20100804x AZ 6801 Appraisal Youngtown AZ.sflb

User Manual: AZ 6801

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REALESTATEAPPRAISAL

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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



HEALTHTRUST FOUNTAIN RETIREMENT HOTEL



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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HEALTHTRUST FOUNTAIN RETIREMENT HOTEL

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iii

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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





As‐Is

19‐Jul‐2010

$2,200,000

‐‐‐

RealPropertyAllocation

$2,000,000

$100,000

$2,200,000

(1)SubjecttotheCertification,StandardConditionsandSpecialConditions

Source:HealthTrust,LLC

RealProperty

FF&E(PersonalProperty)

BusinessValue

MarketValueoftheGoingConcern(TAB)

VALUATIONSUMMARY(1)

DateofValue/AppraisedInterest

MarketValueofFeeSimpleEstate

MarketValueofLeasedFeeEstate

MarketValueofLeaseholdEstate

HEALTHTRUST FOUNTAIN RETIREMENT HOTEL



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



HEALTHTRUST FOUNTAIN RETIREMENT HOTEL



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





HEALTHTRUST FOUNTAIN RETIREMENT HOTEL



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



HEALTHTRUST FOUNTAIN RETIREMENT HOTEL



vii



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.



HEALTHTRUST FOUNTAIN RETIREMENT HOTEL



viii



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.



HEALTHTRUST FOUNTAIN RETIREMENT HOTEL



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.



HEALTHTRUST FOUNTAIN RETIREMENT HOTEL



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.

HEALTHTRUST FOUNTAIN RETIREMENT HOTEL



TABLEOFCONTENTS



PREFACE3

GLOSSARYOFTERMS5

SENIORSHOUSINGANDHEALTHCAREINDUSTRYOVERVIEW7

INTRODUCTION12

SCOPEOFWORK12

APPLICABILITYOFAPPROACHES13

LEGALINTERESTAPPRAISED14

EFFECTIVEDATESOFAPPRAISAL14

USEPREMISE14

DESCRIPTIVEDATA15

SITEDESCRIPTION15

ZONING16

ASSESSMENTANDTAXES16

IMPROVEMENTDESCRIPTION17

MARKETANALYSIS21

REGIONALANALYSIS21

NEIGHBORHOODANALYSIS25

COMPETITIVEMARKETANALYSIS28

REGULATORYOVERVIEW28

DEFINITIONOFPRIMARYMARKETAREA29

SUPPLYANALYSIS29

DEMANDANALYSIS31

PENETRATIONANALYSIS40

MARKETCATEGORIZATION41

HIGHESTANDBESTUSE43

ASIFVACANT43

ASCURRENTLYIMPROVED44

VALUATIONANALYSIS45

INCOMEAPPROACH45

ESTIMATESOFMARKETRENT‐ 53

STABILIZEDOCCUPANCY54

TOTALREVENUEESTIMATES55

OPERATINGEXPENSES56

NETOPERATINGINCOMEESTIMATE61

CAPITALIZATIONRATEDERIVATION63

DISCOUNTRATEDERIVATION68

INCOMEAPPROACHCONCLUSION69

SALESCOMPARISONAPPROACH73

SALESGRIDANALYSIS76

EGIMANALYSIS78

SALESCOMPARISONAPPROACHCONCLUSION78

HEALTHTRUST FOUNTAIN RETIREMENT HOTEL



COSTAPPROACH80

LANDVALUATION80

IMPROVEMENTVALUATION83

DEPRECIATION86

COSTAPPROACHCONCLUSION86

INSURABLEVALUEESTIMATE88

RECONCILIATIONANDFINALVALUEESTIMATES89

ASSETVALUEALLOCATION90

MARKETABILITYANALYSIS92

ADDENDA93

SUBJECTPHOTOGRAPHSANDEXHIBITS

PROVIDEDFINANCIALSTATEMENTS

IMPROVEDSALES

DEMOGRAPHICDATA

ENGAGEMENTLETTER

APPRAISERQUALIFICATIONS



HEALTHTRUST FOUNTAIN RETIREMENT HOTEL



PREFACE



PropertyData

Name: FountainRetirementHotel

Address: 12030113thAve

Youngtown,Arizona85363

PropertyType: AssistedLivingResidence

GrossBuildingArea(SF): 37,102

LandArea(acres): 1.35

YearBuilt: 1971

Condition: Average

EffectiveAge: 35

TotalDensity: 65

UnitMix: No.Units

et‐UpBeds

AL 65 78

Tota

65 78

ParcelNumber: 200‐85‐406B

AssessedValue: $159,938

PropertyTaxes: $9,863

ZoningDistrict: R(RuralDistrict)

FloodZone: Outside

OwnerofRecord: AvivAssetManagementLLC

ManagementCompany: Fountain

Highest&BestUse:

AsThoughVacan

AssistedLivingResidence

AsCurrentlyImproved AssistedLivingResidence

FountainRetirementHotel

EXECUTIVESUMMARY

As‐Is

HEALTHTRUST FOUNTAIN RETIREMENT HOTEL





PurposeoftheAppraisal:

SalientDatesofAppraisal:

AsIs

InterestAppraised:

ExcessLand:

ExcessCON:

ValuationAssumptions:

CapitalizationRate: 9.50%

TerminalCapitalizationRate: 10.00%

DiscountRate: 11.00%

RevenueGrowthRate: 2.50%

ExpenseGrowthRate: 2.50%

ManagementFee: 5.00%

Reserves(Capex)PerUnit: $300

StabilizedExpenseRatio 80.11%

StabilizedOccupancy 77.00%

As‐Is

19‐Jul‐2010

TheCostApproach‐FeeSimple $2,400,000

TheIncomeApproach‐FeeSimple $2,200,000

TheSalesApproach‐FeeSimple $2,200,000

TheIncomeApproach‐LeasedFee ‐‐‐

TheIncomeApproach‐Leasehold ‐‐‐

MarketValueofGoingConcern(TAB) $2,200,000

MarketValueofLeasedFeeEstate ‐‐‐

MarketValueofLeaseholdEstate ‐‐‐

RealProperty $2,000,000

FF&E(PersonalProperty) $100,000

BusinessValue $100,000

MarketValueoftheGoingConcern(TAB) $2,200,000

assistwithunderwritingapotentialloaninvolvingthesubject

ValueIndication(s)

ValueConclusion(s)

July19,2010

feesimple

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, actualresults

achievedduringtheperiodcoveredbyourprospectivefinancialanalyseswillvaryfromourestimatesandthevariationsmaybematerial.

ValueAllocation(s)

FinancialAnalysisSummary

EXECUTIVESUMMARY(CONT.)

HEALTHTRUST FOUNTAIN RETIREMENT HOTEL



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.



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.



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.



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.



TotalAssetsoftheBusiness(TAB):The

tangibleproperty(realpropertyandpersonal

property,includinginventoryandfurniture,

fixtures,andequipment)andintangible

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.



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.



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.



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,

HEALTHTRUST FOUNTAIN RETIREMENT HOTEL



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.



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.



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.



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.



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.



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.



HEALTHTRUST FOUNTAIN RETIREMENT HOTEL



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.

HEALTHTRUST FOUNTAIN RETIREMENT HOTEL



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

HEALTHTRUST FOUNTAIN RETIREMENT HOTEL



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.



HEALTHTRUST FOUNTAIN RETIREMENT HOTEL



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:



HEALTHTRUST FOUNTAIN RETIREMENT HOTEL



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.



HEALTHTRUST FOUNTAIN RETIREMENT HOTEL



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:



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:



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:

OwnerofRecord:

LastSubjectSaleDate:

ORBook/Page:

LastSubjectSalePrice:

Arms'Length?

PendingSale/Contract?

Ifyes,terms:

Noprevioussalesinthepastthreeyears

N/A

SALESHISTORY

AvivAssetManagementLLC

LevelofCare

Occ%Total/RDOcc%Total/RDOcc%Total/RD

AL 77% $47.86 70% $48.40 78% $47.38

AverageOccupancy 77% 70% 78%

TotalRevenues $47.86 $48.40 $47.38

ProfitMargin 19.9% 25.9% 18.9%

Source:HealthTrustLLCandFountain

OPERATIONALSUMMARY

2010Annualized 2009Actual

Appraisal‐Stabilized

HEALTHTRUST FOUNTAIN RETIREMENT HOTEL



 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.



HEALTHTRUST FOUNTAIN RETIREMENT HOTEL



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.



HEALTHTRUST FOUNTAIN RETIREMENT HOTEL



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General 

PrimaryFrontage:113thAveN Sitesize: 1.35acres

Type:2way,1laneeachway  Source: Client

MedianDivided:No Shape: Regular

AccessibilityAverage Topography: Level

VisibilityFair 

ExposureFairOtherSiteImprovements 

  PavedDrives: Yes

FacilitatingEntrytoSite Walkways: Yes

TurnLane:No Landscaping: Yes

StopSign:No Signage: Yes

TrafficLight:No AncillaryBuildings: No

 RetentionPondsorareas:No

Easements 

RightofWay:N/A 

Utility:N/AParking 

Ingress/Egress:N/A OpenParkingspaces: 35

Drainage:N/A CoveredParkingspaces: 20

Other(specify):N/A Garagespaces: 0

 Handicapspaces: 1

UtilityServices Total 56

Electric:Yes 

Gas:YesSoil 

Water:Public Drainage: Adequate

Sewer:Public SoilConditions: Normal

TelephoneYes Above‐GroundStorageTanks:No

Cable:Yes UndergroundStorageTanks:No

  Hazardous Substances: No

FloodZone Coststocure: $0

FloodPlain:Outside 

Designation:X500Seismic 

CommunityPanel:04013C1610J Zone: 1

Date:September30,2005 



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.



HEALTHTRUST FOUNTAIN RETIREMENT HOTEL



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:R(RuralDistrict)

ZoningAuthority:TownofYoungtown

PermittedUses:churches,golfcourses,hospitals,medical

clinics,andpharmacies

MaximumHeight:30to50feetdependingonuse

PermittedDensity:N/A

Max.PermittedFAR:N/A

RequiredParking:onespaceforeachbed

SubjectPermittedAs: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:



HEALTHTRUST FOUNTAIN RETIREMENT HOTEL



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:



DESCRIPTIONOFIMPROVEMENTS

ImprovementDescription:   

YearBuilt:1971BuildingShaperegular

YearofLastMajorRenovationN/ABasementNone

NumberofBuildings1BalconiesNo

NumberofStories2NumberofElevators1

Nurse’sStations1DiningRooms1

OverallConditionAverageDeferredMaintenanceNo

OverallQualityAverageFunctionalObsolescence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.)

ParcelID Land Building Total

200‐85‐406B $1,599,382

TotalAssessedValue: $1,599,382

Adjustments&Taxes:

ExemptValue: $0

AssessmentRatio: 10%

TaxableValue: $159,938

EffectiveTax(Millage)Rate: 61.6676 per$1,000

TotalRealEstateTaxes: $9,863

TotalPersonalPropertyTaxes: $0

TotalTaxes: $9,863

EffectiveYear: 2009

TotalTaxesPer: $152 $126

SubjectAssessedValue(s):

SUMMARYOFREALESTATETAXES

Unit Bed

Portion GBA

Assisted/MemoryCare 37,102

Total 37,102

SUMMARYOFGBA

HEALTHTRUST FOUNTAIN RETIREMENT HOTEL



ConstructionDetails:

FoundationType:Concreteslab

StructureType:WoodFrame

RoofType:Flat

ExteriorWallFinish:Stucco

InteriorPartitions‐CommonAreas:Latexpaintoverdrywall

InteriorPartitions‐ResidentUnits:Latexpaintoverdrywall

Ceilings‐CommonAreas:Latexpaintoverdrywall

Ceilings‐ResidentUnits:Latexpaintoverdrywall

Lighting‐CommonAreas:Fluorescent

Lighting‐ResidentUnits:Fluorescent

HVAC‐CommonAreas:Forcedair

HVAC‐ResidentUnits:PTACs

FloorCoverings‐CommonAreas:Carpet

FloorCoverings‐ResidentUnits:Carpetandvinylsheet

Windows:Aluminumframe,single‐hung

Sprinkler/SecuritySystem:Allunitshave24‐houremergencycallsystemwithcentralmonitoring.

Thebuildingisnotsprinkleredandcontainssmokedetectors.

FF&E: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:



HEALTHTRUST FOUNTAIN RETIREMENT HOTEL



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



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



Balconies/porches No IndividuallycontrolledHVAC Yes

Cable/satelliteTV Yes Kitchenettes Yes

Emergencypull‐cords Yes Privatebaths Yes

Fire/smokedetectors Yes Walk‐inclosets No

Fullkitchens Yes Washer/dryerhookups No

High‐speedinternet No Washers/dryers No

Activityrooms Yes Laundryfacilities Yes

Arts&craftsrooms Yes Library No

Assistancew/ADLs Yes LinenService Yes

Bankbranch No Loungeareas Yes

Beauty/barbershop No Medications No

BusinessCenter No Pharmacy No

Chapel No Postalservices Yes

CoffeeShop/Deli No Puttinggreen No

Computerroom No ReceptionArea Yes

Conciergeservice No Scheduledtransportation No

Courtyard No Security24hour No

Coveredparking No Skillednursingcare No

Diningroom‐main Yes Socialactivities Yes

Diningroom‐private No Spa/Whirlpool No

Exercisefacilities No Storagearea/bin No

Game/billiardsrooms Yes SwimmingPool Yes

Garageparking No Tenniscourts No

Generalstore No Theater/Auditorium No

Golfcourse No TherapyRoom No

GuestAccommodations No Utilities Yes

Healthcenter No Walking/naturetrails No

Housekeeping Yes WandererMgt.System No

Icecreamparlor No Woodworkingshop No

UnitAmenities:

CommunityAmenities:

SUMMARYOFAMENITIES

TypeofUnit No.ofUnits Size(sf) NetRentableArea

AssistedLiving

Semi‐Private 13 280‐280 3,640

Studio 46 280‐280 12,880

1‐Bedroom 6 354‐354 2,124

Total 65 18,644

UNITMIX

HEALTHTRUST FOUNTAIN RETIREMENT HOTEL



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.





AL 65 78 80

Total 65 78 80

BuildingEfficiency: Subject

IL AL CCRC

GrossBuildingArea(GBA): 37,102 114,311 51,000 357,415

RatioofNetRentableArea 50.3% 69.0% 57.5% 71.9%

GBA/Unit 571 914 699 1,146

GBA/Bed 476 N/A N/A N/A

SUMMARYOFIMPROVEMENTS

2009StateofSeniorsHousingMedian

No.OfUnits

2009StateofSeniorsHousingMedianIndications

No.ofUnitsLevelofCare: No.SUBeds No.LicBeds

HEALTHTRUST FOUNTAIN RETIREMENT HOTEL



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.





HEALTHTRUST FOUNTAIN RETIREMENT HOTEL





HEALTHTRUST FOUNTAIN RETIREMENT HOTEL





HEALTHTRUST FOUNTAIN RETIREMENT HOTEL





HEALTHTRUST FOUNTAIN RETIREMENT HOTEL



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



HEALTHTRUST FOUNTAIN RETIREMENT HOTEL



NEIGHBORHOODTRAITS

Boundaries 



Neighborhood Abutters

NorthUS‐60Residential

EastN99thAve IndustrialUses

SouthWOliveAve Single‐FamilyResidential

Westwaterway VacantLand



TypeofNeighborhoodMixed‐use



Composition



PresentPrevalence NeighborhoodCycle

AgricultureNoNone

Community(Recreation)YesLow

HospitalityYesLow

IndustrialYesLow

MedicalYesLow

OfficeYesLow

Public/GovernmentalYesLow

Residential(Single‐Family)YesModerate

Residential(Multi‐Family)YesLow

RetailYesLow



DemandGenerators



HospitalYes

RegionalMallNo

ChurchesYes

SeniorsHousingYes

AdultChildrenHomesYes



Access/Influences



LocalAreaAccessGrandAvenue

RegionalIngress/EgressI‐10andI‐17

NeighborhoodCycleStability

NeighborhoodInfluencePositivelyimpactsthesubject





Growth

Stability

Decline

Revitalize

HEALTHTRUST FOUNTAIN RETIREMENT HOTEL



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Beds

BoswellMemorialHospital 492

Source:ThomsonProfilesofU.S.Hospitals



HEALTHTRUST FOUNTAIN RETIREMENT HOTEL



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.





HEALTHTRUST FOUNTAIN RETIREMENT HOTEL



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:



Dated State‐of

Plant theArt

Reputation/Quality

(Service,Amenities,Reputation)

Reputation/Quality

(Service,Amenities,Reputation)

SUBJECT

Freedom Plaza

The Woodmark at Sun

City

Ventana Winds f.k.a.

