State of Senior Living and the Senior Living Capital Markets 2013

State of Senior Living and the Senior Living Capital Markets 2013*

Dan HermannSenior Managing Director Head of Investment BankingZiegler

Steve JeffreyManaging DirectorSenior Living Investment BankingZiegler

Lisa McCrackenSenior Vice President Senior Living Research & DevelopmentZiegler

Mike McDanielSenior Managing Director Capital MarketsZiegler

*An educational component of the ongoing Ziegler CFO Workshop SeriesSM

AGENDA

Section 1 - PROVIDER & INDUSTRY TRENDS

Section 2 - STATE OF SENIOR LIVING CAPITAL MARKETS

Section 3 - CAPITAL MARKETS UPDATE

Questions & Answers

1

THIS YEAR’S “STATE OF SENIOR LIVING” FEATURES:

2

Provider & Industry Trends• Supply & Demand• External Environment• Operations• The Consumer• The Impact

State of Senior Living Capital Markets• Investment banking• Financing options• Senior living credit • General market

conditions• Municipal bond market

Preview of what’s to come

PROVIDER & INDUSTRY TRENDSSection 1

3


Lisa McCrackenSenior Vice President Senior Living Research & DevelopmentZiegler

4

SUPPLY & DEMAND

EXTERNAL ENVIRONMENT

OPERATIONS

THE CONSUMER

THE IMPACT

CREATING A STRONGER SENIOR LIVING INDUSTRY

5

Creating a Stronger

Senior Living Industry

The Consumer

Supply & DemandOperations

The Impact Creating a Stronger


External Environment

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

1990 1995 2000 2005 2010 2015 2020 2025 2030

(In

Tho

usan

ds)

65 Years & Over 75 Years & Over 85 Years & Over 100 Years & Over

DEMOGRAPHICS DEFINE THE MARKET PROJECTED U.S. SENIORS POPULATION (1990 TO 2030)

6Source: U.S. Census Bureau National Population Projections (released 2008, based on Census 2006)

5 Year Increments

Where we are today

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

1990 1995 2000 2005 2010 2015 2020 2025 2030

(In

Tho

usan

ds)

75 Years & Over 85 Years & Over 100 Years & Over

7Source: U.S. Census Bureau National Population Projections (released 2008, based on Census 2000)


5 Year Increments

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

1990 1995 2000 2005 2010 2015 2020 2025 2030

(In

Tho

usan

ds)

85 Years & Over 100 Years & Over8Source: U.S. Census Bureau National Population Projections (released 2008, based on Census 2000)


5 Year Increments

0

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90+

Popu

lati

on

Age

2012 US Population

DEMOGRAPHICS DEFINE THE MARKETINFLUENCERS

9Sources: US Census Bureau Data

Continuing Care Retirement Communities, 2011 profile

Oldest Baby Boomer turns 67 this year

Adult Children Decision Makers

Average IL age upon move-in

Gen XGen Y

Current age of AL & MC resident

Current average age of

IL resident

10Source: US Census Bureau

DEMOGRAPHICS DEFINE THE MARKETMEDIAN AGE BY STATE 1990

11Source: US Census Bureau

2000DEMOGRAPHICS DEFINE THE MARKETMEDIAN AGE BY STATE

12

Today, eight of the top 11 states with the oldest populations are in the Northeast.

Source: US Census Bureau

2010DEMOGRAPHICS DEFINE THE MARKETMEDIAN AGE BY STATE

SENIOR LIVING TRENDSCONTINUUM OF CARE

13

Age-RestrictedHousing

IndependentLiving

Assisted LivingMemory Care

Skilled Nursing

Increasing Acuity

RealEstate

HealthcareServices

Senior Housing Continuum of Care

HCBS

THE INDEPENDENT LIVING CONSUMERNET WORTH

• Early Boomers (1946-1955) have a significantly higher net worth than previous generations did in their 50s and 60s

14Source: The Nielson Company, 2013

$162,222

$170,604

$241,333

$0 $100,000 $200,000 $300,000

Depression Babies

War Babies

Early Boomers

Net worth (in 2010 dollars) by generation at same age (50-69 year olds)

• Increases seen in health care, drugs, health insurance and… entertainment, hobbies & personal care

• Shift in consumption among 65-74 year olds

15

Spending among 65-74 year olds (‘00’10)

THE INDEPENDENT LIVING CONSUMERSPENDING

16

THE INDEPENDENT LIVING CONSUMERWHO ARE THEY?

17

WELLNESS IN CCRCS: THE ONGOING TRANSFORMATION

Institutionalized Care / Poorhouses

Wellness = Physical Fitness

Whole-Person Wellness

Centers for Healthy Aging

Headline: “Wellness Program Triples Sales for Florida Provider”

– Senior Housing News, July 2013

NATIONAL SURVEY OF WHOLE PERSON WELLNESS IN CCRCS

• 8 Key Characteristics of Culture of Wellness– Written wellness objectives – A wellness team inclusive of residents – More than two departments included on wellness

teams – Staff wellness is part of the mission statement

and/or objectives – Staff use resident wellness programs – Staff-only wellness programs (programs designed

to be used exclusively by staff) – More than two groups excluding residents (e.g.,

residents’ family members) use wellness programs – Staff hired in the past five years specifically to

implement wellness programming

18

• Consumers are better “informed” than ever

THE INDEPENDENT LIVING CONSUMERINFORMATION AT THEIR FINGERTIPS

19

THE ASSISTED LIVING CONSUMER

20

According to the Alzheimer’s Association, in 2012, 15.4 million caregivers provided an estimated 17.5 billion hours of unpaid care, valued at more than $216 billion.

21

• As population ages, increasing demand for support services

• Blurring of continuum– IL with in-home support services versus Assisted Living

• Median age between IL and AL is narrowing

• Consumer often the adult children– Are you designing for adult children?– Marketing to adult children?

THE ASSISTED LIVING CONSUMER

ASSISTED LIVING DEMANDMEMORY CARE SERVICES

2013 Costs of Alzheimer's = $203 Billion

Source: Alzheimers Association, 2013 22

• Notable increases in past five years in demand for short-stay healthcare

• Considerations for CCRC business model– Internal resident admissions vs. from the non-CCRC resident

pool

• Relationship with healthcare reform– Decrease LOS and improve outcomes

23

THE SUB-ACUTE/REHAB CONSUMER

EXISTING BUSINESS LINES AND OPPORTUNITIES FOR GROWTH

24

Services• Home and

Community Based Services

• PACE• Hospice• Other

Traditional Bricks and Mortar Real Estate• Expansions• New Community• Affiliations, Merger

& Acquisitions• Dispositions

25

Creating a Stronger


Supply & Demand

The ImpactThe Consumer


Creating a Stronger


Operations

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

200,000

1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010

Uni

ts

Year

ILU ALU NCB All Units

26

2013 LZ 100Growth: Growth of Largest 100 Systems, Combined Unit MixFrom 1950 (Excludes Evangelical Lutheran Good Samaritan Society)

Partial histories used if complete data was unavailable

Source: 2013 LeadingAge Ziegler 100 Publication (data as of 12/31/12)

27Source: 2013 LeadingAge Ziegler 100

• Full 2013 report just released• www.ziegler.com

• Continued growth in number of units– 2012 #100- 782 units– 2013 #100- 793 units– 1.6% increase in total units

FY 2011-FY 2012

• Increases in IL & AL, continued decline in SN units (largely SNFdispositions)

• Growth largely through expansion and M&A activity

2013 LEADINGAGE ZIEGLER “LZ” 100 TRENDS

0

30,000

60,000

90,000

120,000

ILU ALU NCB

Uni

ts

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

2.4% Average Annual Growth (AAG) in total units from 2000 to 2012

GROWTH: INCREASE IN NFP UNITS (+ NEARLY 200 UNITS)

Increase in ILUs Increase in ALUs Decrease in NCBs

28Source: 2013 LeadingAge Ziegler 100 Publication (data as of 12/31/12)

