Emeritus and Blackstone Joint Venture Acquires 132 Sunwest Senior Living Communities

Emeritus Corporation , a national provider of assisted living and memory care services to seniors, today announced that the Sunwest purchase and sale transaction has closed. The previously announced joint venture between affiliates of Emeritus, Blackstone Real Estate Advisors (an affiliate of The Blackstone Group), and Columbia Pacific Advisors, completed the transaction on August 5, 2010. This Joint Venture has acquired or intends to acquire 144 communities formerly operated by affiliates of Sunwest Management (“Sunwest”) for approximately $1.2 billion.

Mr. Daniel Baty, Chairman and Co-Chief Executive Officer, stated, “We are pleased that the Sunwest transaction has closed and we are able to welcome over 9,200 residents and 5,900 employees to the Emeritus family. The Joint Venture will contribute to our growth over the next several years and should provide a significant return for the Company over time.”

Beyond the previously announced 5% management fee which represents an accretive cash flow opportunity to the Company, a greater potential for long-term value lies in Emeritus’ right of first opportunity to purchase the Sunwest communities, or the Joint Venture interests. Additionally, the Company has the ability to earn additional cash distribution incentives if the rate of return on membership interests in the Joint Venture exceeds established thresholds in the coming years.

The transaction, as communicated previously, includes 144 communities, of which 132 closed on August 5, 2010 and 12 were deferred until finalization of consents with lenders and other matters. Of the 144 community portfolio, Emeritus will begin managing all but one as of the August 5th closing date. The 144 communities consist of approximately 11,769 units. The Joint Venture’s annualized revenues for the total portfolio approximate $346.8 million, with average occupancy of approximately 79.0% and an average rate per occupied unit of approximately $3,108.

Emeritus funded approximately $19.0 million as its equity contribution at closing, representing an approximate equity interest of 5.8% in the Joint Venture. It is expected that the equity interest of Emeritus, as well as that of the other members, will change slightly over time as the Joint Venture completes the deferred transactions, the final rollover member amounts are determined, and additional anticipated funding for capital expenditure projects is completed.

After completion of this transaction, Emeritus operates 460 communities in 44 states with a capacity of over 39,000 units and a resident capacity of over 45,000.

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