ElderCHOICE Portfolio Management

1. ElderCHOICE Portfolio Management Integrating Operations Analysis and Underwriting Maureen McAllister, CPM

2. ALFA definition of assisted living Assisted living provides 24-hour availability of trained staff who provide residents with scheduled and unscheduled assistance with ADL, IADL needs and SAMM in a residential setting

3. ElderCHOICE Portfolio Benchmarks and Trends

4. Who is the Customer? Average age of 84 85% are women 75% have a living child Half say it was their decision to move

5. Assistance Requirements of Assisted Living Residents Needs help to take medications 88% Cannot prepare own meals 80% Cannot keep house clean 74% Cannot manage financial affairs 72% Needs assistance to dress/bathe 65% Cannot do laundry 62%

6. Typical Services Provided Three meals per day 24-hour personal care (averages 45 to 60 minutes per day) Medication Management Assistance Housekeeping & Laundry Activities Transportation Wellness services

7. presentation of planned community team discussion and integrated analytical modeling database of benchmarks industry partners ElderCHOICE Underwriting Success factors

8. Evaluation of Susan S. Bailis Assisted Living

9. Susan BailisProject Development Costs

10. Marketing plan analysis personnel during construction collateral equipment / leases media placement model apartment management fees postage recruitment training timing of staff hired before opening day

11. Marketing Budget Total 256,678 Facility Personnel 55,800 Marketing/collateral 52,200 Space/Telephone 6,000 Model Apartment 0 Start-up costs 9,678 Management fee 30,000 Dev management fee 100,000

12. Furniture, Fixtures & Equipment

13. Capital Budget Considerations Back of house kitchen deliveries housekeeping laundry storage HVAC Communal Space reception marketing administration resident care activities community events

14. Design features Discussion Building layout review First Floor plan Commercial Kitchen Residential spaces Private space finishes clustered versus decentralized common rooms

15. Design features discussion Exterior features roof siding porches / decks Walkways porte-cochiere entrances (ADA)

16. Design features Discussion Corridor length lean rails lighting furnishings flooring elevators storage / signage

18. Design DiscussionFurnishings budget Reception Parlors and lounges Library or card rooms Dining rooms Multi purpose space Salons & fitness Main street vendors

19. OperationsManagement

20. Staffing

21. Intensive Business Management 24 hour/ day 365 days per year business managing 5-6 department heads upwards of 35 full-time equivalent staff managing human resources is key labor accounts for 60-70% of operating budget managing $1.5 to $2.5 million dollar budget per diem and per resident costs Role of the Executive Director

22. Operations -- Service Management Back of house kitchen deliveries housekeeping laundry storage HVAC septic/water Community reception marketing administration resident care activities community events

23. Operations�Administration budget executive staff marketing accounting /auditing office services / equipment telephone training fees

24. Operations�property expenses Maintenance plant services and contracts repairs decorating and refurbishment landscaping Utility cost analysis Taxes Insurance Replacement reserve

25. Resident Services Personal Care Dining Housekeeping Laundry Activities/Wellness

26. Expenses as Percentage of Revenue Personal Care 20% Dining Service 11% General & Administration 10% Property 10% Management Fee 4% Housekeeping/Laundry 4% Social activities 3% EBITDA 37%

27. Resident Care Plan Initial assessments of all residents Daily care plans and Six month assessments 24/7 staff coverage based on plans Variable ADL needs per day or per week Fluctuations in care Issues related to holidays/ vacation/ illness Time management and outside billing

28. Personal Care Cost Analysis number of residents minutes of care identification of shifts job responsibilities regulatory compliance productivity factor use of FT & PT staff holiday/ sick time vacation/ overtime benefits

29. Personal Care Shifts NCB templates

30. Dining Services

31. Dining Services Plan Concept and design Dining Room number of tables seating plans or open seating Server stations Service style menu choices / number of courses Planned or a la carte Kitchen Layout and connection

32. Dining Services Discussion Food and Beverage Service Staff Planning/ Menu Cycle Budget per meal or per day Purchasing / Inventory / contracts Health and Nutrition ( 19D)

33. Dining Services Cost Analysis Staffing Raw food Tables and chairs China and glassware cost Tablecloths and napkins Supplies

34. Dining Services Staffing Model Ratios Continental breakfast: 1:30 Dining for assisted living: 1:12 Dining for dementia care: 1:5 or 1:7 Shifts 7:00 - 2:30 and 3:45 to 7:00 Allows for table set-up, serving, clean-up 9.1 FTE staff needed for 3 daily meals for 100 residents

35. Susan Bailis Assisted Living Performance benchmarks

36. Expenses as Percentage of budget Administration 18% Maintenance 5% Resident Services 55% Utilities 8% Taxes/Insurance 6% Management fee 6% Replacement reserves 2%

37. Expenses as Percentage of Revenue Personal Care 16% Dining Service 13% General & Administration 13% Plant 9% Utilities 6% Management Fee 4% Housekeeping/Laundry 4% Taxes/insurance/security 4% Replacement reserve 1% EBITDA 29%

38. Revenue & Expense Profile (per unit ) Susan BailisAL Monthly Annually Revenue $ 2,569 $ 30,835 Expenses $ 1,829 $ 21,959 Debt $ 7,800 ElderCHOICE portfolio Revenue $ 3,000 $ 36,000 Expenses $ 2,200 $ 26,400 Debt $ 7,600