3.9% AAG

0.2% AAG

3.9% AAG

0

100

200

300

400

500

600

700

800

900

1,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Com

mun

ity M

ix

CCRC IL AL NH

Δ = 3.2%Δ = 2.3%Δ = 2.1%

Δ = 2.3%Δ = 1.4%

Δ = 1.7%

48.5%

13.6%

15.2%

22.7%

47.6%

13.4%

16.6%

22.4%

47.9%

13.6%

16.4%

22.1%

48.5%

14.0%

16.6%

20.9%

48.7%

14.7%

16.6%

20.0%

50.5%

14.7%

16.8%

18.1%

51.4%

14.6%

16.8%

17.2%

50.6%

14.6%

17.0%

17.8%Δ = 1.7%

50.1%

14.4%

16.9%

18.7%

Δ = 0.6%

16.6%

17.2%

14.7%

51.5%

Δ = 0.3%15.9%

17.0%

14.6%

52.5%

Δ = 1.1%

Δ = 3.4%

49.9%

14.7%

16.9%

18.5%

15.4%

16.9%

14.5%

53.3%

Δ = 0.3%

29

2013 LZ 100ANALYSIS OF THE DATA: COMMUNITIESTOTAL COMMUNITIES BY YEAR, BY TOTAL COMMUNITIES, 2000 THROUGH 2012


30


0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011

Uni

ts

Year


Crosslandsopens

Cartmelopens

Kendal at Oberlin opens

Kendal at Ithaca opens

Kendal at Lexington opens

Barclay Friends af f iliated

Kendal at Longwood opens

Lathrop Communities af f iliated

Conistonopens

Kendal at Hanover opens

Kendal at Granville and Kendal on Hudson open

CCRC Second Community (emergence of the system) Other Acquisition

Kendal at Longwood expands

Barclay Friends expands

Oberlin and Lexington expand

Oberlin and Lathrop expand

The Collington acquired

2013 LZ 100 Pace of Growth #8THE KENDAL CORPORATION (PA) The Admiral at the Lake

acquired

Oberlin and Longwood expand


0

500

1,000

1,500

2,000

2,500

3,000

3,500

1926 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012

Uni

ts

Year


AMV expands

Asbury Solomons opens

Inverness Village opens

Reeders Memorial Home acquired

Bethany Village and Epworth Manor acquired in a merger with

Wesley Af f iliated Services

AMV expands

Asbury Solomons and Epworth expand

AMV disposes of assisted living facility

Forestview acquired

AMV and Springhill expand

Springhill acquired

CCRC Second Community (emergence of the system) Other Acquisition

Reeders Memorial

Home disposed

Asbury Methodist Village

(AMV) opens

Epworth Manor sold

Bethany Village and Forestview

expand

AMV expands

Bethany Village expands

2013 LZ 100 Pace of Growth #15ASBURY COMMUNITIES (MD)

32Source: Preliminary 2013 LeadingAge Ziegler 100 Publication (data as of 12/31/12)

0

200

400

600

800

1000

1200

1400

1600

1800

2000

1881 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Uni

ts

Year


Concordia -Main campus

opens

Ridgewood Place expands

Concordia at Ridgewood Place and

Concordia at the Orchard acquired

2013 LZ 100 Pace of Growth #30CONCORDIA LUTHERAN MINISTRIES (PA)

CCRC Second Facility (emergence of the system) Other Acquisition

Concordia at Rebecca Residence

acquired

Main campus expands

Concordia Medical Equipment acquired

Concordia of the South Hills acquired

Concordia of Wexford and Concordia of Franklin Park

acquired

Concordia at Sumner acquired

Concordia of Cranberry and Concordia of Fox Chapel

acquired

Good Samaritan Hospice acquired

Concordia and Cabot expand

2013 LZ 100ANALYSIS OF THE DATA: SYSTEM HEADQUARTERS

33Source: 2013 LeadingAge Ziegler 100 Publication (data as of 12/31/12)

HEADQUARTERS’ LOCATIONS BY SIZE (TOTAL UNITS)

= <1,000 Units

= >5,000 Units

= 5,000-3,000 Units

= 3,000-1,000 Units

THE DEMAND

• Construction is at a historical high for memory care

• The number of Americans 85+ will increase from 5.5 million in 2010 to 19 million by 2050 as adults are living longer

• Researchers predict death rates will decline even faster as science improves

34

Source: NIC MAP Construction Monitor 2013

Source: US Census Bureau

35Source: NIC MAP Data & Analysis Service

0

20

40

60

80

100

120

140

For Profit Not-For-Profit

Num

ber o

f Pro

pert

ies

Und

er C

onst

ruct

ion

Seniors Housing Construction by Profit Status; MAP31As of 2Q13

New PropertiesExpansions

Largely IL w/ AL and memory

support or free-standing AL

NEW CAMPUS VS EXPANSIONS

CONSTRUCTION: COMMUNITIES VS UNITS


Properties under construction

Units under construction


CCRC UNIT GROWTH/CONSTRUCCTION STILL HIGHER AMONG NOT-FOR-PROFITS’S

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

Uni

ts

CCRC Units Under Construction

Not-For-Profit

For-Profit

38

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

Uni

ts

ILUs Under Construction

For-Profit

Not-For-Profit

Source: NIC MAP Data & Analysis Service

INDEPENDENT LIVING RENTALS CONTINUE AMONG FOR-PROFITS

39

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

Uni

ts

ALUs Under Construction

For-Profit

Not-For-Profit


ASSISTED LIVING PROPERTIES CONTINUE AMONG FOR-PROFITS

40

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

Uni

ts

Freestanding MC Units Under Construction

For-Profit

Not-For-Profit


FREE-STANDING MEMORY CARE (MOSTLY AL)

41

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

For-Profit Not-For-Profit For-Profit Not-For-Profit For-Profit Not-For-Profit For-Profit Not-For-Profit

CCRCs Independent Living Assisted Living Freestanding Memory Care

Uni

ts

Total Unit Inventory

2005

2006

2007

2008

2009

2010

2011

2012

2013Q2

TOTAL UNITS: FOR-PROFITS VS NOT-FOR-PROFITS


# San Antonio 1995

1 Air Force Village I

2 Air Force Village II

3 Army Residence Community

4 Emeritus at Amber Oaks (FP)

5 Forum at Lincoln Heights, The (FP)

6 Golden Estates

7 Madison Estates (FP)

8 Morningside Ministries at the Chandler Estate

9 Morningside Ministries at the Meadows

10 Patriot Heights (FP)

11 Timberhill Villa (FP)

12 Village at Incarnate Word, The

# San Antonio 2013

1 Adante Senior Living (FP)

2 Air Force Village I

3 Air Force Village II

4 Army Residence Community

5 Emeritus at Amber Oaks (FP)

6 Emeritus at Hamilton House (FP)

7 Emeritus at Hollywood Park (FP)

8 Emeritus at Kingsley Place Medical Center (FP)

9 Emeritus at Oakwell Farms (FP)

10 Emeritus at Woodbridge Estates (FP)

11 Forum at Lincoln Heights, The (FP)

12 Franklin Park Sonterra (FP)

13 Golden Estates

14 Madison Estates (FP)

15 Morningside Ministries at the Chandler Estate

16 Morningside Ministries at the Meadows

17 Patriot Heights (FP)

18 The Waterford at Thousand Oaks (FP)

19 The Waterford on Huebner (FP)

20 Timberhill Villa (FP)

21 Villa De San Antonio (FP)

22 Village at Incarnate Word, The 42

NEW COMMUNITY GROWTH: LOCAL MARKET ANALYSISSAN ANTONIO 1995 TO 2013

SOURCE: Ziegler Investment Banking; LeadingAge; Caring.com; and Google Maps

1995 2013

GROWTH DEFINED

Growth

New Community locations

HCBS offerings

Expansions

For-profit ventures

Sponsorships

Joint Ventures

43

WHY GROW?• Allows for greater promotion of mission• Greater ability to generate economies

of scale• Attract better talent & leadership

– Greater ability to pursue passions– Growth provides invigorating challenges; diversion from

status quo– Compensation and benefits options increase with growth

• Increased ability to borrow capital• Diversification in services ensures long-term financial

stability• Greater ability to expand into underserved markets• Additional programs and services enhance current customer

experience44

0

100

200

300

400

500

600

700

1985-1989 1990-1994 1995-1999 2000-2004 2005-2009 2010-2012 2012

Expansions New Communities Merg/Acq/Affil Dispositions

SYSTEM TRENDS 2013: EVIDENCE OF GROWTH

45

2013 LZ 100: Types of Growth


5 Years 3 Years Last Year

GROWTHEXPANDING & REPOSITIONING AGING CAMPUSES

• Aging Campuses will continue to be a major management focus and issue

• Numerous campus repositionings in progress

• Size and scope varies– Market size and dynamics – large metro to small market– Competition within market– Modernizing healthcare with emphasis on resident-centered

care– Focus on variety of amenities throughout the continuum– Need for more Memory Care offerings

46

45 46 5993

220

453

9351

0

100

200

300

400

500

1980-1984 1985-1989 1990-1994 1995-1999 2000-2004 2005-2009 2010-2012 2012

Com

mun

ities

Expansion: The addition of new units to an existing community. Note: If a new community is added to an existing campus this is also considered an expansion.

SYSTEM GROWTH & CHANGE: EVIDENCE

47

2013 LZ 100: Expansions


5 Year Increments Last Year

3 Years

48

7.50

8.00

8.50

9.00

9.50

10.00

10.50

11.00

11.50

12.00

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

(Age

)

50th PERCENTILE

Single-Site Multi-Site

AVERAGE AGE OF FACILITY • This ratio (AGE) measures an organization’s commitment to maintaining its physical plant

• Many organizations are embarking upon repositionings and renovations, but AGE suggests the investment isn’t sufficient to counter the aging of their physical plants

Source: Preliminary Financial Ratios & Trend Analysis of CARF-CCAC Accredited Organizations, 2013.

