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

8. Evaluation of Susan S. Bailis Assisted Living

9. Susan BailisProject Development Costs

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

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

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

19. OperationsManagement

20. Staffing

21. Role of the Executive Director • 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

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

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

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

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. 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 Personal Care Cost Analysis

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 BailisALMonthly 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