Health Care Reit Inc /de/ 8-k (events Or Changes Between Quarterly Reports) 2009-02-24

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549

FORM 8-K CURRENT REPORT Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) February 24, 2009

Health Care REIT, Inc. (Exact name of registrant as specified in its charter) Delaware (State or other jurisdiction of incorporation)

1-8923 (Commission File Number)

One SeaGate, Suite 1500, Toledo, Ohio (Address of principal executive offices)

34-1096634 (IRS Employer Identification No.) 43604 (Zip Code)

Registrant’s telephone number, including area code (419) 247-2800

(Former name or former address, if changed since last report.) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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Item 2.02 Results of Operations and Financial Condition. On February 24, 2009, Health Care REIT, Inc. (the “Company”) issued a press release that announced operating results for its fourth quarter and year ended December 31, 2008. The press release refers to a supplemental information package that is available on the Company’s website (www.hcreit.com), free of charge. Copies of the press release and supplemental information package have been furnished as Exhibits 99.1 and 99.2, respectively, to this Current Report, and are incorporated herein by reference. The information included in this Current Report shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and shall not be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing. Item 9.01 Financial Statements and Exhibits. (d) Exhibits. 99.1 99.2

Press release of Health Care REIT, Inc. dated February 24, 2009. Health Care REIT, Inc. Supplemental Information Package for the quarter ended December 31, 2008.

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SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized. HEALTH CARE REIT, INC. By: /s/ GEORGE L. CHAPMAN George L. Chapman Its: Chairman of the Board, Chief Executive Officer and President

Dated: February 24, 2009

Exhibit 99.1 (HEALTHCARE REIT LOGO)

F O R I M M ED I A T E R EL E A S E February 24, 2009 For more information contact: Scott Estes — (419) 247-2800 Mike Crabtree — (419) 247-2800 Health Care REIT, Inc. Reports Fourth Quarter and Year End 2008 Results Toledo, Ohio, February 24, 2009 Health Care REIT, Inc. (NYSE:HCN) today announced operating results for the company’s fourth quarter and year ended December 31, 2008. “In one of the toughest years on record for both REITs and the broader equity markets, we generated a positive 0.5% total return for our shareholders in 2008,” commented George L. Chapman, chief executive officer and president of Health Care REIT, Inc. “In addition, we raised over $775 million of opportunistic equity capital and completed in excess of $1.0 billion of net real estate investments, concentrated in combination senior housing properties and high-quality medical facilities. As we enter 2009, we remain focused on preserving liquidity, but we intend to take advantage of what we believe will be increasingly attractive investment opportunities over time.” Recent Highlights. •

Achieved 4Q08 normalized FFO of $0.83 per share, up 4%

•

Achieved 4Q08 normalized FAD of $0.77 per share, up 3%

•

Achieved 2008 normalized FFO of $3.38 per share, up 8%

•

Achieved 2008 normalized FAD of $3.16 per share, up 9%

•

Completed 2008 net new investments totaling $1.0 billion

•

Recognized $163.9 million of gains on sales of property, generating $287.0 million in net proceeds

•

Added to the S&P 500 Index in January 2009

Key Performance Indicators.

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Net income available to common stockholders (NICS) per diluted share Normalized FFO per diluted share Normalized FAD per diluted share Dividends per common share (1) Normalized FFO Payout Ratio Normalized FAD Payout Ratio

(1)

4Q 08

4Q 07

$0.22 $0.83 $0.77 $0.68 82% 88%

$0.52 $0.80 $0.75 $0.66 83% 88%

C h an ge

-58% 4% 3% 3%

2008

$2.81 $3.38 $3.16 $2.70 80% 85%

2007

$1.46 $3.12 $2.91 $2.62 84% 90%

C h an ge

92% 8% 9% 3%

The $0.3409 prorated dividend paid on December 28, 2006 in connection with the Windrose merger has been included in 2007. Page 1 of 10

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4Q08 Earnings Release

February 24, 2009

4Q08 Earnings. The following table summarizes certain items impacting NICS, FFO and FAD:

4Q 08

NIC S 4Q 07

FFO 4Q 07

C h an ge

4Q 08

-58%

$ 0.31

$0.86

$ 0.02 $(0.31)

$0.05

FAD 4Q 07

C h an ge

4Q 08

-64%

$ 0.37

$0.89

$ 0.02 $(0.31)

$0.05

Per diluted share Includes impact of: Gains on sales of real property (1) Additional other income (2) Impairment charges (3) Realized loss on derivatives (4) Terminated transaction costs (5) Other items, net (6) Prepaid/straight-line rent cash receipts (7) Per diluted share — normalized (a)

$ 0.22

$0.52

$ 0.32

$0.14

$ 0.02 $(0.31)

$0.05

(a)

Amounts may not sum due to rounding $33,120,000 and $11,662,000 of gains in 4Q08 and 4Q07, respectively.

(1)

$(0.21) $(0.02) $ 0.00

$(0.21) $(0.02) $ 0.00

$0.01

$ 0.83

C h an ge

-58%

$(0.21)

$0.01

$0.80

4%

$(0.02) $ 0.00

$0.01

$ 0.12

$0.08

$ 0.77

$0.75

3%

(2)

$2,500,000 and $3,900,000 of additional other income in 4Q08 and 4Q07, respectively.

(3)

$32,648,000 of impairment charges in 4Q08.

(4)

$21,880,000 of realized loss on derivatives in 4Q08.

(5)

$2,291,000 of non-recurring terminated transaction costs in 4Q08.

(6)

See reconciliations for other items.

(7)

$12,602,000 and $6,678,000 of receipts in 4Q08 and 4Q07, respectively.

2008 Year End Earnings. The following table summarizes certain items impacting NICS, FFO and FAD:

Per diluted share Includes impact of: Gains on sales of real property (1) Additional other income (2) Impairment charges (3) Realized loss on derivatives (4) Terminated transaction costs (5) Other items, net (6) Cash receipts — prepaid/straight-line rent (7) Per diluted share — normalized (a)

(a)

2008

NIC S 2007

$ 2.81

$ 1.46

$ 1.74

$ 0.18

$ 0.03 $(0.35)

$ 0.05

$(0.25) $(0.02) $ 0.01

C h an ge

92%

2008

FFO 2007

C h an ge

2008

FAD 2007

C h an ge

$ 2.80

$ 3.16

-11%

$ 2.87

$ 3.18

-10%

$ 0.03 $(0.35)

$ 0.05

$ 0.03 $(0.35)

$ 0.05

$(0.25)

$(0.01)

$(0.02) $ 0.01

$ 3.38

Amounts may not sum due to rounding

$(0.25)

$(0.01)

$ 3.12

8%

$(0.02) $ 0.01

$(0.01)

$ 0.30

$ 0.22

$ 3.16

$ 2.91

9%

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(1)

$163,933,000 and $14,437,000 of gains in 2008 and 2007, respectively.

(2)

$2,500,000 and $3,900,000 of additional other income in 2008 and 2007, respectively.

(3)

$32,648,000 of impairment charges in 2008.

(4)

$23,393,000 of loss on derivatives in 2008.

(5)

$2,291,000 of non-recurring terminated transaction costs in 2008.

(6)

See reconciliations for other items.

(7)

$28,282,000 and $17,469,000 of receipts in 2008 and 2007, respectively.

Significant 2008 Items. The following items impacted 2008 earnings: •

$163.9 million of net gains ($1.74 per diluted share) were recognized in connection with the sales of 38 properties. These sales generated $287.0 million of net proceeds.

•

$2.5 million of additional other income ($0.03 per diluted share) was recognized in connection with a lease termination.

•

$32.6 million of impairment charges ($0.35 per diluted share) were recognized in connection with a portfolio of medical office buildings that the company intends to sell in fiscal 2009. The portfolio includes smaller, low occupancy buildings located generally off campus that are inconsistent with the company’s strategy of owning larger properties affiliated with high quality health systems. These properties have been classified as held-for-sale and historical results have been reclassified to discontinued operations.

•

$23.4 million of realized loss on derivatives ($0.25 per diluted share) was recognized in connection with the termination of two forward-starting interest rate swap agreements. The swaps were put in place in September 2007 and were intended to hedge the 10year treasury rate component of an anticipated offering of 10-year unsecured notes that did not take place as a result of the severe dislocation in the credit markets. Page 2 of 10

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4Q08 Earnings Release •

February 24, 2009

$2.3 million of non-recurring terminated transaction costs ($0.02 per diluted share) primarily related to the termination of the Arcapita/Sunrise agreement.

Dividends for Fourth Quarter 2008. As previously announced, the Board of Directors declared a cash dividend for the quarter ended December 31, 2008 of $0.68 per share, as compared to $0.66 per share for the same period in 2007. The cash dividend was paid on February 20, 2009 and was the company’s 151st consecutive quarterly dividend payment. Dividends for 2009. The Board of Directors approved a quarterly cash dividend rate of $0.68 per share per quarter ($2.72 per share annually), commencing with the May 2009 dividend. The company’s dividend policy is reviewed annually during the Board of Directors’ January planning session. The declaration and payment of quarterly dividends remains subject to review by and approval of the Board of Directors. Restatement of Earnings due to Convertible Debt. In May, 2008 the Financial Accounting Standards Board issued FASB Staff Position 14-1 (“FSP”) which provides guidance on accounting for debt that may be settled in cash upon conversion. This applies to the company’s convertible senior unsecured note issuances in November 2006 and July 2007. The FSP is effective for fiscal year 2009 and requires that prior years be restated to reflect this accounting treatment in all applicable prior periods. The following table illustrates the impact of this restatement for the periods presented (amounts in thousands except per share amounts): 4Q 07

4Q 08

2007

2008

320 883 1,203 103,840 $ 0.01

$ 1,280 $ 1,766 $ 3,046 79,409 $ 0.04

$ 1,280 $ 3,532 $ 4,812 94,309 $ 0.05

0.52 (0.01) 0.51

$ $ $

0.22 (0.01) 0.21

$ $ $

1.46 (0.04) 1.42

$ $ $

2.81 (0.05) 2.76

0.80 (0.01) 0.79

$ $ $

0.83 (0.01) 0.82

$ $ $

3.12 (0.04) 3.08

$ $ $

3.38 (0.05) 3.33

Additional interest expense: November 2006 issuance July 2007 issuance Total Fully diluted weighted-average shares Amount per share

$ 320 $ 883 $ 1,203 82,784 $ 0.01

$ $ $

Summary of per share impacts: Net income available to common stockholders: As reported Convertible debt adjustment Restated

$ $ $

Funds from operations-normalized: As reported Convertible debt adjustment Restated

$ $ $

Outlook for 2009. The company is introducing its 2009 guidance and expects to report net income available to common stockholders in a range of $1.59 to $1.69 per diluted share; normalized FFO in a range of $3.20 to $3.30 per diluted share; and normalized FAD in a range of $3.08 to $3.18 per diluted share. FFO guidance should be compared to the $3.33 per diluted share actual 2008 results as restated for the convertible debt accounting change. In preparing its guidance, the company made the following significant assumptions: •

Gross investments comprised of funded new development totaling $600 million with the investment balance capitalized at the company’s average cost of debt (approximately 5.7%) and recorded as a reduction in interest expense until completion. No acquisitions are assumed in the gross investment forecast.

•

Dispositions of $200 to $300 million at average yields of 10% to 11%.

•

Net investments of $300 million to $400 million.

•

Development conversions of approximately $537 million heavily weighted toward the latter half of the year. Page 3 of 10

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4Q08 Earnings Release

February 24, 2009

•

General and administrative expenses of approximately $46 million for the full year 2009. Our G&A forecast includes $2.9 million of anticipated expensing of accelerated stock-based compensation in 1Q09 but excludes $3.9 million in connection with the departure of Raymond Braun in 1Q09.

•

5.8 million shares of common stock issued on February 3, 2009 for approximately $211 million in net proceeds in connection with our inclusion in the S&P 500 Index.

The company’s guidance excludes any impairments, unanticipated additions to the loan loss reserve or other additional one-time items, including any additional cash payments other than normal monthly rental payments. Please see the exhibits for a reconciliation of the outlook for net income available to common stockholders to normalized FFO and FAD. Conference Call Information. The company has scheduled a conference call on Wednesday, February 25, 2009 at 10:00 a.m. Eastern Time to discuss its fourth quarter and year end 2008 results, industry trends, portfolio performance and outlook for 2009. Telephone access will be available by dialing 888-346-2469 or 706-758-4923 (international). For those unable to listen to the call live, a taped rebroadcast will be available beginning two hours after completion of the call through March 4, 2009. To access the rebroadcast, dial 800-642-1687 or 706-645-9291 (international). The conference ID number is 82951201. To participate in the webcast, log on to www.hcreit.com or www.earnings.com 15 minutes before the call to download the necessary software. Replays will be available for 90 days through the same websites. This earnings release is posted on the company’s website under the heading News & Events. Supplemental Reporting Measures. The company believes that net income available to common stockholders (NICS), as defined by U.S. generally accepted accounting principles (U.S. GAAP), is the most appropriate earnings measurement. However, the company considers funds from operations (FFO) and funds available for distribution (FAD) to be useful supplemental measures of its operating performance. Historical cost accounting for real estate assets in accordance with U.S. GAAP implicitly assumes that the value of real estate assets diminishes predictably over time as evidenced by the provision for depreciation. However, since real estate values have historically risen or fallen with market conditions, many industry investors and analysts have considered presentations of operating results for real estate companies that use historical cost accounting to be insufficient. In response, the National Association of Real Estate Investment Trusts (NAREIT) created FFO as a supplemental measure of operating performance for REITs that excludes historical cost depreciation from net income. FFO, as defined by NAREIT, means net income, computed in accordance with U.S. GAAP, excluding gains (or losses) from sales of real estate, plus real estate depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Normalized FFO represents FFO adjusted for unusual and non-recurring items. FAD represents FFO excluding net straight-line rental adjustments, rental income related to above/below market leases and amortization of deferred loan expenses and less cash used to fund capital expenditures, tenant improvements and lease commissions. Normalized FAD represents FAD excluding prepaid/straight-line rent cash receipts and adjusted for unusual and nonrecurring items. The company’s supplemental reporting measures and similarly entitled financial measures are widely used by investors and equity analysts in the valuation, comparison and investment recommendations of companies. The company’s management uses these financial measures to facilitate internal and external comparisons to historical operating results and in making operating decisions. Additionally, they are utilized by the Board of Directors to evaluate management. The supplemental reporting measures do not represent net income or cash flow provided from operating activities as determined in accordance with U.S. GAAP and should not be considered as alternative measures of profitability or liquidity. Finally, the supplemental reporting measures, as defined by the company, may not be comparable to similarly entitled items reported by other real estate investment trusts or other companies. Please see the exhibits for reconciliations of the supplemental reporting measures. About Health Care REIT. Health Care REIT, Inc., an S&P 500 company with headquarters in Toledo, Ohio, is a real estate investment trust that invests across the full spectrum of senior housing and health care real estate. The company also provides an extensive array of property management and development services. As of December 31, 2008, the company’s broadly diversified portfolio consisted of 633 properties in 39 states. More information is available on the Internet at Page 4 of 10

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4Q08 Earnings Release

February 24, 2009

www.hcreit.com. This document may contain “forward-looking” statements as defined in the Private Securities Litigation Reform Act of 1995. These forwardlooking statements concern and are based upon, among other things, the possible expansion of the company’s portfolio; the sale of properties; the performance of its operators/tenants and properties; its occupancy rates; its ability to acquire, develop and/or manage properties; its ability to enter into agreements with viable new tenants for vacant space or for properties that the company takes back from financially troubled tenants, if any; its ability to make distributions to stockholders; its policies and plans regarding investments, financings and other matters; its tax status as a real estate investment trust; its ability to appropriately balance the use of debt and equity; its ability to access capital markets or other sources of funds; its critical accounting policies; and its ability to meet its earnings guidance. When the company uses words such as “may,” “will,” “intend,” “should,” “believe,” “expect,” “anticipate,” “project,” “estimate” or similar expressions, it is making forward-looking statements. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties. The company’s expected results may not be achieved, and actual results may differ materially from expectations. This may be a result of various factors, including, but not limited to: the status of the economy; the status of capital markets, including availability and cost of capital; issues facing the health care industry, including compliance with, and changes to, regulations and payment policies, responding to government investigations and punitive settlements and operators’/tenants’ difficulty in cost-effectively obtaining and maintaining adequate liability and other insurance; changes in financing terms; competition within the health care and senior housing industries; negative developments in the operating results or financial condition of operators/tenants, including, but not limited to, their ability to pay rent and repay loans; the company’s ability to transition or sell facilities with profitable results; the failure to make new investments as and when anticipated; acts of God affecting the company’s properties; the company’s ability to re-lease space at similar rates as vacancies occur; the company’s ability to timely reinvest sale proceeds at similar rates to assets sold; operator/tenant bankruptcies or insolvencies; government regulations affecting Medicare and Medicaid reimbursement rates and operational requirements; liability or contract claims by or against operators/tenants; unanticipated difficulties and/or expenditures relating to future acquisitions; environmental laws affecting the company’s properties; changes in rules or practices governing the company’s financial reporting; and legal and operational matters, including real estate investment trust qualification and key management personnel recruitment and retention. Finally, the company assumes no obligation to update or revise any forward-looking statements or to update the reasons why actual results could differ from those projected in any forward-looking statements. Page 5 of 10

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4Q08 Earnings Release

February 24, 2009 HEALTH CARE REIT, INC. Financial Supplement

CONSOLIDATED BALANCE SHEETS (unaudited) (In thousands) De ce m be r 31, 2007

2008

Assets Real estate investments: Real property owned Land and land improvements Buildings and improvements Acquired lease intangibles Real property held for sale, net of accumulated depreciation Construction in progress

$

Less accumulated depreciation and intangible amortization Total real property owned Loans receivable Less allowance for losses on loans receivable Net real estate investments Other assets: Equity investments Deferred loan expenses Cash and cash equivalents Restricted cash Receivables and other assets Total assets Liabilities and stockholders’ equity Liabilities: Borrowings under unsecured lines of credit arrangements Senior unsecured notes Secured debt Accrued expenses and other liabilities Total liabilities Minority interests Stockholders’ equity: Preferred stock Common stock Capital in excess of par value Treasury stock Cumulative net income Cumulative dividends Accumulated other comprehensive income Other equity Total stockholders’ equity Total liabilities and stockholders’ equity

504,907 4,653,871 133,324 48,054 639,419 5,979,575 (600,781) 5,378,794 482,885 (7,500) 475,385 5,854,179

$

447,029 4,224,955 131,312 0 313,709 5,117,005 (478,373) 4,638,632 381,394 (7,406) 373,988 5,012,620

1,030 23,579 23,370 154,070 136,890 338,939 $ 6,193,118

1,408 30,499 30,269 17,575 121,485 201,236 $ 5,213,856

$

$

570,000 1,847,247 446,525 107,157 2,970,929 10,603

289,929 104,635 3,180,628 (5,145) 1,362,366 (1,723,819) (1,113) 4,105 3,211,586 $ 6,193,118

307,000 1,890,192 507,476 95,145 2,799,813 9,687

330,243 85,412 2,370,037 (3,952) 1,074,255 (1,446,959) (7,381) 2,701 2,404,356 $ 5,213,856 Page 6 of 10

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4Q08 Earnings Release

February 24, 2009

CONSOLIDATED STATEMENTS OF INCOME (unaudited) (In thousands, except per share data) Th re e Mon ths En de d De ce m be r 31, 2007 2008

Revenues: Rental income Interest income Other income Gross revenues

Twe lve Mon ths En de d De ce m be r 31, 2007 2008

$ 131,372 10,886 4,865 147,123

$ 111,036 8,151 6,099 125,286

30,426 11,389 41,500 13,500 21,880 0 94 118,789

35,340 10,286 36,774 9,080 0 (1,081) 0 90,399

130,813 43,990 156,154 47,193 23,393 (2,094) 94 399,543

131,893 34,707 135,224 37,465 0 (1,081) 0 338,208

Income from continuing operations before income taxes and minority interests

28,334

34,887

151,671

115,323

Income tax expense Income from continuing operations before minority interests

(136) 28,198

(269) 34,618

(1,306) 150,365

(188) 115,135

Minority interests Income from continuing operations

2 28,200

169 34,787

(126) 150,239

(238) 114,897

11,662 0 2,498 14,160 48,947 6,179 $ 42,768

163,933 (32,648) 6,587 137,872 288,111 23,201 $ 264,910

14,437 0 12,068 26,505 141,402 25,130 $ 116,272

Expenses: Interest expense Property operating expenses Depreciation and amortization General and administrative expenses Realized loss on derivatives Gain on extinguishment of debt Provision for loan losses Total expenses

Discontinued operations: Gain on sales of properties Impairment of assets Income from discontinued operations, net Net income Preferred dividends Net income available to common stockholders

33,120 (32,648) (78) 394 28,594 5,541 $ 23,053

Average number of common shares outstanding: Basic Diluted

$ 500,630 40,063 10,521 551,214

82,346 82,784

103,329 103,840

$ 417,673 25,823 10,035 453,531

78,861 79,409

93,732 94,309

Net income available to common stockholders per share: Basic Diluted

$

0.22 0.22

$

0.52 0.52

$

2.83 2.81

$

Common dividends per share

$

0.68

$

0.66

$

2.70

$ 2.2791

1.47 1.46

Page 7 of 10

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4Q08 Earnings Release

February 24, 2009

Funds From Operations Reconciliation (Amounts in 000’s except per share data) T hree Months Ended December 31, 2008 2007

Net income available to common stockholders Depreciation and amortization (1) Gain on sales of properties Minority interests Funds from operations Impairment of assets Realized loss on derivatives Terminated transaction costs One-time acquisition finder’s fees Gain on extinguishment of debt Provision for loan losses Additional other income Non-recurring income tax expense Funds from operations — normalized

$ 23,053 42,150 (33,120) (81) 32,002 32,648 21,880 2,291 0 0 94 (2,500) 0 $ 86,415

$ 42,768 40,081 (11,662) (88) 71,099 0 0 0 0 (1,081) 0 (3,900) 0 $ 66,118

$ 264,910 163,045 (163,933) (342) 263,680 32,648 23,393 2,291 0 (2,094) 94 (2,500) 1,325 $ 318,837

$116,272 149,626 (14,437) (344) 251,117 0 0 0 1,750 (1,081) 0 (3,900) 0 $247,886

103,329 103,840

82,346 82,784

93,732 94,309

78,861 79,409

Average common shares outstanding: Basic Diluted Per share data: Net income available to common stockholders Basic Diluted

