10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2013

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from            to           

Commission file number: 000-54685

CNL Healthcare Properties, Inc.

(Exact name of registrant as specified in its charter)

Maryland	27-2876363
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
CNL Center at City Commons 450 South Orange Avenue Orlando, Florida	32801
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code (407) 650-1000

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes x  No¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes x    No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	x  (Do not check if a smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes ¨    No    x

The number of shares of common stock of the registrant outstanding as of August 2, 2013 was 40,326,053.

CNL HEALTHCARE PROPERTIES, INC. AND SUBSIDIARIES

INDEX

		Page
PART I. FINANCIAL INFORMATION
Item 1.	Condensed Consolidated Financial Information (unaudited):
	Condensed Consolidated Balance Sheets	1
	Condensed Consolidated Statements of Operations	2
	Condensed Consolidated Statements of Comprehensive Loss	3
	Condensed Consolidated Statements of Stockholders’ Equity	4
	Condensed Consolidated Statements of Cash Flows	5
	Notes to Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	45
Item 4.	Controls and Procedures	46
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	47
Item 1A.	Risk Factors	47
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	47
Item 3.	Defaults Upon Senior Securities	49
Item 4.	Mine Safety Disclosures	49
Item 5.	Other Information	49
Item 6.	Exhibits	49
Signatures		50
Exhibits		51

PART I    FINANCIAL INFORMATION

Item 1.  Financial Statements

CNL HEALTHCARE PROPERTIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

ASSETS	June 30,         2013			December 31,   2012
Real estate assets:
Real estate investment properties, net (including VIEs $16,943,329 and $0, respectively)	$	292,822,471		$	230,410,959
Real estate under development, including land (including VIEs $16,597,176 and $8,399,079, respectively)		16,844,776			8,461,571
Total real estate assets, net		309,667,247			238,872,530
Investment in unconsolidated entities		75,267,852			64,560,061
Cash (including VIEs $28,989 and $8,734, respectively)		55,114,656			18,261,750
Intangibles, net (including VIEs $457,158 and $0, respectively)		9,279,426			7,024,470
Deposits		4,594,213			282,079
Loan costs, net (including VIEs $746,272 and $548,157, respectively)		3,973,359			3,338,286
Other assets (including VIEs $4,876 and $230,536, respectively)		3,733,726			3,984,849
Note receivable from related party		1,812,891			—
Deferred rent (including VIEs $8,615 and $0, respectively)		1,679,718			843,370
Restricted cash (including VIEs $236,590 and $236,000, respectively)		1,392,682			609,908
Total assets	$	466,515,770		$	337,777,303
LIABILITIES AND STOCKHOLDERS’ EQUITY
Mortgage and other notes payable (including VIEs $14,559,761 and $2,000, respectively)	$	169,857,272		$	193,151,591
Accounts payable and accrued expenses (including VIEs $2,377,260 and $318,047, respectively)		6,661,602			2,685,000
Due to related parties (including VIEs $90,279 and $71,482, respectively)		2,528,097			1,289,880
Total liabilities		179,046,971			197,126,471
Commitments and contingencies (Note 14)
Stockholders’ equity:
Preferred stock, $0.01 par value per share, 200,000,000 shares authorized and unissued		—			—
Excess shares, $0.01 par value per share, 300,000,000 shares authorized and unissued		—			—
Common stock, $0.01 par value per share, 1,120,000,000 shares authorized; 36,611,960 and 18,447,553 shares issued and 36,556,511 and 18,446,504 shares outstanding as of June 30, 2013 and December 31, 2012, respectively		365,552			184,467
Capital in excess of par value		314,322,207			156,199,995
Accumulated loss		(19,119,088	)		(12,480,338	)
Accumulated other comprehensive income		130,754			—
Accumulated distributions		(8,230,626	)		(3,253,292	)
Total stockholders’ equity		287,468,799			140,650,832
Total liabilities and stockholders’ equity	$	466,515,770		$	337,777,303

The abbreviation VIEs above mean variable interest entities

See accompanying notes to condensed consolidated financial statements.

1

CNL HEALTHCARE PROPERTIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

	Quarter Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
Revenues:
Rental income from operating leases	$	4,068,800		$	1,922,467		$	7,553,207		$	2,863,982
Resident fees and services		4,527,377			—			8,845,095			—
Other revenues		12,838			—			12,838			—
Total revenues		8,609,015			1,922,467			16,411,140			2,863,982
Expenses:
Property operating expenses		3,330,765			—			6,547,848			—
General and administrative		1,567,696			575,352			2,676,728			1,059,400
Acquisition fees and expenses		2,365,781			75,772			2,944,307			1,975,185
Asset management fees		598,034			210,125			1,586,654			280,167
Property management fees		485,786			33,137			941,375			49,515
Depreciation and amortization		2,563,452			631,883			4,882,369			842,079
Total expenses, net		10,911,514			1,526,269			19,579,281			4,206,346
Operating income (loss)		(2,302,499	)		396,198			(3,168,141	)		(1,342,364	)
Other income (expense):
Interest and other income		788			5,245			1,923			5,346
Interest expense and loan cost amortization		(1,678,058	)		(753,922	)		(4,914,594	)		(1,428,761	)
Equity in earnings (loss) from unconsolidated entities		1,181,752			(773,628	)		1,460,135			(773,628	)
Total other income (expense)		(495,518	)		(1,522,305	)		(3,452,536	)		(2,197,043	)
Loss before income taxes		(2,798,017	)		(1,126,107	)		(6,620,677	)		(3,539,407	)
Income tax expense		(31,385	)		—			(18,073	)		—
Net loss	$	(2,829,402	)	$	(1,126,107	)	$	(6,638,750	)	$	(3,539,407	)
Net loss per share of common stock (basic and diluted)	$	(0.09	)	$	(0.16	)	$	(0.25	)	$	(0.71	)
Weighted average number of shares of common stock outstanding (basic and diluted)		30,811,974			6,833,099			26,758,120			4,984,881

See accompanying notes to condensed consolidated financial statements.