Willow Creek

HEALTHTRUST FOUNTAIN RETIREMENT HOTEL



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):





2009 2014

FreedomPlazaCareCenter 65 65

RoyalOaksLifeCareCenter 64 64

WillowCreekAssistedLiving 90 108

TheWoodmarkatSunCity 101 101

SterlingHouseofPeoria 50 50

AmethystSeniorLiving 41 41

BaldwinHouse 50 50

Subject 78 78

AllOther 620 674

Total 1159 1231

@100%fromPMA 1159 1231

PlusMemoryCare 1470 1558

AssistedLivingBeds

PMA

ALSUPPLY

HEALTHTRUST FOUNTAIN RETIREMENT HOTEL



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:





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.



Age 2005 2010 2015 2020 2025 2030

55+ 22.7% 24.7% 27.1% 29.0% 30.0% 30.5%

65+ 12.4% 13.0% 14.5% 16.3% 18.2% 19.7%

75+ 6.1% 6.1% 6.3% 6.8% 8.0% 9.2%

85+ 1.7% 2.0% 2.1% 2.2% 2.3% 2.6%

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

PROPORTIONOFTOTALPOPULATIONTHATWILLBE55+

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

2005 2010 2015 2020 2025 2030

55+

65+

75+

85+

HEALTHTRUST FOUNTAIN RETIREMENT HOTEL



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:



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.



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

0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

3.00%

3.50%

AnnualGrowth2009‐2014

SeniorPopulation

55‐64

65‐74

75‐84

85+

65+

PMA

Population

•Definethesubject'sprimarymarketareaanddemographicsforcurrentandprojected

years.

Age‐Qualified

•Segmentdemographicsonthebasisofmarketderivedagecriterion.

Income‐

Qualified

•Ifneeded,furthersegmentthemarketonthebasisofincomequalifications,

consideringbothincomeandassetsofagequalifiedprospects.

Acuity‐

Qualified

•Ifneeded,quantifytheprevalenceandneedofacuity‐basedservicesofageand

incomequalifieddemand.

Potential

Demand

•ResultingpotentialdemandindicationsarecontrastedtoPMAsupplyandoccupancy

inbothcurrentandprojectedyearsresultinginamarketpenetrationrate.

Penetration

Rate

•Marketpenetrationrateisthenevaluatedagainstmacroindicationsutilizingmarket

penetrationratesderivedutilizingsimilarmethodology.

HEALTHTRUST FOUNTAIN RETIREMENT HOTEL



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 IL/AL

PrivateHome71.6% 70.1%

FamilyResidence9.5% 6.9%

DifferentALR6.1% 6.9%

IndependentLivingCommunity 6.8% 13.8%

NursingHome6.1% 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

AL/MC IL/AL

PrivateHome71.6% 70.1%

DifferentALR6.1% 6.9%

IndependentLivingCommunity 6.8% 13.8%



Total84.5% 90.8%

CorrespondingClaritasFactor (InverseofTotal) 1.18 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:



Independent

Living

•Age‐Qualified

•Income‐

Qualified

AssistedLiving

•Age‐Qualified

•Income‐

Qualified

•Acuity‐

Qualified

MemoryCare

•Age‐Qualified

•Income‐

Qualified

•Acuity‐

Qualified

SkilledNursing

•Age‐Qualified

HEALTHTRUST FOUNTAIN RETIREMENT HOTEL



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

HEALTHTRUST FOUNTAIN RETIREMENT HOTEL



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:



Thus,inordertoestimatepotentialdemandforassistedlivingserviceswehaveappliedthefollowing

personalcarefactorstotherespectiveagegroups:



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

Year % 95%CIInterval

1997 6.6% 6.1%‐7.1%

1998 6.3% 5.9%‐6.8%

1999 6.4% 5.8%‐6.9%

2000 6.4% 5.9%‐6.9%

2001 6.5% 6.0%‐7.0%

2002 6.2% 5.7%‐6.7%

2003 6.5% 6.0%‐7.1%

2004 6.3% 5.8%‐6.8%

2005 6.3% 5.8%‐6.8%

2006 6.1% 5.4%‐6.7%

2007 6.9% 6.2%‐7.6%

2008 6.4% 5.8%‐7.0%

Sep‐09 6.5% 5.8%‐7.2%

Source:NHIS

%65+NEEDINGPERSONALCARE

5.6%

5.8%

6.0%

6.2%

6.4%

6.6%

6.8%

7.0%

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

Sep‐09

%65+NEEDINGPERSONALCARE

%65+

NEEDING

PERSONA

LCARE

AgeGroup Percent

65‐74 3.4%

75‐84 7.0%

85+ 19.9%

Source:CDCNationalHealthInterviewSurvey

PERSONALCARENEEDS

HEALTHTRUST FOUNTAIN RETIREMENT HOTEL



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:



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:



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:



Mild,Moderate&Severe ModerateorSevere

65‐74 1.63% 0.92%

75‐84 6.45% 3.53%

85+ 24.58% 14.54%

Source:GAOAlzheimer'sDisease

ALZHEIMER'SPREVALENCERATES

LevelofCare MinimumMonthlyRate IncomeThreshold

AssistedLiving $1,075 $17,200

ANNUALINCOMETHRESHOLD

HEALTHTRUST FOUNTAIN RETIREMENT HOTEL



INCOMEANDNETWORTHOFRESIDENTS

  OverallIndependentLivingAssistedLivingCCRC

Income   

InThousands

Lessthan$158.4%$11.5LowerQuartile

$15‐24.914.3%$18.9Median$21MedianforAL

$25‐34.918.8%$26LowerQuartile$27.5MedianforSNF

$35‐49.922.9%$40Median$36.0UpperQuartile$48.8MedianforIL

$50‐99.926.4%$60UpperQuartile

$100+9.1%

NetWorth   

InThousands

Under$5011.5%

$50‐99.99.1%$62LowerQuartile$250MedianforSNF

$100‐299.921.3%$100LowerQuartile$205Median$281MedianforAL

$300‐499.916.8%$400Median

$500‐749.913.6%$564UpperQuartile$569MedianforIL

$750+27.7%$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



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



PRIMARYPAYMENTSOURCE

2006 2009 2006 2009

AL/ALZ IL/AL

Self57.9% 63.5% 66.3% 82.6%

Family30.9% 14.7% 14.7% 7.0%

Insurance4.7% 7.1% 3.3% 3.5%

Medicaid2.6% 12.2% 13.6% 5.8%

SSI1.3% 1.9% 2.2% 1.2%

VA2.6% 0.0% 0.0% 0.0%

Unknown0.0% 0.6% 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:

Income

Lessthan$15

$15‐ 24.9

$25‐ 34.9

$35‐ 49.9

$50‐ 99.9

$100+

NetWorth

Under$50

$50‐ 99.9

$100‐ 299.9

$300‐ 499.9

$500‐ 749.9

$750+

HEALTHTRUST FOUNTAIN RETIREMENT HOTEL



INCOMETOCHARGECOMPARISON



Average

MonthlyRate^

AnnualIncome

Threshold*

MedianIncomeof

Resident**

$Surplus/

Shortfall

%Shortfall/

Surplus

IndependentLiving$2,500$39,993$40,000$70.02%

AssistedLiving$3,496$55,942$18,900$‐37,042‐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:



HEALTHTRUST FOUNTAIN RETIREMENT HOTEL





2009 2014

65+Population 51,323 56,038

NursingHomePopulation 1,457 1,482

Adjusted65+Population^ 49,866 54,556

65+Households 31,722 34,154

AnnualMinimumIncomeThreshold

MedianOwner‐OccupiedHouseValue $166,632 $185,237

IncomeQualification:

AgeandIncomeQualifiedHouseholds

65‐74 7,707 8,879

75‐84 7,874 8,208

85+ 3,718 4,191

PersonalCareFactorbyAge

65‐74 3.40% 3.40%

75‐84 7.00% 7.00%

85+ 19.90% 19.90%

HouseholdsMeetingIncomeandAcuity 1,553 1,710

Household/PopulationFactor* 1.57 1.60

ClaritasFactor 1.18 1.18

PotentialAssistedLivingDemand 2,893 3,237

*AdjustedPopulation/Households

^GeneralPopulationlessNursingHomePopulation

Source:HealthTrust,LLC

DEMANDINDICATIONS

AssistedLiving

$17,200

$25,000‐100,000

PMA

HEALTHTRUST FOUNTAIN RETIREMENT HOTEL



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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.

2009 2014

TotalSupply 1470 1558

MarketOccupancy

TotalPotentialDemand 2,893 3,237

PenetrationRate 46.04% 43.60%

Source:HealthTrust,LLC

AssistedLiving

PENETRATIONANALYSIS

PMA

91%

HEALTHTRUST FOUNTAIN RETIREMENT HOTEL



o Fewerlivingoptionsavailablewithinthesecondarymarketsrelativetothelarger,

metropolitanmarkets.

o Smallersizedmarketsallowforincreasededucationandproductawareness.



 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:



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:



MSA

Median LowerQuartile UpperQuartile Phoenix,AZ 2009 2014

AverageOccupancy 89.30% 87.21% 91.55% 89.06% 90.60% 90.60%

AverageREVPOR $3,496 $3,222 $3,741 $3,506 N/A N/A

MedianHouseValue $173,333 $131,269 $234,703 $208,311 $166,632 $185,237

PenetrationRates

$25,000‐100,000 41.7% 31.3% 54.7% 30.4% 46.0% 43.6%

ASSISTEDLIVING

Top100MSABenchmark SubjectPMA

HEALTHTRUST FOUNTAIN RETIREMENT HOTEL



MARKETANALYSISINTERPRETATION

CategoryOccupancyPenetration MarketConclusion

IPMA>NICMAPMedian&PMA>Median

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.

IIPMA<NICMAPMedian&PMA>Median

PMA isoverbuilt,low/negativerate

growthandlow/negativeabsorption.

Marketmaybeskewedbydated,

uncompetitivecommunities.

IIIPMA<NICMAPMedian&PMA<Median

PMA’s consumersarenotfullyaccepting

orareinexperiencedwithseniorshousing

and/ormarkethasnetout‐migration

IVPMA>NICMAPMedian&PMA<Median

PMA hassignificantpotentialandis

under‐servedwithhighrategrowthand

occupancy,indicatingunmetdemand.

Source:HealthTrustLLC



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.



Median

Occupancy

Median

Penetration

MarketCategorization

III

IV I

HEALTHTRUST FOUNTAIN RETIREMENT HOTEL



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.

HEALTHTRUST FOUNTAIN RETIREMENT HOTEL



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.



HEALTHTRUST FOUNTAIN RETIREMENT HOTEL



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



HEALTHTRUST FOUNTAIN RETIREMENT HOTEL







SUBJECT



RecordID: 201007190

PropertyType: AssistedLivingResidence

Name: FountainRetirementHotel

Address: 12030113thAve,Youngtown,Maricopa,,85363

Verification:

With: RobHessat623‐977‐4273



BUILDINGCHARACTERISTICS

YearOpened: 1971 Quality:Average

NumberOfBuildings: 1Condition:Average

NumberOfStories: 2ConstructionType: WoodFrame

LandArea: 1.35acresGrossBuildingArea: 37,102



PROPERTYMIX

LevelCapacity%OccupancyMeals

IL‐‐‐‐‐‐‐‐‐

AL65units77%3daily

ALZ‐‐‐‐‐‐‐‐‐

SN‐‐‐‐‐‐‐‐‐



LEVELOFCARETYPE

LevelTypeMinMax

AL‐‐‐‐‐‐‐‐‐

ALZ‐AL‐‐‐‐‐‐‐‐‐

Other‐‐‐‐‐‐‐‐‐





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



UNITAMENITIES

 Cable/satelliteTV

 Emergencypull‐cords

 Fire/smokedetectors

 Fullkitchens

 IndividuallycontrolledHVAC

 Kitchenettes

 Privatebaths



SERVICEPACKAGE

 Water/Sewer

 Cable/SatelliteTV

 Electricity

 Housekeeping



ASSISTEDLIVINGRENTALANALYSIS

UnitTypeFeebasisMinFeeMaxFeeCommunity

FeeMin

Community

FeeMax

BedsUnitsMinSizeMaxSize

Semi‐PrivateMonthly$1,075‐‐‐‐‐‐‐‐‐2613280‐‐‐

StudioMonthly$1,600‐‐‐‐‐‐‐‐‐4646280‐‐‐

1‐BedroomMonthly$2,000‐‐‐‐‐‐‐‐‐66354‐‐‐



REMARKS:

Respitechargesare$75perday.



HEALTHTRUST FOUNTAIN RETIREMENT HOTEL



RENTALCOMPARABLE#1



RecordID: 8061394

Property

Type:

ContinuingCareRetirementCommunity

Name: FreedomPlaza

Address: 13373N.PlazadelRioBoulevard,Peoria,Maricopa,AZ,

85381

Verification:

With: Dawnat(623)815‐6100



BUILDINGCHARACTERISTICS

YearOpened: 1985 Quality:Above

Average

NumberOf

Buildings:

‐‐‐ Condition:Above

Average

NumberOfStories: ‐‐‐ ConstructionType: Masonry

LandArea: 10.94

acres

GrossBuilding

Area:

‐‐‐



PROPERTYMIX

LevelCapacity%OccupancyMeals

IL347units‐‐‐‐‐‐

AL65units97%3daily

ALZ20units95%3daily

SN111beds80%3daily



LEVELOFCARETYPE

LevelTypeMinMax

ALAll‐inclusive‐‐‐‐‐‐

ALZ‐AL‐‐‐‐‐‐‐‐‐

Other‐‐‐‐‐‐‐‐‐

 



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

 Security24hour

 Skillednursingcare

 Socialactivities

 SwimmingPool

 TherapyRoom



UNITAMENITIES

 Cable/satelliteTV

 Emergencypull‐cords

 Fire/smokedetectors

 Fullkitchens

 IndividuallycontrolledHVAC

 Kitchenettes

 Privatebaths



SERVICEPACKAGE

 Water/Sewer Electricity Housekeeping



ASSISTEDLIVINGRENTALANALYSIS

UnitTypeFeebasisMinFeeMaxFeeCommunity

FeeMin

Community

FeeMax

BedsUnitsMinSizeMaxSize

StudioMonthly$3,400‐‐‐$3,000‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐

1‐BedroomMonthly$5,800‐‐‐$3,000‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐

2‐BedroomMonthly$6,700‐‐‐$3,000‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐



HEALTHTRUST FOUNTAIN RETIREMENT HOTEL



RENTALCOMPARABLE#1

SKILLEDNURSINGRENTALANALYSIS

UnitTypeFeebasisMinFeeMaxFeeCommunity

FeeMin

Community

FeeMax

BedsUnitsMinSizeMaxSize

PrivateDaily$258‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐

Semi‐PrivateDaily$215‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐



CENSUS

CareLevelPayorType%ofCurrentCensus

ALPrivatepay100.0%

SNPrivatepay25.0%

SNMedicare37.0%

SNOther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.



HEALTHTRUST FOUNTAIN RETIREMENT HOTEL



RENTALCOMPARABLE#2



RecordID: 8061517

PropertyType: AssistedLiving/MemoryCareResidence

Name: TheWoodmarkatSunCity

Address: 17207NorthBoswellBlvd.,SunCity,Maricopa,AZ,85373

Verification:

With: Pennyat(623)583‐7600



BUILDINGCHARACTERISTICS

YearOpened: 2001Quality:‐‐‐

NumberOfBuildings: ‐‐‐Condition: ‐‐‐

NumberOfStories: ‐‐‐ConstructionType: ‐‐‐

LandArea: ‐‐‐GrossBuildingArea: ‐‐‐



PROPERTYMIX

LevelCapacity%OccupancyMeals

IL‐‐‐‐‐‐‐‐‐

AL101units94%3daily

ALZ36units94%3daily

SN‐‐‐‐‐‐‐‐‐



LEVELOFCARETYPE

LevelTypeMinMax

ALPoints$490‐‐‐

ALZ‐ALAll‐inclusive‐‐‐‐‐‐

Other‐‐‐‐‐‐‐‐‐

 



PROJECTAMENITIES

 Activityrooms

 Assistancew/ADLs

 Beauty/barbershop

 Diningroom‐main

 Game/billiardsrooms

 Housekeeping

 LinenService

 Loungeareas

 Medications

 ReceptionArea

 Socialactivities

 Utilities



UNITAMENITIES

 Cable/satelliteTV

 Emergencypull‐cords

 Fire/smokedetectors

 IndividuallycontrolledHVAC



SERVICEPACKAGE

 Water/Sewer Electricity Housekeeping



ASSISTEDLIVINGRENTALANALYSIS

UnitTypeFeebasisMinFeeMaxFeeCommunity

FeeMin

Community

FeeMax

BedsUnitsMinSizeMaxSize

StudioMonthly$2,795‐‐‐$1,000‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐

1‐BedroomMonthly$3,095‐‐‐$1,000‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐

2‐BedroomMonthly$3,595‐‐‐$1,000‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐

ExtraPersonMonthly$800‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐



MEMORYCARERENTALANALYSIS

UnitTypeFeebasisMinFeeMaxFeeCommunity

FeeMin

Community

FeeMax

BedsUnitsMinSizeMaxSize

Semi‐PrivateMonthly$3,295$4,495$1,000‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐

StudioMonthly$4,195$5,395$1,000‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐



HEALTHTRUST FOUNTAIN RETIREMENT HOTEL



RENTALCOMPARABLE#2

CENSUS

CareLevelPayorType%ofCurrentCensus

ALPrivatepay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.



