The next president of Ogal Plaza is my trusted ally, Yoji Hoshi. The era of the "pains of creation" is over, and now the era of the "pains of replacement" begins.

This will be the final entry in my Ogal Plaza note trilogy. In the first, I wrote about stepping down as president and the design philosophy of not making the facility dependent on any single person. In the second, I delved into the financial side of that facility, writing about the unsecured and non-guaranteed project financing.

And in this final note, there is something I absolutely must write about. It concerns the new president to whom I am entrusting Ogal Plaza after me.

His name is Yoji Hoshi. He is my trusted ally.

This selection was not something I decided on my own. After thorough discussions with the major shareholder who holds 53.46% of Ogal Plaza's voting rights—namely, Shiwa Town—we decided to ask Mr. Hoshi to take on the role. Why Mr. Hoshi? To explain that, I must first honestly write about the phase that this Ogal Plaza project is currently entering.

The greatest risk for Ogal Plaza is the replacement of tenants.

I do not intend to just list flashy numbers. What I want to write about in this note is the risk that is about to visit Ogal Plaza.

The greatest risk for Ogal Plaza is the replacement of tenants.

For the 15 years since this plaza opened, not a single tenant has changed. We achieved 100% occupancy before construction and have maintained that 100% ever since. This is a fact to be proud of. However, if you look at the same thing from the other side, it means this: all of our tenants have spent 15 years together in this place.

The passage of 15 years flows equally for people and for businesses. The shop owners who were in their prime when we opened have also aged 15 years. The wave of generational change comes to businesses as well. With the changing times, there are cases where the business model itself has finished its role. No matter how good a tenant may be, the time for replacement will inevitably come someday.

And this is where it connects directly to the financial discussion. As I wrote in the second note, the credit of Ogal Plaza resided in the cash flow of the rent generated by the tenants. It was precisely because 100% occupancy was maintained that we were able to pay off those unsecured and non-guaranteed loans. If that is the case, the tenant turnover that is about to occur is nothing less than a phase where the very foundation of that credit will be tested. When one unit becomes vacant, can we find the next occupant suitable for this place and this town, at a rent level that maintains the same balance as before? This is the heaviest risk that will determine the next 15 years of Ogal Plaza.

What I experienced was the "pains of creation"; what Mr. Hoshi will experience is the "pains of replacement."

I want you to notice here that the subject of the risk has clearly shifted.

What I experienced over these 16 years was the "pains of creation." It was the struggle of being the first to walk a path no one had walked before: establishing a building where public facilities and commercial tenants coexist on a piece of land in front of the station that had been left untouched, and backing it with financial support. It was building 100% occupancy before construction, starting from a state where there were zero tenants.

What Mr. Hoshi will experience from here on is a different kind of suffering. Namely, the "pains of replacement."

The quality of the pain is completely different between creating from zero and replacing what is already full. When filling an empty vessel, no one gets hurt. However, the act of having a tenant who has been with us for 15 years vacate their space and passing the baton to the next occupant will inevitably involve pain. Residents will feel sad to see a shop that has been loved by the town for a long time leave. The side leaving, the side remaining, and the side arriving all have their own circumstances and emotions. While facing each of those, one must still maintain the balance of the building as a whole and the scenery of the town. This is a delicate and difficult task that only a mature business faces, distinct from the pains of creation.

Protecting a fully occupied building is, in fact, more difficult than filling an empty one.

That is precisely why it has to be a man named Yoji Hoshi.