T welve Months Ended December 31, 2008 2007

$

0.22 0.22

$

0.52 0.52

$

2.83 2.81

$

1.47 1.46

Funds from operations Basic Diluted

$

0.31 0.31

$

0.86 0.86

$

2.81 2.80

$

3.18 3.16

Funds from operations — normalized Basic Diluted

$

0.84 0.83

$

0.80 0.80

$

3.40 3.38

$

3.14 3.12

FFO Payout Ratio Dividends per common share (2) FFO per diluted share FFO payout ratio

$ $

0.68 0.31 219%

$ $

0.66 0.86 77%

$ $

2.70 2.80 96%

$ $

2.62 3.16 83%

FFO Payout Ratio — Normalized Dividends per share (2) FFO per diluted share — normalized FFO payout ratio — normalized

$ $

0.68 0.83 82%

$ $

0.66 0.80 83%

$ $

2.70 3.38 80%

$ $

2.62 3.12 84%

Notes:

(1) Depreciation and amortization includes depreciation and amortization from discontinued operations. (2) The $0.3409 prorated dividend paid on December 28, 2006 in connection with the Windrose merger has been included in the twelve months ended December 31, 2007. Page 8 of 10

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4Q08 Earnings Release

February 24, 2009

Funds Available For Distribution Reconciliation (Amounts in 000’s except per share data) T hree Months Ended December 31, 2008 2007

Net income available to common stockholders Depreciation and amortization (1) Gain on sales of properties Minority interests Gross straight-line rental income Prepaid/straight-line rent receipts Amortization related to above/(below) market leases, net Non-cash interest expense Cap-ex, tenant improvements, lease commissions Funds available for distribution Impairment of assets Realized loss on derivatives Terminated transaction costs One-time acquisition finder’s fees Gain on extinguishment of debt Provision for loan losses Additional other income Non-recurring income tax expense Prepaid/straight-line rent receipts Funds available for distribution — normalized

$ 23,053 42,150 (33,120) (18) (4,682) 12,602 (363) 1,696 (2,865) 38,453 32,648 21,880 2,291 0 0 94 (2,500) 0 (12,602) $ 80,264

$ 42,768 40,081 (11,662) (8) (4,365) 6,678 (136) 1,790 (1,763) 73,383 0 0 0 0 (1,081) 0 (3,900) 0 (6,678) $ 61,724

$ 264,910 163,045 (163,933) (44) (20,489) 28,282 (1,039) 6,419 (6,347) 270,804 32,648 23,393 2,291 0 (2,094) 94 (2,500) 1,325 (28,282) $ 297,679

$116,272 149,626 (14,437) (10) (17,029) 17,469 (792) 5,366 (4,292) 252,173 0 0 0 1,750 (1,081) 0 (3,900) 0 (17,469) $231,473

103,329 103,840

82,346 82,784

93,732 94,309

78,861 79,409

Average common shares outstanding: Basic Diluted Per share data: Net income available to common stockholders Basic Diluted

T welve Months Ended December 31, 2008 2007

$

0.22 0.22

$

0.52 0.52

$

2.83 2.81

$

1.47 1.46

Funds available for distribution Basic Diluted

$

0.37 0.37

$

0.89 0.89

$

2.89 2.87

$

3.20 3.18

Funds available for distribution — normalized Basic Diluted

$

0.78 0.77

$

0.75 0.75

$

3.18 3.16

$

2.94 2.91

FAD Payout Ratio Dividends per common share (2) FAD per diluted share FAD payout ratio

$ $

0.68 0.37 184%

$ $

0.66 0.89 74%

$ $

2.70 2.87 94%

$ $

2.62 3.18 82%

FAD Payout Ratio — Normalized Dividends per common share (2) FAD per diluted share — normalized FAD payout ratio — normalized

$ $

0.68 0.77 88%

$ $

0.66 0.75 88%

$ $

2.70 3.16 85%

$ $

2.62 2.91 90%

Notes:

(1) Depreciation and amortization includes depreciation and amortization from discontinued operations. (2) The $0.3409 prorated dividend paid on December 28, 2006 in connection with the Windrose merger has been included in the twelve months ended December 31, 2007. Page 9 of 10

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4Q08 Earnings Release

February 24, 2009

Outlook Reconciliations (Amounts in 000’s except per share data) Current Outlook Year Ended December 31, 2009 Low High

FFO Reconciliation: Net income available to common stockholders Depreciation and amortization (1) Funds from operations Non-recurring G&A expenses (2) Funds from operations — normalized Per share data (diluted): Net income available to common stockholders Funds from operations Funds from operations — normalized FAD Reconciliation: Net income available to common stockholders Depreciation and amortization (1) Gross straight-line rental income Amortization related to above/(below) market leases, net Non-cash interest expense Cap-ex, tenant improvements, lease commissions Funds available for distribution Non-recurring G&A expenses (2) Funds available for distribution — normalized Per share data (diluted): Net income available to common stockholders Funds available for distribution Funds available for distribution — normalized Notes:

$175,691 174,000 349,691 3,909 $353,600

$186,741 174,000 360,741 3,909 $364,650

$

$

1.59 3.16 3.20

1.69 3.26 3.30

$175,691 174,000 (13,800) (1,300) 11,500 (10,000) 336,091 3,909 $340,000

$186,741 174,000 (13,800) (1,300) 11,500 (10,000) 347,141 3,909 $351,050

$

$

1.59 3.04 3.08

1.69 3.14 3.18

(1) Depreciation and amortization includes depreciation and amortization from discontinued operations. (2) Expenses to be recognized in connection with the departure of Raymond Braun. Page 10 of 10 Exhibit 99.2

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(FULL PAGE GIF) Ex h i b i t

99. 2

4Q 08

S UP P LEM ENTAL I NF O RM ATI O N

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(FULL PAGE GIF)

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(FULL PAGE GIF) TABLE O F CO NTENTS CO RP O RATE Co r p o r a t e P r o f i l e | 2 An a l y s t Co v e r a g e | 4 I n v e s t o r Re l a t i o n s Co n t a c t s | 4 F o r wa r d - L o o k i n g S t a t e m e n t s a n d Ri s k F a c t o r s | 5 3 3 F I NANCI AL Co n s o l i d a t e d Ba l a n c e S h e e t s ( Un a u d i t e d ) Ac t i v i t y — Qu a r t e r | 1 8 Gr o s s I n v e s t m e n t Ac t i v i t y — Ye a r | 1 9 I n v e s t m e n t T i m i n g | 2 0 Di s p o s i t i o n Ac t i v i t y | 2 0 Di s c o n t i n u e d Op e r a t i o n s | 2 0 P O RTF O LI O P o r t f o l i o Co m p o s i t i o n | 2 1 I n v e s t m e n t M e t r i c s | 2 1 Co n c e n t r a t i o n — M e d i c a l Of f i c e Bu i l d i n g s | 3 1 De v e l o p m e n t Ac t i v i t y | 3 2 De v e l o p m e n t F u n d i n g P r o j e c t i o n s | 3 2 De v e l o p m e n t P r o j e c t Co n v e r s i o n E s t i m a t e s | 3 3 Un s t a b i l i z e d Co n c e n t r a t i o n | 3 4 P o r t f o l i o T r e n d s

| 6 Co n s o l i d a t e d S t a t e m e n t s P o r t f o l i o Co n c e n t r a t i o n | 2 2 | 3 5 G LO S S ARY Gl o s s a r y | 3 6

o f I n c o m e ( Un a u d i t e d ) | 7 F u n d s f r o m Op e r a t i o n s Re c o n c i l i a t i o n T o p T e n Op e r a t o r De s c r i p t i o n s | 2 3 M S A a n d Re g i o n Co n c e n t r a t i o n S u p p l e m e n t a l Re p o r t i n g M e a s u r e s | 3 9

| 8 F u n d s Av a i l a b l e f o r Di s t r i b u t i o n Re c o n c i l i a t i o n | 2 4 P o r t f o l i o P e r f o r m a n c e | 2 5 S a m e S t o r e Re v e n u e

| 9 Ad j u s t e d E BI T DA Re c o n c i l i a t i o n Gr o wt h | 2 5 P o r t f o l i o P e r f o r m a n c e

| 1 0 Ne t Op e r a t i n g I n c o m e Re c o n c i l i a t i o n — I n d e p e n d e n t L i v i n g / CCRC | 2 6 P o r t f o l i o

| 1 1 Ou t l o o k Re c o n c i l i a t i o n | 1 2 Re v e n u e a n d L e a s e M a t u r i t y P e r f o r m a n c e — As s i s t e d L i v i n g | 2 7 P o r t f o l i o P e r f o r m a n c e

| 1 3 De b t M a t u r i t i e s a n d P r i n c i p a l P a y m e n t s | 1 4 — S k i l l e d Nu r s i n g | 2 8 P o r t f o l i o P e r f o r m a n c e —

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| 1 4 Cu r r e n t Ca p i t a l i z a t i o n | 1 5 Re s t a t e m e n t o f E a r n i n g s Co m p o s i t i o n — M e d i c a l Of f i c e Bu i l d i n g s | 3 0 P o r t f o l i o

d u e t o Co n v e r t i b l e De b t | 1 6 2 5 I NVES TM ENT Gr o s s I n v e s t m e n t P e r f o r m a n c e — M e d i c a l Of f i c e Bu i l d i n g s | 3 0 P o r t f o l i o

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(FULL PAGE GIF) CO RP O RATE H EALTH CARE REI T, I NC. , a r e a l e s t a t e i n v e s t m e n t t r u s t ( “ RE I T ” ) wi t h a n e n t e r p r i s e v a l u e o f $ 7 . 6 b i l l i o n , i n v e s t s i n h e a l t h c a r e r e a l e s t a t e , i n c l u d i n g i n d e p e n d e n t l i v i n g , a s s i s t e d l i v i n g a n d s k i l l e d n u r s i n g f a c i l i t i e s , c o n t i n u i n g c a r e r e t i r e m e n t c o m m u n i t i e s , h o s p i t a l s a n d m e d i c a l o f f i c e b u i l d i n g s . T h e Ca p i t a l i z a t i o n : 3 8 % T o p 5 Cu s t o m e r s : 2 5 % Di v i d e n d / Yi e l d : $ 2 . 7 2 / 6 . 4 5 % De b t t o Bo o k Ca p i t a l i z a t i o n : 4 7 % T o p 5 S t a t e s : 4 5 % S h a r e s Ou t s t a n d i n g : 1 0 4 . 7 m i l l i o n S e n i o r De b t Ra t i n g s : Ba a 2 / BBB- / BBB * % o f t o t a l i n v e s t m e n t s F ULL S ERVI CE P LATF O RM He a l t h Ca r e RE I T p r o v i d e s s e n i o r h o u s i n g o p e r a t o r s a n d h e a l t h c a r e s y s t e m s DE VE L OP M E NT F UNDI NG GROS S RE AL E S T AT E AS S E T S $ m i l l i o n s $ m i l l i o n s $ 6 2 1 $ 6 , 8 1 2 $ 5 7 0 $ 6 , 4 6 2 $ 5 , 4 9 8 $ 4 , 4 7 7 $ 3 0 8 $ 3 , 1 3 1 $ 2 , 6 6 7 $ 1 5 9 $ 1 5 9 2 0 0 4 2 0 0 5 2 0 0 6 2 0 0 7 2 0 0 8 2 0 0 9 E * 2 0 0 6 2 0 0 7 2 0 0 8 2 0 0 9 E * F u t u r e * r e p r e s e n t s p r o j e c t e d f u t u r e f u n d i n g f o r p r o j e c t s u n d e r wa y * b a s e d o n m i d - p o i n t o f HCN 2 0 0 9 n e t i n v e s t m e n t a s o f

c o m p a n y ’ s f u l l s e r v i c e p l a t f o r m a l s o o f f e r s p r o p e r t y m a n a g e m e n t a n d d e v e l o p m e n t s e r v i c e s t o i t s c u s t o m e r s . Da t a wi t h a s i n g l e s o u r c e f o r f a c i l i t y p l a n n i n g , d e s i g n a n d t u r n - k e y d e v e l o p m e n t , p r o p e r t y m a n a g e m e n t a n d m o n e t i z a t i o n De c e m b e r 3 1 , 2 0 0 8 g u i d a n c e o f $ 3 0 0 m i l l i o n t o $ 4 0 0 m i l l i o n

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o f : De c e m b e r 3 1 , 2 0 0 8 NYS E S y m b o l : HCN E n t e r p r i s e Va l u e : e x p a n s i o n o f e x i s t i n g r e a l e s t a t e . By e x t e n d i n g s u c c e s s f u l

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As s e t s : $ 6 . 5 b i l l i o n Own e d As s e t s : 9 3 % 5 2 W e e k Hi / L o : as s et cl as s es , t he com pany has s i gni f i cant l y i ncr eas ed

$ 5 3 . 9 8 / $ 3 0 . 1 4 De b t t o M a r k e t pot ent i al i nves t m ent oppor t uni t i es .

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(FULL PAGE GIF) CO RP O RATE S ECURE AND G RO W I NG DI VI DEND He a l t h Ca r e RE I T m a i n t a i n s a c o m m i t m e n t t o i n v e s t m e n t g r a d e r a t i n g s , c o n s e r v a t i v e b a l a n c e s h e e t m a n a g e m e n t a n d u n d e r wr i t i n g , a s s e t a n d p r o p e r t y m a n a g e m e n t p r o t o c o l s t h a t e n s u r e p r u d e n t i n v e s t m e n t s a n d p r o a c t i v e m a n a g e m e n t o v e r t h e l i f e o f i t s l o n g - t e r m l e a s e s . T h e 0 3 0 7 7 1 7 5 7 9 8 3 8 7 9 1 9 5 9 9 0 3 0 7 * v a l u e o f $ 1 0 , 0 0 0 i n v e s t m e n t m a d e 6 / 3 0 / 1 9 7 1 , * a d j u s t e d f o r s t o c k s p l i t s a s s u m i n g r e i n v e s t m e n t o f d i v i d e n d s T OT AL RE T URNS * 1 y e a r - 0 . 1 % 3 y e a r s 1 4 . 3 % 5 y e a r s 9 . 9 % 1 0 y e a r s 1 4 . 0 % 2 0 y e a r s 1 6 . 4 % S i n c e i n c e p t i o n 1 6 . 1 % * a s s u m e s r e i n v e s t m e n t o f d i v i d e n d s RELATI O NS H I P F O CUS ED, c y c l e s . T h e r e l a t i o n s h i p a p p r o a c h e n a b l e s t h e c o m p a n y t o p a r t n e r wi t h t h e b e s t r e g i o n a l l y f o c u s e d o p e r a t o r s a n d h e a l t h s y s t e m s a n d h e l p t h e m g r o w p r o f i t a b l y , wh i l e c o n c e n t r a t i n g o n wh a t t h e y d o b e s t — p r o v i d e q u a l i t y c a r e t o p a t i e n t s a n d r e s i d e n t s . S P EED AND CERTAI NTY O F EXECUTI O N He a l t h Ca r e RE I T ’ s e x p e r i e n c e a n d f unded on t i m e.

com pany has decl ar ed 151 cons ecut i ve quar t er l y di vi dends dur i ng i t s 39- year hi s t or y LO NG - TERM S TRATEG Y W i t h 6 8 o p e r a t o r s a n d o v e r 8 0 0 m e d i c a l o f f i c e t e n a n t s i n 3 9 k n o wl e d g e e n a b l e i t t o m a k e i n v e s t m e n t d e c i s i o n s wi t h i n d a y s , r a t h e r t h a n we e k s o r

a n d r e m a i n s f o c u s e d o n d e l i v e r i n g a t t r a c t i v e s t o c k h o l d e r r e t u r n s . GROW T H S I NCE I NCE P T I ON* S OL I D DI VI DE ND P AYM E NT RE CORD* s t a t e s , t h e c o m p a n y s t r i v e s t o p r o v i d e e a c h c u s t o m e r wi t h t h e h i g h e s t q u a l i t y s e r v i c e a n d a t t e n t i o n t o d e t a i l . T h r o u g h o u t m o n t h s . Th e c o m p a n y h a s a c c e s s e d o v e r $ 3 . 2 b i l l i o n i n c a p i t a l i n t h e l a s t f i v e y e a r s , i n c l u d i n g $ 8 9 4 m i l l i o n i n 2 0 0 7 a n d

$3, 500, 000 $3, 000, 000 $3. 00 $2, 500, 000 $2. 50 $2, 000, 000 $2. 00 $1, 500, 000 $1. 50 $1, 000, 000 $1. 00 $500, 000 $0. 50 $0 $ 0. 00 71 75 79 83 87 91 95 99 t he com pany’ s 39- year hi s t or y, i t has been a l ong- t er m capi t al pr ovi der t o s eni or hous i ng and heal t h car e s ys t em s t hr oughout al l m ar ket $ 8 1 4 m i l l i o n d u r i n g t h e t we l v e m o n t h s e n d e d De c e m b e r 3 1 , 2 0 0 8 . T h e c o m p a n y ’ s $ 1 . 1 5 b i l l i o n l i n e o f c r e d i t e n s u r e s n e w i n v e s t m e n t s wi l l b e

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(FULL PAGE GIF) CO RP O RATE G e o r g e L. Ch a p m a n ANALYS T CO VERAG E Ch a i r m a n , CEO & P r e s i d e n t Ba n k o f Am e r i c a S e c u r i t i e s L L C M r . Ch a p m a n i s c u r r e n t l y Ch a i r m a n , BM O Ca p i t a l M a r k e t s Co r p . Ch i e f E x e c u t i v e Of f i c e r a n d P r e s i d e n t Ca n t o r F i t z g e r a l d o f t h e c o m p a n y . He h a s s e r v e d a s De u t s c h e Ba n k S e c u r i t i e s I n c . Ch a i r m a n a n d Ch i e f E x e c u t i v e Of f i c e r Gr e e n S t r e e t Ad v i s o r s , I n c . s i n c e Oc t o b e r 1 9 9 6 , a n d p r e v i o u s l y Ke y Ba n c Ca p i t a l M a r k e t s M o r g a n Ke e g a n & Co . , I n c . s e r v e d a s P r e s i d e n t o f t h e c o m p a n y E x e c u t i v e Vi c e UBS S e c u r i t i e s P r e s i d e n t a n d Ge n e r a l Co u n s e l o f t h e c o m p a n y . I NVES TO R RELATI O NS J e f f r e y H . M i l l e r EVP - Op e r a t i o n s & Ge n e r a l ANAL YS T / I NVE S T OR CONT ACT Co u n s e l S c o t t A. E s t e s E VP & CF O s e s t e s @ h c r e i t . c o m M r . M i l l e r h a s s e r v e d a s E x e c u t i v e Vi c e P r e s i d e n t - Op e r a t i o n s a n d M i c h a e l A. Cr a b t r e e Ge n e r a l Co u n s e l s i n c e J a n u a r y 2 0 0 9 , VP & T r e a s u r e r E x e c u t i v e Vi c e P r e s i d e n t a n d Ge n e r a l m c r a b t r e e @ h c r e i t . c o m Co u n s e l f r o m M a r c h 2 0 0 6 t o J a n u a r y 2 0 0 9 a n d Vi c e P r e s i d e n t p a r t n e r i n f o @ h c r e i t . c o m i n t h e r e a l e s t a t e p r a c t i c e g r o u p o f t h e l a w f i r m o f S h u m a k e r , L o o p & Ke n d r i c k , L L P . S c o t t A. Es t e s EVP & CFO M r . E s t e s i s c u r r e n t l y E x e c u t i v e Vi c e P r e s i d e n t a n d Ch i e f F i n a n c i a l Of f i c e r . He s e r v e d a s S e n i o r Vi c e P r e s i d e n t a n d Ch i e f F i n a n c i a l Of f i c e r o f t h e c o m p a n y s i n c e M a r c h 2 0 0 6 a n d s e r v e d a s Vi c e P r e s i d e n t o f F i n a n c e o f t h e c o m p a n y f r o m Ap r i l 2 0 0 3 t o M a r c h 2 0 0 6 . F r o m J a n u a r y 2 0 0 0 t o Ap r i l 2 0 0 3 , M r . E s t e s s e r v e d a s a S e n i o r E q u i t y An a l y s t a n d

Ra y m o n d J a m e s & As s o c i a t e s , I n c . f r o m S e p t e m b e r 1 9 9 5 t o M a y 2 0 0 2 . Ro b e r t W . Ba i r d & Co . F r o m J a n u a r y 1 9 9 2 t o S e p t e m b e r S t i f e l Ni c o l a u s & Co m p a n y , I n c . 1 9 9 5 , h e s e r v e d a s a n d Ge n e r a l Co u n s e l o f t h e Co m p a n y f r o m J u l y GE NE RAL I NQUI RI E S E r i n C. I b e l e 2 0 0 4 t o M a r c h 2 0 0 6 . F r o m 1 9 9 6 t o S VP - Ad m i n i s t r a t i o n & Co r p o r a t e S e c r e t a r y J u n e 2 0 0 4 , M r . M i l l e r wa s Vi c e P r e s i d e n t wi t h De u t s c h e Ba n k S e c u r i t i e s . F r o m J a n u a r y 1 9 9 8 t o De c e m b e r 1 9 9 9 , M r . E s t e s s e r v e d a s a S e n i o r E q u i t y An a l y s t a n d Vi c e P r e s i d e n t wi t h Ba n k o f Am e r i c a S e c u r i t i e s .