2

CNL HEALTHCARE PROPERTIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(UNAUDITED)

	Quarter Ended June 30						Six Months Ended June 30,
	2013			2012			2013			2012
Net loss	$	(2,829,402	)	$	(1,126,107	)	$	(6,638,750	)	$	(3,539,407	)
Other comprehensive income:
Unrealized gain on derivative financial instrument		211,166			—			130,754			—
Total other comprehensive income		211,166			—			130,754			—
Comprehensive loss	$	(2,618,236	)	$	(1,126,107	)	$	(6,507,996	)	$	(3,539,407	)

See accompanying notes to condensed consolidated financial statements.

3

CNL HEALTHCARE PROPERTIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED)

For the Six Months Ended June 30, 2013 (unaudited) and the Year Ended December 31, 2012

	Common Stock						Capital in									Accumulated Other		Total
	Number			Par			Excess of			Accumulated			Accumulated			Comprehensive		Stockholders’
	of Shares			Value			Par Value			Loss			Distributions			Income		Equity
Balance at December 31, 2011		1,357,572		$	13,576		$	11,504,283		$	(1,759,580	)	$	(55,892	)	$	—	$	9,702,387
Subscriptions received for common stock through public offering and distribution reinvestment plan		16,850,196			168,503			168,097,804			—			—			—		168,266,307
Stock distributions		239,785			2,398			(2,398	)		—			—			—		—
Redemption of common stock		(1,049	)		(10	)		(10,464	)		—			—			—		(10,474	)
Stock issuance and offering costs		—			—			(23,389,230	)		—			—			—		(23,389,230	)
Net loss		—			—			—			(10,720,758	)		—			—		(10,720,758	)
Cash distributions, declared and paid or reinvested ($0.39996 per share)		—			—			—			—			(3,197,400	)		—		(3,197,400	)
Balance at December 31, 2012		18,446,504			184,467			156,199,995			(12,480,338	)		(3,253,292	)		—		140,650,832
Subscriptions received for common stock through public offering and distribution reinvestment plan		17,782,961			177,830			177,329,637			—			—			—		177,507,467
Stock distributions		373,303			3,733			(3,733	)		—			—			—		—
Redemptions of common stock		(46,257	)		(478	)		(423,295	)		—			—			—		(423,773	)
Stock issuance and offering costs		—			—			(18,780,397	)		—			—			—		(18,780,397	)
Net loss		—			—			—			(6,638,750	)		—			—		(6,638,750	)
Other comprehensive income		—			—			—			—			—			130,754		130,754
Cash distributions, declared and paid or reinvested ($0.19998 per share)		—			—			—			—			(4,977,334	)		—		(4,977,334	)
Balance at June 30, 2013		36,556,511		$	365,552		$	314,322,207		$	(19,119,088	)	$	(8,230,626	)	$	130,754	$	287,468,799

See accompanying notes to condensed consolidated financial statements

4

CNL HEALTHCARE PROPERTIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	Six Months Ended
	June 30,
	2013			2012
Operating activities:
Net cash flows provided by operating activities	$	3,176,041		$	496,601
Investing activities:
Acquisition of properties		(69,455,100	)		(83,650,000	)
Development of properties		(6,390,705	)		—
Investment in unconsolidated entities		(12,175,524	)		(59,269,271	)
Changes in restricted cash		(782,774	)		(39,400	)
Capital expenditures		(79,203	)		—
Deposits on real estate		(4,358,725	)		—
Issuance of note receivable to related party		(1,812,891	)		—
Other		—			(9,087	)
Net cash flows used in investing activities		(95,054,922	)		(142,967,758	)
Financing activities:
Subscriptions received for common stock through public offering		174,851,669			68,533,285
Payment of stock issuance costs		(18,525,209	)		(10,418,795	)
Distributions to stockholders, net of distribution reinvestments		(2,321,536	)		(339,296	)
Redemption of common stock		(219,140	)		(10,474	)
Proceeds from mortgage note payable		92,615,761			111,400,000
Principal payment on mortgage note payable		(115,910,080	)		(21,522,000	)
Lender deposits		(66,907	)		—
Payment of loan costs		(1,692,771	)		(2,091,152	)
Net cash flows provided by financing activities		128,731,787			145,551,568
Net increase in cash		36,852,906			3,080,411
Cash at beginning of period		18,261,750			10,001,872
Cash at end of period	$	55,114,656		$	13,082,283
Supplemental disclosure of non-cash investing and financing activities:
Amounts incurred but not paid (including amounts due to related parties):
Stock issuance and offering costs	$	850,644		$	196,753
Loan costs	$	169,307		$	—
Accrued development costs	$	2,222,001		$	—
Redemptions payable	$	204,633		$	—
Construction management fee	$	44,024		$	—
Stock distributions (at par)	$	3,733		$	570
Loan cost amortization capitalized on development properties	$	31,240		$	—
Unrealized gain on derivative financial instrument	$	130,754		$	—

See accompanying notes to condensed consolidated financial statements.

5

CNL HEALTHCARE PROPERTIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SIX MONTHS ENDED JUNE 30, 2013

(UNAUDITED)

1. Organization

CNL Healthcare Properties, Inc. (the “Company”) is a Maryland corporation incorporated on June 8, 2010 that intends to elect to be taxed as a real estate investment trust (“REIT”) for U.S. federal income tax purposes for the year ended December 31, 2012.

