20100804x AZ 6801 Appraisal Youngtown AZ.sflb

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REAL ESTATE APPRAISAL

SELF‐CONTAINED REPORT
Fountain Retirement Hotel
July 19, 2010

SENIORS HOUSING & HEALTHCARE REAL ESTATE ADVISORY SERVICES
Fountain Retirement Hotel
12030 113th Ave
Youngtown, Arizona 85363
HT File No. 20100804
© 2010 HealthTrust, LLC

6801 Energy Court, Suite 200 | Sarasota, FL 34240 | P: 941.363.7500 | F: 941.363.7525 | HealthTrust.com

FOUNTAIN RETIREMENT HOTEL

HEALTHTRUST

August 13, 2010

Ms. Rona Sherzai
GE Healthcare Financial Services
2 Bethesda Metro Center
Bethesda, MD, 20814
RE:

Real Estate Appraisal of
Fountain Retirement Hotel
12030 113th Ave
Youngtown, Arizona 85363
HT File No. 20100804

Dear Ms. Sherzai:
At your request and authorization, HealthTrust, LLC, has prepared a Self‐Contained Real Estate Appraisal
of the subject, an existing Assisted Living Residence. The “as is” market value is relevant as to the date
we last inspected the site, or July 19, 2010.
The report will be used to assist with underwriting a potential loan involving the subject. The effective
date of the “as is” value was estimated under market conditions observed at that time, reflecting the fee
simple interest in the total assets of the business (“TAB”). Market value, total assets of the business, and
other appraisal terms are defined within the text of the following report. Complete descriptions of the
property, together with the sources of information and the bases of our estimates, are stated in the
accompanying sections of this report.
The report is a Self‐Contained Real Estate Appraisal that complies with the reporting requirements set
forth in Standards Rule 2‐2 of the Uniform Standards of Professional Appraisal Practice and FIRREA.
As a result of our investigation and analysis, we have estimated the "as is" market value of the fee
simple interest in the subject including the total assets of the business (real estate, personal property
and total intangible assets), as depicted in the following table:

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VALUATION SUMMARY(1)
Date of Value/Appraised Interest

As‐Is
19‐Jul‐2010

Market Value of Fee Simple Estate
Market Value of Leased Fee Estate
Market Value of Leasehold Estate

$2,200,000
‐‐‐
‐‐‐

Real Property Allocation
Real Property
FF&E (Personal Property)
Business Value
Market Value of the Going Concern (TAB)

$2,000,000
$100,000
$100,000
$2,200,000

(1) Subject to the Certification, Standard Conditions and Special Conditions
Source: HealthTrust, LLC

The accompanying prospective financial analyses are based on estimates and assumptions developed in
connection with the appraisal. However, some assumptions inevitably will not materialize, and
unanticipated events and circumstances may occur; therefore, actual results achieved during the period
covered by our prospective financial analyses will vary from our estimates and the variations may be
material.
This report, the final estimates of value and the prospective financial analyses are intended solely for
your information and assistance for the function stated above, and should not be relied upon for any
other purpose. This report is for the exclusive use of GE Capital and any and all holders of a note or
notes secured by a mortgage, deed of trust or deed to secure debt encumbering the subject property,
and their respective affiliates, designates, successors and assignees, rating agencies and bond holders,
and no other party shall have any right to rely on any service provided by HealthTrust. Neither our
report nor any of its contents nor any reference to the appraisers or our firm, may be included or
quoted in any document, offering circular or registration statement, prospectus, sales brochure, other
appraisal, loan or other agreement without HealthTrust LLC's prior written approval of the form and
context in which it will appear.
Respectfully submitted,

HealthTrust, LLC

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Certification
I certify that, to the best of my knowledge and belief:
The statements of fact contained in the accompanying report are to the best of our knowledge true and correct.
The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting
conditions and are our personal, unbiased professional analyses, opinions, and conclusions.
We have no present or prospective interest in the property that is the subject of this report, and we have no
personal interest or bias with respect to the parties involved.
Our compensation is not contingent upon the reporting of a predetermined value or direction in value that favors
the cause of the client, the amount of the value estimate, the attainment of a stipulated result, or the occurrence
of a subsequent event.
Our analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with
the requirements of the Code of Professional Ethics and the Standards of Professional Appraisal Practice of the
Appraisal Institute and in conformity with the 2010 Edition of the Uniform Standards of Professional Appraisal
Practice.
The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly
authorized representatives.
Alan C. Plush, MAI has not made an inspection of the subject. No one, other than those so named in the
certification pages herein, provided assistance to the undersigned with preparation of this report.
Alan C. Plush, MAI has not provided consulting or valuation services within the three years immediately preceding
acceptance of this assignment.
The subject of this appraisal, Fountain Retirement Hotel, is located at 12030 113th Ave, Youngtown, Arizona
85363.
As of the date of this report, Alan C. Plush, MAI, has completed the requirements of the continuing education
program of the Appraisal Institute.

x _______________________
Alan C. Plush, MAI
State‐Certified General Appraiser 31350 (AZ)
6801 Energy Court, Suite 200
Sarasota, FL 34240
(941) 363‐7501
alan.plush@healthtrust.com

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Certification
I certify that, to the best of my knowledge and belief:
The statements of fact contained in the accompanying report are to the best of our knowledge true and correct.
The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting
conditions and are our personal, unbiased professional analyses, opinions, and conclusions.
We have no present or prospective interest in the property that is the subject of this report, and we have no
personal interest or bias with respect to the parties involved.
Our compensation is not contingent upon the reporting of a predetermined value or direction in value that favors
the cause of the client, the amount of the value estimate, the attainment of a stipulated result, or the occurrence
of a subsequent event.
Our analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with
the requirements of the Code of Professional Ethics and the Standards of Professional Appraisal Practice of the
Appraisal Institute and in conformity with the 2010 Edition of the Uniform Standards of Professional Appraisal
Practice.
The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly
authorized representatives.
Colleen H. Blumenthal, MAI has not made an inspection of the subject but reviewed this report. Anthony Stablein
has not made an inspection of the subject but assisted with the valuation for this report. Kim Walther assisted
with research for this assignment and Charles Plush inspected the subject property. No one, other than those so
named in the certification pages herein, provided assistance to the undersigned with preparation of this report.
Colleen H. Blumenthal, MAI has provided consulting or valuation services within the three years immediately
preceding acceptance of this assignment. Colleen H. Blumenthal performed a desk review of the subject property
in the fourth quarter of 2009.
The subject of this appraisal, Fountain Retirement Hotel, is located at 12030 113th Ave, Youngtown, Arizona
85363.
As of the date of this report, Colleen H. Blumenthal, MAI, has completed the requirements of the continuing
education program of the Appraisal Institute.

x _______________________
Colleen H. Blumenthal, MAI
State‐Certified General Appraiser 31276 (AZ)
6801 Energy Court, Suite 200
Sarasota, FL 34240
(941) 363‐7502
colleen.blumenthal@healthtrust.com

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Certification
I certify that, to the best of my knowledge and belief:
The statements of fact contained in the accompanying report are to the best of our knowledge true and correct.
The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting
conditions and are our personal, unbiased professional analyses, opinions, and conclusions.
We have no present or prospective interest in the property that is the subject of this report, and we have no
personal interest or bias with respect to the parties involved.
Our compensation is not contingent upon the reporting of a predetermined value or direction in value that favors
the cause of the client, the amount of the value estimate, the attainment of a stipulated result, or the occurrence
of a subsequent event.
Our analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with
the requirements of the Code of Professional Ethics and the Standards of Professional Appraisal Practice of the
Appraisal Institute and in conformity with the 2010 Edition of the Uniform Standards of Professional Appraisal
Practice.
The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly
authorized representatives.
David Rey Salinas, ASA has made an inspection of the subject. No one, other than those so named in the
certification pages herein, provided assistance to the undersigned with preparation of this report.
David Rey Salinas, ASA provided consulting or valuation services within the three years immediately preceding
acceptance of this assignment. Colleen H. Blumenthal performed a desk review of the subject property in the
fourth quarter of 2009.
The subject of this appraisal, Fountain Retirement Hotel, is located at 12030 113th Ave, Youngtown, Arizona
85363.
As of the date of this report, David Rey Salinas, ASA, has completed the requirements of the continuing education
program of the Appraisal Institute.

x _______________________
David Rey Salinas, ASA
State‐Certified General 31205 (AZ)
10 Liberty Square
Boston, MA 02109
(617) 542‐2125
david.salinas@healthtrust.com

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Standard Conditions
This appraisal report shall be subject to standard conditions, permitted and/or limited usage, and terms
of engagement, which are outlined as follows:
Appraisals are performed and written reports are prepared in accordance with the Uniform Standards of
Professional Appraisal Practice of the Appraisal Foundation and with the Appraisal Institute's Standards
of Professional Appraisal Practice and Code of Professional Ethics.
Unless specifically stated, the value conclusion(s) contained in the Appraisal applies to the real estate
only, and does not include personal property, machinery and equipment, trade fixtures, business value,
goodwill or other non‐realty items. The Appraisal report covering the subject is limited to surface rights
only, and does not include any inherent subsurface or mineral rights. Income tax considerations have
not been included or valued unless so specified in the Appraisal. We make no representations as to the
value changes that may be attributed to such considerations.
The legal description used in this report is assumed to be correct and we have made no survey of the
property. We assume that there are no hidden or unapparent conditions of the property, subsoil, or
structures that would render it more or less valuable.
No opinion is rendered as to property title, which is assumed to be good and marketable. Unless
otherwise stated, no consideration is given to liens or encumbrances against the property. Sketches,
maps, photos, or other graphic aids included in appraisal reports are intended to assist the reader in
ready identification and visualization of the property, and are not intended for technical purposes.
It is assumed that legal, engineering, or other professional advice, as may be required, has been or will
be obtained from professional sources and that the appraisal report will not be used for guidance in
legal or technical matters such as, but not limited to, the existence of encroachments, easements or
other discrepancies affecting the legal description of the property. It is assumed that there are no
concealed or dubious conditions of the subsoil or subsurface waters including water table and flood
plain, unless otherwise noted. We further assume there are no regulations of any government entity to
control or restrict the use of the property unless specifically referred to in the report. It is assumed that
the property will not operate in violation of any applicable government regulations, codes, ordinances
or statutes.
This report is not intended to be an engineering report. We are not qualified as structural or
environmental engineers; therefore we are not qualified to judge the structural or environmental
integrity of the improvements, if any. Consequently, no warranty or representations are made nor any
liability assumed for the structural soundness, quality, adequacy or capacities of said improvements and
utility services, including the construction materials, particularly the roof, foundations, and equipment,
including the HVAC systems, if applicable. Should there be any question concerning same, it is strongly
recommended that an engineering, construction and/or environmental inspection be obtained. The
value estimate(s) stated in this Appraisal, unless noted otherwise, is predicated on the assumptions that
all improvements, equipment and building services, if any, are structurally sound and suffer no
concealed or latent defects or inadequacies other than those noted in the Appraisal. We will call to your
attention any apparent defects or material adverse conditions which come to our attention.

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In the absence of competent technical advice to the contrary, it is assumed that the property being
appraised is not adversely affected by concealed or unapparent hazards such as, but not limited to
asbestos, hazardous or contaminated substances, toxic waste or radioactivity.
Information furnished by others is presumed to be reliable, and where so specified in the report, has
been verified; but no responsibility, whether legal or otherwise, is assumed for its accuracy, and it
cannot be guaranteed as being certain. No single item of information was completely relied upon to the
exclusion of other information.
Appraisal reports may contain estimates of future financial performance, estimates or opinions that
represent the appraiser's view of reasonable expectations at a particular point in time, but such
information, estimates or opinions are not offered as predictions or as assurances that a particular level
of income or profit will be achieved, that events will occur, or that a particular price will be offered or
accepted. Actual results achieved during the period covered by our prospective financial analyses will
vary from those described in our report, and the variations may be material.
Any proposed construction of rehabilitation referred to in the Appraisal is assumed to be completed
within a reasonable time and in a workmanlike manner according to or exceeding currently accepted
standards of design and methods of construction.
Any inaccessible portions of the Property or improvements not inspected are assumed to be as reported
or similar to the areas that are inspected.
It should be specifically noted by any prospective mortgagee that the appraisal assumes that the
property will be competently managed, leased, and maintained by financially sound owners over the
expected period of ownership. This appraisal engagement does not entail an evaluation of
management's or owner's effectiveness, nor are we responsible for future marketing efforts and other
management or ownership actions upon which actual results will depend.
The Americans with Disabilities Act ("ADA") became effective January 26, 1992. We have not made a
specific compliance survey and analysis of this property to determine whether or not it is in conformity
with the various detailed requirements of the ADA. It is possible that a compliance survey of the
property, together with a detailed analysis of the requirements of the ADA, could reveal that the
property is not in compliance with one or more of the requirements of the Act. If so, this fact could have
a negative effect upon the value of the property.
The report, the final estimate of value and estimates of future financial performance included therein,
are intended for the information of the person or persons to whom they are addressed, solely for the
purposes stated therein, and should not be relied upon for any other purpose. The addressee shall not
distribute the report to third parties without prior permission of HealthTrust. Before such permission
shall be provided, the third party shall agree to hold HealthTrust harmless relative to their use of the
report. Neither our report, nor its contents, nor any reference to the appraisers or HealthTrust, may be
included or quoted in any offering circular or registration statement, prospectus, sales brochure, other
appraisal, loan or other agreement or document without our prior written permission. Permission will
be granted only upon meeting certain conditions. Generally, HealthTrust will not agree to the use of its
name as a "named expert" within the meaning of the Securities Act of 1933 and the Securities Act of
1934.

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The valuation applies only to the property described and for the purpose so stated and should not be
used for any other purpose. Possession of the report, or copy thereof, does not carry with it the right of
publication. Any allocation of total price between land and the improvements as shown is invalidated if
used separately or in conjunction with any other report.
Neither the report nor any portions thereof (especially any conclusions as to value, the identity of the
appraisers or HealthTrust, or any reference to the Appraisal Institute or other recognized appraisal
organization or the designations they confer) shall be disseminated to the public through public
relations
Media, news media, advertising media, sales media or any other public means of communication
without the prior written consent and approval of the appraisers and HealthTrust. The date(s) of the
valuation to which the value estimate conclusions apply is set forth in the letter of transmittal and
within the body of the report. The value is based on the purchasing power of the United States dollar as
of that date.
Acceptance of and/or use of this report constitutes acceptance of all Standard Conditions.
Appraisal assignments are accepted with the understanding that there is no obligation to furnish
services after completion of the original assignment. If the need for subsequent service related to an
appraisal assignment (e.g., testimony, updates, conferences, reprint or copy service) is contemplated,
special arrangements acceptable to HealthTrust must be made in advance.
Unless otherwise stated, no effort has been made to determine the possible effect, if any, on the subject
property of energy shortage or future federal, state or local legislation, including any environmental or
ecological matters or interpretations thereof.
We take no responsibility for any events, conditions or circumstances affecting the subject Property or
its value, that take place subsequent to either the effective date of value cited in the Appraisal or the
date of our field inspection, whichever occurs first.
This engagement may be terminated whether by client or HealthTrust at any time upon written notice
to that effect to the other parties, it being understood that, unless HealthTrust shall unilaterally
terminate the engagement without the client's consent and without reasonable cause, the provisions
related to the payment of fees and expenses through the date of termination will survive any
termination, and it being further understood that the indemnification and hold harmless provisions shall
survive any termination thereof, whether or not such termination is unilateral.

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Extraordinary Assumptions
Although this appraisal is not contingent upon any particular management, it does presume that the
subject’s management is competent and experienced with operations of an Assisted Living Residence.
The impacts of legislative changes for the reimbursement of Medicaid and Medicare can be significant
but are difficult to predict. Our estimates and conclusions reflect the current reimbursement policies
and those reasonably anticipated for the short term.
Please note that the subject is encumbered by an arm’s length lease. However, our analysis is reflective
of the fee simple interest within the subject property.

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TABLE OF CONTENTS
PREFACE

3

GLOSSARY OF TERMS
SENIORS HOUSING AND HEALTH CARE INDUSTRY OVERVIEW

5
7

INTRODUCTION

12

SCOPE OF WORK
APPLICABILITY OF APPROACHES
LEGAL INTEREST APPRAISED
EFFECTIVE DATES OF APPRAISAL
USE PREMISE

12
13
14
14
14

DESCRIPTIVE DATA

15

SITE DESCRIPTION
ZONING
ASSESSMENT AND TAXES
IMPROVEMENT DESCRIPTION

15
16
16
17

MARKET ANALYSIS

21

REGIONAL ANALYSIS
NEIGHBORHOOD ANALYSIS

21
25

COMPETITIVE MARKET ANALYSIS

28

REGULATORY OVERVIEW
DEFINITION OF PRIMARY MARKET AREA
SUPPLY ANALYSIS
DEMAND ANALYSIS
PENETRATION ANALYSIS
MARKET CATEGORIZATION

28
29
29
31
40
41

HIGHEST AND BEST USE

43

AS IF VACANT
AS CURRENTLY IMPROVED

43
44

VALUATION ANALYSIS

45

INCOME APPROACH

45

ESTIMATES OF MARKET RENT ‐
STABILIZED OCCUPANCY
TOTAL REVENUE ESTIMATES
OPERATING EXPENSES
NET OPERATING INCOME ESTIMATE
CAPITALIZATION RATE DERIVATION
DISCOUNT RATE DERIVATION
INCOME APPROACH CONCLUSION

53
54
55
56
61
63
68
69

SALES COMPARISON APPROACH

73

SALES GRID ANALYSIS
EGIM ANALYSIS
SALES COMPARISON APPROACH CONCLUSION

76
78
78

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COST APPROACH

80

LAND VALUATION
IMPROVEMENT VALUATION
DEPRECIATION
COST APPROACH CONCLUSION
INSURABLE VALUE ESTIMATE

80
83
86
86
88

RECONCILIATION AND FINAL VALUE ESTIMATES

89

ASSET VALUE ALLOCATION
MARKETABILITY ANALYSIS

90
92

ADDENDA

93

SUBJECT PHOTOGRAPHS AND EXHIBITS
PROVIDED FINANCIAL STATEMENTS
IMPROVED SALES
DEMOGRAPHIC DATA
ENGAGEMENT LETTER
APPRAISER QUALIFICATIONS

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PREFACE

Fountain Retirement Hotel
EXECUTIVE SUMMARY
Property Data
Name:
Address:
Property Type:
Gross Building Area (SF):
Land Area (acres):
Year Built:
Condition:
Effective Age:
Total Density:
Unit Mix:
AL
Total
Parcel Number:
Assessed Value:
Property Taxes:
Zoning District:
Flood Zone:
Owner of Record:
Management Company:
Highest & Best Use:
As Though Vacant
As Currently Improved

Fountain Retirement Hotel
12030 113th Ave
Youngtown, Arizona 85363
Assisted Living Residence
37,102
1.35
1971
Average
35
65
As‐Is
No. Units
Set‐Up Beds
65
78
65
78
200‐85‐406B
$159,938
$9,863
R (Rural District)
Outside
Aviv Asset Management LLC
Fountain
Assisted Living Residence
Assisted Living Residence

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EXECUTIVE SUMMARY (CONT.)
Financial Analysis Summary
Purpose of the Appraisal:
Salient Dates of Appraisal:
As Is
Interest Appraised:
Excess Land:
Excess CON:
Valuation Assumptions:
Capitalization Rate:
Terminal Capitalization Rate:
Discount Rate:
Revenue Growth Rate:
Expense Growth Rate:
Management Fee:
Reserves (Capex) Per Unit:
Stabilized Expense Ratio
Stabilized Occupancy

assist with underwriting a potential loan involving the subject
July 19, 2010
fee simple
$0
$0
9.50%
10.00%
11.00%
2.50%
2.50%
5.00%
$300
80.11%
77.00%

Value Indication(s)
As‐Is
19‐Jul‐2010
The Cost Approach ‐ Fee Simple
The Income Approach ‐ Fee Simple
The Sales Approach ‐ Fee Simple

$2,400,000
$2,200,000
$2,200,000

The Income Approach ‐ Leased Fee
The Income Approach ‐ Leasehold

‐‐‐
‐‐‐

Value Conclusion(s)
Market Value of Going Concern (TAB)
Market Value of Leased Fee Estate
Market Value of Leasehold Estate

$2,200,000
‐‐‐
‐‐‐

Value Allocation(s)
Real Property
FF&E (Personal Property)
Business Value
Market Value of the Going Concern (TAB)

$2,000,000
$100,000
$100,000
$2,200,000

The values presented above are subject to the Certification of Value, Standard Conditions, and Extraordinary Conditions and may not be distributed in partial
context without the entire appraisal document. The summary values cannot be completely understood without the entire document and/or additional
information from our work files. The accompanying prospective financial analyses are based on estimates and assumptions developed in connection with
the appraisal. However, some assumptions inevitably will not materialize, and unanticipated events and circumstances may occur; therefore, actual results
achieved during the period covered by our prospective financial analyses will vary from our estimates and the variations may be material.

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Glossary of Terms
Market Value: The most probable price which
a property should bring in a competitive and
open market under all conditions requisite to a
fair sale, the buyer and seller each acting
prudently and knowledgeably, and assuming
the price is not affected by undue stimulus.

property (cash, work force, contracts, name,
patent, copyrights, and other residual intangible
assets, to include capitalized economic profit) of
a business.
Highest and Best Use: The reasonably probable
and legal use of vacant land or an improved
property, which is physically possible,
appropriately supported, financially feasible
and that results in the highest value.

Implicit in this definition is the consummation
of a sale as of a specified date and the passing
of title from seller to buyer under conditions
whereby: a) Buyer and seller are typically
motivated; b) both parties are well informed or
well advised and each acting in what they
consider their own best interests; c) a
reasonable time is allowed for exposure in the
open market; d) payment is made in terms of
cash in United States dollars or in terms of
financial arrangements comparable thereto;
and, e) the price represents the normal
consideration for the property sold unaffected
by special or creative financing or sales
concessions granted by anyone associated with
the sale.

Insurable Value: Value used by insurance
companies as the basis for insurance. Often
considered to be replacement or reproduction
cost less deterioration and non‐insurable items.
Sometimes a cash value but often entirely a
cost concept (Marshall & Swift).
Investment Value: The specific value of an
investment to a particular investor or class of
investors based on individual investment
requirements; distinguished from market value,
which is impersonal and detached.
Real Property: All interests, benefits, and rights
inherent in the ownership of physical real
estate; the bundle of rights with which the
ownership of the real estate is endowed.

Fee Simple Estate:
Absolute ownership
unencumbered by any other interest or estate
subject only to the limitations imposed by the
governmental powers of taxation, eminent
domain, police power, and escheat.

Personal Property (FF&E): Identifiable portable
and tangible objects that are considered by the
general public to be “personal,” e.g.,
furnishings, art work, antiques, gems and
jewelry, collectibles, machinery and equipment;
all property that is not classified as real estate.
(USPAP, 1992 edition) Personal property
includes movable items that are not
permanently affixed to, and part of, the real
estate.

Leased Fee Estate: An ownership interest held
by a landlord with the rights of use and
occupancy conveyed by lease to others. The
rights of the lessor (leased fee owner) and
leased fee are specified by contract terms
contained within the lease.
Leasehold Estate: The interest held by the
lessee (the tenant or renter) through a lease
conveying the rights of use and occupancy for a
stated term under certain conditions.

Business Value (Intangible Property): A value of
enhancement that results from items of
intangible personal property such as marketing
and management skill, an assembled work
force, working capital, trade names, franchises,

Total Assets of the Business (TAB): The
tangible property (real property and personal
property, including inventory and furniture,
fixtures, and equipment) and intangible
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Common Area Maintenance (CAM): The
expense of operating and maintaining common
areas; may or may not include management
charges and usually does not include capital
expenditures on tenant improvements or other
improvements to the property. See also
common area.

patents, trademarks, contracts, leases, and
operating agreements. (going‐concern value).
Floor Area Ratio (FAR): The relationship
between the above‐ground floor area of a
building, as described by the building code, and
the area of the plot plan on which it stands; in
planning and zoning, often expressed as a
decimal, e.g., a ratio of 2.0 indicates that a
permissible floor area of a building is twice the
total land area.

Gross Building Area (GBA): The total floor area
of a building, including below‐grade space but
excluding unenclosed areas, measured from the
exterior of the walls. Gross building area for
office buildings is computed by measuring to
the outside finished surface of permanent outer
building walls without any deductions. All
enclosed floors of the building including
basements, mechanical equipment floors,
penthouses, and the like are included in the
measurement. Parking spaces and parking
garages are excluded.

Life Estate: Total rights of use, occupancy, and
control, limited to the lifetime of a designated
party, often known as the life tenant.
Ad Valorem Tax: A real estate tax based on the
assessed value of the property, which is not
necessarily equivalent to market value.
Appraisal Foundation: (Condensed) Not‐for‐
profit educational foundation, organized in
1987 to foster appraisal professionalism
through the establishment of uniform standards
of appraisal practice and qualifications for the
state certification and licensing of appraisers.
The Foundation’s is responsible for appointing
members to the two independent boards, The
Appraisal Standards Board (ASB) and the
Appraisers Qualification Board (AQB). The ASB
promulgates standards found in USPAP while
the AQB establishes minimum experience,
education, and examination criteria for state
licensing of appraisers and recommends such
criteria for state licensing boards. These boards
operate under the authority (through the
enactment of FIRREA) of Congress, which
delegated responsibility to these boards which
are monitored by the Appraisal Subcommittee.

Financial Institutions Reform, Recovery and
Enforcement Act (FIRREA): (Condensed)
Legislation enacted in 1989 to bail out the
savings and loan industry; FIRREA created the
Office of Thrift Supervision (OTS) under the
Treasury Department. As part of this act, the
OTS was charged with creating the Appraisal
Subcommittee to implement Title XI of FIRREA
mandating state certification of appraisers who
perform assignments for Federal Financial
Institutions Regulatory Agencies.
Uniform Standards of Professional Practice
(USPAP): Current standards of the appraisal
profession, developed for appraisers, and the
users of appraisal services, by the Appraisal
Standards Board, of the Appraisal Foundation.
The Uniform Standards set forth the procedures
to be followed in developing an appraisal,
analysis, or opinion and the manner in which an
appraisal, analysis, or opinion is communicated.
They are endorsed by the Appraisal Institute
and by other professional organizations.

Operating Expense Ratio (OER): The ratio of
total operating expenses (TOE) to effective
gross income (TOE/EGI); the complement of the
net income ratio (NIR), i.e., 1 ‐ NIR.

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Seniors Housing and Health Care Industry Overview
The subject of this analysis is a seniors housing/ health care property. The health care and seniors
housing industry can generally be segregated into five separate and distinct levels. These levels range, in
order of intensity from lowest to highest, from a seniors apartment (i.e., age‐restricted) to independent
living community, assisted living residence, skilled nursing facility to, ultimately, an acute care (hospital).
The following overview is intended to provide a brief overview of this market sector summary.

Senior Apartments: This product type includes all age‐restricted apartments where at least 80% of the
residents are 55 years of age or older. Physically, the properties are similar to traditional apartments
with a clubhouse, perhaps exercise facilities, covered or garage parking, and a swimming pool. No
services are offered for meals or housekeeping, but social activities are typically available. The resident
profile includes an active adult who is typically retired and has no need for assistance with activities of
daily living or instrumental activities of daily living. Units typically include a full kitchen, washer and
dryer hook‐ups, balconies or patios, window treatments and floor covering.
The NIC/American Seniors Housing Association’s Seniors Housing Construction Trends Report 2009
indicates that the construction starts of senior apartment units in 2008/09 (April through March) totals
7,815 units. The report indicates that the total national inventory of senior apartments within the 100
largest Metro markets is 410,000 units.
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Independent Living Communities: Independent living communities were the largest response the
market provided in the 1980s to increasing demand for senior accommodations. These projects,
typically ranging in size from 150 units to 300 units, are designed in similar fashion (operationally) to an
apartment complex, in that units often contain separate bedrooms and cooking facilities. Also provided
in the development is a commons area that includes a kitchen and dining room and offers three meals
per day. Most rental communities include one or two meals per day in conjunction with their service
fee; however, additional meals can be purchased. Services typically included are weekly housekeeping
and linen service, maintenance of grounds, activities, etc.
Residents who locate in an independent living community must be physically and mentally capable of
performing all of the activities of daily living (ADL). Development of these types of communities, given
their large scale, prompted entries into the industry by both local and national firms. However, by the
very nature of the communities (independent), residents are capable of relocating if personal
preferences or needs change. Operationally, lack of experience and underestimation of the complexity
of operating an independent living retirement community has led to bankruptcies and financial
difficulties for many of these facilities. Lack of a clear need motivation for residency in an independent
community, coupled with over‐development in many markets, has caused a reassessment of the true
market potential for these properties. Nonetheless, they continue to serve a much‐needed niche in the
overall retirement housing market.
The NIC/American Seniors Housing Association’s Seniors Housing Construction Trends Report 2009
indicates that there were a total of 5,029 units started in 2008/09, representing a 58% decline from the
previous year. The inventory is estimated at 388,062 units within the 100 largest Metro markets.
According to the 1st Quarter 2010 NIC MAP Construction Monitor, among the 31 largest MSAs,
independent living indicated the following:

Assisted Living Residences: The second level of seniors housing is the assisted living residence. Assisted
living becomes necessary when a resident is no longer capable of performing all of the activities of daily
living (ADLs). ALRs vary in the intensity of personal care services provided, from the resident who is
mentally competent but physically frail, to the resident who is both mentally disoriented and physically
frail. Residents suffering from Alzheimer’s or some other form of dementia typify the higher intensity
level.
Assisted living residences have emerged as one of the growth sectors in the senior housing and health
care market in the late 1980s. Assisted living residences are designed to provide a level of care that is
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roughly between that of independent living and skilled nursing. Residents live in a residential apartment,
but all instrumental activities of daily living (e.g., cooking, cleaning, driving) are provided and typically at
least three or ADLs such as grooming, bathing, dressing, and toileting are provided.
Many of these communities have a distinct section for Alzheimer care where there is a higher ratio of
staffing, a wanderguard system and other amenities specifically designed to improve the quality of life
for these seniors. From a licensure standpoint, most states require little additional documentation or
certification for a property to advertise this specialty unit.
Finally, a number of states have Medicaid reimbursement for stays at assisted living residences. This
appears to be the final level of support needed to legitimize assisted living as a niche within the industry,
and allow for institutional investment over the near term as opposed to the distant future.
The Seniors Housing Construction Trends Report 2009 indicates that there were 3,572 assisted living
units started and 1,298 memory care units started. Nationally, construction in this sector peaked
between 1997 and 2001. However, overall starts are down 42% from last year. The current inventory
within the 100 largest Metro markets is estimated 356,241 units, of which 61,860 units are designed for
memory care. Please, note these are units, with actual supply amounts higher in terms of beds.
According to the 1st Quarter 2010 NIC MAP Construction Monitor, among the 31 largest MSAs, assisted
living indicated the following:

Skilled Nursing Facilities: Skilled nursing facilities are the oldest property type in the
healthcare/retirement industry. They are, operationally, one step below hospitals. Physically, skilled
nursing facilities contain smaller rooms and typically house residents on a semi‐private basis. The rooms,
from an appearance standpoint, are similar to a hospital room and do not contain cooking facilities.
Operationally, these facilities differ from independent and assisted living residences in that a significant
portion of their income is derived from government sources rather than the residents. In fact, Medicare
and Medicaid, combined, paid for approximately 78% of the skilled nursing care provided in 2009. Thus,
changes in reimbursement can have a material impact on a residence’s profitability.
Although increasingly, long‐term care residents are being treated in community (ALR) and residential
(home health) settings, nursing homes will continue to be of need to persons requiring 24‐hour skilled
care. Hence, the acuity of the nursing home resident is expected to increase in coming years.

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The Seniors Housing Construction Trends Report 2009 indicates that there were 3,761 nursing beds
started in 2008/09, representing a 1% increase from last year. American Health Care Associate (AHCA)
estimates the total certified bed count in the US at 1,668,769. According to the 1st Quarter 2010 NIC
MAP Construction Monitor, among the 31 largest MSAs, skilled nursing indicated the following:

Acute Care Hospitals: The final care level offered is the acute care environment, or hospital. This is the
segment of the market with which the general public is most familiar, generally from personal
experience. A hospital often represents the last step in the life cycle, and is totally separate and distinct
from seniors housing and the three care levels discussed previously. Also, there is little exhibited
interrelationship in the relative demand and supply characteristics of acute care hospitals with the
remaining elements of the seniors housing market.
Other Product Types: In addition to the four levels described, numerous hybrids or variations occur. For
instance, a typical Continuing Care Retirement Community (CCRC) offers services beginning at the
independent living level progressing to assisted living and ultimately skilled nursing. CCRCs are often
endowment or buy‐in situations where a large entry fee is charged to the new resident in exchange for
lower monthly service fees for the balance of their residency at the community. Many variations exist on
refund policies of this entry fee ranging from 0% to 90% and higher. Most communities amortize the
non‐refundable fees over four to eight years. Given the orientation of the consumer to either rental or
endowment, CCRCs are generally separate and distinct from direct competition with rental
communities.
Summary: This review of seniors housing services is intentionally brief and is designed to acquaint the
reader with the general differences in product types and services available to the retiree consumer.
These services and products are differentiated by price and need level.
Capital resources appear available ‐ albeit limited ‐ to well‐managed communities and established
operators with the less experienced developer/operators relying on personal relationships with local
lenders. Market fundamentals across most sectors are strong and will continue to do so until significant
development occurs. In spite of the housing market woes, financial market crises and other economic
challenges, the seniors housing industry is faring well. The most recent quarterly update from NIC MAP
suggests the following trends within the 31 largest MSAs in Seniors Housing (Independent and Assisted
Living) and Majority Nursing Care:

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At present, the overall development activity is minimal, following banner years of peak activity and large
portfolio transactions. Of note, more than 25% of all of the seniors housing projects started in 2007/08
were expansions and we believe that in‐fill development will have an increasing role as these projects
have less cost and risk than new projects.
In terms of sales, the amount of activity in 2008 was down about 65% from recent years and most of the
transactions that have occurred involved Class B/C product or non‐performing assets. Deal flow in 2009
has not picked up materially but in the latter half of the year, we have seen increased activity as
Sunwest sheds assets at discounted prices and Sunrise continues to reorganize. Erickson Retirement
Communities, which entered bankruptcy in September, 2009 is also struggling with cash flow and has
halted development on existing and new projects. Following the company’s reorganization, some assets
are expected to be available in 2010. Many outsiders will remain on the sidelines while so many of the
industry largest operators generate negative headlines. However, this will allow opportunities for
strategic buyers, as evidenced by the Lonestar/LaVida and Blackstone/Emeritus purchases (the latter has
yet to close) of Sunwest assets and Brookdale’s purchase of a Sunrise portfolio thus far this year.
Overall the fundamentals of the industry are good for the long‐term, albeit soft for IL and to some
degree AL in the short term. Lack of capital will constrain many deals and require more equity, so we
expect some modest increases in capitalization rates while cash flows remain steady in the short term
and improve over the long term.

