended
                         4,443             1,603              252               329              2,000                 -
  Forecast (B)


 Change (B-A)             -23              -150              -195              -195             -1,100                 -


  Change (%)             -0.5%             -8.6%            -43.6%            -37.2%           -35.5%                  -


(Note 1) The expected number of investment units outstanding at the end of the fiscal period: 164,504 units
(Note 2) The figures presented above are current performance forecasts. The actual operating revenue, operating income, current
         income, net income and dividend per unit may be subject to change.
(Note 3) Monetary figures less than the indicated unit have been rounded down, and percentages have been rounded to the first
         decimal place.

2. Reasons for the Amendment

The Investment Corporation today decided to dispose some properties it owns. (For details please refer to the
press release “Notice on Disposal of Portfolio Properties” dated October 23, 2009.) Reflecting the impact of
the disposal on business results as well as reviewing the rental income status, various expenses and other
factors, the Investment Corporation revised its performance forecasts for the Seventh Fiscal Period ending
October 2009.
3. Comments on Expected Decrease in Dividends due to Disposal of Properties (COI Yotsubashi Building and
Ginza Todoroki Building)

The turmoil in the global financial market, triggered by the subprime loan problems, and the economic
slowdown have had a profound impact on the real economy in Japan. Although the latest situation is
gradually becoming more composed, the real estate transaction market is still captured in stagnancy with no
liquidity, as trading activities themselves are thinning in response to the deterioration in the fund
procurement environment. In the real estate rental market, demand for offices tends to decrease due to the
impact of the worsened real economy.

As such, the management environment surrounding the Investment Corporation continues to remain harsh.
Within this situation, the most immediate management issue is the refinancing of loans that will mature in
December 2009 and January 2010.

The Investment Corporation has decided to dispose its COI Yotsubashi Building and Ginza Todoroki
Building, the two properties that are collateralized for the loans mentioned above, after comprehensively
considering the future revenue prospects of the properties and the increase or decrease of their asset values.

The disposal of the properties will generate cash of approximately 2 billion yen, and the Investment
Corporation plans to use all of the proceeds to repay the said loans.

The Investment Corporation believes that it should be able to realize the value inherent to the assets it owns by
reducing its borrowings in order to lower LTV and remove concerns regarding future refinancing risk, resulting in
enhanced investment unit value.

Although generating capital losses, the disposal of the properties should help reduce borrowings and reinforce the
financial foundation of the Investment Corporation, as well as enable it to make progress concerning the
refinancing of the said loans, its most immediate management issue.

The Investment Corporation and JAPAN OFFICE ADVISORS, Inc., the asset management company, take seriously
the fact that the forecast dividend to unitholders is reduced as a result of the capital losses generated by the disposal,
and are committed to making continuous efforts to eliminate concerns over refinancing risk. The Investment
Corporation and the asset management company ask investors for their understanding and continued support.


Reference) Difference in Forecasts of Dividends for the Seventh Fiscal Period

                                                                  (Portion of Operating Income
                                   Forecast Dividends                                                (Contribution of capital losses)
                                                                    excluding capital losses)

       Forecast upon
   Announcement of the
    Sixth Fiscal Period                3,100 yen            =             3,100 yen              +                   0 yen
          Results
      (June 16, 2009)
  Latest Announcement of
          Forecast                     2,000 yen            =             3,831 yen              +            -1,831 yen
    (October 23, 2009)

         Difference                   -1,100 yen            =               731 yen              +            -1,831 yen
* This document is being distributed today to the Kabuto Club (the press club of the TSE) as well as to the press club for the
  Ministry of Land, Infrastructure, Transport and Tourism and the press club for specialty construction newspapers at the
  Ministry of Land, Infrastructure, Transport and Tourism.
* Website of the Investment Corporation: http://www.japan-office.co.jp/eng/
* This English notice is a translation of the original Japanese notice and is provided solely for informational purposes. Should
  there be any discrepancies between this translation and the Japanese original, the latter shall prevail.
                   Preconditions for Performance Forecasts for the Seventh Fiscal Period

Period under
               Seventh Fiscal Period: May 1, 2009 to October 31, 2009
  Review