The Company’s investment focus is on acquiring properties within the senior housing and healthcare sectors primarily in the United States. Senior housing asset classes the Company may acquire include active adult communities (age-restricted and age-targeted housing), independent and assisted living facilities, continuing care retirement communities, memory care facilities and skilled nursing facilities. Healthcare asset classes the Company may acquire include medical office buildings, as well as other types of healthcare and wellness-related properties such as physicians’ offices, specialty medical and diagnostic service providers, specialty hospitals, walk-in clinics and outpatient surgery centers, hospitals and inpatient rehabilitative facilities, long-term acute care hospitals, pharmaceutical and medical supply manufacturing facilities, laboratories and research facilities and medical marts. The Company expects to primarily lease its properties to third-party tenants but may also lease to wholly-owned taxable REIT subsidiaries (“TRS”) and engage independent third-party managers under management agreements to operate the properties as permitted under applicable tax regulations. The Company also may invest in and originate mortgage, bridge or mezzanine loans or in entities that make investments similar to the foregoing.

On June 27, 2011, the Company commenced its initial public offering of up to $3.0 billion of shares of common stock (the “Offering”), including shares being offered from its distribution reinvestment plan (the “Reinvestment Plan”), pursuant to a registration statement on Form S-11 under the Securities Act of 1933. The shares are being offered at $10.00 per share, or $9.50 per share pursuant to the Reinvestment Plan, unless changed by the board of directors. The Company plans to extend the Offering through June 27, 2014. In certain cases, the current Offering could be extended by an additional 180 days.

The Company is externally managed and advised by CNL Healthcare Corp., (the “Advisor”), a Florida corporation. The Advisor is responsible for managing the Company’s day-to-day affairs and for identifying and making acquisitions and investments on its behalf. The Company has also retained CNL Healthcare Manager Corp., (the “Property Manager”) to manage its properties under a six year property management agreement.

2. Summary of Significant Accounting Policies

Basis of Presentation and Consolidation — The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and note disclosures required by generally accepted accounting principles in the United States (“GAAP”). The unaudited condensed consolidated financial statements reflect all normal recurring adjustments, which, in the opinion of management, are necessary for the fair statement of the Company’s results for the interim period presented. Operating results for the quarter or six months ended June 30, 2013 may not be indicative of the results that may be expected for the year ending December 31, 2013. Amounts as of December 31, 2012 included in the unaudited condensed consolidated financial statements have been derived from audited consolidated financial statements as of that date but do not include all disclosures required by GAAP. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012.

The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.

6

CNL HEALTHCARE PROPERTIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SIX MONTHS ENDED JUNE 30, 2013

(UNAUDITED)

2. Summary of Significant Accounting Policies (continued)

Reclassifications — Certain prior period amounts in the unaudited condensed consolidated financial statements have been reclassified to conform to the current period presentation with no effect on previously reported total assets and total liabilities, net loss or stockholders’ equity.

Derivative Financial Instruments — The Company, through an unconsolidated equity method investment, uses a derivative financial instrument to partially offset the effect of fluctuating interest rates on the cash flows associated with the unconsolidated equity method investment’s variable-rate debt. Upon entry into a derivative, the Company, through its unconsolidated equity method investment, formally designates and documents the financial instrument as a hedge of a specific underlying exposure, as well as the risk management objectives and strategies for undertaking the hedge transaction. The Company, through its unconsolidated equity method investment, accounts for derivatives through the use of a fair value concept whereby the derivative positions are stated at fair value in the accompanying condensed consolidated balance sheets. The fair value of derivatives used to hedge or modify risk fluctuates over time. As such, the fair value amounts should not be viewed in isolation, but rather in relation to the cash flows or fair value of the underlying hedged transaction and to the overall reduction in the exposure relating to adverse fluctuations in interest rates on the variable-rate debt.

The Company’s realized and unrealized gain (loss) on derivative financial instruments designated by the unconsolidated equity method investment as cash flow hedges are reported as a component of other comprehensive income (loss), a component of stockholders’ equity, in the accompanying condensed consolidated statements of comprehensive income (loss) to the extent they are effective; reclassified into earnings on the same line item associated with the hedged transaction and in the same period the hedged transaction affects earnings. Any ineffective portions of cash flow hedges are reported in the accompanying condensed consolidated statements of operations as derivative gain (loss). Realized and unrealized gain (loss) on derivative financial instruments designated as cash flow hedges that are entered into by the Company’s equity method investments are also reported as a component of the Company’s other comprehensive income (loss) in proportion to the Company’s ownership percentage in the investment, with reclassifications and ineffective portions being included in equity in earnings (loss) of unconsolidated entities in the accompanying condensed consolidated statements of operations.

Shares Based Payments to Non-Employees — In connection with the expense support and restricted stock agreement (the “Expense Support Agreement”) described in Note 9, “Related Party Arrangements,” the Company may issue subordinated forfeitable restricted stock (“Restricted Stock”) to the Advisor on a quarterly basis in exchange for providing expense support in the event that cash distributions declared exceed modified funds from operations as defined by the Expense Support Agreement. No Restricted Stock has been issued as of June 30, 2013, however, the Company expects to issue approximately 0.05 million shares during the third quarter of 2013 in connection with expense support of $0.5 million that was provided during the quarter ended June 30, 2013.