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INTRODUCTION
Legal Description: The subject’s legal descriptions were not provided. We presume the descriptions
herein are correct and assume no liability for them.
Three‐Year Sales History: The subject sale history has been analyzed and researched in accordance to
USPAP for the past three years prior to the date of appraisal. The sale history is presented as follows:

SALES HISTORY
Owner of Record:
Last Subject Sale Date:
OR Book/Page:
Last Subject Sale Price:
Arms' Length?
Pending Sale/Contract?
If yes, terms:

Aviv Asset Management LLC
No previous sales in the past three years
N/A
N/A
N/A
No
N/A

The subject property has not sold in the previous three years. Further, we are unaware of any sales
involving the subject property.
Operational History: According to on‐site management, the subject’s occupancy has been mostly stable
over the last several months. The operator’s annualized performance is below the 2009 indication and
the subject’s current operations. Based on the financial and performance data provided, the subject’s
occupancy and operational trends are summarized as follows:

OPERATIONAL SUMMARY
Appraisal ‐ Stabilized
Occ %
Total/RD
AL
77%
$47.86
Average Occupancy
77%
Total Revenues
$47.86
Profit Margin
19.9%
Source: HealthTrust LLC and Fountain

Level of Care

2010 Annualized
Occ %
Total/RD
70%
$48.40
70%
$48.40
25.9%

2009 Actual
Occ %
Total/RD
78%
$47.38
78%
$47.38
18.9%

Purpose and Intended Use of the Appraisal: To estimate the "as is" market value of the subject as a
going concern including personal and intangible property. The intended use of this appraisal is to assist
with underwriting a potential loan involving the subject. The intended users are representatives of the
client.
Scope of Work
General Property Scope: Standards Rule 2‐2 of USPAP requires that each written real property appraisal
report must describe the extent of the process of collecting, confirming and reporting data.
Based on the identified objective of the appraisal, we have viewed the exposure as requiring
tremendous effort, particularly with regard to the subject’s income‐producing potential. In order to
appraise the subject, we have inspected the subject, its neighborhood, and the general market area on
July 19, 2010. As part of the appraisal process, we have examined:
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






Supply and demand
Development trends
Current demographic data and projected changes over the next five years
Operating characteristics
Valuation trends and characteristics
Legislative environment

We have surveyed the most comparable properties in this market area to assess typical demand and
rates in the PMA. As the subject is an income‐producing property type that is typical bought by
investors, we have spent the most time, effort and original research on verifying income and expense
comparables, rent comparables, identifying trends that may impact the subject’s operations. The
greatest extent of research was in the income approach.
While we have attempted to limit this research to the subject’s primary market area, due to lack of
improved sales, we have expanded our search to properties throughout the region. We believe that
most or all‐discoverable pertinent market information has been obtained and considered. All sales were
verified through a party to the transaction and most have been inspected by the appraisers or associates
at HealthTrust.
In terms of the cost approach, we have identified sales of vacant property with public sources and used
the Marshall Valuation Guide and regional cost comparables. Nonetheless, we have expended minimal
research effort for this approach as it generally produces the least reliable indication for a going concern
appraisal.
Lastly, as a part of this process we have obtained and verified data with local market participants
(owners and operators of comparable properties), state regulatory agencies as well as local governing
officials.
The resulting value estimates have been reconciled based on their relative strengths, weaknesses and
appropriateness into a final value estimate. This appraisal report is a written record of our conclusions
and opinions, containing the most pertinent market data used and a discussion of the reasoning
underlying our estimates.
Applicability of Approaches
The COST APPROACH is the sum of the land value and the cost new of the improvements less accrued
depreciation. The cost approach is based on the premise that an informed, rational investor/purchaser
would pay no more for an existing property than the cost to reproduce a substitute property with the
same utility without undue delay.
The INCOME APPROACH is based on the premise that a prudent investor would pay no more for the
subject property than for another investment with similar risk and return characteristics. Since the value
of an investment can be considered equal to the present worth of anticipated future benefits in the
form of dollar income or amenities, this approach estimates the present value of the net income that
the property is capable of producing. These amounts are discounted at a rate that reflects the risk to the
investor and the amount of income necessary to support debt service or the mortgage requirement.

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The SALES COMPARISON APPROACH (market approach) is the process where prices of reasonably
similar properties are compared to the subject and are adjusted for differences in financing, sale
conditions, time, location and physical characteristics. This approach is based upon the principle of
substitution, which implies that a prudent purchaser would not pay more to buy the subject than for a
comparable substitute property in a similar location.
Each approach to value has its strengths and weaknesses, depending on a large extent on the type of
property being appraised and the quantity and quality of data available. In most instances, one or more
of these approaches will produce a more reliable value indication than the other approach(es).
Therefore, the final step in the appraisal process is the RECONCILIATION and correlation of all the value
indications into a final value estimate. This step usually begins with a discussion of the merits and
demerits of each approach and an analysis of the reliability of the data used in each approach. It
concludes with a statement of the final value estimate.
In addition, it is necessary to identify any business value and personal property value separate from the
real estate. The allocated contribution values were estimated following the reconciliation and final value
estimates. This report should be read in its entirety for a complete understanding of the scope of the
appraisal and the limiting conditions that apply to this valuation and report. Specific attention should be
drawn to the Letter of Transmittal, Certification, Standard Conditions and Significant Issues.
Legal Interest Appraised
The real property interest appraised is considered to be the fee simple estate in the 1.35 owned acres.
Effective Dates of Appraisal
Charles Plush physically inspected the subject site on July 19, 2010. The “as is” valuation date is also July
19, 2010. The appraisal is based upon market conditions observed at that time.
Use Premise
The subject property valued herein is based on the existing use as an Assisted Living Residence. The
implications relative to this premise on the highest and best use of the property are addressed in a later
section of this report.

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DESCRIPTIVE DATA
Site Description
We have made a visual inspection of the subject property. Where applicable, we have supplanted our
analysis with information provided by the subject’s management and/or the client. As previously noted,
we are not experts in the presence of hazardous substances or the structural integrity of the site or
improvements. Based on our inspection of the property, the subject’s site characteristics are as follows:

SITE DESCRIPTION
Access
Primary Frontage:
Type:
Median Divided:
Accessibility
Visibility
Exposure

113th Ave N
2 way, 1 lane each way
No
Average
Fair
Fair

Facilitating Entry to Site
Turn Lane:
Stop Sign:
Traffic Light:

No
No
No

Easements
Right of Way:
Utility:
Ingress/Egress:
Drainage:
Other (specify):

N/A
N/A
N/A
N/A
N/A

Utility Services
Electric:
Gas:
Water:
Sewer:
Telephone
Cable:

Yes
Yes
Public
Public
Yes
Yes

Flood Zone
Flood Plain:
Designation:
Community Panel:
Date:

Outside
X500
04013C1610J
September 30, 2005

General
Site size:
Source:
Shape:
Topography:

1.35 acres
Client
Regular
Level

Other Site Improvements
Paved Drives:
Walkways:
Landscaping:
Signage:
Ancillary Buildings:
Retention Ponds or areas:

Yes
Yes
Yes
Yes
No
No

Parking
Open Parking spaces:
Covered Parking spaces:
Garage spaces:
Handicap spaces:
Total

35
20
0
1
56

Soil
Drainage:
Soil Conditions:
Above‐Ground Storage Tanks:
Underground Storage Tanks:
Hazardous Substances:
Costs to cure:

Adequate
Normal
No
No
No
$0

Seismic
Zone:

1

We were not provided with title or a survey detailing the presence of easements on the subject site. We
assume that typical easements exist and are unaware of any restraints that would hinder development
of the subject if vacant.

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AERIAL MAP

Zoning
We verified the subject’s zoning designation and reviewed the corresponding zoning ordinance with the
Town of Youngtown. According to the zoning department, the subject site cannot be rebuilt if it were
destroyed. A summary of the zoning requirements is as follows:
ZONING DESIGNATION
Designation:
Zoning Authority:

R (Rural District)
Town of Youngtown

Permitted Uses:

churches, golf courses, hospitals, medical
clinics, and pharmacies

Maximum Height:
Permitted Density:
Max. Permitted FAR:
Required Parking:
Subject Permitted As:

30 to 50 feet depending on use
N/A
N/A
one space for each bed
legally non‐conforming use

Assessment and Taxes
The subject property is assessed by Maricopa County. The following table details the subject’s most
recent assessment and tax information:

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SUMMARY OF REAL ESTATE TAXES
Subject Assessed Value(s):
Parcel ID
200‐85‐406B
Total Assessed Value:

Land

Building

Adjustments & Taxes:
Exempt Value:
Assessment Ratio:
Taxable Value:
Effective Tax (Millage) Rate:
Total Real Estate Taxes:
Total Personal Property Taxes:
Total Taxes:
Effective Year:

Total
$1,599,382
$1,599,382

61.6676

Total Taxes Per:

$152

Unit

$0
10%
$159,938
per $1,000
$9,863
$0
$9,863
2009
$126

Bed

We have estimated total taxes of $160 per unit, which is similar to the current tax burden of $152 per
unit as we believe the subject is appropriately assessed.
Improvement Description
The following description of the subject improvements is based on our visual inspection of the subject as
well as review of the floor plans and information provided by the operator. These plans are contained in
the Addenda of this report. We have partitioned the subject’s gross building area as follows:

SUMMARY OF GBA
Portion
Assisted/Memory Care
Total

GBA
37,102
37,102

DESCRIPTION OF IMPROVEMENTS
Improvement Description:
Year Built:
Year of Last Major Renovation
Number of Buildings
Number of Stories
Nurse’s Stations
Overall Condition
Overall Quality

1971
N/A
1
2
1
Average
Average

Building Shape
Basement
Balconies
Number of Elevators
Dining Rooms
Deferred Maintenance
Functional Obsolescence

regular
None
No
1
1
No
No

The subject property was constructed at one time. The improvements are well maintained, with
replacements having been made as needed. Overall, we find that the subject property has an effective
age of 35 years, compared to its actual age of 39 years, due to the adequate maintenance of the
improvements. The subject’s improvements are detailed as follows:

DESCRIPTION OF IMPROVEMENTS (CONT.)
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Construction Details:
Foundation Type:
Structure Type:
Roof Type:
Exterior Wall Finish:
Interior Partitions ‐ Common Areas:
Interior Partitions ‐ Resident Units:
Ceilings ‐ Common Areas:
Ceilings ‐ Resident Units:
Lighting ‐ Common Areas:
Lighting ‐ Resident Units:
HVAC ‐ Common Areas:
HVAC ‐ Resident Units:
Floor Coverings ‐ Common Areas:
Floor Coverings ‐ Resident Units:
Windows:
Sprinkler/Security System:
FF&E:

Concrete slab
Wood Frame
Flat
Stucco
Latex paint over drywall
Latex paint over drywall
Latex paint over drywall
Latex paint over drywall
Fluorescent
Fluorescent
Forced air
PTACs
Carpet
Carpet and vinyl sheet
Aluminum frame, single‐hung
All units have 24‐hour emergency call system with central monitoring.
The building is not sprinklered and contains smoke detectors.
This appraisal includes all chattel and personal property associated
with the subject’s operation such as furnishings for all common and
administrative areas, office equipment, kitchen and laundry
equipment, maintenance equipment, and all other accessory items
required for normal operation.

Community Layout
The building is designed in a “square” shape. The resident living units have kitchens or kitchenettes with
range, sinks and partial size refrigerators or full size refrigerators. All units have baths with a sink, toilet
and prefabricated shower stall. Overall, the unit sizes and layouts are typical for senior living.
The following table illustrates the amenities offered by the subject. Overall, we find these to be typical
within the market, and adequate given the subject’s age, quality and prospective resident:

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SUMMARY OF AMENITIES
Unit Amenities:
Balconies/porches
Cable/satellite TV
Emergency pull‐cords
Fire/smoke detectors
Full kitchens
High‐speed internet
Community Amenities:
Activity rooms
Arts & crafts rooms
Assistance w/ ADLs
Bank branch
Beauty/barber shop
Business Center
Chapel
Coffee Shop/Deli
Computer room
Concierge service
Courtyard
Covered parking
Dining room ‐ main
Dining room ‐ private
Exercise facilities
Game/billiards rooms
Garage parking
General store
Golf course
Guest Accommodations
Health center
Housekeeping
Ice cream parlor

No
Yes
Yes
Yes
Yes
No

Individually controlled HVAC
Kitchenettes
Private baths
Walk‐in closets
Washer/dryer hookups
Washers/dryers

Yes
Yes
Yes
No
No
No

Yes
Yes
Yes
No
No
No
No
No
No
No
No
No
Yes
No
No
Yes
No
No
No
No
No
Yes
No

Laundry facilities
Library
Linen Service
Lounge areas
Medications
Pharmacy
Postal services
Putting green
Reception Area
Scheduled transportation
Security 24 hour
Skilled nursing care
Social activities
Spa/Whirlpool
Storage area/bin
Swimming Pool
Tennis courts
Theater/Auditorium
Therapy Room
Utilities
Walking/nature trails
Wanderer Mgt. System
Woodworking shop

Yes
No
Yes
Yes
No
No
Yes
No
Yes
No
No
No
Yes
No
No
Yes
No
No
No
Yes
No
No
No

The subject contains a total of 65 units and 78 beds, indicating the following unit sizes and mix:

UNIT MIX
Type of Unit
Assisted Living
Semi‐Private
Studio
1‐Bedroom
Total

No. of Units

Size (sf)

Net Rentable Area

13
46
6
65

280 ‐ 280
280 ‐ 280
354 ‐ 354

3,640
12,880
2,124
18,644

Compared to the overall industry, the subject indicates the following:

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SUMMARY OF IMPROVEMENTS
Level of Care:
AL
Total

No. of Units

No. SU Beds

No. Lic Beds

65
65

78
78

80
80

Building Efficiency:

Subject

Gross Building Area (GBA):
Ratio of Net Rentable Area
GBA/Unit
GBA/Bed

37,102
50.3%
571
476

2009 State of Seniors Housing Median
No. Of Units
73

2009 State of Seniors Housing Median Indications
IL
AL
CCRC
114,311
51,000
357,415
69.0%
57.5%
71.9%
914
699
1,146
N/A
N/A
N/A

Americans With Disabilities Act: The Americans With Disabilities Act sets strict and specific standards
for handicapped access to and within most commercial and industrial buildings. Determination of
compliance with these standards is beyond appraisal expertise and, therefore, has not been attempted
by the appraisers. For purposes of this appraisal, we are assuming the improvements are in compliance.
We assume no responsibility for the cost of such determination, and our appraisal is subject to revision
if the improvements are not in compliance.
Conclusion ‐ Subject Property Data: Following our review of the plans and our property inspection, we
find that the subject site is adequate to support the improvements. Furthermore, we did not note
evidence of functional obsolescence inherent in the subject’s design and believe that they are functional
for seniors housing and care. Finally, we did not note material deferred maintenance at the subject.

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MARKET ANALYSIS
The subject of this appraisal is located in Youngtown in the Phoenix‐Mesa‐Scottsdale, AZ Metropolitan
Statistical Area (MSA). Appraisal theory recognizes four factors (environmental, social, economic, and
governmental) that influence property values within a region, county, neighborhood or district.
Accordingly, a review of each as it relates to the Phoenix‐Mesa‐Scottsdale, AZ MSA, as well as the
subject’s more immediate neighborhood, is presented.
Regional Analysis
The subject’s location within the Phoenix‐Mesa‐Scottsdale, AZ MSA is as follows:
AREA MAP

Additionally, the following pages were provided by Moody’s Economy.com, Précis Metro reports to
provide a comprehensive analysis regarding current and projected economic conditions for the subject’s
MSA.

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Neighborhood Analysis
The key focus of the neighborhood analysis is not as much competition‐oriented as it is physical and use
oriented. More specifically, this analysis describes the area of generally homogenous uses within which
the subject is located. This neighborhood is not intended to reflect the competitive neighborhood of the
subject; however, it instead reflects the neighborhood in physical proximity to the subject. Our
assessment of the subject neighborhood is presented as follows:
NEIGHBORHOOD MAP

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NEIGHBORHOOD TRAITS
Boundaries

North
East
South
West

Neighborhood
US‐60
N 99th Ave
W Olive Ave
waterway

Type of Neighborhood

Mixed‐use

Abutters
Residential
Industrial Uses
Single‐Family Residential
Vacant Land

Composition

Agriculture
Community (Recreation)
Hospitality
Industrial
Medical
Office
Public/Governmental
Residential (Single‐Family)
Residential (Multi‐Family)
Retail

Present
No
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes

Prevalence
None
Low
Low
Low
Low
Low
Low
Moderate
Low
Low

Demand Generators
Hospital
Regional Mall
Churches
Seniors Housing
Adult Children Homes

Yes
No
Yes
Yes
Yes

Access/Influences
Local Area Access
Regional Ingress/Egress
Neighborhood Cycle
Neighborhood Influence

Grand Avenue
I‐10 and I‐17
Stability
Positively impacts the subject

26

Neighborhood Cycle
Growth

Revitalize

Stability

Decline

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Proximity to hospitals is often an important consideration when selecting a seniors housing community.
Nearby hospitals are identified in the following map and table:
HOSPITAL MAP

SUMMARY OF NEARBY HOSPITALS
Hospital
Boswell Memorial Hospital

Beds
492

Source: Thomson Profiles of U. S. Hospitals

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COMPETITIVE MARKET ANALYSIS
Regulatory Overview
Independent Living: Typically, there are no regulations for freestanding independent living, which
generally has the same requirements from a regulatory standpoint as any multifamily development.
However, independent living units that are in a continuum of care that offers some level of lifecare, are
often regulated by the state’s Department of Insurance.
Assisted Living: State regulations vary considerably for this level of care, ranging from states that have
no regulations and classify them as hotel/motel properties to states that are considering some type of
CON regulations. It is probable that, in the future, as state reimbursement becomes more common,
some type of barrier to entry legislation will become common.
States typically feel that use of CON or similar legislation enhances profitability in that full occupancy is
more efficient than partial occupancy, and ruinous competition is a danger to the industry and quality of
care overall. As the subject is located in Arizona, which has regulatory legislation, at this point it is
appropriate to review this legislation and the impact it will have on the subject and residences in the
market.
Arizona Assisted Living Legislation: The State of Arizona licenses assisted living facilities according to
size and levels of care. Facilities with ten or fewer beds are classified as an assisted living home and
facilities with 11 or more beds are considered an assisted living center. There are three categories of
service: (1) Supervisory Care; (2) Personal Care; and (3) Directed Care. Supervisory care is similar to
independent living and does not permit assistance with ADLs. Personal care provides standard assisted
living services. Directed care is the highest level of assisted living care and allows cognitive stimulation
and activities to maximize functioning. This level provides services to Alzheimer’s and dementia
residents.
Regulatory requirements include three meals a day with not more than 14 hours between the evening
meal and the morning meal; no more than two residents in a unit or bedroom; heating and cooling
systems must maintain the facility at a temperature between 68 to 85 degrees at all times; there must
be at least 80 square feet of floor space for a resident in a private bedroom; there must be at least one
tub or shower for each eight individuals in a facility; a residential unit must contain at least 220 square
feet. A complete description of all regulatory requirements is contained in Title 9: Health Services,
Chapter 10, Supp. 03‐3.
The Arizona Long Term Care System (ALTCS) is a program for low‐income residents. The income limit is
$1,656 per month and resources are limited to $2,000 for a single individual and $3,000 for a couple.

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Definition of Primary Market Area
The 2009 Overview of Assisted Living completed by the Assisted Living Federation of America (ALFA) in
conjunction with AAHSA, ASHA, NCAl and NIC indicates that typical assisted living residences draw 85%
of their residents from within 15 miles, which shows a change from five years earlier when 73% of the
demand would emanate from within a 15‐mile radius.
However, we estimate that 100% of the demand for the subject’s services emanate from within the
PMA. We point out that while residents may reside in a community from outside the primary market,
conversely residents will also leave the primary market to reside elsewhere. Thus, while we do consider
the prevalence of migration in and out of the PMA within our penetration analysis, it is viewed as being
anecdotal in nature and difficult to quantify. Moreover, the Claritas projections serve to estimate the
future migration, as it pertains to the subject’s PMA. However, as we will discuss later in the following
sections, prevalence of adult children are a primary indicator of migration.
Based on our interviews with both executive directors and directors of marketing at comparable
projects in the area, including the subject’s operator, we have determined that the subject’s primary
market area (PMA) is a five‐mile radius.
Supply Analysis
The subject’s management identified the following communities as being its primary competitors:
 Freedom Plaza
 The Woodmark at Sun City
 Ventana Winds f.k.a. Willow Creek
We find the following relationship among the subject and its primary competitors:
Reputation/Quality
(Service, Amenities, Reputation)

Ventana Winds f.k.a.
Willow Creek
The Woodmark at Sun
City

Dated
Plant

Freedom Plaza

SUBJECT

Reputation/Quality
(Service, Amenities, Reputation)

29

State‐of
the Art

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In terms of measuring the PMA supply, while we considered management’s opinion of primary
competition, we have only included units in the PMA that house seniors that are comparable to the
subject.
Consequently, we have excluded those facilities considered to be “mom and pop”, generally containing
less than 25 beds or operating out of a skilled nursing wing. With regard to assisted living and memory
care, we have broken out our supply estimates separately. However, we have added back the memory
care supply to assisted living, noting that the former is a subset of assisted living, with prospective
memory care residents qualifying for occupancy within a traditional assisted living environment. We
estimate the total number of existing and proposed beds/units in this market as presented in the
following table(s):

AL SUPPLY
Assisted Living Beds
PMA
2009
65
64
90
101
50
41
50
78
620
1159
1159
1470

Freedom Plaza Care Center
Royal Oaks Life Care Center
Willow Creek Assisted Living
The Woodmark at Sun City
Sterling House of Peoria
Amethyst Senior Living
Baldwin House
Subject
All Other
Total
@ 100% from PMA
Plus Memory Care

30

2014
65
64
108
101
50
41
50
78
674
1231
1231
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Demand Analysis
A major factor in estimating potential market demand for communities such as the subject involves an
analysis of the number of residents within the primary market area that are qualified for residency in
terms of age and income level. Prospective residents for a seniors housing community such as the
subject are at least 65 years of age or older, have sufficient income to cover monthly rental fees and
other living expenses. Historical and anticipated growth in the senior age groups, nationally, is presented
in the following table:

PROPORTION OF TOTAL POPULATION THAT WILL BE 55+
Age
55+
65+
75+
85+

2005
22.7%
12.4%
6.1%
1.7%

2010
24.7%
13.0%
6.1%
2.0%

2015
27.1%
14.5%
6.3%
2.1%

2020
29.0%
16.3%
6.8%
2.2%

2025
30.0%
18.2%
8.0%
2.3%

2030
30.5%
19.7%
9.2%
2.6%

Source: US Census Bureau 2004 "US Interim Projections by Age, Sex, Race and Hispanic Origin

35.0%
30.0%
25.0%
55+

20.0%

65+
15.0%

75+

10.0%

85+

5.0%
0.0%
2005

2010

2015

2020

2025

2030

The elderly group age 85 and over represents the fastest‐growing segment of the U.S. population.
According to the US Census Bureau, there were 4.3 million seniors aged 85+ in 2000 and this segment
will swell to 20.9 million by 2050. This is a key market for the seniors housing industry because 44% of
those over 85 need long‐term care or assistance with activities of daily living. As a result, industry
analysts project strong growth in seniors housing revenue through the end of the decade and beyond.
In terms of identifying potential demand, we have begun with the examination of the number of
households with persons at least 65 years of age. While we note that residents residing in senior
housing communities are generally much older than 65 years of age, we have utilized this cohort as
minimum standard for residency in order to better reflect potential demand source across all product
types.

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Please note that the senior population estimates and projections prepared by Claritas are presented in
the addenda of this report. A summary of the estimated senior population and growth rates for the PMA
are presented in the following chart:

Senior Population
Annual Growth 2009‐2014
3.50%
3.00%

55‐64

2.50%

65‐74

2.00%

75‐84

1.50%

85+

1.00%

65+

0.50%
0.00%

In order to test the viability of the market, we have surveyed current and future supply pattern,
analyzing age, size, amenities and service package. Moreover, we have analyzed market occupancy,
current and future penetration rates, historical rate growth, development interest and the geographic
composition. We firmly believe that characterizing a market based on any single factor can be inaccurate
and misleading. Overall, we utilize the following process in identifying demand for senior’s housing
communities.

PMA
Population

•Define the subject's primary market area and demographics for current and projected
years.
•Segment demographics on the basis of market derived age criterion.

Age‐Qualified

Income‐
Qualified

Acuity‐
Qualified

Potential
Demand

Penetration
Rate

•If needed, further segment the market on the basis of income qualifications,
considering both income and assets of age qualified prospects.
•If needed, quantify the prevalence and need of acuity‐based services of age and
income qualified demand.
•Resulting potential demand indications are contrasted to PMA supply and occupancy
in both current and projected years resulting in a market penetration rate.
•Market penetration rate is then evaluated against macro indications utilizing market
penetration rates derived utilizing similar methodology.

In terms of care levels, the following criterion is utilized by level of care:

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Independent
Living
• Age‐Qualified
• Income‐
Qualified

Assisted Living

Memory Care

• Age‐Qualified
• Income‐
Qualified
• Acuity‐
Qualified

Skilled Nursing

• Age‐Qualified
• Income‐
Qualified
• Acuity‐
Qualified

• Age‐Qualified

In addition to reviewing the demographics, it is important to account for the ALFA’s 2009 Overview of
Assisted Living indicates the following prior residences before moving into an assisted living residence:

RESIDENCE PRIOR TO MOVING INTO AN ALR
AL/MC
71.6%
9.5%
6.1%
6.8%
6.1%

Private Home
Family Residence
Different ALR
Independent Living Community
Nursing Home

IL/AL
70.1%
6.9%
6.9%
13.8%
2.3%

Source: 2009 Overview of Assisted Living

As previously mentioned, we have relied on estimates and projections of senior population in the
subject PMA prepared by Claritas. During discussions with senior management at Claritas, we learned
that per census procedures, Claritas’ household estimates only reflect seniors living in their primary
residence acting as head of household. Therefore, the income statistics will not reflect that portion of
the demand that emanates from nursing homes (institutionalized population) or within a family
residence not acting as head of household. Thus, we have calculated a factor for each level of care in
order to more accurately reflect demand sources not captured within the census data provided by
Claritas. Based on this premise, we have adjusted the household numbers, which we refer to as a
Claritas Factor, as follows:

DEMAND CAPTURED BY CLARITAS
Private Home
Different ALR
Independent Living Community

AL/MC
71.6%
6.1%
6.8%

IL/AL
70.1%
6.9%
13.8%

Total
Corresponding Claritas Factor (Inverse of Total)

84.5%
1.18

90.8%
1.10

Source: 2009 Overview of Assisted Living

Thus, we can, nonetheless, reasonably estimate total demand in the PMA by using the information
prepared by Claritas and dividing it by the ratio of total demand the private residence component
represents. For example, for independent living, if we calculated the current total of age/need/income‐
qualified households in the market, we can divide it by 90.8% to reach an estimate of total private pay
demand:

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Claritas Household Demand/90.8%

= 100% of IL demand
= 1/0.908
= 1.10

Please note that for the purposes of this analysis, we have also applied the relevant factors for the AL
and memory care populations of 1.18.
Additionally, we need to adjust the household data in order for it to be viewed in terms of population.
This is only done for assisted living and memory care, as independent living communities generally only
attract the entire household, and rarely utilized semi‐private accommodations of unrelated individuals.
Accordingly, on the supply side, we only view the number of units as opposed to the number of
residents or beds.
Therefore for assisted living and memory care, we have adjusted the household figures by dividing the
adjusted 65 and up population by the number of 65 and up households. The adjusted population is
calculated by subtracting the institutionalized nursing home population from the overall population. This
is referred to as the Household/Population Factor in the following tables.
Independent Living
According to the American Seniors Housing Association (ASHA) 2003 study The Benefits of Independent
Living Communities surveyed residents and non‐residents of independent living communities, and found
the following conclusions and key findings:
 There were no differences between the abilities of residents of an ILC and those who are not in
walking, getting out of bed, bathing, dressing, or toileting.
 Residents and non‐residents view their health status equally, despite residents having been
more likely to have been in a hospital, used an assistive device, report difficulty in climbing stairs
and lift heavy objects in the previous two years.
 A statistically greater proportion of ILC residents have long term care insurance when compared
to those not residing in an ILC.
Primary reasons for residents choosing the particular community included





Location
Layout and design of community
Friendliness of staff
Cost

Primary reasons for residents moving out of their primary residence include:






Health problems of respondent or spouse
Passing away of spouse
Desire to be relieved of home maintenance
Desire for social contact
Because the respondent and/or spouse needed nursing care services
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Overall, independent living is ultimately viewed as a lifestyle choice, as opposed to a need based
services. Consequently, we have only viewed the age and income criterion as driving factors for
residency at the subject.
Assisted Living
The National Health Interview Survey is conducted by the Center for Disease Control and utilizes data
based on household interviews of a sample of the civilian non‐institutionalized population identifying
personal care needs among those aged 65 and up. Personal care needs are defined as requiring
assistance with any Activity of Daily Living (ADL). The NHIS has been conducted continuously since 1957,
with the primary objective of monitoring the health of the United States population. The cross sectional
study includes a sample size of approximately 35,000 households and 87,500 persons, allowing for the
valid reporting of health status and limitations, injuries, healthcare access and utilization in the US. The
publication is widely accepted throughout the industry, including the American Seniors Housing
Association. Over the last seven years the survey has found the following, though we note that the while
there are variances year to year, they have not been defined as statistically significant:
% 65+ NEEDING PERSONAL CARE
95% CI Interval
%
6.1% ‐ 7.1%
6.6%
5.9% ‐ 6.8%
6.3%
5.8% ‐ 6.9%
6.4%
5.9% ‐ 6.9%
6.4%
6.0% ‐ 7.0%
6.5%
5.7% ‐ 6.7%
6.2%
6.0% ‐ 7.1%
6.5%
5.8% ‐ 6.8%
6.3%
5.8% ‐ 6.8%
6.3%
5.4% ‐ 6.7%
6.1%
6.2% ‐ 7.6%
6.9%
5.8% ‐ 7.0%
6.4%
5.8% ‐ 7.2%
6.5%

% 65+ NEEDING PERSONAL CARE
7.0%
6.8%
6.6%
6.4%
6.2%
6.0%
5.8%
5.6%

% 65+
NEEDING
PERSONA
L CARE

1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
Sep‐09

Year
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
Sep‐09

Source: NHIS

Thus, in order to estimate potential demand for assisted living services we have applied the following
personal care factors to the respective age groups:
PERSONAL CARE NEEDS
Age Group
65‐74
75‐84
85+

Percent
3.4%
7.0%
19.9%

Source: CDC National Health Interview Survey

Alzheimer’s Care
In estimating potential demand for Alzheimer’s care we have surveyed the Prevalence of Dementia in
the United States: The Aging, Demographics and Memory Study published in October, 2007 and
performed by Plassman, et al for Duke University Medical Center in which a nationally representative
sample of individuals 71 and older from the Health and Retirement Study were evaluated for dementia
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vie a comprehensive in‐home examination. This is the first nationally representative population‐based
study of dementia within the United States. Based on the study the prevalence of Alzheimer’s Dementia
among those 71 and older was 9.7%; however, this statistic does not differentiate between the level of
Alzheimer’s Dementia, thus not all would be candidates for traditional memory care units. The most
recent data we have found on prevalence of moderate and severe dementia is from a study released by
the GAO in 1998, which found the following prevalence rates:

ALZHEIMER'S PREVALENCE RATES
65‐74
75‐84
85+

Mild, Moderate & Severe
1.63%
6.45%
24.58%

Moderate or Severe
0.92%
3.53%
14.54%

Source: GAO Alzheimer's Disease

Accordingly, we have only considered the statistics relevant to moderate or severe dementia to be
eligible for occupancy within memory care units.
Income‐Qualifications (IL/AL/MC)
Based on the subject’s in‐place rents and rental comparables, we have estimated a minimum monthly
fee for the subject, multiplied by 12 months and assuming that the rental fee would account for 75% of
all living expenses. We note it is inappropriate to utilize an average rent as we are estimating the actual
demand for units in the subject’s price range. Therefore, the following annual minimum incomes
(rounded) would be required:
ANNUAL INCOME THRESHOLD
Level of Care
Assisted Living

Minimum Monthly Rate
$1,075

Income Threshold
$17,200

Claritas household income demographics are compiled from census data, which generally defines
income as receipts for the previous year. Consequently, we find that while household income is
generally a good indicator of affordability for the subject’s services, it does not necessarily correlate into
a prospective resident’s ability to pay for services. Moreover, in terms of affordability a prospective
resident’s net worth must be considered as assets are often spent down and home equity is tapped in
order to meet housing and expense obligations. As provided within the 2008 Seniors Housing Statistical
Handbook, the following income vs. net worth characteristics were comprised residents of independent,
assisted and CCRC residents:

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INCOME AND NET WORTH OF RESIDENTS
Overall

In Thousands

In Thousands

Income
Less than $15
$15 ‐ 24.9
$25 ‐ 34.9
$35 ‐ 49.9
$50 ‐ 99.9
$100+
Net Worth
Under $50

8.4%
14.3%
18.8%
22.9%
26.4%
9.1%

Independent Living

Assisted Living

CCRC

$11.5 Lower Quartile
$18.9 Median
$26 Lower Quartile
$40 Median
$60 Upper Quartile

$21 Median for AL
$27.5 Median for SNF
$48.8 Median for IL

$36.0 Upper Quartile

11.5%

$50 ‐ 99.9

9.1%

$100 ‐ 299.9

21.3%

$100 Lower Quartile
$400 Median

$300 ‐ 499.9

16.8%

$500 ‐ 749.9

13.6%

$750+

27.7%

$62 Lower Quartile

$250 Median for SNF

$205 Median

$281 Median for AL

$564 Upper Quartile

$569 Median for IL

$800 Upper Quartile

Source: American Seniors Housing Association The Benefits of Independent Living Communities, 2003
Assisted Living Federation of America, with AAHSA, ASHA, NCAL< and NIC, Overview of Assisted Living, 2009.
American Association of Homes and Services for the Aging, with ASHA and NIC, Continuing Care Retirement Communities: 2005 Profile

Income

Net Worth
Under $50

Less than $15

$50 ‐ 99.9

$15 ‐ 24.9

$100 ‐ 299.9

$25 ‐ 34.9

$300 ‐ 499.9

$35 ‐ 49.9

$500 ‐ 749.9

$50 ‐ 99.9

$750+

$100+

The 2006 and 2009 Overview of Assisted Living indicated the following sources of primary payment:

PRIMARY PAYMENT SOURCE
2006

2009

2006

AL/ALZ
Self
Family
Insurance
Medicaid
SSI
VA
Unknown

57.9%
30.9%
4.7%
2.6%
1.3%
2.6%
0.0%

2009
IL/AL

63.5%
14.7%
7.1%
12.2%
1.9%
0.0%
0.6%

66.3%
14.7%
3.3%
13.6%
2.2%
0.0%
0.0%

82.6%
7.0%
3.5%
5.8%
1.2%
0.0%
0.0%

Source: 2006 and 2009 Overview of Assisted Living

As seen in the foregoing, residents are not typically responsible for their entire fee within senior housing
communities. Further, if we view typical incomes of residents with current average fees, it is apparent
that a resident’s income is not the primary source of funds:
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INCOME TO CHARGE COMPARISON

Independent Living
Assisted Living

Average
Monthly Rate^
$2,500
$3,496

Annual Income
Threshold*
$39,993
$55,942

Median Income of
Resident**
$40,000
$18,900

$ Surplus/
Shortfall
$7
$‐37,042

% Shortfall/
Surplus
0.02%
‐66.21%

^NIC MAP 1st Quarter 2010
*Average Monthly Rate/75%*12
**The Benefits of Independent Living Communities, 2003 & Overview of Assisted Living, 2009.

