May 15, 2008

K.K. daVinci Select

Private Placement
Presentation for Investors

Disclaimer:
z

This presentation includes forward-looking statements about DA Office Investment

Corporation and daVinci Select. To the extent that statements in this presentation do not
relate to historical or current facts, they constitute forward-looking statements. These
forward-looking statements are based on the current assumptions and beliefs of the
Group in light of current information and involve known and unknown risks,
uncertainties and other factors. Such risks, uncertainties and other factors may cause
actual performance to be materially different from any future results, performance,
achievements or financial position expressed or implied by these forward-looking
statements.

This document is not intended as an inducement or invitation to purchase or invest in

the products or investment shares of the Group. Nor is the document intended to provide
comprehensive information about the business performance and strategies of the Group.
Each investment decision requires the independent exercise of judgment in fully
reviewing the merits and risks. Investment decisions should not rely solely on the
information contained herein and should consider multiple factors using various sources
of information.

The Group undertakes no obligation to publicly update any forward-looking statements

after the date of this presentation.

Contents
1. Summary of Private Placement
2. Background of Private Placement
3. Use of Funds
4. Effect on Results
5. Future Financial Strategy
6. Target Dividend for the Investment Corporation

1. Summary of Private Placement

Use of Funds

Summary of Private Placement and Allottee

The table below summarizes the private placement being conducted by the
Investment Corporation and the allottee.
Summary of Private Placement

Item

The Investment Corporation will appropriate the funds raised

through the private placement for the payment of short-term
borrowings and the redemption of Investment Corporation bonds.

Description

Number of new investment units

to be issued

138,905 units (total number of investment units

issued: 343,905 units)

Issue price and total issue prices

431,949 yen (total is 59,999,875,845 yen)

Allottee and number of

investment units to be allotted

K.K. Columbus (number of units to be allotted:

138,905 units)

Date of payment

June 4, 2008

Reasonableness of Issue Terms

The issue price is set at 95% of the average closing price of an
investment unit of the Investment Corporation in regular
transactions in the Tokyo Stock Exchange for the three months
until the business day (May 13, 2008) immediately preceding the
date of resolution for the issue (May 14, 2008), or from February
14, 2008 to May 13, 2008. The issue price is 8% more than the

Outline of Allottee

Item

closing price on the business day immediately preceding the

date of resolution.

Description

Business name

K.K. Columbus

Business

(1) Concluding anonymous association contracts and managing

investments
(2) Acquiring, holding and trading securities
(3) Operations incidental or relating to the above

Established

November 2, 2007

Representative

President & Representative Director Tsutomu Koyama

Capital

100 million yen

Major shareholder, holding,

and relationship with asset
management company

K.K. daVinci Advisors

(Holding: 100%)
An interested party with respect to the asset management
company

Issue price
431,949 yen

Closing price on May 13, 2008

400,000 yen

Others
(1) Lock-up for six months
(2) The Investment Corporation has concluded an agreement with
the allottee on cooperation in the event conduit requirements
are violated.

This document is not a disclosure document under the Financial Products and Trading Act and is not intended for solicitation. Investors are requested to make their own final investment decisions.

2. Background of Private Placement

Rise in Borrowing Costs and Refinancing Risk

Graph 1: Rising borrowing costs

As shown in graph 1, the average borrowing cost of the Investment

Corporation, including loan handling commissions, has increased much
more sharply than the average three-month TIBOR rate with interest rate
changes.

Increase in costs with a change in the financial markets

(Rate of rise (%))

1.8
1.6

Average borrowing cost

Average basic interest rate

1.4
1.2

This was caused by a significant increase in the spread requested by

securitization lenders, including foreign lenders, which have played a
significant role in financing, and the tightening of financing by financial
institutions to the real-estate sector in the wake of the subprime mortgage
crisis.

1
0.8
0.6
0.4
0.2
0

The Investment Corporation believed that the current situation would

continue for some time and assumed record borrowing costs when
preparing forecasts for the sixth period. However, the spread required by
financial institutions rose beyond the assumption because of the refinancing
risk inherent in loans of close to 100 billion due within this year, as shown
in graph 2.

(Accounting period)

(Note) The average borrowing cost includes loan handling commissions. The average basic interest rate is the simple average of threemonth TIBOR rates with interest rate changes. Rates of increase from the first accounting period are expressed graphically.

Graph 2: Refinance risk

Risk arising from the concentration of due dates (the
orange part will be refinanced by December 3, 2008).

(100 million yen)

Cost Cutting and External Growth

by Mitigating the Refinancing Risk

700
600
Repaym ent am ount

Although we believe we need to eliminate the refinancing risk as soon as

possible, refinancing only through borrowings from financial institutions
will be expensive given the circumstances described above.

500
400
300
200
100

We have consequently elected to raise funds through a private placement in

addition to borrowings from financial institutions. In this way, we believe
we can reduce borrowing costs and LTV, a situation that will allow us to
achieve external growth.
LTV = Interest-bearing debt / total assets (on an acquisition price basis)

0
Nov.
2008

May
2009

Nov.
2009

May
2010

Nov.
2010

May
2011

Nov.
2011

May
2012

Nov.
2012

Repayment period

This document is not a disclosure document under the Financial Products and Trading Act and is not intended for solicitation. Investors are requested to make their own final investment decisions.