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(FULL PAGE GIF) CO RP O RATE F o r wa r d - Lo o k i n g S t a t e m e n t s a n d Ri s k F a c t o r s T h i s d o c u m e n t m a y c o n t a i n “ f o r wa r d - l o o k i n g ” s t a t e m e n t s a s d e f i n e d i n t h e P r i v a t e S e c u r i t i e s L i t i g a t i o n Re f o r m Ac t o f 1 9 9 5 . T h e s e f o r wa r d - l o o k i n g s t a t e m e n t s c o n c e r n a n d a r e b a s e d u p o n , a m o n g o t h e r t h i n g s , t h e p o s s i b l e e x p a n s i o n o f t h e c o m p a n y ’ s p o r t f o l i o ; t h e s a l e o f p r o p e r t i e s ; t h e p e r f o r m a n c e o f i t s o p e r a t o r s / t e n a n t s a n d p r o p e r t i e s ; i t s o c c u p a n c y r a t e s ; i t s a b i l i t y t o a c q u i r e , d e v e l o p a n d / o r m a n a g e p r o p e r t i e s ; i t s a b i l i t y t o e n t e r i n t o a g r e e m e n t s wi t h v i a b l e n e w t e n a n t s f o r v a c a n t s p a c e o r f o r p r o p e r t i e s t h a t t h e c o m p a n y t a k e s b a c k f r o m f i n a n c i a l l y t r o u b l e d t e n a n t s , i f a n y ; i t s a b i l i t y t o m a k e d i s t r i b u t i o n s t o s t o c k h o l d e r s ; i t s p o l i c i e s a n d p l a n s r e g a r d i n g i n v e s t m e n t s , f i n a n c i n g s a n d o t h e r m a t t e r s ; i t s t a x s t a t u s a s a r e a l e s t a t e i n v e s t m e n t t r u s t ; i t s a b i l i t y t o a p p r o p r i a t e l y b a l a n c e t h e u s e o f d e b t a n d e q u i t y ; i t s a b i l i t y t o a c c e s s c a p i t a l m a r k e t s o r o t h e r s o u r c e s o f f u n d s ; i t s c r i t i c a l a c c o u n t i n g p o l i c i e s ; a n d i t s a b i l i t y t o m e e t i t s e a r n i n g s g u i d a n c e . W h e n t h e c o m p a n y u s e s wo r d s s u c h a s “ m a y , ” “ wi l l , ” “ i n t e n d , ” “ s h o u l d , ” “ b e l i e v e , ” “ e x p e c t , ” “ a n t i c i p a t e , ” “ p r o j e c t , ” “ e s t i m a t e ” o r s i m i l a r e x p r e s s i o n s , i t i s m a k i n g f o r wa r d - l o o k i n g s t a t e m e n t s . F o r wa r d - l o o k i n g s t a t e m e n t s a r e n o t g u a r a n t e e s o f f u t u r e p e r f o r m a n c e a n d i n v o l v e r i s k s a n d u n c e r t a i n t i e s . T h e c o m p a n y ’ s e x p e c t e d r e s u l t s m a y n o t b e a c h i e v e d , a n d a c t u a l r e s u l t s m a y d i f f e r m a t e r i a l l y f r o m e x p e c t a t i o n s . T h i s m a y b e a r e s u l t o f v a r i o u s f a c t o r s , i n c l u d i n g , b u t n o t l i m i t e d t o : t h e s t a t u s o f t h e e c o n o m y ; t h e s t a t u s o f c a p i t a l m a r k e t s , i n c l u d i n g a v a i l a b i l i t y a n d c o s t o f c a p i t a l ; i s s u e s f a c i n g t h e h e a l t h c a r e i n d u s t r y , i n c l u d i n g c o m p l i a n c e wi t h , a n d c h a n g e s t o , r e g u l a t i o n s a n d p a y m e n t p o l i c i e s , r e s p o n d i n g t o g o v e r n m e n t i n v e s t i g a t i o n s a n d p u n i t i v e s e t t l e m e n t s a n d o p e r a t o r s ’ / t e n a n t s ’ d i f f i c u l t y i n c o s t - e f f e c t i v e l y o b t a i n i n g a n d m a i n t a i n i n g a d e q u a t e l i a b i l i t y a n d o t h e r i n s u r a n c e ; c h a n g e s i n f i n a n c i n g t e r m s ; c o m p e t i t i o n wi t h i n t h e h e a l t h c a r e a n d s e n i o r h o u s i n g i n d u s t r i e s ; n e g a t i v e d e v e l o p m e n t s i n t h e o p e r a t i n g r e s u l t s o r f i n a n c i a l c o n d i t i o n o f o p e r a t o r s / t e n a n t s , i n c l u d i n g , b u t n o t l i m i t e d t o , t h e i r a b i l i t y t o p a y r e n t a n d r e p a y l o a n s ; t h e c o m p a n y ’ s a b i l i t y t o t r a n s i t i o n o r s e l l f a c i l i t i e s wi t h p r o f i t a b l e r e s u l t s ; t h e f a i l u r e t o m a k e n e w i n v e s t m e n t s a s a n d wh e n a n t i c i p a t e d ; a c t s o f Go d a f f e c t i n g t h e c o m p a n y ’ s p r o p e r t i e s ; t h e c o m p a n y ’ s a b i l i t y t o r e - l e a s e s p a c e a t s i m i l a r r a t e s a s v a c a n c i e s o c c u r ; t h e c o m p a n y ’ s a b i l i t y t o t i m e l y r e i n v e s t s a l e p r o c e e d s a t s i m i l a r r a t e s t o a s s e t s s o l d ; o p e r a t o r / t e n a n t b a n k r u p t c i e s o r i n s o l v e n c i e s ; g o v e r n m e n t r e g u l a t i o n s a f f e c t i n g M e d i c a r e a n d M e d i c a i d r e i m b u r s e m e n t r a t e s a n d o p e r a t i o n a l 4 r e q u i r e m e n t s ; l i a b i l i t y o r c o n t r a c t c l a i m s b y o r a g a i n s t o p e r a t o r s / t e n a n t s ; u n a n t i c i p a t e d d i f f i c u l t i e s a n d / o r e x p e n d i t u r e s r e l a t i n g t o f u t u r e a c q u i s i t i o n s ; e n v i r o n m e n t a l l a ws a f f e c t i n g t h e c o m p a n y ’ s p r o p e r t i e s ; c h a n g e s i n r u l e s o r p r a c t i c e s g o v e r n i n g t h e c o m p a n y ’ s f i n a n c i a l r e p o r t i n g ; a n d l e g a l a n d o p e r a t i o n a l m a t t e r s , i n c l u d i n g r e a l e s t a t e i n v e s t m e n t t r u s t q u a l i f i c a t i o n a n d k e y m a n a g e m e n t p e r s o n n e l r e c r u i t m e n t a n d r e t e n t i o n . F i n a l l y , t h e c o m p a n y a s s u m e s n o o b l i g a t i o n t o u p d a t e o r r e v i s e a n y f o r wa r d - l o o k i n g s t a t e m e n t s o r t o u p d a t e t h e r e a s o n s wh y a c t u a l r e s u l t s c o u l d d i f f e r f r o m t h o s e p r o j e c t e d i n a n y f o r wa r d - l o o k i n g s t a t e m e n t s .

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(FULL PAGE GIF) F I NANCI AL Co n s o l i d a t e d Ba l a n c e S h e e t s ( u n a u d i t e d ) ( d o l l a r s i n t h o u s a n d s ) De c e m b e r 3 1 , 2 0 0 8 2 0 0 7 As s e t s Re a l e s t a t e i n v e s t m e n t s : Re a l p r o p e r t y o wn e d L a n d a n d l a n d i m p r o v e m e n t s $ 5 0 4 , 9 0 7 $ 4 4 7 , 0 2 9 Bu i l d i n g s a n d i m p r o v e m e n t s 4 , 6 5 3 , 8 7 1 4 , 2 2 4 , 9 5 5 Ac q u i r e d l e a s e i n t a n g i b l e s 1 3 3 , 3 2 4 1 3 1 , 3 1 2 Re a l p r o p e r t y h e l d f o r s a l e , n e t o f a c c u m u l a t e d d e p r e c i a t i o n 4 8 , 0 5 4 - Co n s t r u c t i o n i n p r o g r e s s 6 3 9 , 4 1 9 3 1 3 , 7 0 9 G r o s s r e a l p r o p e r t y o wn e d 5 , 9 7 9 , 5 7 5 5 , 1 1 7 , 0 0 5 L e s s a c c u m u l a t e d d e p r e c i a t i o n a n d a m o r t i z a t i o n ( 6 0 0 , 7 8 1 ) ( 4 7 8 , 3 7 3 ) Ne t r e a l p r o p e r t y o wn e d 5 , 3 7 8 , 7 9 4 4 , 6 3 8 , 6 3 2 Re a l e s t a t e l o a n s r e c e i v a b l e 4 8 2 , 8 8 5 3 8 1 , 3 9 4 L e s s a l l o wa n c e f o r l o s s e s o n l o a n s r e c e i v a b l e ( 7 , 5 0 0 ) r e a l e s t a t e l o a n s r e c e i v a b l e 4 7 5 , 3 8 5 3 7 3 , 9 8 8 Ne t r e a l e s t a t e i n v e s t m e n t s 5 , 8 5 4 , 1 7 9 5 , 0 1 2 , 6 2 0 O t h e r a s s e t s : E q u i t y i n v e s t m e n t s 1 , 0 3 0 1 , 4 0 8 De f e r r e d l o a n e x p e n s e s 2 3 , 5 7 9 3 0 , 4 9 9 Ca s h a n d c a s h e q u i v a l e n t s 2 3 , 3 7 0 3 0 , 2 6 9 Re s t r i c t e d c a s h 1 5 4 , 0 7 0 1 7 , 5 7 5 Re c e i v a b l e s a n d o t h e r a s s e t s ( 1 ) 1 3 6 , 8 9 0 1 2 1 , 4 8 5 To t a l o t h e r a s s e t s 3 3 8 , 9 3 9 2 0 1 , 2 3 6 To t a l a s s e t s $ 6 , 1 9 3 , 1 1 8 $ 5 , 2 1 3 , 8 5 6 Li a b i l i t i e s a n d s t o c k h o l d e r s ’ e q u i t y Li a b i l i t i e s : Bo r r o wi n g s u n d e r u n s e c u r e d l i n e s o f c r e d i t a r r a n g e m e n t s $ 5 7 0 , 0 0 0 $ 3 0 7 , 0 0 0 S e n i o r u n s e c u r e d n o t e s 1 , 8 4 7 , 2 4 7 1 , 8 9 0 , 1 9 2 S e c u r e d d e b t 4 4 6 , 5 2 5 5 0 7 , 4 7 6 Ac c r u e d e x p e n s e s a n d o t h e r l i a b i l i t i e s 1 0 7 , 1 5 7 9 5 , 1 4 5 To t a l l i a b i l i t i e s 2 , 9 7 0 , 9 2 9 2 , 7 9 9 , 8 1 3 i n t e r e s t s 1 0 , 6 0 3 9 , 6 8 7 S t o c k h o l d e r s ’ e q u i t y : P r e f e r r e d s t o c k 2 8 9 , 9 2 9 3 3 0 , 2 4 3 Co m m o n s t o c k 1 0 4 , 6 3 5 8 5 , 4 1 2 Ca p i t a l i n e x c e s s o f p a r v a l u e 3 , 1 8 0 , 6 2 8 2 , 3 7 0 , 0 3 7 T r e a s u r y s t o c k ( 5 , 1 4 5 ) ( 3 , 9 5 2 ) Cu m u l a t i v e n e t i n c o m e 1 , 3 6 2 , 3 6 6 1 , 0 7 4 , 2 5 5 Cu m u l a t i v e d i v i d e n d s ( 1 , 7 2 3 , 8 1 9 ) ( 1 , 4 4 6 , 9 5 9 ) Ac c u m u l a t e d o t h e r c o m p r e h e n s i v e i n c o m e ( 1 , 1 1 3 ) ( 7 , 3 8 1 ) Ot h e r e q u i t y 4 , 1 0 5 2 , 7 0 1 To t a l s t o c k h o l d e r s ’ e q u i t y 3 , 2 1 1 , 5 8 6 2 , 4 0 4 , 3 5 6 To t a l l i a b i l i t i e s a n d s t o c k h o l d e r s ’ e q u i t y $ 6 , 1 9 3 , 1 1 8 $ 5 , 2 1 3 , 8 5 6 No t e s : ( 1 ) I n c l u d e s s t r a i g h t - l i n e r e c e i v a b l e b a l a n c e o f $ 4 4 , 9 6 3 , 0 0 0 a n d $ 5 2 , 7 5 6 , 0 0 0 a t De c e m b e r 3 1 , 2 0 0 8 a n d 2 0 0 7 , r e s p e c t i v e l y .

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(FULL PAGE GIF) F I NANCI AL Co n s o l i d a t e d S t a t e m e n t s o f I n c o m e ( u n a u d i t e d ) ( a m o u n t s i n t h o u s a n d s e x c e p t p e r s h a r e d a t a ) T h r e e M o n t h s E n d e d Ye a r E n d e d De c e m b e r 3 1 , De c e m b e r 3 1 , 2 0 0 8 2 0 0 7 2 0 0 8 2 0 0 7 Re v e n u e s : Re n t a l i n c o m e $ 1 3 1 , 3 7 2 $ 1 1 1 , 0 3 6 $ 5 0 0 , 6 3 0 $ 4 1 7 , 6 7 3 I n t e r e s t i n c o m e 1 0 , 8 8 6 8 , 1 5 1 4 0 , 0 6 3 2 5 , 8 2 3 Ot h e r i n c o m e 4 , 8 6 5 6 , 0 9 9 1 0 , 5 2 1 1 0 , 0 3 5 To t a l r e v e n u e s 1 4 7 , 1 2 3 1 2 5 , 2 8 6 5 5 1 , 2 1 4 4 5 3 , 5 3 1 Ex p e n s e s : I n t e r e s t e x p e n s e 3 0 , 4 2 6 3 5 , 3 4 0 1 3 0 , 8 1 3 1 3 1 , 8 9 3 P r o p e r t y o p e r a t i n g e x p e n s e s 1 1 , 3 8 9 1 0 , 2 8 6 4 3 , 9 9 0 3 4 , 7 0 7 De p r e c i a t i o n a n d a m o r t i z a t i o n 4 1 , 5 0 0 e x t i n g u i s h m e n t o f d e b t — ( 1 , 0 8 1 ) ( 2 , 0 9 4 ) ( 1 , 0 8 1 ) P r o v i s i o n f o r l o a n l o s s e s 9 4 — 9 4 - To t a l e x p e n s e s 1 1 8 , 7 8 9 9 0 , 3 9 9 3 9 9 , 5 4 3 3 3 8 , 2 0 8 I n c o m e f r o m c o n t i n u i n g o p e r a t i o n s b e f o r e i n c o m e t a x e s a n d m i n o r i t y i n t e r e s t s 2 8 , 3 3 4 3 4 , 8 8 7 1 5 1 , 6 7 1 1 1 5 , 3 2 3 I n c o m e t a x e x p e n s e ( 1 3 6 ) ( 2 6 9 ) ( 1 , 3 0 6 ) ( 1 8 8 ) I n c o m e f r o m c o n t i n u i n g o p e r a t i o n s b e f o r e m i n o r i t y i n t e r e s t s 2 8 , 1 9 8 3 4 , 6 1 8 1 5 0 , 3 6 5 1 1 5 , 1 3 5 M i n o r i t y i n t e r e s t s , n e t o f t a x 2 1 6 9 ( 1 2 6 ) ( 2 3 8 ) I n c o m e f r o m c o n t i n u i n g o p e r a t i o n s 2 8 , 2 0 0 3 4 , 7 8 7 1 5 0 , 2 3 9 1 1 4 , 8 9 7 Di s c o n t i n u e d o p e r a t i o n s : Ga i n n e t ( 7 8 ) 2 , 4 9 8 6 , 5 8 7 1 2 , 0 6 8 Di s c o n t i n u e d o p e r a t i o n s , n e t 3 9 4 1 4 , 1 6 0 1 3 7 , 8 7 2 2 6 , 5 0 5 Ne t i n c o m e 2 8 , 5 9 4 4 8 , 9 4 7 2 8 8 , 1 1 1 1 4 1 , 4 0 2 P r e f e r r e d s t o c k d i v i d e n d s 5 , 5 4 1 6 , 1 7 9 2 3 , 2 0 1 2 5 , 1 3 0 Ne t i n c o m e a v a i l a b l e t o c o m m o n s t o c k h o l d e r s $ 2 3 , 0 5 3 $ 4 2 , 7 6 8 $ 2 6 4 , 9 1 0 $ 1 1 6 , 2 7 2 Av e r a g e n u m b e r o f c o m m o n s h a r e s o u t s t a n d i n g : Ba s i c 1 0 3 , 3 2 9 8 2 , 3 4 6 9 3 , 7 3 2 7 8 , 8 6 1 Di l u t e d 1 0 3 , 8 4 0 8 2 , 7 8 4 9 4 , 3 0 9 7 9 , 4 0 9 Ne t i n c o m e a v a i l a b l e t o c o m m o n s t o c k h o l d e r s p e r s h a r e : Ba s i c $ 0 . 2 2 $ 0 . 5 2 $ 2 . 8 3 $ 1 . 4 7 Di l u t e d $ 0 . 2 2 $ 0 . 5 2 $ 2 . 8 1 $ 1 . 4 6

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(FULL PAGE GIF) F I NANCI AL F u n d s F r o m O p e r a t i o n s Re c o n c i l i a t i o n ( a m o u n t s i n t h o u s a n d s e x c e p t p e r s h a r e d a t a ) T h r e e M o n t h s E n d e d Ye a r E n d e d De c e m b e r e x t i n g u i s h m e n t o f d e b t — ( 1 , 0 8 1 ) ( 2 , 0 9 4 ) ( 1 , 0 8 1 ) P r o v i s i o n f o r l o a n l o s s e s 9 4 — 9 4 - Ad d i t i o n a l o t h e r i n c o m e ( 2 , 5 0 0 ) ( 3 , 9 0 0 ) ( 2 , 5 0 0 ) Di l u t e d $ 0 . 8 3 $ 0 . 8 0 $ 3 . 3 8 $ 3 . 1 2 F F O P a y o u t Ra t i o Di v i d e n d s p e r s h a r e ( 2 ) $ 0 . 6 8 $ 0 . 6 6 $ 2 . 7 0 $ 2 . 6 2 F F O p e r d i l u t e d s h a r e $ 0 . 3 1 $

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$ 1 1 6 , 2 7 2 De p r e c i a t i o n a n d a m o r t i z a t i o n ( 1 ) 4 2 , 1 5 0 4 0 , 0 8 1 1 6 3 , 0 4 5 1 4 9 , 6 2 6 Ga i n 3 o n s a l e s o f p r o p e r t i e s ( 3 3 , 1 2 0 ) ( 1 1 , 6 6 2 ) ( 1 6 3 , 9 3 3 ) ( 1 4 , 4 3 7 ) M i n o r i t y i n t e r e s t s ( 8 1 ) ( 8 8 ) ( 3 4 2 ) ( 3 4 4 ) F u n d s f r o m o p e r a t i o n s 3 2 , 0 0 2 7 1 , 0 9 9 2 6 3 , 6 8 0 2 5 1 , 1 1 7 I m p a i r m e n t o f a s s e t s 3 2 , 6 4 8 — 3 2 , 6 4 8 - Re a l i z e d l o s s o n d e r i v a t i v e s 2 1 , 8 8 0 — 2 3 , 3 9 3 - T e r m i n a t e d t r a n s a c t i o n c o s t s 2 , 2 9 1 — 2 , 2 9 1 - On e - t i m e a c q u i s i t i o n f i n d e r ’ s f e e s — - — 1 , 7 5 0 Ga i n o n 3 1 8 , 8 3 7 $ 2 4 7 , 8 8 6 Av e r a g e c o m m o n s h a r e s o u t s t a n d i n g : Ba s i c 1 0 3 , 3 2 9 8 2 , 3 4 6 9 3 , 7 3 2 7 8 , 8 6 1 Di l u t e d 1 0 3 , 8 4 0 8 2 , 7 8 4 9 4 , 3 0 9 7 9 , 4 0 9 P e r s h a r e d a t a : Ne t i n c o m e a v a i l a b l e t o c o m m o n s t o c k h o l d e r s Ba s i c $ 0 . 2 2 $ 0 . 5 2 $ 2 . 8 3 $ 1 . 4 7 Di l u t e d $ 0 . 2 2 $ 0 . 5 2 $ 2 . 8 1 $ 1 . 4 6 F u n d s f r o m o p e r a t i o n s Ba s i c $ 0 . 3 1 $ 0 . 8 6 $ 2 . 8 1 $ 3 . 1 8 Di l u t e d $ 0 . 3 1 $ 0 . 8 6 $ 2 . 8 0 $ 3 . 1 6 F u n d s f r o m o p e r a t i o n s — n o r m a l i z e d Ba s i c $ 0 . 8 4 $ 0 . 8 0 $ 3 . 4 0 $ 3 . 1 4 $ 0 . 6 8 $ 0 . 6 6 $ 2 . 7 0 $ 2 . 6 2 F F O p e r d i l u t e d s h a r e — n o r m a l i z e d $ 0 . 8 3 $ 0 . 8 0 $ 3 . 3 8 $ 3 . 1 2 F F O p a y o u t r a t i o — n o r m a l i z e d 8 2 % 8 3 % 8 0 % 8 4 % No t e s : ( 1 ) De p r e c i a t i o n a n d a m o r t i z a t i o n i n c l u d e s d e p r e c i a t i o n a n d a m o r t i z a t i o n f r o m d i s c o n t i n u e d o p e r a t i o n s . ( 2 ) T h e $ 0 . 3 4 0 9 p r o r a t e d d i v i d e n d p a i d o n De c e m b e r 2 8 , 2 0 0 6 i n c o n n e c t i o n wi t h t h e W i n d r o s e m e r g e r h a s b e e n i n c l u d e d i n t h e t we l v e m o n t h s e n d e d De c e m b e r 3 1 , 2 0 0 7 .