Therefore, while our analysis will focus on the income‐qualified senior, we must recognize that for
private pay communities, adult children and long‐term care insurance policies are often covering a
senior who has lower than required annual income and resources. Moreover, residents are also likely to
spend down their assets in order to utilize care, particularly for higher levels of care (assisted living and
memory care). Because household income statistics provided by Claritas only include money receipts
(pension income, social security income, etc.) for a given year, they do not include the following sources
that could also fund residency:





Stocks, bonds and other liquid assets
Assistance from family
Home equity
Medicaid Waivers

Consequently, we have adjusted our income‐qualifications below that of the income threshold
calculated previously to account for these additional sources of income. We have viewed those
residents indicating incomes of $25,000 ‐ 100,000 for assisted living. We note that the difference
between the required minimal income and the concluded income qualification used reflects spending
down of assets associated with a resident’s net worth, assistance from adult children and other sources
including long‐term care insurance.
Finally, based on the foregoing, we have calculated the potential demand for seniors housing as shown:

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DEMAND INDICATIONS
Assisted Living
PMA
2009
2014
51,323
56,038
1,457
1,482
49,866
54,556
31,722
34,154
$17,200
$166,632
$185,237
$25,000 ‐ 100,000

65+ Population
Nursing Home Population
Adjusted 65+ Population^
65+ Households
Annual Minimum Income Threshold
Median Owner‐Occupied House Value
Income Qualification:
Age and Income Qualified Households
65‐74
7,707
75‐84
7,874
85+
3,718
Personal Care Factor by Age
65‐74
3.40%
75‐84
7.00%
85+
19.90%
Households Meeting Income and Acuity
1,553
Household/Population Factor*
1.57
Claritas Factor
1.18
Potential Assisted Living Demand
2,893
*Adjusted Population/Households
^General Population less Nursing Home Population
Source: HealthTrust, LLC

39

8,879
8,208
4,191
3.40%
7.00%
19.90%
1,710
1.60
1.18
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Penetration Analysis
For the purpose of this analysis, the market penetration rate is measured as the number of residents
from the PMA living in seniors housing communities divided by the total number of age/income/need
qualified households. It can be expressed as:
[Market Occupancy x Supply x Ratio from the PMA]/Income‐Qualified Demand
The market penetration rate is viewed as a comparison of supply and demand relative to a snapshot in
time for both the current year and projected year based on information available as of the date of the
inspection. Based on the PMA average occupancy level, we find that the market is currently
demonstrating the following penetration level:

PENETRATION ANALYSIS
Assisted Living
PMA
2009
1470

Total Supply
Market Occupancy
Total Potential Demand
Penetration Rate

2014
1558
91%

2,893
46.04%

3,237
43.60%

Source: HealthTrust, LLC

Penetration rates are indices that represent the relationship between supply and demand, which allow
for meaningful comparison to the broader market. Unlike other real estate asset classes, penetration
rates are not to be analyzed on the basis of their absolute value, but rather used for their relative values
when compared to the larger market. More clearly, due to the imperfect nature of the available data,
resulting penetration rates can sometimes lead to indications that could be construed as being
misleading. For example, a penetration rate in excess of 100% is not necessarily indicative of a saturated
market, but only to the extent of how it relates to other market derived penetration rates using identical
methodology. In doing hundreds of appraisals and market studies annually of senior housing properties,
we have found the following significant trends and conclusions:
 Markets with high penetration rates have better‐educated populations with regards to the
seniors housing product type. Further, among the 100 MSAs, there is a positive correlation
between penetration rates and occupancy levels. Conversely, as penetration rates increase,
average rents decrease, indicative of a competitive market.
 Based on our analysis of the 100 largest MSAs, we find a significant variance in assisted living
and memory care penetration rates for the largest 31 MSAs relative to that of the smaller MSAs
(32‐100). Generally, the latter indicates on average, 25% to 35% higher penetration rates,
depending on age and income qualifications. Further, in our experience, we find this variance to
be even more pronounced within tertiary markets. While, it’s anecdotal, we attribute this to
the following:
o

Greater in‐migration from rural out bounding areas due to availability of healthcare
resources.

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o

Fewer living options available within the secondary markets relative to the larger,
metropolitan markets.
Smaller sized markets allow for increased education and product awareness.

o

 Adult Children (45‐64 age cohorts) play a primary role in the decision process for a prospective
resident with regard to assisted living and even more so to memory care. Higher penetration
rates among adult children reflect net‐in migration for the particular service and result in
increased penetration. This is not necessarily the case for independent living, where no
correlation is found among adult children.
 Availability of State Assistance (Medicaid) is a driving demand force for senior housing
properties. The utilization of such programs allows for increased access to residents who could
otherwise not afford the product, thereby resulting in higher penetration rates. States with high
utilization of State Assistance include North Carolina, Oregon and Washington.
Overall, while penetration rates provide a barometer for the makeup of a particular market, in analyzing
any market, primary weight is placed on market occupancy levels, once adjusted for variances among
the age and quality of assets available.
Market Categorization
In order to categorize the market, we have compared the subject’s PMA against the 100 largest MSAs. In
order to provide for industry benchmarks, we have utilized supply estimates from 1st Quarter NIC MAP
and applied our supply and demand methodology previously described. The subject’s PMA relative to
the broader market is as follows:
ASSISTED LIVING
Average Occupancy
Average REVPOR
Median House Value
Penetration Rates
$25,000 ‐ 100,000

Top 100 MSA Benchmark
Median Lower Quartile Upper Quartile
89.30%
87.21%
91.55%
$3,496
$3,222
$3,741
$173,333
$131,269
$234,703
41.7%

31.3%

54.7%

MSA
Phoenix, AZ
89.06%
$3,506
$208,311
30.4%

Subject PMA
2009
2014
90.60%
90.60%
N/A
N/A
$166,632
$185,237
46.0%

43.6%

Conclusions
Based on its estimated stabilized occupancy level, we find the market’s AL penetration is above the
median and the memory care penetration is above the median of the 100 MSAs, but within the quartile
range. Relative to the Phoenix MSA, the subject’s penetration and occupancy rate are higher.
Our observations of hundreds of markets annually resulted in the following general interpretation of
market indicators:

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FOUNTAIN RETIREMENT HOTEL

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MARKET ANALYSIS INTERPRETATION
Category

Occupancy

Penetration

I

PMA > NIC MAP Median

& PMA > Median

II

PMA < NIC MAP Median

& PMA > Median

III

PMA < NIC MAP Median

& PMA < Median

IV

PMA > NIC MAP Median

& PMA < Median

Market Conclusion
PMA has positive rate growth and
absorption. May have net in‐migration
and/or prevalence of state assistance.
Experienced and highly competitive
market with potential of moving into II or
IV depending on demographic growth
and/or proposed supply.
PMA is overbuilt, low/negative rate
growth and low/negative absorption.
Market may be skewed by dated,
uncompetitive communities.
PMA’s consumers are not fully accepting
or are inexperienced with seniors housing
and/or market has net out‐migration
PMA has significant potential and is
under‐served with high rate growth and
occupancy, indicating unmet demand.

Source: HealthTrust LLC

Market Categorization
IV
Median
Occupancy

I

II

III
Median
Penetration

The subject is best characterized as a Type I market, and is expected to remain so over the next five
years. While this model is not an indicator of outright feasibility for the subject, this does suggest that at
present, and over the next five years, the market risk will not increase significantly enough to offset
demand and that were the subject introduced during this period, it would not cause a significant change
in the current balance between supply and demand. Therefore, our review of the local market indicates
that there is positive demand for seniors housing properties to support development of the subject.
Furthermore the following valuation analysis suggests that it is feasible as well.

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HIGHEST AND BEST USE
Highest and best use is an appraisal concept defined as that use of many possible and legally allowable
alternative uses, which may reasonably be expected to produce the greatest net return to the property
in the foreseeable future. In order to estimate the highest and best use of the subject property, we have
considered the possible and most probable uses of the site, including those uses for which the land is
adapted with respect to size, configuration, contour, and location. In particular, we considered those
uses that are legally permissible, physically possible, and in conformity with existing improvements in
the area, and which result in the highest economic return to the land. Legal uses permitted under local
zoning ordinances have been analyzed as well as probable uses stemming from an analysis of economic
aspects affecting the use of the land. This analysis is conducted as if the site were vacant to identify the
ideal improvements for the site, and then as improved to compare the existing improvements to the
ideal improvements.
As If Vacant
Physically Possible: The site is comprised of one parcel containing a gross land area of 1.35 acres. The
site's shape is regular and its terrain is level. The building site lies in an X500 flood zone, and drainage is
adequate. All utilities are available to the site and we are unaware of any soil conditions that may hinder
development. Hence, the site appears to be readily developable from a physical standpoint.
The subject's immediate vicinity is developed with the following:





Residential
Industrial Uses
Single‐Family Residential
Vacant Land

In summary, the site “as vacant” has few physical restrictions that would impact development of the
site.
Legally Permissible: The subject is zoned R (Rural District). Permitted uses include churches, golf
courses, hospitals, medical clinics, and pharmacies. The subject property is permitted as a legally non‐
conforming use, but we understand that it could not be rebuilt; it is our understanding, however, that
the subject was zoned Rural District at the time it was built and given that the use is complementary to
permitted uses, we believe that the subject would likely be approved if the site were currently vacant.
Economic Feasibility: Based on the subject’s existing use, we have focused the remainder of our efforts
on seniors housing, particularly an Assisted Living Residence. As mentioned in the preceding
Competitive Market Analysis, the subject’s primary market area (PMA) is a five‐mile radius. Further, our
supply and demand analysis indicates positive demand for the subject property, while the following
valuation analysis suggests it is feasible as well. Therefore, we have concluded the subject is
economically feasible.
Maximally Productive: We have identified a seniors housing development as the only use which is
immediately financially feasible and would therefore provide the greatest return to the site. Hence, we
have concluded that a seniors housing use is the highest and best use of the property, as vacant.
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FOUNTAIN RETIREMENT HOTEL

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As Currently Improved
Financially Feasible: Both physical and legal issues were discussed previously in the highest and best
use, as if vacant scenario. Demand within the subject's market area is considered to be adequate for the
existing units, as presented in the previous analysis. Hence, we feel that continued operation of the
subject is economically feasible.
Maximally Productive: It is clearly apparent that the subject is worth more as an operational enterprise
than it would be were the improvements demolished and the land sold separately. As previously
discussed, no other uses were considered feasible. The subject's existing improvements do meet the
first three criteria for highest and best use; hence, they are also considered to represent the maximally
productive use of the site. Therefore, we conclude that the subject's highest and best use “as currently
improved,” is to continue operation of the Assisted Living Residence.

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VALUATION ANALYSIS
Income Approach
We have been provided with the income and expense data for the subject. A copy of these statements
may be found in the addenda of this report. We have carefully examined the data, deducted expenses
that are not associated with the operation of an Assisted Living Residence and compared the adjusted
totals with the experience of other communities. The resulting net income estimates are the basis for
our valuation of the subject.
We have surveyed comparable and competitive communities in and near the subject’s primary market
area. These communities are described on the following pages:
RENT COMPARABLE MAP

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FOUNTAIN RETIREMENT HOTEL

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SUBJECT
Record ID:
Property Type:
Name:
Address:

201007190
Assisted Living Residence
Fountain Retirement Hotel
12030 113th Ave, Youngtown, Maricopa, , 85363

Verification:
With:

Rob Hess at 623‐977‐4273

Year Opened:
Number Of Buildings:
Number Of Stories:
Land Area:

BUILDING CHARACTERISTICS
1971
Quality:
1
Condition:
2
Construction Type:
1.35 acres
Gross Building Area:

PROPERTY MIX
Level
IL
AL
ALZ
SN

Capacity
‐‐‐
65 units
‐‐‐
‐‐‐

Average
Average
Wood Frame
37,102

LEVEL OF CARE TYPE

% Occupancy
‐‐‐
77%
‐‐‐
‐‐‐

Meals
‐‐‐
3 daily
‐‐‐
‐‐‐

Level

Type
‐‐‐
‐‐‐
‐‐‐

AL
ALZ ‐ AL
Other

Min
‐‐‐
‐‐‐
‐‐‐

Max
‐‐‐
‐‐‐
‐‐‐

PROJECT AMENITIES














Activity rooms
Arts & crafts rooms
Assistance w/ ADLs
Dining room ‐ main
Game/billiards rooms
Housekeeping

Laundry facilities
Linen Service
Lounge areas
Postal services
Reception Area
Social activities




Swimming Pool
Utilities



Private baths

UNIT AMENITIES




Cable/satellite TV
Emergency pull‐cords
Fire/smoke detectors





Full kitchens
Individually controlled HVAC
Kitchenettes




Water/Sewer
Cable/Satellite TV




Electricity
Housekeeping

SERVICE PACKAGE

ASSISTED LIVING RENTAL ANALYSIS
Unit Type

Fee basis

Min Fee

Max Fee

Semi‐Private
Studio
1‐Bedroom

Monthly
Monthly
Monthly

$1,075
$1,600
$2,000

‐‐‐
‐‐‐
‐‐‐

Community
Fee Min
‐‐‐
‐‐‐
‐‐‐

Community
Fee Max
‐‐‐
‐‐‐
‐‐‐

REMARKS:
Respite charges are $75 per day.

46

Beds

Units

Min Size

Max Size

26
46
6

13
46
6

280
280
354

‐‐‐
‐‐‐
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FOUNTAIN RETIREMENT HOTEL

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RENTAL COMPARABLE #1
Record ID:
Property
Type:
Name:
Address:

Verification:
With:

8061394
Continuing Care Retirement Community
Freedom Plaza
13373 N. Plaza del Rio Boulevard, Peoria, Maricopa, AZ,
85381

Dawn at (623) 815‐6100
BUILDING CHARACTERISTICS
1985
Quality:

Year Opened:
Number Of
Buildings:
Number Of Stories:
Land Area:

PROPERTY MIX
Level
IL
AL
ALZ
SN

Capacity
347 units
65 units
20 units
111 beds

‐‐‐

Condition:

‐‐‐
10.94
acres

Construction Type:
Gross Building
Area:

Above
Average
Above
Average
Masonry
‐‐‐

LEVEL OF CARE TYPE

% Occupancy
‐‐‐
97%
95%
80%

Meals
‐‐‐
3 daily
3 daily
3 daily

Level

Type
All‐inclusive
‐‐‐
‐‐‐

AL
ALZ ‐ AL
Other

Min
‐‐‐
‐‐‐
‐‐‐

Max
‐‐‐
‐‐‐
‐‐‐

PROJECT AMENITIES










Activity rooms
Assistance w/ ADLs
Beauty/barber shop
Courtyard
Dining room ‐ main
Dining room ‐ private
Exercise facilities
Game/billiards rooms
General store











Housekeeping
Ice cream parlor
Laundry facilities
Library
Linen Service
Lounge areas
Postal services
Reception Area
Scheduled transportation





Cable/satellite TV
Emergency pull‐cords
Fire/smoke detectors





Full kitchens
Individually controlled HVAC
Kitchenettes







Security 24 hour
Skilled nursing care
Social activities
Swimming Pool
Therapy Room



Private baths



Housekeeping

UNIT AMENITIES

SERVICE PACKAGE




Water/Sewer

Electricity
ASSISTED LIVING RENTAL ANALYSIS

Unit Type

Fee basis

Min Fee

Max Fee

Studio
1‐Bedroom
2‐Bedroom

Monthly
Monthly
Monthly

$3,400
$5,800
$6,700

‐‐‐
‐‐‐
‐‐‐

Community
Fee Min
$3,000
$3,000
$3,000

Community
Fee Max
‐‐‐
‐‐‐
‐‐‐

47

Beds

Units

Min Size

Max Size

‐‐‐
‐‐‐
‐‐‐

‐‐‐
‐‐‐
‐‐‐

‐‐‐
‐‐‐
‐‐‐

‐‐‐
‐‐‐
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FOUNTAIN RETIREMENT HOTEL

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RENTAL COMPARABLE #1
SKILLED NURSING RENTAL ANALYSIS
Unit Type

Fee basis

Min Fee

Max Fee

Private
Semi‐Private

Daily
Daily

$258
$215

‐‐‐
‐‐‐

Community
Fee Min
‐‐‐
‐‐‐

Community
Fee Max
‐‐‐
‐‐‐

Beds

Units

Min Size

Max Size

‐‐‐
‐‐‐

‐‐‐
‐‐‐

‐‐‐
‐‐‐

‐‐‐
‐‐‐

CENSUS
Care Level
AL
SN
SN
SN

Payor Type
Private pay
Private pay
Medicare
Other

% of Current Census
100.0%
25.0%
37.0%
38.0%

REMARKS:
Freedom Plaza is owned and operated by Brookdale. It attracts most of its residents from the Sun City market area. An assisted living building containing 65 units
opened in April 2001. There are 2 skilled nursing facilities (Freedom Care and Plaza Del Rio) with a combined total of 239 beds. The information above is for Freedom
Care only. Plaza Del Rio is written up separately. The facility offers a couple different plans including a 0% and 80% refundable entrance fee. The rates above reflect
the 0% refundable option.
An 80% refundable plan is designed for those who wish to preserve the majority of their entry fee and also want protection against future healthcare expenses. It
provides an 80% refund, and carries the maximum healthcare benefit. When a resident transfers into Health Center, they continue paying monthly service fee for the
apartment. The 0% refundable plan provides similar healthcare benefits to that of the 80% plan, while the other 0% refundable plan has lower entrance fee but less
healthcare benefits.
Only skilled nursing and assisted living information was obtained at this time. The assisted living rates are all inclusive of additional care needed.

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RENTAL COMPARABLE #2
Record ID:
Property Type:
Name:
Address:

8061517
Assisted Living/Memory Care Residence
The Woodmark at Sun City
17207 North Boswell Blvd., Sun City, Maricopa, AZ, 85373

Verification:
With:

Penny at (623) 583‐7600

Year Opened:
Number Of Buildings:
Number Of Stories:
Land Area:

BUILDING CHARACTERISTICS
2001
Quality:
‐‐‐
Condition:
‐‐‐
Construction Type:
‐‐‐
Gross Building Area:

PROPERTY MIX
Level
IL
AL
ALZ
SN

Capacity
‐‐‐
101 units
36 units
‐‐‐

‐‐‐
‐‐‐
‐‐‐
‐‐‐

LEVEL OF CARE TYPE

% Occupancy
‐‐‐
94%
94%
‐‐‐

Meals
‐‐‐
3 daily
3 daily
‐‐‐

Level
AL
ALZ ‐ AL
Other

Type
Points
All‐inclusive
‐‐‐

Min
$490
‐‐‐
‐‐‐

Max
‐‐‐
‐‐‐
‐‐‐

PROJECT AMENITIES





Activity rooms
Assistance w/ ADLs
Beauty/barber shop
Dining room ‐ main






Game/billiards rooms
Housekeeping
Linen Service
Lounge areas




Cable/satellite TV
Emergency pull‐cords




Fire/smoke detectors
Individually controlled HVAC



Water/Sewer



Electricity






Medications
Reception Area
Social activities
Utilities



Housekeeping

UNIT AMENITIES

SERVICE PACKAGE

ASSISTED LIVING RENTAL ANALYSIS
Unit Type

Fee basis

Min Fee

Max Fee

Studio
1‐Bedroom
2‐Bedroom
Extra Person

Monthly
Monthly
Monthly
Monthly

$2,795
$3,095
$3,595
$800

‐‐‐
‐‐‐
‐‐‐
‐‐‐

Unit Type

Fee basis

Min Fee

Max Fee

Semi‐Private
Studio

Monthly
Monthly

$3,295
$4,195

$4,495
$5,395

Community
Fee Min
$1,000
$1,000
$1,000
‐‐‐

Community
Fee Max
‐‐‐
‐‐‐
‐‐‐
‐‐‐

Beds

Units

Min Size

Max Size

‐‐‐
‐‐‐
‐‐‐
‐‐‐

‐‐‐
‐‐‐
‐‐‐
‐‐‐

‐‐‐
‐‐‐
‐‐‐
‐‐‐

‐‐‐
‐‐‐
‐‐‐
‐‐‐

Beds

Units

Min Size

Max Size

‐‐‐
‐‐‐

‐‐‐
‐‐‐

‐‐‐
‐‐‐

‐‐‐
‐‐‐

MEMORY CARE RENTAL ANALYSIS
Community
Fee Min
$1,000
$1,000

Community
Fee Max
‐‐‐
‐‐‐

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RENTAL COMPARABLE #2
CENSUS
Care Level
AL

Payor Type
Private pay

% of Current Census
100.0%

REMARKS:
This community offers independent living, assisted living, and a 36‐unit Alzheimer's/ dementia facility. The independent living is just the base rate without any
additional levels of care, and all beds are licensed for assisted living. They charge a $1,000 move‐in fee.
The assisted living care is offered on a points system. These services average around $490/month for residents. The memory care rates are all inclusive.

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RENTAL COMPARABLE #3
Record ID:
Property Type:
Name:
Address:

8061531
Assisted Living/Memory Care Residence
Ventana Winds f.k.a. Willow Creek
12322 N. 113th Avenue, Youngtown, Maricopa, AZ, 85363

Verification:
With:

Kathleen at (623) 583 2460

Year Opened:
Number Of Buildings:
Number Of Stories:
Land Area:

BUILDING CHARACTERISTICS
2001
Quality:
1
Condition:
3
Construction Type:
‐‐‐
Gross Building Area:

PROPERTY MIX
Level
IL
AL
ALZ
SN

Capacity
‐‐‐
90 units
18 units
‐‐‐

Good
Good
‐‐‐
‐‐‐

LEVEL OF CARE TYPE

% Occupancy
‐‐‐
85%
83%
‐‐‐

Meals
‐‐‐
3 daily
3 daily
‐‐‐

Level

Type
Levels
Levels
‐‐‐

AL
ALZ ‐ AL
Other

Min
$100
$100
‐‐‐

Max
$1,000
$1,000
‐‐‐

PROJECT AMENITIES







Activity rooms
Assistance w/ ADLs
Beauty/barber shop
Courtyard
Dining room ‐ main
Dining room ‐ private








Exercise facilities
Game/billiards rooms
Housekeeping
Laundry facilities
Library
Linen Service






Balconies/porches
Cable/satellite TV
Emergency pull‐cords
Fire/smoke detectors






Individually controlled HVAC
Kitchenettes
Private baths
Walk‐in closets



Water/Sewer



Electricity








Lounge areas
Medications
Reception Area
Scheduled transportation
Social activities
Swimming Pool



Housekeeping

UNIT AMENITIES

SERVICE PACKAGE

ASSISTED LIVING RENTAL ANALYSIS
Unit Type

Fee basis

Min Fee

Max Fee

Community
Fee Max
‐‐‐
‐‐‐

Beds

Units

Min Size

Max Size

‐‐‐
‐‐‐

Community
Fee Min
$500
$500

1‐Bedroom
1‐Bedroom
DX
2‐Bedroom

Monthly
Monthly

$2,595
$2,795

‐‐‐
‐‐‐

‐‐‐
‐‐‐

830
945

‐‐‐
‐‐‐

Monthly

$3,495

‐‐‐

$1,000

‐‐‐

‐‐‐

‐‐‐

1015

‐‐‐

Unit Type

Fee basis

Min Fee

Max Fee

Beds

Units

Min Size

Max Size

Semi‐Private
Studio

Monthly
Monthly

$3,295
$3,975

‐‐‐
‐‐‐

‐‐‐
‐‐‐

‐‐‐
‐‐‐

340
182

‐‐‐
‐‐‐

MEMORY CARE RENTAL ANALYSIS
Community
Fee Min
$500
$500

Community
Fee Max
‐‐‐
‐‐‐

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RENTAL COMPARABLE #3
CENSUS
Care Level
AL
AL

Payor Type
Private pay
Medicaid

% of Current Census
60.0%
40.0%

REMARKS:
This is a three‐story assisted living residence with a one‐story secured Alzheimer's/dementia care wing. The improvements are in good condition and the access and
visibility are both good from the residential thoroughfare. They have a one‐time community fee of $500 and offer additional levels of care from $100 up to
$1,000/month.
They are planning on adding an additional 18 unit enhanced memory care wing by fall 2010. Rates for the enhanced wing are expected to be $3,995 for a private
room and $3,595 for a semi‐private room. These rooms will be completely private pay.

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FOUNTAIN RETIREMENT HOTEL

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Estimates of Market Rent ‐ Seniors Housing
We have surveyed the following properties that offer services similar to the subject.

ASSISTED LIVING ASKING RENTAL ANALYSIS
Semi‐Private
Min
Max
$1,075
‐‐
‐‐
‐‐
‐‐
‐‐
‐‐
‐‐
$1,075
$1,075
‐‐
$1,075 ‐ $1,075

Property
Fountain Retirement Hotel
Freedom Plaza
The Woodmark at Sun City
Ventana Winds f.k.a. Willow Creek
Median
Average
Mode
Range

Studio
Min
Max
$1,600
‐‐
$3,400
‐‐
$2,795
‐‐
‐‐
‐‐
$2,795
$2,598
‐‐
$1,600 ‐ $3,400

1‐Bedroom
Min
Max
$2,000
‐‐
$5,800
‐‐
$3,095
‐‐
$2,595
‐‐
$2,845
$3,373
‐‐
$2,000 ‐ $5,800

The subject’s rental rates represent the low end of the range of the comparable properties. According to
management rates concessions are not offered at the subject, nor are they prevalent in the market.
Occupancy at the subject is mostly stable and typically operates below market levels. We requested, but
were not provided with ac current rent roll. Placing most weight on the asking rates within the market,
our analysis yielded the following conclusions for the subject’s market rent:
ASSISTED LIVING MARKET SUMMARY
Semi‐Private
Studio
1‐Bedroom

Reconciled
$1,075
$1,600
$2,000

Average
$1,075
$2,598
$3,373

Median
$1,075
$2,795
$2,845

Source:HealthTrust LLC; *Unadjusted Market Range

53

Mode
N/A
N/A
N/A

Subject Asking
$1,075
$1,600
$2,000

Street Rate Range*
$1,075 ‐ $1,075
$1,600 ‐ $3,400
$2,000 ‐ $5,800

FOUNTAIN RETIREMENT HOTEL

HEALTHTRUST

Stabilized Occupancy
The subject and comparables indicate the following as of the day of the most recent inspection:

OCCUPANCY ANALYSIS
Property
Fountain Retirement Hotel
Freedom Plaza
The Woodmark at Sun City
Ventana Winds f.k.a. Willow Creek
Median
Average
Mode
Range
PMA Average Occupancy

AL
77%
97%
94%
85%
90%
89%
‐‐
77% ‐ 97%
91%

Overall, the subject’s occupancy history and projections (based on set‐up capacity) are summarized as
follows:

OPERATIONAL SUMMARY
Appraisal ‐ Stabilized
Occ %
Total/RD
AL
77%
$47.86
Average Occupancy
77%
Total Revenues
$47.86
Profit Margin
19.9%
Source: HealthTrust LLC and Fountain
Level of Care

2010 Annualized
Occ %
Total/RD
70%
$48.40
70%
$48.40
25.9%

2009 Actual
Occ %
Total/RD
78%
$47.38
78%
$47.38
18.9%

There are 88 beds entering the market and average market occupancy at 91% for assisted living, we
have estimated a stabilized occupancy level for the subject of 77%, reconciling between historical levels,
market indications and current occupancy.

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FOUNTAIN RETIREMENT HOTEL

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Following our estimates of rental levels and occupancy, we have estimated the subject’s effective gross
rental income as shown:
SUMMARY OF REVENUE PROJECTIONS
Year:
No.
Units/Beds
AL Revenues
Semi‐Private
Studio
1‐Bedroom
Total Potential AL Base Fee Income
Less AL Vacancy/Collection Loss

26
46
6
78

1

2

3

Stabilized

$335,400
$883,200
$144,000
$1,362,600

$343,785
$905,280
$147,600
$1,396,665

$352,380
$927,912
$151,290
$1,431,582

$335,400
$883,200
$144,000
$1,362,600

23.00%
‐$313,398
$0
$1,049,202

23.00%
‐$321,233
$0
$1,075,432

23.00%
‐$329,264
$0
$1,102,318

23.00%
‐$313,398
$0
$1,049,202

Monthly
Rent
$1,075
$1,600
$2,000

@

Lifecare Utilization Discount
Effective Gross AL Base Fee Income

Source: HealthTrust, LLC

Total Revenue Estimates
Incorporating the estimates of market rents, stabilized occupancies, and ancillary income, we have
prepared the following statements of estimated revenues for the subject. In order to determine an
inflation factor we have reviewed the consumer price index trends over the past ten years, as shown in
the following table:

10‐YEAR CONSUMER PRICE INDEX TRENDS
Year
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
10‐Year Annual Average

CPI
172.2
177.1
179.9
184.0
188.9
195.3
201.6
207.3
215.3
214.5

Ann. Increase
‐‐‐
2.8%
1.6%
2.3%
2.7%
3.4%
3.2%
2.8%
3.9%
‐0.4%
2.5%

Source: US Department of Labor

Considering the rate increases evident in the market and the CPI changes above, we have incorporated
an annual rate of increase for revenues of 2.50%.

55

FOUNTAIN RETIREMENT HOTEL

HEALTHTRUST

SUMMARY OF REVENUE PROJECTIONS
2010 Annualized

1

2

3

Stabilized

$967,266
$967,266

$1,049,202
$1,049,202

$1,075,432
$1,075,432

$1,102,318
$1,102,318

$1,049,202
$1,049,202

$967,266
$14,881
$48.40

$1,049,202
$16,142
$47.86
‐1.11%

$1,075,432
$16,545
$49.06
2.50%

$1,102,318
$16,959
$50.28
2.50%

$1,049,202
$16,142
$47.86

Summary of Effective Gross Fee Income
AL Revenues
Total Effective Gross Base Fee Income
Ancillary and Other Fees
Total Effective Gross Income
EGI/Unit (Bed)
EGI/Resident Day
Change % (per resident day)
Source: HealthTrust, LLC

Operating Expenses
Operating expenses are based upon an analysis of historical operating expense data of the subject, as
well as those of comparable properties. Based upon our careful analysis of these data and our judgment
and experience, we have estimated operating expenses and staffing at what we considered reasonable
and customary levels for the subject property.
Fixed expenses include liability insurance and property taxes. In addition to the tax comparables
presented earlier in the PMA, we have examined tax levels at comparable properties within the region.
Placing most weight on the subject’s current assessment and likely changes, we have estimated
property taxes at $10,400 annually.
REAL ESTATE TAXES
Total
Per Unit/Bed
Per Resident Day
Ratio of EGI

2010 Annualized 2009 Actual HT Stabilized
$0
$11,159
$10,400
$0
$172
$160
$0.00
$0.50
$0.47
0.00%
1.06%
0.99%

HT Year 1
$10,400
$160
$0.47
0.99%

HT Year 2
$10,660
$164
$0.49
0.99%

HT Year 3
Comp Min Comp Max
$10,927
$168
$381
$883
$0.50
$1.09
$1.63
0.99%
1.17%
2.15%

Comp Median
$460
$1.35
1.38%

Source: HealthTrust, LLC

Building and liability insurance is estimated based primarily on national and regional comparables. The
insurance expense does not reflect an umbrella insurance program but does include general and
professional liability as well as worker’s comp.
INSURANCE
Insurance (General, Professional)
Worker's Comp
Other Insurance
Total Insurance
Per Unit/Bed
Per Resident Day
Ratio of EGI

2010 Annualized 2009 Actual HT Stabilized
$29,612
$18,486
$19,500
$679
$12,603
$13,000
$3,842
$816
$3,250
$34,132
$31,906
$35,750
$525
$491
$550
$1.71
$1.43
$1.63
3.53%
3.02%
3.41%

HT Year 1
$19,500
$13,000
$3,250
$35,750
$550
$1.63
3.41%

HT Year 2
$19,988
$13,325
$3,331
$36,644
$564
$1.67
3.41%

HT Year 3
Comp Min Comp Max
$20,487
$13,658
$3,415
$37,560
$578
$329
$909
$1.71
$0.96
$3.09
3.41%
0.95%
3.22%

Comp Median

$624
$1.15
1.51%

Source: HealthTrust, LLC

We have estimated utilities expenses including water, gas, trash, electricity and sewer as shown, noting
that this amount falls as shown relative to the comparable properties.