The Restricted Stock is forfeited if shareholders do not ultimately receive their original invested capital back with at least a 6% annualized return of investment upon a future liquidity event of the Company. As a result of the uncertainty whether the Restricted Stock shares ever vest since there is no ability to determine whether the economic hurdle and liquidation event conditions will be met, the shares granted will have no value upon issuance. The achievement of these hurdles is subject to many factors including future market conditions, valuations for the Company and its assets and the performance of the Company’s various assets and is not within the control of the Advisor. Upon issuance of Restricted Stock, the Company measures the fair value at its then-current lowest aggregate fair value pursuant to ASC 505-50. However, given that performance is outside the control of the Advisor and involves both market conditions and counterparty performance conditions, the shares are treated as unissued for accounting purposes and a fair value of zero is recognized as compensation expense until the instruments vest.

7

CNL HEALTHCARE PROPERTIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SIX MONTHS ENDED JUNE 30, 2013

(UNAUDITED)

2. Summary of Significant Accounting Policies (continued)

On the date in which the Advisor satisfies the vesting criteria, the Company remeasures the fair value of the Restricted Stock pursuant to ASC 505-50 and records expense equal to the difference between the original fair value and that of the remeasurement date. Until such time, the Company concludes there would be no fair value recognition of expense and no adjustment to stockholders’ equity related to the issuance of Restricted Stock to the Advisor in lieu of payment in cash for advisory services.

Pursuant to the Expense Support Agreement, the Advisor shall be the record owner of the Restricted Stock until the shares of common stock are sold or otherwise disposed of, and shall be entitled to all of the rights of a stockholder of the Company including, without limitation, the right to vote such shares (to the extent permitted by the Articles) and receive all dividends and other distributions paid with respect to such shares. All dividends or other distributions actually paid to the Advisor in connection with the Restricted Stock shall vest immediately and will not be subject to forfeiture. As such, the Company recognizes expense related to the dividends on the Restricted Stock shares as declared.

The Company will only include the Restricted Stock in the calculation of diluted earnings per share to the extent their effect is dilutive and the vesting conditions have been satisfied as of the reporting date.

Adopted Accounting Pronouncements — In February 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No. 2013-02, “Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income (AOCI).” This update clarified the guidance in subtopic 220 and requires preparers to report, in one place, information about reclassifications out of AOCI. The ASU also requires companies to report changes in AOCI balances. Effective January 1, 2013, the Company adopted this ASU. The adoption of this update did not have a material impact on the Company’s financial position, results of operations or cash flows.

In December 2011, the FASB issued ASU No. 2011-11, “Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities (Topic 210).” This ASU also serves to amend the disclosure requirements in FASB ASU 815, “Derivatives and Hedging.” This ASU will require companies to provide both net amounts (those that are offset) and gross information (as if amounts are not offset) in notes to the financial statements. In January 2013, the FASB issued ASU No. 2013-01, Balance Sheet (Topic 210): Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities”, that clarifies which instruments and transactions are subject to the offsetting disclosure requirement within the scope of ASU 2011-11. This ASU is effective for interim and annual periods beginning on or after January 1, 2013. The adoption of this ASU did not have a material effect on the Company’s financial statements and disclosures. See Note 10. “Derivative Financial Instruments” for additional information.

In December 2011, the FASB issued ASU No. 2011-10, “Property, Plant, and Equipment (Topic 360): Derecognition of in Substance Real Estate – a Scope Clarification.” This update clarified the guidance in subtopic 360-20 as it applies to the derecognition of in substance real estate when the parent ceases to have a controlling financial interest in a subsidiary that is in substance real estate because of a default by the subsidiary on its nonrecourse debt. The amendments in this update are effective for fiscal years, and interim periods within those years, beginning on or after June 15, 2012. The Company has determined that the impact of this update will not have a material impact on the Company’s financial position, results of operations or cash flows.

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CNL HEALTHCARE PROPERTIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SIX MONTHS ENDED JUNE 30, 2013

(UNAUDITED)

2. Summary of Significant Accounting Policies (continued)

Recent Accounting Pronouncements — In February 2013, the FASB issued ASU No. 2013-04, “Liabilities (Topic 405): Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation is Fixed at the Reporting Date.” This update clarified the guidance in subtopic 405 and requires entities to measure obligations resulting from joint and several liability arrangements for which total obligation is fixed at the reporting date. Entities are required to measure the obligation as the amount that the reporting entity agreed to pay on the basis of its arrangement among its co-obligors plus any additional amount the reporting entity expects to pay on behalf of its co-obligors. Additionally, the guidance requires entities to disclose the nature and amount of the obligations as well as other information about those obligations. The amendments in this update are effective for fiscal years, and interim periods within those years, beginning on or after December 15, 2013 for public entities. The Company has determined that the impact of this update will not have a material impact on the Company’s financial position, results of operations or cash flows.

3. Acquisitions

Consolidated Entities — During the six months ended June 30, 2013, the Company acquired the following seven single-tenant triple-net leased properties:

Property/Description	Location	Date of   Acquisition	Allocated   Purchase Price
Perennial Skilled Nursing Facilities (“Perennial SNFs”)
Bates Healthcare Center	Batesville, AR	5/31/2013	$	6,205,650
One skilled nursing facility
Broadway Healthcare Center	West Memphis, AR	5/31/2013		11,798,650
One skilled nursing facility
Jonesboro Healthcare Center	Jonesboro, AR	5/31/2013		15,232,050
One skilled nursing facility
Magnolia Healthcare Center	Magnolia, AR	5/31/2013		11,847,150
One skilled nursing facility
Mine Creek Healthcare Center	Nashville, AR	5/31/2013		3,373,500
One skilled nursing facility
Searcy Healthcare Center	Searcy, AR	5/31/2013		7,898,100
One skilled nursing facility
Medical Office Building
LaPorte Cancer Center	Westville, IN	6/14/2013		13,100,000
One medical office building
			$	69,455,100

For the six months ended June 30, 2013, the Company paid to the Advisor approximately $1.3 million of investment service fees and acquisition expenses related to the acquisition of the Perennial SNFs and the LaPorte Cancer Center.