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(FULL PAGE GIF) F u n d s Av a i l a b l e f o r Di s t r i b u t i o n Re c o n c i l i a t i o n ( a m o u n t s i n t h o u s a n d s e x c e p t p e r s h a r e d a t a ) T h r e e M o n t h s E n d e d Ye a r E n d e d De c e m b e r 3 1 , De c e m b e r 3 1 , 2 0 0 8 2 0 0 7 2 0 0 8 2 0 0 7 Ne t i n c o m e a v a i l a b l e t o c o m m o n s t o c k h o l d e r s $ 2 3 , 0 5 3 $ 4 2 , 7 6 8 $ 2 6 4 , 9 1 0 $ 1 1 6 , 2 7 2 De p r e c i a t i o n a n d a m o r t i z a t i o n ( 1 ) 4 2 , 1 5 0 4 0 , 0 8 1 1 6 3 , 0 4 5 1 4 9 , 6 2 6 Ga i n 3 o n s a l e s o f p r o p e r t i e s ( 3 3 , 1 2 0 ) ( 1 1 , 6 6 2 ) ( 1 6 3 , 9 3 3 ) ( 1 4 , 4 3 7 ) M i n o r i t y i n t e r e s t s ( 1 8 ) ( 8 ) ( 4 4 ) ( 1 0 ) Gr o s s s t r a i g h t - l i n e r e n t a l i n c o m e ( 4 , 6 8 2 ) ( 4 , 3 6 5 ) ( 2 0 , 4 8 9 ) ( 1 7 , 0 2 9 ) P r e p a i d / s t r a i g h t - l i n e r e n t r e c e i p t s 1 2 , 6 0 2 6 , 6 7 8 2 8 , 2 8 2 1 7 , 4 6 9 Am o r t i z a t i o n r e l a t e d t o a b o v e / ( b e l o w) m a r k e t l e a s e s , n e t ( 3 6 3 ) ( 1 3 6 ) ( 1 , 0 3 9 ) ( 7 9 2 ) No n - c a s h i n t e r e s t e x p e n s e 1 , 6 9 6 1 , 7 9 0 6 , 4 1 9 5 , 3 6 6 Ca p - e x , t e n a n t i m p r o v e m e n t s , l e a s e c o m m i s s i o n s ( 2 , 8 6 5 ) ( 1 , 7 6 3 ) ( 6 , 3 4 7 ) ( 4 , 2 9 2 ) F u n d s a v a i l a b l e f o r d i s t r i b u t i o n 3 8 , 4 5 3 7 3 , 3 8 3 2 7 0 , 8 0 4 2 5 2 , 1 7 3 I m p a i r m e n t o f a s s e t s 3 2 , 6 4 8 — 3 2 , 6 4 8 - Re a l i z e d l o s s o n d e r i v a t i v e s 2 1 , 8 8 0 — 2 3 , 3 9 3 - T e r m i n a t e d t r a n s a c t i o n c o s t s 2 , 2 9 1 — 2 , 2 9 1 - On e - t i m e a c q u i s i t i o n f i n d e r ’ s f e e s — - — 1 , 7 5 0 Ga i n o n e x t i n g u i s h m e n t o f d e b t — ( 1 , 0 8 1 ) ( 2 , 0 9 4 ) ( 1 , 0 8 1 ) P r o v i s i o n f o r l o a n l o s s e s 9 4 — 9 4 - Ad d i t i o n a l o t h e r i n c o m e ( 2 , 5 0 0 ) ( 3 , 9 0 0 ) ( 2 , 5 0 0 ) ( 3 , 9 0 0 ) No n - r e c u r r i n g i n c o m e t a x e x p e n s e — - 1 , 3 2 5 - - P r e p a i d / s t r a i g h t - l i n e r e n t r e c e i p t s ( 1 2 , 6 0 2 ) ( 6 , 6 7 8 ) ( 2 8 , 2 8 2 ) ( 1 7 , 4 6 9 ) F u n d s a v a i l a b l e f o r d i s t r i b u t i o n — n o r m a l i z e d $ 8 0 , 2 6 4 $ 6 1 , 7 2 4 $ 2 9 7 , 6 7 9 $ 2 3 1 , 4 7 3 Av e r a g e c o m m o n s h a r e s o u t s t a n d i n g : Ba s i c 1 0 3 , 3 2 9 8 2 , 3 4 6 9 3 , 7 3 2 7 8 , 8 6 1 Di l u t e d 1 0 3 , 8 4 0 8 2 , 7 8 4 9 4 , 3 0 9 7 9 , 4 0 9 P e r s h a r e d a t a : Ne t i n c o m e a v a i l a b l e t o c o m m o n s t o c k h o l d e r s Ba s i c $ 0 . 2 2 $ 0 . 5 2 $ 2 . 8 3 $ 1 . 4 7 Di l u t e d $ 0 . 2 2 $ 0 . 5 2 $ 2 . 8 1 $ 1 . 4 6 F u n d s a v a i l a b l e f o r d i s t r i b u t i o n Ba s i c $ 0 . 3 7 $ 0 . 8 9 $ 2 . 8 9 $ 3 . 2 0 Di l u t e d $ 0 . 3 7 $ 0 . 8 9 $ 2 . 8 7 $ 3 . 1 8 F u n d s a v a i l a b l e f o r d i s t r i b u t i o n — n o r m a l i z e d Ba s i c $ 0 . 7 8 $ 0 . 7 5 $ 3 . 1 8 $ 2 . 9 4 Di l u t e d $ 0 . 7 7 $ 0 . 7 5 $ 3 . 1 6 $ 2 . 9 1 F AD P a y o u t Ra t i o Di v i d e n d s p e r s h a r e ( 2 ) $ 0 . 6 8 $ 0 . 6 6 $ 2 . 7 0 $ 2 . 6 2 F AD p e r d i l u t e d s h a r e $ 0 . 3 7 $ 0 . 8 9 $ 2 . 8 7 $ 3 . 1 8 F AD p a y o u t r a t i o 1 8 4 % 7 4 % 9 4 % 8 2 % F AD P a y o u t Ra t i o — No r m a l i z e d Di v i d e n d s p e r s h a r e ( 2 ) $ 0 . 6 8 $ 0 . 6 6 $ 2 . 7 0 $ 2 . 6 2 F AD p e r d i l u t e d s h a r e — n o r m a l i z e d $ 0 . 7 7 $ 0 . 7 5 $ 3 . 1 6 $ 2 . 9 1 F AD p a y o u t r a t i o — n o r m a l i z e d 8 8 % 8 8 % 8 5 % 9 0 % No t e s : ( 1 ) De p r e c i a t i o n a n d a m o r t i z a t i o n i n c l u d e s d e p r e c i a t i o n a n d a m o r t i z a t i o n f r o m d i s c o n t i n u e d o p e r a t i o n s . ( 2 ) T h e $ 0 . 3 4 0 9 p r o r a t e d d i v i d e n d p a i d o n De c e m b e r 2 8 , 2 0 0 6 i n c o n n e c t i o n wi t h t h e W i n d r o s e m e r g e r h a s b e e n i n c l u d e d i n t h e t we l v e m o n t h s e n d e d De c e m b e r 3 1 , 2 0 0 7 .

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(FULL PAGE GIF) F I NANCI AL Ad j u s t e d EBI TDA Re c o n c i l i a t i o n ( d o l l a r s i n t h o u s a n d s ) T we l v e M o n t h s E n d e d De c e m b e r 3 1 , M a r c h 3 1 , J u n e Ra t i o ( 1 ) I n t e r e s t e x p e n s e ( 3 ) $ 1 4 2 , 2 7 9 $ 1 4 5 , 1 2 7 $ 1 4 5 , 2 1 9 $ 1 4 2 , 7 8 4 $ 1 3 6 , 2 4 7 No n - c a s h i n t e r e s t e x p e n s e ( 5 , 3 6 6 ) 1 8 9 , 3 1 0 $ 1 8 6 , 1 7 7 Ad j u s t e d E BI T DA $ 4 3 9 , 4 6 4 $ 4 5 5 , 5 6 7 $ 5 9 0 , 4 4 5 $ 6 1 8 , 5 1 2 $ 5 9 5 , 2 3 9 Ad j u s t e d f i x e d c h a r g e c o v e r a g e De c e m b e r 3 1 , 2 0 0 8 , r e s p e c t i v e l y .

3 0 , S e p t e m b e r 3 0 , De c e m b e r 3 1 , 2 0 0 7 2 0 0 8 2 0 0 8 2 0 0 8 2 0 0 8 Ne t i n c o m e $ 1 4 1 , 4 0 2 $ 1 4 8 , 3 2 9 $ 2 7 8 , 7 8 9 $ 3 0 8 , 4 6 5 $ 2 8 8 , 1 1 1 I n t e r e s t e x p e n s e ( 3 ) 1 4 2 , 2 7 9 1 4 5 , 1 2 7 1 4 5 , 2 1 9 1 4 2 , 7 8 4 1 3 6 , 2 4 7 I n c o m e t a x e x p e n s e 1 8 8 1 , 4 5 6 1 , 5 6 9 1 , 4 3 9 ( 5 , 8 2 3 ) ( 6 , 2 3 5 ) ( 6 , 5 1 3 ) ( 6 , 4 1 9 ) Ca p i t a l i z e d i n t e r e s t ( 5 ) 1 2 , 5 2 6 1 5 , 3 6 7 1 7 , 8 6 0 2 1 , 0 6 2 2 5 , 0 2 9 To t a l i n t e r e s t $ 1 4 9 , 4 3 9 $ 1 5 4 , 6 7 1 $ 1 5 6 , 8 4 4 $ 1 5 7 , 3 3 3 $ 1 5 4 , 8 5 7 Ad j u s t e d E BI T DA $ 4 3 9 , 4 6 4 $ 4 5 5 , 5 6 7 $ 5 9 0 , 4 4 5 $ 6 1 8 , 5 1 2 $ 5 9 5 , 2 3 9 r a t i o 2 . 4 1 x 2 . 4 3 x 3 . 1 2 x 3 . 2 7 x 3 . 2 0 x No t e s : ( 1 ) A c o m p a r a b l e c o v e n a n t i n o u r s e n i o r u n s e c u r e d n o t e s i s a m i n i m u m o f 1 . 5 0 t i m e s . ( 2 ) A c o m p a r a b l e c o v e n a n t i n o u r u n s e c u r e d l i n e o f c r e d i t a r r a n g e m e n t i s a m i n i m u m o f

1 , 3 0 6 De p r e c i a t i o n a n d a m o r t i z a t i o n ( 3 ) 1 4 9 , 6 2 6 1 5 5 , 3 3 9 1 5 9 , 4 2 2 1 6 0 , 9 7 5 1 6 3 , 0 4 5 S t o c k - b a s e d c o m p e n s a t i o n ( 4 ) 7 , 0 5 0 7 , 7 2 3 7 , 8 5 3 8 , 0 2 4 8 , 5 3 0 P r o v i s i o n f o r l o a n l o s s e s — - — - 9 4 Ga i n o n e x t i n g u i s h m e n t o f d e b t ( 1 , 0 8 1 ) ( 2 , 4 0 7 ) ( 2 , 4 0 7 ) ( 3 , 1 7 5 ) ( 2 , 0 9 4 ) Ad j u s t e d EBI TDA $ 4 3 9 , 4 6 4 $ 4 5 5 , 5 6 7 $ 5 9 0 , 4 4 5 $ 6 1 8 , 5 1 2 $ 5 9 5 , 2 3 9 I n t e r e s t Co v e r a g e Ad j u s t e d i n t e r e s t c o v e r a g e r a t i o 2 . 9 4 x 2 . 9 5 x 3 . 7 6 x 3 . 9 3 x 3 . 8 4 x F i x e d Ch a r g e Co v e r a g e Ra t i o ( 2 ) T o t a l i n t e r e s t ( 3 ) $ 1 4 9 , 4 3 9 $ 1 5 4 , 6 7 1 $ 1 5 6 , 8 4 4 $ 1 5 7 , 3 3 3 $ 1 5 4 , 8 5 7 S e c u r e d d e b t p r i n c i p a l a m o r t i z a t i o n 7 , 9 5 0 8 , 1 4 9 8 , 0 6 6 8 , 1 3 7 8 , 1 1 9 P r e f e r r e d d i v i d e n d s 2 5 , 1 3 0 2 4 , 9 6 0 2 4 , 4 2 7 2 3 , 8 4 0 2 3 , 2 0 1 To t a l f i x e d c h a r g e s $ 1 8 2 , 5 1 9 $ 1 8 7 , 7 8 0 $ 1 8 9 , 3 3 7 $ 1 . 7 5 t i m e s . ( 3 ) I n t e r e s t e x p e n s e a n d d e p r e c i a t i o n a n d a m o r t i z a t i o n i n c l u d e d i s c o n t i n u e d o p e r a t i o n s . ( 4 ) S t o c k - b a s e d c o m p e n s a t i o n e x p e n s e wa s $ 1 , 8 0 4 , 0 0 0 a n d $ 8 , 5 3 0 , 0 0 0 f o r t h e t h r e e a n d t we l v e m o n t h s e n d e d De c e m b e r 3 1 , 2 0 0 8 , r e s p e c t i v e l y . ( 5 ) Ca p i t a l i z e d i n t e r e s t wa s $ 8 , 4 3 5 , 0 0 0 a n d $ 2 5 , 0 2 9 , 0 0 0 f o r t h e t h r e e a n d t we l v e m o n t h s e n d e d

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(FULL PAGE GIF) Ne t Op e r a t i n g I n c o m e Re c o n c i l i a t i o n ( d o l l a r s i n t h o u s a n d s ) F I NANCI AL T h r e e M o n t h s E n d e d Ye a r E n d e d De c e m b e r 3 1 , De c e m b e r 3 1 , 2 0 0 8 2 0 0 7 2 0 0 8 2 0 0 7 T o t a l r e v e n u e s : I n v e s t m e n t p r o p e r t i e s : Re n t a l i n c o m e : ( 1 ) I n d e p e n d e n t l i v i n g / CCRCs $ 1 9 , 5 6 2 $ 1 2 , 4 4 3 $ 6 6 , 4 0 2 $ 4 3 , 0 7 2 As s i s t e d l i v i n g f a c i l i t i e s 2 7 , 5 2 1 2 8 , 6 4 6 1 1 7 , 0 0 9 1 0 8 , 4 7 5 S k i l l e d n u r s i n g f a c i l i t i e s 4 0 , 5 9 5 4 1 , 0 2 5 1 6 1 , 6 4 2 1 6 7 , 7 1 8 S p e c i a l t y c a r e f a c i l i t i e s 1 2 , 3 5 9 7 , 0 1 2 4 3 , 7 9 6 2 6 , 4 1 8 S u b - t o t a l r e n t a l i n c o m e 1 0 0 , 0 3 7 8 9 , 1 2 6 3 8 8 , 8 4 9 3 4 5 , 6 8 3 I n t e r e s t i n c o m e ( 1 ) 3 3 , 1 3 8 3 0 , 8 7 7 1 3 3 , 3 3 2 1 1 1 , 6 1 4 Ot h e r i n c o m e 2 2 2 4 9 7 9 3 0 4 9 7 T o t a l M OB i n c o m e 3 3 , 3 6 0 3 1 , 3 7 4 1 3 4 , 2 6 2 1 1 2 , 1 1 1 No n - s e g m e n t / c o r p o r a t e o t h e r i n c o m e 7 9 3 3 8 4 1 , 6 9 2 1 , 5 2 8 T o t a l r e v e n u e s 1 4 8 , 9 2 6 1 3 4 , 2 5 3 5 7 2 , 7 6 5 4 9 3 , 1 5 5 P r o p e r t y o p e r a t i n g e x p e n s e s : I n v e s t m e n t p r o p e r t i e s — - — - M e d i c a l o f f i c e b u i l d i n g s ( 1 ) 1 2 , 0 1 9 1 1 , 2 2 4 4 6 , 6 2 9 3 7 , 4 7 5 No n - s e g m e n t / c o r p o r a t e — - — - T o t a l p r o p e r t y o p e r a t i n g e x p e n s e s 1 2 , 0 1 9 1 1 , 2 2 4 4 6 , 6 2 9 3 7 , 4 7 5 Ne t o p e r a t i n g i n c o m e : I n v e s t m e n t p r o p e r t i e s 1 1 4 , 7 7 3 1 0 2 , 4 9 5 No t e : ( 1 ) T h e t h r e e m o n t h s e n d e d De c e m b e r 3 1 , 2 0 0 8 i n c l u d e s t h e f o l l o wi n g a m o u n t s ( i n t h o u s a n d s ) : Re n t a l i n c o m e f r o m d i s c o n t i n u e d o p e r a t i o n s : As s i s t e d l i v i n g f a c i l i t i e s $ 2 0 6 S k i l l e d n u r s i n g f a c i l i t i e s 2 7 S p e c i a l t y c a r e f a c i l i t i e s 9 8 9 M e d i c a l o f f i c e b u i l d i n g s 5 8 1 T o t a l $ 1 , 8 0 3 No n - c a s h r e n t a l i n c o m e f r o m c o n t i n u i n g o p e r a t i o n s : I n d e p e n d e n t l i v i n g / CCRCs $ 1 , 3 9 7 As s i s t e d l i v i n g f a c i l i t i e s 1 , 2 5 4 S k i l l e d n u r s i n g f a c i l i t i e s 9 4 8 S p e c i a l t y c a r e f a c i l i t i e s 3 9 2 M e d i c a l o f f i c e b u i l d i n g s 1 , 4 1 1 T o t a l

i ncom e 436, 811 $ 5, 402

1 0 , 8 8 6 8 , 1 5 1 4 0 , 0 6 3 2 5 , 8 2 3 Ot h e r i n c o m e 3 , 8 5 0 5 , 2 1 8 7 , 8 9 9 8 , 0 1 0 T o t a l i n v e s t m e n t p r o p e r t y i n c o m e 1 1 4 , 7 7 3 1 0 2 , 4 9 5 4 3 6 , 8 1 1 3 7 9 , 5 1 6 M e d i c a l o f f i c e b u i l d i n g s : 3 7 9 , 5 1 6 M e d i c a l o f f i c e b u i l d i n g s 2 1 , 3 4 1 2 0 , 1 5 0 8 7 , 6 3 3 7 4 , 6 3 6 No n - s e g m e n t / c o r p o r a t e 7 9 3 3 8 4 1 , 6 9 2 1 , 5 2 8 Ne t o p e r a t i n g i n c o m e $ 1 3 6 , 9 0 7 $ 1 2 3 , 0 2 9 $ 5 2 6 , 1 3 6 $ Pr ope r t y ope r a t i ng e xpe ns e s f r om di s c ont i nue d ope r a t i ons : M e di c a l of f i c e bui l di ngs $630 11

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t h o u s a n d s e x c e p t p e r s h a r e d a t a ) Ye a r E n d e d De c e m b e r 3 1 , 2 0 0 9 L o w Hi g h I n v e s t m e n t s : Ac q u i s i t i o n s $ — $ - De v e l o p m e n t 6 0 0 , 0 0 0 6 0 0 , 0 0 0 Gr o s s n e w i n v e s t m e n t s 6 0 0 , 0 0 0 6 0 0 , 0 0 0 Di s p o s i t i o n s ( 3 0 0 , 0 0 0 ) ( 2 0 0 , 0 0 0 ) Ne t n e w i n v e s t m e n t s 3 0 0 , 0 0 0 4 0 0 , 0 0 0 F F O Re c o n c i l i a t i o n : Ne t i n c o m e a v a i l a b l e t o c o m m o n s t o c k h o l d e r s $ n o r m a l i z e d 3 . 2 0 3 . 3 0 F AD Re c o n c i l i a t i o n : Ne t i n c o m e a v a i l a b l e t o c o m m o n s t o c k h o l d e r s $ 1 7 5 , 6 9 1 $ 1 8 6 , 7 4 1 De p r e c i a t i o n a n d a m o r t i z a t i o n ( 1 ) 1 7 4 , 0 0 0 1 7 4 , 0 0 0 Gr o s s s t r a i g h t - l i n e r e n t a l i n c o m e ( 1 3 , 8 0 0 ) ( 1 3 , 8 0 0 ) Am o r t i z a t i o n r e l a t e d t o a b o v e ( b e l o w) m a r k e t l e a s e s , n e t ( 1 , 3 0 0 ) ( 1 , 3 0 0 ) No n - c a s h i n t e r e s t e x p e n s e d i s t r i b u t i o n 3 . 0 4 3 . 1 4 F u n d s a v a i l a b l e f o r d i s t r i b u t i o n — n o r m a l i z e d 3 . 0 8 3 . 1 8 No t e s : ( 1 ) De p r e c i a t i o n a n d a m o r t i z a t i o n i n c l u d e s d e p r e c i a t i o n a n d a m o r t i z a t i o n f r o m d i s c o n t i n u e d o p e r a t i o n s . ( 2 ) E x p e n s e s t o b e r e c o g n i z e d i n c o n n e c t i o n wi t h t h e d e p a r t u r e o f Ra y m o n d Br a u n .

1 7 5 , 6 9 1 $ 1 8 6 , 7 4 1 De p r e c i a t i o n a n d a m o r t i z a t i o n ( 1 ) 1 7 4 , 0 0 0 1 7 4 , 0 0 0 F u n d s f r o m o p e r a t i o n s $ 3 4 9 , 6 9 1 $ 3 6 0 , 7 4 1 No n - r e c u r r i n g 1 1 , 5 0 0 1 1 , 5 0 0 Ca p - e x , t e n a n t i m p r o v e m e n t s , l e a s e c o m m i s s i o n s ( 1 0 , 0 0 0 ) ( 1 0 , 0 0 0 ) F u n d s a v a i l a b l e f o r d i s t r i b u t i o n $ 3 3 6 , 0 9 1

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( a m o u n t s i n t h o u s a n d s e x c e p t p e r s h a r e d a t a ) Re n t a l I n c o m e ( 1 ) I n d e p e n d e n t As s i s t e d S k i l l e d S p e c i a l t y M e d i c a l T o t a l Re n t a l I n t e r e s t T o t a l % o f Ye a r L i v i n g / CCRC L i v i n g Nu r s i n g Ca r e 3 , 6 2 7 2 , 1 0 6 5 , 4 5 5 2 5 , 9 6 8 2 , 3 4 0 2 8 , 3 0 8 5 . 2 % 2 0 1 8 3 , 5 9 4 3 5 , 8 7 7 1 6 , 2 4 1 6 , 3 3 0 2 , 0 8 0 6 4 , 1 2 2 2 , 0 0 9 6 6 , 1 3 1 1 2 . 1 % Th e r e a f t e r 6 2 , 9 1 2 4 9 , 6 6 5 1 1 4 , 9 2 9 4 1 , 5 2 6 1 0 , 8 8 5 2 7 9 , 9 1 7 4 , 4 1 3 2 8 4 , 3 3 0 5 2 . 0 % $ a m o r t i z a t i o n o f a b o v e / b e l o w m a r k e t l e a s e i n t a n g i b l e s . ( 2 ) Re f l e c t s c o n t r a c t r a t e o f i n t e r e s t f o r l o a n s , n e t o f c o l l e c t a b i l i t y r e s e r v e s i f a p p l i c a b l e .

