ASSISTED AND INDEPENDENT LIVING FACILITY PRICES ON THE RISE,SKILLED NURSING FACILITY PRICES LOWEST IN TEN YEARS According to Irving Levin Associates, Inc.

NEW CANAAN, CT – March 10, 2004 - End-of-year results indicate that in 2003, the average price per bed paid for skilled nursing facilities plummeted, while resurgence was seen in the average price per unit of assisted living and independent living facilities, according to a report by Irving Levin Associates, Inc., a research and publishing firm that tracks mergers and acquisitions in the seniors’ housing and health care markets.

The Senior Care Acquisition Report, Ninth Edition, reveals that in 2003 the average price paid for skilled nursing facilities declined by more than 17% to $31,650 per bed, which represents the lowest average price paid since 1993. Last year this sector saw an unusually low percentage of skilled nursing facility transactions at prices above $50,000 per bed, although some high-priced deals were made. Preliminary statistics show that 56% of the deals made in 2003 were priced below $30,000 per bed, compared with 39% in 2002.

“It appears that the skilled nursing facility market has finally bottomed out, and we expect that the surge in public equity prices for the large chains in 2003 will translate into higher bed prices in 2004, especially with the higher Medicare rates,” commented Stephen M. Monroe, editor of the Report.

In the assisted living market, the average price per unit sold in 2003 rebounded by 11% from the dismal results of 2002 to just over $72,500 per unit, although the record pricing seen in 2000 and 2001 has not returned. A major trend the Report will examine is the difference in pricing of stabilized facilities, which appear to have sold at prices significantly above the overall average, versus non-stabilized facilities, which sold at levels well below the overall average price paid.

The independent living market, the thinnest of the three senior care sectors, saw a jump in average price per unit of nearly 11% compared with 2002. At least 50% of these communities had an assisted living component, including the six highest priced deals on a per-unit basis.

“The assisted and independent living market hit bottom in 2002 and we have recovered as the pace of new construction slowed and occupancy rates increased in the past two years,” stated Mr. Monroe. Cap rates across the board decreased from their unusually high levels in 2002, including the nursing home sector, despite the significant drop in the per-bed price for nursing facilities.

The final results of last year’s M&A activity in the seniors’ housing market are being published in The Senior Care Acquisition Report, Ninth Edition, which will be available in April 2004. This latest edition of the Report contains statistics on the nursing home, assisted living and retirement housing merger and acquisition market, including prices per bed or unit, capitalization rates, income multiples and regional statistics, as well as transaction information on each of the publicly announced senior care, home health care and hospice acquisitions made in 2003.

Click here to get more information or to order any of our Publications.