9

CNL HEALTHCARE PROPERTIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SIX MONTHS ENDED JUNE 30, 2013

(UNAUDITED)

3. Acquisitions (continued)

The following summarizes the allocation of the purchase price for the above properties, and the estimated fair values of the assets acquired as of June 30, 2013 and 2012:

	June 30, 2013		June 30, 2012
Land and land improvements	$	2,999,600	$	5,746,081
Buildings and building improvements		59,693,800		75,680,273
Furniture and equipment		3,549,000		933,313
In place lease intangibles (1)		3,212,700		1,690,333
	$	69,455,100	$	84,050,000

FOOTNOTES:

(1) At the acquisition date, the weighted-average amortization period on the acquired lease intangibles was approximately 11.4 years and 10 years, respectively.

The revenues and net losses (including deductions for acquisition fees and expenses and depreciation and amortization expense) attributable to the properties included in the Company’s condensed consolidated statements of operations were approximately $0.6 million and $(1.6) million, respectively, for the quarter and six months ended June 30, 2013; and approximately $1.9 million and $0.3 million, respectively, and $2.9 million and $(1.6) million, respectively, for the quarter and six months ended June 30, 2012.

In July 2013, the Company acquired a portfolio of four medical office buildings in Knoxville, Tennessee (the “Knoxville MOBs”), see Note 16, “Subsequent Events,” for additional information.

The following table presents the unaudited pro forma results of operations for the Company as if each of the properties (including the Knoxville MOBs) were acquired as of January 1, 2012 and owned during the quarter and six months ended June 30, 2013 and 2012:

	(Unaudited) Quarter ended June 30,						(Unaudited) Six months  ended June 30,
	2013			2012			2013			2012
Revenues	$	10,963,230		$	4,858,933		$	21,703,963		$	9,744,721
Net loss (1)	$	(845,210	)	$	(560,651	)	$	(3,743,104	)	$	(3,927,082	)
Income (loss) per share of common stock (basic and diluted)	$	(0.02	)	$	(0.07	)	$	(0.12	)	$	(0.39	)
Weighted average number of shares of common stock outstanding (basic and diluted)(2)		34,903,153			7,617,081			31,361,964			10,121,510

FOOTNOTES:

(1) The pro forma results for the quarter and six months ended June 30, 2013, were adjusted to exclude approximately $3.2 million of acquisition related expenses directly attributable to the acquisition of the eleven properties, of which approximately $1.8 million was included in the condensed consolidated statement of operations for the quarter and six months ended June 30, 2013, and approximately $1.4 million was incurred subsequently in July 2013. The pro forma results for the quarter and six months ended June 30, 2012 were adjusted to include these charges as if the properties had been acquired on January 1, 2012.

(2) As a result of the properties being treated as operational since January 1, 2012, the Company assumed approximately 5.1 million shares were issued as of January 1, 2012. Consequently the weighted average shares outstanding was adjusted to reflect this amount of shares being issued on January 1, 2012 instead of actual dates on which the shares were issued, and such shares were treated as outstanding as of the beginning of the period presented.

10

CNL HEALTHCARE PROPERTIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SIX MONTHS ENDED JUNE 30, 2013

(UNAUDITED)

4. Real Estate Investment Properties, net

As of June 30, 2013 and December 31, 2012, real estate investment properties consisted of the following:

	June 30,              2013			December 31,   2012
Land and land improvements	$	19,178,506		$	16,162,081
Building and building improvements		271,020,835			211,321,273
Equipment		8,492,935			4,887,313
Less: accumulated depreciation		(5,869,805	)		(1,959,708	)
Real estate investment properties, net		292,822,471			230,410,959
Real estate under development, including land		16,844,776			8,461,571
Total real estate assets, net	$	309,667,247		$	238,872,530

Depreciation expense on the Company’s real estate investment properties, net was approximately $2.1 million and $3.9 million for the quarter and six months ended June 30, 2013, respectively; and approximately $0.6 million and $0.8 million for the quarter and six months ended June 30, 2012, respectively.

5. Intangibles, net

The gross carrying amount and accumulated amortization of the Company’s intangible assets as of June 30, 2013 are as follows:

	June 30,        2013			December 31,   2012
In place lease intangibles	$	10,394,805		$	7,165,333
Less: accumulated amortization		(1,115,379	)		(140,863	)
Intangibles, net	$	9,279,426		$	7,024,470

Amortization expense on the Company’s intangible assets was approximately $0.5 million and $1.0 million for the quarter and six months ended June 30, 2013, respectively; and approximately $0.04 million and $0.06 million for the quarter and six months ended June 30, 2012, respectively.

The estimated future amortization for the Company’s intangible assets as of June 30, 2013 was as follows:

2013	$	1,074,674
2014		2,149,349
2015		1,357,749
2016		566,149
2017		566,149
Thereafter		3,565,356
	$	9,279,426

11

CNL HEALTHCARE PROPERTIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SIX MONTHS ENDED JUNE 30, 2013

(UNAUDITED)

6. Operating Leases

As described in Note 3, “Acquisitions,” the Company acquired seven single-tenant properties that were 100% leased under operating leases during the six months ended June 30, 2013.