CARF-CCAC AVERAGE AGE OF PHYSICAL PLANTNATIONAL TREND IS AT ALL-TIME HIGH

REPOSITIONING & EXPANDINGSELECT ZIEGLER-FINANCINGS

49

Miralea

North HillRiverMead

Spring Lake

MRC CrestviewC.C. Young

The Terraces at San Joaquin Epworth Villa

22

4743

50

68

75

22

6

0

25

50

75

1980-1984 1985-1989 1990-1994 1995-1999 2000-2004 2005-2009 2010-2012 2012

Com

mun

ities

New Community: Growth by the addition of units through construction of a new location.

50

2013 LZ 100: GROWTH: SPECIFIC GROWTH TYPE BREAKDOWN

New Community Growth

• Pace of new community development has slowedSource: 2013 LeadingAge Ziegler 100 Publication (data as of 12/31/12)

5 Year IncrementsLast Year3 Years

The Kendal Corporation,The Admiral at the Lake,

Chicago, ILFriendship Senior Options,

Greenfields at Geneva,Geneva, IL

Volunteers of America,Mary Marshall Assisted Living,

Arlington, VA

Presbyterian Homes and Services,Founders Ridge,Bloomington, MN

Volunteers of America,The Homestead at Anoka,

Anoka, MN

Presbyterian Homes and Services,Valley Ridge,

Burnsville, MN

2013 LEADINGAGE ZIEGLER 100GROWTH: NEW COMMUNITIES2012 LOCATIONS


NEW COMMUNITY DEVELOPMENT - CCRCSRECENT OPENINGS & PROJECTED OPENINGS

52

2011:15 Craigside, HIThe Stayton at Museum Way, TXAberdeen Heights, MOMirador, TX

2012:GreenFields of Geneva, IL Park Place, ILThe Admiral, ILCarondelet Village, MN

2013 & Beyond:Covenant Place of Lenexa, KSThe Village at Orchard Ridge, VAThe Terraces at Bonita Springs, FLThe Barrington of Carmel, INSearStone CCRC, NCHertiage at Fort Wayne, IN

The Terraces of Boise, IDThe Arlington of Naples, FLThe Crossings, TXMonteCedro, CASinai Residences, FLLutheran Village at Miller’s Grant, MD

The Crossings, TX

The Arlington of Naples, FLThe Terraces at Bonita Springs, FL

SELECT ZIEGLER FINANCEDNEW CAMPUSES

53

Aberdeen Heights

Mirador

Stayton at Museum WayPark Place of Elmhurst

The Terraces at Bonita Springs

The AdmiralAt The Lake

The Barrington of Carmel

15 Craigside

GreenFields of Geneva

54

621

46 51 43 5170

9269 65 74 81

3528

52

85 7074

9381

89

5446 33 20

8

0

20

40

60

80

100

120

140

160

180

200

Loca

tions

Purpose built Non-purpose built

34

73

131121 117

144151

181

123 111107 101

Source: Ziegler National CCRC Listing and Profile

43

Proj

ecte

d

ZIEGLER NATIONAL CCRC LISTING & PROFILECCRC INCREMENTAL GROWTH, BY CCRC TYPE (1950 TO PRESENT)

5 Year Increments

Fina

ncia

l Cri

sis

0

180

360

540

720

900

1,080

1,260

1,440

1,620

1,800

1950 1953 1956 1959 1962 1965 1968 1971 1974 1977 1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013

Com

mun

ities

Year

Purpose Built Non-PB All CCRCs

Growth of CCRCs, By CCRC TypeFROM 1950

55Source: Ziegler National CCRC Listing and Profile

ZIEGLER NATIONAL CCRC LISTING & PROFILE

Approximately 1,960 CCRCs

56

• Costs– Capital costs are coming

down– Construction costs are flat– Site acquisition costs are

down

• Capital Access– Fixed rate market has been

the source– Banks – still sitting on the

sidelines, appraisals problem

– Alternate bond structures have been created to fill bank void

• Third Party Seed Capital is available for qualified projects– Bond Anticipation Notes -

with lead time– Other project specific

options

• Sponsor Support – “skin in the game” is likely essential– Equity (can be minimal)– Liquidity Support

Agreements

NEW COMMUNITY GROWTH

NEW COMMUNITY GROWTHNATURAL INDUSTRY BUSINESS CYCLE PROGRESSION

57

How does your

organization foster

innovation?

Fina

ncia

l spo

nsor

ship

/com

mit

men

t by

pur

suin

g or

gani

zati

on

Strategic control by candidate organization

High Control Low Control

Joint Venture

Sponsorship Transition Options

Asset

Purchase

Affiliation & Merger

Management Company

Acquisition

SPONSORSHIP TRANSITION – CONTINUUM OF OPTIONS

58

21

1217

42

56

75

26

8

0

10

20

30

40

50

60

70

80

1980-1984 1985-1989 1990-1994 1995-1999 2000-2004 2005-2009 2010-2012 2012

Com

mun

itie

s

59

2013 LZ 100: Affiliations, Mergers & AcquisitionsSYSTEM GROWTH & CHANGE: EVIDENCE


5 Year IncrementsLast Year3 Years

2013 LEADINGAGE ZIEGLER 100GROWTH: MERGERS/ACQUISITIONS/AFFILIATIONS2012 LOCATIONS

Concordia Lutheran Ministries,Concordia at Wexford,

Wexford, PA

* Acquisitions of communities that were previously joint ventures.

Concordia Lutheran Ministries,Concordia of Franklin Park,

Sewickley, PA

Givens Estates Retirement Community,Givens Highland Farms,

Black Mountain, NC

Presbyterian Homes and Services,Walnut Ridge,

Clive, IA

The Eddy,Our Lady of Mercy Center,

Guilderland, NY

The Eddy,St. Peter’s Nursing and Rehab Center,

Albany, NY

The Eddy,Schuyler Ridge,Clifton Park, NY

Concordia Lutheran Ministries,Concordia at Sumner,

Copley, OH

2013 LZ 100AFFILIATIONS & ACQUISITIONS & MERGERS2000 - 2012

61

• Affiliation most often through NFP to NFP, often along similar faith based traditions


0

5

10

15

20

25

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

NH AL IL CCRC

Healthcare Reform

82

56

37

59

5055

61 6052

73

8693

48

0

10

20

30

40

50

60

70

80

90

100

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013YTD(August)

Hospital M&A Transactions

62SOURCE: Irving Levin Associates, Inc

HEALTHCARE (HOSPITAL) CONSOLIDATION TRENDS

GROWTH THROUGH CONSOLIDATION:AFFILIATION, MERGER & ACQUISITION

• Anticipate that in the next few years, most expansion into new physical locations will be through consolidation– Single-sites growing into systems– Systems looking to expand into new markets– Struggling single-sites or multi-sites exploring

affiliation strategies

• External influencers:– Healthcare reform– Statewide managed care organizations (size matters)– Technological investments– Consistent trends: healthcare, home health

63

THE GOOD NEWS & THE BAD NEWS

• The Good News – Not-for-profits as a whole are in a strong financial position– Innovation is blossoming with alternative revenue streams,

services and models– Success evident in HCBS offerings– Growth in units and communities through M&A continues– Expansion into more memory care within continuum– Supply continues to grow– For-profits have largely pulled out of new entry fee CCRCs

• The Bad News:– Barriers to new entry-free CCRCs are high– The for-profit growth in AL and MC has lessened the pull for

expansion among NFPs to new locations64

65

Creating a Stronger


Supply & Demand

The ImpactThe Consumer


Creating a Stronger


Operations

66

• Home Health• Hospice• PACE• Villages• Medical Homes• Senior Centers• Child care programs• Physician Services

• On-campus to existing residents vs off-campus

• “Housing with services”

CONTINUED DEMAND FOR SERVICES AT HOME

67

• HCBS for non-residents accounts for nearly 3% of revenue among 2013 LZ 100

• 61% of the LZ 100 provide HCBS

• Expansion of mission

• Joint ventures and affiliations

• Increased dependence on sophistication & core competencies for success

INCREASE IN HOME CARE USE, 2000 - 2010

Educational materials from ECRI Institute

Average Age of HCBS Providers

Average Age of Non-HCBS Provider

2013 LZ 100 81 yrs. 63 yrs.

HOME & COMMUNITY-BASED SERVICES (HCBS)

INCREASING SOPHISTICATION IN MEMORY CARE SERVICES

• Specialized Adult Day services– Memory Cafes– Memory Club– Friends Club

• Caregiver support– “Alzheimer’s Supper Club”

• Non-traditional services (nighttime respite; dinner)• Use of cognitive stimulation technologies• Collaboration opportunities with other organizations

(churches, senior centers)

68

69Credited to CliftonLarsonAllen 9/2013

1 25 6 7

9

13

25

0

10

20

30

1990 1998 2003 2004 2009 2010 2011 Projectedend of2015

Cumulative Number of CCaH Operations

CONTINUING CARE AT HOME (“CCRC WITHOUT WALLS”)

• Continued growth in CCaH model• Expected to nearly double within the next two years

PACE GROWTH

• 94 programs across 31 states• 30,000+ enrollees nationally• Few managed care states mandate PACE as option (NJ, KS)• Currently all NFP programs except one (may change in 2014

to more FPs)• Growing numbers

of state PACEassociations

70

PACE Enrollment Growth: 2006-2012

Source: National PACE Association

71

• Long Term Care Commission– Recommendations issued; funding source

still unclear• Affordable Care Act

– Medicaid expansion varies by state– Large employer mandate pushed back

• Reimbursement– Threatened profitability– ACA encouraging at home services to thwart decreased revenues– Long-term care insurance rates continue to increase

• IRS– Non-Profit Status issues continue to increase

• FASB – CCRC Entrance Fee Accounting

EXTERNAL ENVIRONMENT-HOT SPOTS

HEALTHCARE REFORM: THE LATEST

• Value Based Payments, ACOs and Bundled Payments Underway

• CMS Pilot Programs Continue– July release of results from

Pioneer ACO Model-23 ACOs participate (cost comparisons; shared savings; quality measures)

• Increased need for care coordination between long-term care, hospitals and safety-net providers (AAAs, social service agencies)

• Use of technology (EHRs, etc.)