               ・     The Investment Corporation owns 57 properties as of September 30, 2009
                    (hereafter, “total acquired properties”). The forecast has been based on 54
 Portfolio          properties, excluding COI Naha Building, COI Yotsubashi Building and Ginza
  Assets            Todoroki Building to be disposed from the 57 properties.
               ・    In practice, however, forecasts are subject to revision due to changes other those
                    mentioned above, such as the disposal of existing properties, etc.
Number of
Outstanding    ・ As of the Seventh Fiscal Period, the number of investment units outstanding is assumed
Investment       to be 164,504 units, the current figure for the number as of today.
   Units
               ・ Rental revenues are calculated based on lease contracts that are in effect as of September
                 30, 2009, while taking into consideration factors such as the competitiveness of the
 Operating       properties and market conditions and using past actual values of previously acquired
 Revenue         assets as a standard.
               ・ The Investment Corporation anticipates 2 million yen (13 yen per unit over outstanding
                 investment units of 164,504) of capital gains from the disposal of COI Naha Building.
               ・ Among rental expenses, which are the principal operating expenses, those other than
                 depreciation are calculated based on historical data, while taking into consideration
                 variable expenses.
               ・ Property tax and city planning tax to be recorded as expenses are assumed to be 344
                 million yen for the Seventh Fiscal Period. Further more, although property tax and city
                 planning tax in the disposal/purchase of real estate are generally split with the former
                 owner at the time the property is acquired on a pro-rata basis in accordance with the
                 length of the ownership period, the Investment Corporation includes this amount in the
                 acquisition costs.
               ・ The building maintenance and repair expenses for the Seventh Fiscal Period are assumed
                 to be 78 million yen. Furthermore, the building maintenance and repair expenses for
 Operating       each fiscal period could differ significantly from the estimated amounts due to various
 Expenses        reasons such as damage to the building caused by unexpected factors, the variance in
                 amounts generally tending to grow from year to year and repair expenses not arising
                 regularly.
               ・ Depreciation is calculated using the straight line method, including the depreciation for
                 total acquired properties currently owned as well as depreciation for additional future
                 capital expenditure. Depreciation for the Seventh Fiscal Period is assumed to be 650
                 million yen.
               ・   Outsourcing expenses including property management fees are assumed to be 443 million yen for
                   the Seventh Fiscal Period.
               ・   Capital losses from the disposal of COI Yotsubashi Building and Ginza Todoroki Building are
                   assumed to be 303 million yen (1,844 yen per unit over outstanding investment units of
                   164,504).
   Non-        ・ Interest payment for the Seventh Fiscal Period is assumed to be 659 million.
 operating     ・ Costs related to financing for the Seventh Fiscal Period are assumed to be 682
 Expenses        million yen.
               ・ As of the end of the Sixth Fiscal Period (April 30, 2009), the Investment
                 Corporation had an outstanding balance of borrowings of 59,654 million yen. As of
                 the end of the Seventh Fiscal Period, the Investment Corporation assumes 56,454
                 million yen as the balance of borrowings after repaying 1,200 million yen, 1,500
 Borrowings
                 million yen and 500 million yen for the AIG Loan, GERE Loan II and Shinsei Bank
                 Loan, respectively, through the disposal of the three properties mentioned above.
                 Other than these, the Investment Corporation assumes to conduct refinancing of
                 borrowings that will be matured in the Seventh Fiscal Period.
               ・ Distributions (dividend per unit) are based on the assumption that distributions will
                 comply with the monetary distribution policy stipulated in the Investment Corporation’s
                 Articles of Incorporation.
Dividend per
               ・ The amount of the dividend per unit is subject to change due to factors such as
    Unit
                 changes in rental income associated with changes in tenants, other changes in
                 properties, the emergence of unexpected repair costs, fluctuations in interest rates,
                 and the issuance of additional investment units.
Dividend in
 Excess of     ・ The Investment Corporation does not plan on making any monetary distribution
Earnings per     exceeding profits (dividend in excess of earnings per unit) at this point.
    Unit
               ・ The performance forecasts are based on the assumption that revisions impacting the
                 forecast figures above will not be made to laws and regulations, the tax system,
                 accounting standards, the listing rules, or the rules of the Investment Trusts
  Others         Association, Japan, etc.
               ・ It is also assumed that there will be no unexpected material change in general
                 economic trends, the real estate market, etc.

								
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