56

FOUNTAIN RETIREMENT HOTEL

HEALTHTRUST

UTILITIES
Water
Gas
Trash
Electricity
Total Utilities
Per Unit/Bed
Per Resident Day
Ratio of EGI

2010 Annualized 2009 Actual HT Stabilized
$7,265
$10,927
$11,022
$10,524
$12,863
$12,976
$1,609
$1,587
$1,601
$36,182
$45,344
$41,652
$55,580
$70,721
$67,251
$855
$1,088
$1,035
$2.78
$3.17
$3.07
5.75%
6.70%
6.41%

HT Year 1
$11,022
$12,976
$1,601
$41,652
$67,251
$1,035
$3.07
6.41%

HT Year 2
$11,298
$13,300
$1,641
$42,693
$68,932
$1,060
$3.14
6.41%

HT Year 3
Comp Min Comp Max
$11,580
$13,633
$1,682
$43,760
$70,655
$1,087
$1,263
$2,015
$3.22
$1.99
$6.51
6.41%
2.52%
6.78%

Comp Median

$1,900
$5.56
5.49%

Source: HealthTrust, LLC

The maintenance department includes salaries for the maintenance administration, grounds, security
personnel, drivers, maintenance crew and clerical support. In addition, the department includes the
supplies and repairs, purchased services and vehicle expense. Our estimate relative to the subject’s
performance and that of comparables is shown:
MAINTENANCE
Repairs and Supplies
Maintenance Salaries
Total Maintenance
Per Unit/Bed
Per Resident Day
Ratio of EGI

2010 Annualized 2009 Actual HT Stabilized
$2,791
$46,086
$32,883
$20,131
$18,278
$18,438
$22,921
$64,364
$51,320
$353
$990
$790
$1.15
$2.89
$2.34
2.37%
6.10%
4.89%

HT Year 1
$32,883
$18,438
$51,320
$790
$2.34
4.89%

HT Year 2
$33,705
$18,899
$52,603
$809
$2.40
4.89%

HT Year 3
Comp Min Comp Max
$34,548
$19,371
$53,919
$830
$749
$1,536
$2.46
$2.17
$4.46
4.89%
2.30%
4.65%

Comp Median

$1,339
$2.84
3.74%

Source: HealthTrust, LLC

Management fees are estimated at 5.0% of effective gross income, primarily based on our experience
with comparable properties. Management fees also include general bookkeeping and various incidental
and legal consultation fees. This amount falls within the range of 3.5% to 7.0% that we see at most
communities.
The administration department includes supplies, telephone, bad debt and office expenses required to
operate the administrative office. Other expenses reflect the subject's historical performance.
We note that some of the expense comparables account for all of their payroll and related costs in this
department. A summary of our estimate compared to the subject’s performance and regional trends is
presented; please note that many of the comparables include payroll in this category, whereas the
subject’s history and our projections break that expense out departmentally:
ADMINISTRATIVE AND GENERAL
Admin Supplies & Other Admin
Admin Salaries
Total Administrative
Per Unit/Bed
Per Resident Day
Ratio of EGI

2010 Annualized 2009 Actual HT Stabilized
$27,619
$68,626
$65,766
$67,146
$82,190
$82,909
$94,765
$150,815
$148,675
$1,458
$2,320
$2,287
$4.74
$6.77
$6.78
9.80%
14.29%
14.17%

HT Year 1
$65,766
$82,909
$148,675
$2,287
$6.78
14.17%

HT Year 2
$67,410
$84,982
$152,392
$2,344
$6.95
14.17%

HT Year 3
Comp Min Comp Max
$69,095
$87,106
$156,201
$2,403
$2,060
$12,067
$7.13
$7.01
$22.30
14.17%
7.30%
29.39%

Comp Median

$3,917
$11.46
11.32%

Source: HealthTrust, LLC

Housekeeping and laundry expenses include both staffing and miscellaneous supply expenses. The
subject contains in‐house laundry facilities.
HOUSEKEEPING AND LAUNDRY
Housekeeping and Laundry Supplies
Housekeeping and Laundry Salaries
Total Housekeeping and Laundry
Per Unit/Bed
Per Resident Day
Ratio of EGI

2010 Annualized 2009 Actual HT Stabilized
$7,049
$13,660
$13,780
$100,520
$100,467
$101,346
$107,569
$114,127
$115,126
$1,655
$1,756
$1,771
$5.38
$5.12
$5.25
11.12%
10.81%
10.97%

Source: HealthTrust, LLC

57

HT Year 1
$13,780
$101,346
$115,126
$1,771
$5.25
10.97%

HT Year 2
$14,124
$103,880
$118,004
$1,815
$5.38
10.97%

HT Year 3
Comp Min Comp Max
$14,477
$106,477
$120,954
$1,861
$443
$981
$5.52
$1.30
$2.09
10.97%
1.28%
2.39%

Comp Median

$723
$1.81
2.15%

FOUNTAIN RETIREMENT HOTEL

HEALTHTRUST

One of the three major departmental expenses is the dietary department, which provides food service
for the residents and employees. Good quality food and service are priority considerations in seniors
housing communities.
Our analysis of this department is based on the staffing levels at this property type in general and
information provided by other national and regional operators. Based upon the estimated occupancy
ratios, we have estimated a raw food cost of $3.59 per resident day. Our estimate, relative to
comparable properties and the subject’s performance, is summarized as follows:
DIETARY
Food Cost
Supplies & Other Dietary Costs
Dietary Salaries
Total Dietary
Per Unit/Bed
Per Resident Day
Ratio of EGI

2010 Annualized 2009 Actual HT Stabilized
$62,334
$78,021
$78,704
$2,352
$4,741
$4,782
$96,817
$92,219
$93,026
$161,503
$174,981
$176,512
$2,485
$2,692
$2,716
$8.08
$7.86
$8.05
16.70%
16.58%
16.82%

HT Year 1
$78,704
$4,782
$93,026
$176,512
$2,716
$8.05
16.82%

HT Year 2
$80,672
$4,902
$95,351
$180,925
$2,783
$8.25
16.82%

HT Year 3
Comp Min Comp Max
$82,688
$5,025
$97,735
$185,448
$2,853
$1,914
$4,537
$8.46
$5.60
$11.02
16.82%
5.53%
11.69%

Comp Median

$3,806
$8.38
11.05%

Source: HealthTrust, LLC

One of the most costly services provided by the subject property is nursing care. Staffing requirements
are estimated based on the subject's current staffing and our experience with comparable communities.
NURSING
Nursing Supplies & Other
Nursing/Personal Care Salaries
Total Nursing
Per Unit/Bed
Per Resident Day
Ratio of EGI

2010 Annualized 2009 Actual HT Stabilized
$616
$7,458
$7,523
$70,431
$80,164
$76,727
$71,047
$87,621
$84,250
$1,093
$1,348
$1,296
$3.55
$3.93
$3.84
7.35%
8.30%
8.03%

HT Year 1
$7,523
$76,727
$84,250
$1,296
$3.84
8.03%

HT Year 2
$7,711
$78,645
$86,356
$1,329
$3.94
8.03%

HT Year 3
Comp Min Comp Max
$7,904
$80,611
$88,515
$1,362
$4,314
$7,215
$4.04
$8.48
$21.10
8.03%
10.72%
20.85%

Comp Median

$5,372
$13.92
14.77%

Source: HealthTrust, LLC

Activities and social expenses include entertainment, transportation expenses, supplies and associated
salaries. Our estimate, in comparison to the subject’s performance and the comparable properties, is as
follows:
ACTIVITIES/SOCIAL
Activities/Social Supplies
Activities/Social Salaries
Total Activities/Social
Per Unit/Bed
Per Resident Day
Ratio of EGI

2010 Annualized 2009 Actual HT Stabilized
$0
$4,388
$4,427
$15,695
$16,326
$16,469
$15,695
$20,714
$20,895
$241
$319
$321
$0.79
$0.93
$0.95
1.62%
1.96%
1.99%

HT Year 1
$4,427
$16,469
$20,895
$321
$0.95
1.99%

HT Year 2
$4,537
$16,880
$21,418
$330
$0.98
1.99%

HT Year 3
Comp Min Comp Max
$4,651
$17,302
$21,953
$338
$523
$1,043
$1.00
$1.19
$2.21
1.99%
1.50%
2.54%

Comp Median

$700
$1.73
1.91%

Source: HealthTrust, LLC

Typically, seniors housing communities will either charge these expenses to the staffed departments
(i.e., administrative, dietary, nursing, housekeeping, and maintenance) or charge them all to
administrative. We have allocated these expenses to each operated department.
Nationally, we have seen a predominant range of payroll taxes and benefits of 18‐40% of wages and
salaries, depending on how holiday, vacation and sick time are accounted. Some regions, notably the
Northeast, will produce higher payroll taxes and benefits. Additionally, not‐for‐profit operations typically
report higher levels of payroll taxes and benefits. For the purposes of this appraisal, we have estimated
payroll taxes of 8% of payroll with a benefit load of 7%, incorporating the subject’s trend and market
parameters.
58

FOUNTAIN RETIREMENT HOTEL

HEALTHTRUST

Payroll taxes and benefits may actually be greater for salaried and full time staff and lower for part time
staff and those at lower wage levels. Although expenses are estimated by department, staff employed in
one department may occasionally perform other duties on an as needed basis, in order to maintain
efficient operation of the property.
OTHER PAYROLL
Payroll Taxes
Benefits
Total Other Payroll Costs
Per Unit/Bed
Per Resident Day
Ratio of EGI

2010 Annualized 2009 Actual HT Stabilized
$31,941
$31,153
$31,113
$54,137
$25,801
$27,224
$86,078
$56,953
$58,337
$1,324
$876
$897
$4.31
$2.56
$2.66
8.90%
5.40%
5.56%

HT Year 1
$31,113
$27,224
$58,337
$897
$2.66
5.56%

HT Year 2
$31,891
$27,905
$59,796
$920
$2.73
5.56%

HT Year 3
Comp Min Comp Max
$32,688
$28,602
$61,290
$943
$1,803
$2,175
$2.80
$6.13
$6.30
5.56%
6.39%
6.68%

Comp Median

$1,989
$6.21
6.54%

Source: HealthTrust, LLC

In order to estimate staffing for the subject, we have relied on actual staffing patterns presently
exhibited by the operator and have tempered that staffing schedule with patterns presented by the
expense comparables at the conclusion of this section as well as our experience with comparable
operations.
Finally, we have also allocated a reserve for replacement fund used to replace short‐lived items such as
appliances, furniture, fixtures, equipment, roofing, and carpeting. Most lenders and agencies with whom
we have spoken use between $250 and $450 per unit (and per bed for skilled nursing). We have utilized
$300 per unit for the estimate of replacement reserve.
Operating Expense Summary
Total forecasted operating expenses, exclusive of management fee and reserves are estimated at
$768,516 for year one. Including management fees and reserves, we estimate operating expenses to be
$840,476 for the same period. A summary of our total expense forecasts relative to the subject’s
performance and the expense comparables is as follows:
OPERATING EXPENSES
Total
Per Unit/Bed
Per Resident Day
Ratio of EGI

2010 Annualized 2009 Actual HT Stabilized
$717,154
$855,631
$840,476
$11,033
$13,164
$12,930
$35.88
$38.41
$38.34
74.14%
81.07%
80.11%

Source: HealthTrust, LLC; Excludes Management Fee and Reserves

59

HT Year 1
$840,476
$12,930
$38.34
80.11%

HT Year 2
$861,488
$13,254
$39.30
80.11%

HT Year 3
Comp Min Comp Max
$883,025
$13,585
$19,556
$31,774
$40.28
$47.90
$66.53
80.11%
59.77%
77.39%

Comp Median
$21,423
$61.25
65.80%

FOUNTAIN RETIREMENT HOTEL

HEALTHTRUST

EXPENSE COMPARABLE SUMMARY
Property
State
No. IL
No. AL
No. ALZ
No. SN
Total Units/Beds
Year
Occupancy
Total Resident Days
EGI/RD
EXPENSES
Real Estate Taxes
Insurance
Utilities
Maintenance
Marketing
Administrative
Dietary
Housekeeping/Laundry
Nursing/Personal Care
Activities
Other Payroll, Taxes & Benefits
Management Fees
Reserves
Total

$/RD
$0.47
$1.63
$3.07
$2.34
$0.00
$6.78
$8.05
$5.25
$3.84
$0.95
$2.66
$2.39
$0.89
$38.34

Subject
Arizona
0
65
0
0
65

1
AZ
0
41
38
0
79

2
AZ
0
102
0
0
102

3
AZ
0
102
0
0
102

4
AZ
0
65
0
0
65

5
AZ
0
62
0
0
62

Stabilized
77%
21,922
$47.86

12/31/09
94%
27,010
$101.21

10/31/09
81%
29,982
$95.99

12/31/08
95%
35,239
$94.24

12/31/05
98%
41,182
$79.10

12/31/05
84%
33,547
$75.88

$/Unit
$160
$550
$1,035
$790
$0
$2,287
$2,716
$1,771
$1,296
$321
$897
$807
$300
$12,930

%EGI
1.0%
3.4%
6.4%
4.9%
0.0%
14.2%
16.8%
11.0%
8.0%
2.0%
5.6%
5.0%
1.9%
80.1%

$/RD
$1.35
$0.96
$5.56
$3.92
$1.81
$11.46
$5.60
$1.30
$21.10
$1.53
$0.00
$5.05
$0.87
$60.49

$/Unit
$460
$329
$1,900
$1,339
$619
$3,917
$1,914
$443
$7,215
$523
$0
$1,727
$298
$20,683

%EGI
1.3%
1.0%
5.5%
3.9%
1.8%
11.3%
5.5%
1.3%
20.9%
1.5%
0.0%
5.0%
0.9%
59.8%

$/RD
$1.51
$3.09
$6.51
$4.46
$2.29
$7.01
$10.76
$2.06
$14.68
$2.21
$6.13
$4.80
$1.02
$66.53

$/Unit
$443
$909
$1,913
$1,312
$674
$2,060
$3,163
$607
$4,314
$649
$1,803
$1,411
$299
$19,556

Source: HealthTrust, LLC

60

%EGI
1.6%
3.2%
6.8%
4.7%
2.4%
7.3%
11.2%
2.2%
15.3%
2.3%
6.4%
5.0%
1.1%
69.3%

$/RD
$1.10
$1.42
$5.83
$2.17
$5.55
$7.03
$11.02
$2.09
$13.92
$0.00
$6.30
$4.71
$0.87
$62.01

$/Unit
$381
$492
$2,015
$749
$1,918
$2,429
$3,806
$723
$4,809
$0
$2,175
$1,628
$300
$21,423

%EGI
1.2%
1.5%
6.2%
2.3%
5.9%
7.5%
11.7%
2.2%
14.8%
0.0%
6.7%
5.0%
0.9%
65.8%

$/RD
$1.09
$1.00
$1.99
$2.29
$0.00
$18.68
$7.06
$1.33
$8.48
$1.19
$0.00
$3.95
$0.83
$47.90

$/Unit
$692
$631
$1,263
$1,453
$0
$11,837
$4,475
$842
$5,372
$752
$0
$2,501
$526
$30,345

%EGI
1.4%
1.3%
2.5%
2.9%
0.0%
23.6%
8.9%
1.7%
10.7%
1.5%
0.0%
5.0%
1.1%
60.6%

$/RD
$1.63
$1.15
$2.78
$2.84
$0.00
$22.30
$8.38
$1.81
$11.12
$1.93
$0.00
$3.79
$0.98
$58.72

$/Unit
$883
$624
$1,507
$1,536
$0
$12,067
$4,537
$981
$6,019
$1,043
$0
$2,049
$530
$31,774

%EGI
2.2%
1.5%
3.7%
3.7%
0.0%
29.4%
11.1%
2.4%
14.7%
2.5%
0.0%
5.0%
1.3%
77.4%

FOUNTAIN RETIREMENT HOTEL

HEALTHTRUST

We have attempted to reconcile our estimates with the market while considering the subject’s actual
performance. Consequently, we find our estimates reasonable.
Net Operating Income Estimate
In terms of net operating income (NOI), our estimated Year 1 NOI of $208,726 compares to the subject’s
2010 Annualized NOI of $250,113. In prior periods, the subject has reported NOI of $199,749. Our
estimates are 20% lower than the 2010 Annualized performance, as we have placed primary weight on
the subjects’ full year expense indications. Alternatively, in comparison to the 2009 Actual total NOI of
$199,749 our estimate is similar, with a variance of less 3%. A summary of our forecasts relative to the
subject’s performance is as follows:
NET OPERATING INCOME
Total
Per Unit/Bed
Per Resident Day
Ratio of EGI

2010 Annualized 2009 Actual HT Stabilized
$250,113
$199,749
$208,726
$3,848
$3,073
$3,211
$12.51
$8.97
$9.52
25.86%
18.93%
19.89%

HT Year 1
$208,726
$3,211
$9.52
19.89%

HT Year 2
$213,944
$3,291
$9.76
19.89%

HT Year 3
Comp Min Comp Max
$219,293
$3,374
$8,659
$19,770
$10.00
$29.46
$40.72
19.89%
22.61%
40.23%

Comp Median
$11,135
$31.72
34.20%

Source: HealthTrust, LLC

Our year estimates are presented on the following page juxtaposed with the subject’s adjusted budget:

61

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SUMMARY OF APPRAISAL ESTIMATES AND SUBJECT'S ADJUSTED FINANCIAL STATEMENTS
Year
Total Resident Days
Total Units/Beds
Occupancy
Total $
Revenues
AL Rental Revenues
Total Effective Gross Revenue

HT Year 1
21,922
65
77%
$/Unit

$/RD

% EGI

Total $

2010 Annualized
19,986
65
70%
$/Unit
$/RD

% EGI

Total $

2009 Actual
22,275
65
78%
$/Unit
$/RD

% EGI

$1,049,202
$1,049,202

$16,142
$16,142

$47.86
$47.86

100.0%
100.0%

$967,266
$967,266

$14,881
$14,881

$48.40
$48.40

100.0%
100.0%

$1,055,380
$1,055,380

$16,237
$16,237

$47.38
$47.38

100.0%
100.0%

Expenses
Real Estate Taxes
Insurance
Utilities
Maintenance
Marketing
Administrative/General
Housekeeping/Laundry
Dietary
Nursing/Personal Care
Activities/Social
Other Payroll, Payroll Taxes & Benefits
Total Operating Expenses

$10,400
$35,750
$67,251
$51,320
$0
$148,675
$115,126
$176,512
$84,250
$20,895
$58,337
$768,516

$160
$550
$1,035
$790
$0
$2,287
$1,771
$2,716
$1,296
$321
$897
$11,823

$0.47
$1.63
$3.07
$2.34
$0.00
$6.78
$5.25
$8.05
$3.84
$0.95
$2.66
$35.06

1.0%
3.4%
6.4%
4.9%
0.0%
14.2%
11.0%
16.8%
8.0%
2.0%
5.6%
73.2%

$0
$34,132
$55,580
$22,921
$0
$94,765
$107,569
$161,503
$71,047
$15,695
$86,078
$649,291

$0
$525
$855
$353
$0
$1,458
$1,655
$2,485
$1,093
$241
$1,324
$9,989

$0.00
$1.71
$2.78
$1.15
$0.00
$4.74
$5.38
$8.08
$3.55
$0.79
$4.31
$32.49

0.0%
3.5%
5.7%
2.4%
0.0%
9.8%
11.1%
16.7%
7.3%
1.6%
8.9%
67.1%

$11,159
$31,906
$70,721
$64,364
$0
$150,815
$114,127
$174,981
$87,621
$20,714
$56,953
$783,362

$172
$491
$1,088
$990
$0
$2,320
$1,756
$2,692
$1,348
$319
$876
$12,052

$0.50
$1.43
$3.17
$2.89
$0.00
$6.77
$5.12
$7.86
$3.93
$0.93
$2.56
$35.17

1.1%
3.0%
6.7%
6.1%
0.0%
14.3%
10.8%
16.6%
8.3%
2.0%
5.4%
74.2%

Management Fee
Reserve for Replacement
Total Expenses

$52,460
$19,500
$840,476

$807
$300
$12,930

$2.39
$0.89
$38.34

5.0%
1.9%
80.1%

$48,363
$19,500
$717,154

$744
$300
$11,033

$2.42
$0.98
$35.88

5.0%
2.0%
74.1%

$52,769
$19,500
$855,631

$812
$300
$13,164

$2.37
$0.88
$38.41

5.0%
1.8%
81.1%

Net Operating Income (EBITDAR)

$208,726

$3,211

$9.52

19.9%

$250,113

$3,848

$12.51

25.9%

$199,749

$3,073

$8.97

18.9%

Source: HealthTrust, LLC

62

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Capitalization Rate Derivation
In selecting an appropriate capitalization rate for the subject property, we conducted an investor survey
and considered indications provided by the comparable sales, the Band of Investment, Mortgage‐Equity
Method, and the Debt Coverage Ratio.
Overall, rates will be higher than more traditional multifamily property types. In fact, as care level
increases, rates generally increase. Our analysis of cap rate trends shows a definite uptick in the last few
years that leveled off in 2009:

Capitalization Rate Trends (median)
17.0%
15.0%

AL
AL/ALZ
IL
IL/AL
CCRC

13.0%
11.0%
9.0%
7.0%
5.0%
2000

2003

2006

2009

We have also consulted the 2010 Senior Housing Investment Survey. This publication includes the
participation of owner/operators, financial institutions/investors, brokers/mortgage bankers, and
appraisers/consultants. Our largest concern with this survey, however, is that there appears to be no
uniform handling of management fees and reserves. As only 26% of the respondents were appraisers,
we assume that most of the participants did not include reserves and may or may not have included
management fees. Furthermore, there is no distinction between for‐profit and not‐for‐profit properties.
As not‐for‐profit properties have little or no real estate and personal property taxes and a different cost
of capital, we question the reliability of these indications but will at least review them for this analysis.

OVERALL CAPITALIZATION RATE
Unlicensed Congregate Care (IL)
Licensed Assisted Living
Licensed Alzheimer/Dementia
Licensed Skilled Nursing‐Long Term Care
Licensed Skilled Nursing‐Subacute Care
Continuing Care Retirement Community

2010 All Responses
Range
Average
7.0‐10.5%
8.5%
7.0‐12.3%
9.1%
7.5‐12.0%
9.7%
8.5‐18.0%
12.6%
8.5‐15.0%
12.7%
7.0‐15.0%
9.7%

Source: 2010 Senior Housing Investment Survey

63

2010 Adjusted Responses
Range
Average
7.0‐9.0%
8.5%
7.5‐10.6%
9.1%
8.5‐11.5%
9.7%
10.0‐14.0%
12.5%
9.3‐14.0%
12.8%
9.4%
8.0‐12.5%

Basis Point Change
From 2009
+10
‐10
‐10
0
+40
0

FOUNTAIN RETIREMENT HOTEL

HEALTHTRUST

The exclusion of the expenses would yield higher capitalization rates than if the expenses were
deducted.
Each of the abstracted rates considers the requirement of debt and equity in order to reach an
appropriate capitalization rate. Therefore, we have incorporated the subject’s anticipated, weighted‐
average interest rate of 7.00%, a 75% loan‐to‐value ratio, an amortization period of 25 years, and a debt
coverage ratio of 1.40. Equity requirements include an equity dividend (cash on cash) rate of 12.00% and
an equity yield rate of 20.00%.
The Band of Investment technique develops an overall rate by weighing the return requirement of both
debt and equity positions. Incorporating the debt and equity requirements cited above, this method
produces an overall capitalization rate of 9.36%.
The Debt Coverage Ratio Analysis is technique used by institutional lenders in an effort to provide a
cushion to determine if a borrower can meet debt service obligations if the property income declines.
Based on our assumed requirements, an overall capitalization rate of 8.91% is indicated.
The Mortgage‐Equity method utilizes a mortgage‐equity technique that considers available mortgage
terms, provisions for equity build‐up and estimated property appreciation during the estimate period. In
this analysis, this technique indicated an overall capitalization rate of 11.18%.
The comparable sales presented in the following section of this report suggest a range of 7.84% to
9.93% in overall capitalization rates:
Capitalization rates measure risk. One of the challenges of the valuation process is to insulate the
process against short term fluctuations and insure that longer term trends are adequately reported. To
the extent that a temporary decrease or imbalance exists, valuation theory should dilute this in favor of
the longer term value trends, much like the stock market and the valuation of individual stocks. Thus the
temporary low level of long term interest rates is not perceived to be long lasting by the market
participants, hence has not affected cap rates as significantly as one would expect. Other factors
(operational and market risk) mitigate the impact below a certain threshold.
The National Investment Center collects capitalization rate from regional and national appraisal firms
who work on all seniors housing properties types. Over the last five years, indications for the
independent and assisted living sectors have varied as follows:

64

FOUNTAIN RETIREMENT HOTEL

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IL CAPITALIZATION RATES
Period
Q4, 2004
Q1, 2005
Q2, 2005
Q3, 2005
Q4, 2005
Q1, 2006
Q2, 2006
Q3, 2006
Q4, 2006
Q1, 2007
Q2, 2007
Q3, 2007
Q4, 2007
Q1, 2008
Q2, 2008
Q3, 2008
Q4, 2008
Q1, 2009
Q2, 2009
Q3, 2009
Q4, 2009

Low
8.00%
7.00%
7.00%
6.25%
6.70%
7.00%
7.00%
5.80%
5.90%
6.70%
7.00%
4.90%
5.80%
5.80%
6.60%
6.50%
7.50%
7.00%
8.00%
8.00%
8.00%

High
10.00%
12.00%
10.50%
12.50%
10.30%
10.30%
10.20%
10.00%
9.00%
10.00%
10.00%
10.00%
9.70%
9.20%
8.75%
13.00%
10.60%
9.50%
9.50%
9.50%
10.00%

Average No. Transactions
9.10%
17
9.00%
‐‐‐
8.20%
27
8.20%
28
8.50%
29
8.20%
40
8.30%
36
7.70%
33
7.70%
35
7.70%
44
7.90%
15
7.40%
32
7.30%
17
7.60%
12
7.80%
13
8.70%
15
8.70%
19
8.10%
22
8.50%
14
8.80%
12
8.80%
31

Source: NIC Key Financial Indicators

14.00%
13.00%
12.00%
11.00%
10.00%

Low

9.00%

High

8.00%

Average

7.00%
6.00%
5.00%

65

FOUNTAIN RETIREMENT HOTEL

HEALTHTRUST

AL CAPITALIZATION RATES
Period
Q4, 2004
Q1, 2005
Q2, 2005
Q3, 2005
Q4, 2005
Q1, 2006
Q2, 2006
Q3, 2006
Q4, 2006
Q1, 2007
Q2, 2007
Q3, 2007
Q4, 2007
Q1, 2008
Q2, 2008
Q3, 2008
Q4, 2008
Q1, 2009
Q2, 2009
Q3, 2009
Q4, 2009

Low
8.50%
7.50%
7.25%
7.50%
7.20%
7.20%
7.30%
7.50%
6.50%
6.80%
6.60%
6.00%
6.60%
7.10%
7.00%
7.10%
7.90%
7.20%
8.20%
8.50%
8.40%

High
20.00%
12.00%
10.50%
14.50%
10.50%
10.50%
11.00%
15.00%
12.50%
12.50%
12.00%
12.50%
14.90%
11.30%
12.20%
12.20%
13.00%
11.50%
13.50%
13.00%
16.60%

Average
10.50%
10.00%
9.20%
9.25%
8.90%
8.90%
8.70%
9.20%
8.70%
8.80%
8.50%
9.00%
9.10%
8.80%
9.00%
9.20%
9.30%
9.40%
9.50%
9.60%
9.90%

No. Transactions
76
‐‐‐
40
50
22
53
92
74
132
111
85
70
81
41
82
39
50
50
42
37
133

Source: NIC Key Financial Indicators

21.00%
19.00%
17.00%
15.00%
Low

13.00%

High

11.00%

Average

9.00%
7.00%
5.00%

The consensus of the Valuation Panel at the Winter Board meeting of the American Seniors Housing
Association was that quality assets comparable to the subject have simply not traded in the last 18
months. However, with the increased equity requirements and increasing spreads on debt cost,
intuitively, cap rates have increased 50‐125 basis points since 2007. The quoted range of IL capitalization
66

FOUNTAIN RETIREMENT HOTEL

HEALTHTRUST

rates was 7.00‐8.00% with AL/ALZ properties exhibiting a wider range of 8.50‐10.00%. We have
considered these industry indications as well in our capitalization rate selection.
Factors that influence our selection of the subject’s capitalization rate include:






Risk associated with caring for the subject’s targeted population
Size of 65 beds – permits economies of scale
Older age and lower quality asset
Below market occupancy performance
Net operating income estimate reflecting modest change

Therefore, we have reconciled to a going‐in rate of 9.50%. To account for the greater risk involved with
the property at the time of reversion due to unknown factors of the market and the condition of the
buildings at that time, an additional 50 basis points have been added to the overall capitalization rate to
derive a terminal capitalization rate of 10.00%.

SUMMARY OF CAPITALIZATION RATE INDICATIONS
MORTGAGE INTEREST RATE
AMORTIZATION TERM
LOAN TO VALUE RATIO
DEBT COVERAGE RATIO
EQUITY DIVIDEND RATE
EQUITY YIELD RATE
BAND OF INVESTMENT
DEBT COMPONENT:
EQUITY COMPONENT:
ROUNDED TO:
DEBT COVERAGE
ROUNDED TO:
MORTGAGE‐EQUITY
DEBT COMPONENT:
EQUITY COMPONENT:

7.00%
25
75.00%
140.00%
12.00%
20.00%
75%
25%

x
x

0.0848
0.1200

75%

x

1.4

75%
25%

x
x

0.0848
0.2000

LESS PRINCIPAL REDUCTION:
BASIC RATE
PROPERTY VALUE CHANGE
OVERALL CAPITALIZATION RATE
ROUNDED TO:
IMPROVED SALE INDICATIONS

=
=

x

0.0636
0.0300
0.093610128
9.36%
0.0848
0.0891
8.91%
=
=

7.84%

SELECTED OVERALL CAPITALIZATION RATE:

0.0636
0.0500
0.1136
‐0.0014
0.1122
‐0.0004
0.1118
11.18%
to 9.93%
9.50%

Source: HealthTrust, LLC

67

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Discount Rate Derivation
The 2010 Senior Housing Investment Survey suggests the following ranges for discount rates in the
seniors housing and nursing markets.

INTERNAL RATE OF RETURN / (DISCOUNT RATE)
2010 All Responses
Range
Average
Unlicensed Congregate Care (IL)
Licensed Assisted Living
Licensed Alzheimer/Dementia
Licensed Skilled Nursing‐Long Term Care
Licensed Skilled Nursing‐Subacute Care
Continuing Care Retirement Community

8.0‐25.0%
8.8‐30.0%
9.3‐30.0%
11.0‐30.0%
11.0‐30.0%
10.0‐25.0%

2010 Adjusted Responses
Range
Average

13.1%
14.3%
14.8%
16.1%
16.4%
14.4%

10.0‐20.0%
11.5‐20.0%
11.0‐20.0%
12.0‐20.0%
12.0‐20.0%
11.0‐20.0%

12.4%
13.6%
14.1%
15.2%
15.6%
14.0%

Basis Point Change
From 2009
‐50
‐40
‐20
0
+20
+30

Source: 2010 Senior Housing Investment Survey

Based on our estimated cash flows, growth rates and capitalization rate, the sensitivity analysis for the
subject’s discount rate is as follows:
RATE ANALYSIS
Fountain Retirement Hotel
July 19, 2010
K = [1 ‐ (1 + C)^n / S^n] / (Y ‐ C) * An
Ro = [(Y ‐ D*1/Sn) / K]

where:
K = factor
C = constant ratio change in income
S = future value factor
An = present value factor for ordinary level annuity
Y = yield rate, or discount rate
D = total change in property value over holding period

Inferred Change Components of DCF:
# of Years
Amount
Change
_____________ _____________ _____________
Change Attributable to Net Operating Income:
Period 1 Stabilized NOI
Terminal Year Stabilized NOI
Annualized Constant Ratio Change (C)

10

$208,726
$267,187
2.50%

Inferred Change in Property Value:
Current Stabilized Property Value
Terminal Net Sale Proceeds
Change in Property Value (D)

10

$2,251,901
$2,564,992
13.90%

Inferred Stabilized Ro for Individual Y Estimates:
Discount Rate Assumptions (Y)
K‐factor
Annualized Change in Property Value
Inferred Stabilized Overall Cap. Rate (Ro)
Discounted Cash Flow Anaysis
Direct Capitalization Analysis
Stabilized Ro Selection

10.00%
10.50%
11.00%
11.50%
12.00%
1.099013
1.098035
1.097065
1.096105
1.095154
0.87%
0.85%
0.83%
0.81%
0.79%
_____________ _____________ _____________ _____________ _____________
8.31%
8.79%
9.27%
9.75%
10.23%
$2,398,432
$2,323,583
$2,251,901
$2,183,231
$2,117,426
$2,197,114
$2,197,114
$2,197,114
$2,197,114
$2,197,114
9.50%
9.50%
9.50%
9.50%
9.50%

Value Differential
Rate Differential (basis points)

‐9.16%
‐119

‐5.76%
‐71

‐2.49%
‐23

0.63%
25

3.63%
73

Source: HealthTrust, LLC

Considering the calculation‐derived indications and investor surveys, we have used an 11.00% discount
rate in this analysis.
Our assumptions for the discounted cash flow analysis and direct capitalization are as follows:
68

FOUNTAIN RETIREMENT HOTEL

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GLOBAL VALUATION ASSUMPTIONS
Fountain Retirement Hotel
Revenue Growth Rate
Expense Growth Rate
Management Fee
Reserves (Capex) Per Unit
Stabilized Occupancy
Rent Loss
Projection Period (Yrs)
Capitalization Rate
Terminal Capitalization Rate
Discount Rate
Sale Costs

2.50%
2.50%
5.00%
$300
77%
$0
10
9.50%
10.00%
11.00%
4.00%

Source: HealthTrust, LLC

Income Approach Conclusion
As Is: Applying a reversion capitalization rate of 10.00% and a discount rate of 11.00% to the estimated
cash flows developed in this report results in a total estimated “as is” value for the subject (after
deducting 4% from the reversion value for sale costs) of $2,300,000, rounded.
Alternatively, direct capitalization suggests a value of $2,200,000, rounded. Overall, we have more
confidence in the market support for the direct capitalization rate than the discount rate and have
placed more weight on its indication. Therefore, we have reconciled to the direct capitalization
indication of $2,200,000.
The discount cash flow analysis is presented on the following page followed by the direct capitalization.