72

Patients Populations

Reactive Preventive

Individual Providers

Integrated health teams & network

Individuals Communities

Sick-care system Well-care system

ACCOUNTABLE CARE ORGANIZATIONS: NATIONAL LANDSCAPE

73

478

278

200

160

100

200

300

400

500

Total IndividualACOs

Medicare ACOs(three models)

Private SectorACOs (existoutside ofMedicare)*

Medicaid ACOs(states)

Source: Centers for Medicaid & Medicare Services*Industry estimates of private sector

• 40% of Americans live in an area w/ an ACO

• 28% live in an area w/ two or more ACOs

74

• Some hospitals in acquisition mode; most looking for stronger integration and coordination

• Data, Data, Data! – Quality outcomes are king (LOS, readmissions)– Patient/resident satisfaction– Lower costs

• Technology• Strong record of governance• Size matters• Five-Star rating(s)

HEALTHCARE REFORM: WHAT WILL GET YOU A SEAT AT THE TABLE?

Creating a Stronger


75

Operations

The Consumer


Supply & Demand

Creating a Stronger


The Impact

• Relentless Commitment to Mission Through Bottom Line– NOM– Rate increases – outpacing CPI– Ongoing monitoring entry fee pricing and move-in incentives

• Marketing and Sales • Incremental improvements in housing market• Impact of Social Media

• Aging Plant• Governance

– Leadership development programs– Succession Planning – Benchmarking and Scorecards

• Technology

OPERATIONAL HOT SPOTS

76

TRENDS IN THE WORKFORCE

• Wave of retirees among top management• Despite wave of retirements in certain positions, overall, the

workforce is aging• Workforce shortages, particularly

with expansion of HCBS

• Increasing diversity of olderadult living alone presentsadditional staffing demands(highest proportion of seniorliving alone among minority populations)

• Population aging and so is your workforce!

77

Percent of 60+ Employed Population

Source: Centers for Retirement Research at Boston College, May 2013

• Personal care aides and home health aides are projected to be the fastest-growing occupations in the country between 2010 and 2020, increasing by 71% and 69%

• Positions for nursing aides, orderlies and attendants are expected to increase by 20%

• the number of women aged 25-54—the main labor pool that supplies direct-care workers—will only increase by about 1% compared to demand for these workers increasing by 48%.

78Source: Paraprofessional Healthcare Institute, July 2013

LABOR POOL CHALLENGES

79

55

105

155

205

255

305

355

405

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

(Day

s)

50th PERCENTILE


DAYS CASH ON HAND • Days Cash on Hand (DCOH) up for both provider types

• Remains in the +/- 300 day range of the past five to ten years for both provider types

Source: Preliminary Financial Ratios & Trend Analysis of CARF-CCAC Accredited Organizations, 2013.

FOCUS ON OPERATIONSDAYS CASH ON HAND

FOCUS ON OPERATIONSNET OPERATING MARGIN RATIO

80Source: Financial Ratios & Trend Analysis of CARF-CCAC Accredited Organizations, 2013.

• Slight decrease for multi-site providers to 6.77%. 2012 was the highest multi-site NOM in study history

• Single-site providers weakened to 6.55%, following years of sustained improvement

• Multi-site providers have nearly ‘caught up’ to single-site providers

• NOMs remain well-above recent averages

• Increased spending for marketing and HCBS for both provider types

NET OPERATING MARGIN

-8.00

-6.00

-4.00

-2.00

0.00

2.00

4.00

6.00

8.00

10.00

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

(Per

cent

ages

)

50th PERCENTILE


FOCUS ON OPERATIONSNOM-ADJUSTED (NOM-A) RATIO

81Source: Financial Ratios & Trend Analysis of CARF-CCAC Accredited Organizations, 2013.

NET OPERATING MARGIN-ADJ

5.50

7.50

9.50

11.50

13.50

15.50

17.50

19.50

21.50

23.50

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

(Per

cent

ages

)

50th PERCENTILE


• NOM-A highlights importance of cash flow from entrance fees, compared to NOM (where net entrance fee receipts are excluded)

• Creditors, regulators, rating agencies, etc. acknowledge importance of entrance fees in offsetting healthcare risk, operating costs

• NOM-A relatively flat for both provider types due to an increase in entrance fees refunded, for both provider types, that offset entrance fees received

82Source: NIC MAP Monitor Report 2nd Q 2013

83%

85%

87%

89%

91%

93%

95%

2006 2007 2008 2009 2010 2011 2012 2013

CCRC Occupancy by Profit Status; MAP314Q05 – 2Q13

Not-For-Profit

For-Profit

NFP CCRC occupancy consistently higher than

for-profit CCRCs

NOT-FOR-PROFIT DIFFERENTIATOR

FOCUS ON OPERATIONSOCCUPANCY

83

In addition: • Non-profit

occupancy continues approximately 60 bps above for-profit occupancy

• Occupancy rates are somewhat stronger for 100 largest MSAs

• NIC research shows that entrance fee occupancy has certainly been affected by recent economic challenges

85.0%

86.0%

87.0%

88.0%

89.0%

90.0%

91.0%

92.0%

93.0%

94.0%

95.0%

4Q20

051Q

2006

2Q20

063Q

2006

4Q20

061Q

2007

2Q20

073Q

2007

4Q20

071Q

2008

2Q20

083Q

2008

4Q20

081Q

2009

2Q20

093Q

2009

4Q20

091Q

2010

2Q20

103Q

2010

4Q20

101Q

2011

2Q20

113Q

2011

4Q20

111Q

2012

2Q20

123Q

2012

4Q20

121Q

2013

2Q20

13Entrance Fee Rent

Source: NIC MAPTM 6/30/13, Most recent available data as of 9/18/13

DEBT SERVICE COVERAGE RATIO

84

• Debt Service Coverage (DSC) ratio is generally considered to be the most important ratio for evaluating an organization’s financial viability

• Reflects ability to fund debt service with cash flow from net cash revenues and net entrance fees

• DSC weakened slightly for multi-sites and to a greater degree for single-sites

• Both provider types impacted by an increase in entrance fees refunded and an increase in principal payments

Source: Financial Ratios & Trend Analysis of CARF-CCAC Accredited Organizations, 2012.

1.00

1.50

2.00

2.50

3.00

3.50

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

(Rat

io)

50th PERCENTILE


DEBT SERVICE COVERAGE

• Building your Brand– Continued name changes

• Resource Challenged Providers: Obtaining the most “Bang for your Buck”– Those with lower occupancy most likely with oldest physical

plant and need a greater commitment with marketing expenditures

• Creating that initial “WOW” experience for….– Prospective residents AND Adult Children

• Continued pressure on marketing counselor to be savvy and experienced

85

MARKETING STRATEGIES AND TRENDS

• Home prices historically peak during the summer months.

• Every city tracked by the S&P Index is showing very positive signs (Composite-20 up ~12%).

• Chicago, after 66 consecutive months of negative YOY growth, has finally showed improvement.

• Seven housing markets had greater than 15% year-over-year growth.