HEALTHTRUST FOUNTAIN RETIREMENT HOTEL



RENTALCOMPARABLE#3



RecordID: 8061531

PropertyType: AssistedLiving/MemoryCareResidence

Name: VentanaWindsf.k.a.WillowCreek

Address: 12322N.113thAvenue,Youngtown,Maricopa,AZ,85363

Verification:

With: Kathleenat(623)5832460



BUILDINGCHARACTERISTICS

YearOpened: 2001Quality:Good

NumberOfBuildings: 1Condition:Good

NumberOfStories: 3ConstructionType: ‐‐‐

LandArea: ‐‐‐ GrossBuildingArea: ‐‐‐



PROPERTYMIX

LevelCapacity%OccupancyMeals

IL‐‐‐‐‐‐‐‐‐

AL90units85%3daily

ALZ18units83%3daily

SN‐‐‐‐‐‐‐‐‐



LEVELOFCARETYPE

LevelTypeMinMax

ALLevels$100$1,000

ALZ‐ALLevels$100$1,000

Other‐‐‐‐‐‐‐‐‐





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

 Loungeareas

 Medications

 ReceptionArea

 Scheduledtransportation

 Socialactivities

 SwimmingPool



UNITAMENITIES

 Balconies/porches

 Cable/satelliteTV

 Emergencypull‐cords

 Fire/smokedetectors

 IndividuallycontrolledHVAC

 Kitchenettes

 Privatebaths

 Walk‐inclosets



SERVICEPACKAGE

 Water/Sewer Electricity Housekeeping



ASSISTEDLIVINGRENTALANALYSIS

UnitTypeFeebasisMinFeeMaxFeeCommunity

FeeMin

Community

FeeMax

BedsUnitsMinSizeMaxSize

1‐BedroomMonthly$2,595‐‐‐$500‐‐‐‐‐‐‐‐‐830‐‐‐

1‐Bedroom

DX

Monthly$2,795‐‐‐$500‐‐‐‐‐‐‐‐‐945‐‐‐

2‐BedroomMonthly$3,495‐‐‐$1,000‐‐‐‐‐‐‐‐‐1015‐‐‐



MEMORYCARERENTALANALYSIS

UnitTypeFeebasisMinFeeMaxFeeCommunity

FeeMin

Community

FeeMax

BedsUnitsMinSizeMaxSize

Semi‐PrivateMonthly$3,295‐‐‐$500‐‐‐‐‐‐‐‐‐340‐‐‐

StudioMonthly$3,975‐‐‐$500‐‐‐‐‐‐‐‐‐182‐‐‐



HEALTHTRUST FOUNTAIN RETIREMENT HOTEL



RENTALCOMPARABLE#3

CENSUS

CareLevelPayorType%ofCurrentCensus

ALPrivatepay60.0%

ALMedicaid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.



HEALTHTRUST FOUNTAIN RETIREMENT HOTEL

53



EstimatesofMarketRent‐SeniorsHousing



Wehavesurveyedthefollowingpropertiesthatofferservicessimilartothesubject.



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:



Property Min Max Min Max Min Max

FountainRetirementHotel $1,075 ‐‐ $1,600 ‐‐ $2,000 ‐‐

FreedomPlaza ‐‐ ‐‐ $3,400 ‐‐ $5,800 ‐‐

TheWoodmarkatSunCity ‐‐ ‐‐ $2,795 ‐‐ $3,095 ‐‐

VentanaWindsf.k.a.WillowCreek ‐‐ ‐‐ ‐‐ ‐‐ $2,595 ‐‐

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

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

Mode ‐‐ ‐‐ ‐‐

Range

ASSISTEDLIVINGASKINGRENTALANALYSIS

Semi‐Private Studio 1‐Bedroom

$1,075‐$1,075 $1,600‐$3,400 $2,000‐$5,800

Reconciled Average Median Mode SubjectAsking StreetRateRange*

Semi‐Private $1,075 $1,075 $1,075 N/A $1,075 $1,075‐$1,075

Studio $1,600 $2,598 $2,795 N/A $1,600 $1,600‐$3,400

1‐Bedroom $2,000 $3,373 $2,845 N/A $2,000 $2,000‐$5,800

Source:HealthTrustLLC;*UnadjustedMarketRange

ASSISTEDLIVINGMARKETSUMMARY

HEALTHTRUST FOUNTAIN RETIREMENT HOTEL



StabilizedOccupancy



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



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

follows:



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.





Property AL

FountainRetirementHotel 77%

FreedomPlaza 97%

TheWoodmarkatSunCity 94%

VentanaWindsf.k.a.WillowCreek 85%

Median 90%

Average 89%

Mode ‐‐

Range 77%‐97%

PMAAverageOccupancy 91%

OCCUPANCYANALYSIS

LevelofCare

Occ%Total/RDOcc%Total/RDOcc%Total/RD

AL 77% $47.86 70% $48.40 78% $47.38

AverageOccupancy 77% 70% 78%

TotalRevenues $47.86 $48.40 $47.38

ProfitMargin 19.9% 25.9% 18.9%

Source:HealthTrustLLCandFountain

OPERATIONALSUMMARY

2010Annualized 2009Actual

Appraisal‐Stabilized

HEALTHTRUST FOUNTAIN RETIREMENT HOTEL



Followingourestimatesofrentallevelsandoccupancy,wehaveestimatedthesubject’seffectivegross

rentalincomeasshown:



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:



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%.



Year: 1 2 3 Stabilized



No.

Units/Beds

Monthly

Rent

ALRevenues

Semi‐Private 26 $1,075 $335,400 $343,785 $352,380 $335,400

Studio 46 $1,600 $883,200 $905,280 $927,912 $883,200

1‐Bedroom 6 $2,000 $144,000 $147,600 $151,290 $144,000

TotalPotentialALBaseFeeIncome 78 $1,362,600 $1,396,665 $1,431,582 $1,362,600

LessALVacancy/CollectionLoss @ 23.00% 23.00% 23.00% 23.00%

‐$313,398 ‐$321,233 ‐$329,264 ‐$313,398

LifecareUtilizationDiscount $0 $0 $0 $0

EffectiveGrossALBaseFeeIncome $1,049,202 $1,075,432 $1,102,318 $1,049,202

Source:HealthTrust,LLC

SUMMARYOFREVENUEPROJECTIONS

Year CPI Ann.Increase

2000 172.2 ‐‐‐

2001 177.1 2.8%

2002 179.9 1.6%

2003 184.0 2.3%

2004 188.9 2.7%

2005 195.3 3.4%

2006 201.6 3.2%

2007 207.3 2.8%

2008 215.3 3.9%

2009 214.5 ‐0.4%

10‐YearAnnualAverage 2.5%

Source:USDepartmentofLabor

10‐YEARCONSUMERPRICEINDEXTRENDS

HEALTHTRUST FOUNTAIN RETIREMENT HOTEL



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.



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.



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.



2010Annualized 123

Stabilized

SummaryofEffectiveGrossFeeIncome

ALRevenues $967,266 $1,049,202 $1,075,432 $1,102,318 $1,049,202

TotalEffectiveGrossBaseFeeIncome $967,266 $1,049,202 $1,075,432 $1,102,318 $1,049,202

AncillaryandOtherFees

TotalEffectiveGrossIncome $967,266 $1,049,202 $1,075,432 $1,102,318 $1,049,202

EGI/Unit(Bed) $14,881 $16,142 $16,545 $16,959 $16,142

EGI/ResidentDay $48.40 $47.86 $49.06 $50.28 $47.86

Change%(perresidentday) ‐1.11% 2.50% 2.50%

Source:HealthTrust,LLC

SUMMARYOFREVENUEPROJECTIONS

2010Annualized 2009Actual HTStabilized HTYear1HTYear2HTYear3CompMin CompMax CompMedian

Total $0 $11,159 $10,400 $10,400 $10,660 $10,927

PerUnit/Bed $0 $172 $160 $160 $164 $168 $381 $883 $460

PerResidentDay $0.00 $0.50 $0.47 $0.47 $0.49 $0.50 $1.09 $1.63 $1.35

RatioofEGI 0.00% 1.06% 0.99% 0.99% 0.99% 0.99% 1.17% 2.15% 1.38%

Source:HealthTrust,LLC

REALESTATETAXES

2010Annualized 2009Actual HTStabilized HTYear1HTYear2HTYear3CompMin CompMax CompMedian

Insurance(General,Professional) $29,612 $18,486 $19,500 $19,500 $19,988 $20,487

Worker'sComp $679 $12,603 $13,000 $13,000 $13,325 $13,658

OtherInsurance $3,842 $816 $3,250 $3,250 $3,331 $3,415

TotalInsurance $34,132 $31,906 $35,750 $35,750 $36,644 $37,560

PerUnit/Bed $525 $491 $550 $550 $564 $578 $329 $909 $624

PerResidentDay $1.71 $1.43 $1.63 $1.63 $1.67 $1.71 $0.96 $3.09 $1.15

RatioofEGI 3.53% 3.02% 3.41% 3.41% 3.41% 3.41% 0.95% 3.22% 1.51%

Source:HealthTrust,LLC

INSURANCE

HEALTHTRUST FOUNTAIN RETIREMENT HOTEL



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:



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:



Housekeepingandlaundryexpensesincludebothstaffingandmiscellaneoussupplyexpenses.The

subjectcontainsin‐houselaundryfacilities.



2010Annualized 2009Actual HTStabilized HTYear1HTYear2HTYear3CompMin CompMax CompMedian

Water $7,265 $10,927 $11,022 $11,022 $11,298 $11,580

Gas $10,524 $12,863 $12,976 $12,976 $13,300 $13,633

Trash $1,609 $1,587 $1,601 $1,601 $1,641 $1,682

Electricity $36,182 $45,344 $41,652 $41,652 $42,693 $43,760

TotalUtilities $55,580 $70,721 $67,251 $67,251 $68,932 $70,655

PerUnit/Bed $855 $1,088 $1,035 $1,035 $1,060 $1,087 $1,263 $2,015 $1,900

PerResidentDay $2.78 $3.17 $3.07 $3.07 $3.14 $3.22 $1.99 $6.51 $5.56

RatioofEGI 5.75% 6.70% 6.41% 6.41% 6.41% 6.41% 2.52% 6.78% 5.49%

Source:HealthTrust,LLC

UTILITIES

2010Annualized 2009Actual HTStabilized HTYear1HTYear2HTYear3CompMin CompMax CompMedian

RepairsandSupplies$2,791 $46,086 $32,883 $32,883 $33,705 $34,548

MaintenanceSalaries $20,131 $18,278 $18,438 $18,438 $18,899 $19,371

TotalMaintenance $22,921 $64,364 $51,320 $51,320 $52,603 $53,919

PerUnit/Bed $353 $990 $790 $790 $809 $830 $749 $1,536 $1,339

PerResidentDay $1.15 $2.89 $2.34 $2.34 $2.40 $2.46 $2.17 $4.46 $2.84

RatioofEGI 2.37% 6.10% 4.89% 4.89% 4.89% 4.89% 2.30% 4.65% 3.74%

Source:HealthTrust,LLC

MAINTENANCE

2010Annualized 2009Actual HTStabilized HTYear1HTYear2HTYear3CompMin CompMax CompMedian

AdminSupplies&OtherAdmin $27,619 $68,626 $65,766 $65,766 $67,410 $69,095

AdminSalaries $67,146 $82,190 $82,909 $82,909 $84,982 $87,106

TotalAdministrative $94,765 $150,815 $148,675 $148,675 $152,392 $156,201

PerUnit/Bed $1,458 $2,320 $2,287 $2,287 $2,344 $2,403 $2,060 $12,067 $3,917

PerResidentDay $4.74 $6.77 $6.78 $6.78 $6.95 $7.13 $7.01 $22.30 $11.46

RatioofEGI 9.80% 14.29% 14.17% 14.17% 14.17% 14.17% 7.30% 29.39% 11.32%

Source:HealthTrust,LLC

ADMINISTRATIVEANDGENERAL

2010Annualized 2009Actual HTStabilized HTYear1HTYear2HTYear3CompMin CompMax CompMedian

HousekeepingandLaundrySupplies $7,049 $13,660 $13,780 $13,780 $14,124 $14,477

HousekeepingandLaundrySalaries $100,520 $100,467 $101,346 $101,346 $103,880 $106,477

TotalHousekeepingandLaundry $107,569 $114,127 $115,126 $115,126 $118,004 $120,954

PerUnit/Bed $1,655 $1,756 $1,771 $1,771 $1,815 $1,861 $443 $981 $723

PerResidentDay $5.38 $5.12 $5.25 $5.25 $5.38 $5.52 $1.30 $2.09 $1.81

RatioofEGI 11.12% 10.81% 10.97% 10.97% 10.97% 10.97% 1.28% 2.39% 2.15%

Source:HealthTrust,LLC

HOUSEKEEPINGANDLAUNDRY

HEALTHTRUST FOUNTAIN RETIREMENT HOTEL



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:



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.



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:



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.

2010Annualized 2009Actual HTStabilized HTYear1HTYear2HTYear3CompMin CompMax CompMedian

FoodCost $62,334 $78,021 $78,704 $78,704 $80,672 $82,688

Supplies&OtherDietaryCosts $2,352 $4,741 $4,782 $4,782 $4,902 $5,025

DietarySalaries $96,817 $92,219 $93,026 $93,026 $95,351 $97,735

TotalDietary $161,503 $174,981 $176,512 $176,512 $180,925 $185,448

PerUnit/Bed $2,485 $2,692 $2,716 $2,716 $2,783 $2,853 $1,914 $4,537 $3,806

PerResidentDay $8.08 $7.86 $8.05 $8.05 $8.25 $8.46 $5.60 $11.02 $8.38

RatioofEGI 16.70% 16.58% 16.82% 16.82% 16.82% 16.82% 5.53% 11.69% 11.05%

Source:HealthTrust,LLC

DIETARY

2010Annualized 2009Actual HTStabilized HTYear1HTYear2HTYear3CompMin CompMax CompMedian

NursingSupplies&Other $616 $7,458 $7,523 $7,523 $7,711 $7,904

Nursing/PersonalCareSalaries $70,431 $80,164 $76,727 $76,727 $78,645 $80,611

TotalNursing $71,047 $87,621 $84,250 $84,250 $86,356 $88,515

PerUnit/Bed $1,093 $1,348 $1,296 $1,296 $1,329 $1,362 $4,314 $7,215 $5,372

PerResidentDay $3.55 $3.93 $3.84 $3.84 $3.94 $4.04 $8.48 $21.10 $13.92

RatioofEGI 7.35% 8.30% 8.03% 8.03% 8.03% 8.03% 10.72% 20.85% 14.77%

Source:HealthTrust,LLC

NURSING

2010Annualized 2009Actual HTStabilized HTYear1HTYear2HTYear3CompMin CompMax CompMedian

Activities/SocialSupplies $0 $4,388 $4,427 $4,427 $4,537 $4,651

Activities/SocialSalaries $15,695 $16,326 $16,469 $16,469 $16,880 $17,302

TotalActivities/Social $15,695 $20,714 $20,895 $20,895 $21,418 $21,953

PerUnit/Bed $241 $319 $321 $321 $330 $338 $523 $1,043 $700

PerResidentDay $0.79 $0.93 $0.95 $0.95 $0.98 $1.00 $1.19 $2.21 $1.73

RatioofEGI 1.62% 1.96% 1.99% 1.99% 1.99% 1.99% 1.50% 2.54% 1.91%

Source:HealthTrust,LLC

ACTIVITIES/SOCIAL

HEALTHTRUST FOUNTAIN RETIREMENT HOTEL



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.