69

FOUNTAIN RETIREMENT HOTEL

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DISCOUNTED CASH FLOW ANALYSIS
1
REVENUES
Effective Gross Rental Revenues
Entrance Fee Revenues
Ancillary Revenues
TOTAL EFFECTIVE GROSS REVENUE

2

3

4

5

6

7

8

9

10

Reversion

$1,049,202
$0
$0
$1,049,202

$1,075,432
$0
$0
$1,075,432

$1,102,318
$0
$0
$1,102,318

$1,129,876
$0
$0
$1,129,876

$1,158,123
$0
$0
$1,158,123

$1,187,076
$0
$0
$1,187,076

$1,216,753
$0
$0
$1,216,753

$1,247,171
$0
$0
$1,247,171

$1,278,351
$0
$0
$1,278,351

$1,310,310
$0
$0
$1,310,310

$1,343,067
$0
$0
$1,343,067

Real Estate Taxes
Insurance
Utilities
Maintenance
Marketing
Administrative/General
Housekeeping/Laundry
Dietary
Nursing/Personal Care
Activities/Social
Other Payroll, Payroll Taxes and Benefits
SUB‐TOTAL OPERATING EXPENSES

$10,400
$35,750
$67,251
$51,320
$0
$148,675
$115,126
$176,512
$84,250
$20,895
$58,337
$768,516

$10,660
$36,644
$68,932
$52,603
$0
$152,392
$118,004
$180,925
$86,356
$21,418
$59,796
$787,729

$10,927
$37,560
$70,655
$53,919
$0
$156,201
$120,954
$185,448
$88,515
$21,953
$61,290
$807,422

$11,200
$38,499
$72,422
$55,267
$0
$160,106
$123,978
$190,084
$90,728
$22,502
$62,823
$827,608

$11,480
$39,461
$74,232
$56,648
$0
$164,109
$127,077
$194,837
$92,996
$23,065
$64,393
$848,298

$11,767
$40,448
$76,088
$58,064
$0
$168,212
$130,254
$199,707
$95,321
$23,641
$66,003
$869,505

$12,061
$41,459
$77,990
$59,516
$0
$172,417
$133,511
$204,700
$97,704
$24,232
$67,653
$891,243

$12,362
$42,496
$79,940
$61,004
$0
$176,728
$136,848
$209,818
$100,146
$24,838
$69,344
$913,524

$12,671
$43,558
$81,938
$62,529
$0
$181,146
$140,270
$215,063
$102,650
$25,459
$71,078
$936,362

$12,988
$44,647
$83,987
$64,092
$0
$185,674
$143,776
$220,440
$105,216
$26,095
$72,855
$959,771

$13,313
$45,763
$86,087
$65,695
$0
$190,316
$147,371
$225,951
$107,847
$26,748
$74,676
$983,766

Management Fee
Reserve for Replacement
TOTAL EXPENSES

$52,460
$19,500
$840,476

$53,772
$19,988
$861,488

$55,116
$20,487
$883,025

$56,494
$20,999
$905,101

$57,906
$21,524
$927,728

$59,354
$22,062
$950,922

$60,838
$22,614
$974,695

$62,359
$23,179
$999,062

$63,918
$23,759
$1,024,039

$65,515
$24,353
$1,049,640

$67,153
$24,962
$1,075,881

NET OPERATING INCOME (EBITDAR)

$208,726

$213,944

$219,293

$224,775

$230,394

$236,154

$242,058

$248,109

$254,312

$260,670

$267,187
$2,671,867
‐$106,875
$2,564,992

0.900900901

0.811622433

0.731191381

0.658730974

0.593451328

0.534640836

0.481658411

0.433926496

0.390924771

0.352184479

0.352184479

$188,041

$173,642

$160,345

$148,066

$136,728

$126,258

$116,589

$107,661

$99,417

$91,804

$903,350

EXPENSES

DISCOUNTED @
NPV SUMMARY

11.00%

Reversion Revenue
Reversion Expenses
Reversion NOI
Terminal Rate
Reversion Value
Less: Broker Fee (4.00%)
Total Reversion

$1,343,067
$1,075,881
$267,187
10.00%
$2,671,866.75
‐$106,875
$2,564,992.08

Source: HealthTrust, LLC

70

NPV Cash Flows
Less Deferred Maintenance:
Plus Excess Land/CON:

$2,251,901
$0
$0

Discounted Cash Flow Value:

$2,251,901

Rounded to:

$2,300,000

FOUNTAIN RETIREMENT HOTEL

HEALTHTRUST

DIRECT CAPITALIZATION
REVENUES
Effective Gross Rental Revenues
Entrance Fee Revenues
Ancillary Revenues
Total Effective Gross Revenue

$1,049,202
$0
$0
$1,049,202

EXPENSES
Real Estate Taxes
Insurance
Utilities
Maintenance
Marketing
Administrative/General
Housekeeping/Laundry
Dietary
Nursing/Personal Care
Activities/Social
Other Payroll, Payroll Taxes and Benefits
SUB‐TOTAL OPERATING EXPENSES

$10,400
$35,750
$67,251
$51,320
$0
$148,675
$115,126
$176,512
$84,250
$20,895
$58,337
$768,516

Management Fee
Reserve for Replacement
TOTAL EXPENSES

$52,460
$19,500
$840,476

80.11%

NET OPERATING INCOME (EBITDAR)

$208,726

Capitalized @
Less Deferred Maintenance:
Plus Excess Land/CON:
Less Rent Loss
Direct Capitalization Value:

9.50%

Rounded to:

$2,197,114
$0
$0
$0
$2,197,114
$2,200,000

Source: HealthTrust, LLC

71

FOUNTAIN RETIREMENT HOTEL

HEALTHTRUST

SALES COMPARISON APPROACH
The sales comparison approach is predicated upon the principle of substitution that asserts that the
amount a buyer will pay for a property is limited by the cost of comparable properties with similar
utility. In order to apply this approach in the analysis, we have selected sales of communities throughout
the subject’s region, as this type of property (senior housing or healthcare usage) does not transfer
frequently. Further, given the changes in market conditions over the last 12‐24 months, we have
attempted to utilized the most recent and pertinent transactions, ultimately resulting in a larger
geographic area.
We have attempted to select sales that are operationally as similar to the subject as possible.
“Operationally” is more a matter of the quality of care and community (i.e., no mom and pops or
troubled properties which would trade for under $30,000 per bed) than ILC versus ALR as anymore
these distinctions can change rapidly; in fact many ILCs are purchased for ALR use. As the pool of
institutional grade communities is limited; few transactions (less than 75) occur annually. The bulk of
transactions occur where the largest senior populations are located (i.e., Florida and Arizona) as well as
the two coasts (CA and the Northeast). Therefore, every time we find ourselves outside of these
pockets, we must stretch for “comparable” sales. The sales selected from a database including hundreds
of transactions are deemed most comparable to the subject.
Although we have attempted to select sales most similar to the subject, significant differences remain
between the subject and these properties. Consequently, when comparing the sales on the basis of
price per bed, or unit (the most consistent unit of measure). Transaction prices will be affected by a
number of variables such as:
Financing/Conditions of Sale: Favorable financing or unusual conditions of sale (such as
assemblage, seller duress, related parties, sale lease‐ or sale management‐back, etc.) can impact
the sales price of a property.
Time/Market Conditions: The time adjustment reflects changes in market conditions (e.g.,
supply, demand, macro economic conditions) between those existing at the time of sale and
those as of the effective date of appraisal. Statistical data gathered and contained in our
proprietary database (HealthComps©) has been tracked over the past twelve years is presented
below relative to US transaction trends occurring over the past five years.

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FOUNTAIN RETIREMENT HOTEL

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Location: Location factors such as visibility, access, size of market (including regional, local,
rural, metropolitan buyer perceptions) and neighborhood composition often will impact the
selling price.
Occupancy: Effective gross income and profit margins will be directly impacted by a properties
historical, and potential occupancy levels. Whether a property has maintained a stabilized
occupancy at the time of sale will have a material impact on a selling price.
Age: As part of a research project we were engaged for by the American Senior Housing
Association, HealthTrust found that the age of a physical plant has a significant impact on sale
price and capitalization rates. Next, as the remaining economic life of an asset decreases, the
capitalization rate typically increases reflecting the higher risk associated with an older property
that may suffer competitive disadvantages due to its failure to keep up with recent
development trends. Senior housing facilities demonstrate the following relationship over the
last ten years:
Relationship of Age and Capitalization Rate
5 or Fewer Years

6‐9 Years
Capitalization Rate
10‐19 Years

20+ Years
9.00%

9.50% 10.00% 10.50% 11.00% 11.50%

Source: ASHA,
HealthTrust, LLC

Census: Properties that sell with a high ratio of private pay residents are typically more desirable
than those with low quality mixes due to profitability margins. Census is more relevant when
analyzing long term care, and to some extent assisted living transactions.
Size: The relative size of a property (total number of units/beds) should be considered relative
to the economies of scale, or the tendency for larger assets to sell for less than smaller assets on
a price per square foot, or per unit/bed basis.
For our valuation analysis, we have applied adjustments via a Sales Grid Analysis accounting for the NOI
per Unit/Bed. In addition to making adjustments to the sales via the sales grid, we have included a
second valuation analysis tool. An EGIM analysis was developed to support, and or contrast the value
indication via the comparison grid.
The selected sales are described in summary on the following pages along with a map identifying the
location of each property. Complete detailed sale information has been provided in the Addenda of this
report.
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FOUNTAIN RETIREMENT HOTEL

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IMPROVED SALES MAP

SENIOR HOUSING/HEALTHCARE TRANSACTIONS
Sale No.
1

Name/Location
Morningstar at Littleton
Littleton, Colorado

Date
May‐09

No. Units/Beds
85

Year Built
2006

Sale Price
$25,250,000

$/Unit
$297,059

NOI/Unit
$26,141

Occ.
91%

OAR
8.80%

2

Timber Ridge at Eureka
Eureka, California

Feb‐09

90

1998

$11,625,000

$129,167

$12,826

97%

9.93%

3

Caruth Haven Court
Dallas, Texas

Jan‐09

91

1999

$20,500,000

$225,275

$18,247

91%

8.10%

4

Adobe House
Petaluma, California

Dec‐08

40

1996

$14,540,000

$363,500

$35,877

75%

9.87%

5

Prestonwood Court
Plano, Texas

Mar‐08

124

2006

$29,000,000

$233,871

$18,335

90%

7.84%

Source: HealthTrust, LLC

75

FOUNTAIN RETIREMENT HOTEL

HEALTHTRUST

Sales Grid Analysis
The transactions selected and the subject will vary in terms of conditions of sale, date, location, size, age
and condition, census and construction quality. In addition, market factors ‐ especially those involving
the market’s supply and demand ‐ are important as they have a material impact on a property’s ability
to generate income. Another major influence on the value of a seniors housing community is the
management characteristics of the owner. All of these factors directly relate to the property’s ability to
produce profits, the motivation of the sale.
We have adjusted the sales to account for these differences. A property exhibiting superiority to the
subject receives an overall downward adjustment while one that is inferior receives an overall upward
adjustment. The adjustment formula is as follows:
Subject NOI per unit/bed MINUS Comparable NOI per unit/bed
DIVIDED BY Comparable NOI per unit/bed EQUALS Percent of Adjustment

NOI versus Price/Unit
$420,000
$370,000
$320,000
$270,000
$220,000
$170,000
$120,000
$70,000
$20,000
$0

$5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000
Price/Unit

Linear (Price/Unit)

We have operating data on a majority of the sale properties. In order to account for all the differences
between the comparables and the subject, we have examined these communities on the basis of net
operating income per unit/bed. This analysis will enable us to make a single adjustment that will
inherently recognize all of the differences between the subject and the comparables. This comparison
analysis produces a considerably tighter range of adjustments allowing for a more reasonable range to
reconcile a probable value for the subject via the Sales Grid Analysis.
We have reconciled to a value estimate within the range, following any rent loss deductions, or
adjustments for excess land as presented in the following table:

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FOUNTAIN RETIREMENT HOTEL

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IMPROVED SALES GRID ANALYSIS
SUBJECT
NAME/LOCATION/ATTRIBUTES
YEAR BUILT
OCCUPANCY @ SALE
OVERALL CAPITALIZATION RATE
EGIM
EXPENSE RATIO
NO. IL UNITS
NO. AL UNITS/BEDS
NO. ALZ UNITS/BEDS
NO. SN BEDS
TOTAL DENSITY
LAND AREA (AC)
GROSS BUILDING AREA (SF)
GBA per UNIT/BED
SALE DATE
SALE PRICE
PRICE PER UNIT/BED
PRICE PER SF
NOI/UNIT‐BED

Fountain Retirement Hotel
Youngtown,Arizona
1971
77%
‐‐‐
‐‐‐
80%
0
65
0
0
65
1.35
37,102
571
‐‐‐
‐‐‐
‐‐‐
‐‐‐
$3,211

ADJUSTMENTS (SALE CONDITIONS)
FINANCING
ADJUSTED INDICATION
CONDITIONS OF SALE
ADJUSTED INDICATION
MARKET CONDITIONS
ADJUSTED INDICATION
ADJUSTMENTS
NOI PER UNIT
OTHER
NET ADJUSTMENT
INDICATED VALUE
TREND INDICATOR TOOLS
AVERAGE SIZE OF ADJUSTMENT:
MINIMUM:
MAXIMUM:
MEDIAN:
AVERAGE:
STD. DEVIATION:
RECONCILED VALUE:

1

2

3

4

5

Morningstar at Littleton

Timber Ridge at Eureka

Caruth Haven Court

Adobe House

Prestonwood Court

Eureka, California

Dallas, Texas

Littleton, Colorado
2006
91%
8.80%
4.67
59%
0
65
20
0
85
3.13
71,080
836
May‐09
$25,250,000
$297,059
$355.23
$26,141

1998
97%
9.93%
3.01
70%
0
68
22
0
90
1.76
45,762
508
Feb‐09
$11,625,000
$129,167
$254.03
$12,826

1999
91%
8.10%
3.25
74%
0
91
0
0
91
2.215
74,647
820
Jan‐09
$20,500,000
$225,275
$274.63
$18,247

Petaluma, California
1996
75%
9.87%
4.89
52%
0
0
40
0
40
1.68
23,022
576
Dec‐08
$14,540,000
$363,500
$631.57
$35,877

0%
$297,059
0%
$297,059
0%
$297,059

0%
$129,167
0%
$129,167
0%
$129,167

0%
$225,275
0%
$225,275
0%
$225,275

0%
$363,500
0%
$363,500
0%
$363,500

0%
$233,871
0%
$233,871
0%
$233,871

‐88%
0%
‐88%

‐75%
0%
‐75%

‐82%
0%
‐82%

‐91%
0%
‐91%

‐82%
0%
‐82%

$36,491

$32,338

$39,644

$32,535

$40,959

VALUATION SUMMARY
65
$35,000
$2,275,000
$2,300,000

‐84%
$32,338
$40,959
$36,491
$36,393
$3,961
$35,000

Source: HealthTrust, LLC

77

UNITS/BEDS
TIMES $/UNIT
EQUALS
ROUNDED

Plano, Texas
2006
90%
7.84%
4.01
69%
0
124
0
0
124
3.8757
117,412
947
Mar‐08
$29,000,000
$233,871
$246.99
$18,335

FOUNTAIN RETIREMENT HOTEL

HEALTHTRUST

EGIM Analysis
In addition to making adjustment to the improved sales via a sales grid analysis, we have examined the
indicated EGIMs of each property and the expense ratio. This method compares the subject’s income
characteristics with those of the comparable properties and develops a multiplier that is appropriate for
the subject. Typically, the higher the expense ratio, the lower the EGIM will result. Based on our
analysis, we have concluded to an appropriate EGIM as follows:

EGIM ANALYSIS
PROPERTY
Timber Ridge at Eureka
Caruth Haven Court
Morningstar at Littleton
Prestonwood Court
Adobe House
Subject

EGIM
3.01
3.25
4.67
4.01
4.89

EXPENSE RATIO
70%
74%
59%
69%
52%
80%

EXPENSE RATIO

EGIM ANALYSIS
85%
80%
75%
70%
65%
60%
55%
50%
0.5

1.5

2.5

3.5

4.5

5.5

EGIM

Effective Gross Income of
Multiplied by
Total
Rounded to

$1,049,202
2.00
$2,098,404
$2,100,000

Source: HealthTrust, LLC

Sales Comparison Approach Conclusion
This approach contains two methods (sales grid and EGIM analysis) to reach a value estimate for the
subject. Due to the strong correlation between expense ratios and multipliers indicated by the
comparable sales, we find the EGIM analysis to be reliable and have attributed equal weight to its
indication. Thus, the reconciled value via the sales comparison approach is presented in the following
table:

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FOUNTAIN RETIREMENT HOTEL

HEALTHTRUST

SALES COMPARISON CONCLUSION
Sales Grid Analysis
Total Units /Beds
65

X

EGIM Method
Effective Gross Income
$1,049,202

X

Value/Unit or Bed
$35,000
=

EGIM
2.00

=

Value
$2,275,000

$2,098,404

Reconciled Value
Indicated Value Reconciled to:
Less Deferred Maintenance
Plus Excess Land/CON
Less Rent Loss
Total

$2,186,702
$0
$0
$0
$2,186,702

Final Value Conclusion

$2,200,000

Source: HealthTrust, LLC

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COST APPROACH
The cost approach is based upon the principle of substitution, which states that a prudent purchaser
would not pay more for a property than the amount required to purchase a similar site and construct
similar improvements, without undue delay, to produce a property of equal desirability and utility.
The procedure begins by estimating the value of the subject site at its highest and best use, based upon
a market analysis of recent comparable sales of vacant land similar to the subject site. The next step
involves estimating current reproduction costs of the improvements, including an appropriate estimate
for entrepreneurial profit, in order to reflect the return a developer would require for the time,
expertise, and equity investment. The final step in the cost approach involves estimating accrued
depreciation from all causes and adding the depreciated value of the improvements to the estimated
land value.
Land Valuation
In estimating the value of the subject site, we used direct market comparison of the subject site with
recent sales of vacant land with similar utility and physical characteristics. Adjustments have been made
for the sales as necessary to offset differences in various factors affecting value, such as date of sale,
location, size, zoning density and any other significant differences. All sales were adjusted for and
analyzed on the basis of cash equivalent sale prices.
Land Sales Map

80

FOUNTAIN RETIREMENT HOTEL

HEALTHTRUST

VACANT LAND TRANSACTIONS
Sale No.

Location

Units

Acres

Sale Date

Sale Price

$/Unit

$/AC

$/SF

1

NE Dynamite & 44th St
Cave Creek, Arizona

35

14.44

Apr‐10

$1,200,000

$34,286

$83,102

$1.91

2

SE of Pima Rd and Legacy Blvd
Scottsdale, Arizona

465

9.82

Dec‐09

$13,240,000

$28,473

$1,348,269

$30.95

3

685 South Freeway Drive
Napa, California

22

1.06

Feb‐09

$1,200,000

$54,545

$1,132,075

$25.99

4

SE Corner of Imola Avenue and Golden Gate Drive
Napa, California

17

0.86

Feb‐09

$850,000

$50,000

$988,372

$22.69

5

2975 Dutton Meadow
Santa Rosa, California

96

4.00

Aug‐08

$2,800,000

$29,167

$700,000

$16.07

Source: HealthTrust, LLC

Seniors housing community site purchasers typically buy property on the basis of price per unit.
Demographics, existing and proposed supply, and location relative to health care properties are all
factors that most influence these buyers. As a result, the markets for these sites tend to be regional
rather than local, as it is with other commercial property types. When necessary, we have expanded our
search to include non‐senior housing developments, multifamily developments, and other
developments that best compared to the land acquired for the construction of the subject. Due to the
prevalent land sales data available, we have valued the subject’s site on the basis of price per unit.
Subsequent to our research, we have identified the following sales that are summarized below, with
detailed write‐ups located within the Addenda of this report. Adjustments shown in the Land Sales
Analysis chart are discussed in the following paragraphs. All of the sales involved fee simple interests.
Therefore, we consider financing/condition of sale, market conditions, location/access/visibility, size and
density as the most relevant factors of adjustment. Transaction prices will be affected by a number of
variables such as:
Financing/Conditions of Sale: Favorable financing or unusual conditions of sale (such as
assemblage, seller duress, etc.) can impact the sales price of a property.
Time/Market Conditions: The time adjustment reflects changes in market conditions (e.g.,
supply, demand, macro economic conditions) between those existing at the time of sale and
those as of the effective date of appraisal.
Location: Location factors such as visibility, access, size of market (including regional, local,
rural, metropolitan buyer perceptions) and neighborhood composition often will impact the
selling price.
Zoning/Density: The permissible uses in a zoning district and the density to which these uses are
permitted can affect the price of a vacant property. Density adjustments for land analyzed on a
per unit basis are negative for less developed sites (more green area per unit, less crowded) and
positive for more densely developed sites. Conversely, on a per‐square‐foot basis, higher density
is favorable and would require a downward adjustment.
Size: Size adjustments consider the economies of scale, or the tendency for larger tracts to sell
less than smaller tracts on a price per square foot, or per unit/bed basis.

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LAND SALES ANALYSIS SUMMARY
PROPERTY
LOCATION
USE
SIZE:
UNITS
ACRES
DENSITY
SALE DATE
SALE PRICE
PRICE/UNIT
PRICE/SF
ADJUSTMENTS:
FINANCING
ADJUSTED INDICATION
CONDITIONS OF SALE
ADJUSTED INDICATION
MARKET CONDITIONS
ADJUSTED INDICATION
OTHER ADJUSTMENTS:
LOCATION
SIZE
ZONING/DENISTY
OTHER

SUBJECT
12030 113th Ave
Youngtown, Arizona
ALR

SALE 1
NE Dynamite & 44th St
Cave Creek, Arizona
Master Planned Community / Single Family Development

SALE 2
SE of Pima Rd and Legacy Blvd
Scottsdale, Arizona
465 unit CCRC

SALE 3
685 South Freeway Drive
Napa, California
Multi‐family residential

SALE 4
SE Corner of Imola Avenue and Golden Gate Drive
Napa, California
Multi‐family residential

SALE 5
2975 Dutton Meadow
Santa Rosa, California
Apartments

65
1.35
48.1

35
14.44
2.4
Apr‐10
$1,200,000
$34,286
$1.91

465
9.82
47.4
Dec‐09
$13,240,000
$28,473
$30.95

22
1.06
20.8
Feb‐09
$1,200,000
$54,545
$25.99

17
0.86
19.8
Feb‐09
$850,000
$50,000
$22.69

96
4.00
24.0
Aug‐08
$2,800,000
$29,167
$16.07

0%
$34,286
0%
$34,286
0%
$34,286

0%
$28,473
0%
$28,473
0%
$28,473

0%
$54,545
0%
$54,545
0%
$54,545

0%
$50,000
0%
$50,000
0%
$50,000

0%
$29,167
0%
$29,167
0%
$29,167

Similar
Superior
Superior
Similar

Superior
Inferior
Similar
Similar

Superior
Superior
Superior
Similar

Superior
Superior
Superior
Similar

Similar
Similar
Superior
Similar

NET ADJUSTMENT

‐50%

‐40%

‐70%

‐70%

‐40%

INDICATED VALUE

$17,143

$17,084

$16,364

$15,000

$17,500

MINIMUM:
MAXIMUM:
AVERAGE:
STD. DEVIATION:

$15,000
$17,500
$16,618
$994

ESTIMATED VALUE OF SUBJECT:
65 UNITS @

$16,500

EXCESS LAND VALUE:
ROUNDED TO

Source: HealthTrust, LLC

82

$1,072,500
$0
$1,070,000

FOUNTAIN RETIREMENT HOTEL

HEALTHTRUST

Land Value Conclusion
The comparable land sales grid indicated adjusted values for the subject property, which we reconciled
based on necessary adjustments, as presented. Therefore, we have reconciled within the range, or at
$16,500 per unit, resulting in a concluded land value of $1,070,000, rounded.
Improvement Valuation
Direct/Hard Costs: Based upon our inspection of the subject improvements, and our knowledge of
construction quality, the construction of the various buildings is best represented by the Marshall and
Swift Valuation Service: Multiple Residences – Seniors Housing, Multiple Residences – Elderly Assisted
Living (AL), Convalescent Hospitals (SN), and Clubhouses for Senior Citizens (Clubhouse/Commons
Buildings). We have estimated the hard construction costs for the building improvements as follows:
SUMMARY OF BASE BUILDING COSTS
Component
Class/Quality
Base Building Cost
Add for Sprinklers
Subtotal
FAR Multiplier
Local Multiplier
Current Multiplier
Subtotal
Ratio to total
Final Building Cost

IL
‐‐
$0.00
$2.00
2.00
0.000
0.000
0.000
0.00
0%

AL
Class D, Average
$79.29
$2.00
81.29
0.950
0.970
0.970
72.66
100%

SN
‐‐
$0.00
$2.00
2.00
0.000
0.000
0.000
0.00
0%

Cottage
‐‐
$0.00
$0.00
0.00
0.000
0.000
0.000
0.00
0%

Clubhouse
‐‐
$0.00
$2.00
2.00
0.000
0.000
0.000
0.00
0%

Total

$72.66

Source: Marshall Valuation Service/HealthTrust, LLC

The table above indicates values per square foot given to the various buildings that comprise the
property. Other hard costs include paving estimated, landscaping and site work/retention.
Personal Property: Furniture, fixtures, and equipment (FF&E) are estimated based upon our knowledge
of these costs for similar type properties, including the development cost comparables presented at the
conclusion of this section. The comparables range from $0 to $10,788 and we reconciled to $5,000 per
unit for FF&E.
Other Indirect/Soft Costs: We have estimated typical soft cost amounts for legal, accounting,
professional fees, real estate taxes during hold, and insurance at a lump sum; research into remaining
contingency and other miscellaneous items leads us to conclude at a rate of 5% of the total hard costs.
Premarketing/Stabilization Costs: Total costs to bring the property into production to a stabilized
occupancy level include marketing and pre‐marketing expenses, operating losses incurred during fill‐up,
promotional and public relations expenses, marketing consultants, and professional advertising through
the various media. Based upon our knowledge of these expenses for similar properties, and discussions
with marketing specialists and consultants, we estimated the total costs to bring the property into
production at stabilized occupancy to be approximately $5,000 per unit. We note that this estimate
presumes a healthy market and a competent marketing/management team.
Entrepreneurial Incentive: The last accountable cost is entrepreneurial incentive and overhead essential
to complete a project of this size. Our discussion with developers active in the retirement community
market suggests a range in anticipated returns of 10% to 20% of the project costs (excluding land).
However, our experience with Erickson Retirement, Sunrise Senior Living, and Life Care Services is that
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FOUNTAIN RETIREMENT HOTEL

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developers take a smaller return on larger projects, more in the neighborhood of 5% to 10%. We also
point out that barriers to entry in any given market, or risk play an integral role in developer incentive.
Given the size, scope, and risk of the subject development, we have incorporated entrepreneurial
incentive of 15% of project costs.
Total Replacement Cost New (RCN): We have applied cost estimated from a reliable cost estimator
(Marshall & Swift) to derive a reasonable RCN for the subject. The chart on the following page includes
recently constructed senior housing/healthcare projects throughout the region/country. We therefore
conclude that these comparable properties support our estimated replacement cost new for the
subject.

84

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COST COMPARABLE SUMMARY
PROPERTY
DATE
LOCATION
NO. UNITS/BEDS
GROSS BUILDING AREA
CONSTRUCTION TYPE

Arizona
65
37,102
Wood Frame

1
2010
Arizona
140
125,316
Steel Frame

2
2009
California
124
113,708
Steel Frame

3
2009
Texas
80
81,163
Steel Frame

4
2008
Texas
74
57,000

5
2008
Texas
134
0
Unknown

LAND COST

$1,070,000

$1,945,500

$2,500,000

$468,000

$1,500,000

$0

SITE WORK
HARD COSTS
FF&E
SOFT COSTS
TOTAL
ENTREPRENEURIAL INCENTIVE
REPLACEMENT COST NEW

$29,403
$2,776,009
$325,000
$794,562
$3,924,974
$588,746
$4,513,720

$900,000
$11,005,020
$1,429,088
$5,557,500
$18,891,608
$2,833,741
$21,725,349

$4,300,000
$18,286,870
$790,260
$10,783,103
$34,160,233
$5,124,035
$39,284,268

$0
$9,123,989
$863,076
$2,886,597
$12,873,662
$1,931,049
$14,804,711

$0
$5,700,000
$500,000
$943,218
$7,143,218
$1,071,483
$8,214,701

$0
$14,400,000
$0
$0
$14,400,000
$2,160,000
$16,560,000

$69,442
$121.66

$155,181
$173.36

$316,809
$345.48

$185,059
$182.41

$111,009
$144.12

$123,582
N/A

COSTS PER UNIT
COSTS PER SF

SUBJECT

Source: HealthTrust, LLC

Note: Costs may be combined in some categories

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Depreciation
Depreciation is allocated between the various types of curable and incurable depreciable items.
Depreciation is defined as a loss in value from any cause, and consists of physical deterioration,
functional obsolescence, and economic or external obsolescence.
Physical curable depreciation (deferred maintenance) includes all items of maintenance that should be
corrected on the date of appraisal to maximize profit or minimize loss that would result if the property
were sold. A measure of physical curable deterioration is the cost to perform this maintenance and
includes such items as interior and exterior painting, roof repair, etc.
The estimated physical incurable depreciation includes both short‐lived and long‐lived components and
represents general wear and tear on the property that does not warrant immediate repair. Deducting
this replacement cost new from the property’s total, results in a depreciable base for the long‐lived
components. Based on the estimated effective age of the subject, assuming an economic life of 50 years,
we were able to estimate total long‐lived incurable depreciation for the subject.
Functional obsolescence includes items of deficiency or superadequacy that impact the structure’s
utility. Curable items are economically feasible to correct while incurable items cannot be fixed for less
than the resulting contribution to value.
External obsolescence results from factors and influences outside the property. This type of
obsolescence is usually incurable because the tenant and landlord are typically powerless to remove or
change the influence creating the obsolescence. Examples of external obsolescence include government
fees and regulations, the presence of a landfill or equally undesirable neighbor, and market conditions
that do not support development costs. We have noted no evidence of external obsolescence impacting
the subject.
Cost Approach Conclusion
The final step in the cost approach is adding the previously estimated land value of the subject site to
the estimated depreciated replacement cost new of the improvements. Therefore, the market value of
the subject, via the cost approach, is presented in the following exhibit.

86

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COST APPROACH SUMMARY
HARD COSTS
Main Structure
Other Structure
Walkways & Paving
Landscaping
Site Work/Retention
Furniture, Fixtures, & Equipment
Total Hard Costs:
SOFT COSTS
Professional Fees, Title, Ins., Taxes, etc.
Miscellaneous & Contingency @
Pre‐marketing expenses @
Total Soft Costs:
ENTREPRENEURIAL INCENTIVE @
REPLACEMENT COST NEW
DEPRECIATION
Physical Curable:
Physical Incurable (Short‐Lived):
COMPONENT
Roof
FF&E
Flooring
HVAC
Site Improvements
Physical Incurable (Long‐Lived):
Replacement Cost New
Less Short‐Lived Items
Depreciable Basis
Effective Age/Economic Life
Functional Obsolescence:
External Obsolescence:
TOTAL ESTIMATED ACCRUED DEPRECIATION
VALUATION SUMMARY
DEPRECIATED VALUE OF IMPROVEMENTS
ADD EXCESS CON VALUE @
LAND VALUE
EXCESS LAND VALUE
ADD TOTAL LAND VALUE
PRELIMINARY COST APPROACH VALUE
LESS ADJUSTMENT FOR LACK OF STABILIZATION
ESTIMATED VALUE VIA COST APPROACH
ROUNDED TO

37,102
‐
14,702
2,940
58,806
65

SF @
SF @
SF @
SF @
SF @
Units/Beds @

$72.66
$0.00
$5.00
$2.25
$0.50
$5,000

$2,695,886
$0
$73,508
$6,616
$29,403
$325,000
$3,130,412
$313,041
$156,521
$325,000

5%
$5,000 Per Unit

$794,562
$588,746

15%
$69,442 /Per Unit

$121.66 /Square Foot

$4,513,720

$0
Cost New
$74,204
$325,000
$148,408
$185,510
$73,508
$806,630

Effective
Age
18
9
8
18
10

Economic
Life
25
12
10
25
25

Amount
$53,427
$243,750
$118,726
$133,567
$29,403
$578,873

‐$
$
35 /50

=

70.0%

$4,513,720
806,630
3,707,091
$2,594,963
$0
$0
‐$3,173,837

$0 Per Bed

Source: HealthTrust, LLC

87

$1,339,883
$0
$1,070,000
$0
$1,070,000
$2,409,883
$0
$2,409,883
$2,400,000

FOUNTAIN RETIREMENT HOTEL

HEALTHTRUST

Insurable Value Estimate
Based on the foregoing, we have also estimated the subject’s insurable value, as shown below:

INSURABLE VALUE CALCULATIONS
Fountain Retirement Hotel
Replacement Cost New
Less:
Site Work/Retention
Entrepreneurial Incentive
INSURABLE VALUE CALCULATION
ROUNDED TO

$4,513,720
58,806 SF @

$0.50

‐$29,403
‐$588,746
$3,895,571
$3,900,000

Source: HealthTrust, LLC

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RECONCILIATION AND FINAL VALUE ESTIMATES
The purpose of this appraisal is to assist with underwriting a potential loan involving the subject of the
fee simple interest in the subject. We have applied three approaches to estimate the subject’s value.
The value estimates provided by these approaches are:

VALUATION SUMMARY
Value Indication(s)
As‐Is
19‐Jul‐2010
The Cost Approach ‐ Fee Simple
The Income Approach ‐ Fee Simple
The Sales Approach ‐ Fee Simple

$2,400,000
$2,200,000
$2,200,000

The Income Approach ‐ Leased Fee
The Income Approach ‐ Leasehold

‐‐‐
‐‐‐

Value Conclusion(s)
Market Value of Going Concern (TAB)
Market Value of Leased Fee Estate
Market Value of Leasehold Estate

$2,200,000
‐‐‐
‐‐‐

Five land sales are used in the Cost Approach to provide an estimate of the subject’s value. These sales
offered a reliable indication of the subject’s site value. The replacement cost new reflects current costs
as estimated by a reliable cost manual, national averages for retirement community development,
development cost comparables, and our experience. However, the depreciation estimates are more
subjective and have less direct market support. The older the improvements, the less reliable this
approach becomes due to the necessarily significant depreciation estimates applied. Hence, while we
believe this approach provides a reliable estimate of the subject’s value, less weight was place on this
approach rather than the income approach.
The Income Approach has been employed to estimate the present value of the cash flows generated by
the subject’s operation. Our estimates of revenues and expenses reflect the performance of numerous
similar properties and are well supported. The going‐in/terminal capitalization and discount rates used
are extracted from the market and reflect the subject’s financing terms. This approach has the most
support from the market and best reflects the manner in which the probable purchaser would examine
the subject; that is, because a senior housing and healthcare assets are income‐producing properties, a
buyer will most strongly consider the cash flows that an asset can generate. The income approach is
thus the most reliable and has been accorded the most weight for our valuation analysis. We typically
employ direct capitalization and discounted cash flow methods, weight the strengths of each, and
reconciling accordingly.
The Sales Comparison Approach includes five sales of senior housing/healthcare assets that have
transferred recently. These sales differ from the subject but were able to produce a reliable estimate of
the subject’s value. We do point out that this approach is heavily dependent on whether there is
sufficient and active sales volume. Historically, while a number of sales do exist in this product niche, the
number of sales is considerably less than that of traditional commercial or residential properties. Hence,
significant adjustments are often required and this approach is largely used to provide benchmarks to
89