86

0.0%

4.0%

8.0%

12.0%

16.0%

20.0%

24.0%

28.0%

Com

posi

te-1

0Co

mpo

site

-20

Phoe

nix

- A

ZLo

s A

ngel

es -

CA

San

Die

go -

CA

San

Fran

cisc

o -

CAD

enve

r -

COW

ashi

ngto

n -

DC

Mia

mi -

FLTa

mpa

- F

LA

tlan

ta -

GA

Chic

ago

- IL

Bost

on -

MA

Det

roit

- M

IM

inne

apol

is -

MN

Char

lott

e -

NC

Las

Vega

s -

NV

New

Yor

k -

NY

Clev

elan

d -

OH

Port

land

- O

RD

alla

s -

TXSe

attl

e -

WA

S&P/Case-Shiller® Home Price Index% Change (YOY)

June 2013

Source: S&P/Case-Shiller® Home Price Index, August 2013

2013 REAL ESTATE MARKETS: S&P CASE-SHILLER® INDEX

87

0

10

20

30

40

50

60

70

80

All Adults(2013)

All Adults(2005)

Ages 50-64 Ages 65+(2013)

Ages 65+(2009)

Percentage of Internet Users Who Use Social Networking Sites

IMPACT OF SOCIAL MEDIA

• Technology increasingly a differentiator• Must have vs. “Nice to have”

– Healthcare reform– Relationship to outcomes

• Telehealth (Behavioral and Biometric)• Electronic Health Records• Personal Emergency Response Systems• Health Information Exchange

• Increase in companies offering aging-related technologies

88

TECHNOLOGY: A GAME CHANGER

75.5%83.0%

9.6%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

EMR/EHR Systems POC/POS Systems None

89Responses add up to more than 100% as question was “check all that apply” N=94

DOES YOUR ORGANIZATION USE ANY OF THE FOLLOWING ELECTRONIC DOCUMENTATION TECHNOLOGIES?2013 LZ 100

• The use of the Internet for those over 65 has gone from 19% in 2008 to 40% in 2010 to 53% in 2012 (Pew Research Center, 2012)

• Nationally, more than 59% of those over 65 have made an online purchase (Forrester Research, 2012)

90

Re-thinking, re-committing and re-tasking those charged with governance to better contend with the ‘new reality’

• Leadership Development– National LeadingAge program extending to state

organizations

• Recruitment, orientation, education and engagement of board members– Diversity of talents, backgrounds, commitment a must

• Succession Planning an increasing focus of many senior living providers

• Drivers of growth– Need strategic, business-minded, mission-driven thinkers to

challenge the organization91

GOVERNANCE: LIVING THE “NEW REALITY”

Creating a Stronger


92

The Impact


Supply & Demand

Operations Creating a Stronger


The Consumer

WHAT IS THE IMPACT OF ALL OF THIS?

• Identify the intersections between:– Understanding your consumer– Knowing your local demand and supply characteristics– Appreciating how the environment can shape your

organization and foster innovation– Refining operations to satisfy short-term goals and positioning

the organization for future growth and evolution

Embrace the opportunitiesAdvance the not-for-profit imperative

93

STATE OF SENIOR LIVING CAPITAL MARKETSSection 2

94

Steve JeffreyManaging DirectorSenior Living Investment BankingZiegler

95

• Total industry volume estimated to exceed $4.0 billion for the second consecutive year

• Fixed-rate and bank credit volume driven primarily by refundings in the first half of the year, with more activity expected around new money financings and bank refinancing options in the second half of the year

• Long-term rates driven upward in June by rise in Treasury yields and massive cash flows out of general and high yield municipal bond funds

• Bank market has remained active with a focus on direct purchase options with bank LOC options increasingly rare

STATE OF SENIOR LIVING CAPITAL MARKET TRENDS

FINANCING A SENIOR LIVING PROJECT SENIOR LIVING FINANCING DECISION TREE

96

UseCashFund

new project

Conventional Bank Loan

Taxable Bonds

Tax-Exempt

Variable Rate*

Unrated Rated GovernmentPrograms

(HUD/Freddie/Fannie)

Fixed Rate*

Bank Direct Purchase/ Enhanced

LOC

ARROSSM

TEMPSSMBank Direct Purchase

Fixed/VariableCombination

Taxable

*Synthetic fixed rate debt and synthetic floating rate debt are also possible through the use of interest rate management products (swaps).

IssueDebt

0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

3.00%

3.50%

4.00%

4.50%

3 Month 6 Month 1 Year 3 Year 5 Year 7 Year 10 Year 30 Year

Yield %

Maturities

4 Years Ago 3 Years Ago 2 Years Ago Friday 9/13/13

HISTORICAL INTEREST RATES

97

Treasury Yield Curve

SOURCE: Ziegler Investment Banking, as of 9/13/13

VRDBs Direct Bank Purchase

Traditional Fixed-Rate Bonds

98Source: Ziegler Investment Banking, as of 9/13/13

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

9.00

10.00

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

SIFMA LIBOR (1 Month)

SIFMA 1 Mo. LIBOR

Minimum: 0.05% 0.18%

Maximum: 7.96% 8.69%

Average: 2.49% 3.58%

Current: 0.06% 0.18%

HISTORICAL INTEREST RATES (SENIOR LIVING)

$1,5

77

$1,4

90

$2,2

46

$2,5

06

$2,3

20

$2,2

93

$3,1

42

$3,5

24

$5,0

77

$4,9

82

$2,8

49

$2,8

60

$3,7

80

$3,1

60

$3,0

32

$4,1

38

$5,9

11

$7,3

94

$2,4

80

$1,8

01

$2,6

37

$1,1

48

$3,6

65

$3,1

00

$475

$1,0

66

$1,3

00

$1,5

00

$1,2

50

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

Est 2

013

(In M

illio

ns)

Other Bank Credit Par Volume

99

• Fixed-rate market shut down from Fall 2008 to Fall 2009• 2009-2010 volume due to pent-up demand following shut-down• Bank credit continues in the form of direct purchase

# ofIssues 277153 186 286 186 223 216 284 447 335 191 171 216 194 201 218 240 291 86 59 5885 65

NOT-FOR-PROFIT SENIOR LIVING FINANCINGS

SOURCE: Thomson Financial Securities Data, as of 9/13/13; and Ziegler Investment Banking , 2013 estimates thru 12/31/13

Estimated Other/Bank

Credit

100

$1,2

87

$1,1

86

$1,4

48

$1,6

30

$1,5

00

$1,6

63

$2,2

43

$2,4

45

$2,5

22

$4,0

58

$2,4

34

$2,6

05

$2,9

66

$2,1

46

$2,0

92

$2,4

42

$3,1

45

$3,9

34

$1,3

20

$1,1

74

$1,9

00

$968

$1,3

81

$1,4

00

$290

$304 $7

98 $876

$820

$630

$899 $1

,079

$2,5

55

$924

$415

$255

$814

$1,0

14$9

40

$1,6

96

$2,7

66

$3,4

60

$1,1

60

$627

$737

$180

$2,2

84

$1,7

00

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,00019

90

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

Est.

201

3

New Money Refunding

In M

illio

ns

VOLUME BY PURPOSE


• Trends for refinancings follow borrowing cost movement– greater proportion in 2012-2013• Average new money per year for last five years was approximately $1.3 billion• New money average for 5 most recent years far below 5 year average “pre-crash” of $2.8 billion

SOURCE: Thomson Financial Securities Data, as of 9/13/13; and Ziegler Investment Banking 2013 estimates thru 12/31/13

101

VOLUME BY CREDIT STRUCTURE

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,00019

90

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

Est.

201

3

Non-Rated (Unenhanced) Rated (Unenhanced) Letter Of Credit Backed Bond Insurance FHA/GNMA

In M

illion

s


• 2009 was a “transition” year as bank LOCs “evaporated”• Nearly all publicly issued debt is done through the fixed rate markets

SOURCE: Thomson Financial Securities Data, as of 9/13/13; and Ziegler Investment Banking 2013 estimates thru 12/31/13

• Compared with one year ago, the sector experienced a net loss of one rating; there is also one less organization rated by multiple rating agencies.

102

NON-PROFIT SENIOR LIVING CREDIT RATING TRENDSCUMULATIVE SENIOR LIVING RATINGS

NOTE: Of the 145 organizations, 1 has some type of unique third party support essential to the rating; and 2 ratings backed by guarantees; and 2 ratings based on bond insured program; both are excluded from the above totals.

• All of these agencies publish guidelines for their ratings

• CCAC, Fitch & S&P publish rating category medians for key ratios

0

20

40

60

80

100

120

140

160

180

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

YTD

2013

S&P Fitch Moody's

Rated Bond Issues Through 9/13/13

S&P 65

Fitch 96

Moody’s 3

*164

*19 organizations have debt rated by more than one rating agency. Therefore, there are a total of 145 organizations with rated debt.