The Perennial Communities are operated by a subsidiary of Arkansas SNF Operations Acquisition III, LLC (“Arkansas SNF”) under triple-net lease agreements having an initial term of ten years, with two five-year renewal options. In the initial year, the aggregate minimum annual rent for the Perennial SNFs is approximately $5.54 million, and the average effective annual rental per usable bed is approximately $7,100. Annual base rent is equal to the properties’ lease basis multiplied by the initial lease rate of 9.75% and will escalate thereafter pursuant to the lease agreements. Annual capital reserve income is paid to the Company based on $500 per bed each year.

The LaPorte Cancer Center is leased to Michiana Hematology Oncology, P.C., the largest independent oncology practice in Indiana, under a 20-year triple-net lease, which will expire on October 31, 2030, with current annual base rent of approximately $1.04 million. Holladay Properties, the largest private healthcare property management and development group in the United States, manages the building under a property management agreement having an initial term of two years, with automatic renewals of one year each unless terminated by either party.

Under the terms of the aforementioned lease agreements, each tenant is responsible for the payment of property taxes, general liability insurance, utilities, repairs and maintenance, including structural and roof expenses. Each tenant is expected to pay real estate taxes directly to taxing authorities. However, if the tenant does not pay, the Company will be liable. The total annualized property tax assessed on these properties as of June 30, 2013 was approximately $1.4 million.

As of June 30, 2013, the Company owned 17 real estate investment properties that were 100% leased under operating leases. The following is a schedule of future minimum lease payments to be received under non-cancellable operating leases for the remainder of 2013 and each of the next four years and thereafter, in the aggregate, as of June 30, 2013:

2013	$	10,911,827
2014		22,091,325
2015		22,488,690
2016		22,964,927
2017		23,470,940
Thereafter		126,034,377
	$	227,962,086

12

CNL HEALTHCARE PROPERTIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SIX MONTHS ENDED JUNE 30, 2013

(UNAUDITED)

7. Unconsolidated Entities

In January 2013, the Company acquired a 90% membership interest in a two-story medical office building in Claremont, California for approximately $7.0 million in equity through a joint venture (“Montecito Joint Venture”) formed by the Company and its co-venture partner, an unrelated party, that holds the remaining 10% interest. Under the terms of the venture agreement, operating cash flows will be distributed to the Company and its co-venture partner on a pro rata basis. The Company accounts for this investment under the equity method of accounting because the decisions that significantly impact the entity are shared between the Company and its co-venture partner. The total acquisition price for the medical office building was approximately $19.8 million. The medical office building consists of a single two-story building having a total net rentable area of 48,984 square feet.

The Montecito Joint Venture obtained a five-year credit facility for a maximum aggregate principal amount of $35 million, of which $12.5 million was funded in connection with the acquisition of the medical office building and an additional $0.4 million was funded upon completion of certain tenant improvements. The non-recourse loan which is collateralized by the property and future properties that may be funded under the facility matures in January 2018 and bears interest at a rate equal to the sum of LIBOR plus 2.6% per annum, payable monthly. The loan requires interest-only payments on the outstanding principal amount through July 2014 and monthly payments thereafter of principal and interest based upon a 360-month amortization schedule. In addition, the Montecito Joint Venture further entered into a three-year forward starting swap with a notional amount of $12.4 million related to the credit facility balance which will bear interest at a fixed rate of 3.935% in years three through five. Refer to Note 10, “Derivative Financial Instruments” for additional information.

In April 2013, the Company, through its Windsor Manor joint venture, acquired a 75% membership interest in two additional senior housing properties located in Iowa collectively valued at approximately $12.2 million (the “Windsor Manor II Communities”). The Windsor Manor II Communities feature 82 living units comprised of 62 assisted living units and 20 memory care units. In connection with the acquisition, the Windsor Manor joint venture assumed two non-recourse loans encumbering the Windsor Manor II Communities with total outstanding principal balances of approximately $6.0 million.

For the six months ended June 30, 2013, the Company capitalized approximately $0.5 million of investment service fees and acquisition expenses related to the Company’s investment in the Montecito and Windsor Manor joint ventures. The acquisition fees and expenses create an outside basis difference that are allocated to the assets of the investee and, if assigned to depreciable or amortizable assets, the basis differences are then amortized as a component of equity in earnings (loss) of unconsolidated entities.

In December 2012, in connection with an existing purchase option held by Sunrise Living Investments, Inc. (“Sunrise”) on CHTSunIV, another unconsolidated entity, the Company entered into a sale agreement with Health Care REIT, Inc. (“HCN”), as result of a potential merger by HCN with Sunrise. Under the agreement, HCN and Sunrise were entitled to purchase the Company’s interest in CHTSunIV for an aggregate purchase price of approximately $62.5 million subject to adjustment based on the closing date and actual cash flow distribution (the “Joint Venture Dispositions”). The Joint Venture Dispositions were conditioned upon the merger of HCN with Sunrise, which was completed in January 2013. The sale of CHTSunIV closed on July 1, 2013 as described in Note 16, “Subsequent Events.”

13

CNL HEALTHCARE PROPERTIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SIX MONTHS ENDED JUNE 30, 2013

(UNAUDITED)

7. Unconsolidated Entities (continued)

The following table presents condensed financial information for each of the Company’s unconsolidated entities as of and for the quarter and six months ended June 30, 2013:

	For the quarter ended June 30, 2013
	Montecito(2)			CHTSunIV(4)		Windsor Manor		Total
Revenues	$	452,712		$	12,183,182	$	2,509,978	$	15,145,872
Operating income (loss)	$	158,276	(3)	$	3,877,329	$	(74,298)	$	3,961,307
Net income (loss)	$	54,486		$	379,551	$	(319,010)	$	115,027
Income (loss) allocable to other venture partners (1)	$	5,447		$	(507,556)	$	(588,653)	$	(1,090,762)
Income allocable to the Company (1)	$	49,039		$	887,107	$	269,643	$	1,205,789
Amortization of capitalized acquisition costs		(1,876)			(18,174)		(3,987)		(24,037)
Equity in earnings of unconsolidated entities	$	47,163		$	868,933	$	265,656	$	1,181,752
Distributions declared to the Company	$	342,158		$	1,507,987	$	5,301	$	1,855,446
Distributions received by the Company	$	—		$	1,486,500	$	175,095	$	1,661,595

