1. Investment Case For Seniors Housing and Assisted Living Properties Anthony J. Mullen, CPA, M.S. Director of Executive Development, Johns Hopkins/NIC Seniors Housing & Care Program

3. Occupancy Rates: For Stabilized Properties (Those Open 24 Months or Longer) © National Investment Center for the Seniors Housing & Care Industries

4. Occupancy Rates: For Stabilized Properties (Those Open 24 Months or Longer) © National Investment Center for the Seniors Housing & Care Industries

5. Occupancy Rates: For Stabilized Properties (Those Open 24 Months or Longer) © National Investment Center for the Seniors Housing & Care Industries

6. Move-in Rates: For Properties Not Yet Stabilized (Those Open Less Than 24 Months) © National Investment Center for the Seniors Housing & Care Industries

7. Move-in Rates: For Properties Not Yet Stabilized (Those Open Less Than 24 Months) © National Investment Center for the Seniors Housing & Care Industries

8. Capitalization Rates © National Investment Center for the Seniors Housing & Care Industries

9. Capitalization Rates © National Investment Center for the Seniors Housing & Care Industries

10. Performing* Non-Performing** In Foreclosure *Performing may include some loans not in compliance with non-payment financial covenants or on watch list. **Non-performing includes loans 2 or more payments delinquent © National Investment Center for the Seniors Housing & Care Industries Loan Performance for Permanent Debt

11. Total Units Under Construction by Property Type: 2003 Source: ASHA Seniors Housing Construction Report 2003

12. Seniors Housing Construction: Total Units by Property Type 1999 & 2003 Source: ASHA Seniors Housing Construction Report 2003

13. 2000-20052000-2015 Seniors Apartments1.2%1.8% Independent1.25%1.6% Assisted Living1.9%2.0% Compare to: Overall Population0.9% Properly Weighted Seniors Population Growth Rates per Year Note: Based upon actual 5-year cohort growth rates and age of residents at entrance. Source: KMF Senior Housing Investors

14. The Powerful Investment Benefits of Operating Leverage Due to the high expense to revenue ratio of IL, AL, and CCRC, there is a significant increase in NOI when expense increases can be held 1% to 2% (absolute) below revenue increases. 60% Expense / 40% NOI Margin70% Expense / 30% NOI Margin Revenue %5%4%5%4% Expense%4%3%4%3% NOI%6.5%5.5%7.3%6.3%

15. Assisted Living Independent Living CCRC Lower Quartile 18.8%24%6.9% Median28.3%33%29.7% Upper Quartile 34.3%41.6%34.1% Margins Vary Significantly (after management fee and cap x) 82% difference between lower and upper quartile in AL 73% difference between lower and upper quartile in IL 394% difference between lower and upper quartile in CCRCs Source: ASHA The State of Seniors Housing 2003

16. Upper Quartile Current Returns on Investment (Unlevered) Independent Living14.5% Assisted Living16.0% CCRCs24.0% Source: ASHA The State of Seniors Housing 2003

17. Assisted LivingIndependent Living Lower Quartile$5,383$6,019 Median$9,113$8,684 Upper Quartile$11,695$11,485 Margins Can Be Misleading Net Operating Income, Per Unit After Management Fee and Cap X, is the Key Number to Focus On Source: ASHA The State of Seniors Housing 2003

18. The Powerful Investment Benefits of Financial Leverage Especially With a Large Difference Between Cap Rate and Interest Rate 75% Debt / 25% Equity70% Debt / 30% Equity Cap Rate10%11%10%11% Interest Rate6.5% ROE20.5%24.5%18%21.5% ROE w/25 year amortization* 16%20%14.5%18% * True ROE is about 1% (absolute) higher due to principal amortization, which is not accounted for in the return calculation.

19. CCRC**Independent**AL* Extremely5%7%32% Very6%11%30% Somewhat30%31%20% Not25%26%14% Not at All34%25%4% Needs-Influenced vs. Needs-Driven Element of IL vs. AL Proportion of Residents by Urgency of Move ** CCRC and Independent Data: ASHA Independent Living Report * AL Data: NIC National Survey of Adult Children

20. IN HOUSESTREET 20024%5% 20014.5%5% 20004%5% 19994% 19984% 19973.5%4% 19963.5%4% 19954% 19944%4.5% Yearly Median Increases in Resident Revenue Independent Living Source: ASHA The State of Seniors Housing 2003

21. IN HOUSESTREET 20025% 20015%5.5% 20004%4.5% 19993.5%5% 19984%5% 19973.5%5% 19964%5% 19954%5% 19944% Yearly Median Increases in Resident Revenue Assisted Living Source: ASHA The State of Seniors Housing 2003

22. Have You Ever Visited a Retirement Community to Consider It As a Place For You to Live? Source: NIC National Housing Survey

23. Proportion of Prospects by Attitude Toward Age-Qualified Community Source: NIC National Housing Survey

24. Proportion Age 60+ Households by Preference for Age-Qualified Community by Wave of Survey Source: NIC National Housing Survey

25. Proportion of Age 60+ Households by Plans to Move to a Retirement Community by Wave of Survey

26. Today – Here vs. Previous More Frequently Source: American Seniors Housing Association

27. I Am Healthier Today Source: American Seniors Housing Association

28. Satisfaction With Quality of Life in This Community? Source: American Seniors Housing Association

29. Willing to Recommend to my Friends

30. Homeownership Rates Source: U.S. Census Bureau

31. Distribution by Disability19821984198919941999 Nondisabled73.8% 75.6%77.5%80.3% IADL only5.76.24.84.43.2 1 or 2 ADLs6.97.06.76.16.0 3 or 4 ADLs3.03.13.73.43.5 5 or 6 ADLs3.73.43.0 2.9 Institutional Residents6.86.66.15.74.2 Population Distribution of Disabilities 1982 to 1999 Over-65 Year Old Population Source: Manton and Gu. Proceeding of the National Academy of Sciences, 98(11), pp.6354-6359.