NON-PROFIT SENIOR LIVINGCREDIT RATING TRENDS

NON-PROFIT SENIOR LIVING CREDIT RATING TRENDS

103

19

38

8

0

28

54

13

12 1 0 00

10

20

30

40

50

60

A CategoryRatings

BBB CategoryRatings

BB CategoryRatings

OtherCategoryRatings

S&P Fitch Moody's

Rating Categories

“A” & “BBB” 142

“BB” 21

Other 1

164

Ratings Distribution by Category

• Roughly 25% of individual CCRCs are rated

• Some of these are within the rating of a larger obligated group


NON-PROFIT SENIOR LIVING CREDIT RATING TRENDSUPGRADES AND DOWNGRADES

104Indicates change in rating for an organizationSOURCE: Ziegler Investment Banking, as of 9/13/13

• 2013 YTD has the best Upgrade/Downgrade Ratio since 1997• FitchRatings assigned Stable outlook to the sector in fall 2012• S&P maintains negative outlook but is cautiously optimistic

• Recent Downgrades– Deterioration in cash combined with

physical plant needs– Additional debt and project risk

105

INSTITUTIONAL PURCHASERS OFNOT-FOR-PROFIT SENIOR LIVING DEBT

• Top 20 institutional buyers purchase just over 80% of senior living debt

• Top 5 buyers purchase roughly 40%

• Top 5 buyers have purchased between 40 and 75 individual issues since 2005

• Some differentiation among rated and non-rated buyers: 3 firms appear in Top 5 for both rated and non-rated issues

Top 5

Top 10

Top 20

All Institutions

0%

20%

40%

60%

80%

100%

Percen

t of P

ar Value

Purchased

Institutional Purchasers of NFP Senior Living Debt All Fixed Rate2005 ‐ 2012

Ziegler UnderwrittenSource: ZIB

MMD 30-Year "AAA"

Minimum: 2.69%

Maximum: 4.51%

Average: 3.40%

Current: 4.41%

2.00%2.25%2.50%2.75%3.00%3.25%3.50%3.75%4.00%4.25%4.50%4.75%5.00%5.25%5.50%5.75%6.00%6.25%6.50%6.75%7.00%

1/2/

2013

1/6/

2013

1/10

/201

31/

14/2

013

1/18

/201

31/

22/2

013

1/26

/201

31/

30/2

013

2/3/

2013

2/7/

2013

2/11

/201

32/

15/2

013

2/19

/201

32/

23/2

013

2/27

/201

33/

3/20

133/

7/20

133/

11/2

013

3/15

/201

33/

19/2

013

3/23

/201

33/

27/2

013

3/31

/201

34/

4/20

134/

8/20

134/

12/2

013

4/16

/201

34/

20/2

013

4/24

/201

34/

28/2

013

5/2/

2013

5/6/

2013

5/10

/201

35/

14/2

013

5/18

/201

35/

22/2

013

5/26

/201

35/

30/2

013

6/3/

2013

6/7/

2013

6/11

/201

36/

15/2

013

6/19

/201

36/

23/2

013

6/27

/201

37/

1/20

137/

5/20

137/

9/20

137/

13/2

013

7/17

/201

37/

21/2

013

7/25

/201

37/

29/2

013

8/2/

2013

8/6/

2013

8/10

/201

38/

14/2

013

8/18

/201

38/

22/2

013

8/26

/201

38/

30/2

013

9/3/

2013

9/7/

2013

9/11

/201

39/

15/2

013

106

HISTORICAL INTEREST RATES & PRICING SPREADSSELECT 2013 SPREADS ABOVE 30-YEAR MMD “AAA”

106

Yields and Spreads above 30 year MMD forspecific “rated” transactions indicated

(1) Final maturity of greater than 30 years(2) Final maturity of less than 30 yearsSource: Thomson Financial Municipal Market Monitor, as of 9/18/13

1/24/13ABHOWPleasanton, CA4.125%+139 bps (1)

S&P BBB /Fitch BBB+

1/31/13Appalachian Christian VillageJohnson City, TN4.80% +193 bps (1)

Fitch BBB-

2/7/13Emerald HeightsSeattle, WA3.85% +99 bps (1)

Fitch A-

3/5/13Fleet LandingAtlantic Beach, FL3.99% +105 bps (1)

Fitch BBB

4/23/13Kendal at OberlinOberlin, OH3.65% +75 bps (2)

S&P A-

7/16/13Covenant

Westminster, CO5.769% +177 bps (2)

Fitch BBB+ / S&P BBB

8/1/13BHI Senior LivingIndianapolis, IN

6.10% +188 bps (2)

Fitch BBB+

8/13/13United Methodist Retirement CommunityChelsea, MI6.25% +188 bps (1)

Fitch BBB+

2.00%2.25%2.50%2.75%3.00%3.25%3.50%3.75%4.00%4.25%4.50%4.75%5.00%5.25%5.50%5.75%6.00%6.25%6.50%6.75%7.00%

1/2/

2013

1/6/

2013

1/10

/201

31/

14/2

013

1/18

/201

31/

22/2

013

1/26

/201

31/

30/2

013

2/3/

2013

2/7/

2013

2/11

/201

32/

15/2

013

2/19

/201

32/

23/2

013

2/27

/201

33/

3/20

133/

7/20

133/

11/2

013

3/15

/201

33/

19/2

013

3/23

/201

33/

27/2

013

3/31

/201

34/

4/20

134/

8/20

134/

12/2

013

4/16

/201

34/

20/2

013

4/24

/201

34/

28/2

013

5/2/

2013

5/6/

2013

5/10

/201

35/

14/2

013

5/18

/201

35/

22/2

013

5/26

/201

35/

30/2

013

6/3/

2013

6/7/

2013

6/11

/201

36/

15/2

013

6/19

/201

36/

23/2

013

6/27

/201

37/

1/20

137/

5/20

137/

9/20

137/

13/2

013

7/17

/201

37/

21/2

013

7/25

/201

37/

29/2

013

8/2/

2013

8/6/

2013

8/10

/201

38/

14/2

013

8/18

/201

38/

22/2

013

8/26

/201

38/

30/2

013

9/3/

2013

9/7/

2013

9/11

/201

39/

15/2

013

107

HISTORICAL INTEREST RATES & PRICING SPREADSSELECT 2013 SPREADS ABOVE 30-YEAR MMD “AAA”

107

Yields and Spreads above 30 year MMD forspecific “unrated” transactions indicated

(1) Final maturity of greater than 30 years(2) Final maturity of less than 30 yearsSource: Thomson Financial Municipal Market Monitor, as of 9/18/13

4/30/13Plymouth Place

Ottawa, IL6.00% +316 bps (1)

5/22/13Lutheran Homes, Irmo, SC

5.14% +210 bps (1)

6/4/13PRCN, Seattle, WA5.043% +175 bps (1)

6/5/13Country Manor

Sartell, MN5.50%

+221 bps (1)

6/18/13Inverness VillageTulsa, OK5.875%+235 bps (2)

MMD 30-Year "AAA"

Minimum: 2.69%

Maximum: 4.51%

Average: 3.40%

Current: 4.41%

6/27/13North Hill,Needham, MA6.68%+247 bps (1)

7/16/13Presbyterian ManorsWichita, KS6.57% +257 bps (2)

8/1/13Magnolia ManorColumbus, GA6.50%+228 bps (1)

2013 SENIOR LIVING BANK CREDIT MARKETS OVERVIEW

• Banks of all sizes continue to have a strong appetite for senior living and are aggressively competing for new opportunities.

• Clear movement toward direct purchase financings or direct loans with LOC options rare due to BASEL III reserve requirements requiring equal reserves.

• Cost of bank credit is falling and term lengths are extending. Direct purchase commitments of 5-7 years likely with up to 10 years also a possibility. Direct purchase fixed or floating options available. Yield protection language is typically standard.

• In 2012-2013YTD, the top 5 banks captured just over 50% of the Ziegler-facilitated transactions

108

109

• LOC enhanced debt has been replaced by direct bank purchase, taxable construction loans

SOURCE: Thomson Financial Securities Data, as of 9/13/13, Ziegler Investment Banking, Other Bank Credit Estimates thru 12/31/13

BANK CREDIT ACTIVITY (SENIOR LIVING)

$-

$500

$1,000

$1,500

$2,000

$2,500

$3,000

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

Est

.

Volu

me

Mill

ions

Letter of Credit Backed VRDB's & Other Bank Credit Volume1990 - 2013

Other Bank Credit (Est.)

Letter of Credit Backed

110

BANK CREDIT ACTIVITY (SENIOR LIVING)ZIEGLER FACILITATED NEW MONEY VS EXISTING DEBT

$14.9

$67.2 $92.5 $148.5

$108.6

$178.1 $220.3

$645.2 $569.5

$270.7

$0

$100

$200

$300

$400

$500

$600

$700

$800

2009 2010 2011 2012 2013 YTD

Bank

Cre

dit

Vol

ume

(MM

)

Bank Credit ActivityZiegler Facilitated

New Money v. Existing Debt

New Money

Exiting Debt

Source: ZIB 09/01/13

111

Variable Rate Demand Bonds vs Revenue Bond Index vs Fed Fund Target Rate vs 30-Year NR Institutional


0.00

2.00

4.00

6.00

8.00

10.00

12.00

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

Variable Rate Demand Bonds Revenue Bond Index

Fed Fund Target Rate 30-Yr NR-Institutional

VRDBsRevenue

Bond IndexFed Fund

Target Rate30-YR NR

InstitutionalMinimum: 0.05% 4.06% 0.25% 5.00%Maximum: 8.00% 7.83% 8.25% 10.75%Average: 2.50% 5.60% 3.46% 7.16%Current: 0.06% 5.31% 0.25% 7.00%

HISTORICAL INTEREST RATES (SENIOR LIVING)

STATE OF SENIOR LIVING CAPITAL MARKETS UPDATE

Section 3

112

Mike McDanielSenior Managing Director Capital MarketsZiegler

113

STATE OF SENIOR LIVING CAPITAL MARKETS FIXED RATE MARKETS

• Historic Lows

• Supply is Favorable

• Buyers Have Money

“Now History”