	For the six months ended June 30, 2013
	Montecito(2)			CHTSunIV(4)		Windsor Manor		Total
Revenues	$	808,741		$	24,107,268	$	3,283,221	$	28,199,230
Operating income (loss)	$	(55,125)	(3)	$	7,483,713	$	5,803	$	7,434,391
Net loss	$	(238,559)		$	(46,380)	$	(492,014)	$	(776,953)
Loss allocable to other venture partners (1)	$	(23,856)		$	(1,365,854)	$	(894,414)	$	(2,284,124)
Income (loss) allocable to the Company (1)	$	(214,703)		$	1,319,474	$	402,400	$	1,507,171
Amortization of capitalized acquisition costs		(3,813)			(36,347)		(6,876)		(47,036)
Equity (loss) in earnings of unconsolidated entities	$	(218,516)		$	1,283,127	$	395,524	$	1,460,135
Distributions declared to the Company	$	342,158		$	2,990,282	$	180,396	$	3,512,836
Distributions received by the Company	$	—		$	2,954,639	$	223,985	$	3,178,624

  FOOTNOTES:

(1) Income (loss) is allocated between the Company and its joint venture partner using the HLBV method of accounting.

(2) Represents operating results from the date of acquisition through the end of the periods presented.

(3) Includes approximately $0.1 and $0.5 million of non-recurring acquisition expenses incurred by the joint venture for the quarter and six months ended June 30, 2013.

(4) In July 2013, the Company completed its sale of its joint venture membership interest in CHTSunIV. Refer to Note 16, “Subsequent Events,” for additional information.

14

CNL HEALTHCARE PROPERTIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SIX MONTHS ENDED JUNE 30, 2013

(UNAUDITED)

7. Unconsolidated Entities (continued)

The following tables present financial information for the Company’s unconsolidated entities as of and for the quarter and six months ended June 30, 2012:

	Quarter ended   June 30, 2012 (2)			Six months ended   June 30, 2012 (2)
Revenues	$	—		$	—
Operating loss	$	(1,372,635	)	$	(1,372,635	)
Net loss	$	(1,433,935	)	$	(1,433,935	)
Loss allocable to other venture partners (1)	$	(660,307	)	$	(660,307	)
Loss allocable to the Company (1)	$	(773,628	)	$	(773,628	)
Amortization of capitalized acquisition costs		—			—
Loss in earnings of unconsolidated entities	$	(773,628	)	$	(773,628	)

FOOTNOTES:

(1) Income is allocated between the Company and its joint venture partner using the HLBV method of accounting.

(2) Represents operating data from the date of acquisition through the end of the period presented.

8. Indebtedness

In March 2013, the Company extinguished the outstanding balance of $40 million of its mezzanine loan prior to its scheduled expiration. In connection therewith, the Company wrote-off approximately $0.2 million in unamortized loan costs as interest expense and loss on the early extinguishment of debt. Both the unamortized loan costs and the exit fee are included in interest expense and loan cost amortization in the accompanying condensed consolidated statement of operations for the six months ended June 30, 2013. In addition, the Company paid an exit fee of $0.8 million or 2.0% upon extinguishment of the CHTSunIV mezzanine loan.

During the six months ended June 30, 2013, the Company repaid approximately $75 million (including $25.3 million that was re-advanced in March 2013 pursuant to a loan modification) on the Primrose II bridge loan of which approximately $23.5 million was funded with permanent financing obtained during the period.

In May 2013, the Company obtained long-term financing for two of the five Primrose II Communities located in Decatur, Illinois and Zanesville, Ohio. Each of these properties entered into a combined loan and security agreement with an aggregate original principal amount of approximately $23.5 million (collectively, the “Primrose II Loans”). The Company has guaranteed the Primrose II Loans pursuant to standard non-recourse carve-out guarantees. Interest on the outstanding principal balance of the Primrose II Loans accrues at a fixed rate of 3.81% per annum. Beginning on July 1, 2013, the Primrose II Loans are payable in equal monthly installments of principal and interest based on a 30-year amortization schedule, with all outstanding principal, plus all accrued and unpaid interest, due and payable on June 1, 2020.

15

CNL HEALTHCARE PROPERTIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SIX MONTHS ENDED JUNE 30, 2013

(UNAUDITED)

8. Indebtedness (continued)

In May 2013, in connection with the Perennial SNFs acquisition, the Company entered into a secured non-recourse loan agreement for a three-year term loan in the aggregate principal amount of $30.0 million (the “Perennial Loan”). The Perennial Loan matures on May 31, 2016 and may be prepaid in whole or in part without penalty except for any breakage costs. Interest on the outstanding principal balance of the Perennial Loan accrues at a rate equal to LIBOR plus 4.25%. In addition to each monthly interest payment, the Company is required to make monthly principal payments commencing May 10, 2015 through the maturity date in an amount sufficient to amortize the loan on a 25-year schedule at a per annum rate of 6%.

In June 2013, in connection with the LaPorte Cancer Center acquisition, the Company entered into a non-recourse loan agreement for $8.5 million, which matures on June 14, 2028 (“LaPorte Loan”). The loan bears interest at a rate of 4.25% for the first seven years and, thereafter, at a rate subject to changes in an independent index which is the weekly average yield on the 7-year International SWAPs and Derivatives Association (“ISDA”) mid-market par SWAP rates.