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(FULL PAGE GIF) F I NANCI AL De b t M a t u r i t i e s a n d P r i n c i p a l P a y m e n t s ( d o l l a r s i n t h o u s a n d s ) % o f Ye a r L i n e o f Cr e d i t ( 1 ) S e n i o r No t e s ( 2 , 4 ) S e c u r e d De b t ( 2 , 5 ) T o t a l T o t a l 2 0 0 9 $ — $ — $ 3 9 , 6 5 7 $ 3 9 , 6 5 7 1 . 4 % 2 0 1 0 — - 1 5 , 1 2 0 1 5 , 1 2 0 0 . 5 % 2 0 1 1 5 7 0 , 0 0 0 — 5 2 , 3 1 4 6 2 2 , 3 1 4 2 1 . 7 % 2 0 1 2 — 2 5 0 , 0 0 0 1 3 , 7 1 0 2 6 3 , 7 1 0 9 . 2 % 2 0 1 3 — 3 0 0 , 0 0 0 6 2 , 1 9 8 3 6 2 , 1 9 8 1 2 . 6 % 2 0 1 4 — - 1 2 2 , 3 7 2 1 2 2 , 3 7 2 4 . 3 % 2 0 1 5 - 2 5 0 , 0 0 0 7 0 , 6 5 4 3 2 0 , 6 5 4 1 1 . 2 % T h e r e a f t e r — 1 , 0 4 5 , 0 0 0 7 2 , 3 5 3 1 , 1 1 7 , 3 5 3 3 9 . 1 % To t a l s $ 5 7 0 , 0 0 0 $ 1 , 8 4 5 , 0 0 0 Pr i nc i pa l % o f De b t F i x e d Ra t e De b t S e n i o r n o t e s ( 2 ) $ 1 , 8 4 5 , 0 0 0 6 4 . 4 % S e c u r e d d e b t ( 2 ) $ 4 4 8 , 3 7 8 1 5 . 7 % To t a l f i x e d $ 2 , 2 9 3 , 3 7 8 8 0 . 1 % F l o a t i n g Ra t e De b t L i n e o f c r e d i t ( 1 ) $ 5 7 0 , 0 0 0 1 9 . 9 % To t a l f l o a t i n g $ 5 7 0 , 0 0 0 1 9 . 9 % To t a l d e b t $ 2 , 8 6 3 , 3 7 8 1 0 0 . 0 % No t e s : ( 1 ) Cu r r e n t l i n e o f c r e d i t c a p a c i t y o f $ 1 . 1 5 b i l l i o n wi t h r e m a i n i n g a v a i l a b i l i t y o f $ 5 8 0 m i l l i o n a t De c e m b e r 3 1 , 2 0 0 8 . L i n e o f c r e d i t c u r r e n t l y m a t u r e s o n Au g u s t 5 , 2 0 1 1 b u t c a n b e e x t e n d e d f o r o n e y e a r a t o u r o f c r e d i t i n t e r e s t r a t e r e p r e s e n t s 1 - m o n t h L I BOR + 6 0 b p s a t De c e m b e r 3 1 , 2 0 0 8 . S e n i o r n o t e s a n d s e c u r e d d e b t a v e r a g e i n t e r e s t r a t e r e p r e s e n t s t h e f a c e v a l u e n o t e r a t e . ( 4 ) $ 3 4 5 m i l l i o n o f c o n v e r t i b l e s e n i o r n o t e s a r e p u t t a b l e o n De c e m b e r 1 , 2 0 1 1 a n d $ 4 0 0 m i l l i o n o f c o n v e r t i b l e s e n i o r n o t e s a r e p u t t a b l e o n J u l y 1 5 , 2 0 1 2 . W e i g h t e d a v e r a g e m a t u r i t i e s wo u l d b e 4 . 7 y e a r s a n d 4 . 5 y e a r s f o r s e n i o r n o t e s a n d t o t a l d e b t , r e s p e c t i v e l y , u s i n g t h e p u t t a b l e d a t e s . ( 5 ) $ 6 , 3 0 8 , 0 0 0 o f s ecur ed debt and t ot al debt , r es pect i vel y, i f one us ed a 12/ 31/ 09 ext i ngui s hm ent dat e.

$ 4 4 8 , 3 7 8 $ 2 , 8 6 3 , 3 7 8 1 0 0 . 0 % W e i g h t e d Av g I n t e r e s t Ra t e ( 3 ) 1 . 2 % 5 . 8 % 6 . 1 % 4 . 9 % W e i g h t e d Av g M a t u r i t y ( 4 ) 2 . 8 1 0 . 7 5 . 7 8 . 4 F i x e d a n d F l o a t i n g Ra t e De b t ( d o l l a r s i n t h o u s a n d s ) d i s c r e t i o n . ( 2 ) Am o u n t s a b o v e r e p r e s e n t p r i n c i p a l a m o u n t s d u e a n d d o n o t i n c l u d e u n a m o r t i z e d p r e m i u m s / d i s c o u n t s o r o t h e r f a i r v a l u e a d j u s t m e n t s a s r e f l e c t e d o n t h e b a l a n c e s h e e t . ( 3 ) s e c u r e d d e b t t h a t m a t u r e s i n 2 0 1 3 a n d $ 8 , 2 0 5 , 0 0 0 o f s e c u r e d d e b t t h a t m a t u r e s i n 2 0 1 5 r e l a t e s t o a s s e t s - h e l d - f o r s a l e . W e i g h t e d - a v e r a g e m a t u r i t i e s wo u l d b e 5 . 5 y e a r s a n d 8 . 4 y e a r s f o r

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(FULL PAGE GIF) F I NANCI AL Cu r r e n t Ca p i t a l i z a t i o n ( a m o u n t s i n t h o u s a n d s e x c e p t p e r s h a r e d a t a ) Ba l a n c e % o f T o t a l Bo o k Ca p i t a l i z a t i o n ( 1 ) L i n e o f c r e d i t $ 5 7 0 , 0 0 0 9 . 3 % L o n g - t e r m d e b t o b l i g a t i o n s 2 , 2 9 3 , 7 7 2 3 7 . 8 % De b t t o t o t a l b o o k c a p i t a l i z a t i o n 2 , 8 6 3 , 7 7 2 4 7 . 1 % S t o c k h o l d e r s ’ e q u i t y 3 , 2 1 1 , 5 8 6 5 2 . 9 % To t a l b o o k c a p i t a l i z a t i o n $ 6 , 0 7 5 , 3 5 8 1 0 0 . 0 % Un d e p r e c i a t e d Bo o k Ca p i t a l i z a t i o n L i n e o f c r e d i t $ 5 7 0 , 0 0 0 8 . 5 % L o n g - t e r m d e b t o b l i g a t i o n s 2 , 2 9 3 , 7 7 2 3 4 . 4 % De b t t o u n d e p r e c i a t e d b o o k c a p i t a l i z a t i o n 2 , 8 6 3 , 7 7 2 4 2 . 9 % Ac c u m u l a t e d d e p r e c i a t i o n L i n e o f c r e d i t $ 5 7 0 , 0 0 0 7 . 5 % L o n g - t e r m d e b t o b l i g a t i o n s 2 , 2 9 3 , 7 7 2 3 0 . 3 % De b t t o t o t a l e n t e r p r i s e v a l u e 2 , 8 6 3 , 7 7 2 3 7 . 8 % Co m m o n s h a r e s o u t s t a n d i n g 1 0 4 , 7 0 4 P e r i o d e n d s h a r e p r i c e $ 4 2 . 2 0 Co m m o n e q u i t y m a r k e t c a p i t a l i z a t i o n 4 , 4 1 8 , 5 0 9 5 8 . 4 % P r e f e r r e d s t o c k 2 8 9 , 9 2 9 3 . 8 % To t a l e n t e r p r i s e v a l u e $ 7 , 5 7 2 , 2 1 0 1 0 0 . 0 % S e c u r e d De b t a s % o f T o t a l As s e t s ( 2 ) S e c u r e d d e b t $ 4 4 6 , 5 2 5 7 . 2 % T o t a l a s s e t s $ 6 , 1 9 3 , 1 1 8 T o t a l De b t a s % o f T o t a l As s e t s ( 3 ) To t a l d e b t $ 2 , 8 6 3 , 7 7 2 4 6 . 2 % T o t a l a s s e t s $ 6 , 1 9 3 , 1 1 8 Un e n c u m b e r e d As s e t s a s l i ne of cr edi t ar r angem ent i s a m axi m um of 60% . ( 2) A com par abl e covenant i n our s eni or uns ecur ed not es i s a m axi m um of 40% . A com par abl e covenant i n our uns ecur ed l i ne of cr edi t ar r angem ent i s a m axi m um of 30% . ( 3) A com par abl e covenant i n our s eni or uns ecur ed not es i s a m axi m um of 60% . ( 4) A com par abl e covenant i n our uns ecur ed l i ne of cr edi t ar r angem ent i s a m i ni m um of 167% . A com par abl e covenant i n our s eni or uns ecur ed not es i s a m i ni m um of 150% .

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(FULL PAGE GIF) F I NANCI AL Re s t a t e m e n t o f Ea r n i n g s d u e t o Co n v e r t i b l e De b t ( a m o u n t s i n t h o u s a n d s e x c e p t p e r s h a r e d a t a ) 1 Q 2 Q 3 Q 4 Q F u l l Ye a r Ye a r e n d e d De c e m b e r 3 1 , 2 0 0 7 Ad d i t i o n a l i n t e r e s t e x p e n s e No v e m b e r 2 0 0 6 i s s u a n c e $ 3 2 0 $ 3 2 0 $ 3 2 0 $ 3 2 0 $ 1 , 2 8 0 J u l y 2 0 0 7 i s s u a n c e $ — $ — $ 8 8 3 $ 8 8 3 $ 1 , 7 6 6 T o t a l $ 3 2 0 $ 3 2 0 $ 1 , 2 0 3 $ 1 , 2 0 3 $ 3 , 0 4 6 F u l l y d i l u t e d we i g h t e d - a v e r a g e s h a r e s 7 3 , 7 9 1 7 9 , 5 4 6 8 1 , 1 6 3 8 2 , 7 8 4 7 9 , 4 0 9 Am o u n t p e r s h a r e $ — $ — $ 0 . 0 1 $ 0 . 0 1 $ 0 . 0 4 S u m m a r y o f p e r s h a r e i m p a c t s : $ 0 . 5 1 $ 1 . 4 2 F u n d s f r o m o p e r a t i o n s — n o r m a l i z e d As r e p o r t e d $ 0 . 7 6 $ 0 . 7 8 $ 0 . 7 9 $ 0 . 8 0 $ 3 . 1 2 Co n v e r t i b l e d e b t a d j u s t m e n t $ — $ — $ ( 0 . 0 1 ) $ ( 0 . 0 1 ) $ ( 0 . 0 4 ) Re s t a t e d $ 0 . 7 6 $ 0 . 7 8 $ 0 . 7 8 $ 0 . 7 9 $ 3 . 0 8 Ye a r e n d e d De c e m b e r 3 1 , 2 0 0 8 Ad d i t i o n a l i n t e r e s t e x p e n s e No v e m b e r 2 0 0 6 i s s u a n c e $ 3 2 0 $ 3 2 0 $ 3 2 0 $ 3 2 0 $ 1 , 2 8 0 J u l y 2 0 0 7 i s s u a n c e $ 8 8 3 $ 8 8 3 $ 8 8 3 $ 8 8 3 $ 3 , 5 3 2 T o t a l $ 1 , 2 0 3 $ 1 , 2 0 3 $ 1 , 2 0 3 $ 1 , 2 0 3 $ 4 , 8 1 2 F u l l y d i l u t e d we i g h t e d - a v e r a g e s h a r e s 8 6 , 6 1 0 8 9 , 8 5 3 9 6 , 8 4 9 1 0 3 , 8 4 0 Co n v e r t i b l e d e b t a d j u s t m e n t $ ( 0 . 0 1 ) $ ( 0 . 0 1 ) $ ( 0 . 0 1 ) $ ( 0 . 0 1 ) $ ( 0 . 0 5 ) Re s t a t e d $ 0 . 3 4 $ 1 . 7 3 $ 0 . 5 6 $ 0 . 2 1 $ 2 . 7 6 F u n d s f r o m o p e r a t i o n s — n o r m a l i z e d As r e p o r t e d $ 0 . 8 1 $ 0 . 8 7 $ 0 . 8 6 $ 0 . 8 3 $ 3 . 3 8 Co n v e r t i b l e d e b t a d j u s t m e n t $ ( 0 . 0 1 ) $ ( 0 . 0 1 ) $ ( 0 . 0 1 ) $ ( 0 . 0 1 ) $ ( 0 . 0 5 ) Re s t a t e d $ 0 . 8 0 $ 0 . 8 6 $ 0 . 8 5 $ 0 . 8 2 $ 3 . 3 3 I n M a y , 2 0 0 8 t h e F i n a n c i a l Ac c o u n t i n g S t a n d a r d s Bo a r d i s s u e d F AS B S t a f f P o s i t i o n 1 4 - 1 ( “ F S P ” ) wh i c h p r o v i d e s g u i d a n c e o n a c c o u n t i n g f o r d e b t t h a t m a y b e s e t t l e d i n pr i or year s be r es t at ed t o r ef l ect t hi s account i ng t r eat m ent i n al l appl i cabl e pr i or per i ods .

Ne t i n c o m e a v a i l a b l e t o c o m m o n s t o c k h o l d e r s As r e p o r t e d $ 0 . 3 2 $ 0 . 3 2 $ 0 . 3 0 $ 0 . 5 2 $ 1 . 4 6 Co n v e r t i b l e d e b t a d j u s t m e n t $ — $ — $ ( 0 . 0 1 ) $ ( 0 . 0 1 ) $ ( 0 . 0 4 ) Re s t a t e d $ 0 . 3 2 $ 0 . 3 2 $ 0 . 2 9 9 4 , 3 0 9 Am o u n t p e r s h a r e $ 0 . 0 1 $ 0 . 0 1 $ 0 . 0 1 $ 0 . 0 1 $ 0 . 0 5 S u m m a r y o f p e r s h a r e i m p a c t s : Ne t i n c o m e a v a i l a b l e t o c o m m o n s t o c k h o l d e r s As r e p o r t e d $ 0 . 3 5 $ 1 . 7 4 $ 0 . 5 7 $ 0 . 2 2 $ 2 . 8 1 c a s h u p o n c o n v e r s i o n . T h i s a p p l i e s t o t h e c o m p a n y ’ s c o n v e r t i b l e s e n i o r u n s e c u r e d n o t e i s s u a n c e s i n No v e m b e r 2 0 0 6 a n d J u l y 2 0 0 7 . T h e F S P i s e f f e c t i v e f o r f i s c a l y e a r 2 0 0 9 a n d r e q u i r e s t h a t

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(FULL PAGE GIF) I NVES TM ENT I n v e s t m e n t Ti m i n g 1 6 ( d o l l a r s i n t h o u s a n d s ) I n i t i a l Ca s h L o a n I n i t i a l Ca s h Co n s t r u c t i o n I n i t i a l Ca s h Ac q u i s i t i o n s Yi e l d Ad v a n c e s Yi e l d Co n v e r s i o n s Yi e l d Di s p o s i t i o n s Yi e l d o n S a l e J a n u a r y $ 4 2 , 5 0 0 1 0 . 3 % $ 8 1 4 1 1 . 4 % $ 6 8 7 9 . 1 % $ — 0 . 0 % F e b r u a r y 3 8 , 9 2 8 7 . 5 % 5 , 9 5 7 1 0 . 4 % — 0 . 0 % - 0 . 0 % M a r c h 1 1 , 8 0 0 8 . 1 % 9 8 0 1 1 . 5 % 2 0 , 7 4 8 8 . 5 % — 0 . 0 % Ap r i l — 0 . 0 % 3 , 0 2 4 1 0 . 6 % 2 2 , 7 5 3 9 . 8 % 6 , 0 4 1 1 0 . 4 % M a y 1 2 3 , 4 9 0 9 . 1 % 1 , 5 7 9 1 1 . 1 % 9 5 , 7 9 5 9 . 9 % 9 . 2 % 1 5 , 5 1 6 5 . 8 % Oc t o b e r — 0 . 0 % 1 , 4 6 1 1 1 . 6 % 6 1 4 9 . 5 % 4 3 , 1 3 6 7 . 4 % No v e m b e r — 0 . 0 % 3 , 0 3 1 9 . 4 % 6 , 5 1 0 8 . 5 % — 0 . 0 % De c e m b e r 1 4 , 0 0 0 1 1 . 0 % 4 , 2 6 4 1 1 . 4 % 4 0 , 5 5 4 8 . 6 % — 0 . 0 % To t a l $ 4 5 3 , 2 6 2 8 . 6 % $ 1 4 2 , 7 5 8 8 . 8 % $ 2 8 3 , 0 6 8 9 . 4 % $ 1 9 4 , 2 4 3 6 . 6 % Di s p o s i t i o n Ac t i v i t y ( d o l l a r s i n t h o u s a n d s ) F o u r t h Qu a r t e r 2 0 0 8 Ye a r E n d e d 2 0 0 8 Am o u n t % o f T o t a l Am o u n t % o f T o t a l p Di s p o s i t i o n s b y I n v e s t m e n t T y p e Re a l p r o p e r t y $ 4 3 , 1 3 6 1 0 0 . 0 % $ 1 8 5 , 4 2 8 1 7 , 4 7 8 9 . 0 % F r e e s t a n d i n g a s s i s t e d l i v i n g 3 3 , 3 7 6 7 7 . 4 % 1 3 3 , 0 1 1 6 8 . 5 % F r e e s t a n d i n g s k i l l e d n u r s i n g 1 , 8 0 0 4 . 2 % 4 , 7 6 8 2 . 5 % S p e c i a l t y c a r e f a c i l i t y — 8 , 7 3 5 4 . 5 % M e d i c a l o f f i c e b u i l d i n g — 6 , 7 8 1 3 . 5 % Re a l e s t a t e l o a n s r e c e i v a b l e — 6 , 8 8 4 3 . 5 % To t a l $ 4 3 , 1 3 6 1 0 0 . 0 % $ 1 9 4 , 2 4 3 1 0 0 . 0 % Di s c o n t i n u e d O p e r a t i o n s ( d o l l a r s i n t h o u s a n d s ) F o u r t h Qu a r t e r Ye a r E n d e d 2 0 0 8 2 0 0 7 2 0 0 8 2 0 0 7 Re v e n u e s Re n t a l i n c o m e $ 1 , 8 0 3 $ 8 , 9 6 7 $ 2 1 , 5 5 1 $ 3 9 , 6 2 4 E x p e n s e s I n t e r e s t

1 , 9 3 1 1 1 . 6 % J u n e 9 7 , 2 2 5 7 . 9 % 1 1 4 , 6 4 7 8 . 4 % 2 4 , 6 1 9 9 . 5 % 1 2 5 , 3 0 6 6 . 2 % J u l y 6 5 , 6 4 7 8 . 9 % 2 , 0 0 3 1 0 . 9 % — 0 . 0 % — 0 . 0 % Au g u s t — 0 . 0 % 1 , 0 5 7 1 1 . 6 % 5 5 1 1 0 . 0 % 2 , 3 1 3 9 . 5 % S e p t e m b e r 5 9 , 6 7 2 7 . 4 % 3 , 9 4 1 1 0 . 3 % 7 0 , 2 3 7 9 5 . 5 % Re a l e s t a t e l o a n s r e c e i v a b l e — 0 . 0 % 8 , 8 1 5 4 . 5 % To t a l $ 4 3 , 1 3 6 1 0 0 . 0 % $ 1 9 4 , 2 4 3 1 0 0 . 0 % Di s p o s i t i o n s b y P r o p e r t y T y p e Co m b i n a t i o n — r e n t a l $ 7 , 9 6 0 1 8 . 4 % $ 1 6 , 5 8 6 8 . 5 % F r e e s t a n d i n g i n d e p e n d e n t l i v i n g — e x p e n s e 6 0 1 2 , 2 2 4 5 , 4 3 4 1 0 , 3 8 6 P r o p e r t y o p e r a t i n g e x p e n s e s 6 3 0 9 3 8 2 , 6 3 9 2 , 7 6 8 De p r e c i a t i o n a n d a m o r t i z a t i o n 6 5 0 3 , 3 0 7 6 , 8 9 1 1 4 , 4 0 2 I n c o m e / ( l o s s ) f r o m d i s c o n t i n u e d o p e r a t i o n s , n e t $ ( 7 8 ) $ 2 , 4 9 8 $ 6 , 5 8 7 $ 1 2 , 0 6 8

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(FULL PAGE GIF) P o r t f o l i o Co m p o s i t i o n 1 7 ( d o l l a r s i n t h o u s a n d s ) P r o p e r t i e s I n v e s t m e n t Ba l a n c e % o f T o t a l Co m m i t t e d Ba l a n c e % o f T o t a l Ba l a n c e S h e e t Da t a Re a l p r o p e r t y 6 0 0 $ 5 , 3 7 8 , 7 9 4 9 1 . 8 % $ 6 , 1 0 8 , 0 7 1 9 2 . 7 % L o a n s 3 3 4 8 2 , 8 8 5 8 . 2 % 4 8 2 , 8 8 6 7 . 3 % To t a l 6 3 3 $ 5 , 8 6 1 , 6 7 9 1 0 0 . 0 % $ 6 , 5 9 0 , 9 5 7 1 0 0 . 0 % I n v e s t m e n t Co n c e n t r a t i o n — By P r e d o m i n a n t S e r v i c e I n v e s t m e n t Co n c e n t r a t i o n — S e n i o r Ho u s i n g & Ca r e a n d M e d i c a l F a c i l i t i e s S e n i o r h o u s i n g & c a r e p o r t f o l i o CCRC — e n t r a n c e f e e 6 $ 2 8 6 , 7 4 2 4 . 9 % $ 3 8 2 , 1 6 5 5 . 8 % CCRC — r e n t a l 1 2 1 8 6 , 3 7 2 3 . 2 % 1 8 9 , 7 4 1 2 . 9 % Co m b i n a t i o n — e n t r a n c e f e e 9 3 0 3 , 9 5 3 5 . 2 % 3 8 8 , 6 7 5 5 . 9 % Co m b i n a t i o n — r e n t a l 1 2 8 1 , 0 6 3 , 7 2 9 1 8 . 1 % 1 , 2 1 3 , 3 3 8 1 8 . 4 % S u b t o t a l 1 , 7 3 1 , 8 6 9 2 9 . 5 % 1 , 7 5 0 , 6 1 9 2 6 . 6 % L a n d 5 1 6 , 5 1 0 0 . 3 % 1 6 , 5 1 0 0 . 3 % Ot h e r L o a n s — 2 7 3 , 1 1 7 4 . 7 % 2 7 3 , 1 1 7 4 . 0 % S e n i o r h o u s i n g & c a r e t o t a l 4 7 4 3 , 8 6 2 , 2 9 2 6 5 . 9 % 4 , 2 1 4 , 1 6 5 6 3 . 9 % M e d i c a l f a c i l i t i e s p o r t f o l i o S p e c i a l t y c a r e 3 1 6 1 9 , 6 7 0 1 0 . 6 % 8 8 4 , 8 6 7 1 3 . 5 % M e d i c a l o f f i c e 1 2 8 1 , 3 7 9 , 7 1 7 2 3 . 5 % 1 , 4 9 1 , 9 2 5 2 2 . 6 % M e d i c a l f a c i l i t i e s t o t a l 1 5 9 1 , 6 0 7 , 6 7 6 5 2 , 4 2 0 S p e c i a l t y c a r e 1 , 9 1 1 b e d s 8 8 4 , 8 6 7 4 6 3 , 0 3 9 M e d i c a l o f f i c e 5 , 6 0 4 , 8 0 2 s f 1 , 4 9 1 , 9 2 5 2 6 6 To t a l $ 6 , 5 9 0 , 9 5 7