FOUNTAIN RETIREMENT HOTEL

HEALTHTRUST

test for reasonableness of the primary valuation tool (income approach). Consequently, this approach
has received secondary weight.
Asset Value Allocation
According to the 2010 Edition of the Uniform Standards of Professional Appraisal Practice of the
Appraisal Foundation, it is necessary to identify any personal property, trade fixtures or intangible items
that are not real property but are included in the appraisal. Business value or “intangible assets” is
generally created when a property such as the subject has achieved stabilized operations.
An Assisted Living Residence is a unique property because it contains elements of all three types of
values. It is often very difficult to separate the going concern business value from the real estate value,
for example, because neither can exist without the other. However, we have attempted to allocate the
relative contribution values of the real property, personal property and intangible assets as a going
concern.
Several schools of thought exist with regard to how these components are allocated. Hotel appraisers
will typically deduct a franchise fee paid for the use of a brand name (i.e., Marriott, Ritz Carlton, Hilton,
etc.), and a passive management fee of say 3.0% to 5.0% from gross revenue to derive NOI that is
capitalized into a business value. Others have advocated numerous other deductions for work force in
place, original cost to hire and train the work force, and other intangibles that should be deducted from
the Total Assets of the Business (TAB) to isolate the value of the real estate only. We understand this
methodology has had very limited success in the courts thus far. A course offered by the Appraisal
Institute (Course 800) was based on similar theories. However, it was so controversial the Appraisal
Institute suspended teaching the course in 2007. We have attempted to allocate the values to each of
the components through a combination of methods (Income Residual, Management Capitalization, and
Cost Residual), thus reconciling to a final allocation for each component.
Income Residual Method: In this case, we begin with the total estimated NOI of the going concern, as
estimated in our valuation analysis. From this we deduct the return associated with FF&E to arrive at a
purely real estate based income stream which we capitalized at a lower rate than the going concern to
account for the lower risk factor. Hence, we deduct the depreciated cost of the FF&E and the Real Estate
value from the total concluded property value. The remainder reflects the indicated business value.
Management Capitalization Method: This is a simplistic version of the Income Residual Method
whereby we utilize and assume the management fee reflects the income attributable to the business.
We thus capitalize the management fee at a significantly higher rate to account for the increased
perception of risk associated with and isolated to the business.
Cost Residual Method: In this instance, it is assumed a cost approach analysis has been completed.
Therefore, when we allocate value, first we satisfy the personal property component; this estimate
represents the depreciated value of the FF&E presented in the cost approach and rounded to the
nearest $100,000. Then, we will allocate value to real estate. When the cost approach conclusion
(before deduction for a lack of stabilized occupancy) is higher than the final value estimates, we
estimate the real estate by deducting the FF&E from the final value conclusions. When the cost
approach conclusion (before deduction for a lack of stabilized occupancy) is lower than the final value
estimates, we deduct the FF&E from the cost approach conclusion (before deduction for a lack of
stabilized occupancy). Typically, in the appraisal of a successful retirement property, our business value
90

FOUNTAIN RETIREMENT HOTEL

HEALTHTRUST

allocation method is supported by virtue of the differential between the cost approach conclusion and
the final value estimate. In other words, anything remaining after personal and real property have been
satisfied constitutes business value.
In this instance, we have allocated value as follows:

VALUE ALLOCATION SUMMARY
As‐Is
(1)

(2)

Income Residual Method
Estimated NOI (Going Concern)
Less: Return on FF&E of 20.00%
Income Attributable to Real Estate
Value of Real Estate @

=
=
=
9.00% =
Rounded:
=
@
@

$100,000

Total Property Value Concluded via Appraisal
Less: Personal Property (FF&E)
Less: Real Estate Value
Remainder (Indicated Business Value)

(3)

Management Capitalization Method
Management Fee, or income to business of
Capitalized at business capitalization rate of

30.00%

Indicated Business Value

(4)
(5)
(6)

(1)
(2)
(3)
(4)
(5)
(6)

$208,726
‐$20,000
$188,726
$2,096,953
$2,100,000
$2,200,000
‐$100,000
‐$2,100,000

=

$0

=
=

$52,460
$174,867

Rounded:

$200,000

Cost Residual Method
Total Property Value Concluded via Appraisal
Preliminary Cost Approach Conclusion
Value of Real Estate (Cost less Excess CON, less FF&E)
Value of FF&E and Excess CON
Value of Business (Total value less RE, less FF&E, less excess CON

=
=
=
=
=

$2,200,000
$2,400,000
$2,100,000
$100,000
$0

Reconciled Business Allocation

@

$100,000

Reconciled Personal Property Allocation

@

$100,000

Remainder Real Estate Allocation

@

$2,000,000

NOI of going concern including intangible assets, or TAB
50 basis points less than going concern cap rate
Substantially higher cap rate than going concern to account for risk
Excludes any adjustment for lack of stabilization
Certificate of Need (CON) considered chattel or movable personal property
Business value if > Total Property Value; otherwise zero

Source: HealthTrust, LLC

91

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HEALTHTRUST

Marketability Analysis
The definition of “market value” incorporates the assumption that the subject of the appraisal has been
exposed on the market for a reasonable period of time. The Appraisal Standards Board (ASB) made the
following comment to Standard 6 of USPAP:
Reasonable exposure time is one of a series of conditions in most market value definitions. Exposure
time is always presumed to precede the effective date of the appraisal.
Exposure time may be defined as follows: The estimated length of time the property interest being
appraised would have been offered on the market prior to the hypothetical consummation of a sale at
market value on the effective date of the appraisal; a retrospective estimate based on an analysis of past
events assuming a competitive and open market.
The statement continues with remarking that this exposure time is not a prediction of a date of sale and
should not be confused with a marketing period. The Appraisal Standards Board distinguishes marketing
time as the period required to sell a property immediately after the effective date of appraisal. This
estimate is not part of the appraisal process and has no impact on market value. Because we are
estimating market value, we have made an estimate of the subject's exposure time that is presumed to
have occurred prior to the effective date of the appraisal.
In accordance with our conclusion of highest and best use, we believe that the most probable purchaser
of the subject property would be a nursing home/retirement community owner/operator or possibly a
limited partnership with specialized expertise in elderly care.
Financing for the subject property would most likely be obtained through a commercial bank with strong
local ties, life insurance company or through tax‐exempt bond issues. In the current market, lenders
now place much more underwriting emphasis on the financial position and credit‐worthiness of the
borrower and less weight on the real estate as security collateral. We understand this to hold true in the
nursing home and retirement industry as well.
We also contacted three well‐known brokerage firms that specialize in marketing healthcare properties
nationally. Both Mel Gamzon, principal of Senior Housing Investment Advisors and Allen McMurtry, a
broker with CLW Realty Group, Inc. indicated current marketing periods ranging from six to twelve
months from listing to closing. Since both of these firms are familiar with this product type, we are
confident that if the subject were actively marketed to this group of potential buyers at a price near our
estimates of market value, it would sell within twelve months. Dave Rothschild of CB Commercial
concurs with the six‐ to twelve‐month marketing period. In this case, marketing time and exposure time
are the same.
The key to estimating a probable exposure time for the subject is the relationship between its net
income, its competitive market, and the final value estimate developed. We note that nationally there is
activity in the retirement market as many of the national players are positioning themselves to increase
market share. Hence, we believe that if the subject were actively marketed to this group of potential
buyers at a price near our estimates of market value, it would sell within twelve months.

92

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ADDENDA

93

HEALTHTRUST

Subject Photographs and Exhibits

ADDENDA

HEALTHTRUST

Provided Financial Statements

ADDENDA

11:11 PM

Fountain Retirement Center, Inc

06/22/10

Profit & Loss
January through March 2010

Accrual Basis

Jan - Mar 10
Ordinary Income/Expense
Income
4000 · Room & Board
4010 · Room & Boaard - Private
4040 · Medi-Set
4000 · Room & Board - Other
Total 4000 · Room & Board
4200 · Revenue Deductions
4210 · Private Deductions
Total 4200 · Revenue Deductions
Total Income
Gross Profit
Expense
Payroll Expenses
5000 · Supervisory Expenses
5010 · Supervisory Salaries
5000 · Supervisory Expenses - Other
Total 5000 · Supervisory Expenses
5100 · Dietary Expenses
5110 · Dietary Salaries
5120 · Dietary Food
5130 · Dietary Supplies
5150 · Dietary Purchased Services
Total 5100 · Dietary Expenses
5200 · Housekeeping Expenses
5210 · Housekeeping Salaries
5220 · Housekeeping Supplies
5230 · Housekeeping Repairs
Total 5200 · Housekeeping Expenses
5300 · Laundry Expenses
5310 · Laundry Salaries
Total 5300 · Laundry Expenses
5400 · Social Service Expenses
5410 · Social Service Salaries
Total 5400 · Social Service Expenses
5500 · Maintenance Expenses
5510 · Maintenance Salaries
5530 · Maintenance Repairs
5540 · Maintenance Purchased Service
5550 · Waste Management
5560 · Natural Gas
5570 · Water/Sewer
5580 · Electricity
5500 · Maintenance Expenses - Other
Total 5500 · Maintenance Expenses
5600 · Janitor Expenses

162,065.10
81,855.00
400.00
244,320.10
-5,816.06
-5,816.06
238,504.04
238,504.04
22.50
17,366.66
151.77
17,518.43
23,872.78
15,369.95
418.90
160.95
39,822.58
19,940.75
1,015.13
473.00
21,428.88
4,845.00
4,845.00
3,870.07
3,870.07
4,963.76
-1,303.31
1,911.41
396.75
2,594.95
1,791.27
8,921.61
80.00
19,356.44
250.00

Page 1

11:11 PM

Fountain Retirement Center, Inc

06/22/10

Profit & Loss
January through March 2010

Accrual Basis

Jan - Mar 10
5700 · Administration Expenses
5710 · Administration Salaries
5730 · Administration Purch Services
5750 · Accounting Fees
5840 · Insurance General
5845 · Insurance Medical & Life
5850 · Insurance Vehicle
5855 · Insurance Workmans Comp
5875 · Miscellaneous Expense
5900 · Postage
5950 · Rent
5970 · Taxes/Licenses
5980 · Telephone
Total 5700 · Administration Expenses
6000 · Employee Benefits
6020 · Sun Country Credit Union
6030 · Payroll Taxes
6040 · Unemployment Taxes
6060 · Vacation - Holiday Pay
Total 6000 · Employee Benefits

16,556.66
137.84
1,800.00
7,301.53
12,885.73
947.22
167.47
1,610.65
176.00
59,537.61
108.20
2,477.42
103,706.33
500.00
7,140.71
735.21
463.00
8,838.92

Total Expense

219,659.15

Net Ordinary Income

18,844.89

Other Income/Expense
Other Expense
8500 · Other Expenses
8530 · Interest Expense
Total 8500 · Other Expenses
Total Other Expense
Net Other Income
Net Income

4,837.50
4,837.50
4,837.50
-4,837.50
14,007.39

Page 2

9:56 AM

Fountain Retirement Center, Inc

04/19/10

Profit & Loss
October through December 2009

Accrual Basis

Oct - Dec 09
Ordinary Income/Expense
Income
4000 · Room & Board
4010 · Room & Boaard - Private
4040 · Medi-Set
4000 · Room & Board - Other
Total 4000 · Room & Board
4200 · Revenue Deductions
4210 · Private Deductions
4230 · Other Deductions
Total 4200 · Revenue Deductions
Total Income
Gross Profit
Expense
Payroll Expenses
5000 · Supervisory Expenses
5010 · Supervisory Salaries
5020 · Supervisory Central Supplies
5030 · Supervisory Repairs
5040 · Supervisory Purchased Services
5050 · S/C - Finger Printing
Total 5000 · Supervisory Expenses
5100 · Dietary Expenses
5110 · Dietary Salaries
5120 · Dietary Food
5130 · Dietary Supplies
5150 · Dietary Purchased Services
Total 5100 · Dietary Expenses
5200 · Housekeeping Expenses
5210 · Housekeeping Salaries
5220 · Housekeeping Supplies
5230 · Housekeeping Repairs
5240 · Housekeeping Purchased Service
Total 5200 · Housekeeping Expenses
5300 · Laundry Expenses
5310 · Laundry Salaries
5320 · Laundry Supplies
5330 · Laundry Repairs
Total 5300 · Laundry Expenses
5400 · Social Service Expenses
5410 · Social Service Salaries
5420 · Social Service Supplies
5440 · Social Service Purchased Servic
Total 5400 · Social Service Expenses
5500 · Maintenance Expenses
5510 · Maintenance Salaries
5520 · Maintenance Supplies
5530 · Maintenance Repairs
5540 · Maintenance Purchased Service
5550 · Waste Management
5560 · Natural Gas
5570 · Water/Sewer
5580 · Electricity
5500 · Maintenance Expenses - Other
Total 5500 · Maintenance Expenses

1,002,298.23
62,805.00
100.00
1,065,203.23
-9,528.69
-295.00
-9,823.69
1,055,379.54
1,055,379.54
0.00
80,163.58
5,925.05
26.00
1,467.79
138.00
87,720.42
92,218.62
78,021.26
2,517.95
2,223.02
174,980.85
81,723.45
8,918.01
1,632.29
76.00
92,349.75
18,743.50
1,195.49
1,838.17
21,777.16
16,325.76
2,234.33
2,154.03
20,714.12
18,277.65
5,191.85
13,422.60
26,251.75
1,587.00
12,863.37
10,926.58
45,344.08
1,220.00
135,084.88

Page 1

9:56 AM

Fountain Retirement Center, Inc

04/19/10

Profit & Loss
October through December 2009

Accrual Basis

Oct - Dec 09
5700 · Administration Expenses
5710 · Administration Salaries
5730 · Administration Purch Services
5740 · Ads/Help Wanted
5750 · Accounting Fees
5780 · Bank Charges
5790 · Board of Directors Fees
5810 · Depreciation
5820 · Donations
5830 · Dues/Subscriptions
5840 · Insurance General
5845 · Insurance Medical & Life
5850 · Insurance Vehicle
5855 · Insurance Workmans Comp
5870 · Legal Fees
5875 · Miscellaneous Expense
5880 · Office Supplies
5890 · Permits/Fees
5900 · Postage
5910 · Printing/Duplication
5930 · Property Tax
5950 · Rent
5960 · Seminar/Education
5970 · Taxes/Licenses
5980 · Telephone
5990 · Vehicle Expenses
Total 5700 · Administration Expenses
6000 · Employee Benefits
6030 · Payroll Taxes
6040 · Unemployment Taxes
Total 6000 · Employee Benefits

82,189.73
74.24
1,318.63
10,415.10
9.73
1,000.00
35,461.00
1,000.00
1,059.70
18,486.34
25,800.87
816.00
12,603.20
1,000.00
-1,812.53
2,272.15
-135.00
1,233.07
5,597.80
11,159.30
229,148.88
970.00
3,768.50
3,973.60
36,880.69
484,291.00
31,152.52
0.00
31,152.52

66900 · Reconciliation Discrepancies

0.00

Total Expense

1,048,070.70

Net Ordinary Income

7,308.84

Other Income/Expense
Other Income
8000 · Other Income
8010 · Meal Income
8030 · Interest Income
Total 8000 · Other Income
Total Other Income
Other Expense
8500 · Other Expenses
8530 · Interest Expense
8540 · Penalties/Fines
Total 8500 · Other Expenses
Total Other Expense
Net Other Income
Net Income

382.00
1,289.21
1,671.21
1,671.21

3,225.00
-18.41
3,206.59
3,206.59
-1,535.38
5,773.46

Page 2

HEALTHTRUST

Improved Sales

ADDENDA

IMPROVED SALE #1
Record ID:
Property
Type:
Name:
Address:

8054704
---

Verified with:
By:

Grantee, Grantor, Senior Care Investor
Colleen H. Blumenthal, MAI & David Rey Salinas, AS on
3/22/2009

Morningstar at Littleton
5344 South Ripling Parkway, Littleton, Jefferson, CO, 80127

Sale Price:
Adjusted Sale Price:
Sale Date:
Cap Rate:
EGIM:

Grantor:
Grantee:
Property Rights:
Financing:
Occupancy at sale:
Private Pay Census:
Medicaid Census:
Effective Gross Income:
Operating Expenses:
NOI:
Exp per Capacity:

SALE DATA
MH MS Littleton, LLP (MacKenzie House, LLC)
AEW Senior Housing Investors, LP
Fee Simple
Cash to seller
91%
100%
--$5,401,384
$3,178,988
$2,222,396
$37,400

Year Opened:
Major Renovation:
Gross Building Area:
Number of Buildings:
Number of Stories:
Elevators:
Construction:
Quality:
Condition:
Parking Garage:
Parking Spaces:

PROPERTY MIX
Level
IL
AL
ALZ
SN
HPL
Total Capacity

Capacity
--65 units
20 units
----85

Land Area:
Description:
Improvements:
Parcel / Legal:
Proposed Use:
Zoning:

KEY INDICATORS
$25,250,000 Price per Capacity:
--Price per Acre:
5/2009
Price per SF:
8.80%
Time on Market:
4.67
Exp as Percent of EGI:

$297,059
$8,067,093
$185.19
--58.86%

PHYSICAL PLANT DATA
2006
--71,080
------Steel Frame
---------

LAND DATA
3.13 Acres
Slightly irregular parcel on well-traveled road. 3.13 acres.
85-unit assisted living and memory care residence
195809
--P-D (Planned Development) Jefferson County

REMARKS:
The financial indicators are based on the 2009 budget adjusted to reflect a 5% management fee and capital reserves. The property is of excellent quality and was in
excellent condition at the time of the sale. Lisa Widmier of Vant*Age Point represented the seller as broker.

IMPROVED SALE #2
Record ID:
Property Type:
Name:
Address:

8054703
--Timber Ridge at Eureka
2740 Timber Ridge Lane, Eureka, Humboldt, CA, 95503

Verified with:
By:

Grantee and Grantor
Colleen H. Blumenthal, MAI on 3/22/2009

Sale Price:
Adjusted Sale Price:
Sale Date:
Cap Rate:
EGIM:

Grantor:
Grantee:
Property Rights:
Financing:
Occupancy at sale:
Private Pay Census:
Medicaid Census:
Effective Gross Income:
Operating Expenses:
NOI:
Exp per Capacity:

SALE DATA
FKS Investment Company
Humboldt Walford, LLC
Fee Simple
Cash to seller
97%
100%
--$3,865,984
$2,711,559
$1,154,425
$30,128

Year Opened:
Major Renovation:
Gross Building Area:
Number of Buildings:
Number of Stories:
Elevators:
Construction:
Quality:
Condition:
Parking Garage:
Parking Spaces:

PROPERTY MIX
Level
IL
AL
ALZ
SN
HPL
Total Capacity

KEY INDICATORS
$11,625,000 Price per Capacity:
--Price per Acre:
2/2009
Price per SF:
9.93%
Time on Market:
3.01
Exp as Percent of EGI:

$129,167
$6,605,114
$151.63
--70.14%

PHYSICAL PLANT DATA
1998
--45,762
------Wood Frame
--------LAND DATA

Capacity
--68 units
22 units
----90

Land Area:
Description:
Improvements:
Parcel / Legal:
Proposed Use:
Zoning:

1.76 Acres
-----------

REMARKS:
This transaction reflects the exercise of a lease option negotiated in 1998. According to the lease, the optional purchase price is calculated by multiplying the total
development costs by an annual factor of 10% and subtracting the annual lease payments. Based on calculations provided by the operator, we understand this
purchase price is $11,625,000. We find this option price is slightly below current market conditions due to the fact it was negotiated in 1998.
The financial indicators reflect the actual performance trended to 2009 dollars and adjusted to include a 5% management fee and $300/unit reserves.

2

IMPROVED SALE #3
Record ID:
Property
Type:
Name:
Address:

8054899
---

Verified
with:
By:

SeniorCare Investor, Cornerstone REIT Press Release and
broker (Megan Fetter) CLW at
Anthony Carter on 4/6/2009

Caruth Haven Court
5585 Caruth Haven Lane, Dallas, Dallas, TX, 75225

Sale Price:
Adjusted Sale Price:
Sale Date:
Cap Rate:
EGIM:

Grantor:
Grantee:
Property Rights:
Financing:
Occupancy at sale:
Private Pay Census:
Medicaid Census:
Effective Gross Income:
Operating Expenses:
NOI:
Exp per Capacity:

SALE DATA
Senior Housing Partners II, LP
Cornerstone Real Estate Funds (REIT)
Fee Simple
Cash to Seller
91%
100%
--$6,307,692
$4,647,192
$1,660,500
$51,068

Year Opened:
Major Renovation:
Gross Building Area:
Number of Buildings:
Number of Stories:
Elevators:
Construction:
Quality:
Condition:
Parking Garage:
Parking Spaces:

PROPERTY MIX
Level
IL
AL
ALZ
SN
HPL
Total Capacity

Capacity
--91 units
------91

Land Area:
Description:
Improvements:
Parcel / Legal:
Proposed Use:
Zoning:

KEY INDICATORS
$20,500,000 Price per Capacity:
--Price per Acre:
1/2009
Price per SF:
8.10%
Time on Market:
3.25
Exp as Percent of EGI:

$225,275
$9,255,079
$212.47
--73.67%

PHYSICAL PLANT DATA
1999
--74,647
------Wood Frame
--------LAND DATA
2.22 Acres
Level; Irregularly shaped; not in a flood zone
--005450000P0040000
--PD

REMARKS:
This is high quality, three story assisted living residence located within an exclusive area (Highland Park) of Dallas. The property was sold by 12 Oaks Management to
Prudential in 2003 for $12,950,000. Since the previous sale, NOI has been increased approximately 10% and the previous sale had a substantially higher cap rate at
11.24%. Based on the paired sales, the value has appreciated 8.13% annually or 46% aggregately. Throughout the previous sale and the current sale, 12 Oaks
continues to manage the property.
Although the subject has 91 units, it is licensed for 95 beds. Thus, this leaves the option to add four second residents.

IMPROVED SALE #4
Record ID:
Property
Type:
Name:
Address:

8053918
---

Verified with:
By:

Buyer representative
Scott A. McCorvie on 1/12/2009

Adobe House
750 North McDowell Boulevard, Petaluma, Sonoma, CA,
94954

Sale Price:
Adjusted Sale Price:
Sale Date:
Cap Rate:
EGIM:

Grantor:
Grantee:
Property Rights:
Financing:
Occupancy at sale:
Private Pay Census:
Medicaid Census:
Effective Gross Income:
Operating Expenses:
NOI:
Exp per Capacity:

SALE DATA
Adobe House, LLC
Wilkinson 1031, LLC
Fee Simple
cash equivalent
75%
100%
--$2,973,331
$1,537,473
$1,435,858
$38,437

Year Opened:
Major Renovation:
Gross Building Area:
Number of Buildings:
Number of Stories:
Elevators:
Construction:
Quality:
Condition:
Parking Garage:
Parking Spaces:

PROPERTY MIX
Level
IL
AL
ALZ
SN
HPL
Total Capacity

Capacity
----40 units
----40

Land Area:
Description:
Improvements:
Parcel / Legal:
Proposed Use:
Zoning:

KEY INDICATORS
$14,540,000 Price per Capacity:
--Price per Acre:
12/2008
Price per SF:
9.88%
Time on Market:
4.89
Exp as Percent of EGI:

$363,500
$8,654,762
$198.69
--51.71%

PHYSICAL PLANT DATA
1996
--23,022
------Wood Frame
--------LAND DATA
1.68 Acres
----137-061-038
--R-5

REMARKS:
This residence is went under contract in May 2008 and was able to close in December 2008. The total purchase price $14,540,000 is allocated as $14,440,000 in real
estate and $100,000 in personal property. The financial analysis includes the 2008 annualized performance with a 5% management fee and $300 per unit in
replacement reserves.

4

IMPROVED SALE #5
Record ID:
Property Type:
Name:
Address:

8053453
--Prestonwood Court
7001 West Plano Parkway, Plano, Denton, TX, 75093

Verified with:
By:

Third Party Appraiser
Anthony Carter on 11/21/2008

Sale Price:
Adjusted Sale Price:
Sale Date:
Cap Rate:
EGIM:

Grantor:
Grantee:
Property Rights:
Financing:
Occupancy at sale:
Private Pay Census:
Medicaid Census:
Effective Gross Income:
Operating Expenses:
NOI:
Exp per Capacity:

SALE DATA
Prestonwood Court LTD
Aureus Group, LLC
Fee Simple
--90%
100%
--$7,231,920
$4,958,320
$2,273,600
$39,986

Year Opened:
Major Renovation:
Gross Building Area:
Number of Buildings:
Number of Stories:
Elevators:
Construction:
Quality:
Condition:
Parking Garage:
Parking Spaces:

PROPERTY MIX
Level
IL
AL
ALZ
SN
HPL
Total Capacity

KEY INDICATORS
$29,000,000 Price per Capacity:
--Price per Acre:
3/2008
Price per SF:
7.84%
Time on Market:
4.01
Exp as Percent of EGI:

PHYSICAL PLANT DATA
2006
--117,412
------Steel Frame
--------LAND DATA

Capacity
--124 units
------124

Land Area:
Description:
Improvements:
Parcel / Legal:
Proposed Use:
Zoning:

3.88 Acres
----257359
-----

REMARKS:
The expenses above include a 5% management fee and $300 per unit for reserves The revenue and expenses reflect the buyers Year 1 proforma.

$233,871
$7,482,519
$171.78
--68.56%

HEALTHTRUST

Land Sales

ADDENDA

HEALTHTRUST

Demographic Data

ADDENDA

Senior Life 2009

Radius 1: 12030 N 113TH AVE, YOUNGTOWN, AZ 85363-1241, 0.00 - 5.00 Miles, Total
2000
Census

Population by Age
Total Population
Age 55 - 59
Age 60 - 64
Age 65 - 69
Age 70 - 74
Age 75 - 79
Age 80 - 84
Age 85 and over

%

142,630
6,146
7,039
8,780
10,677
11,498
9,245
8,674

Age 55 and over
Age 65 and over

62,060
48,875

Total Population, Male
Age 55 - 59
Age 60 - 64
Age 65 - 69
Age 70 - 74
Age 75 - 79
Age 80 - 84
Age 85 and over

2009
Estimate

4.31%
4.94%
6.16%
7.49%
8.06%
6.48%
6.08%

195,339
7,885
9,536
10,364
10,146
10,786
9,535
10,492

43.51%
34.27%

68,744
51,323

66,137
2,586
2,961
3,885
4,640
4,844
3,764
3,013

Age 55 and over
Age 65 and over

%

2014
Projection

%

4.04%
4.88%
5.31%
5.19%
5.52%
4.88%
5.37%

225,422
9,140
9,752
12,211
11,551
11,139
9,566
11,571

4.05%
4.33%
5.42%
5.12%
4.94%
4.24%
5.13%

35.19%
26.27%

74,930
56,038

33.24%
24.86%

3.91%
4.48%
5.87%
7.02%
7.32%
5.69%
4.56%

93,042
3,499
4,062
4,624
4,381
4,554
3,908
3,965

3.76%
4.37%
4.97%
4.71%
4.89%
4.20%
4.26%

107,790
4,418
4,071
5,346
4,968
4,657
3,812
4,274

4.10%
3.78%
4.96%
4.61%
4.32%
3.54%
3.97%

25,694
20,146

38.85%
30.46%

28,993
21,432

31.16%
23.03%

31,546
23,057

29.27%
21.39%

Total Population, Female
Age 55 - 59
Age 60 - 64
Age 65 - 69
Age 70 - 74
Age 75 - 79
Age 80 - 84
Age 85 and over

76,492
3,560
4,077
4,895
6,037
6,655
5,481
5,661

4.65%
5.33%
6.40%
7.89%
8.70%
7.17%
7.40%

102,297
4,386
5,475
5,740
5,765
6,232
5,627
6,527

4.29%
5.35%
5.61%
5.64%
6.09%
5.50%
6.38%

117,631
4,722
5,681
6,865
6,583
6,482
5,754
7,297

4.01%
4.83%
5.84%
5.60%
5.51%
4.89%
6.20%

Age 55 and over
Age 65 and over

36,366
28,729

47.54%
37.56%

39,751
29,891

38.86%
29.22%

43,384
32,981

36.88%
28.04%

Prepared On: Fri Jul 30, 2010

Page

1

Of 11

Prepared By:
Nielsen Solution Center 1 800 866 6511

Prepared For:

© 2010 The Nielsen Company. All rights reserved.

Senior Life 2009

Radius 1: 12030 N 113TH AVE, YOUNGTOWN, AZ 85363-1241, 0.00 - 5.00 Miles, Total
2000
Census

Population by Single Race Classification
White Alone
Age 65 and over
Black or African American Alone
Age 65 and over
American Indian and Alaska Native Alone
Age 65 and over
Asian Alone
Age 65 and over
Native Hawaiian and Other Pacific Islander Alone
Age 65 and over
Some Other Race Alone
Age 65 and over
Two or More Races
Age 65 and over

123,102
47,753
3,688
320
781
50
1,855
162
132
21
10,171
360
2,900
209
2000
Census

Population by Hispanic or Latino
Hispanic or Latino
Age 65 and over
Not Hispanic or Latino
Age 65 and over

Prepared On: Fri Jul 30, 2010

%

2

Of 11

8.68%
6.40%
8.73%
15.91%
3.54%
7.21%

%

24,688
1,187
117,942
47,688

Page

38.79%

4.81%
40.43%

2009
Estimate
157,847
48,851
8,328
712
1,600
94
3,730
348
256
31
17,054
810
6,525
477
2009
Estimate
48,485
2,732
146,854
48,591

%

2014
Projection
176,438
52,506
11,723
1,041
2,147
159
5,022
511
355
45
20,749
1,106
8,987
670

30.95%
8.55%
5.88%
9.33%
12.11%
4.75%
7.31%

%

2014
Projection

5.63%
33.09%

Prepared By:
Nielsen Solution Center 1 800 866 6511

Prepared For:

© 2010 The Nielsen Company. All rights reserved.

63,328
3,989
162,094
52,049

%
29.76%
8.88%
7.41%
10.18%
12.68%
5.33%
7.46%

%
6.30%
32.11%

Senior Life 2009

Radius 1: 12030 N 113TH AVE, YOUNGTOWN, AZ 85363-1241, 0.00 - 5.00 Miles, Total
2000
Census

Household Income by Age of Householder
Householder Age 55 - 59
Income less than $10,000
Income $10,000 - $14,999
Income $15,000 - $19,999
Income $20,000 - $24,999
Income $25,000 - $29,999
Income $30,000 - $34,999
Income $35,000 - $39,999
Income $40,000 - $44,999
Income $45,000 - $49,999
Income $50,000 - $59,999
Income $60,000 - $74,999
Income $75,000 - $99,999
Income $100,000 - $124,999
Income $125,000 - $149,999
Income $150,000 - $199,999
Income $200,000 - $249,999
Income $250,000 - $499,999
Income $500,000 or more

3,869
277
180
182
245
272
203
262
241
231
405
503
471
204
77
78
21
11
5

Median Household Income

7.16%
4.65%
4.70%
6.33%
7.03%
5.25%
6.77%
6.23%
5.97%
10.47%
13.00%
12.17%
5.27%
1.99%
2.02%
0.54%
0.28%
0.13%

$46,562

Householder Age 60 - 64
Income less than $10,000
Income $10,000 - $14,999
Income $15,000 - $19,999
Income $20,000 - $24,999
Income $25,000 - $29,999
Income $30,000 - $34,999
Income $35,000 - $39,999
Income $40,000 - $44,999
Income $45,000 - $49,999
Income $50,000 - $59,999
Income $60,000 - $74,999
Income $75,000 - $99,999
Income $100,000 - $124,999
Income $125,000 - $149,999
Income $150,000 - $199,999
Income $200,000 - $249,999
Income $250,000 - $499,999
Income $500,000 or more

3,227
249
164
167
218
238
172
229
196
204
318
400
364
159
60
62
16
9
3

Median Household Income
Prepared On: Fri Jul 30, 2010

%

3

Of 11

4,267
225
128
131
132
180
191
207
218
153
362
815
592
470
215
135
63
37
14

%

2014
Projection

5.27%
3.00%
3.07%
3.09%
4.22%
4.48%
4.85%
5.11%
3.59%
8.48%
19.10%
13.87%
11.01%
5.04%
3.16%
1.48%
0.87%
0.33%

$63,814

7.72%
5.08%
5.18%
6.76%
7.38%
5.33%
7.10%
6.07%
6.32%
9.85%
12.40%
11.28%
4.93%
1.86%
1.92%
0.50%
0.28%
0.09%

$44,505
Page

2009
Estimate

5,166
325
183
210
200
254
299
285
277
201
485
872
648
484
204
131
71
28
11

4.88%
2.73%
2.83%
2.79%
3.34%
3.95%
4.06%
4.55%
4.49%
7.27%
14.45%
18.01%
10.94%
7.01%
4.77%
1.86%
1.56%
0.47%

$69,444

6.29%
3.54%
4.07%
3.87%
4.92%
5.79%
5.52%
5.36%
3.89%
9.39%
16.88%
12.54%
9.37%
3.95%
2.54%
1.37%
0.54%
0.21%

$57,212

Prepared By:
Nielsen Solution Center 1 800 866 6511

Prepared For:

4,880
238
133
138
136
163
193
198
222
219
355
705
879
534
342
233
91
76
23

%

© 2010 The Nielsen Company. All rights reserved.