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:



2010Annualized 2009Actual HTStabilized HTYear1HTYear2HTYear3CompMin CompMax CompMedian

PayrollTaxes$31,941 $31,153 $31,113 $31,113 $31,891 $32,688

Benefits $54,137 $25,801 $27,224 $27,224 $27,905 $28,602

TotalOtherPayrollCosts $86,078 $56,953 $58,337 $58,337 $59,796 $61,290

PerUnit/Bed $1,324 $876 $897 $897 $920 $943 $1,803 $2,175 $1,989

PerResidentDay $4.31 $2.56 $2.66 $2.66 $2.73 $2.80 $6.13 $6.30 $6.21

RatioofEGI 8.90% 5.40% 5.56% 5.56% 5.56% 5.56% 6.39% 6.68% 6.54%

Source:HealthTrust,LLC

OTHERPAYROLL

2010Annualized 2009Actual HTStabilized HTYear1HTYear2HTYear3CompMin CompMax CompMedian

Total $717,154 $855,631 $840,476 $840,476 $861,488 $883,025

PerUnit/Bed $11,033 $13,164 $12,930 $12,930 $13,254 $13,585 $19,556 $31,774 $21,423

PerResidentDay $35.88 $38.41 $38.34 $38.34 $39.30 $40.28 $47.90 $66.53 $61.25

RatioofEGI 74.14% 81.07% 80.11% 80.11% 80.11% 80.11% 59.77% 77.39% 65.80%

Source:HealthTrust,LLC;ExcludesManagementFeeandReserves

OPERATINGEXPENSES

HEALTHTRUST FOUNTAIN RETIREMENT HOTEL

60



Property 1 2345

State Arizona AZ AZ AZ AZ AZ

No.IL 0 0 0000

No.AL 65 41 102 102 65 62

No.ALZ 0 380000

No.SN 0 0 0 0 0 0

TotalUnits/Beds 65 79 102 102 65 62

Year Stabilized 12/31/09 10/31/09 12/31/08 12/31/05 12/31/05

Occupancy 77% 94% 81% 95% 98% 84%

TotalResidentDays 21,922 27,010 29,982 35,239 41,182 33,547

EGI/RD $47.86 $101.21 $95.99 $94.24 $79.10 $75.88

EXPENSES $/RD $/Unit %EGI $/RD $/Unit %EGI $/RD $/Unit %EGI $/RD $/Unit %EGI $/RD $/Unit %EGI $/RD $/Unit %EGI

RealEstateTaxes $0.47 $160 1.0% $1.35 $460 1.3% $1.51 $443 1.6% $1.10 $381 1.2% $1.09 $692 1.4% $1.63 $883 2.2%

Insurance $1.63 $550 3.4% $0.96 $329 1.0% $3.09 $909 3.2% $1.42 $492 1.5% $1.00 $631 1.3% $1.15 $624 1.5%

Utilities $3.07 $1,035 6.4% $5.56 $1,900 5.5% $6.51 $1,913 6.8% $5.83 $2,015 6.2% $1.99 $1,263 2.5% $2.78 $1,507 3.7%

Maintenance $2.34 $790 4.9% $3.92 $1,339 3.9% $4.46 $1,312 4.7% $2.17 $749 2.3% $2.29 $1,453 2.9% $2.84 $1,536 3.7%

Marketing $0.00 $0 0.0% $1.81 $619 1.8% $2.29 $674 2.4% $5.55 $1,918 5.9% $0.00 $0 0.0% $0.00 $0 0.0%

Administrative $6.78 $2,287 14.2% $11.46 $3,917 11.3% $7.01 $2,060 7.3% $7.03 $2,429 7.5% $18.68 $11,837 23.6% $22.30 $12,067 29.4%

Dietary $8.05 $2,716 16.8% $5.60 $1,914 5.5% $10.76 $3,163 11.2% $11.02 $3,806 11.7% $7.06 $4,475 8.9% $8.38 $4,537 11.1%

Housekeeping/Laundry $5.25 $1,771 11.0% $1.30 $443 1.3% $2.06 $607 2.2% $2.09 $723 2.2% $1.33 $842 1.7% $1.81 $981 2.4%

Nursing/PersonalCare $3.84 $1,296 8.0% $21.10 $7,215 20.9% $14.68 $4,314 15.3% $13.92 $4,809 14.8% $8.48 $5,372 10.7% $11.12 $6,019 14.7%

Activities $0.95 $321 2.0% $1.53 $523 1.5% $2.21 $649 2.3% $0.00 $0 0.0% $1.19 $752 1.5% $1.93 $1,043 2.5%

OtherPayroll,Taxes&Benefits $2.66 $897 5.6% $0.00 $0 0.0% $6.13 $1,803 6.4% $6.30 $2,175 6.7% $0.00 $0 0.0% $0.00 $0 0.0%

ManagementFees $2.39 $807 5.0% $5.05 $1,727 5.0% $4.80 $1,411 5.0% $4.71 $1,628 5.0% $3.95 $2,501 5.0% $3.79 $2,049 5.0%

Reserves $0.89 $300 1.9% $0.87 $298 0.9% $1.02 $299 1.1% $0.87 $300 0.9% $0.83 $526 1.1% $0.98 $530 1.3%

Total $38.34 $12,930 80.1% $60.49 $20,683 59.8% $66.53 $19,556 69.3% $62.01 $21,423 65.8% $47.90 $30,345 60.6% $58.72 $31,774 77.4%

Source:HealthTrust,LLC

EXPENSECOMPARABLESUMMARY

Subject

HEALTHTRUST FOUNTAIN RETIREMENT HOTEL

61



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:



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



2010Annualized 2009Actual HTStabilized HTYear1HTYear2HTYear3CompMin CompMax CompMedian

Total $250,113 $199,749 $208,726 $208,726 $213,944 $219,293

PerUnit/Bed $3,848 $3,073 $3,211 $3,211 $3,291 $3,374 $8,659 $19,770 $11,135

PerResidentDay $12.51 $8.97 $9.52 $9.52 $9.76 $10.00 $29.46 $40.72 $31.72

RatioofEGI 25.86% 18.93% 19.89% 19.89% 19.89% 19.89% 22.61% 40.23% 34.20%

Source:HealthTrust,LLC

NETOPERATINGINCOME

HEALTHTRUST FOUNTAIN RETIREMENT HOTEL

62



Year

TotalResidentDays

TotalUnits/Beds

Occupancy

Total$ $/Unit $/RD %EGI Total$$/Unit $/RD %EGI Total$ $/Unit $/RD %EGI

Revenues

ALRentalRevenues $1,049,202 $16,142 $47.86 100.0% $967,266 $14,881 $48.40 100.0% $1,055,380 $16,237 $47.38 100.0%

TotalEffectiveGrossRevenue $1,049,202 $16,142 $47.86 100.0% $967,266 $14,881 $48.40 100.0% $1,055,380 $16,237 $47.38 100.0%

Expenses

RealEstateTaxes $10,400 $160 $0.47 1.0% $0 $0 $0.00 0.0% $11,159 $172 $0.50 1.1%

Insurance $35,750 $550 $1.63 3.4% $34,132 $525 $1.71 3.5% $31,906 $491 $1.43 3.0%

Utilities $67,251 $1,035 $3.07 6.4% $55,580 $855 $2.78 5.7% $70,721 $1,088 $3.17 6.7%

Maintenance $51,320 $790 $2.34 4.9% $22,921 $353 $1.15 2.4% $64,364 $990 $2.89 6.1%

Marketing $0 $0 $0.00 0.0% $0 $0 $0.00 0.0% $0 $0 $0.00 0.0%

Administrative/General $148,675 $2,287 $6.78 14.2% $94,765 $1,458 $4.74 9.8% $150,815 $2,320 $6.77 14.3%

Housekeeping/Laundry $115,126 $1,771 $5.25 11.0% $107,569 $1,655 $5.38 11.1% $114,127 $1,756 $5.12 10.8%

Dietary $176,512 $2,716 $8.05 16.8% $161,503 $2,485 $8.08 16.7% $174,981 $2,692 $7.86 16.6%

Nursing/PersonalCare $84,250 $1,296 $3.84 8.0% $71,047 $1,093 $3.55 7.3% $87,621 $1,348 $3.93 8.3%

Activities/Social$20,895 $321 $0.95 2.0% $15,695 $241 $0.79 1.6% $20,714 $319 $0.93 2.0%

OtherPayroll,PayrollTaxes&Benefits $58,337 $897 $2.66 5.6% $86,078 $1,324 $4.31 8.9% $56,953 $876 $2.56 5.4%

TotalOperatingExpenses $768,516 $11,823 $35.06 73.2% $649,291 $9,989 $32.49 67.1% $783,362 $12,052 $35.17 74.2%



ManagementFee $52,460 $807 $2.39 5.0% $48,363 $744 $2.42 5.0% $52,769 $812 $2.37 5.0%

ReserveforReplacement $19,500 $300 $0.89 1.9% $19,500 $300 $0.98 2.0% $19,500 $300 $0.88 1.8%

TotalExpenses $840,476 $12,930 $38.34 80.1% $717,154 $11,033 $35.88 74.1% $855,631 $13,164 $38.41 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

SUMMARYOFAPPRAISALESTIMATESANDSUBJECT'SADJUSTEDFINANCIALSTATEMENTS

2010Annualized

19,986

HTYear1

21,922

2009Actual

22,275

78%77% 70%

HEALTHTRUST FOUNTAIN RETIREMENT HOTEL



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:



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

2010AllResponses

RangeAverage

2010AdjustedResponses

RangeAverage

BasisPointChange

From2009

UnlicensedCongregateCare(IL)7.0‐10.5%8.5%7.0‐9.0%8.5%+10

LicensedAssistedLiving7.0‐12.3%9.1%7.5‐10.6%9.1%‐10

LicensedAlzheimer/Dementia7.5‐12.0%9.7%8.5‐11.5%9.7%‐10

LicensedSkilledNursing‐LongTermCare8.5‐18.0%12.6%10.0‐14.0%12.5%0

LicensedSkilledNursing‐SubacuteCare8.5‐15.0%12.7%9.3‐14.0%12.8%+40

ContinuingCareRetirementCommunity7.0‐15.0%9.7%8.0‐12.5%9.4%0

Source:2010SeniorHousingInvestmentSurvey



5.0%

7.0%

9.0%

11.0%

13.0%

15.0%

17.0%

2000 2003 2006 2009

CapitalizationRateTrends(median)

AL/ALZ

IL/AL

CCRC

HEALTHTRUST FOUNTAIN RETIREMENT HOTEL



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:



HEALTHTRUST FOUNTAIN RETIREMENT HOTEL



Period Low High Average No.Transactions

Q4,2004 8.00% 10.00% 9.10% 17

Q1,2005 7.00% 12.00% 9.00% ‐‐‐

Q2,2005 7.00% 10.50% 8.20% 27

Q3,2005 6.25% 12.50% 8.20% 28

Q4,2005 6.70% 10.30% 8.50% 29

Q1,2006 7.00% 10.30% 8.20% 40

Q2,2006 7.00% 10.20% 8.30% 36

Q3,2006 5.80% 10.00% 7.70% 33

Q4,2006 5.90% 9.00% 7.70% 35

Q1,2007 6.70% 10.00% 7.70% 44

Q2,2007 7.00% 10.00% 7.90% 15

Q3,2007 4.90% 10.00% 7.40% 32

Q4,2007 5.80% 9.70% 7.30% 17

Q1,2008 5.80% 9.20% 7.60% 12

Q2,2008 6.60% 8.75% 7.80% 13

Q3,2008 6.50% 13.00% 8.70% 15

Q4,2008 7.50% 10.60% 8.70% 19

Q1,2009 7.00% 9.50% 8.10% 22

Q2,2009 8.00% 9.50% 8.50% 14

Q3,2009 8.00% 9.50% 8.80% 12

Q4,2009 8.00% 10.00% 8.80% 31

Source:NICKeyFinancialIndicators

ILCAPITALIZATIONRATES

5.00%

6.00%

7.00%

8.00%

9.00%

10.00%

11.00%

12.00%

13.00%

14.00%

Low

High

Average

HEALTHTRUST FOUNTAIN RETIREMENT HOTEL



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

Period Low High Average No.Transactions

Q4,2004 8.50% 20.00% 10.50% 76

Q1,2005 7.50% 12.00% 10.00% ‐‐‐

Q2,2005 7.25% 10.50% 9.20% 40

Q3,2005 7.50% 14.50% 9.25% 50

Q4,2005 7.20% 10.50% 8.90% 22

Q1,2006 7.20% 10.50% 8.90% 53

Q2,2006 7.30% 11.00% 8.70% 92

Q3,2006 7.50% 15.00% 9.20% 74

Q4,2006 6.50% 12.50% 8.70% 132

Q1,2007 6.80% 12.50% 8.80% 111

Q2,2007 6.60% 12.00% 8.50% 85

Q3,2007 6.00% 12.50% 9.00% 70

Q4,2007 6.60% 14.90% 9.10% 81

Q1,2008 7.10% 11.30% 8.80% 41

Q2,2008 7.00% 12.20% 9.00% 82

Q3,2008 7.10% 12.20% 9.20% 39

Q4,2008 7.90% 13.00% 9.30% 50

Q1,2009 7.20% 11.50% 9.40% 50

Q2,2009 8.20% 13.50% 9.50% 42

Q3,2009 8.50% 13.00% 9.60% 37

Q4,2009 8.40% 16.60% 9.90% 133

Source:NICKeyFinancialIndicators

ALCAPITALIZATIONRATES

5.00%

7.00%

9.00%

11.00%

13.00%

15.00%

17.00%

19.00%

21.00%

Low

High

Average

HEALTHTRUST FOUNTAIN RETIREMENT HOTEL



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%.





MORTGAGEINTERESTRATE 7.00%

AMORTIZATIONTERM 25

LOANTOVALUERATIO 75.00%

DEBTCOVERAGERATIO 140.00%

EQUITYDIVIDENDRATE 12.00%

EQUITYYIELDRATE 20.00%

BANDOFINVESTMENT

DEBTCOMPONENT: 75% x 0.0848 = 0.0636

EQUITYCOMPONENT: 25% x 0.1200 = 0.0300

0.093610128

ROUNDEDTO: 9.36%

DEBTCOVERAGE 75% x 1.4 x 0.0848 0.0891

ROUNDEDTO: 8.91%

MORTGAGE‐EQUITY

DEBTCOMPONENT: 75% x 0.0848 =0.0636

EQUITYCOMPONENT: 25% x 0.2000 =0.0500

0.1136

LESSPRINCIPALREDUCTION: ‐0.0014

BASICRATE 0.1122

PROPERTYVALUECHANGE ‐0.0004

OVERALLCAPITALIZATIONRATE 0.1118

ROUNDEDTO: 11.18%

IMPROVEDSALEINDICATIONS 7.84% to9.93%

SELECTEDOVERALLCAPITALIZATIONRATE: 9.50%

Source:HealthTrust,LLC

SUMMARYOFCAPITALIZATIONRATEINDICATIONS

HEALTHTRUST FOUNTAIN RETIREMENT HOTEL



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

2010AdjustedResponses

RangeAverage

BasisPointChange

From2009

UnlicensedCongregateCare(IL)8.0‐25.0% 13.1% 10.0‐20.0% 12.4%‐50

LicensedAssistedLiving8.8‐30.0% 14.3% 11.5‐20.0% 13.6%‐40

LicensedAlzheimer/Dementia9.3‐30.0% 14.8% 11.0‐20.0% 14.1%‐20

LicensedSkilledNursing‐LongTermCare11.0‐30.0% 16.1% 12.0‐20.0% 15.2%0

LicensedSkilledNursing‐SubacuteCare11.0‐30.0% 16.4% 12.0‐20.0% 15.6%+20

ContinuingCareRetirementCommunity10.0‐25.0% 14.4% 11.0‐20.0% 14.0%+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:



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:

FountainRetirementHotel

K=[1‐(1+C)^n/S^n]/(Y‐C)*An where:

Ro=[(Y‐D*1/Sn)/K] 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 $208,726

TerminalYearStabilizedNOI 10 $267,187

AnnualizedConstantRatioChange(C) 2.50%

InferredChangeinPropertyValue:

CurrentStabilizedPropertyValue $2,251,901

TerminalNetSaleProceeds 10 $2,564,992

ChangeinPropertyValue(D) 13.90%

InferredStabilizedRoforIndividualYEstimates:

DiscountRateAssumptions(Y) 10.00% 10.50% 11.00% 11.50% 12.00%

K‐factor 1.099013 1.098035 1.097065 1.096105 1.095154

AnnualizedChangeinPropertyValue 0.87% 0.85% 0.83% 0.81% 0.79%

____________

InferredStabilizedOverallCap.Rate(Ro) 8.31% 8.79% 9.27% 9.75% 10.23%

DiscountedCashFlowAnaysis $2,398,432 $2,323,583 $2,251,901 $2,183,231 $2,117,426

DirectCapitalizationAnalysis $2,197,114 $2,197,114 $2,197,114 $2,197,114 $2,197,114

StabilizedRoSelection 9.50% 9.50% 9.50% 9.50% 9.50%

ValueDifferential ‐9.16% ‐5.76% ‐2.49% 0.63% 3.63%

RateDifferential(basispoints) ‐119 ‐71 ‐23 25 73

Source:HealthTrust,LLC

RATEANALYSIS

July19,2010

HEALTHTRUST FOUNTAIN RETIREMENT HOTEL



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.