T y p e I n d e p e n d e n t l i v i n g / CCRC 6 3 c o m b i n a t i o n / CCRC 1 5 5 1 , 8 4 0 , 7 9 6 1, 999, 387 34. 1% 2, 376, 792 36. 1%

$ 1 , 1 0 5 , 4 6 0 1 8 . 9 % $ 1 , 2 8 8 , 9 7 3 1 9 . 5 % As s i s t e d l i v i n g 1 8 6 1 , 1 7 3 , 7 4 8 2 0 . 0 % 1 , 3 1 7 , 5 1 6 2 0 . 0 % S k i l l e d 31. 4% 2, 173, 919 33. 0% Fr e e s t a ndi ng i nde pe nde nt l i vi ng 22 157, 396 2. 7% 157, 396 2. 4% Fr e e s t a ndi ng To t a l p o r t f o l i o 6 3 3 $ 5 , 8 6 1 , 6 7 9 1 0 0 . 0 % $ 6 , 5 9 0 , 9 5 7 1 0 0 . 0 % Be d / Un i t Co m m i t t e d P e r Be d / Un i t /

n u r s i n g 2 2 5 1 , 5 8 3 , 0 8 4 2 7 . 0 % 1 , 6 0 7 , 6 7 6 2 4 . 4 % S p e c i a l t y c a r e 3 1 6 1 9 , 6 7 0 1 0 . 6 % 8 8 4 , 8 6 7 1 3 . 5 % M e d i c a l o f f i c e 1 2 8 1 , 3 7 9 , 7 1 7 2 3 . 5 % 1 , 4 9 1 , 9 2 5 2 2 . 6 % To t a l 6 3 3 $ 5 , 8 6 1 , 6 7 9 1 0 0 . 0 % $ 6 , 5 9 0 , 9 5 7 1 0 0 . 0 % a s s i s t e d l i vi ng 67 230, 015 3. 9% 230, 015 3. 5% Fr e e s t a ndi ng de m e nt i a c a r e 33 159, 573 2. 7% 172, 529 2. 6% Fr e e s t a ndi ng s ki l l e d nur s i ng 192 1, 184, 885 20. 2% 1, 190, 679 18. 1% Subt ot al f r e e s t andi ng 314 S q u a r e F o o t Ba l a n c e ( $ 0 0 0 ) / S q u a r e F o o t I n v e s t m e n t M e t r i c s I n d e p e n d e n t l i v i n g / CCRC 7 , 5 4 4 u n i t s $ 1 , 2 8 8 , 9 7 3 $ 1 7 0 , 8 6 1 As s i s t e d l i v i n g 1 1 , 2 9 7 u n i t s 1 , 3 1 7 , 5 1 6 1 1 6 , 6 2 5 S k i l l e d n u r s i n g 3 0 , 6 6 9 b e d s

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(FULL PAGE GIF) P O RTF O LI O 1 8 P o r t f o l i o Co n c e n t r a t i o n ( d o l l a r s i n t h o u s a n d s ) T o t a l I n v e s t m e n t % o f To t a l % o f P r o p e r t i e s Ba l a n c e Ba l a n c e s Re v e n u e s ( 1 ) Re v e n u e s By Op e r a t o r / T e n a n t S e n i o r L i v i n g Co m m u n i t i e s , L L C 1 0 $ 3 4 5 , 9 7 4 5 . 9 % $ 5 , 4 5 9 3 . 8 % S i g n a t u r e He a l t h c a r e L L C 3 4 3 1 7 , 2 8 4 5 . 4 % 1 0 , 1 2 1 7 . 0 % Br o o k d a l e S e n i o r L i v i n g , I n c . 8 6 2 9 8 , 1 4 3 5 . 1 % 9 , 8 9 4 6 . 9 % L i f e Ca r e Ce n t e r s o f Am e r i c a , I n c . 2 5 2 6 4 , 5 7 8 4 . 5 % 7 , 6 4 4 5 . 3 % E m e r i t u s Co r p o r a t i o n 2 1 2 4 5 , 7 4 1 4 . 2 % 7 , 8 0 6 5 . 4 % M e r r i l l Ga r d e n s L L C 1 3 1 7 0 , 8 3 2 2 . 9 % 5 , 4 0 1 3 . 7 % Gu l f Co a s t He a l t h Ca r e 2 5 1 5 7 , 5 5 8 2 . 7 % 4 , 4 7 8 3 . 1 % T a r a Ca r e s , L L C 3 3 1 4 7 , 9 8 8 2 . 5 % 4 , 5 1 5 3 . 1 % L y r i c He a l t h Ca r e , L L C 2 7 1 4 7 , 6 6 7 2 . 5 % 4 , 6 0 7 3 . 2 % Vi b r a He a l t h c a r e , L L C 5 1 4 5 , 2 5 0 2 . 5 % 3 , 6 0 2 2 . 5 % Re m a i n i n g p o r t f o l i o 3 5 4 3 , 6 2 0 , 6 6 4 6 1 . 8 % 8 0 , 5 3 4 5 6 . 0 % To t a l 6 3 3 $ 5 , 8 6 1 , 6 7 9 1 0 0 . 0 % $ 1 4 4 , 0 6 1 1 0 0 . 0 % I n d e p e n d e n t As s i s t e d S k i l l e d S p e c i a l t y M e d i c a l T o t a l I n v e s t m e n t % o f L i v i n g / CCRC L i v i n g Nu r s i n g Ca r e Of f i c e P r o p e r t i e s Ba l a n c e T o t a l Ba l a n c e s By S t a t e F l o r i d a $ 1 9 3 , 9 8 1 $ 4 4 , 1 7 3 $ 2 8 6 , 7 0 6 $ — $ 2 6 8 , 8 5 2 9 1 $ 7 9 3 , 7 1 2 1 3 . 5 % T e x a s 1 8 , 1 1 6 9 3 , 2 8 4 1 6 9 , 5 3 3 1 6 7 , 2 1 9 2 0 3 , 6 7 0 7 7 6 5 1 , 8 2 2 1 1 . 1 % Ca l i f o r n i a 1 6 6 , 9 8 8 5 6 , 8 7 9 — 1 1 9 , 5 9 7 1 2 2 , 3 6 6 2 9 4 6 5 , 8 3 0 7 . 9 % M a s s a c h u s e t t s 5 9 , 5 5 1 9 4 , 0 0 8 2 0 9 , 1 5 6 4 3 , 4 5 0 — 3 7 4 0 6 , 1 6 5 6 . 9 % T e n n e s s e e — 4 5 , 3 9 3 2 1 4 , 2 8 9 — 6 7 , 1 7 1 3 4 3 2 6 , 8 5 3 5 . 6 % Oh i o 4 9 , 1 1 7 3 8 , 5 6 2 1 8 0 , 1 3 1 4 0 , 2 1 1 7 , 3 5 2 3 1 3 1 5 , 3 7 3 5 . 4 % S o u t h Ca r o l i n a 2 1 0 , 8 0 0 6 , 6 3 8 - - - 1 6 , 9 8 7 1 3 2 3 4 , 4 2 5 4 . 0 % No r t h Ca r o l i n a 4 6 , 3 5 2 1 6 2 , 7 9 6 — - 2 3 , 8 5 4 5 3 2 3 3 , 0 0 2 4 . 0 % I l l i n o i s — 9 6 , 5 9 2 2 8 , 4 2 5 5 1 , 0 1 2 1 6 , 9 8 1 1 5 1 9 3 , 0 1 0 3 . 3 % I n d i a n a 1 0 1 , 0 7 7 4 , 5 8 5 3 1 , 0 5 2 3 0 , 1 4 7 2 1 , 9 5 3 1 4 1 8 8 , 8 1 4 3 . 2 % Re m a i n i n g p o r t f o l i o 2 5 9 , 4 7 8 5 3 0 , 8 3 8 4 6 3 , 7 9 2 1 6 8 , 0 3 4 6 3 0 , 5 3 1 2 3 9 2 , 0 5 2 , 6 7 3 3 5 . 1 % To t a l $ 1 , 1 0 5 , 4 6 0 $ 1 , 1 7 3 , 7 4 8 $ 1 , 5 8 3 , 0 8 4 $ 6 1 9 , 6 7 0 $ 1 , 3 7 9 , 7 1 7 6 3 3 $ 5 , 8 6 1 , 6 7 9 1 0 0 . 0 % I n d e p e n d e n t As s i s t e d S k i l l e d S p e c i a l t y M e d i c a l T o t a l T o t a l % o f L i v i n g / CCRC L i v i n g Nu r s i n g Ca r e Of f i c e P r o p e r t i e s Re v e n u e s ( 1 ) T o t a l Re v e n u e s By S t a t e F l o r i d a $ 3 , 6 3 3 $ 1 , 1 0 5 $ 8 , 9 3 7 $ — $ 6 , 4 2 1 9 1 $ 2 0 , 0 9 6 1 3 . 9 % T e x a s 5 9 8 2 , 7 0 8 4 , 5 1 6 4 , 2 5 4 4 , 8 3 4 7 7 1 6 , 9 1 0 1 1 . 7 % Ca l i f o r n i a 4 , 6 0 3 1 , 9 3 4 — 1 , 9 8 8 3 , 5 2 4 2 9 1 2 , 0 4 9 8 . 4 % T e n n e s s e e — 1 , 0 6 4 6 , 9 3 7 6 5 2 , 0 9 0 3 4 1 0 , 1 5 6 7 . 0 % M a s s a c h u s e t t s 2 2 2 , 6 6 1 5 , 9 1 2 1 , 1 2 5 — 3 7 9 , 7 2 0 6 . 7 % No r t h Ca r o l i n a 1 , 1 8 6 5 , 6 3 3 — - 5 1 3 5 3 7 , 3 3 2 5 . 1 % Oh i o — 6 3 8 4 , 9 4 2 1 , 0 5 5 2 1 3 3 1 6 , 8 4 8 4 . 8 % I n d i a n a 1 , 8 8 9 1 4 0 4 9 9 — 1 , 8 3 9 1 4 4 , 3 6 7 3 . 0 % Ge o r g i a 2 , 8 2 8 1 8 0 9 8 9 7 6 8 5 3 1 2 4 5 , 2 9 6 3 . 7 % I l l i n o i s 2 3 5 4 0 3 4 2 7 — 2 , 3 7 1 1 5 3 , 4 3 6 2 . 4 % Re m a i n i n g p o r t f o l i o 5 , 6 8 6 1 3 , 5 3 9 1 3 , 1 4 7 4 , 6 7 7 1 0 , 8 0 2 2 2 8 4 7 , 8 5 1 3 3 . 3 % To t a l $ 2 0 , 6 8 0 $ 3 0 , 0 0 5 $ 4 6 , 3 0 6 $ 1 3 , 9 3 2 $ 3 3 , 1 3 8 6 3 3 $ 1 4 4 , 0 6 1 1 0 0 . 0 % No t e s : ( 1 ) Re v e n u e s r e p r e s e n t r e n t a n d i n t e r e s t i n c o m e i n c l u d i n g r e n t f r o m d i s c o n t i n u e d o p e r a t i o n s f o r t h e t h r e e m o n t h s e n d e d De c e m b e r 3 1 , 2 0 0 8 . Re v e n u e s e x c l u d e o t h e r i n c o m e t o t a l i n g $ 4 , 8 6 5 , 0 0 0 f o r t h e t h r e e m o n t h s e n d e d De c e m b e r 3 1 , 2 0 0 8 . 2 2

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(FULL PAGE GIF) P O RTF O LI O To p Te n O p e r a t o r De s c r i p t i o n s S e n i o r Li v i n g Co m m u n i t i e s , LLC, l o c a t e d i n Ch a r l o t t e , NC, o p e r a t e s p r e m i e r c o n t i n u i n g c a r e r e t i r e m e n t c o m m u n i t i e s ( CCRCs ) t h r o u g h o u t t h e s o u t h e a s t e r n Un i t e d S t a t e s . T h e c o m p a n y o p e r a t e s t e n c a m p u s e s i n f o u r s t a t e s . As o f De c e m b e r 3 1 , 2 0 0 8 , t h e HCN p o r t f o l i o c o n s i s t e d o f t e n p r o p e r t i e s i n f o u r s t a t e s wi t h a n i n v e s t m e n t b a l a n c e o f $ 3 4 6 . 0 m i l l i o n . S i g n a t u r e H e a l t h c a r e LLC, l o c a t e d i n P a l m Be a c h Ga r d e n s , F L , i s a p r i v a t e o p e r a t o r o f s k i l l e d n u r s i n g f a c i l i t i e s s p r e a d a m o n g s e v e n s t a t e s . T h e c o m p a n y o p e r a t e s 6 5 s k i l l e d n u r s i n g f a c i l i t i e s wi t h 7 , 6 4 6 b e d s . As o f De c e m b e r 3 1 , 2 0 0 8 , t h e HCN p o r t f o l i o c o n s i s t e d o f 3 4 p r o p e r t i e s i n f o u r s t a t e s wi t h a n i n v e s t m e n t b a l a n c e o f $ 3 1 7 . 3 m i l l i o n . Br o o k d a l e S e n i o r Li v i n g , I n c . ( NYS E : BKD) , l o c a t e d i n Ch i c a g o , I L , i s a n a t i o n a l p u b l i c p r o v i d e r o f i n d e p e n d e n t l i v i n g a n d a s s i s t e d l i v i n g s e r v i c e s . T h e c o m p a n y o p e r a t e s 5 5 0 f a c i l i t i e s i n 3 5 s t a t e s wi t h t h e a b i l i t y t o s e r v e o v e r 5 2 , 0 0 0 r e s i d e n t s . As o f De c e m b e r 3 1 , 2 0 0 8 , t h e HCN p o r t f o l i o c o n s i s t e d o f 8 6 p r o p e r t i e s i n 1 6 s t a t e s wi t h a n i n v e s t m e n t b a l a n c e o f $ 2 9 8 . 1 m i l l i o n . Li f e Ca r e Ce n t e r s o f Am e r i c a , I n c . , l o c a t e d i n Cl e v e l a n d , T N, i s o n e o f t h e l a r g e s t p r i v a t e o wn e r s a n d o p e r a t o r s o f s k i l l e d n u r s i n g f a c i l i t i e s i n t h e c o u n t r y . T h e c o m p a n y h a s g r o wn t o m o r e t h a n 2 6 0 s k i l l e d n u r s i n g , a s s i s t e d l i v i n g , r e t i r e m e n t , h o m e c a r e a n d Al z h e i m e r ’ s c e n t e r s i n 2 8 s t a t e s . As o f De c e m b e r 3 1 , 2 0 0 8 , t h e HCN p o r t f o l i o c o n s i s t e d o f 2 5 p r o p e r t i e s i n 1 2 s t a t e s wi t h a n i n v e s t m e n t b a l a n c e o f $ 2 6 4 . 6 m i l l i o n . Em e r i t u s Co r p o r a t i o n ( AM E X: E S C) , l o c a t e d i n S e a t t l e , W A, i s a n a t i o n a l p u b l i c p r o v i d e r o f i n d e p e n d e n t l i v i n g , a s s i s t e d l i v i n g a n d Al z h e i m e r ’ s s e r v i c e s . T h e c o m p a n y o p e r a t e s 2 8 9 c o m m u n i t i e s r e p r e s e n t i n g c a p a c i t y f o r a p p r o x i m a t e l y 2 5 , 0 0 0 r e s i d e n t s i n 3 4 s t a t e s . As o f De c e m b e r 3 1 , 2 0 0 8 , t h e HCN p o r t f o l i o c o n s i s t e d o f 2 1 p r o p e r t i e s i n 1 6 s t a t e s wi t h a n i n v e s t m e n t b a l a n c e o f $ 2 4 5 . 7 m i l l i o n . M e r r i l l G a r d e n s LLC, l o c a t e d i n S e a t t l e , W A, i s a p r i v a t e l y h e l d c o r p o r a t i o n o r g a n i z e d u n d e r t h e l a ws o f W a s h i n g t o n S t a t e . T h e c o m p a n y o wn s , o p e r a t e s a n d / o r m a n a g e s 5 5 I L / AL f a c i l i t i e s wi t h 6 , 4 5 5 u n i t s i n e i g h t s t a t e s . As o f De c e m b e r 3 1 , 2 0 0 8 , t h e HCN p o r t f o l i o c o n s i s t e d o f 1 3 p r o p e r t i e s i n s e v e n s t a t e s wi t h a n i n v e s t m e n t b a l a n c e o f $ 1 7 0 . 8 m i l l i o n . G u l f Co a s t H e a l t h Ca r e , l o c a t e d i n P e n s a c o l a , F L , i s a p r i v a t e o p e r a t o r o f s k i l l e d n u r s i n g f a c i l i t i e s . T h e c o m p a n y o p e r a t e s 4 3 s k i l l e d n u r s i n g f a c i l i t i e s wi t h 5 , 4 8 0 b e d s / u n i t s l o c a t e d i n F l o r i d a , Al a b a m a , a n d M i s s i s s i p p i . As o f De c e m b e r 3 1 , 2 0 0 8 , t h e HCN p o r t f o l i o c o n s i s t e d o f 2 5 p r o p e r t i e s i n t h r e e s t a t e s wi t h a n i n v e s t m e n t b a l a n c e o f $ 1 5 7 . 6 m i l l i o n . Ta r a Ca r e s , LLC, l o c a t e d i n Or c h a r d P a r k , NY, i s a p r i v a t e o p e r a t o r o f s k i l l e d n u r s i n g a n d a s s i s t e d l i v i n g f a c i l i t i e s i n s e v e n s t a t e s . Cu r r e n t l y , t h e c o m p a n y o p e r a t e s 3 6 f a c i l i t i e s wi t h 5 , 0 0 6 b e d s . As o f De c e m b e r 3 1 , 2 0 0 8 , t h e HCN p o r t f o l i o c o n s i s t e d o f 3 3 p r o p e r t i e s i n s e v e n s t a t e s wi t h a n i n v e s t m e n t b a l a n c e o f $ 1 4 8 . 0 m i l l i o n . Ly r i c H e a l t h Ca r e , LLC, l o c a t e d i n Co l u m b i a , M D, i s a p r i v a t e o p e r a t o r o f 3 1 s k i l l e d n u r s i n g f a c i l i t i e s a n d l o n g t e r m a c u t e c a r e h o s p i t a l s wi t h 3 , 8 0 0 b e d s / u n i t s i n 1 0 s t a t e s a n d h a s a m a n a g e m e n t a g r e e m e n t wi t h E n c o r e He a l t h c a r e L L C t o o p e r a t e t h e f a c i l i t i e s . As o f De c e m b e r 3 1 , 2 0 0 8 , t h e HCN p o r t f o l i o c o n s i s t e d o f 2 7 p r o p e r t i e s i n n i n e s t a t e s wi t h a n i n v e s t m e n t b a l a n c e o f $ 1 4 7 . 7 m i l l i o n . Vi b r a H e a l t h c a r e , LLC, l o c a t e d i n M e c h a n i c s b u r g , P A, i s a p r i v a t e o p e r a t o r o f i n p a t i e n t r e h a b i l i t a t i o n f a c i l i t i e s a n d l o n g t e r m a c u t e c a r e h o s p i t a l s i n n i n e s t a t e s . T h e c o m p a n y o p e r a t e s 1 5 p r o p e r t i e s wi t h 9 9 8 b e d s . As o f S e p t e m b e r 3 0 , 2 0 0 8 , t h e HCN p o r t f o l i o c o n s i s t e d o f f i v e p r o p e r t i e s i n t h r e e s t a t e s wi t h a n i n v e s t m e n t b a l a n c e o f $ 1 4 5 . 2 5 m i l l i o n .