“Supply is Still Favorable”

“Buyers Have Little, if any, Money”

• Credit Risk

114


• Housing Market

115


• Uncertainty

116


STATE OF SENIOR LIVING CAPITAL MARKETS MUNICIPAL VOLUME

117

TOTAL NFP SENIOR LIVING $3.665 Billion

(1.0% of Municipal)

Healthcare$29.8 Billion

8.0%

$376.2 BillionTOTAL MUNICIPAL

SOURCE: Totals from Thomson Securities Data and The Bond Buyer as of 1/2/13

118

STATE OF SENIOR LIVING CAPITAL MARKETS FREQUENCY IN THE MARKETS: ZIEGLER 2012

Issue Date State Total Par Rating Project TypeFriendship Village of Tempe March AZ $77,030,000 Unrated RefundingInverness Village May OK $47,130,000 Unrated RefundingWake Robin May VT $23,835,000 Unrated RefundingCapital Manor May CA $50,135,000 Unrated RefundingHolland Home Obligated Group June MI $50,390,000 BB+ RefundingKahala Senior Living Community June HI $73,400,000 BBB- RefundingACTS Retirement-Life Communities July FL/GA/PA $105,875,000 A-/BBB+ RefundingNazareth Living Center July MO $8,035,000 Unrated New Money/ExpansionThe Blakeford at Green Hills July TN $29,210,000 BBB- RefundingThe Barrington of Carmel August IN $119,020,000 Unrated New CampusCovenant Retirement Communities August CO $150,170,000 BBB+/BBB- RefundingWestminster Village of Terre Haute August IN $12,175,000 Unrated RefundingCountry Manor Campus August MN $20,410,000 Unrated RefundingThe Terraces at San Joaquin Gardens (ABHOW) September CA $71,035,000 Unrated New Money/RepositioningTerwilliger Plaza October OR $18,245,000 BBB RefundingMasonic Homes of Kentucky October KY $49,655,000 Unrated New Money/RefundingChristian Living Communities October CO $49,195,000 Unrated RefundingAsbury Pennsylvania Obligated Group October PA $51,640,000 Unrated RefundingLutheran Homes & Services Obligated Group October IL $98,500,000 Unrated New Money/RefundingLindenGrove, Inc. October WI $17,390,000 Unrated RefundingThe United Methodist Village-Godfrey November IL $10,365,000 Unrated RefundingKendal at Ithaca November NY $8,985,000 BBB+ RefundingEpiscopal Communities & Services November CA $64,160,000 A- RefundingEpiscopal Senior Communities and Services December CA $127,480,000 BBB+/BBB- New CampusEpworth Village December OK $78,635,000 Unrated New Money/RefundingMRC The Crossing Point December TX $7,645,000 Unrated BANSEl Castillo Retirement Community December NM $24,030,000 BBB- New Money/RefundingClare Oaks December IL $14,000,000 Unrated New Money2012 Total $1,457,775,000

Non-Profit Senior Living Fixed Rate Issues 2012

Source: Ziegler Investment Banking

STATE OF SENIOR LIVING CAPITAL MARKETS FREQUENCY IN THE MARKETS: ZIEGLER 2013

119Source: Ziegler Investment Banking *In Process

Issue Date State Total Par Rating Project TypeAmerican Baptist Homes of the West OG Jan CA $71,250,000 BBB+/BBB New Money/ExpansionAppalachian Christian Village Jan TN $19,520,000 BBB- New Money/RefundingEmerald Heights Feb WA $29,845,000 A- RefundingFleet Landing Mar FL $40,050,000 BBB RefundingKendal at Oberlin Apr OH $21,620,000 A- RefundingPlymouth Place Arp IL $24,765,000 NR RefundingLutheran Homes of South Carolina May SC $35,450,000 NR New Money/RefundingCountry Manor Campus Jun MN $13,445,000 NR New Money/ExpansionPresbyterian Retirement Communities Northwest Jun WA $14,840,000 NR RefundingInverness Village Jun OK $24,110,000 NR RefundingNorth Hill Jul MA $93,625,000 NR New Money/ExpansionPresbyterian Manors Jul KS $85,055,000 NR New Money/RefundingCovenant Retirement Communities Jul CA/CO $59,995,000 BBB+/BBB- New Money/RefundingMagnolia Manor Aug GA $35,840,000 NR RefundingBHI Senior Living Aug IN $22,015,000 BBB+ New MoneyUnited Methodist Retirement Communities Aug MI $11,000,000 BBB+ New Money2013 Total $602,425,000*Rockwood Retirement Communities Day-to-Day WA $108,000,000 NR*Peace Village Sep IL $25,000,000 NR*Poway RHF Housing Oct CA $15,000,000 NR*Fleet Landing Oct FL $39,500,000 BBB*East Ridge Retirement Village Nov FL $70,000,000 NR*Ohio Presbyterian Retirement Services Nov OH $50,000,000 BBB2013 Total $909,925,000

Non-Profit Senior Living Fixed Rate Issues 2013

STATE OF SENIOR LIVING CAPITAL MARKETS FIXED-RATE DISTRIBUTION (CONT’D)

120

97%

3%

Institutional Retail

92%

8%

Institutional Retail

• In past 12 months, Ziegler’s retail and institutional distribution of total underwritten product was 5% and 95%, respectively

Non-RatedAugust 2012 – September 2013

RatedAugust 2012 – September 2013

Source: Investment Banking, as of September, 2013

2

2.5

3

3.5

4

4.5

5

5.5

6

Jan-

08

Apr

-08

Jul-

08O

ct-0

8Ja

n-0

9A

pr-0

9Ju

l-09

Oct

-09

Jan-

10

Apr

-10

Jul-

10O

ct-1

0Ja

n-1

1A

pr-1

1Ju

l-11

Oct

-11

Jan-

12

Apr

-12

Jul-

12O

ct-1

2Ja

n-1

3A

pr-1

3Ju

l-13

Perc

ent

(%)

'AAA' MMD Index30-Year Maturity Yield

121Source: Thomson Financial Municipal Market Monitor, as of 9/13/12

4.39%

STATE OF CAPITAL MARKETSHISTORICAL INTEREST RATES

Minimum: 2.47%Maximum: 5.92%Average: 4.05%Current: 4.39%

122

Senior Living Credit Spreads - “Bubbles and Pops”

2.00

3.00

4.00

5.00

6.00

7.00

8.00

9.00

10.00

11.00

12.00

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

30-YR NR NewCampus

30-YR NR-Institutional

30-YR NR-Retail

30-YR "BBB"

30-YR "A"

MMD 30-YR "AAA"

Tech Bubble Real Estate Bubble

NR = Non-Rated


STATE OF SENIOR LIVING CAPITAL MARKETS HISTORICAL INTEREST RATES

2.00

3.00

4.00

5.00

6.00

7.00

8.00

9.00

10.00

11.00

12.00

2008

2009

2010

2011

2012

2013

30-YR NR NewCampus

30-YR NR-Institutional

30-YR NR-Retail

30-YR "BBB"

30-YR "A"

MMD 30-YR "AAA"

123

NR = Non-Rated


MMD 30-YR "AAA"Maximum: 5.92Minimum: 2.47Average: 4.03Current: 4.39

STATE OF SENIOR LIVING CAPITAL MARKETS HISTORICAL INTEREST RATES (CONT’D)

Senior Living Rates: Visual Spread

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0

Sep-

03

Mar

-04

Sep-

04

Mar

-05

Sep-

05

Mar

-06

Sep-

06

Mar

-07

Sep-

07

Mar

-08

Sep-

08

Mar

-09

Sep-

09

Mar

-10

Sep-

10

Mar

-11

Sep-

11

Mar

-12

Sep-

12

Mar

-13

Sep-

13

Perc

en

t (%

)

Senior Living Yields 30-Year Maturity, 'A' Category

10-Year Average

1990 - YTD Average

A Category Yield

STATE OF SENIOR LIVING CAPITAL MARKETSHISTORICAL INTEREST RATES (CONT’D)

124

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0

Sep-

03

Mar

-04

Sep-

04

Mar

-05

Sep-

05

Mar

-06

Sep-

06

Mar

-07

Sep-

07

Mar

-08

Sep-

08

Mar

-09

Sep-

09

Mar

-10

Sep-

10

Mar

-11

Sep-

11

Mar

-12

Sep-

12

Mar

-13

Sep-

13

Perc

en

t (%

)

Senior Living Yields 30-Year Maturity, 'BBB' Category

BBB Category Yield

10-Year Average

1990 - YTD Average

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0

11.0

Sep-

03

Mar

-04

Sep-

04

Mar

-05

Sep-

05

Mar

-06

Sep-

06

Mar

-07

Sep-

07

Mar

-08

Sep-

08

Mar

-09

Sep-

09

Mar

-10

Sep-

10

Mar

-11

Sep-

11

Mar

-12

Sep-

12

Mar

-13

Sep-

13

Perc

en

t (%

)