FountainRetirementHotel

RevenueGrowthRate 2.50%

ExpenseGrowthRate 2.50%

ManagementFee 5.00%

Reserves(Capex)PerUnit $300

StabilizedOccupancy 77%

RentLoss $0

ProjectionPeriod(Yrs) 10

CapitalizationRate 9.50%

TerminalCapitalizationRate 10.00%

DiscountRate 11.00%

SaleCosts 4.00%

Source:HealthTrust,LLC

GLOBALVALUATIONASSUMPTIONS

HEALTHTRUST FOUNTAIN RETIREMENT HOTEL

70







12345678910Reversion

REVENUES

EffectiveGrossRentalRevenues $1,049,202 $1,075,432 $1,102,318 $1,129,876 $1,158,123 $1,187,076 $1,216,753 $1,247,171 $1,278,351 $1,310,310 $1,343,067

EntranceFeeRevenues $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

AncillaryRevenues $0$0$0$0$0$0$0$0$0$0 $0

TOTALEFFECTIVEGROSSREVENUE $1,049,202 $1,075,432 $1,102,318 $1,129,876 $1,158,123 $1,187,076 $1,216,753 $1,247,171 $1,278,351 $1,310,310 $1,343,067

EXPENSES

RealEstateTaxes $10,400 $10,660 $10,927 $11,200 $11,480 $11,767 $12,061 $12,362 $12,671 $12,988 $13,313

Insurance $35,750 $36,644 $37,560 $38,499 $39,461 $40,448 $41,459 $42,496 $43,558 $44,647 $45,763

Utilities $67,251 $68,932 $70,655 $72,422 $74,232 $76,088 $77,990 $79,940 $81,938 $83,987 $86,087

Maintenance $51,320 $52,603 $53,919 $55,267 $56,648 $58,064 $59,516 $61,004 $62,529 $64,092 $65,695

Marketing $0$0$0$0$0$0$0$0$0$0 $0

Administrative/General $148,675 $152,392 $156,201 $160,106 $164,109 $168,212 $172,417 $176,728 $181,146 $185,674 $190,316

Housekeeping/Laundry $115,126 $118,004 $120,954 $123,978 $127,077 $130,254 $133,511 $136,848 $140,270 $143,776 $147,371

Dietary $176,512 $180,925 $185,448 $190,084 $194,837 $199,707 $204,700 $209,818 $215,063 $220,440 $225,951

Nursing/PersonalCare $84,250 $86,356 $88,515 $90,728 $92,996 $95,321 $97,704 $100,146 $102,650 $105,216 $107,847

Activities/Social$20,895 $21,418 $21,953 $22,502 $23,065 $23,641 $24,232 $24,838 $25,459 $26,095 $26,748

OtherPayroll,PayrollTaxesandBenefits $58,337 $59,796 $61,290 $62,823 $64,393 $66,003 $67,653 $69,344 $71,078 $72,855 $74,676

SUB‐TOTALOPERATINGEXPENSES $768,516 $787,729 $807,422 $827,608 $848,298 $869,505 $891,243 $913,524 $936,362 $959,771 $983,766



ManagementFee $52,460 $53,772 $55,116 $56,494 $57,906 $59,354 $60,838 $62,359 $63,918 $65,515 $67,153

ReserveforReplacement $19,500 $19,988 $20,487 $20,999 $21,524 $22,062 $22,614 $23,179 $23,759 $24,353 $24,962

TOTALEXPENSES $840,476 $861,488 $883,025 $905,101 $927,728 $950,922 $974,695 $999,062 $1,024,039 $1,049,640 $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

DISCOUNTED@ 11.00% 0.900900901 0.811622433 0.731191381 0.658730974 0.593451328 0.534640836 0.481658411 0.433926496 0.390924771 0.352184479 0.352184479

NPVSUMMARY $188,041 $173,642 $160,345 $148,066 $136,728 $126,258 $116,589 $107,661 $99,417 $91,804 $903,350

ReversionRevenue $1,343,067 NPVCashFlows $2,251,901

ReversionExpenses $1,075,881 LessDeferredMaintenance: $0

ReversionNOI $267,187 PlusExcessLand/CON: $0

TerminalRate 10.00%

ReversionValue $2,671,866.75 DiscountedCashFlowValue: $2,251,901

‐$106,875

TotalReversion $2,564,992.08 Roundedto: $2,300,000

Source:HealthTrust,LLC

Less:BrokerFee(4.00%)

DISCOUNTEDCASHFLOWANALYSIS

HEALTHTRUST FOUNTAIN RETIREMENT HOTEL



REVENUES

EffectiveGrossRentalRevenues $1,049,202

EntranceFeeRevenues $0

AncillaryRevenues $0

TotalEffectiveGrossRevenue $1,049,202

EXPENSES

RealEstateTaxes $10,400

Insurance $35,750

Utilities $67,251

Maintenance $51,320

Marketing $0

Administrative/General $148,675

Housekeeping/Laundry $115,126

Dietary $176,512

Nursing/PersonalCare $84,250

Activities/Social$20,895

OtherPayroll,PayrollTaxesandBenefits $58,337

SUB‐TOTALOPERATINGEXPENSES $768,516



ManagementFee $52,460

ReserveforReplacement $19,500

TOTALEXPENSES 80.11% $840,476

NETOPERATINGINCOME(EBITDAR) $208,726

Capitalized@ 9.50% $2,197,114

LessDeferredMaintenance: $0

PlusExcessLand/CON: $0

LessRentLoss $0

DirectCapitalizationValue: $2,197,114

Roundedto: $2,200,000

Source:HealthTrust,LLC

DIRECTCAPITALIZATION

HEALTHTRUST FOUNTAIN RETIREMENT HOTEL



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.



HEALTHTRUST FOUNTAIN RETIREMENT HOTEL



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:



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.

9.00% 9.50% 10.00% 10.50% 11.00% 11.50%

20+Years

10‐19Years

6‐9Years

5orFewerYears

RelationshipofAgeandCapitalizationRate

CapitalizationRate

Source:ASHA,

HealthTrust,LLC

HEALTHTRUST FOUNTAIN RETIREMENT HOTEL



IMPROVEDSALESMAP





SaleNo. Name/Location Date No.Units/Beds YearBuilt SalePrice $/Unit NOI/Unit Occ. OAR

1 MorningstaratLittleton May‐09 85 2006 $25,250,000 $297,059 $26,141 91% 8.80%

Littleton,Colorado

2TimberRidgeatEureka Feb‐09 90 1998 $11,625,000 $129,167 $12,826 97% 9.93%

Eureka,California

3CaruthHavenCourt Jan‐09 91 1999 $20,500,000 $225,275 $18,247 91% 8.10%

Dallas,Texas

4 AdobeHouse Dec‐08 40 1996 $14,540,000 $363,500 $35,877 75% 9.87%

Petaluma,California

5 PrestonwoodCourt Mar‐08 124 2006 $29,000,000 $233,871 $18,335 90% 7.84%

Plano,Texas

Source:HealthTrust,LLC

SENIORHOUSING/HEALTHCARETRANSACTIONS

HEALTHTRUST FOUNTAIN RETIREMENT HOTEL



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



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:



$20,000

$70,000

$120,000

$170,000

$220,000

$270,000

$320,000

$370,000

$420,000

$0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000

NOIversusPrice/Unit

Price/Unit Linear(Price/Unit)

HEALTHTRUST FOUNTAIN RETIREMENT HOTEL



SUBJECT12345

NAME/LOCATION/ATTRIBUTES FountainRetirementHotel

MorningstaratLittleton TimberRidgeatEureka CaruthHavenCourt AdobeHouse PrestonwoodCourt

Youngtown,Arizona Littleton,Colorado Eureka,California Dallas,Texas Petaluma,California Plano,Texas

YEARBUILT 1971 2006 1998 1999 1996 2006

OCCUPANCY@SALE 77% 91% 97% 91% 75% 90%

OVERALLCAPITALIZATIONRATE ‐‐‐ 8.80% 9.93% 8.10% 9.87% 7.84%

EGIM ‐‐‐ 4.67 3.01 3.25 4.89 4.01

EXPENSERATIO 80% 59% 70% 74% 52% 69%

NO.ILUNITS 000000

NO.ALUNITS/BEDS 65 65 68 91 0 124

NO.ALZUNITS/BEDS 02022 040 0

NO.SNBEDS 0 00000

TOTALDENSITY 6585909140124

LANDAREA(AC) 1.35 3.13 1.76 2.215 1.68 3.8757

GROSSBUILDINGAREA(SF) 37,102 71,080 45,762 74,647 23,022 117,412

GBAperUNIT/BED 571 836 508 820 576 947

SALEDATE ‐‐‐ May‐09 Feb‐09 Jan‐09 Dec‐08 Mar‐08

SALEPRICE ‐‐‐ $25,250,000 $11,625,000 $20,500,000 $14,540,000 $29,000,000

PRICEPERUNIT/BED ‐‐‐ $297,059 $129,167 $225,275 $363,500 $233,871

PRICEPERSF ‐‐‐ $355.23 $254.03 $274.63 $631.57 $246.99

NOI/UNIT‐BED $3,211 $26,141 $12,826 $18,247 $35,877 $18,335

ADJUSTMENTS(SALECONDITIONS)

FINANCING 0% 0% 0% 0% 0%

ADJUSTEDINDICATION $297,059 $129,167 $225,275 $363,500 $233,871

CONDITIONSOFSALE 0% 0% 0% 0% 0%

ADJUSTEDINDICATION $297,059 $129,167 $225,275 $363,500 $233,871

MARKETCONDITIONS 0% 0% 0% 0% 0%

ADJUSTEDINDICATION $297,059 $129,167 $225,275 $363,500 $233,871

ADJUSTMENTS

NOIPERUNIT ‐88% ‐75% ‐82% ‐91% ‐82%

OTHER 0% 0% 0% 0% 0%

NETADJUSTMENT ‐88% ‐75% ‐82% ‐91% ‐82%

INDICATEDVALUE $36,491 $32,338 $39,644 $32,535 $40,959

TRENDINDICATORTOOLS VALUATIONSUMMARY

AVERAGESIZEOFADJUSTMENT: ‐84% 65 UNITS/BEDS

MINIMUM: $32,338 $35,000 TIMES$/UNIT

MAXIMUM: $40,959 $2,275,000 EQUALS

MEDIAN: $36,491 $2,300,000 ROUNDED

AVERAGE: $36,393

STD.DEVIATION: $3,961

RECONCILEDVALUE: $35,000

Source:HealthTrust,LLC

IMPROVEDSALESGRIDANALYSIS

HEALTHTRUST FOUNTAIN RETIREMENT HOTEL



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:



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:

PROPERTY EGIM EXPENSERATIO

TimberRidgeatEureka 3.01 70%

CaruthHavenCourt 3.25 74%

MorningstaratLittleton 4.67 59%

PrestonwoodCourt 4.01 69%

AdobeHouse 4.89 52%

Subject80%

EffectiveGrossIncomeo

$1,049,202

Multipliedby 2.00

Total $2,098,404

Roundedto $2,100,000

Source:HealthTrust,LLC

EGIMANALYSIS

50%

55%

60%

65%

70%

75%

80%

85%

0.5 1.5 2.5 3.5 4.5 5.5

EXPENSE RATIO

EGIM

EGIM ANALYSIS

HEALTHTRUST FOUNTAIN RETIREMENT HOTEL



SalesGridAnalysis

TotalUnits/Beds Value/UnitorBed Value

65 X $35,000 = $2,275,000

EGIMMethod

EffectiveGrossIncome EGIM

$1,049,202 X 2.00 = $2,098,404

ReconciledValue

IndicatedValueReconciledto: $2,186,702

LessDeferredMaintenance $0

PlusExcessLand/CON $0

LessRentLoss $0

Total $2,186,702

FinalValueConclusion $2,200,000

Source:HealthTrust,LLC

SALESCOMPARISONCONCLUSION

HEALTHTRUST FOUNTAIN RETIREMENT HOTEL



COSTAPPROACH

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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.

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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.

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LandValuation

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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.

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LandSalesMap

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HEALTHTRUST FOUNTAIN RETIREMENT HOTEL

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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.

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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:

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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.

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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.

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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.

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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.

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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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SaleNo. Location Units Acres SaleDate SalePrice $/Unit $/AC $/SF

1NEDynamite&44thSt 35 14.44 Apr‐10 $1,200,000 $34,286 $83,102 $1.91

CaveCreek,Arizona

2SEofPimaRdandLegacyBlvd 465 9.82 Dec‐09 $13,240,000 $28,473 $1,348,269 $30.95

Scottsdale,Arizona

3685SouthFreewayDrive 22 1.06 Feb‐09 $1,200,000 $54,545 $1,132,075 $25.99

Napa,California

4SECornerofImolaAvenueandGoldenGateDrive 17 0.86 Feb‐09 $850,000 $50,000 $988,372 $22.69

Napa,California

52975DuttonMeadow 96 4.00 Aug‐08 $2,800,000 $29,167 $700,000 $16.07

SantaRosa,California

Source:HealthTrust,LLC

VACANTLANDTRANSACTIONS

HEALTHTRUST FOUNTAIN RETIREMENT HOTEL

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PROPERTY SUBJECT SALE1SALE2SALE3SALE4SALE5

LOCATION 12030113thAve NEDynamite&44thSt SEofPimaRdandLegacyBlvd 685SouthFreewayDrive SECornerofImolaAvenueandGoldenGateDrive 2975DuttonMeadow

Youngtown,Arizona CaveCreek,Arizona Scottsdale,Arizona Napa,California Napa,California SantaRosa,California

USE ALR MasterPlannedCommunity/SingleFamilyDevelopment 465unitCCRC Multi‐familyresidential Multi‐familyresidential Apartments

SIZE:

UNITS 65 35 465 22 17 96

ACRES 1.35 14.44 9.82 1.06 0.86 4.00

DENSITY 48.1 2.4 47.4 20.8 19.8 24.0

SALEDATE Apr‐10 Dec‐09 Feb‐09 Feb‐09 Aug‐08

SALEPRICE $1,200,000 $13,240,000 $1,200,000 $850,000 $2,800,000

PRICE/UNIT $34,286 $28,473 $54,545 $50,000 $29,167

PRICE/SF $1.91 $30.95 $25.99 $22.69 $16.07

ADJUSTMENTS:

FINANCING 0% 0% 0% 0% 0%

ADJUSTEDINDICATION $34,286 $28,473 $54,545 $50,000 $29,167

CONDITIONSOFSALE 0% 0% 0% 0% 0%

ADJUSTEDINDICATION $34,286 $28,473 $54,545 $50,000 $29,167

MARKETCONDITIONS 0% 0% 0% 0% 0%

ADJUSTEDINDICATION $34,286 $28,473 $54,545 $50,000 $29,167

OTHERADJUSTMENTS:

LOCATION Similar Superior Superior Superior Similar

SIZE Superior Inferior Superior Superior Similar

ZONING/DENISTY Superior Similar Superior Superior Superior

OTHER Similar Similar Similar Similar Similar

NETADJUSTMENT ‐50% ‐40% ‐70% ‐70% ‐40%

INDICATEDVALUE $17,143 $17,084 $16,364 $15,000 $17,500

MINIMUM: $15,000 ESTIMATEDVALUEOFSUBJECT:

MAXIMUM: $17,500 65 UNITS@ $16,500 $1,072,500

AVERAGE: $16,618 EXCESSLANDVALUE: $0

STD.DEVIATION: $994 ROUNDEDTO $1,070,000

Source:HealthTrust,LLC

LANDSALESANALYSISSUMMARY

HEALTHTRUST FOUNTAIN RETIREMENT HOTEL

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LandValueConclusion

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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.

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ImprovementValuation

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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:

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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.

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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.

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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.

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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.

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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

Component IL AL SN Cottage Clubhouse Total

Class/Quality ‐‐ ClassD,Average ‐‐ ‐‐ ‐‐

BaseBuildingCost $0.00 $79.29 $0.00 $0.00 $0.00

AddforSprinklers $2.00 $2.00 $2.00 $0.00 $2.00

Subtotal 2.0081.292.000.002.00

FARMultiplier 0.000 0.950 0.000 0.000 0.000

LocalMultiplier 0.000 0.970 0.000 0.000 0.000

CurrentMultiplier 0.000 0.970 0.000 0.000 0.000

Subtotal 0.0072.660.000.000.00

Ratiotototal 0%100%0%0%0%

FinalBuildingCost   $72.66

Source:MarshallValuationService/HealthTrust,LLC

SUMMARYOFBASEBUILDINGCOSTS

HEALTHTRUST 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.