3. Use of Funds
Repayment of Interest-Bearing Debt
Funds to be raised through the private placement will be appropriated for the repayment of part of the interest-bearing debt due within this year. As
a result, interest-bearing debt will be markedly reduced, the refinancing risk caused by the concentration of repayment and redemption dates will be
substantially mitigated, and funding costs will be reduced.
Mitigation of the financing risk through substantial debt elimination

Before private placement

(100 million yen)
900

After private placement

(100 million yen)

Loan balance

45 (to be repaid with cash reserves)

Amount to be repaid

110

800

135
700

700

600

500

Repaying 64.5 billion in debt

before the private placement
(99.0 billion) and attenuating
refinancing risk

355

600

Repayment
through the private
placement

400

500

400

25

300

300

25

245
200

Balance after repayment

900

A heap of debt reduced

through repayment

800

Loan balance

(*)

44.48

200

May 2009
(Excluding loans
due on
December 3)

138.22
Nov. 2009

20
May 2011

100

50

75

Nov. 2012

* The principal was 30 billion, of which 5.5 billion was repaid.

50

86.25

Nov. 2008
(Including loans
due on
December 3)

100
May 2009
(Excluding loans
due on
December 3)

138.22
Nov. 2009

Nov. 2008
(Including loans
due on
December 3)

100

75

44.48

50

86.25

100

245

20
May 2011

50
Nov. 2012

This document is not a disclosure document under the Financial Products and Trading Act and is not intended for solicitation. Investors are requested to make their own final investment decisions.

4. Effect on Results
Change in Dividends
The dividend for the sixth period will be 14,232 (down 3.2%) after the private placement.
Operating performance for the sixth period will fall to 6,746 ((2) in the table below) from 8,967 (1) after the private placement.
However, since gains from the sale of Believe OMORI and daVinci MITA will be posted, EPS for the sixth period will decline only a
small amount to 14,232 (3) from 14,706.
Operating performance for the seventh and subsequent periods will rise from about 8,500 (4) before the private placement to about
9,000 (5) after the placement because of an expected reduction in interest-bearing debt costs. While operating performance will remain
largely unchanged, from 8,967 (1) before the placement in the sixth period to about 9,000 (5) in the seventh period after the placement,
LTV will fall significantly after the placement after the seventh period, showing external growth potential.
6th period (*1)
Item

Before placement
(disclosed on Jan. 23)

7th and subsequent periods (estimate *1)

After placement
(disclosed on May 14)

Before placement

After placement

EPS

14,706

14,232 (3)

yen

yen

Gain on sales

5,739

7,486

yen

yen

8,967 (1)

6,746 (2)

About 8,500 (4)

About 9,000 (5)

Balance of Interest-bearing debt

(million yen)

152,095

83,395

143,395

83,395 (-43.6%)

LTV

54.3%

30.1%

51.8%

30.1%

2,270

1,805

2,394

1,082 (-54.8%)

EPS less gain on sales

(operating performance)

Interest-bearing debt cost (million yen)

(*1) Figures for the sixth period and seventh period and thereafter are estimated, based on data available now and involve uncertainties.
Estimates for the seventh period and thereafter are computed, based on the figures for the sixth period, considering a certain rise in the basic interest rate.
LTV = Interest-bearing debt / total assets (on an acquisition price basis)
This document is not a disclosure document under the Financial Products and Trading Act and is not intended for solicitation. Investors are requested to make their own final investment decisions.

5. Future Financial Strategy

Dispersing repayment and redemption dates
To respond flexibly to rapid changes in the real-estate market and financial market, we will use leveraged control at an
interest-bearing debt rate of 40-50%, and will endeavor to stabilize financing.
To prevent refinancing from being concentrated on a certain period, we will disperse repayment and redemption dates so that
the amount of repayment and redemption will be about 20 billion in each accounting period.
We will increase the rate of long-term loans to 60-70%.

Borrowing from a diverse array of lenders, especially domestic financial institutions

The Investment Corporation was unable to deal flexibly with the effect of the subprime mortgage crisis because it raised funds
primarily from securitization lenders including foreign ones.
To respond flexibly to rapid changes in the real-estate market and financial markets, we will borrow from a diverse array of
lenders, especially domestic financial institutions. We are negotiating with domestic financial institutions (two city banks, two
trust banks, four regional banks, and one life and non-life insurance company) to borrow 20 billion in June through August.

Considering secured financing

The Investment Corporation has sought unsecured financing to issue Investment Corporation bonds on favorable conditions.
Given the deterioration in the market environment, however, it has become difficult to issue Investment Corporation bonds at
the financing costs assumed by the Investment Corporation.
With a tightening in the financing made available to the real-estate sector by financial institutions, the Investment
Corporation is negotiating loans from domestic financial institutions. We will consider secured financing, which will help to
negotiate with a greater number of domestic financial institutions.
This document is not a disclosure document under the Financial Products and Trading Act and is not intended for solicitation. Investors are requested to make their own final investment decisions.

6. Target Dividend for the Investment Corporation

Target Dividend for the Investment Corporation

Internal growth
Rent gap in the total portfolio:
31.3%

Target dividend

External
growth

High
14,000s

Falling property prices

Sale of
properties
Giving priority to the sale of small
and regional properties

Rising distribution of properties