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(FULL PAGE GIF) P O RTF O LI O M e t r o p o l i t a n S t a t i s t i c a l Ar e a Co n c e n t r a t i o n * 1 9 ( d o l l a r s i n t h o u s a n d s ) T o p 3 1 T o p 7 5 a r e a s a r e a s d e f i n e d b y t h e U. S . Ce n s u s Bu r e a u . T o p 3 1 , 7 5 a n d 1 0 0 c l a s s i f i c a t i o n s a r e r e p o r t e d p e r and ar e i t em i zed i n t he gl os s ar y. 14

To p t he

1 0 0 I n d e p e n d e n t l i v i n g / CCRC $ 3 0 8 , 7 0 3 $ 5 3 2 , 5 2 1 Na t i o n a l I n v e s t m e n t Ce n t e r M a r k e t Ar e a P r o f i l e s

$ 696, 739 % Subs c r i pt i on

o f i n d e p e n d e n t l i v i n g / CCRC 2 7 . 9 % 4 8 . 2 % 6 3 . 0 % As s i s t e d S e r v i c e . Re g i o n Co n c e n t r a t i o n ( d o l l a r s i n t h o u s a n d s ) T o t a l

l i vi ng 423, 380 661, 366 703, 475 % of I n v e s t m e n t % o f P r o p e r t i e s Ba l a n c e

as s i s t ed l i vi ng 36. 1% T o t a l By Re g i o n * S o u t h

56. 3% 59. 9% Ski l l e d nur s i ng 462, 161 831, 492 921, 047 % of s ki l l e d At l a n t i c 2 0 0 $ 1 , 5 6 5 , 6 5 0 2 6 . 7 % E a s t No r t h Ce n t r a l 7 3 8 7 6 , 7 0 3 1 5 . 0 %

nur s i ng 29. 2% 52. 5% 58. 2% Spe c i a l t y W e s t S o u t h Ce n t r a l 1 0 9 7 7 5 , 8 8 4 1 3 . 2 %

car e 269, 317 472, 406 510, 335 % of s peci al t y car e 43. 5% 76. 2% 82. 4% M edi cal of f i ce 984, 258 1, 262, 414 1, 264, 279 % P a c i f i c 3 9 6 0 3 , 5 0 0 1 0 . 3 % E a s t S o u t h Ce n t r a l 7 0 5 6 1 , 3 0 7 9 . 6 % M o u n t a i n 4 8 5 2 8 , 3 1 0 9 . 0 % Ne w E n g l a n d 4 9 4 6 9 , 5 5 1 8 . 0 %

of m edi cal of f i ce 71. 3% 91. 5% 91. 6% M i d d l e At l a n t i c 3 4 3 4 5 , 8 6 1 5 . 9 % W e s t

To t a l No r t h

por t f ol i o $ 2, 447, 819 $ 3, 760, 199 $ 4, 095, 875 Ce n t r a l 1 1 1 3 4 , 9 1 3 2 . 3 % To t a l 6 3 3 $ 5 , 8 6 1 , 6 7 9

% of t ot al por t f ol i o 41. 8% 64. 1% 69. 9% * M e t r opol i t a n s t a t i s t i c a l 1 0 0 . 0 % * Re g i o n d e f i n i t i o n s a r e d e r i v e d f r o m c e n s u s b u r e a u d e f i n i t i o n s

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(FULL PAGE GIF) P O RTF O LI O 2 0 P o r t f o l i o P e r f o r m a n c e F a c i l i t y Re v e n u e M i x T T M T T M Ag e Oc c u p a n c y CBM F ( 1 ) CAM F ( 1 ) P r i v a t e P a y M e d i c a i d M e d i c a r e S t a b l e P o r t f o l i o * I n d e p e n d e n t l i v i n g / CCRC 1 1 9 0 . 6 % 1 . 3 1 x 1 . 1 1 x 9 2 . 5 % 2 . 0 % 5 . 5 % As s i s t e d l i v i n g 1 0 8 8 . 8 % 1 . 5 5 x 1 . 3 2 x 8 8 . 0 % 1 1 . 8 % 0 . 2 % S k i l l e d n u r s i n g 2 3 8 3 . 9 % 2 . 2 6 x 1 . 6 6 x 1 9 . 0 % 5 1 . 4 % 2 9 . 6 % S p e c i a l t y c a r e 1 1 4 9 . 5 % 2 . 2 6 x i n t h o u s a n d s ) 4 Q0 7 S a m e S t o r e 4 Q0 8 S a m e S t o r e P r o p e r t i e s ( 1 ) Re v e n u e * Re v e n u e * % Ch a n g e S a m e S t o r e P o r t f o l i o I n d e p e n d e n t l i v i n g / CCRC 5 0 $ 1 2 , 2 7 2 $ 1 2 , 7 0 3 3 . 5 % As s i s t e d l i v i n g 1 6 3 2 3 , 0 2 0 2 3 , 7 9 4 3 . 4 % S k i l l e d n u r s i n g 2 2 1 3 9 , 8 0 8 4 0 , 8 2 5 2 . 6 % S p e c i a l t y c a r e 1 6 6 , 3 2 0 6 , 4 5 9 2 . 2 % To t a l 4 5 0 $ 8 1 , 4 2 0 $ 8 3 , 7 8 1 2 . 9 % * S a m e s t o r e r e v e n u e r e p r e s e n t s c a s h - o n l y r e n t o r i n t e r e s t i n c o m e e x c l u d i n g t h e i m p a c t o f l e a s e o r

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(FULL PAGE GIF) Sa m e 1. 2%

S t o r e ( 1 9 p r o p e r t i e s ) P O RTF O LI O $3, 000 St a bl e 0. 4% - 1. 6% 4Q 2006

P o r t f o l i o P e r f o r m a n c e — I n d e p e n d e n t Li v i n g / CCRC S t a b l e T r a i l i n g 1 Q 2 0 0 7 2 Q 2 0 0 7 3 Q 2 0 0 7 4 Q 2 0 0 7 1 Q 2 0 0 8 2 Q 2 0 0 8 3 Q 2 0 0 8 Ex p e n s e p e r

T we l v e M o n t h Oc c u p i e d Un i t

P a y m e n t Co v e r a g e Be f o r e M a n a g e m e n t F e e s 1 . 6 0 1 . 5 5 1 . 5 0 1 . 4 4 x 1 . 4 5 1 . 4 0 1 . 3 5 $ 2 , 5 0 0 $ 2 , 3 4 2 $ 2 , 2 5 0 $ 2 , 2 8 1 3 Q0 8 / 3 Q0 8 / ( % c h g ) 3 Q0 7 2 Q0 8 S a m e S t o r e 7 . 0 %

1. 31x 0. 5%

1 . 3 0 b a s i s 3 Q0 8 / 3 Q0 8 / p o i n t s 3 Q0 7 2 Q0 8 1 . 2 5 S a m e S t o r e St a bl e 3. 6% - 0. 3% $2, 000 4Q 2006 1Q 2007 2Q 2007 3Q 2007

( 2) ( 4) 4Q 2007

1. 20 St a bl e ( 15) ( 6) 4Q 2006 1Q 2008 2Q 2008 3Q 2008 26

1Q 2007

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4Q 2007

1Q 2008

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Oc c u p a n c y

95%

93%

91. 8%

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3 Q0 8

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( 90)

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( 80)

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4Q 2007

1Q 2008

2Q 2008

3Q 2008

Re v e n u e

per

Oc c u p i e d

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$4, 000

$3, 750

$3, 439

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(FULL PAGE GIF) S a m e S t o r e ( 1 4 6 p r o p e r t i e s ) P O RTF O LI O S t a b l e P o r t f o l i o P e r f o r m a n c e 4 Q 2 0 0 6 1 Q 2 0 0 7 2 Q 2 0 0 7 3 Q 2 0 0 7 4 Q 2 0 0 7 1 Q 2 0 0 8 2 Q 2 0 0 8 3 Q 2 0 0 8 Ex p e n s e

— As s i s t e d Li v i n g T r a i l i n g T we l v e M o n t h P a y m e n t p e r Oc c u p i e d Un i t $ 3 , 0 0 0 $ 2 , 8 3 8 $ 2 , 7 5 0 $ 2 , 8 2 4 3 Q0 8

Co v e r a g e / 3 Q0 8 /

Be f o r e $2, 500

M a n a g e m e n t F e e s 1 . 6 5 1 . 5 5 x 1 . 5 5 1 . 5 5 x 1 . 4 5 b a s i s 3 Q0 8 / 3 Q0 8 ( % c h g ) 3 Q0 7 2 Q0 8 S a m e S t o r e 6 . 0 % 2 . 0 % $ 2 , 2 5 0 S t a b l e 4 . 7 %

/ p o i n t s 3 Q0 7 1. 5% 4Q 2006

2 Q0 8 1 . 3 5 S a m e 1Q 2007 2Q 2007

St or e ( 7) ( 2) St a bl e ( 6) ( 1) 1. 25 4Q 2006 1Q 2007 3Q 2007 4Q 2007 1Q 2008 2Q 2008 3Q 2008 23 27

2Q 2007

3Q 2007

4Q 2007

1Q 2008

2Q 2008

3Q 2008

Oc c u p a n c y

92%

90%

88. 9%

88%

88. 8%

86%

bas i s

3 Q0 8

/

3 Q0 8

/

poi nt s

3 Q0 7

2 Q0 8

84%

Sa m e

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( 20)

110

82%

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( 10)

130

4Q 2006

1Q 2007

2Q 2007

3Q 2007

4Q 2007

1Q 2008

2Q 2008

3Q 2008

Re v e n u e

per

Oc c u p i e d

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$4, 298

$4, 350

$4, 278

$4, 100

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3 Q0 8

/

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3. 8%

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(FULL PAGE GIF) P O RTF O LI O S a m e S t o r e ( 1 9 9 p r o p e r t i e s ) P o r t f o l i o 5. 0% 1. 0% 4Q 2006 1Q 2007 2Q 2007 3Q 2007 4Q 2007

Pe r f o r m a n c e — 1Q 2008 2Q 2008

S k i l l e d Nu r s i n g 3 Q 2 0 0 8 Ex p e n s e

S t a b l e T r a i l i n g T we l v e M o n t h P a y m e n t Co v e r a g e Be f o r e M a n a g e m e n t F e e s 2 . 5 2 . 3 5 x 2 . 3 2 . 2 6 x 2 . 0 1 . 8 1 . 5 b a s i s 3 Q0 8 p e r Oc c u p i e d Be d $ 5 , 5 0 0 $ 5 , 3 5 7 $ 5 , 2 5 0 $ 5 , 3 4 6 $ 5 , 0 0 0 3 Q0 8 / 3 Q0 8 / ( % c h g ) 3 Q0 7 2 Q0 8 $ 4 , 7 5 0 S a m e S t o r e 5 . 8 % 1 . 6 %

/ 3 Q0 8 St a bl e

/ p o i n t s 3 Q0 7 2 Q0 8 6. 1% 1. 7% $4, 500

1. 3 Sa m e St or e 4Q 2006 1Q 2007

8 ( 2) 1. 0 St a bl e 3 ( 3) 4Q 2006 1Q 2007 2Q 2007 3Q 2007 2Q 2007 3Q 2007 4Q 2007 1Q 2008 2Q 2008 3Q 2008

4Q 2007

1Q 2008

2Q 2008

3Q 2008

Oc c u p a n c y

88%

83. 9%

85%

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3 Q0 8

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1Q 2007

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(FULL PAGE GIF) Sa m e

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2Q 2007

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Oc c u p a n c y

65%

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(FULL PAGE GIF) P O RTF O LI O P o r t f o l i o Co m p o s i t i o n — M e d i c a l O f f i c e Bu i l d i n g s ( d o l l a r s i n t h o u s a n d s ) I n v e s t m e n t T o t a l Op e r a t i n g P r o p e r t i e s S q u a r e F e e t Ba l a n c e Re v e n u e s E x p e n s e s NOI Ag e Oc c u p a n c y On Ca m p u s 4 5 2 , 4 7 1 , 9 6 4 $ 6 7 7 , 6 5 2 $ 1 8 , 1 5 2 $ 6 , 1 0 9 $ 1 2 , 0 4 3 1 1 9 3 . 1 % Of f Ca m p u s - Af f i l i a t e d 2 1 8 3 9 , 6 3 7 1 9 1 , 5 1 3 5 , 7 4 4 2 , 3 1 7 3 , 4 2 7 1 3 9 1 . 8 % Of f Ca m p u s 4 3 1 , 3 3 0 , 7 6 5 3 8 0 , 0 6 5 8 , 8 8 3 2 , 9 6 3 5 , 9 2 0 1 3 8 4 . 6 % S u b t o t a l 1 0 9 4 , 6 4 2 , 3 6 6 1 , 2 4 9 , 2 3 0 3 2 , 7 7 9 1 1 , 3 8 9 2 1 , 3 9 0 1 2 9 0 . 4 % He l d - f o r - s a l e 1 4 2 7 4 , 3 5 5 2 1 , 8 4 3 5 8 1 6 3 0 ( 4 9 ) De v e l o p m e n t 4 6 8 8 , 0 8 1 9 6 , 7 7 2 L a n d 1 1 1 , 8 7 2 To t a l 1 2 8 5 , 6 0 4 , 8 0 2 $ 1 , 3 7 9 , 7 1 7 $ 3 3 , 3 6 0 $ 1 2 , 0 1 9 $ 2 1 , 3 4 1 P o r t f o l i o P e r f o r m a n c e — M e d i c a l O f f i c e Bu i l d i n g s ( d o l l a r s i n t h o u s a n d s ) 4 Q0 7 A 1 Q0 8 A 2 Q0 8 A 3 Q0 8 A 4 Q0 8 A T o t a l M OB P e r f o r m a n c e P r o p e r t i e s * 1 0 2 1 0 5 1 0 6 1 0 9 1 0 9 S q u a r e f e e t * 4 , 2 2 8 , 7 9 1 4 , 4 0 0 , 0 7 9 4 , 4 2 7 , 5 2 7 4 , 6 4 2 , 3 6 6 4 , 6 4 2 , 3 6 6 I n v e s t m e n t b a l a n c e * $ 1 , 1 7 8 , 0 3 2 $ 1 , 2 0 7 , 2 0 3 $ 1 , 1 9 5 , 3 7 5 $ 1 , 2 5 7 , 9 9 3 $ 1 , 2 4 9 , 2 3 0 Oc c u p a n c y * 9 1 . 3 % 9 0 . 9 % 9 1 . 9 % 9 1 . 5 % 9 0 . 4 % T o t a l r e v e n u e * $ 2 9 , 5 5 6 $ 3 1 , 9 0 6 $ 3 1 , 9 7 9 $ 3 3 , 2 2 6 $ 3 2 , 7 7 9 Op e r a t i n g e x p e n s e s * $ 1 0 , 2 7 4 $ 1 0 , 7 0 1 $ 1 0 , 6 9 1 $ 1 1 , 1 7 8 $ 1 1 , 3 8 9 NOI f r o m c o n t i n u i n g o p e r a t i o n s * $ 1 9 , 2 8 2 $ 2 1 , 2 0 5 $ 2 1 , 2 8 8 $ 2 2 , 0 4 8 $ 2 1 , 3 9 0 NOI f r o m d i s c o n t i n u e d o p e r a t i o n s $ 8 6 8 $ 8 7 1 $ 5 7 7 $ 3 0 4 $ ( 4 9 ) T o t a l c a p - e x / T I / L C $ 1 , 7 6 3 $ 7 6 5 $ 1 , 1 6 2 $ 1 , 5 5 5 $ 2 , 8 6 5 E x p i r e d ( s q u a r e f e e t ) * 1 1 3 , 6 8 3 2 2 2 , 8 2 0 1 7 2 , 6 1 8 1 2 1 , 3 5 4 1 8 8 , 3 6 7 Re t a i n e d ( s q u a r e f e e t ) * 9 8 , 2 3 6 1 9 7 , 0 5 5 1 4 3 , 8 1 4 8 3 , 1 1 1 1 4 5 , 3 4 9 Re t e n t i o n r a t e * 8 6 . 4 % 8 8 . 4 % 8 3 . 3 % 6 8 . 5 % 7 7 . 2 % 4 Q0 7 1 Q0 8 2 Q0 8 3 Q0 8 4 Q0 8 S a m e S t o r e P e r f o r m a n c e * P r o p e r t i e s 9 9 9 9 9 9 9 9 9 9 S q u a r e f e e t 4 , 1 0 4 , 5 5 8 4 , 1 0 4 , 5 5 8 4 , 1 0 4 , 5 5 8 4 , 1 0 4 , 5 5 8 4 , 1 0 4 , 5 5 8 I n v e s t m e n t b a l a n c e $ 1 , 1 4 7 , 2 0 5 $ 1 , 1 3 5 , 3 3 0 $ 1 , 1 1 8 , 1 2 0 $ 1 , 1 0 7 , 9 1 6 $ 1 , 1 0 0 , 4 7 1 Oc c u p a n c y 9 1 . 1 % 9 0 . 3 % 9 1 . 3 % 9 0 . 5 % 8 9 . 3 % T o t a l r e v e n u e $ 2 9 , 3 0 2 $ 3 0 , 1 6 7 $ 2 9 , 8 6 1 $ 3 0 , 1 9 0 $ 2 8 , 8 2 8 Op e r a t i n g e x p e n s e s $ 1 0 , 2 4 5 $ 1 0 , 1 9 3 $ 1 0 , 0 1 5 $ 1 0 , 3 5 2 $ 1 0 , 1 9 5 NOI $ 1 9 , 0 5 7 $ 1 9 , 9 7 4 $ 1 9 , 8 4 6 $ 1 9 , 8 3 8 $ 1 8 , 6 3 3 2 0 0 9 2 0 1 0 2 0 1 1 2 0 1 2 2 0 1 3 Re m a i n i n g L e a s e E x p i r a t i o n s * S q u a r e f e e t 4 2 6 , 7 8 5 4 2 8 , 8 4 7 4 7 4 , 2 4 0 5 3 7 , 6 9 5 3 7 1 , 1 1 1 % o f t o t a l p o r t f o l i o 8 . 7 % 8 . 7 % 9 . 6 % 1 0 . 9 % 7 . 5 % * Re s u l t s a n d f o r e c a s t s i n c l u d e m o n t h - t o - m o n t h a n d h o l d o v e r l e a s e s a n d e x c l u d e t e r m i n a t i o n s a n d d i s c o n t i n u e d o p e r a t i o n s .

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(FULL PAGE GIF) De v e l o p m e n t Ac t i v i t y ( d o l l a r s i n t h o u s a n d s ) P ORT F OL I O Be d s / Un i t s / CI P Ba l a n c e 2 0 0 8 YT D 2 0 0 8 YT D CI P Ba l a n c e P r o j e c t s S q u a r e F e e t a t 1 2 / 3 1 / 0 7 F u n d i n g Co n v e r s i o n s ( 1 ) a t 1 2 / 3 1 / 0 8 De v e l o p m e n t P r o p e r t i e s CCRC — e n t r a n c e f e e 3 7 5 7 $ 4 4 , 4 7 7 $ 1 2 3 , 4 4 8 $ — $ 1 6 7 , 9 2 5 CCRC — r e n t a l 3 2 7 5 3 7 , 0 1 4 4 , 5 7 3 ( 4 1 , 3 5 6 ) 2 3 1 Co m b i n a t i o n — T o t a l 4 8 $ 2 8 9 , 7 6 1 $ 5 9 6 , 7 8 1 $ ( 2 5 3 , 9 3 6 ) $ 6 3 2 , 6 0 6 E x p a n s i o n P r o j e c t s CCRC — e n t r a n c e f e e 3 9 1 $ 5 , 3 1 5 $ 6 , 4 9 8 $ ( 7 , 9 9 9 ) $ 3 , 8 1 4 Co m b i n a t i o n — e n t r a n c e f e e 5 1 2 9 1 8 , 6 3 3 1 7 , 3 2 1 ( 3 2 , 9 5 5 ) 2 , 9 9 9 T o t a l 8 2 3 , 9 4 8 2 3 , 8 1 9 ( 4 0 , 9 5 4 ) 6 , 8 1 3 De v e l o p m e n t T o t a l 5 6 $ 3 1 3 , 7 0 9 $ 6 2 0 , 6 0 0 $ ( 2 9 4 , 8 9 0 ) $ 6 3 9 , 4 1 9 No t e s : ( 1 ) I n c l u d e s o n e p a r c e l o f l a n d P r o p e r t i e s CCRC — e n t r a n c e f e e 3 7 5 7 9 . 7 % $ 7 5 , 4 1 3 $ 1 5 , 6 8 8 $ — $ 9 1 , 1 0 1 $ 2 5 9 , 0 2 6 CCRC — r e n t a l 1 2 4 1 0 . 5 % 3 , 3 6 9 — - 3 , 3 6 9 3 , 6 0 0 Co m b i n a t i o n — e n t r a n c e f e e 4 6 1 8 8 . 7 % 7 4 , 0 1 3 7 , 5 0 4 — 8 1 , 5 1 7 1 8 8 , 4 7 5 Co m b i n a t i o n — r e n t a l 1 4 1 , 6 9 3 8 . 4 % 1 4 3 , 4 4 4 6 , 1 6 5 — 1 4 9 , 6 0 9 3 1 1 , 8 2 3 F r e e s t a n d i n g d e m e n t i a c a r e 3 1 6 1 9 . 1 % 1 2 , 9 5 6 — 4 , 3 2 2 $ 8 , 1 3 6 Co m b i n a t i o n — e n t r a n c e f e e 4 3 1 8 . 7 % 3 , 2 0 5 — - 3 , 2 0 5 6 , 2 0 4 T o t a l 7 8 . 9 % 6 , 9 6 0 4 5 6 1 1 1 7 , 5 2 7 1 4 , 3 4 0 De v e l o p m e n t T o t a l 4 0 8 . 8 % $ 5 7 0 , 1 9 2 $ 1 2 1 , 0 2 5 $ 3 8 , 0 6 1 $ 7 2 9 , 2 7 8 $ 1 , 3 6 8 , 6 9 7 3 2

ent r ance r el at i ng - 12, 956

f e e 5 8 3 2 6 4 , 9 5 6 1 0 1 , 2 0 8 ( 5 9 , 2 0 6 ) 1 0 6 , 9 5 8 Co m b i n a t i o n — r e n t a l 2 1 2 , 2 0 1 7 8 , 5 8 9 1 6 5 , 2 5 4 ( 8 1 , 6 2 9 ) 1 6 2 , 2 1 4 F r e e s t a n d i n g d e m e n t i a c a r e 4 2 0 3 7 , 4 2 5 1 4 , 4 2 2 ( 7 , 8 5 3 ) 1 3 , 9 9 4 F r e e s t a n d i n g s k i l l e d n u r s i n g 2 2 4 0 9 , 5 9 3 1 6 , 3 2 7 ( 1 6 , 9 1 8 ) 9 , 0 0 2 S p e c i a l t y c a r e 5 3 1 2 3 3 , 0 1 9 7 7 , 6 4 2 ( 3 5 , 1 5 1 ) 7 5 , 5 1 0 M e d i c a l o f f i c e 5 6 8 8 , 0 8 1 1 4 , 6 8 8 9 3 , 9 0 7 ( 1 1 , 8 2 3 ) 9 6 , 7 7 2 t o a p o t e n t i a l f u t u r e M OB d e v e l o p m e n t t h a t wa s r e c l a s s i f i e d t o l a n d a n d l a n d i m p r o v e m e n t s . De v e l o p m e n t F u n d i n g P r o j e c t i o n s ( d o l l a r s i n t h o u s a n d s ) P r o j e c t e d F u t u r e F u n d i n g Be d s / Un i t s / S q u a r e I n i t i a l 2 0 0 9 2 0 1 0 F u n d i n g Un f u n d e d Co m m i t t e d P r o j e c t s F e e t Yi e l d F u n d i n g F u n d i n g T h e r e a f t e r Co m m i t m e n t s Ba l a n c e s De v e l o p m e n t 2 6 , 9 5 0 F r e e s t a n d i n g s k i l l e d n u r s i n g 1 1 2 0 9 . 2 % 5 , 7 9 4 — - 5 , 7 9 4 1 4 , 7 9 6 S p e c i a l t y c a r e 3 2 1 2 9 . 4 % 1 3 9 , 2 1 9 8 8 , 0 2 8 3 7 , 9 5 0 2 6 5 , 1 9 7 3 4 0 , 7 0 7 M e d i c a l o f f i c e 4 6 8 8 , 0 8 1 7 . 5 % 1 0 9 , 0 2 4 3 , 1 8 4 — 1 1 2 , 2 0 8 2 0 8 , 9 8 0 T o t a l 3 3 8 . 8 % $ 5 6 3 , 2 3 2 $ 1 2 0 , 5 6 9 $ 3 7 , 9 5 0 $ 7 2 1 , 7 5 1 $ 1 , 3 5 4 , 3 5 7 E x p a n s i o n P r o j e c t s CCRC — e n t r a n c e f e e 3 4 1 9 . 1 % $ 3 , 7 5 5 $ 4 5 6 $ 1 1 1 $