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HEALTHTRUST FOUNTAIN RETIREMENT HOTEL

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PROPERTY SUBJECT12345

DATE 20102009200920082008

LOCATION Arizona Arizona California Texas Texas Texas

NO.UNITS/BEDS 65 140 124 80 74 134

GROSSBUILDINGAREA 37,102 125,316 113,708 81,163 57,000 0

CONSTRUCTIONTYPE WoodFrame SteelFrame SteelFrame SteelFrame Unknown

LANDCOST $1,070,000 $1,945,500 $2,500,000 $468,000 $1,500,000 $0

SITEWORK $29,403 $900,000 $4,300,000 $0 $0 $0

HARDCOSTS $2,776,009 $11,005,020 $18,286,870 $9,123,989 $5,700,000 $14,400,000

FF&E $325,000 $1,429,088 $790,260 $863,076 $500,000 $0

SOFTCOSTS $794,562 $5,557,500 $10,783,103 $2,886,597 $943,218 $0

TOTAL $3,924,974 $18,891,608 $34,160,233 $12,873,662 $7,143,218 $14,400,000

ENTREPRENEURIALINCENTIVE $588,746 $2,833,741 $5,124,035 $1,931,049 $1,071,483 $2,160,000

REPLACEMENTCOSTNEW $4,513,720 $21,725,349 $39,284,268 $14,804,711 $8,214,701 $16,560,000

COSTSPERUNIT $69,442 $155,181 $316,809 $185,059 $111,009 $123,582

COSTSPERSF $121.66 $173.36 $345.48 $182.41 $144.12 N/A

Source:HealthTrust,LLC

Note:Costsmaybecombinedinsomecategories

COSTCOMPARABLESUMMARY

HEALTHTRUST FOUNTAIN RETIREMENT HOTEL

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Depreciation

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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.

 

HEALTHTRUST FOUNTAIN RETIREMENT HOTEL



HARDCOSTS

MainStructure 37,102 SF@ $72.66 $2,695,886

OtherStructure ‐ SF@ $0.00 $0

Walkways&Paving 14,702 SF@ $5.00 $73,508

Landscaping 2,940 SF@ $2.25 $6,616

SiteWork/Retention 58,806 SF@ $0.50 $29,403

Furniture,Fixtures,&Equipment 65 Units/Beds@ $5,000 $325,000

TotalHardCosts: $3,130,412

SOFTCOSTS

ProfessionalFees,Title,Ins.,Taxes,etc. $313,041

Miscellaneous&Contingency@ 5% $156,521

Pre‐marketingexpenses@ $5,000 PerUnit $325,000

TotalSoftCosts: $794,562

ENTREPRENEURIALINCENTIVE@ 15% $588,746

REPLACEMENTCOSTNEW $69,442 /PerUnit $121.66 /SquareFoot $4,513,720

DEPRECIATION

PhysicalCurable: $0

PhysicalIncurable(Short‐Lived): Effective Economic

COMPONENT CostNew Age Life Amount

Roof $74,204 18 25 $53,427

FF&E $325,000 9 12 $243,750

Flooring $148,408 8 10 $118,726

HVAC $185,510 18 25 $133,567

SiteImprovements $73,508 10 25 $29,403

$806,630 $578,873

PhysicalIncurable(Long‐Lived):

ReplacementCostNew $4,513,720

LessShort‐LivedItems 806,630‐$

DepreciableBasis 3,707,091$

EffectiveAge/EconomicLife 35 /50= 70.0% $2,594,963

FunctionalObsolescence: $0

ExternalObsolescence: $0

TOTALESTIMATEDACCRUEDDEPRECIATION ‐$3,173,837

VALUATIONSUMMARY

DEPRECIATEDVALUEOFIMPROVEMENTS $1,339,883

ADDEXCESSCONVALUE@$0PerBed $0

LANDVALUE $1,070,000

EXCESSLANDVALUE $0

ADDTOTALLANDVALUE $1,070,000

PRELIMINARYCOSTAPPROACHVALUE $2,409,883

LESSADJUSTMENTFORLACKOFSTABILIZATION $0

ESTIMATEDVALUEVIACOSTAPPROACH $2,409,883

ROUNDEDTO $2,400,000

Source:HealthTrust,LLC

COSTAPPROACHSUMMARY

HEALTHTRUST FOUNTAIN RETIREMENT HOTEL



InsurableValueEstimate



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



FountainRetirementHotel



ReplacementCostNew $4,513,720

Less:

SiteWork/Retention 58,806 SF@ $0.50 ‐$29,403

EntrepreneurialIncentive ‐$588,746

INSURABLEVALUECALCULATION $3,895,571

ROUNDEDTO $3,900,000

Source:HealthTrust,LLC

INSURABLEVALUECALCULATIONS

HEALTHTRUST FOUNTAIN RETIREMENT HOTEL



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:



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

As‐Is

19‐Jul‐2010

TheCostApproach‐FeeSimple $2,400,000

TheIncomeApproach‐FeeSimple $2,200,000

TheSalesApproach‐FeeSimple $2,200,000

TheIncomeApproach‐LeasedFee ‐‐‐

TheIncomeApproach‐Leasehold ‐‐‐

MarketValueofGoingConcern(TAB) $2,200,000

MarketValueofLeasedFeeEstate ‐‐‐

MarketValueofLeaseholdEstate ‐‐‐

ValueIndication(s)

ValueConclusion(s)

VALUATIONSUMMARY

HEALTHTRUST FOUNTAIN RETIREMENT HOTEL



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

HEALTHTRUST FOUNTAIN RETIREMENT HOTEL



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:





As‐Is

IncomeResidualMethod

(1)

EstimatedNOI(GoingConcern) = $208,726

Less:ReturnonFF&Eof20.00% $100,000 = ‐$20,000

IncomeAttributabletoRealEstate = $188,726

(2)

ValueofRealEstate@ 9.00% = $2,096,953

Rounded: $2,100,000

TotalPropertyValueConcludedviaAppraisal = $2,200,000

Less:PersonalProperty(FF&E)

‐$100,000

Less:RealEstateValue

‐$2,100,000

Remainder(IndicatedBusinessValue) = $0

ManagementCapitalizationMethod

ManagementFee,orincometobusinessof = $52,460

(3)

Capitalizedatbusinesscapitalizationrateof 30.00% = $174,867

IndicatedBusinessValue Rounded: $200,000

CostResidualMethod

TotalPropertyValueConcludedviaAppraisal = $2,200,000

(4)

PreliminaryCostApproachConclusion = $2,400,000

ValueofRealEstate(CostlessExcessCON,lessFF&E) = $2,100,000

(5)

ValueofFF&EandExcessCON = $100,000

(6)

ValueofBusiness(TotalvaluelessRE,lessFF&E,lessexcessCON = $0

ReconciledBusinessAllocation

$100,000

ReconciledPersonalPropertyAllocation

$100,000

RemainderRealEstateAllocation

$2,000,000

(1) NOIofgoingconcernincludingintangibleassets,orTAB

(2) 50basispointslessthangoingconcerncaprate

(3) Substantiallyhighercapratethangoingconcerntoaccountforrisk

(4) Excludesanyadjustmentforlackofstabilization

(5) CertificateofNeed(CON)consideredchattelormovablepersonalproperty

(6) Businessvalueif>TotalPropertyValue;otherwisezero

Source:HealthTrust,LLC

VALUEALLOCATIONSUMMARY

HEALTHTRUST FOUNTAIN RETIREMENT HOTEL



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.



HEALTHTRUST FOUNTAIN RETIREMENT HOTEL



ADDENDA



HEALTHTRUST ADDENDA

SubjectPhotographsandExhibits

HEALTHTRUST ADDENDA

ProvidedFinancialStatements

Jan - Mar 10

Ordinary Income/Expense

Income

4000 · Room & Board

4010 · Room & Boaard - Private 162,065.10

4040 · Medi-Set 81,855.00

4000 · Room & Board - Other 400.00

Total 4000 · Room & Board 244,320.10

4200 · Revenue Deductions

4210 · Private Deductions -5,816.06

Total 4200 · Revenue Deductions -5,816.06

Total Income 238,504.04

Gross Profit 238,504.04

Expense

Payroll Expenses 22.50

5000 · Supervisory Expenses

5010 · Supervisory Salaries 17,366.66

5000 · Supervisory Expenses - Other 151.77

Total 5000 · Supervisory Expenses 17,518.43

5100 · Dietary Expenses

5110 · Dietary Salaries 23,872.78

5120 · Dietary Food 15,369.95

5130 · Dietary Supplies 418.90

5150 · Dietary Purchased Services 160.95

Total 5100 · Dietary Expenses 39,822.58

5200 · Housekeeping Expenses

5210 · Housekeeping Salaries 19,940.75

5220 · Housekeeping Supplies 1,015.13

5230 · Housekeeping Repairs 473.00

Total 5200 · Housekeeping Expenses 21,428.88

5300 · Laundry Expenses

5310 · Laundry Salaries 4,845.00

Total 5300 · Laundry Expenses 4,845.00

5400 · Social Service Expenses

5410 · Social Service Salaries 3,870.07

Total 5400 · Social Service Expenses 3,870.07

5500 · Maintenance Expenses

5510 · Maintenance Salaries 4,963.76

5530 · Maintenance Repairs -1,303.31

5540 · Maintenance Purchased Service 1,911.41

5550 · Waste Management 396.75

5560 · Natural Gas 2,594.95

5570 · Water/Sewer 1,791.27

5580 · Electricity 8,921.61

5500 · Maintenance Expenses - Other 80.00

Total 5500 · Maintenance Expenses 19,356.44

5600 · Janitor Expenses 250.00

11:11 PM Fountain Retirement Center, Inc

06/22/10 Profit & Loss

Accrual Basis January through March 2010

Page 1

Jan - Mar 10

5700 · Administration Expenses

5710 · Administration Salaries 16,556.66

5730 · Administration Purch Services 137.84

5750 · Accounting Fees 1,800.00

5840 · Insurance General 7,301.53

5845 · Insurance Medical & Life 12,885.73

5850 · Insurance Vehicle 947.22

5855 · Insurance Workmans Comp 167.47

5875 · Miscellaneous Expense 1,610.65

5900 · Postage 176.00

5950 · Rent 59,537.61

5970 · Taxes/Licenses 108.20

5980 · Telephone 2,477.42

Total 5700 · Administration Expenses 103,706.33

6000 · Employee Benefits

6020 · Sun Country Credit Union 500.00

6030 · Payroll Taxes 7,140.71

6040 · Unemployment Taxes 735.21

6060 · Vacation - Holiday Pay 463.00

Total 6000 · Employee Benefits 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 4,837.50

Total 8500 · Other Expenses 4,837.50

Total Other Expense 4,837.50

Net Other Income -4,837.50

Net Income 14,007.39

11:11 PM Fountain Retirement Center, Inc

06/22/10 Profit & Loss

Accrual Basis January through March 2010

Page 2

Oct - Dec 09

Ordinary Income/Expense

Income

4000 · Room & Board

4010 · Room & Boaard - Private 1,002,298.23

4040 · Medi-Set 62,805.00

4000 · Room & Board - Other 100.00

Total 4000 · Room & Board 1,065,203.23

4200 · Revenue Deductions

4210 · Private Deductions -9,528.69

4230 · Other Deductions -295.00

Total 4200 · Revenue Deductions -9,823.69

Total Income 1,055,379.54

Gross Profit 1,055,379.54

Expense

Payroll Expenses 0.00

5000 · Supervisory Expenses

5010 · Supervisory Salaries 80,163.58

5020 · Supervisory Central Supplies 5,925.05

5030 · Supervisory Repairs 26.00

5040 · Supervisory Purchased Services 1,467.79

5050 · S/C - Finger Printing 138.00

Total 5000 · Supervisory Expenses 87,720.42

5100 · Dietary Expenses

5110 · Dietary Salaries 92,218.62

5120 · Dietary Food 78,021.26

5130 · Dietary Supplies 2,517.95

5150 · Dietary Purchased Services 2,223.02

Total 5100 · Dietary Expenses 174,980.85

5200 · Housekeeping Expenses

5210 · Housekeeping Salaries 81,723.45

5220 · Housekeeping Supplies 8,918.01

5230 · Housekeeping Repairs 1,632.29

5240 · Housekeeping Purchased Service 76.00

Total 5200 · Housekeeping Expenses 92,349.75

5300 · Laundry Expenses

5310 · Laundry Salaries 18,743.50

5320 · Laundry Supplies 1,195.49

5330 · Laundry Repairs 1,838.17

Total 5300 · Laundry Expenses 21,777.16

5400 · Social Service Expenses

5410 · Social Service Salaries 16,325.76

5420 · Social Service Supplies 2,234.33

5440 · Social Service Purchased Servic 2,154.03

Total 5400 · Social Service Expenses 20,714.12

5500 · Maintenance Expenses

5510 · Maintenance Salaries 18,277.65

5520 · Maintenance Supplies 5,191.85

5530 · Maintenance Repairs 13,422.60

5540 · Maintenance Purchased Service 26,251.75

5550 · Waste Management 1,587.00

5560 · Natural Gas 12,863.37

5570 · Water/Sewer 10,926.58

5580 · Electricity 45,344.08

5500 · Maintenance Expenses - Other 1,220.00

Total 5500 · Maintenance Expenses 135,084.88

9:56 AM Fountain Retirement Center, Inc

04/19/10 Profit & Loss

Accrual Basis October through December 2009

Page 1

Oct - Dec 09

5700 · Administration Expenses

5710 · Administration Salaries 82,189.73

5730 · Administration Purch Services 74.24

5740 · Ads/Help Wanted 1,318.63

5750 · Accounting Fees 10,415.10

5780 · Bank Charges 9.73

5790 · Board of Directors Fees 1,000.00

5810 · Depreciation 35,461.00

5820 · Donations 1,000.00

5830 · Dues/Subscriptions 1,059.70

5840 · Insurance General 18,486.34

5845 · Insurance Medical & Life 25,800.87

5850 · Insurance Vehicle 816.00

5855 · Insurance Workmans Comp 12,603.20

5870 · Legal Fees 1,000.00

5875 · Miscellaneous Expense -1,812.53

5880 · Office Supplies 2,272.15

5890 · Permits/Fees -135.00

5900 · Postage 1,233.07

5910 · Printing/Duplication 5,597.80

5930 · Property Tax 11,159.30

5950 · Rent 229,148.88

5960 · Seminar/Education 970.00

5970 · Taxes/Licenses 3,768.50

5980 · Telephone 3,973.60

5990 · Vehicle Expenses 36,880.69

Total 5700 · Administration Expenses 484,291.00

6000 · Employee Benefits

6030 · Payroll Taxes 31,152.52

6040 · Unemployment Taxes 0.00

Total 6000 · Employee Benefits 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 382.00

8030 · Interest Income 1,289.21

Total 8000 · Other Income 1,671.21

Total Other Income 1,671.21

Other Expense

8500 · Other Expenses

8530 · Interest Expense 3,225.00

8540 · Penalties/Fines -18.41

Total 8500 · Other Expenses 3,206.59

Total Other Expense 3,206.59

Net Other Income -1,535.38

Net Income 5,773.46

9:56 AM Fountain Retirement Center, Inc

04/19/10 Profit & Loss

Accrual Basis October through December 2009

Page 2

HEALTHTRUST ADDENDA

ImprovedSales

IMPROVED SALE #1

Record ID:

8054704

Property

Type:

---

Name:

Morningstar at Littleton

Address:

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

Verified with:

Grantee, Grantor, Senior Care Investor

By:

Colleen H. Blumenthal, MAI & David Rey Salinas, AS on

3/22/2009

KEY INDICATORS

Sale Price:

$25,250,000

Price per Capacity:

$297,059

Adjusted Sale Price:

---

Price per Acre:

$8,067,093

Sale Date:

5/2009

Price per SF:

$185.19

Cap Rate:

8.80%

Time on Market:

---

EGIM:

4.67

Exp as Percent of EGI:

58.86%

SALE DATA

Grantor:

MH MS Littleton, LLP (MacKenzie House, LLC)

Grantee:

AEW Senior Housing Investors, LP

Property Rights:

Fee Simple

Financing:

Cash to seller

Occupancy at sale:

91%

Private Pay Census:

100%

Medicaid Census:

---

Effective Gross Income:

$5,401,384

Operating Expenses:

$3,178,988

NOI:

$2,222,396

Exp per Capacity:

$37,400

PHYSICAL PLANT DATA

Year Opened:

2006

Major Renovation:

---

Gross Building Area:

71,080

Number of Buildings:

---

Number of Stories:

---

Elevators:

---

Construction:

Steel Frame

Quality:

---

Condition:

---

Parking Garage:

---

Parking Spaces:

---

PROPERTY MIX

Level

Capacity

---

65 units

ALZ

20 units

---

HPL

---

Total Capacity

LAND DATA

Land Area:

3.13 Acres

Description:

Slightly irregular parcel on well-traveled road. 3.13 acres.