5,325
289
166
163
185
201
237
271
277
244
404
805
872
511
338
205
79
58
19
$64,197

5.43%
3.12%
3.06%
3.47%
3.77%
4.45%
5.09%
5.20%
4.58%
7.59%
15.12%
16.38%
9.60%
6.35%
3.85%
1.48%
1.09%
0.36%

Senior Life 2009

Radius 1: 12030 N 113TH AVE, YOUNGTOWN, AZ 85363-1241, 0.00 - 5.00 Miles, Total
2000
Census

Household Income by Age of Householder
Householder Age 65 - 69
Income less than $10,000
Income $10,000 - $14,999
Income $15,000 - $19,999
Income $20,000 - $24,999
Income $25,000 - $29,999
Income $30,000 - $34,999
Income $35,000 - $39,999
Income $40,000 - $44,999
Income $45,000 - $49,999
Income $50,000 - $59,999
Income $60,000 - $74,999
Income $75,000 - $99,999
Income $100,000 - $124,999
Income $125,000 - $149,999
Income $150,000 - $199,999
Income $200,000 - $249,999
Income $250,000 - $499,999
Income $500,000 or more

6,040
381
430
594
565
623
617
552
407
339
506
374
380
123
48
65
18
14
4

Median Household Income

6.31%
7.12%
9.83%
9.35%
10.31%
10.22%
9.14%
6.74%
5.61%
8.38%
6.19%
6.29%
2.04%
0.79%
1.08%
0.30%
0.23%
0.07%

$33,459

Householder Age 70 - 74
Income less than $10,000
Income $10,000 - $14,999
Income $15,000 - $19,999
Income $20,000 - $24,999
Income $25,000 - $29,999
Income $30,000 - $34,999
Income $35,000 - $39,999
Income $40,000 - $44,999
Income $45,000 - $49,999
Income $50,000 - $59,999
Income $60,000 - $74,999
Income $75,000 - $99,999
Income $100,000 - $124,999
Income $125,000 - $149,999
Income $150,000 - $199,999
Income $200,000 - $249,999
Income $250,000 - $499,999
Income $500,000 or more

5,647
377
433
568
547
598
588
512
363
304
438
331
330
115
43
66
18
13
5

Median Household Income
Prepared On: Fri Jul 30, 2010

%

4

Of 11

5,898
350
289
392
442
484
460
437
474
362
585
634
494
252
103
62
44
21
12

%

2014
Projection

5.93%
4.90%
6.65%
7.49%
8.21%
7.80%
7.41%
8.04%
6.14%
9.92%
10.75%
8.38%
4.27%
1.75%
1.05%
0.75%
0.36%
0.20%

$41,000

6.68%
7.67%
10.06%
9.69%
10.59%
10.41%
9.07%
6.43%
5.38%
7.76%
5.86%
5.84%
2.04%
0.76%
1.17%
0.32%
0.23%
0.09%

$32,564
Page

2009
Estimate

5,857
362
305
441
492
485
473
456
471
361
576
538
417
221
111
62
45
29
12

5.63%
4.37%
5.85%
6.21%
7.05%
7.40%
6.89%
6.63%
6.53%
9.74%
11.16%
11.46%
5.30%
2.35%
1.61%
0.93%
0.58%
0.32%

$44,973

6.18%
5.21%
7.53%
8.40%
8.28%
8.08%
7.79%
8.04%
6.16%
9.83%
9.19%
7.12%
3.77%
1.90%
1.06%
0.77%
0.50%
0.20%

$39,059

Prepared By:
Nielsen Solution Center 1 800 866 6511

Prepared For:

6,908
389
302
404
429
487
511
476
458
451
673
771
792
366
162
111
64
40
22

%

© 2010 The Nielsen Company. All rights reserved.

6,599
391
295
414
479
490
499
463
461
457
653
658
579
345
173
113
58
50
20
$42,906

5.93%
4.47%
6.27%
7.26%
7.43%
7.56%
7.02%
6.99%
6.93%
9.90%
9.97%
8.77%
5.23%
2.62%
1.71%
0.88%
0.76%
0.30%

Senior Life 2009

Radius 1: 12030 N 113TH AVE, YOUNGTOWN, AZ 85363-1241, 0.00 - 5.00 Miles, Total
2000
Census

Household Income by Age of Householder
Householder Age 75 - 79
Income less than $10,000
Income $10,000 - $14,999
Income $15,000 - $19,999
Income $20,000 - $24,999
Income $25,000 - $29,999
Income $30,000 - $34,999
Income $35,000 - $39,999
Income $40,000 - $44,999
Income $45,000 - $49,999
Income $50,000 - $59,999
Income $60,000 - $74,999
Income $75,000 - $99,999
Income $100,000 - $124,999
Income $125,000 - $149,999
Income $150,000 - $199,999
Income $200,000 - $249,999
Income $250,000 - $499,999
Income $500,000 or more

9,278
646
911
1,000
928
918
723
661
584
427
840
564
496
262
82
91
71
55
19

Median Household Income

6.96%
9.82%
10.78%
10.00%
9.89%
7.79%
7.12%
6.29%
4.60%
9.05%
6.08%
5.35%
2.82%
0.88%
0.98%
0.77%
0.59%
0.20%

$31,633

Householder Age 80 - 84
Income less than $10,000
Income $10,000 - $14,999
Income $15,000 - $19,999
Income $20,000 - $24,999
Income $25,000 - $29,999
Income $30,000 - $34,999
Income $35,000 - $39,999
Income $40,000 - $44,999
Income $45,000 - $49,999
Income $50,000 - $59,999
Income $60,000 - $74,999
Income $75,000 - $99,999
Income $100,000 - $124,999
Income $125,000 - $149,999
Income $150,000 - $199,999
Income $200,000 - $249,999
Income $250,000 - $499,999
Income $500,000 or more

6,234
512
693
754
650
600
474
427
375
269
493
340
307
141
55
63
40
32
9

Median Household Income
Prepared On: Fri Jul 30, 2010

%

5

Of 11

6,820
446
421
601
634
594
560
510
451
371
562
626
477
266
126
77
31
50
17

%

2014
Projection

6.54%
6.17%
8.81%
9.30%
8.71%
8.21%
7.48%
6.61%
5.44%
8.24%
9.18%
6.99%
3.90%
1.85%
1.13%
0.45%
0.73%
0.25%

$36,512

8.21%
11.12%
12.09%
10.43%
9.62%
7.60%
6.85%
6.02%
4.32%
7.91%
5.45%
4.92%
2.26%
0.88%
1.01%
0.64%
0.51%
0.14%

$29,230
Page

2009
Estimate

6,349
455
431
617
629
568
514
444
418
325
512
533
409
234
95
59
38
51
17

6.00%
5.06%
7.49%
8.58%
8.29%
7.88%
7.52%
6.58%
5.59%
8.48%
9.64%
8.59%
4.73%
2.35%
1.52%
0.57%
0.79%
0.33%

$39,457

7.17%
6.79%
9.72%
9.91%
8.95%
8.10%
6.99%
6.58%
5.12%
8.06%
8.40%
6.44%
3.69%
1.50%
0.93%
0.60%
0.80%
0.27%

$34,612

Prepared By:
Nielsen Solution Center 1 800 866 6511

Prepared For:

6,971
418
353
522
598
578
549
524
459
390
591
672
599
330
164
106
40
55
23

%

© 2010 The Nielsen Company. All rights reserved.

6,325
431
374
519
571
559
480
445
412
360
528
580
482
275
139
67
30
57
15
$37,562

6.81%
5.91%
8.21%
9.03%
8.84%
7.59%
7.04%
6.51%
5.69%
8.35%
9.17%
7.62%
4.35%
2.20%
1.06%
0.47%
0.90%
0.24%

Senior Life 2009

Radius 1: 12030 N 113TH AVE, YOUNGTOWN, AZ 85363-1241, 0.00 - 5.00 Miles, Total
2000
Census

Household Income by Age of Householder
Householder Age 85 and over
Income less than $10,000
Income $10,000 - $14,999
Income $15,000 - $19,999
Income $20,000 - $24,999
Income $25,000 - $29,999
Income $30,000 - $34,999
Income $35,000 - $39,999
Income $40,000 - $44,999
Income $45,000 - $49,999
Income $50,000 - $59,999
Income $60,000 - $74,999
Income $75,000 - $99,999
Income $100,000 - $124,999
Income $125,000 - $149,999
Income $150,000 - $199,999
Income $200,000 - $249,999
Income $250,000 - $499,999
Income $500,000 or more

%

4,258
448
580
539
442
409
307
272
202
178
319
197
165
72
40
41
25
15
6

Median Household Income

10.52%
13.62%
12.66%
10.38%
9.61%
7.21%
6.39%
4.74%
4.18%
7.49%
4.63%
3.88%
1.69%
0.94%
0.96%
0.59%
0.35%
0.14%

$26,463
2000
Census

Households by Household Income
Total Households
Income less than $15,000
Income $15,000 - $24,999
Income $25,000 - $34,999
Income $35,000 - $49,999
Income $50,000 - $74,999
Income $75,000 - $99,999
Income $100,000 - $149,999
Income $150,000 - $249,999
Income $250,000 - $499,999
Income $500,000 or more

6,798
586
595
760
666
578
532
442
409
357
490
551
359
181
84
77
51
58
23

%

2014
Projection
7,354
599
536
695
705
617
553
501
447
389
585
608
491
249
123
99
54
71
31

8.62%
8.75%
11.18%
9.80%
8.50%
7.83%
6.50%
6.02%
5.25%
7.21%
8.11%
5.28%
2.66%
1.24%
1.13%
0.75%
0.85%
0.34%

$32,017

%

61,482
7,603
9,301
9,530
11,894
12,496
6,111
3,158
1,074
240
74

2009
Estimate

12.37%
15.13%
15.50%
19.35%
20.32%
9.94%
5.14%
1.75%
0.39%
0.12%

2009
Estimate
76,905
6,748
8,231
9,160
13,570
18,130
10,290
8,169
1,895
536
175

%

2014
Projection

8.77%
10.70%
11.91%
17.65%
23.57%
13.38%
10.62%
2.46%
0.70%
0.23%

86,340
6,701
7,901
8,811
14,065
19,569
13,068
12,067
3,136
740
282

$49,610

$61,552

$68,478

Median Household Income

$40,431

$51,025

$57,272

Per Capita Income

$21,722

$24,481

$26,445

Page

6

Of 11

Prepared By:
Nielsen Solution Center 1 800 866 6511

Prepared For:

8.15%
7.29%
9.45%
9.59%
8.39%
7.52%
6.81%
6.08%
5.29%
7.95%
8.27%
6.68%
3.39%
1.67%
1.35%
0.73%
0.97%
0.42%

$34,738

Average Household Income

Prepared On: Fri Jul 30, 2010

%

© 2010 The Nielsen Company. All rights reserved.

%
7.76%
9.15%
10.21%
16.29%
22.67%
15.14%
13.98%
3.63%
0.86%
0.33%

Senior Life 2009

Radius 1: 12030 N 113TH AVE, YOUNGTOWN, AZ 85363-1241, 0.00 - 5.00 Miles, Total
2000
Census

All Owner-Occupied Housing Unit Values
Total All Owner-Occupied Housing Unit Values
Value Less than $20,000
Value $20,000 - $39,999
Value $40,000 - $59,999
Value $60,000 - $79,999
Value $80,000 - $99,999
Value $100,000 - $149,999
Value $150,000 - $199,999
Value $200,000 - $299,999
Value $300,000 - $399,999
Value $400,000 - $499,999
Value $500,000 - $749,999
Value $750,000 - $999,999
Value $1,000,000 or more

%

50,462
1,009
1,763
3,181
8,039
11,405
19,242
4,243
1,299
179
25
29
10
38

Median All Owner-Occupied Housing Unit Value

2.00%
3.49%
6.30%
15.93%
22.60%
38.13%
8.41%
2.57%
0.35%
0.05%
0.06%
0.02%
0.08%

$99,708
2000
Census

Group Quarters by Population Type*

1,533
4
1,503
27

Noninstitutionalized

1,275

0.26%
98.04%
1.76%

2000
Census

Tenure of Occupied Housing Units
Owner Occupied
Renter Occupied

Page

7

Of 11

2014
Projection
70,468
477
1,009
1,196
2,094
2,611
14,291
19,236
23,526
4,016
1,045
620
161
187

0.85%
1.66%
2.15%
3.47%
5.34%
26.85%
29.08%
26.13%
2.72%
0.88%
0.53%
0.12%
0.22%

2009
Estimate
1,483
4
1,457
23

%

2014
Projection
1,507
4
1,482
22

0.27%
98.25%
1.55%

1,244

1,260
2014
Projection

62,845
14,060

Prepared By:
Nielsen Solution Center 1 800 866 6511

Prepared For:

%
0.68%
1.43%
1.70%
2.97%
3.71%
20.28%
27.30%
33.39%
5.70%
1.48%
0.88%
0.23%
0.27%

$185,237

2009
Estimate

50,458
10,886

Prepared On: Fri Jul 30, 2010

62,845
534
1,044
1,353
2,182
3,354
16,875
18,278
16,421
1,707
551
336
73
136

%

$166,632

%

Institutionalized:
Correctional Institutions
Nursing Homes
Other Institutions

2009
Estimate

© 2010 The Nielsen Company. All rights reserved.

70,468
15,872

%
0.27%
98.34%
1.46%

Senior Life 2009

Radius 1: 12030 N 113TH AVE, YOUNGTOWN, AZ 85363-1241, 0.00 - 5.00 Miles, Total
2000 Tenure By Age of Householder

Total

%

Total Households
Owner Occupied
Householder 55 to 59 Years
Householder 60 to 64 Years
Householder 65 to 74 Years
Householder 75 to 84 Years
Householder 85 and over

61,369
50,462
2,923
3,307
10,608
11,912
4,350

5.79%
6.55%
21.02%
23.61%
8.62%

Renter Occupied
Householder 55 to 59 Years
Householder 60 to 64 Years
Householder 65 to 74 Years
Householder 75 to 84 Years
Householder 85 and over

10,907
353
436
976
1,939
1,823

3.24%
4.00%
8.95%
17.78%
16.71%

2000 Pop 65 and over by HH Type and Relationship

Total

Total for Pop 65 and over
In Households:
In Family Households:
Householder
Male
Female
Spouse
Parent
Other Relatives
Nonrelatives
In Non-Family Households:
Male householder
Living Alone
Not Living Alone
Female Householder
Living Alone
Not Living Alone
Nonrelatives
In Group Quarters:
Institutionalized population
Noninstitutionalized population

Prepared On: Fri Jul 30, 2010

Page

8

Of 11

%

48,968
46,977
31,514
16,435
14,745
1,690
13,675
666
647
91
15,462
3,585
3,314
271
11,436
11,196
240
441

64.36%
33.56%
30.11%
3.45%
27.93%
1.36%
1.32%
0.19%
31.58%
7.32%
6.77%
0.55%
23.35%
22.86%
0.49%
0.90%

1,992
1,476
515

3.01%
1.05%

Prepared By:
Nielsen Solution Center 1 800 866 6511

Prepared For:

© 2010 The Nielsen Company. All rights reserved.

Senior Life 2009

Radius 1: 12030 N 113TH AVE, YOUNGTOWN, AZ 85363-1241, 0.00 - 5.00 Miles, Total
2000 Mobility and Disability Civilian
Noninstitutionalized Persons Age 16 and over

Totals

Total Disability
Sensory Disability
Physical Disability
Mental Disability
Self-Care Disability
Go-Outside-Home Disability

45,064
7,288
15,661
6,279
4,151
11,685

2000 Mobility and Disability Civilian
Noninstitutionalized Persons Age 16 and over

Totals

Disability by Sex by Age
Male
With a Disability
No Disability
Female
With a Disability
No Disability

Totals

Total Units
With Telephone
No Telephone

9

Of 11

44.97%
12.76%
32.21%
55.03%
15.28%
39.75%

%

61,369
60,742
627

Page

16.17%
34.75%
13.93%
9.21%
25.93%

%

113,162
50,890
14,436
36,455
62,272
17,291
44,981

2000 Occupied Housing Units

Prepared On: Fri Jul 30, 2010

%

98.98%
1.02%

65 Yrs
And Over
31,660
5,854
11,435
3,775
3,008
7,589
65 - 74
Yrs
19,268
8,462
2,563
5,899
10,806
2,721
8,085
65 - 74
Yrs
11,584
11,513
72

%
18.49%
36.12%
11.92%
9.50%
23.97%

%
43.92%
13.30%
30.62%
56.08%
14.12%
41.96%

%
99.39%
0.62%

Prepared By:
Nielsen Solution Center 1 800 866 6511

Prepared For:

© 2010 The Nielsen Company. All rights reserved.

75 Yrs
And Over
28,224
11,430
5,061
6,369
16,794
7,561
9,233
75 Yrs
And Over
20,025
19,935
90

%
40.50%
17.93%
22.57%
59.50%
26.79%
32.71%

%
99.55%
0.45%

Senior Life 2009

Radius 1: 12030 N 113TH AVE, YOUNGTOWN, AZ 85363-1241, 0.00 - 5.00 Miles, Total
2000 Census Poverty Status in 1999 Families
By Household Type by Age of Householder

Totals

Population with Known Poverty Status
Married-Couple Families
In other Families
Male householder, no wife present
Female householder, no husband present
Unrelated individuals
Income At or Above Poverty Level
Married-Couple Families
In other Families
Male householder, no wife present
Female householder, no husband present
Unrelated individuals
Income Below Poverty Level
Married-Couple Families
In other Families
Male householder, no wife present
Female householder, no husband present
Unrelated individuals

Prepared On: Fri Jul 30, 2010

%

140,007
97,510
17,706
5,904
11,802
24,791
130,523
94,058
14,704
4,925
9,778
21,761
9,484
3,451
3,002
978
2,024
3,031

Page

10

Of 11

69.65%
12.65%
4.22%
8.43%
17.71%
93.23%
67.18%
10.50%
3.52%
6.98%
15.54%
6.77%
2.46%
2.14%
0.70%
1.45%
2.16%

65 - 74
Yrs
19,268
13,823
788
148
640
4,656
18,461
13,504
745
135
610
4,211
808
319
43
13
30
445

%
71.74%
4.09%
0.77%
3.32%
24.16%
95.81%
70.09%
3.87%
0.70%
3.17%
21.85%
4.19%
1.66%
0.22%
0.07%
0.16%
2.31%

Prepared By:
Nielsen Solution Center 1 800 866 6511

Prepared For:

© 2010 The Nielsen Company. All rights reserved.

75 Yrs
And Over
28,224
15,743
1,160
332
828
11,321
26,546
15,381
1,078
297
781
10,087
1,678
361
82
35
47
1,235

%
55.78%
4.11%
1.18%
2.93%
40.11%
94.05%
54.50%
3.82%
1.05%
2.77%
35.74%
5.95%
1.28%
0.29%
0.12%
0.17%
4.38%

Senior Life 2009

Appendix: Area Listing
Area Name:
Type: Radius 1

Reporting Detail: Aggregate

Reporting Level: Block Group

Radius Definition:
12030 N 113TH AVE

Latitude/Longitude 33.593614

YOUNGTOWN, AZ 85363-1241

Radius

0.00

Project Information:
Site:

1

Order Number: 969045949

Prepared On: Fri Jul 30, 2010

Page

11

Of 11

Prepared By:
Nielsen Solution Center 1 800 866 6511

Prepared For:

© 2010 The Nielsen Company. All rights reserved.

-

-112.303028
5.00

HEALTHTRUST

Engagement Letter

ADDENDA

HEALTHTRUST

Appraiser Qualifications

ADDENDA

ALAN C. PLUSH, MAI
EMPLOYMENT
HEALTHTRUST LLC – February 2003 to present
Sarasota, Florida
President, Senior Partner (Healthcare and Senior Housing Valuation)
PRICEWATERHOUSECOOPERS, LLP – 1999 to February, 2003
Sarasota, Florida
Director (Senior Advisory Services, Global Real Estate Valuation Group)
GULF/ATLANTIC VALUATION SERVICES, INC. – 1994 to 1999
Sarasota, Florida
President (Healthcare & Retirement Valuation, Market Studies, and Feasibility Reports)
PARDUE, HEID, CHURCH, SMITH AND WALLER OF SARASOTA, INC. – 1992 to 1994
Sarasota, Florida
Managing Partner (Healthcare & Retirement Valuation, Market Studies, and Feasibility Reports)
PARDUE, HEID, CHURCH, SMITH AND WALLER OF TAMPA, INC. – 1991 to 1992
Tampa, Florida
Senior Appraiser (Healthcare & Retirement Valuation)
SMITH PARKE AND COMPANY – 1984 to 1990
Sarasota, Florida
Vice President (Commercial & Healthcare Real Estate Valuation)
EDUCATION
UNIVERSITY OF FLORIDA
Bachelor of Science, 1981
Business Administration
MANATEE JUNIOR COLLEGE
AA Degree
APPRAISAL INSTITUTE
Standards of Professional Practice
Principles of Real Estate Appraising
Basic Valuation Procedures
Capitalization Theory & Techniques ‐ Part A
Capitalization Theory & Techniques ‐ Part B
Case Studies in Real Estate Valuation
Report Writing and Valuation Analysis
Demonstration Appraisal Report
Comprehensive Examination

CONTINUING EDUCATION
Online Analyzing Operating Expenses (2010)
Office Building Valuation (2008)
FHA and the Appraisal Process (2008)
Forecasting Revenue (2008)
Florida State Law Update for Real Estate Appraisers (2004, 2006, 2008)
Professional Standards USPAP Update, Core Law for Appraisers (1994‐2007)
Business Practice and Ethics (2006)
Online Appraising From Blueprints and Specifications (2006)
Online Analyzing Operating Expenses (2006)
Evaluating Commercial Construction (2006)
Online Appraisal of Nursing Facilities (2005)
15‐hour National USPAP Course (2003, 2004)
Analyzing Commercial Lease Causes (2002)
Standards of Prof. Practice, Part C (1999, 2001)
Regression Analysis in Appraisal Practice (2001)
Real Estate Value Cycles (2001)
Advanced Applications (2000)
Litigation Valuation Overview (1998)
Appraising From Blue Prints & Specifications (1998)
Understanding and Using DCF Software (1997)
Appraisal of Nursing Facilities (1996)
Standards of Professional Practice, Part A & B (1996)
Law/Regulations, Richmond Association of REALTORS (1995)
National Health Lawyers Association Annual Review (1994)
Maximizing the Value of an Appraisal Practice (1994)
CERTIFICATIONS & AFFILIATIONS
State‐Certified General Appraiser ‐ G00502 (Alabama)
State‐Certified General Appraiser ‐ 31350 (Arizona)
State‐Certified General Appraiser ‐ CG1371N (Arkansas)
State‐Certified General Appraiser ‐ AG027998 (California)
State‐Certified General Appraiser ‐ CG40023432 (Colorado)
State‐Certified General Appraiser – RCG.0000503 (Connecticut)
State‐Certified General Appraiser ‐ RZ 0000566 (Florida)
State‐Certified General Appraiser ‐ 3913 (Georgia)
State‐Certified General Appraiser ‐ 153.0001571 (Illinois)
State‐Certified General Appraiser ‐ CG49400124 (Indiana)
State‐Certified General Appraiser ‐ 002055 (Kentucky)
State‐Certified General Appraiser ‐ CG00000688 (Maine)
State‐Certified General Appraiser ‐ 10806 (Maryland)
State‐Certified General Appraiser ‐ 2946 (Massachusetts)
State‐Certified General Appraiser ‐ 1201003568 (Michigan)
State‐Certified General Appraiser ‐ 20076706 (Minnesota)
State‐Certified General Appraiser ‐ GA‐468 (Mississippi)
State‐Certified General Appraiser ‐ 589RAG (Montana)
State‐Certified General Appraiser ‐ CG970189R (Nebraska)

State‐Certified General Appraiser ‐ NHCG313 (New Hampshire)
State‐Certified General Appraiser ‐ 42RG00139300 (New Jersey)
State‐Certified General Appraiser ‐ 46000010343 (New York)
State‐Certified General Appraiser ‐ A5418 (North Carolina)
State‐Certified General Appraiser ‐ 000398459 (Ohio)
State‐Certified General Appraiser ‐ GA‐001255‐L (Pennsylvania)
State‐Certified General Appraiser ‐ A00681G (Rhode Island)
State‐Certified General Appraiser‐CG6708 (South Carolina)
State‐Certified General Appraiser ‐ TX‐1326778‐G (Texas)
State‐Certified General Appraiser ‐ 4001‐003762 (Virginia)
State‐Certified General Appraiser ‐ 1100985 (Washington)
State of Florida Building Contractor Class B (Inactive) CB C035068
MAI
Alan C. Plush, MAI, Member, Appraisal Institute
OWNERSHIP ACTIVITIES
Proformance Senior Living – 9 assets, sold all in 2006
Rittenhouse Senior Living – 9 assets currently owned, contracted for purchase or under development
BOARD SEATS
Investment Committee, SHP Investments (on behalf of CalPers Investment Fund), 2002‐2007.
American Seniors Housing Association (ASHA), 2001‐present.
SPEAKING ENGAGEMENTS – BANKS
Regions Bank
Private Bank
PNC Bank/ARCS
GE Healthcare Financial Services
HSH Nordbank
Fannie Mae DUS Lenders Conference
Fleet Bank, Albany, New York
Bank United Annual Correspondents Conference, Dallas, Texas
Key Bank, Cleveland, Ohio
Bank of America Healthcare Task Force, Chicago, Illinois
NationsBank, Baltimore, Maryland
Prudential Life Insurance/Insignia Mortgage, Atlanta, Georgia
LECTURE ASSIGNMENTS & SEMINARS
U.S. Department of Housing and Urban Development, Chicago, IL, 2010
Attendee: Lean Section 232 Lender Underwriting Training
National Investment Conference (NIC), San Diego, CA , 2010
Speaker, “Practical Realities of HUD Lean & Underwriting & Valuation of Assets”: Stabilized Properties

National Medicaid/Medicare Conference, Sarasota, FL 1994 to 1999, 2004 ‐ Present
Founding Member/Speaker/Developer/Co‐Sponsor (with GMAC Commercial Mortgage & Capstone
Capital)
National Investment Conference (NIC), Washington DC, 1991 ‐ Present
Attendee, Contributor, Sponsor
2b Alive Mexico Independent and Assisted Living Industry Summit & Expo, La Jolla, CA, 2008
Speaker, “Current Trends in the valuation of Healthcare and Senior Housing Assets”
N.C Healthcare Association, 2008
Speaker, “Market Trends for Healthcare and Senior Housing Assets”
NIC Western Regional Conference, Las Vegas, NV, 2008
Speaker, “Current Valuation Trends in the Healthcare and Senior Housing Industry”
International Association of Assessing Officers (IAAO) annual conferences, Miami Beach, FL, 2001
Speaker, “Valuation Issues for Assessment of Senior Housing and Healthcare Facilities”
International Association of Assessing Officers, Florida Chapter, Clearwater, FL, 2001
Speaker, “Valuation Issues for Assessment of Senior Housing and Healthcare Facilities”
Commercial Property News “Seniors Housing Symposium”, New York City, NY, 1999 – 2001
Co‐sponsor and presenter, “Market Trends in the Seniors Housing Industry”
Information Management Network “Seniors Housing Finance Symposium”, New York City, NY, 1998 ‐1999
Co‐sponsor and presenter, “Market Trends in the Seniors Housing Industry”
National Association of Real Estate Financial Intermediaries Annual Meeting, 1997, 1999
Speaker, “Transaction Overview and Unique Valuation Issues Associated with Congregate Properties”
Massachusetts ALFA, Boston, MA, 1997
Speaker, “Development Trends in the Assisted Living Industry”
Essex County Assessor’s Meeting, Danvers, MA, 1997
Speaker, “Valuation Techniques for Assisted Living Properties”
Assisted Living Federation of America (ALFA) Spring Conference, Phoenix, AZ, 1997
Speaker, “The 1994‐1996 Transaction Survey of Congregate and Assisted Living Industries”
Appraisal Institute, Boston Chapter, 1997
Attendee, “Healthcare and Retirement Property Appraisal Seminar”
Plymouth County Assessor’s Meeting, Duxbury, MA, 1996
Speaker, “Assessing Healthcare and Retirement Properties”
International Association of Assessing Officers (IAAO) annual conferences, Seattle, Washington, 1994

Speaker, “Methods Used to Appraise Healthcare and Retirement Properties”
PUBLISHED ARTICLES
Annual co author and contributor to The State of Seniors Housing, co published by ASHA, NIC, AAHSA
Co‐author with ASHA of the annual survey of transactions and economic indicators, 2002‐Present.
Co‐author with ASHA of the 2000 Seniors Housing absorption study.
Co‐author with ALFA (Assisted Living Federation of America) and ASHA (American Seniors Housing
Association) of the 1997, 1998 and 1999 annual survey of transactions and economic indicators.
The Appraisal Journal, Appraisal Institute, July 1995
“USPAP Competency Provision and the Appraisal of Healthcare/Retirement Facilities”
Force Financial, Quarterly Newsletter, 1995
“The Impact of Assisted Living on CCRCs”
APPEARANCE AS AN EXPERT WITNESS
SNF, District Court, Polk County, Iowa‐2009
CCRC, Tax appeal case, Atlanta, Georgia – 2008
SNF, Federal Bankruptcy Court, Tampa, Florida – 1999
IL/AL, Superior Court, Lansing, Michigan – prior to 2000
SNF, Circuit Court, Polk County, Florida – prior to 2000
Circuit Court, Duval County, Florida – prior to 2000
SPECIALIZED EXPERTISE & EXPERIENCE
Mr. Plush has specialized exclusively in commercial real estate valuation throughout his career and property
types he has appraised have included: condominiums, apartment complexes, single‐family subdivisions, golf
courses and planned unit developments, vacant land, office buildings, and a variety of retail structures. He is
currently the Senior Partner of HealthTrust, LLC, a specialty senior housing and healthcare appraisal and
consulting firm. Mr. Plush oversees a staff of highly qualified appraisers at the Sarasota office and, further,
has additional resources available from offices in Boston, Massachusetts, and Birmingham, Alabama. In late
1986, Mr. Plush began specializing in the appraisal of a large number of healthcare properties. With a
foundation in the appraisal of adult congregate living facilities, his specialized expertise has grown
substantially. The specialized service niche was created to satisfy the ever increasing demand for reliable
and well‐documented healthcare/retirement valuations, market studies and feasibility reports, as well as
market rent/lease analysis. Mr. Plush has overseen the growth of HealthTrust to include its four U.S.
locations and an annual volume in excess of 1,000 healthcare and senior housing appraisals in addition to
ownership, operations and brokerage activities.
CORPORATE/INSTITUTIONAL CLIENTS SERVED
Bank of America

Citizens Bank

Key Bank

Merrill Lynch
PNC Bank
Marine Midland
LaSalle Bank
GMAC‐CM ‐ Healthcare
MediTrust
First NH Bank
Capstone Capital
Brookdale Living
Senior Campus Living
Banque Paribas
Glaser Financial
Goldman Sachs
SIS Bank
PRN Mortgage
Peoples Heritage Bank
AEW Capital Management
Fremont Investment & Loan
Manufacturers Bank
Bancorp South
Bank One Corp

Signet Bank
New York HFA
USTrust
SouthTrust Bank of Alabama
Prudential Insurance
UBS Warburg Pincus
Bank of Ireland
Norwest Bank
Provident Bank of Maryland
Dynex Healthcare
Continental Wingate
DLJ
Archon Financial
Holiday Retirement
Balanced Care
AMRESCO
AmSouth Bank
Zions First National Bank
Wells Fargo
Greystone & Co.
HSBC Bank USA

Fleet National Bank
First Union
M & T Bank
Senior Lifestyles
Riggs Bank of Wash. DC
Emeritus Corporation
CareMatrix
BankBoston
Heller Financial
Bank United
Credit Suisse First Boston
PhyMatrix
Berkshire Bank
Sunrise Assisted Living
Mercantile Safe Deposit
Senior Campus Living
Solomon Smith Barney
Allfirst Mortgage Corp.
Union Planters
Capital Company of America
KBC Bank of New York

COLLEEN H. BLUMENTHAL, MAI
EMPLOYMENT
HEALTHTRUST LLC ‐ 2003 to Present
Sarasota, Florida
Managing Partner, Partner (Healthcare & Retirement Real Estate Valuation & Market Studies)
PRICEWATERHOUSECOOPERS LLP ‐ 1999 to 2002
Sarasota, Florida
Senior Manager (Healthcare & Retirement Real Estate Valuation & Market Studies)
GULF/ATLANTIC VALUATION SERVICES, INC. – 1994 to 1999
Sarasota, Florida
Vice President/Partner (Healthcare & Retirement Real Estate Valuation & Market Studies)
PARDUE, HEID, CHURCH, SMITH AND WALLER OF SARASOTA, INC. – 1992 to 1994
Sarasota, Florida
Senior Healthcare Appraiser (Healthcare & Retirement Real Estate Valuation & Market Studies)
E. GORDON TUCKER ASSOCIATES, INC. – 1990 to 1992
Sarasota, Florida
Appraiser (Real Estate Valuation)
PANNELL KERR FORSTER – 1988 to 1990
Miami, Florida
Consultant, Real Estate Advisory Services –1989 to 1990
Consultant, Management Advisory Services – 1988 to 1989
(Hospitality Valuation & Market Studies)
PANNELL KERR FORSTER – 1987
Denver, Colorado
Research Assistant (Hospitality Valuation & Market Studies)
EDUCATION
UNIVERSITY OF DENVER
Bachelor of Science Degree, 1987
Business Administration
AMERICAN INSTITUTE OF REAL ESTATE APPRAISERS AND APPRAISAL INSITUTE
Case Studies in Real Estate Valuation (1992&8)
Report Writing (1993)
Standards of Professional Practice (1991, 2000, 2003)

Capitalization Theory and Techniques, Part B (1992)
Real Estate Principles (1990)
Basic Valuation (1990)
Capitalization Theory and Techniques, Part A (1990)
CONTINUING EDUCATION
7‐Hour USPAP Update (1994,96,98,2000,02,04,05,06,07,08)
Florida State Law, Tampa, FL (2007)
15‐Hour USPAP, Denver, CO (2003) & Miami, FL (2006)
Business Practices and Ethics, Orlando, FL (2005)
Condemnation Appraising (2005)
Separating Real and Personal Property from Intangible Business Assets (2003)
Third Party MAP Technical Training, Jacksonville, FL (2000)
Third Party LEAN Technical Training, Seattle, WA (2008)
Partial Interests (1999)
Special Purpose Properties (1996)
Highest and Best Use Analysis (1994)
General Demo Appraisal Report Writing (2006)
Uniform Standards for Federal Land Acquisitions (2006)
CERTIFICATIONS & AFFILIATIONS
State‐Certified General Appraiser ‐ G00833 (Alabama)
State‐Certified General Appraiser ‐ 31276 (Arizona)
State‐Certified General Appraiser ‐ AG043383 (California)
State‐Certified General Appraiser ‐ CG100026253 (Colorado)
State‐Certified General Appraiser ‐ X1‐0000402 (Delaware)
State‐Certified General Appraiser ‐ RZ0001722 (Florida)
State‐Certified General Appraiser ‐ 299798 (Georgia)
State‐Certified General Appraiser ‐ CG40600349 (Indiana)
State‐Certified General Appraiser ‐ 1201072933 (Michigan)
State‐Certified General Appraiser ‐ CG270068R (Nebraska)
State‐certified General Appraiser ‐ 42RG00223800 (New Jersey)
State‐Certified General Appraiser ‐ 46000048804 (New York)
State‐Certified General Appraiser ‐ A6404 (North Carolina)
State‐Certified General Appraiser ‐ 2003012188 (Ohio)
State‐Certified General Appraiser ‐ GA003428 (Pennsylvania)
State‐Certified General Appraiser‐ CG6709 (South Carolina)
State‐Certified General Appraiser ‐ 00003618 (Tennessee)
State‐Certified General Appraiser ‐ 1334017 (Texas)
Colleen Blumenthal, MAI, Member, Appraisal Institute
Treasurer — Appraisal Institute, Gulf Coast Florida Chapter (1992)
Panel Member — FL Dept. of Commerce ‐ Div. of Economic Development Tourism Seminar
Licensed Real Estate Salesman — State of Florida (Inactive)

