The document prepared herein is the copyrighted intellectual property of Rainmaker Marketing Corporation, Inc. As such, no retransmission of this document, in whole or in part, by any means (written, oral and/or electronic) is authorized without the express written consent of Rainmaker Marketing Corporation, Inc. This document is a technical report for discussion purposes only and is not a warrantee or guarantee of future financial results of operations.
Rainmaker Marketing Corporation, Inc. makes the following certifications and/or renders the following opinions:
Conflicts-Of-Interest. Rainmaker Marketing Corporation, Inc. (“Rainmaker”) does not own an equity ownership interest, right, option or other interest in the entity that holds legal title to the proposed project or proposed project site.
Compensation. Rainmaker’s compensation is not:
Tied to Rainmaker’s opinion regarding the viability of the market in which the owner intends to develop and operate the proposed project; and
Tied to the provision of funding that is Rainmaker’s duty to provide; and
Tied to any other contingency that, would in fact and/or in spirit, be construed to apply to the proposed project other than the completion of this report.
Experience. Rainmaker is providing a professional opinion regarding the market viability of the proposed project based upon Rainmaker’s experience in rendering essentially similar services for essentially similar projects in the past. Rainmaker has issued hundreds of professional opinions on projects of this type in the past. Rainmaker has previously issued market feasibility opinions of the subject marketing area for the purposes of determining the feasibility of new construction of senior housing facilities.
Report Life. Rainmaker issues this report for the period of December 2007 to June 2008, after which, this report may be considered no longer germane due to potential changes in the market.
Scope of Work. The scope of work performed by Rainmaker included the following:
An analysis to determine the most likely geographical primary marketing area the proposed project would likely access on an ongoing basis; and
An initial demographics analysis of the demand for to-be-built senior housing at the independent living, assisted living and dementia care levels (rental plan housing programs) using the primary end-user demographic profile; and
A field investigation and survey of the existing competition of senior housing facilities located within the primary marketing area of the proposed project site; and
An analysis of the resulting facility information gleaned from the field investigation; and
A final demographic analysis of the demand for to-be-built senior housing at the independent living, assisted living and dementia care levels using the competitive facility information to modify the final analysis in terms of changes in the supply of housing within the primary marketing area; and
The drafting of the final report.
Liability Limitations & Miscellaneous Disclosures
Rainmaker Marketing Corporation, Inc. issues this report subject to the following limitations:
Third-Party Information. Rainmaker Marketing Corporation created this report using information provided by third-parties. As such, the entire market feasibility analysis is subject to errors and/or omissions created by potential inaccuracies pertaining to said third-party reports and Rainmaker Marketing Corporation, Inc. is not responsible for any resulting direct and/or indirect damages that may result from use of this information and/or the third-party reports.
Regulatory Limitations. Rainmaker Marketing Corporation created this report subject to the current regulatory requirements pertaining to projects essentially similar to that being proposed by the owner. As such, changes in the regulatory processes, regulations and limitations may in fact exist and/or be in the process of being adopted that could affect the viability of the proposed project that are beyond the reasonable control of Rainmaker Marketing Corporation to predict and/or quantify in terms of said impact(s) and Rainmaker Marketing Corporation shall not be responsible for changes in regulatory policies that may reduce and/or eliminate the nature of the economic opportunity the proposed project presents.
Industry Benchmarks. The resulting report provided herein is based upon data that was compiled, organized and/or analyzed using current industry benchmarks. To the extent these benchmarks do not reflect the current and/or future market potential of the proposed project, Rainmaker Marketing Corporation cannot be responsible.
Miscellaneous Matters & Definition of Terms
The following additional matters are cited for the reader’s edification:
Numbering. The document contains line numbering for the purposes of quick-reference. Paragraph numbers are entered sequentially in the document.
Exhibits. For the purposes of presenting information, the document makes use of the following types of exhibits:
Pictures – copied and pasted as bitmap images; and
Maps – copied and pasted as bitmap images; and
Graphs – copied and pasted as bitmap images.
Captions – appear above the given exhibit.
Some bitmap images may be enlarged for the purposes of better viewing the resulting information.
Navigation. The report includes a Table of Contents, Table of Exhibits and Index. Double-clicking an entry (or CTRL-click) will allow the document to automatically navigate to the given entry in the document (when document is viewed on the computer).
The following terms used in this Memorandum shall have the following definitions:
Activities of Daily Living (ADLs). Refers to certain personal care activities that serve as a measure of a person’s ability to live outside a congregate living and/or group living setting.
Alzheimer’s Assisted Living Care Facility (ALZ/ALCF). Refers to a dementia/Alzheimer’s specialty care facility operated pursuant to the assisted living care facility regulatory requirements.
Assisted Living Care Facility (ALCF). Refers to a senior housing facility operated pursuant to the assisted living care facility regulatory requirements.
Competitive Compendium. Refers to the existing senior housing facilities analyzed by the Consultant for the purposes of this market feasibility analysis.
Consultant. Refers to Rainmaker Marketing Corporation, Inc.
Core-Based Statistical Area (CBSA). Refers to any city having a population of at least 10,000 persons. This unit of quantification is promulgated by the Census Bureau and replaces the Metropolitan Statistical Area (MSA) level of demographic quantification.
Gross Demand. Refers to the demand for to-be-built senior housing predicated upon the assumed number of cohorts in the demographic pool that are age qualified, income qualified, living status qualified and are theoretically likely to require group quarters living arrangements, and said pool of cohorts is modified to reflect the potential impact of Adult Children Households in terms of in-migration for the purposes of transferring a senior living outside the marketing area into a facility located within the PMA.
Independent Living Facility (ILF). Refers to a senior housing community that offers housing services, but no healthcare services for seniors.
Instrumental Activities of Daily Living (IADLs). Refers to certain activities that serve as a measure of a person’s ability to live unassisted in the community at large.
Memorandum. Refers to this document.
Metropolitan Statistical Area (MSA). Refers to a unit of demographic quantification commonly used to describe cities having populations of at least 50,000 persons. This unit of demographic quantification is being replaced by the CBSA standard (see above).
Net Demand. Refers to that pool of cohorts consisting of Gross Demand (see above) theoretically available for residency in a senior housing program within the PMA after the pool of cohorts has been adjusted to reflect the reduction of Gross Demand due to changes in the existing and/or future forecasted changes in the supply of senior housing facilities not including the proposed Project.
Net Buildable Demand. Refers to the demand for new housing construction based upon the number of income-qualified, ADL/IADL qualified, age-qualified prospects that remain in the demographics analysis pool after all competing facilities have theoretically been filled to 100% capacity on an ongoing basis.
Owner. Refers to Shadow Mountain Plaza, LLC.
Owner’s Program. Refers to the capitalization, construction, marketing, operations, investment goals, operating requirements and strategies the owner has placed on the development of the proposed Project.
Primary Marketing Area (PMA). Refers to that geographical area, within which, a given senior housing project is expected to garner 75% of its routine revenues.
Project. Refers to the proposed ALCF project of the Owner.
Project Site. Refers to the real property located at 9100 Oracle Road, Oro Valley, Arizona.
Rainmaker. Refers to Rainmaker Marketing Corporation, Inc. – the Consultant.
Report. Refers to this document.
Secondary Marketing Area. Refers to that geographical area that extends beyond the PMA, within which, the proposed Project is anticipated to conduct all of its trade. For the purposes of this Report (i.e.: the quantification of new construction demand on a basis that could reasonably be described as a conservative analysis) the impact of the Secondary Marketing Area demand for new construction is not included in the Net Buildable Demand computations set forth herein.