Improvements:

85-unit assisted living and memory care residence

Parcel / Legal:

195809

Proposed Use:

---

Zoning:

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:

8054703

Property Type:

---

Name:

Timber Ridge at Eureka

Address:

2740 Timber Ridge Lane, Eureka, Humboldt, CA, 95503

Verified with:

Grantee and Grantor

By:

Colleen H. Blumenthal, MAI on 3/22/2009

KEY INDICATORS

Sale Price:

$11,625,000

Price per Capacity:

$129,167

Adjusted Sale Price:

---

Price per Acre:

$6,605,114

Sale Date:

2/2009

Price per SF:

$151.63

Cap Rate:

9.93%

Time on Market:

---

EGIM:

3.01

Exp as Percent of EGI:

70.14%

SALE DATA

Grantor:

FKS Investment Company

Grantee:

Humboldt Walford, LLC

Property Rights:

Fee Simple

Financing:

Cash to seller

Occupancy at sale:

97%

Private Pay Census:

100%

Medicaid Census:

---

Effective Gross Income:

$3,865,984

Operating Expenses:

$2,711,559

NOI:

$1,154,425

Exp per Capacity:

$30,128

PHYSICAL PLANT DATA

Year Opened:

1998

Major Renovation:

---

Gross Building Area:

45,762

Number of Buildings:

---

Number of Stories:

---

Elevators:

---

Construction:

Wood Frame

Quality:

---

Condition:

---

Parking Garage:

---

Parking Spaces:

---

PROPERTY MIX

Level

Capacity

---

68 units

ALZ

22 units

---

HPL

---

Total Capacity

LAND DATA

Land Area:

1.76 Acres

Description:

---

Improvements:

---

Parcel / Legal:

---

Proposed Use:

---

Zoning:

---

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.

IMPROVED SALE #3

Record ID:

8054899

Property

Type:

---

Name:

Caruth Haven Court

Address:

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

Verified

with:

SeniorCare Investor, Cornerstone REIT Press Release and

broker (Megan Fetter) CLW at

By:

Anthony Carter on 4/6/2009

KEY INDICATORS

Sale Price:

$20,500,000

Price per Capacity:

$225,275

Adjusted Sale Price:

---

Price per Acre:

$9,255,079

Sale Date:

1/2009

Price per SF:

$212.47

Cap Rate:

8.10%

Time on Market:

---

EGIM:

3.25

Exp as Percent of EGI:

73.67%

SALE DATA

Grantor:

Senior Housing Partners II, LP

Grantee:

Cornerstone Real Estate Funds (REIT)

Property Rights:

Fee Simple

Financing:

Cash to Seller

Occupancy at sale:

91%

Private Pay Census:

100%

Medicaid Census:

---

Effective Gross Income:

$6,307,692

Operating Expenses:

$4,647,192

NOI:

$1,660,500

Exp per Capacity:

$51,068

PHYSICAL PLANT DATA

Year Opened:

1999

Major Renovation:

---

Gross Building Area:

74,647

Number of Buildings:

---

Number of Stories:

---

Elevators:

---

Construction:

Wood Frame

Quality:

---

Condition:

---

Parking Garage:

---

Parking Spaces:

---

PROPERTY MIX

Level

Capacity

---

91 units

ALZ

---

HPL

---

Total Capacity

LAND DATA

Land Area:

2.22 Acres

Description:

Level; Irregularly shaped; not in a flood zone

Improvements:

---

Parcel / Legal:

005450000P0040000

Proposed Use:

---

Zoning:

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:

8053918

Property

Type:

---

Name:

Adobe House

Address:

750 North McDowell Boulevard, Petaluma, Sonoma, CA,

94954

Verified with:

Buyer representative

By:

Scott A. McCorvie on 1/12/2009

KEY INDICATORS

Sale Price:

$14,540,000

Price per Capacity:

$363,500

Adjusted Sale Price:

---

Price per Acre:

$8,654,762

Sale Date:

12/2008

Price per SF:

$198.69

Cap Rate:

9.88%

Time on Market:

---

EGIM:

4.89

Exp as Percent of EGI:

51.71%

SALE DATA

Grantor:

Adobe House, LLC

Grantee:

Wilkinson 1031, LLC

Property Rights:

Fee Simple

Financing:

cash equivalent

Occupancy at sale:

75%

Private Pay Census:

100%

Medicaid Census:

---

Effective Gross Income:

$2,973,331

Operating Expenses:

$1,537,473

NOI:

$1,435,858

Exp per Capacity:

$38,437

PHYSICAL PLANT DATA

Year Opened:

1996

Major Renovation:

---

Gross Building Area:

23,022

Number of Buildings:

---

Number of Stories:

---

Elevators:

---

Construction:

Wood Frame

Quality:

---

Condition:

---

Parking Garage:

---

Parking Spaces:

---

PROPERTY MIX

Level

Capacity

---

ALZ

40 units

---

HPL

---

Total Capacity

LAND DATA

Land Area:

1.68 Acres

Description:

---

Improvements:

---

Parcel / Legal:

137-061-038

Proposed Use:

---

Zoning:

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.

IMPROVED SALE #5

Record ID:

8053453

Property Type:

---

Name:

Prestonwood Court

Address:

7001 West Plano Parkway, Plano, Denton, TX, 75093

Verified with:

Third Party Appraiser

By:

Anthony Carter on 11/21/2008

KEY INDICATORS

Sale Price:

$29,000,000

Price per Capacity:

$233,871

Adjusted Sale Price:

---

Price per Acre:

$7,482,519

Sale Date:

3/2008

Price per SF:

$171.78

Cap Rate:

7.84%

Time on Market:

---

EGIM:

4.01

Exp as Percent of EGI:

68.56%

SALE DATA

Grantor:

Prestonwood Court LTD

Grantee:

Aureus Group, LLC

Property Rights:

Fee Simple

Financing:

---

Occupancy at sale:

90%

Private Pay Census:

100%

Medicaid Census:

---

Effective Gross Income:

$7,231,920

Operating Expenses:

$4,958,320

NOI:

$2,273,600

Exp per Capacity:

$39,986

PHYSICAL PLANT DATA

Year Opened:

2006

Major Renovation:

---

Gross Building Area:

117,412

Number of Buildings:

---

Number of Stories:

---

Elevators:

---

Construction:

Steel Frame

Quality:

---

Condition:

---

Parking Garage:

---

Parking Spaces:

---

PROPERTY MIX

Level

Capacity

---

124 units

ALZ

---

HPL

---

Total Capacity

124

LAND DATA

Land Area:

3.88 Acres

Description:

---

Improvements:

---

Parcel / Legal:

257359

Proposed Use:

---

Zoning:

---

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.

HEALTHTRUST ADDENDA

LandSales

HEALTHTRUST ADDENDA

DemographicData

Senior Life 2009

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

Population by Age ProjectionEstimateCensus %% 20142000 2009

Total Population 142,630 195,339 225,422

4.05%4.31% 4.04% Age 55 - 59 6,146 7,885 9,140

4.33%4.94% 4.88% Age 60 - 64 7,039 9,536 9,752

5.42%6.16% 5.31% Age 65 - 69 8,780 10,364 12,211

5.12%7.49% 5.19% Age 70 - 74 10,677 10,146 11,551

4.94%8.06% 5.52% Age 75 - 79 11,498 10,786 11,139

4.24%6.48% 4.88% Age 80 - 84 9,245 9,535 9,566

5.13%6.08% 5.37% Age 85 and over 8,674 10,492 11,571

33.24%43.51% 35.19%Age 55 and over 62,060 68,744 74,930

24.86%34.27% 26.27%Age 65 and over 48,875 51,323 56,038

Total Population, Male 66,137 93,042 107,790

4.10%3.91% 3.76% Age 55 - 59 2,586 3,499 4,418

3.78%4.48% 4.37% Age 60 - 64 2,961 4,062 4,071

4.96%5.87% 4.97% Age 65 - 69 3,885 4,624 5,346

4.61%7.02% 4.71% Age 70 - 74 4,640 4,381 4,968

4.32%7.32% 4.89% Age 75 - 79 4,844 4,554 4,657

3.54%5.69% 4.20% Age 80 - 84 3,764 3,908 3,812

3.97%4.56% 4.26% Age 85 and over 3,013 3,965 4,274

29.27%38.85% 31.16%Age 55 and over 25,694 28,993 31,546

21.39%30.46% 23.03%Age 65 and over 20,146 21,432 23,057

Total Population, Female 76,492 102,297 117,631

4.01%4.65% 4.29% Age 55 - 59 3,560 4,386 4,722

4.83%5.33% 5.35% Age 60 - 64 4,077 5,475 5,681

5.84%6.40% 5.61% Age 65 - 69 4,895 5,740 6,865

5.60%7.89% 5.64% Age 70 - 74 6,037 5,765 6,583

5.51%8.70% 6.09% Age 75 - 79 6,655 6,232 6,482

4.89%7.17% 5.50% Age 80 - 84 5,481 5,627 5,754

6.20%7.40% 6.38% Age 85 and over 5,661 6,527 7,297

36.88%47.54% 38.86%Age 55 and over 36,366 39,751 43,384

28.04%37.56% 29.22%Age 65 and over 28,729 29,891 32,981

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

Population by Single Race Classification ProjectionEstimateCensus %% 20142000 2009

White Alone 123,102 157,847 176,438

29.76%38.79% 30.95% Age 65 and over 47,753 48,851 52,506

Black or African American Alone 3,688 8,328 11,723

8.88%8.68% 8.55% Age 65 and over 320 712 1,041

American Indian and Alaska Native Alone 781 1,600 2,147

7.41%6.40% 5.88% Age 65 and over 50 94 159

Asian Alone 1,855 3,730 5,022

10.18%8.73% 9.33% Age 65 and over 162 348 511

Native Hawaiian and Other Pacific Islander Alone 132 256 355

12.68%15.91% 12.11% Age 65 and over 21 31 45

Some Other Race Alone 10,171 17,054 20,749

5.33%3.54% 4.75% Age 65 and over 360 810 1,106

Two or More Races 2,900 6,525 8,987

7.46%7.21% 7.31% Age 65 and over 209 477 670

Population by Hispanic or Latino ProjectionEstimateCensus %% 20142000 2009

Hispanic or Latino 24,688 48,485 63,328

6.30%4.81% 5.63% Age 65 and over 1,187 2,732 3,989

Not Hispanic or Latino 117,942 146,854 162,094

32.11%40.43% 33.09% Age 65 and over 47,688 48,591 52,049

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Senior Life 2009

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

Household Income by Age of Householder ProjectionEstimateCensus %% 20142000 2009

Householder Age 55 - 59 3,869 4,267 4,880

4.88%7.16% 5.27% Income less than $10,000 277 225 238

2.73%4.65% 3.00% Income $10,000 - $14,999 180 128 133

2.83%4.70% 3.07% Income $15,000 - $19,999 182 131 138

2.79%6.33% 3.09% Income $20,000 - $24,999 245 132 136

3.34%7.03% 4.22% Income $25,000 - $29,999 272 180 163

3.95%5.25% 4.48% Income $30,000 - $34,999 203 191 193

4.06%6.77% 4.85% Income $35,000 - $39,999 262 207 198

4.55%6.23% 5.11% Income $40,000 - $44,999 241 218 222

4.49%5.97% 3.59% Income $45,000 - $49,999 231 153 219

7.27%10.47% 8.48% Income $50,000 - $59,999 405 362 355

14.45%13.00% 19.10% Income $60,000 - $74,999 503 815 705

18.01%12.17% 13.87% Income $75,000 - $99,999 471 592 879

10.94%5.27% 11.01% Income $100,000 - $124,999 204 470 534

7.01%1.99% 5.04% Income $125,000 - $149,999 77 215 342

4.77%2.02% 3.16% Income $150,000 - $199,999 78 135 233

1.86%0.54% 1.48% Income $200,000 - $249,999 21 63 91

1.56%0.28% 0.87% Income $250,000 - $499,999 11 37 76

0.47%0.13% 0.33% Income $500,000 or more 5 14 23

Median Household Income $46,562 $63,814 $69,444

Householder Age 60 - 64 3,227 5,166 5,325

5.43%7.72% 6.29% Income less than $10,000 249 325 289

3.12%5.08% 3.54% Income $10,000 - $14,999 164 183 166

3.06%5.18% 4.07% Income $15,000 - $19,999 167 210 163

3.47%6.76% 3.87% Income $20,000 - $24,999 218 200 185

3.77%7.38% 4.92% Income $25,000 - $29,999 238 254 201

4.45%5.33% 5.79% Income $30,000 - $34,999 172 299 237

5.09%7.10% 5.52% Income $35,000 - $39,999 229 285 271

5.20%6.07% 5.36% Income $40,000 - $44,999 196 277 277

4.58%6.32% 3.89% Income $45,000 - $49,999 204 201 244

7.59%9.85% 9.39% Income $50,000 - $59,999 318 485 404

15.12%12.40% 16.88% Income $60,000 - $74,999 400 872 805

16.38%11.28% 12.54% Income $75,000 - $99,999 364 648 872

9.60%4.93% 9.37% Income $100,000 - $124,999 159 484 511

6.35%1.86% 3.95% Income $125,000 - $149,999 60 204 338

3.85%1.92% 2.54% Income $150,000 - $199,999 62 131 205

1.48%0.50% 1.37% Income $200,000 - $249,999 16 71 79

1.09%0.28% 0.54% Income $250,000 - $499,999 9 28 58

0.36%0.09% 0.21% Income $500,000 or more 3 11 19

Median Household Income $44,505 $57,212 $64,197

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Senior Life 2009

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

Household Income by Age of Householder ProjectionEstimateCensus %% 20142000 2009

Householder Age 65 - 69 6,040 5,898 6,908

5.63%6.31% 5.93% Income less than $10,000 381 350 389

4.37%7.12% 4.90% Income $10,000 - $14,999 430 289 302

5.85%9.83% 6.65% Income $15,000 - $19,999 594 392 404

6.21%9.35% 7.49% Income $20,000 - $24,999 565 442 429

7.05%10.31% 8.21% Income $25,000 - $29,999 623 484 487

7.40%10.22% 7.80% Income $30,000 - $34,999 617 460 511

6.89%9.14% 7.41% Income $35,000 - $39,999 552 437 476

6.63%6.74% 8.04% Income $40,000 - $44,999 407 474 458

6.53%5.61% 6.14% Income $45,000 - $49,999 339 362 451

9.74%8.38% 9.92% Income $50,000 - $59,999 506 585 673

11.16%6.19% 10.75% Income $60,000 - $74,999 374 634 771

11.46%6.29% 8.38% Income $75,000 - $99,999 380 494 792

5.30%2.04% 4.27% Income $100,000 - $124,999 123 252 366

2.35%0.79% 1.75% Income $125,000 - $149,999 48 103 162

1.61%1.08% 1.05% Income $150,000 - $199,999 65 62 111

0.93%0.30% 0.75% Income $200,000 - $249,999 18 44 64

0.58%0.23% 0.36% Income $250,000 - $499,999 14 21 40

0.32%0.07% 0.20% Income $500,000 or more 4 12 22

Median Household Income $33,459 $41,000 $44,973

Householder Age 70 - 74 5,647 5,857 6,599

5.93%6.68% 6.18% Income less than $10,000 377 362 391

4.47%7.67% 5.21% Income $10,000 - $14,999 433 305 295

6.27%10.06% 7.53% Income $15,000 - $19,999 568 441 414

7.26%9.69% 8.40% Income $20,000 - $24,999 547 492 479

7.43%10.59% 8.28% Income $25,000 - $29,999 598 485 490

7.56%10.41% 8.08% Income $30,000 - $34,999 588 473 499

7.02%9.07% 7.79% Income $35,000 - $39,999 512 456 463

6.99%6.43% 8.04% Income $40,000 - $44,999 363 471 461

6.93%5.38% 6.16% Income $45,000 - $49,999 304 361 457

9.90%7.76% 9.83% Income $50,000 - $59,999 438 576 653

9.97%5.86% 9.19% Income $60,000 - $74,999 331 538 658

8.77%5.84% 7.12% Income $75,000 - $99,999 330 417 579

5.23%2.04% 3.77% Income $100,000 - $124,999 115 221 345

2.62%0.76% 1.90% Income $125,000 - $149,999 43 111 173

1.71%1.17% 1.06% Income $150,000 - $199,999 66 62 113

0.88%0.32% 0.77% Income $200,000 - $249,999 18 45 58

0.76%0.23% 0.50% Income $250,000 - $499,999 13 29 50

0.30%0.09% 0.20% Income $500,000 or more 5 12 20

Median Household Income $32,564 $39,059 $42,906

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114 OfPageFri Jul 30, 2010Prepared On:

