Seniors housing and care’s market value is $260 billion and growing.
Seniors housing private and public investment returns outperformed other commercial real estate property investments during the past five years.
Three of the 10 largest REITs are now health care REITs.
Seniors housing was a resilient real estate sector during the economic recession.
Strong outlook for seniors housing market fundamentals.
Market Values by Property Type Source: National Multifamily Housing Council, Mortgage Bankers Association, REIS, Smith Travel Research, American Hotel and Lodging Association, NIC Research Estimated Market Values ($B) as of 2010Q4 3
Size of the Senior Housing Market Source: NIC Research Estimated National Counts as of 2010Q4 9
Manages $48.8 billion of real estate assets and securities on behalf of institutional and private investors
A pioneer investing institutional capital in the senior housing sector, AEW made its first investment in 1997 and has acquired, repositioned and/or developed over 11,600 senior housing units with a gross property value in excess of $1.7 billion
Investments have primarily been joint ventures with experienced national, regional and local senior housing operators, both public and private
Investments have focused on age – restricted multifamily, independent, assisted living, memory care and CCRC communities across the U.S. and Canada
AEW Overview 1
Rent Growth in Seniors Housing Vs. Apartments Rent growth remained positive for seniors housing throughout the most recent business cycle Rent growth has been less volatile for seniors housing than for apartments
Rent levels for independent living remain at all time highs, while assisted living rents are only down 0.3% from peak levels; rents for all other property types remain below peak Over the past year, rents have seen positive growth for independent living, assisted living and multifamily properties 2 RENT GROWTH COMPARISONS AS OF Q2 2011
Assisted living and apartment vacancy rates have seen the most improvement since their cyclical high points, but remain above their cyclical low points 2 VACANCY RATE COMPARISONS DURING THIS BUSINESS CYCLE
Seniors Housing Returns Vs. Other Property Types
AEW Real Estate Market Outlook
On a three, five and eight year basis, seniors housing outperforms the overall NCREIF NPI index and the apartment index. The one-year and 2 nd quarter underperformance reflects the “catch up” the other sectors are undergoing after their oversized write-downs. 4
Seniors Housing Income Returns Vs. Other Property Types
AEW Real Estate Market Outlook
Income returns for seniors housing outperforms the overall NCRIEF NPI as well as the apartment index for all periods. 5
Q2’11/Q2’10 New York (tightest) 92.1%/91.7% Las Vegas (loosest) 85.1%/81.3% U.S. 88.0%/87.5% Above the line implies improvement; below the line implies deterioration SENIORS HOUSING OCCUPANCY RATES: CURRENT QUARTER VERSUS YEAR AGO AEW Real Estate Market Outlook 6
Rent levels for independent living remain at all time highs, while assisted living rents are only down 0.3% from peak levels; rents for all other property types remain below peak Assisted living and apartment vacancy rates have seen the most improvement since their cyclical high points 2