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f e e 4 0 0 0 4 Co m b i n a t i o n — r e n t a l 1 3 0 1 0 1 4 F r e e s t a n d i n g a s s i s t e d l i v i n g 4 ( 1 ) 0 0 3 F r e e s t a n d i n g d e m e n t i a c a r e 7 ( 2 ) 0 0 5 F r e e s t a n d i n g s k i l l e d n u r s i n g 2 0 1 0 3 S p e c i a l t y c a r e 5 0 0 1 6 To t a l $ 8 4 5 , 0 1 5 1 4 . 4 % 9 / 3 0 / 2 0 0 8 Co n s t r u c t i o n Ac q u i s i t i o n s / 1 2 / 3 1 / 0 8 P r o p e r t i e s S t a b i l i z e d Co n v e r s i o n s E x p a n s i o n s P r o g r e s s i o n s P r o p e r t i e s Oc c u p a n c y 0 — 5 0 % 1 6 0 2 0 ( 2 ) 1 6 5 0 % — 7 0 % 9 0 0 1 ( 1 ) 9 7 0 %

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(FULL PAGE GIF) P O RTF O LI O P o r t f o l i o Tr e n d s Op e r a t o r s t abl e and uns t abi l i zed pr oper t i es . 35

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j o r r e n o v a t i o n s . As s i s t e d Li v i n g : As s i s t i o n s . T h e c o v e r a g e s h o wn e x c l u d e s p r o p e r c a s h f l o ws f o r t h e o p e r a t o r / b o r r o we r t o s . Co m b i n a t i o n : A p r o p e r t y t h a t o f f e r s es t , t axes , depr eci at i on, am or t i zat i on u l a t e E BI T DARM a n d h a s n o t i n d e p e n d e n t l ns e per occupi ed uni t and has not i ndepe

ed l i vi ng f aci l i t i es ar e s t a t i es t hat ar e uns t abi l i zed, pay r ent and m eet ot her obl t wo o r m o r e l e v e l s o f c a r e and r ent . M anagem ent f ees y ver i f i ed t he i nf or m at i on. ndent l y ver i f i ed t he i nf or m

t e r e g u l a t e d r e n t a l p r o p e r t i e s t h a t p r o v i d e t h e s a m e s e r v i c e s a s i n d e p e n d e n t l i v i n g f a c i l i t i e s , b u t a l s o p r o v i d e s u p p o r t i v e c a r e f r o m t r a i n e d e m p l o y e e s t o r e s i d e n t s wh o r e q u i r e a s s i s t a n c e wi t h a c t i v i t i e s o f d a i l y l i v i n g , i n c l u d i n g m a n a g e m e n t o f m e d i c a t i o n s , b a t h i n g , d r e s s i n g , t o i l e t i n g , a m b u l a t i n g a n d e a t i n g . CAM F : Co v e r a g e a f t e r m a n a g e m e n t f e e s r e p r e s e n t s t h e r a t i o o f E BI T DAR t o c o n t r a c t u a l r e n t f o r l e a s e s o r i n t e r e s t a n d p r i n c i p a l p a y m e n t s f o r l o a n s . CAM F i s a m e a s u r e o f a p r o p e r t y ’ s a b i l i t y t o g e n e r a t e s u f f i c i e n t c a s h c l o s e d o r f o r wh i c h d a t a i s n o t a v a i l a b l e o r m e a n i n g f u l . Ca p - e x , Te n a n t I m p r o v e m e n t s , Le a s i n g Co m m i s s i o n s : Re p r e s e n t s a m o u n t s p a i d i n c a s h f o r : 1 ) r e c u r r i n g a n d n o n - r e c u r r i n g c a p i t a l e x p e n d i t u r e s r e q u i r e d t o m a i n t a i n a n d r e - t e n a n t o u r p r o p e r t i e s , 2 ) s e c o n d g e n e r a t i o n t e n a n t i m p r o v e m e n t s a n d 3 ) l e a s i n g c o m m i s s i o n s p a i d t o t h i r d p a r t y l e a s i n g a g e n t s t o s e c u r e n e w t e n a n t s . CBM F : Co v e r a g e b e f o r e m a n a g e m e n t f e e s r e p r e s e n t s t h e r a t i o o f E BI T DARM t o c o n t r a c t u a l r e n t f o r l e a s e s o r i n t e r e s t a n d p r i n c i p a l p a y m e n t s f o r l o a n s . i g a t i o n s , a s s u m i n g t h a t m a n a g e m e n t f e e s a r e n o t p a i d . T h e c o v e r a g e s h o wn e x c l u d e s p r o p e r t i e s t h a t a r e u n s t a b i l i z e d , c l o s e d o r f o r wh i c h d a t a i s n o t a v a i l a b l e o r m e a n i n g f u l . CCRC: Co n t i n u i n g c a r e r e t i r e m e n t c o m m u n i t i e s i n c l u d e a c o m b i n a t i o n o f d e t a c h e d h o m e s , a n i n d e p e n d e n t l i v i n g f a c i l i t y , a n a s s i s t e d l i v i n g f a c i l i t y a n d / o r a s k i l l e d n u r s i n g f a c i l i t y o n o n e c a m p u s . Re s i d e n t p a y m e n t p l a n s v a r y , b u t c a n i n c l u d e e n t r a n c e f e e s , c o n d o m i n i u m f e e s a n d r e n t a l f e e s . M a n y o f t h e s e c o m m u n i t i e s a l s o c h a r g e m o n t h l y m a i n t e n a n c e ( i . e . i n d e p e n d e n t l i v i n g , a s s i s t e d l i v i n g , d e m e n t i a a n d s k i l l e d n u r s i n g ) , b u t d o e s n o t m e e t t h e d e f i n i t i o n o f a CCRC. Co m m i t t e d Ba l a n c e : Re p r e s e n t s i n v e s t m e n t b a l a n c e p l u s u n f u n d e d c o n s t r u c t i o n c o m m i t m e n t s f o r wh i c h i n i t i a l f u n d i n g h a s c o m m e n c e d . Co n s t r u c t i o n Co n v e r s i o n : Re p r e s e n t s c o m p l e t e d c o n s t r u c t i o n p r o j e c t s t h a t we r e p l a c e d i n t o s e r v i c e a n d b e g a n e a r n i n g r e n t . De m e n t i a Ca r e : Ce r t a i n a s s i s t e d l i v i n g f a c i l i t i e s m a y i n c l u d e s t a t e l i c e n s e d s e t t i n g s t h a t s p e c i a l i z e i n c a r i n g f o r t h o s e a f f l i c t e d wi t h Al z h e i m e r ’ s d i s e a s e a r e i m p u t e d a t 5 % o f r e v e n u e s f o r i n d e p e n d e n t l i v i n g , a s s i s t e d l i v i n g , s k i l l e d n u r s i n g a n d CCRCs a n d a t 3 % f o r s p e c i a l t y c a r e wh i c h t h e c o m p a n y b e l i e v e s r e p r e s e n t t y p i c a l m a n a g e m e n t f e e s . T h e c o m p a n y u s e s u n a u d i t e d , p e r i o d i c f i n a n c i a l i n f o r m a t i o n p r o v i d e d s o l e l y b y t e n a n t s / b o r r o we r s t o c a l c u l a t e E BI T DAR a n d h a s n o t i n d e p e n d e n t l y v e r i f i e d t h e i n f o r m a t i o n . E BI T DAR i s u s e d t o c a l c u l a t e CAM F . EBI TDARM : E a r n i n g s b e f o r e i n t e r e s t , t a x e s , d e p r e c i a t i o n , a m o r t i z a t i o n , r e n t a n d m a n a g e m e n t f e e s . T h e c o m p a n y u s e s u n a u d i t e d , p e r i o d i c E BI T DARM i s u s e d t o c a l c u l a t e CBM F . En t r a n c e F e e : A p r o p e r t y wh e r e t h e r e s i d e n t p a y s a s u b s t a n t i a l u p f r o n t f e e a n d a n o n g o i n g m o n t h l y s e r v i c e f e e f o r t h e r i g h t t o o c c u p y a u n i t . T y p i c a l l y , a p o r t i o n o f t h e u p f r o n t f e e i s r e f u n d a b l e . Ex p e n s e p e r O c c u p i e d Un i t : Re p r e s e n t s t h e r a t i o o f r e v e n u e l e s s E BI T DARM t o o c c u p i e d u n i t s b a s e d o n t h e m o s t r e c e n t q u a r t e r o f a v a i l a b l e d a t a a n d e x c l u d e s p r o p e r t i e s t h a t a r e u n s t a b i l i z e d , c l o s e d , o r f o r wh i c h d a t a i s n o t a v a i l a b l e o r m e a n i n g f u l . T h e c o m p a n y u s e s u n a u d i t e d , p e r i o d i c f i n a n c i a l at i on.

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(FULL PAGE GIF) F r e e s t a n d i n g : A p r o p e r t y t h a t o f f e r s o n e l e v e l o f s e r v i c e . G LO S S ARY I n d e p e n d e n t Li v i n g : I n d e p e n d e n t l i v i n g f a c i l i t i e s a r e a g e - r e s t r i c t e d m u l t i - f a m i l y p r o p e r t i e s wi t h c e n t r a l d i n i n g f a c i l i t i e s t h a t p r o v i d e r e s i d e n t s a c c e s s t o 2 8 m e a l s a n d o t h e r s e r v i c e s s u c h a s h o u s e k e e p i n g , l i n e n s e r v i c e , t r a n s p o r t a t i o n a n d s o c i a l a n d r e c r e a t i o n a l a c t i v i t i e s . I n i t i a l Ca s h Yi e l d : Re p r e s e n t s a n n u a l i z e d c o n t r a c t u a l i n c o m e t o b e r e c e i v e d i n c a s h a t d a t e o f i n v e s t m e n t d i v i d e d b y i n v e s t m e n t a m o u n t . I n v e s t m e n t Am o u n t : Ac q u i s i t i o n s — Re p r e s e n t s p u r c h a s e p r i c e . Ne w l o a n s — Re p r e s e n t s f a c e a m o u n t o f n e w l o a n . Co n s t r u c t i o n c o n v e r s i o n — Re p r e s e n t s b o o k b a l a n c e c o n v e r t e d f r o m CI P t o r e a l p r o p e r t y u p o n c o m p l e t i o n . Ca p i t a l i m p r o v e m e n t s t o e x i s t i n g p r o p e r t i e s — Re p r e s e n t s c a s h f u n d e d t o t e n a n t s u n d e r a n e x i s t i n g l e a s e a g r e e m e n t . L o a n a d v a n c e s — Re p r e s e n t s c a s h f u n d e d t o o p e r a t o r s u n d e r a n e x i s t i n g l o a n a g r e e m e n t . I n v e s t m e n t Ba l a n c e : Re p r e s e n t s n e t b o o k v a l u e o f r e a l e s t a t e i n v e s t m e n t s a s r e f l e c t e d o n t h e c o m p a n y ’ s b a l a n c e s h e e t . M e d i c a l O f f i c e : M e d i c a l o f f i c e b u i l d i n g s a r e o f f i c e a n d c l i n i c f a c i l i t i e s , o f t e n l o c a t e d n e a r h o s p i t a l s o r o n h o s p i t a l c a m p u s e s , s p e c i f i c a l l y c o n s t r u c t e d a n d d e s i g n e d f o r u s e b y p h y s i c i a n s a n d o t h e r h e a l t h c a r e p e r s o n n e l t o p r o v i d e s e r v i c e s t o t h e i r p a t i e n t s . T h e y m a y a l s o i n c l u d e a m b u l a t o r y s u r g e r y c e n t e r s t h a t a r e u s e d f o r g e n e r a l o r s p e c i a l t y s u r g i c a l p r o c e d u r e s n o t r e q u i r i n g a n o v e r n i g h t s t a y i n a h o s p i t a l . M e d i c a l o f f i c e b u i l d i n g s t y p i c a l l y c o n t a i n s o l e a n d g r o u p p h y s i c i a n p r a c t i c e s a n d m a y p r o v i d e l a b o r a t o r y a n d o t h e r p a t i e n t s e r v i c e s . M e t r o p o l i t a n S t a t i s t i c a l Ar e a : M e t r o p o l i t a n s t a t i s t i c a l a r e a s a r e g e o g r a p h i c e n t i t i e s d e f i n e d b y t h e U. S . Of f i c e o f M a n a g e m e n t a n d Bu d g e t ( OM B) f o r u s e b y F e d e r a l s t a t i s t i c a l a g e n c i e s i n c o l l e c t i n g , t a b u l a t i n g a n d p u b l i s h i n g F e d e r a l s t a t i s t i c s . T h e NI C M AP ™ Da t a a n d An a l y s i s S e r v i c e p r o v i d e s r e v e n u e , s u p p l y a n d d e m o g r a p h i c i n f o r m a t i o n f o r t h e I L / CCRC, a s s i s t e d l i v i n g , a n d s k i l l e d n u r s i n g s e r v i c e t y p e s a n d c o m m o n l y a g g r e g a t e s t h e i n f o r m a t i o n f o r t h e t o p 3 1 , t o p 7 5 a n d t o p 1 0 0 M S As . T h e c o m p a n y p r o v i d e s i n v e s t m e n t b a l a n c e i n f o r m a t i o n i n t h e s a m e c a t e g o r i e s a s a n o t h e r m e a s u r e o f g e o g r a p h i c c o n c e n t r a t i o n . O c c u p a n c y : M e d i c a l o f f i c e o c c u p a n c y r e p r e s e n t s t h e p e r c e n t a g e o f t o t a l r e n t a b l e s q u a r e f e e t l e a s e d a n d o c c u p i e d , i n c l u d i n g m o n t h - t o - m o n t h l e a s e s , a s o f t h e d a t e r e p o r t e d . Oc c u p a n c y f o r a l l o t h e r p r o p e r t y t y p e s r e p r e s e n t s a v e r a g e q u a r t e r l y o p e r a t i n g o c c u p a n c y b a s e d o n t h e m o s t r e c e n t q u a r t e r o f a v a i l a b l e d a t a a n d e x c l u d e s p r o p e r t i e s t h a t a r e u n s t a b i l i z e d , c l o s e d o r f o r wh i c h d a t a i s n o t a v a i l a b l e o r m e a n i n g f u l . T h e c o m p a n y u s e s u n a u d i t e d , p e r i o d i c f i n a n c i a l i n f o r m a t i o n p r o v i d e d s o l e l y b y t e n a n t s / b o r r o we r s t o c a l c u l a t e o c c u p a n c y a n d h a s n o t i n d e p e n d e n t l y v e r i f i e d t h e i n f o r m a t i o n . O f f Ca m p u s : P r o p e r t i e s t h a t a r e n e i t h e r o n c a m p u s n o r o f f c a m p u s a f f i l i a t e d . O f f Ca m p u s - Af f i l i a t e d : P r o p e r t i e s n o t o n c a m p u s a r e c o n s i d e r e d a f f i l i a t e d wi t h a h o s p i t a l o r h e a l t h s y s t e m i f o n e o r m o r e o f t h e f o l l o wi n g c o n d i t i o n s a r e m e t : 1 ) a g r o u n d l e a s e i s m a i n t a i n e d wi t h a h o s p i t a l o r s y s t e m e n t i t y ; 2 ) a m a s t e r l e a s e i s m a i n t a i n e d wi t h a h o s p i t a l o r s y s t e m e n t i t y ; 3 ) s i g n i f i c a n t s q u a r e f o o t a g e i s l e a s e d t o a h o s p i t a l o r s y s t e m e n t i t y ; o r 4 ) t h e p r o p e r t y i n c l u d e s a n a m b u l a t o r y s u r g e r y c e n t e r wi t h a h o s p i t a l p a r t n e r s h i p i n t e r e s t . O n Ca m p u s : P r o p e r t i e s a r e c o n s i d e r e d o n c a m p u s i f o n e o r m o r e o f t h e f o l l o wi n g c r i t e r i a a r e m e t : 1 ) t h e l a n d p a r c e l i s c o n t a i n e d wi t h i n t h e p h y s i c a l b o u n d a r i e s o f a h o s p i t a l c a m p u s ; 2 ) t h e l a n d p a r c e l i s l o c a t e d a d j a c e n t t o t h e c a m p u s ; o r 3 ) t h e b u i l d i n g i s p h y s i c a l l y c o n n e c t e d t o t h e h o s p i t a l r e g a r d l e s s o f t h e l a n d o wn e r s h i p s t r u c t u r e .

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(FULL PAGE GIF) G LO S S ARY Re g i o n De f i n i t i o n s : E i g h t d i v i s i o n s a s e s t a b l i s h e d b y t h e Ce n s u s Bu r e a u . Ne w E n g l a n d — Co n n e c t i c u t , M a i n e , M a s s a c h u s e t t s , Ne w Ha m p s h i r e , Rh o d e I s l a n d , Ve r m o n t . M i d d l e At l a n t i c — Ne w J e r s e y , Ne w Yo r k , P e n n s y l v a n i a . E a s t No r t h Ce n t r a l — I n d i a n a , I l l i n o i s , M i c h i g a n , Oh i o , W i s c o n s i n . W e s t No r t h Ce n t r a l — I o wa , Ka n s a s , M i n n e s o t a , M i s s o u r i , Ne b r a s k a , No r t h Da k o t a , S o u t h Da k o t a . S o u t h At l a n t i c — De l a wa r e , Di s t r i c t o f Co l u m b i a , F l o r i d a , Ge o r g i a , M a r y l a n d , No r t h Ca r o l i n a , S o u t h Ca r o l i n a , Vi r g i n i a , W e s t Vi r g i n i a . E a s t S o u t h Ce n t r a l — Al a b a m a , Ke n t u c k y , M i s s i s s i p p i , T e n n e s s e e . W e s t S o u t h Ce n t r a l — Ar k a n s a s , L o u i s i a n a , Ok l a h o m a , T e x a s . M o u n t a i n — Ar i z o n a , Co l o r a d o , I d a h o , Ne w M e x i c o , M o n t a n a , Ut a h , Ne v a d a , W y o m i n g . P a c i f i c — Al a s k a , Ca l i f o r n i a , Ha wa i i , Or e g o n , W a s h i n g t o n . Re n e wa l Ra t e : T h e r a t i o o f t o t a l s q u a r e f e e t e x p i r i n g a n d a v a i l a b l e f o r l e a s e t o t o t a l r e n e we d s q u a r e f e e t . Re n e we d S q u a r e F e e t : S q u a r e f e e t e x p i r i n g d u r i n g t h e r e p o r t i n g p e r i o d u p o n wh i c h a l e a s e i s e x e c u t e d b y t h e c u r r e n t o c c u p a n t . Re n t a l : A p r o p e r t y wh e r e t h e r e s i d e n t p a y s a m o n t h l y m a r k e t r a t e f o r t h e l e v e l o f c a r e p r o v i d e d , b u t i s n o t r e q u i r e d t o p a y a s u b s t a n t i a l u p f r o n t f e e . Re v e n u e p e r O c c u p i e d Un i t : Re p r e s e n t s t h e r a t i o o f t o t a l r e v e n u e t o o c c u p i e d u n i t s b a s e d o n t h e m o s t r e c e n t q u a r t e r o f a v a i l a b l e d a t a a n d e x c l u d e s p r o p e r t i e s t h a t a r e u n s t a b i l i z e d , c l o s e d , o r f o r wh i c h d a t a i s n o t a v a i l a b l e o r m e a n i n g f u l . T h e c o m p a n y u s e s u n a u d i t e d , p e r i o d i c f i n a n c i a l i n f o r m a t i o n p r o v i d e d s o l e l y b y t e n a n t s / b o r r o we r s t o c a l c u l a t e r e v e n u e p e r o c c u p i e d u n i t a n d h a s n o t i n d e p e n d e n t l y v e r i f i e d t h e i n f o r m a t i o n . S a m e S t o r e : F o r t h e m e d i c a l o f f i c e b u i l d i n g p o r t f o l i o , s a m e s t o r e i s d e f i n e d a s t h o s e p r o p e r t i e s i n t h e p o r t f o l i o a s o f Oc t o b e r 1 , 2 0 0 7 . F o r a l l o t h e r p r o p e r t y t y p e s , s a m e s t o r e i s d e f i n e d a s t h o s e p r o p e r t i e s i n t h e s t a b l e p o r t f o l i o f o r t h e 2 4 m o n t h s p r e c e d i n g t h e e n d o f t h e p o r t f o l i o p e r f o r m a n c e r e p o r t i n g p e r i o d , u n l e s s o t h e r wi s e n o t e d . S k i l l e d Nu r s i n g : S k i l l e d n u r s i n g f a c i l i t i e s a r e l i c e n s e d d a i l y r a t e o r r e n t a l p r o p e r t i e s wh e r e t h e m a j o r i t y o f i n d i v i d u a l s r e q u i r e 2 4 - h o u r n u r s i n g a n d / o r m e d i c a l c a r e . Ge n e r a l l y , t h e s e p r o p e r t i e s a r e l i c e n s e d f o r M e d i c a i d a n d / o r M e d i c a r e r e i m b u r s e m e n t . 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Ot h e r s p e c i a l t y c a r e f a c i l i t i e s t y p i c a l l y p r o v i d e s p e c i a l i z e d i n p a t i e n t a n d o u t p a t i e n t c a r e f o r s p e c i f i c i l l n e s s e s o r d i s e a s e s , i n c l u d i n g , a m o n g o t h e r s , o r t h o p e d i c a n d n e u r o l o g i c c a r e . S q u a r e F e e t : Ne t r e n t a b l e s q u a r e f e e t c a l c u l a t e d u t i l i z i n g Bu i l d i n g Own e r s a n d M a n a g e r s As s o c i a t i o n m e a s u r e m e n t s t a n d a r d s . S t a b l e : A f a c i l i t y wi l l e n t e r t h e s t a b l e p o r t f o l i o a f t e r i t h a s g e n e r a t e d CAM F o f 1 . 1 0 x o r g r e a t e r f o r t h r e e c o n s e c u t i v e m o n t h s . 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