Senior Life 2009

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

Household Income by Age of Householder ProjectionEstimateCensus %% 20142000 2009

Householder Age 75 - 79 9,278 6,820 6,971

6.00%6.96% 6.54% Income less than $10,000 646 446 418

5.06%9.82% 6.17% Income $10,000 - $14,999 911 421 353

7.49%10.78% 8.81% Income $15,000 - $19,999 1,000 601 522

8.58%10.00% 9.30% Income $20,000 - $24,999 928 634 598

8.29%9.89% 8.71% Income $25,000 - $29,999 918 594 578

7.88%7.79% 8.21% Income $30,000 - $34,999 723 560 549

7.52%7.12% 7.48% Income $35,000 - $39,999 661 510 524

6.58%6.29% 6.61% Income $40,000 - $44,999 584 451 459

5.59%4.60% 5.44% Income $45,000 - $49,999 427 371 390

8.48%9.05% 8.24% Income $50,000 - $59,999 840 562 591

9.64%6.08% 9.18% Income $60,000 - $74,999 564 626 672

8.59%5.35% 6.99% Income $75,000 - $99,999 496 477 599

4.73%2.82% 3.90% Income $100,000 - $124,999 262 266 330

2.35%0.88% 1.85% Income $125,000 - $149,999 82 126 164

1.52%0.98% 1.13% Income $150,000 - $199,999 91 77 106

0.57%0.77% 0.45% Income $200,000 - $249,999 71 31 40

0.79%0.59% 0.73% Income $250,000 - $499,999 55 50 55

0.33%0.20% 0.25% Income $500,000 or more 19 17 23

Median Household Income $31,633 $36,512 $39,457

Householder Age 80 - 84 6,234 6,349 6,325

6.81%8.21% 7.17% Income less than $10,000 512 455 431

5.91%11.12% 6.79% Income $10,000 - $14,999 693 431 374

8.21%12.09% 9.72% Income $15,000 - $19,999 754 617 519

9.03%10.43% 9.91% Income $20,000 - $24,999 650 629 571

8.84%9.62% 8.95% Income $25,000 - $29,999 600 568 559

7.59%7.60% 8.10% Income $30,000 - $34,999 474 514 480

7.04%6.85% 6.99% Income $35,000 - $39,999 427 444 445

6.51%6.02% 6.58% Income $40,000 - $44,999 375 418 412

5.69%4.32% 5.12% Income $45,000 - $49,999 269 325 360

8.35%7.91% 8.06% Income $50,000 - $59,999 493 512 528

9.17%5.45% 8.40% Income $60,000 - $74,999 340 533 580

7.62%4.92% 6.44% Income $75,000 - $99,999 307 409 482

4.35%2.26% 3.69% Income $100,000 - $124,999 141 234 275

2.20%0.88% 1.50% Income $125,000 - $149,999 55 95 139

1.06%1.01% 0.93% Income $150,000 - $199,999 63 59 67

0.47%0.64% 0.60% Income $200,000 - $249,999 40 38 30

0.90%0.51% 0.80% Income $250,000 - $499,999 32 51 57

0.24%0.14% 0.27% Income $500,000 or more 9 17 15

Median Household Income $29,230 $34,612 $37,562

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115 OfPageFri Jul 30, 2010Prepared On:

Senior Life 2009

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

Household Income by Age of Householder ProjectionEstimateCensus %% 20142000 2009

Householder Age 85 and over 4,258 6,798 7,354

8.15%10.52% 8.62% Income less than $10,000 448 586 599

7.29%13.62% 8.75% Income $10,000 - $14,999 580 595 536

9.45%12.66% 11.18% Income $15,000 - $19,999 539 760 695

9.59%10.38% 9.80% Income $20,000 - $24,999 442 666 705

8.39%9.61% 8.50% Income $25,000 - $29,999 409 578 617

7.52%7.21% 7.83% Income $30,000 - $34,999 307 532 553

6.81%6.39% 6.50% Income $35,000 - $39,999 272 442 501

6.08%4.74% 6.02% Income $40,000 - $44,999 202 409 447

5.29%4.18% 5.25% Income $45,000 - $49,999 178 357 389

7.95%7.49% 7.21% Income $50,000 - $59,999 319 490 585

8.27%4.63% 8.11% Income $60,000 - $74,999 197 551 608

6.68%3.88% 5.28% Income $75,000 - $99,999 165 359 491

3.39%1.69% 2.66% Income $100,000 - $124,999 72 181 249

1.67%0.94% 1.24% Income $125,000 - $149,999 40 84 123

1.35%0.96% 1.13% Income $150,000 - $199,999 41 77 99

0.73%0.59% 0.75% Income $200,000 - $249,999 25 51 54

0.97%0.35% 0.85% Income $250,000 - $499,999 15 58 71

0.42%0.14% 0.34% Income $500,000 or more 6 23 31

Median Household Income $26,463 $32,017 $34,738

Households by Household Income ProjectionEstimateCensus %% 20142000 2009

Total Households 61,482 76,905 86,340

7.76%12.37% 8.77% Income less than $15,000 7,603 6,748 6,701

9.15%15.13% 10.70% Income $15,000 - $24,999 9,301 8,231 7,901

10.21%15.50% 11.91% Income $25,000 - $34,999 9,530 9,160 8,811

16.29%19.35% 17.65% Income $35,000 - $49,999 11,894 13,570 14,065

22.67%20.32% 23.57% Income $50,000 - $74,999 12,496 18,130 19,569

15.14%9.94% 13.38% Income $75,000 - $99,999 6,111 10,290 13,068

13.98%5.14% 10.62% Income $100,000 - $149,999 3,158 8,169 12,067

3.63%1.75% 2.46% Income $150,000 - $249,999 1,074 1,895 3,136

0.86%0.39% 0.70% Income $250,000 - $499,999 240 536 740

0.33%0.12% 0.23% Income $500,000 or more 74 175 282

Average Household Income $49,610 $61,552 $68,478

Median Household Income $40,431 $51,025 $57,272

Per Capita Income $21,722 $24,481 $26,445

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

All Owner-Occupied Housing Unit Values ProjectionEstimateCensus %% 20142000 2009

Total All Owner-Occupied Housing Unit Values 50,462 62,845 70,468

0.68%2.00% 0.85% Value Less than $20,000 1,009 534 477

1.43%3.49% 1.66% Value $20,000 - $39,999 1,763 1,044 1,009

1.70%6.30% 2.15% Value $40,000 - $59,999 3,181 1,353 1,196

2.97%15.93% 3.47% Value $60,000 - $79,999 8,039 2,182 2,094

3.71%22.60% 5.34% Value $80,000 - $99,999 11,405 3,354 2,611

20.28%38.13% 26.85% Value $100,000 - $149,999 19,242 16,875 14,291

27.30%8.41% 29.08% Value $150,000 - $199,999 4,243 18,278 19,236

33.39%2.57% 26.13% Value $200,000 - $299,999 1,299 16,421 23,526

5.70%0.35% 2.72% Value $300,000 - $399,999 179 1,707 4,016

1.48%0.05% 0.88% Value $400,000 - $499,999 25 551 1,045

0.88%0.06% 0.53% Value $500,000 - $749,999 29 336 620

0.23%0.02% 0.12% Value $750,000 - $999,999 10 73 161

0.27%0.08% 0.22% Value $1,000,000 or more 38 136 187

Median All Owner-Occupied Housing Unit Value $99,708 $166,632 $185,237

Group Quarters by Population Type* ProjectionEstimateCensus %% 20142000 2009

Institutionalized: 1,533 1,483 1,507

0.27%0.26% 0.27% Correctional Institutions 4 4 4

98.34%98.04% 98.25% Nursing Homes 1,503 1,457 1,482

1.46%1.76% 1.55% Other Institutions 27 23 22

Noninstitutionalized 1,275 1,244 1,260

Tenure of Occupied Housing Units ProjectionEstimateCensus 20142000 2009

Owner Occupied 50,458 62,845 70,468

Renter Occupied 10,886 14,060 15,872

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

Total2000 Tenure By Age of Householder

Total Households 61,369

Owner Occupied 50,462

5.79% Householder 55 to 59 Years 2,923

6.55% Householder 60 to 64 Years 3,307

21.02% Householder 65 to 74 Years 10,608

23.61% Householder 75 to 84 Years 11,912

8.62% Householder 85 and over 4,350

Renter Occupied 10,907

3.24% Householder 55 to 59 Years 353

4.00% Householder 60 to 64 Years 436

8.95% Householder 65 to 74 Years 976

17.78% Householder 75 to 84 Years 1,939

16.71% Householder 85 and over 1,823

Total2000 Pop 65 and over by HH Type and Relationship

Total for Pop 65 and over 48,968

In Households: 46,977

64.36% In Family Households: 31,514

33.56% Householder 16,435

30.11% Male 14,745

3.45% Female 1,690

27.93% Spouse 13,675

1.36% Parent 666

1.32% Other Relatives 647

0.19% Nonrelatives 91

31.58% In Non-Family Households: 15,462

7.32% Male householder 3,585

6.77% Living Alone 3,314

0.55% Not Living Alone 271

23.35% Female Householder 11,436

22.86% Living Alone 11,196

0.49% Not Living Alone 240

0.90% Nonrelatives 441

In Group Quarters: 1,992

3.01% Institutionalized population 1,476

1.05% Noninstitutionalized population 515

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

And Over

65 Yrs

TotalsNoninstitutionalized Persons Age 16 and over

2000 Mobility and Disability Civilian % %

Total Disability 45,064 31,660

16.17% 18.49% Sensory Disability 7,288 5,854

34.75% 36.12% Physical Disability 15,661 11,435

13.93% 11.92% Mental Disability 6,279 3,775

9.21% 9.50% Self-Care Disability 4,151 3,008

25.93% 23.97% Go-Outside-Home Disability 11,685 7,589

And Over

75 Yrs

Yrs

65 - 74

TotalsNoninstitutionalized Persons Age 16 and over

2000 Mobility and Disability Civilian %%%

Disability by Sex by Age 113,162 19,268 28,224

40.50%44.97% 43.92% Male 50,890 8,462 11,430

17.93%12.76% 13.30% With a Disability 14,436 2,563 5,061

22.57%32.21% 30.62% No Disability 36,455 5,899 6,369

59.50%55.03% 56.08% Female 62,272 10,806 16,794

26.79%15.28% 14.12% With a Disability 17,291 2,721 7,561

32.71%39.75% 41.96% No Disability 44,981 8,085 9,233

And Over

75 Yrs

Yrs

65 - 74

Totals2000 Occupied Housing Units

%%%

Total Units 61,369 11,584 20,025

99.55%98.98% 99.39% With Telephone 60,742 11,513 19,935

0.45%1.02% 0.62% No Telephone 627 72 90

Nielsen Solution Center 1 800 866 6511

Prepared By:

Prepared For:

119 OfPageFri Jul 30, 2010Prepared On:

Senior Life 2009

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

And Over

75 Yrs

Yrs

65 - 74

TotalsBy Household Type by Age of Householder

2000 Census Poverty Status in 1999 Families %%%

Population with Known Poverty Status 140,007 19,268 28,224

55.78%69.65% 71.74% Married-Couple Families 97,510 13,823 15,743

4.11%12.65% 4.09% In other Families 17,706 788 1,160

1.18%4.22% 0.77% Male householder, no wife present 5,904 148 332

2.93%8.43% 3.32% Female householder, no husband present 11,802 640 828

40.11%17.71% 24.16% Unrelated individuals 24,791 4,656 11,321

94.05%93.23% 95.81%Income At or Above Poverty Level 130,523 18,461 26,546

54.50%67.18% 70.09% Married-Couple Families 94,058 13,504 15,381

3.82%10.50% 3.87% In other Families 14,704 745 1,078

1.05%3.52% 0.70% Male householder, no wife present 4,925 135 297

2.77%6.98% 3.17% Female householder, no husband present 9,778 610 781

35.74%15.54% 21.85% Unrelated individuals 21,761 4,211 10,087

5.95%6.77% 4.19%Income Below Poverty Level 9,484 808 1,678

1.28%2.46% 1.66% Married-Couple Families 3,451 319 361

0.29%2.14% 0.22% In other Families 3,002 43 82

0.12%0.70% 0.07% Male householder, no wife present 978 13 35

0.17%1.45% 0.16% Female householder, no husband present 2,024 30 47

4.38%2.16% 2.31% Unrelated individuals 3,031 445 1,235

Nielsen Solution Center 1 800 866 6511

Prepared By:

Prepared For:

1110 OfPageFri Jul 30, 2010Prepared On:

Senior Life 2009

Appendix: Area Listing

Radius Definition:

Block GroupType: Radius 1 Reporting Detail: Aggregate Reporting Level:

Area Name:

YOUNGTOWN, AZ 85363-1241 -

Radius

Latitude/Longitude

12030 N 113TH AVE

0.00 5.00

-112.30302833.593614

969045949

Project Information:

Order Number:

Site:

Nielsen Solution Center 1 800 866 6511

Prepared By:

Prepared For:

1111 OfPageFri Jul 30, 2010Prepared On:

HEALTHTRUST ADDENDA

EngagementLetter

HEALTHTRUST ADDENDA

AppraiserQualifications



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SignetBankFleetNationalBank

PNCBankNewYorkHFAFirstUnion

MarineMidlandUSTrustM&TBank

LaSalleBankSouthTrustBankofAlabamaSeniorLifestyles

GMAC‐CM‐HealthcarePrudentialInsuranceRiggsBankofWash.DC

MediTrustUBSWarburgPincusEmeritusCorporation

FirstNHBankBankofIrelandCareMatrix

CapstoneCapitalNorwestBankBankBoston

BrookdaleLivingProvidentBankofMarylandHellerFinancial

SeniorCampusLivingDynexHealthcareBankUnited

BanqueParibasContinentalWingateCreditSuisseFirstBoston

GlaserFinancialDLJPhyMatrix

GoldmanSachsArchonFinancialBerkshireBank

SISBankHolidayRetirementSunriseAssistedLiving

PRNMortgageBalancedCare MercantileSafeDeposit

PeoplesHeritageBankAMRESCOSeniorCampusLiving

AEWCapitalManagementAmSouthBankSolomonSmithBarney

FremontInvestment&LoanZionsFirstNationalBankAllfirstMortgageCorp.

ManufacturersBankWellsFargoUnionPlanters

BancorpSouthGreystone&Co.CapitalCompanyofAmerica

BankOneCorpHSBCBankUSA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KeyBank

AureusGroupJPMorgan/Chase

BankofAmericaJohnsonCapital

BrookdaleLivingCommunitiesLancasterPollard

CapMarkLoveFunding

CollateralRealEstateCapital,LLCMorganStanley

ErikssonRetirementCommunitiesPrudentialMortgageCapitalCompany

Fifth‐ThirdBankRedMortgageCapital

HolidayRetirementSunriseSeniorLiving

HSH‐NordbankTeachersInsurance&AnnuitiesFund

GEHealthcareFinance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CitizensBank(RBS) ZieglerHealthcareCapital

MerrillLynchPRNMortgage AffirmativeEquitiesCompany

PNCBankTorontoDominion(TDBankNorth) PonusCapital

HongKongShanghaiBankCorp(HSBC)LifeCareCentersofAmerica AEWCapital

PeoplesBank‐Connecticut CommerceBank CreditSuisseFirstBoston(CSFB)

GMAC

–

CommercialMortgageCapmark SovereignBank

LifeCareServicesCorp(LCS)LeggatMcCall RockwoodRealtyAssociates

AlliedIrishBank(AIB)BankofIreland CapitalSource

TheMarshallGroupSkyBank CollateralMortgage

EricksonRetirementCommunitiesRadiusSeniorHousingKBCBankNewYork

MercantileSafeDeposit&TrustHerbertJ.SimsCapital RoskampManagement

HowardBankVermontWestportSeniorLiving HSHNordbank

NationwideHealthCareProperties

–

NHCPTheFreshwaterGroup G&LRealty

KBCBankLosAngelesHuntingtonBank CitizensBank(Ohio)

ArchdioceseofBoston BankofScotlandLookingGlass

ContinentalBankUnityBank SiemensFinancial

SeniorHousingInvestmentAdvisorsChevyChaseBank 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unit

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



20100804x AZ 6801 Appraisal Youngtown AZ.sflb

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