Senior Living Yields 30-Year Maturity, Non-Rated

Non-Rated Category Yield

10-Year Average

1990 - YTD Average

Source: Ziegler Capital Markets


125Source: Ziegler Capital Markets

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0

Sep-

03

Mar

-04

Sep-

04

Mar

-05

Sep-

05

Mar

-06

Sep-

06

Mar

-07

Sep-

07

Mar

-08

Sep-

08

Mar

-09

Sep-

09

Mar

-10

Sep-

10

Mar

-11

Sep-

11

Mar

-12

Sep-

12

Mar

-13

Sep-

13

Perc

en

t (%

)

Senior Living Yields 30-Year Maturity, 'A' Category

10-Year Average

1990 - YTD Average

A Category Yield



3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0

Sep-

03

Mar

-04

Sep-

04

Mar

-05

Sep-

05

Mar

-06

Sep-

06

Mar

-07

Sep-

07

Mar

-08

Sep-

08

Mar

-09

Sep-

09

Mar

-10

Sep-

10

Mar

-11

Sep-

11

Mar

-12

Sep-

12

Mar

-13

Sep-

13

Perc

en

t (%

)

Senior Living Yields 30-Year Maturity, 'BBB' Category

BBB Category Yield

10-Year Average

1990 - YTD Average



3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0

11.0

Sep-

03

Mar

-04

Sep-

04

Mar

-05

Sep-

05

Mar

-06

Sep-

06

Mar

-07

Sep-

07

Mar

-08

Sep-

08

Mar

-09

Sep-

09

Mar

-10

Sep-

10

Mar

-11

Sep-

11

Mar

-12

Sep-

12

Mar

-13

Sep-

13

Perc

en

t (%

)

Senior Living Yields 30-Year Maturity, Non-Rated

Non-Rated Category Yield

10-Year Average

1990 - YTD Average

STATE OF SENIOR LIVING CAPITAL MARKETSRATES, CASH FLOWS & MARKET FAILS

128

0.00

2.00

4.00

6.00

8.00

10.00

12.00

-$20,000

-$15,000

-$10,000

-$5,000

$0

$5,000

$10,000

$15,000

Jan-

90

Jan-

91

Jan-

92

Jan-

93

Jan-

94

Jan-

95

Jan-

96

Jan-

97

Jan-

98

Jan-

99

Jan-

00

Jan-

01

Jan-

02

Jan-

03

Jan-

04

Jan-

05

Jan-

06

Jan-

07

Jan-

08

Jan-

09

Jan-

10

Jan-

11

Jan-

12

Jan-

13

Cash Flow 30-YR NR-Institutional MMD 30-YR "AAA"

Source: Investment Company Institute, Cash Flows as of July, 2013, and Ziegler Investment Banking, as of 9/13/13

2.00

3.00

4.00

5.00

6.00

7.00

8.00

9.00

10.00

11.00

12.0020

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

30-YR NRInstitutional

30-Yr MMD

129

30-Year NR Institutionalvs

MMD 30-Year “AAA”

NR = Non-Rated

• Fed May 22 statement

• Detroit bankruptcy, Puerto Rico credit concerns

• T/E Mutual Fund outflows


30-YR NRInstitutional

MMD 30-YR"AAA"

Maximum: 10.75 6.04Minimum: 5.10 2.47Average: 6.97 4.48Current: 7.00 4.39

STATE OF SENIOR LIVING CAPITAL MARKETS HISTORICAL INTEREST RATES (CONT’D)

STATE OF SENIOR LIVING CAPITAL MARKETS ALL MUNICIPAL BOND FUNDS: INFLOWS/OUTFLOWS

130Source: LipperFMI Data Service, as of 9/11/13

All Municipal Bond Fund Weekly In/Outflows

($7,000,000)

($6,000,000)

($5,000,000)

($4,000,000)

($3,000,000)

($2,000,000)

($1,000,000)

$0

$1,000,000

$2,000,000

$3,000,000

01/0

7/09

02/0

7/09

03/0

7/09

04/0

7/09

05/0

7/09

06/0

7/09

07/0

7/09

08/0

7/09

09/0

7/09

10/0

7/09

11/0

7/09

12/0

7/09

01/0

7/10

02/0

7/10

03/0

7/10

04/0

7/10

05/0

7/10

06/0

7/10

07/0

7/10

08/0

7/10

09/0

7/10

10/0

7/10

11/0

7/10

12/0

7/10

01/0

7/11

02/0

7/11

03/0

7/11

04/0

7/11

05/0

7/11

06/0

7/11

07/0

7/11

08/0

7/11

09/0

7/11

10/0

7/11

11/0

7/11

12/0

7/11

01/0

7/12

02/0

7/12

03/0

7/12

04/0

7/12

05/0

7/12

06/0

7/12

07/0

7/12

08/0

7/12

09/0

7/12

10/0

7/12

11/0

7/12

12/0

7/12

01/0

7/13

02/0

7/13

03/0

7/13

04/0

7/13

05/0

7/13

06/0

7/13

07/0

7/13

08/0

7/13

09/0

7/13

In/Outflows ($000s)

-$12,000,000

-$10,000,000

-$8,000,000

-$6,000,000

-$4,000,000

-$2,000,000

$0

$2,000,000

$4,000,000

$6,000,000

Jan-

2012

Feb-

2012

Mar

-201

2

Apr-

2012

May

-201

2

Jun-

2012

Jul-2

012

Aug-

2012

Sep-

2012

Oct-

2012

Nov-

2012

Dec-

2012

Jan-

2013

Feb-

2013

Mar

-201

3

Apr-

2013

May

-201

3

Jun-

2013

Jul-2

013

Aug-

2013

Sep-

2013

In/Outflows (000s)

131

All Municipal Bond Funds Inflows/Outflows (Monthly)2012 – 2013

Source: LipperFMI Data Service, as of 8/22/12

STATE OF SENIOR LIVING CAPITAL MARKETS MUNICIPAL BOND FUNDS FLOWS

$200.0

$250.0

$300.0

$350.0

$400.0

$450.0

$500.0

$550.0

$600.0

$650.0

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

In Billions

132Source: Investment Company Institute, as of July, 2013

$535.6B

Changes in Municipal Bond Fund Asset Values (1996 – 2013)

STATE OF SENIOR LIVING CAPITAL MARKETS CHANGES IN MUNICIPAL BOND FUND ASSET VALUES

133

Senior Living Interest Rate Ranges Tax-Exempt Revenue Bonds (1)

1) Non-state specific2) Long-term (25-30 Yr), fixed rate


STATE OF SENIOR LIVING CAPITAL MARKETS CURRENT INTEREST RATES (SENIOR LIVING)

SENIOR LIVINGFINANCING STRUCTURES

(Insurers Ratings: Fitch/S&P/Moody's)

CREDITENHANCEMENT

Unrated - Start-Up Communities 8.25% - 8.50% -- 8.25% - 8.50% + 386 to + 411 + 294 to + 319Unrated - Existing Stable Communities 7.00% - 7.25% -- 7.00% - 7.25% + 261 to + 286 + 169 to + 194Unrated - Ziegler Retail 6.75% - 7.00% -- 6.75% - 7.00% + 236 to + 261 + 144 to + 169"BBB" Rated (Fitch, S&P or Moody's) 6.25% - 6.50% -- 6.25% - 6.50% + 186 to + 211 + 94 to + 119"A" Rated (Fitch, S&P or Moody's) 5.70% - 5.85% -- 5.70% - 5.85% + 131 to + 146 + 39 to + 54"AA" Rated (FHA) 5.00% - 5.15% 0.50% 5.50% - 5.65% + 111 to + 126 + 19 to + 34

AVERAGE LONG-TERM INTEREST RATE

RANGES (2)

ALL-ININTEREST

COST

AVERAGE RATESPREAD TO

"AAA" MARKET*

SPREAD TOREVENUE BOND

INDEX

SUMMARY

• Interest rates

• Credit spreads

• Supply/Demand

• Fed

134

WRAP-UP & PREVIEW OF WHAT’S TO COME

135


136

137

2103 LEADINGE AGE ANNUAL MEETING: DALLAS

138

The 2013 Ziegler Reception at The House of Blues

Tuesday, October 29, 20138:00 p.m. - 11:00 p.m.The House of Blues2200 N Lamar Street | Dallas, TX 75202

QUESTIONS & ANSWERSB.C. Ziegler and Company is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be addressed to the National Registry of CPE Sponsors, 150 Fourth Avenue North, Suite 700, Nashville, TN, 37219-2417. Website: www.nasba.org. Attendees are eligible to receive up to 14.0 credits for attendance at the 16th Annual Ziegler Senior Living Finance + Strategy Conference. No prerequisites or advance preparation are required for this group-live educational conference. Program level is basic.

For more information regarding administrative policies such as complaint and refund, please contact our offices at 312-705-7262. No fees are required for senior living providers or capital markets participants (Letter of Credit Banks or Investors).

©2013 B.C. Ziegler and Company | Member SIPC and FINRA | www.ZieglerSeniorLivingFinance.com

Documents

State of Senior Living and the Senior Living Capital Markets 2013