Kenedix Realty Investment : Notice Concerning Debt Financing (Series 136) and the Execution of an Interest Rate Swap Agreement

Translation of Japanese Original

To All Concerned Parties

January 12, 2017

REIT Issuer: Kenedix Office Investment Corporation Naokatsu Uchida, Executive Director

(Securities Code: 8972)

Asset Management Company: Kenedix Real Estate Fund Management, Inc. Ryosuke Homma, CEO and President

Inquiries: Hikaru Teramoto

General Manager of Planning Department

Office REIT Division TEL: [phone]

Notice Concerning Debt Financing (Series 136) and the Execution of an Interest Rate Swap Agreement

Kenedix Office Investment Corporation ("the Investment Corporation") today announced its decision to undertake debt financing (total of ¥1,000 million) and the execution of an interest rate swap agreement.

Please see below for additional details.

1. Outline of Debt Financing

   Series	Lender	Amount	Interest Rate (Note 1) (Note 2)	Contract Date	Drawdown Date	Principal Repayment Date (Note 1)	Collateral・ Repayment Method
   136-A	Sumitomo Mitsui Trust Bank, Limited	¥500 million	Base rate (JPY TIBOR for 1 month) + 0.25000%	January 12, 2017	January 16, 2017	January 31, 2018	Unsecured, unguaranteed ・ Repayment of principal in full on maturity date
   136-B		¥500 million	Base rate (JPY TIBOR for 1 month) + 0.60000%			January 31, 2027

   Note 1: The first interest payment is due at the end of January 2017, and on the last day of every month thereafter with the principal repayment day. If each interest payment day or the principal repayment day is a non-business day, then the interest payment or the principal repayment will be due on the next business day and if that next business day is in the next month, then previous business day will be applied.

   Note 2: The base rate that is applied during interest period for the interest due on each interest payment date shall be calculated based on Japanese Yen TIBOR for 1 month, which the JBA TIBOR Administration ("the JBATA") releases two business days before each interest payment date. The Japanese Yen TIBOR of the JBATA is available on the JBATA website (http://www.jbatibor.or.jp/english/rate/).

2. Purpose of Debt Financing

   Series 136 is to apply the fund towards the repayment of Series 80 (¥1,000 million) with the principal repayment date of January 16, 2017.

3. Interest Rate Swap Agreement

4. Purpose

   For a hedge against possible increases in future interest rate for Series 136-B with floating interest rate.

5. Details of the Interest Rate Swap Agreement

   Series 136-B
   Counterparty		Sumitomo Mitsui Trust Bank, Limited
   Notional Amount		¥500 million
   Interest Rate	Fixed interest rate for payment	0.25960%
   	Floating interest rate for receipt	Base rate (JPY TIBOR for 1 month)
   Commencement Date		January 16, 2017
   Termination Date		January 31, 2027
   Payment Date		The first payment is due at the end of January 2017, and on the last day of every month thereafter, with January 31, 2027. (If each payment day is a non-business day, then the payment will be due on the next business day and if that next business day is in the next month, then previous business day will be applied.)

   Note: By entering into the interest rate swap agreement, the interest rate for Series 136-B is essentially fixed at 0.85960%.

6. Status of Debt Financing and Corporate Bonds after the Borrowings (as of January 16, 2017)

   (Millions of yen)

   	Classification	Balance before the Borrowings	Balance after the Borrowings	Difference
   Short-Term Borrowings (Note 1)	4,000	4,000	0
   Long-Term Borrowings (Note 2)	164,800	164,800	0
   Total Borrowings	168,800	168,800	0
   Corporate Bonds	9,300	9,300	0
   Total Borrowings and Corporate Bonds		178,100	178,100	0

   Note 1: Short-term borrowings refer to debt financing with a period less than or equal to one year from the drawdown date to the principal repayment date. However, the borrowings for which the period until the principal repayment date have surpassed one year because the principal repayment date one year from the drawdown date is not a business day, and for which the principal repayment date has been moved to a different business day, are included in short-term borrowings.

   Note 2: Long-term borrowings refer to debt financing with a period more than one year from the drawdown date to the principal repayment date.

7. Other

8. For risks concerning the repayment of the aforementioned borrowings, there are no significant changes to the "Investment Risks" as described in the Securities Report (submitted July 28, 2016).

   The Investment Corporation's website: http://www.kdo-reit.com/en/

   This notice is the English translation of the Japanese announcement on our website released on January 12, 2017. However, no assurance or warranties are given for the completeness or accuracy of this English translation.