CONFERENCES & SEMINARS
Medicaid/Medicare Seminar, Sarasota, FL, 1994‐99, 2000‐07
National Investment Conference, Washington, DC & Chicago, IL, 1993,94,96, 1998‐08
Young Advisory Council, Washington, DC, 1994,96
SPECIALIZED EXPERTISE & EXPERIENCE
Market demand studies for a variety of seniors housing and healthcare developments throughout
the United States.
Appraisal analyses for continuing care retirement communities (CCRCs), seniors housing
communities, assisted living/memory care residences, hospitals, healthcare facilities, and medical
office buildings located throughout the United States.
Task Force Leader, State of Seniors Housing, 2006 ‐ 2009
Co‐authorship of Impact of Interest Rates on Seniors Housing Capitalization Rates (2004)
Co‐authorship of Investment Trends in the Assisted Living Industry (1997‐8); co‐authorship of
Investment Trends in the Senior Housing Industry (1999, 2002, 2003, 2005, 2006)
Authorship of Healthcare and Retirement Property Appraisal Seminar.
Authorship of Valuation Issues for Healthcare and Retirement Property Assessment Seminar.
Co‐author with ASHA of Seniors Housing Absorption Trends 2000.
CORPORATE/INSTITUTIONAL CLIENTS SERVED (PARTIAL LIST)
AEW
Aureus Group
Bank of America
Brookdale Living Communities
CapMark
Collateral Real Estate Capital, LLC
Eriksson Retirement Communities
Fifth‐Third Bank
Holiday Retirement
HSH‐Nordbank
GE Healthcare Finance

KeyBank
JP Morgan/Chase
Johnson Capital
Lancaster Pollard
Love Funding
Morgan Stanley
Prudential Mortgage Capital Company
Red Mortgage Capital
Sunrise Senior Living
Teachers Insurance & Annuities Fund
Wachovia

DAVID REY SALINAS, ASA, MRICS
EMPLOYMENT
HEALTHTRUST LLC – 2003 to Present
Boston, Massachusetts
Partner (Healthcare Valuation and Consulting)
PRICEWATERHOUSECOOPERS, LLP – 1999 to 2003
Boston, Massachusetts
CCRC Product Leader (Senior Advisory Services, Global Real Estate Valuation Group)
GULF/ATLANTIC VALUATION SERVICES, INC. – 1994 to 1999
Boston, Massachusetts
Regional Vice President (Healthcare & Retirement Valuation, Feasibility Studies)
MMC, INC. (MUNICIPAL MANAGEMENT CONSULTANTS, INC.) – 1987 to 1994
Chelmsford, Massachusetts
Staff Appraiser to Senior Commercial Appraiser (Ad‐Valorem Tax Appraisal, Real Estate Valuation)
SELECTIVE MARKETING, INC. – 1985 to 1987
Boston, Massachusetts
Commercial Sales Associate (Commercial Real Estate Sales & Leasing)
EDUCATION
WENTWORTH INSTITUTE OF TECHNOLOGY
Graduate ‐ College of Design & Construction, 1986
APPRAISAL INSTITUTE
General Demonstration Report Writing (2010) – Ft. Lauderdale, FL
Appraising from Blueprints & Specs (2009) – Online
Forecasting Revenue (2008) – Norfolk, VA
Office Building Valuation (2007) – Miami, FL
Analyzing Operating Expenses (2007) – Online, Chicago, IL
Standards of Professional Practice (2008) – Florida International University, Miami, FL
Florida Core Law Update (2006) – Florida Atlantic University, Boca Raton, FL
Pennsylvania Law Update (2005) – Philadelphia, PA
Introduction to Income Capitalization (2005) – Portland, ME
Case Studies in Limited Partnership Valuation (2005) – University of San Diego, CA
Separating Intangible Business Assets (2003) – Tampa, FL
Hotel/Motel Valuation (2003) – Online, Chicago, IL
Appraising Nursing/Congregate Care Facilities (1996) (2003) – Claymont, DE
Comprehensive Appraisal Workshop (2001) – Tampa, FL
Advanced Applications (2000) – Florida Atlantic University, Boca Raton, FL
Economic Real Estate Trends (1999) – Boston, MA
Mock Trial Presentation (1996) – Needham, MA
Narrative Report Writing Seminar (1994) – Norwood, MA
Highest & Best Use Market Analysis (1994) – Norwood, MA
Demonstration Report Writing Seminar (1993) – Norwood, MA
Capitalization Theory & Techniques ‐ Part A (1991) – Tufts University, MA
Capitalization Theory & Techniques ‐ Part B (1991) – Tufts University, MA
Residential Valuation (1990) – Tufts University, MA
Basic Valuation Procedures (1990) – University of San Diego, CA
Principles of Real Estate Appraising (1989) – Dartmouth College, NH

NATIONAL ASSOCIATION OF REALTORS
Commercial Brokerage & Financing (1988)
PRICEWATERHOUSECOOPERS
FAS University (2002) – Disney World, Orlando, FL
CERTIFICATIONS
State‐Certified General Appraiser – 31205 (Arizona)
State‐Certified General Appraiser – A044449 (California)
State‐Certified General Appraiser – RCG.0000896 (Connecticut)
State‐Certified General Appraiser – RZ2617 (Florida)
State‐Certified General Appraiser – 255867 (Georgia)
State‐Certified General Appraiser – CG1533 (Maine)
State‐Certified General Appraiser – 2059 (Massachusetts)
State‐Certified General Appraiser – 1201073275 (Michigan)
State‐Certified General Appraiser – NHCG‐217 (New Hampshire)
State‐Certified General Appraiser – 42RG00190300 (New Jersey)
State‐Certified General Appraiser – 46000039117 (New York)
State‐Certified General Appraiser – 2008001298 (Ohio)
State‐Certified General Appraiser – GA‐003351 (Pennsylvania)
State‐Certified General Appraiser – A00826G (Rhode Island)
State‐Certified General Appraiser – 00211 (Vermont)
MEMBERSHIPS & AFFILIATIONS
David Rey Salinas, Associate Member, Appraisal Institute
American Society of Appraisers – Member, ASA Designation (Certificate 10404)
Royal Institution of Chartered Surveyors, Member No. 1294125 (MRICS)
AAHSA (American Association of Homes and Services for the Aging) – Member
Appraisal Institute, Boston Chapter: Former Co‐Chairman Public Relations Committee
Mass ALFA (Massachusetts Assisted Living Facilities Association) – Member
State of Massachusetts: Licensed Real Estate Salesman (Inactive)
LITIGATION ASSIGNMENTS
Appearance as Expert Witness, Bennington County Superior Court, Bennington, VT – 2009
State of Vermont v. Equinox, II, LLP, Docket No. 127‐3‐09 BNCV
Appearance as Expert Witness, United States Bankruptcy Court, Tampa, FL – 2009
Chestnut Hill Rehab Hospital v. Participant Banks, Case No. 08:08‐BK‐02150‐PMG
Provided Consulting, CCRC Tax Appeal, Reading, PA – 2009
Provided Consulting, CCRC Tax Appeal, Burlington, VT – 2009
Provided Consulting, Entry Fee ILC, Manchester Center, VT – 2009
Provided Consulting, CCRC Tax Appeal, Whiting, NJ – 2009
Prepared Consulting & Appraisal Report, CCRC Tax Appeal, Atlanta, GA – 2008
Park Springs, LLC v. DeKalb County Assessors, Case No. 05CV9893‐1
Provided Consulting, CCRC Tax Appeal, Westchester County, NY – 2004
Provided Consulting, Entry Fee IALC, Duxbury, MA – 1998
Appearance as Expert Witness, Superior Court, Rockingham County, NH – 1993
Town of Durham v. Property Owner Tax Appellant(s) (Expert for Town, 3 Separate Cases)
SPEAKING ENGAGEMENTS – BANKS
Sovereign – Santander: “Global Market Correction, Healthcare Senior Housing & CCRC Market Trends”,
Boston, MA, 2009
Arbor National Mortgage and Law Offices Taylor, Ganson & Perrin, LLP: “CCRCs – Product Overview &
Valuation Techniques”, Boston, MA 2001

SENIOR HOUSING CONFERENCES & SEMINARS
NIC (National Investment Center) – Attendee; Washington DC, 1995, 97, 2007, 08, 09
National Medicaid/Medicare Conference – Co‐Sponsor; Sarasota, FL 1995‐2007
State of Senior Housing Conference – Attendee; New York, NY 1996, 1999, 2001
ASHA (American Seniors Housing Association) – Attendee; Boca Raton, FL 2004
Ziegler Finance + Strategy Conference – Attendee; Chateau ‘Elan, GA 2004; Lake George, NY 2008
La Costa, CA 2009
Ziegler Capital Markets For‐Profit CCRC Symposium – Attendee; Bonita Springs, FL 2009
HERBERT J. SIMS’ Late Winter Conference – Attendee; TPC Sawgrass, FL 2003; Innisbrook Resort, FL 2004;
Walt Disney, FL 2006; Lake Las Vegas Resort, NV 2007; La Costa Resort & Spa, CA 2008
AAHSA (American Association of Homes and Services for the Aging) – Attendee; San Antonio, TX 2005;
San Francisco, CA 2006; Chicago, IL 2009
SELECTED CLIENTS SERVED/INDUSTRY RELATIONSHIPS
Bank of America
Merrill Lynch
PNC Bank
Hong Kong Shanghai Bank Corp (HSBC)
Peoples Bank ‐ Connecticut
GMAC – Commercial Mortgage
Life Care Services Corp (LCS)
Allied Irish Bank (AIB)
The Marshall Group
Erickson Retirement Communities
Mercantile Safe Deposit & Trust
Howard Bank Vermont
Nationwide Health Care Properties – NHCP
KBC Bank Los Angeles
Archdiocese of Boston
Continental Bank
Senior Housing Investment Advisors

Citizens Bank (RBS)
PRN Mortgage
Toronto Dominion ( TD Bank North)
Life Care Centers of America
Commerce Bank
Capmark
Leggat McCall
Bank of Ireland
Sky Bank
Radius Senior Housing
Herbert J. Sims Capital
Westport Senior Living
The Freshwater Group
Huntington Bank
Bank of Scotland
Unity Bank
Chevy Chase Bank

Ziegler Healthcare Capital
Affirmative Equities Company
Ponus Capital
AEW Capital
Credit Suisse First Boston (CSFB)
Sovereign Bank
Rockwood Realty Associates
CapitalSource
Collateral Mortgage
KBC Bank New York
Roskamp Management
HSH Nordbank
G & L Realty
Citizens Bank (Ohio)
Looking Glass
Siemens Financial
M & T Bank

CCRC & ENTRANCE‐FEE INDEPENDENT & ASSISTED LIVING CAMPUS ENGAGEMENTS
Galleria Woods, Birmingham, AL – NFP, entrance fee rental CCRC, valuation/consulting for sponsor, 206 units (3)
Edgehill, Stamford, CT – Upscale, entrance fee, Type A life care CCRC, valuation/consulting for Hospital System, 287 units (2)
The Fairfax, Fort Belvoir, VA – Entrance fee, life care CCRC, valuation for REIT leaseback position, 487 units
The Quadrangle – Haverford, PA – Entrance fee life care CCRC, valuation for REIT leaseback position, 542 units
Rydal Park, Rydal, PA – Not‐for‐profit, entrance fee life care CCRC, renovation, 465 units
Bethany Village, Mechanicsburg, PA – Not‐for‐profit entrance fee rental CCRC, significant expansion, 523 units
Park Regency Village, Chandler, AZ – Owner/Operator; rental CCRC, 186 units
Brandon Wild, Augusta, GA – Not‐for‐profit life care CCRC, hospital partner part ownership sale negotiation
Buckingham, Houston, TX – NFP entrance fee life care CCRC, third party consultant for IRS submission; 325 units
The Cedars, Chapel Hill, NC – Upscale Proposed condo life care CCRC; consultant to investment banker/equity partner, 336 units
University Park, Sarasota, FL –(land only), Proposed CareMatrix CCRC; (Abandoned)
Pennswood Village, Newtown, PA – Existing life care CCRC; proposed for expansion, 405 units
Riderwood Village, Silver Spring, MD – Erickson Retirement Communities; new CCRC, 2,656 units
Riverwoods, Exeter, NH – Managed by Life Care Services Corp, not‐for‐profit CCRC; 261 units
Village of Duxbury, MA – Entrance Fee IALF, private owner, coop, tax appeal case
Glenmeadow, Longmeadow, MA – Entrance Fee IALF, private owner, upscale target market
Carleton‐Willard Village, Bedford, MA – Not‐for‐profit CCRC, substantial renovation.

The Highlands, Pittsford, NY – A Greystone operated CCRC, new construction, 317 units
Cedar Crest, Pequannock, NJ – Erickson Retirement Communities CCRC; 1,865 units
Glen Eddy, Niskayuna, NY – Entrance Fee IALF, new construction, bond issuance, letter of credit
Cypress, Charlotte, NC – Cypress Properties CCRC, Sister Project of Cypress of Hilton Head Island
Ferris Hills, Canandaigua, NY – NFP, FFT Health Systems, bond issuance, letter of credit, 132 units.
Goodwin House, Alexandria, VA – Entry Fee, Not‐for‐profit CCRC, substantial renovation & expansion tower
Tidepointe, Hilton Head, SC – Coop CCRC, Bankruptcy workout, now Hyatt owned/managed
Bentley Village, Naples, FL – A Hyatt community; non‐prototype CCRC acquisition, 743 units
Fox Run Village, Novi, MI – Erickson Retirement Communities CCRC, new construction, 1,815 units
Golden Years, Fort Wayne, IN – Not‐for‐profit CCRC, private owner; 233 units
Blakehurst CCRC, Baltimore (Towson), MD – Life Care Services Corporation CCRC; 227 units (2)
Caren Coop House, Adelphia, MD – Entry Fee ILF, new construction; Coop ownership
Hunt Community, Nashua, NH – not‐for‐profit owner/operator CCRC, major renovation
Brooksby Village, Peabody, MA – Erickson Retirement Communities CCRC; new project, 1702 units (2)
Applewood, Amherst, MA – private, not‐for‐profit owner/operator CCRC, off site skilled nursing
Reeds Landing, Springfield, MA – Not‐for‐profit owner CCRC, managed by Life Care Services Corp. (2)
Coburg Village, Clifton Park, NY – Original entrance Fee IALF, changed to rental.
Beverwyck, Slingerlands, NY – Eddy Healthcare Systems owner/operator; NFP CCRC, 227 units
Winchester Gardens, Maplewood, NJ – CCRC, designed by Frederick Law Olmstead, major rehab
The Glen, Queensbury, NY – IALF, Eddy Healthcare Systems owner/operator; not‐for‐profit, 124 units
Bermuda Village, Advance, NC – Clubhouse & 24 unit nursing center split out CCRC
Goodwin House West, Falls Church, VA – Entry Fee, Not‐for‐profit CCRC, 408 units
Laurel Mead, Providence, RI – Upscale CCRC (co‐op); now operationally separate IL from AL/SN health center.
Ann’s Choice, Warminster, PA – Navy Warfare Air Base (decommissioned); proposed CCRC, 1,863 units
Whitney Center, Hamden, CT – Not‐for‐profit CCRC; expansion/renovation, rehab, 258 units
College Harbor, St. Petersburg, FL – Not‐for‐profit CCRC, Owned by Eckerd College, 174 units (2)
Kingsway Manor, Schenectady, NY – Private owner, ALF carve out for collateral loan on CCRC campus
Glen at Hilard Meadows, Queensbury, NY – IALF, not‐for‐profit, new construction, bond issuance, LOC
Valley View, Boise, ID – Life Care Services Corp, non‐prototype acquisition, rental CCRC
Seasons Retirement Community, Cincinnati, OH – Rental CCRC, acquisition, 340 units
Westside Village, Indianapolis, IN – Life Care Centers of America, part of a portfolio refinance engagement
Hillside, Portland, OR – Sunwest engagement, pending acquisition of troubled asset with Ziegler acting as Receiver
Friendship Haven, Fort Dodge, IA – CCRC, Not‐for‐profit, Phase I expansion upgrading of circa 1995 campus
Freedom Bay, Portsmouth, RI – (land only), proposed life care & for‐sale (condo) combo active adult CCRC, water view, 310 units
Arbor Glen, Somerset, NJ – Existing and stabilized Type B life care CCRC, unique FFS format, 296 units
Grandview Terrace, Sun City West, AZ – Exiting life care CCRC, tri‐annual state audit requirement, 466 units
Las Ventanas, Las Vegas, NV – Proposed life care, upscale entry fee CCRC operated by Greystone, IRS NFP submission, 400 units (2)
Newbury Court, Concord, MA – Existing life care, entry fee CCRC proposed for expansion, 318 units
Lake Pointe Woods, Sarasota, FL – Entry Fee IALC, 268 units (R)
Rockridge, Northampton, MA – Existing ALR, proposed for expansion with entry fee IL garden/cottage apts., 103 units
The Overlook, Charlton, MA – Existing life care, entry fee CCRC proposed for expansion, ILC split out, 219 units
New Pond Village, Walpole, MA – Existing Entry Fee operationally separate CCRC, acquisition, condo (lot split IL/AL/SN), 199 units
Harbor’s Edge, Norfolk, VA – Proposed, life care, upscale entry fee CCRC, rejuvenated downtown waterfront district, 246 units (2)
Harbor Ridge, Port Washington, NY – (land only) Proposed life care, high‐end entry fee CCRC, water view, 400 units

St. Mary’s of the Woods, Avon, OH – Proposed life care CCRC, NFP credit enhanced bond issuance, 159 units
Hill at Whitemarsh, Philadelphia, PA – Upscale Entry Fee, Type A, life care CCRC, NFP credit enhanced bond issuance, 357 units
Orlando Lutheran – Entry fee, Type B CCRC, not‐for‐profit model, bond reissue/release analysis, 420 units
Heritage at Green Hills, Reading, PA – (land only) Proposed Entry Fee CCRC, Type C, valuation and market study, 632 units (R)(2)
The Osborn, Rye, NY – Type C, entry fee CCRC, litigation support for tax abatement proceedings, 377 units
Carriage Club, Naperville, NY – (land only) Proposed entry fee IALF, valuation and market study, supply/demand analysis, 294 units
Phoebe Berks Village, Wernersville, PA – Type C, Entry Fee CCRC, not‐for‐profit model, Refinance, 406 units (R)
Phoebe Home & Terrace, Allentown, PA – Type B, Entry Fee CCRC, not‐for‐profit model, refinance, 538 units (R)
St. Andrews Village, Aurora, CO – Proposed entry fee CCRC (Starwood), Type B, modified fee simple model, 269 units
National Benevolent Association (NBA) – 11 CCRCs; litigation support for U.S. Bankruptcy Court proceedings, appraisal review (R)
Fountains at Sea Bluffs, Dana Point, CA – Entry Fee IALF, discounted healthcare benefits in ALF, fee simple and rental
Fountains at Pacific Regent, La Jolla, CA – Entry Fee CCRC, Type C, fee simple and life estate unit format, 207 units
Fountains at Carlotta, Palm Desert, CA – Entry Fee CCRC, Type C (no healthcare benefits), 269 units
Fountains at Millbrook, Millbrook, NY – Entry Fee IALF, converted to rental, outstanding refundable basis, 171 units
Fountains at Albemarle, Tarboro, NY – Rental CCRC, Type C (no healthcare benefits), rural market, 208 units
Fountains at Logan Square, Philadelphia, PA – Entry Fee CCRC, Type B, converting to rental, outstanding refundables, 477 units (2)
Fountains at Washington Square, Alexandria, VA – Entry Fee CCRC, Type B, significant renovation, 230 units
United Zion Community, Lititz, PA – Entry Fee CCRC, Type C, not‐for‐profit model, 126 units (R)
Malden Hospital, Malden, MA – Confidential CCRC consulting engagement for Hallmark Health Hospital System
Bell Trace, Bloomington, IN – Existing Entry Fee CCRC, Type C , proposed for expansion, 243 units (R)
Freedom Village, Bradenton, FL – Existing Entry Fee CCRC, Type B, contract‐for‐sale, 751 units, (R)
RainbowVision, Palm Springs, CA – Vacant Land, Proposed for‐sale (condo) IALC with commercial support space, 240 units (R)
Maplewood & Heritage, Bridgeport, WV – Entry Fee CCRC, Type C, transaction support & valuation, contract‐for‐sale, 199 units
Redstone Presbyterian at Murrysville, PA – Entry Fee IALC, not‐for‐profit model, refinance bond debt, 134 units (R)
Redstone Presbyterian at Huntingdon, PA – Entry Fee IALC, not‐for‐profit model, refinance bond debt, 135 units (R)
Redstone Presbyterian at Greensburg, PA, Entry Fee CCRC, Type C, not‐for‐profit model, refinance bond debt, 201 units (R)
Hill Farm, Annville, PA – Proposed Entry Fee IALC, existing ALR Mansion on site with Panoramic Views, 200 units
Sun Mountain, Las Vegas, NV – Existing Rental CCRC, Type C, , pending acquisition, high acuity vent unit SNF, 357 units
Meadow Ridge, Redding, CT – Upscale Entry Fee CCRC, Type A, Life Care Model, proposed expansion, 416 units (2)
Talmage Terrace, Athens, GA – Entry Fee IALC, life care model for AL services, valuation & consulting, 80 units
Gorham House, Gorham, ME – Rental CCRC, Type C, specialized AL Alzheimer & SN psychiatric wings, 167 units (R)
Clover Manor, Auburn, ME ‐ Rental CCRC, Type C, specialized AL Alzheimer wing, first CCRC in state, 272 units (R)
Grace Ridge, Morganton, NC – Entry Fee CCRC, Type A, disposition consulting/valuation for hospital system, 231 units
Asbury Heights, Mt. Lebanon, PA – Entry Fee CCRC, Type B, refinance coupled with off‐campus expansion, 444 units
The Embassy at Asbury Heights, Mt. Lebanon, PA – Entry Fee ILC, off‐campus expansion of existing CCRC, 35 units
Sunrise Fox Hill, Bethesda, MD – Condo IALC, former Marriott project, adjacent Burning Tree CC, upscale target market, 323 units,
Attleboro Village, Langhorne, PA – Existing Entry Fee CCRC, Type A, three separate buildings, 416 units
The Heritage, Brentwood, TN – Consulting assignment for equity bond investor, opine on viability of cash flows, 431 units (2)
Knollwood, Washington, DC – Army Distaff CCRC for Retired Career Military Officers, Entry Fee, Type C, expansion, 284 units
Preswick Glen, New Hartford, NY – Proposed Entry Fee ILC, large detached cottage component, 126 units (R)
Wake Robin, Shelburne, VT – Entry Fee CCRC, Type A, only Lifecare campus in state of Vermont, expansion, 295 units
MacKenzie Place, Colorado Springs, CO – Entry fee, for‐sale IALC with cottages, proposed construction, 234 units (R)
MacKenzie Place, Fort Collins, CO – Entry fee, for‐sale IALC with cottages, proposed construction, 240 units (R)
The Fountains at Logan Square, Philadelphia, PA – Entry Fee, Type B, converting from EF to rental format, 477 units

Lake Seminole Square, Seminole, FL – Entry Fee, Type B, IALC, long term life care provided at off‐site SNF, 338 units
Freedom Square, Seminole, FL – Entry Fee CCRC, Type B, leased fee and fee simple valuation, 731 units
University Village, Tampa, FL – Entry Fee CCRC, Type B, managed by Greystone, 676 units (R)
Gleannloch Farms, Spring, TX – Entry Fee CCRC, Type A Lifecare, upscale Greystone development consultant, 216 units
3030 Park, Bridgeport, CT – Former Entry Fee CCRC, consulting/valuation for bankruptcy acquisition, 284 units
Hubbard Hill, Elkhart, IN – Entry Fee CCRC, Type C, not‐for‐profit refinance, 255 units
La Loma Village, Litchfield Park, AZ – Entry Fee CCRC, Type A Lifecare, Phase II expansion refinance, 225 units
Holly Creek, Centennial, CO – Entry Fee CCRC, Type B, Phase II expansion and bond re‐issuance, 262 units
Cypress Cove, Ft. Myers, FL – Entry Fee CCRC, Type A, appraisal and consulting for Phase II expansion, 470 units (R)(2)
Plymouth Harbor, Sarasota, FL – Entry Fee CCRC, Type B, consulting assignment, proposed expansion and repositioning (R)
Park Springs, Stone Mountain, GA – Entry Fee CCRC, Type A, appraisal and consulting for plaintiff litigation, 462 units
East Hill Woods, Southbury, CT – Entry Fee CCRC, Type A, appraisal for equity partner and repositioning, 248 units
Longhorn Village, Austin, TX – Proposed Entry Fee CCRC, Type A, affiliated with University of Texas, appraisal, 310 units
Navesink Harbor, Red Bank, NJ – Entry Fee CCRC, Modified, significant renovation and expansion, 182 units
The Colonnade, Surprise, AZ – Proposed Entry Fee CCRC, Type B, affiliated with sister CCRC for SNF benefits, 358 units
The Covenant at South Hills, Mt. Lebanon, PA – Entry Fee, Type A, valuation for bankruptcy sale, 232 units (R)(3)
Edgewater at Tallyn’s Reach, Des Moines, IA – Proposed Entry Fee, Type B, valuation for LOC financing, 239 units
NewBridge on the Charles, Dedham, MA – Proposed Entry Fee, Type C, letter of credit financing, 615 units (R)
Meriter Retirement Campus, Madison, WI – Repositioning of Entry Fee, Type C, new bond issue, CCRC, 317 units.
Kendal on Hudson, Sleepy Hollow, NY – Upscale Entry Fee CCRC, Type A, valuation for permanent financing, 288 units
The Fountains at La Cholla, Tucson, AZ – Entry Fee, Mixed plan IALC, Type C, valuation for financing, 396 units
Whiteland Village, Exton, PA –Entry Fee, Type A, Phase I only IL units, redevelopment of Superfund Site, 936 units
Woodland at New Paltz, Highland, NY – Entry Fee, Type A, valuation for LOC bond issuance, 301units
Sagewood, Phoenix, AZ – Entry Fee, Type A, Lifecare, for‐profit model, upscale market, proposed LCS project, 1,128 units
St. Mary’s East, Erie, PA – Entry Fee, Type C, not‐for‐profit sponsor, two asset expansion/upgrade, 232 units
St. Mary’s Asbury Ridge, Erie, PA – Entry Fee, Type C, not‐for‐profit sponsor, two asset expansion/upgrade, 196 units
Heritage Crossing, Edmond, OK – Entry Fee, Type C, former NBA Bankruptcy asset, 233 units
Baycrest Village, North Bend, OR – Entry Fee, Type C, NFP to for‐profit acquisition post refinance, 240 units
Longwood at Oakmont, Verona, PA – Entry Fee, Type A, Lifecare, LOC bond issue, expansion project, 439 units (VA)
Crane’s Mill, West Caldwell, NJ – Entry Fee, Type A, Lifecare, NFP, for expansion project final phase, 430 units (R)
Seabrook Village, NJ – Entry Fee, Type C, Erickson Retirement Communities, final phase construction revolver, 1,692 units
Mirabella Portland, OR, Entry Fee, Entry Fee, Lifecare, Type B, proposed, high‐rise, letter of credit financing, 260 units (R)
Bradford Village, Edmond, OK – Entry Fee, Type C, CCRC, existing not‐for‐profit, refinance existing debt, 236 Units
Cypress Village, Jacksonville, FL – Entry Fee, Type C, CCRC, converting from Type C to Type A, refinance, 480 units (R)
Monroe Village, Jamesburg, NJ – Entry Fee, Type B, CCRC, existing campus, refinance, 374 units (R)
Meadow Lakes, Hightstown, NJ – Entry Fee, Type B, CCRC, existing campus proposed for expansion, 423 units (R)
Crestwood Manor, Whiting, NJ – Entry Fee, Type B, CCRC, existing campus, refinance, 464 units (R)
Bixby Knolls, Long Beach, CA – Rental, existing campus, CCRC, not‐for‐profit, refinance 324 units (R)
Gold Country, Placerville, CA – Rental, existing not‐for‐profit campus, CCRC, refinance 259 units (R)
Bishop’s Glen Retirement Center, Holly Hill, FL – Rental, CCRC, existing campus, not‐for‐profit, refinance 415 units (R)
Mayflower Gardens, Lancaster, CA – Rental, CCRC, existing campus, not‐for‐profit, refinance 542 units (R)
Courtenay Springs Village, Merritt Island, FL – Rental, CCRC, existing campus, not‐for‐profit, refinance 263 units (R)
Westminster Health Care Center, Clarksville, IN – Rental, CCRC, existing campus, not‐for‐profit, refinance 350 units (R)
Lucy Corr Village, Chesterfield, VA – Existing ALSN, proposed for IL entry fee continuum, 365 units (R)

The Tradition of the Palm Beaches, West Palm Beach, FL – Existing rental, not‐for‐profit CCRC, 424 units (R)
Laurel Lake Retirement Community, Hudson, OH – Type A, Entry Fee, CCRC, confidential engagement terms, 434 units (R)
Paul’s Run, Philadelphia, PA – Rental CCRC format, refinance, not‐for‐profit, 439 units (VA)
Seacoast, Mt. Pleasant, SC – Proposed Entry Fee, IALC, for‐profit, 230 units (VA)
Bethel Foundation Community, Woodstock, GA – Proposed Entry Fee CCRC, for‐profit, 250 units (VA)
Kendal at Hanover, Hanover, NH, ‐ Entry Fee, Type A, CCRC, not‐for‐profit, refinance, 306 units (R)
First Community Village, Upper Arlington, OH – Entry Fee, CCRC, not‐for‐profit, proposed expansion, 411 units (VA)
Wood River Village, Bensalem, PA – Entry Fee, Type A, Lifecare CCRC, confidential engagement terms, 355 units.
Windsor Run, Mathews, NC – Entry Fee, Type C, Erickson Retirement Communities, construction revolver, 1252 units (VA)
North Oaks, Owings Mills, MD – Entry Fee, Type A, Lifecare CCRC, valuation consulting assignment, 232 units (VA)(2)
Peachtree Hills Place, Buckhead, GA – High end, Entry Fee, Type A, Lifecare CCRC, LCS to manage, 310 units (VA)
La Posada, Palm Beach Gardens, FL – Entry Fee CCRC, developed by Westport, managed by Greystone, 294 units (R)
Trillium Woods, Plymouth, MN – Land only, proposed for development with Lifecare CCRC, LCS to develop, 425 units (R)
Devonshire at PGA National, Palm Beach Gardens, FL – Entry Fee, Type A, Lifecare CCRC, transaction, 418 units (R)
Freedom Village, Lake Forest, CA – Entry Fee, Type B CCRC, pending transaction 380 units (R)
The Village, Hemet, CA – Entry Fee, Type B CCRC, pending transaction, 351 units (R)
The Village of Germantown, Shelby, TN – Entry Fee Type A, Lifecare CCRC, valuation to test pending contact for sale, 247 units (R)
La Vida Llena, Albuquerque, NM – Entry Fee Type B, Lifecare CCRC, refinance, 387 units
Providence Point, South Hills, PA – Entry Fee Type B, Lifecare CCRC, finance new construction and bond finance, 403 units (R)
StoneRidge, Mystic, CT – Entry Fee Type A, Lifecare CCRC, internal corporate valuation assignment, 322 units
Timber Ridge at Talus, Issaquah, WA – Entry Fee Type A, Lifecare CCRC, internal corporate valuation assignment, 220 units (R)
Freedom Plaza, Peoria, AZ – Entry Fee Type B, CCRC, leasehold – concluding leased fee analysis, 538 units (R)
Whiteland Village, Exton, PA – Entry Fee CCRC, proposed construction and land loan, 936 units (R)
Mirabella Seatlle, Seattle, WA – Upscale Downtown, Entry Fee Type A, Lifecare CCRC, valuation update, 365 units (VA)
Westminster Village, Terre Haute, IN – Entry Fee Type C CCRC, update valuation for existing loan, 320 units (VA)
Bayview Gardens, Clearwater, FL – valuation and consulting for transitional CCRC campus (R)
Fox Run, Novi, MI – Entry Fee, Type C, Erickson Retirement Communities, construction revolver, 890 units (VA)
Maris Grove, Glen Mills, PA – Entry Fee Type C, Erickson Retirement Communities, construction revolver, 1,089 units (VA)
Ashby Ponds, Ashburn, VA – Entry Fee Type C, Erickson Retirement Communities, construction revolver, 456 units (VA)
Eagles Trace, Houston, TX – Entry Fee Type C, Erickson Retirement Communities, construction revolver, 470 units
Tallgrass Creek, Overland Park, KS – Entry Fee Type C, Erickson Retirement Communities, construction revolver, 227 units (VA)
Equinox Village, Manchester Center, VT – Entry Fee ILC, valuation for lender and consulting for tax appeal, 56 units
Braecroft, East Aurora, NY – Entrance fee, not‐for‐profit model, IALF, new construction, bond issuance, line‐of‐credit
(R) Review

(VA) Valuation Assistance

Current to November 2009

ANTHONY G. STABLEIN
EMPLOYMENT
HEALTHTRUST LLC – October 2005 to Present
Sarasota, Florida
Director
CUSHMAN & WAKEFIELD INC – May 2005 to September 2005
Tampa, Florida
EDUCATION
UNIVERSITY OF FLORIDA
Bachelor of Science, 2004
Major: Psychology
Minor: Business Administration
APPRAISAL INSTITUTE
Basic Principles of Appraisal Practice
Basic Procedures of Appraisal Practice
USPAP (Uniform Standards of Professional Appraisal Practice)
General Appraiser Income Approach/Part 1
Advanced Income Capitalization
Advanced Sales Comparison and Cost Approaches
CERTIFICATIONS & AFFILIATIONS
Certified General Appraiser – RZ 3368 (Florida)
Anthony G. Stablein, Associate Member, Appraisal Institute
CONFERENCES & SEMINARS
National Medicaid/Medicare Seminar 2006, 2007
Healthcare Deal Making Summit, 2009

KIMBERLY WALTHER
EMPLOYMENT
HEALTHTRUST LLC – September 2007 to Present
Sarasota, Florida
Associate
EDUCATION
UNIVERSITY OF SOUTH FLORIDA
Bachelor of Science, 2010
Major: Finance
APPRAISAL INSTITUTE
General Appraiser Income Approach Part I (2009)
ED KLOPFER SCHOOL OF REAL ESTATE
Basic Appraisal Principles (2009)
Basic Appraisal Procedures (2009)
Florida Appraisal Law, Rules & Procedures (2009)
COOKE REAL ESTATE SCHOOL
15 Hour National USPAP (2009)
CERTIFICATIONS AND AFFILIATIONS
Registered Real Estate Trainee Appraiser – RI23463 (Florida)
Kimberly Walther, Student Affiliate Member, Appraisal Institute



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