The Company’s loans contain customary affirmative, negative and financial covenants including limitations on incurrence of additional indebtedness, minimum occupancy at the properties, debt service coverage and minimum tangible net worth. As of June 30, 2013, the Company was in compliance with the aforementioned financial covenants.

Maturities of indebtedness for the remainder of 2013 and each of the next four years and thereafter, in the aggregate, as of June 30, 2013 were as follows:

2013	$	1,491,674
2014		3,087,301
2015		3,634,960
2016		33,059,855
2017		8,618,368
Thereafter		119,965,114
	$	169,857,272

The fair value and carrying value of mortgage and other notes payable were approximately $159.2 million and $169.9 million as of June 30, 2013, respectively, and both were approximately $193.2 million as of December 31, 2012 based on then-current rates and spreads the Company would expect to obtain for similar borrowings. Since this methodology includes inputs that are less observable by the public and are not necessarily reflected in active markets, the measurement of the estimated fair values related to the Company’s mortgage note payable is categorized as level 3 on the three-level fair value hierarchy. The estimated fair value of accounts payable and accrued expenses approximates the carrying value as of June 30, 2013 and December 31, 2012 because of the relatively short maturities of the obligations.

16

CNL HEALTHCARE PROPERTIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SIX MONTHS ENDED JUNE 30, 2013

(UNAUDITED)

9. Related Party Arrangements

In March 2013, the Company’s board of directors approved an amendment to the advisory agreement with the Advisor that will provide for payments of asset management fees based on a percentage of the average real estate values as defined in the agreement rather than amounts as of the end of the preceding month.

In March 2013, the Company entered into the Expense Support Agreement with the Advisor pursuant to which the Advisor has agreed to accept certain payments in the form of forfeitable restricted common stock of the Company in lieu of cash for services rendered and applicable asset management fees and specified expenses owed by the Company to the Advisor under the advisory agreement. The term of the Expense Support Agreement runs from April 1, 2013 until December 31, 2013, subject to the right of the Advisor to terminate the Expense Support Agreement upon 30 days’ written notice to the Company. The term of the Expense Support Agreement may be extended by the mutual consent of the Company and the Advisor.

Commencing on April 1, 2013, the Advisor shall provide expense support to the Company through forgoing the payment of fees in cash and acceptance of restricted stock for services in an amount equal to the positive excess, if any, of (a) aggregate stockholder cash distributions declared for the applicable quarter, over (b) the Company’s aggregate modified funds from operations (as defined in the Expense Support Agreement). The expense support amount shall be determined for each calendar quarter of the Company, on a non-cumulative basis, with each such quarter-end date (“Determination Date”).

In exchange for services rendered under the advisory agreement and in consideration of the expense support provided by the Advisor, the Company shall issue to the Advisor, within 45 days following each Determination Date, a number of shares of restricted stock equal to the quotient of the expense support amount for the preceding quarter divided by the then-current public offering price per share of common stock, on the terms and conditions and subject to the restrictions set forth in the Expense Support Agreement. Any amounts deferred, and for which restricted stock shares are issued, pursuant to the Expense Support Agreement will be permanently waived by the Advisor and the Company will have no obligation to pay such amounts. The restricted stock is subordinated and forfeited to the extent that shareholders do not receive their original invested capital back with at least a 6% annualized return of investment upon ultimate liquidity of the company.

For the quarter and six months ended June 30, 2013, approximately $0.5 million in asset management fees were forgone in accordance with the terms of the Expense Support Agreement. As of June 30, 2013, the Advisor had forgone a total of $0.5 million in asset management fees under the terms of the Expense Support Agreement. The Company expects to issue approximately 0.05 million shares during the third quarter of 2013 in connection with the expense support received during the quarter ended June 30, 2013.

As of June 30, 2013, the Advisor is not entitled to any dividends or other distributions with respect to the Restricted Stock shares and no compensation expense has been recognized for the quarter and six months ended June 30, 2013.

17

CNL HEALTHCARE PROPERTIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SIX MONTHS ENDED JUNE 30, 2013

(UNAUDITED)

9. Related Party Arrangements (continued)

For the quarters and six months ended June 30, 2013 and 2012, the Company incurred the following fees in connection with its Offering:

	Quarter ended June 30,				Six months ended June 30,
	2013		2012		2013		2012
Selling commissions	$	2,221,835	$	2,510,749	$	3,917,433	$	4,432,183
Marketing support fees		3,039,569		1,217,197		5,210,451		2,040,669
Total Offering expenses	$	5,261,404	$	3,727,946	$	9,127,884	$	6,472,852

For the quarters and six months ended June 30, 2013 and 2012, the Company incurred the following fees and reimbursable expenses as follows:

	Quarter ended June 30,				Six months ended June 30,
	2013		2012		2013		2012
Reimbursable expenses:
Offering costs	$	1,244,417	$	2,022,653	$	2,022,147	$	3,427,346
Operating expenses		744,116		407,337		1,348,268		824,043
	$	1,988,533	$	2,429,990	$	3,370,415	$	4,251,389
Investment services fees (1)	$	1,545,768	$	2,301,311	$	1,866,281	$	3,856,236
Property management fees (2)		320,974		33,137		583,767		49,215
Asset management fees (3)		633,297		210,125		1,633,817		280,167
Total reimbursable expenses, net	$	2,500,039	$	2,544,573	$	4,083,865	$	4,185,618

FOOTNOTES:

⁽¹⁾  For the quarter and six months ended June 30, 2013, the Company incurred approximately $1.5 million and $1.9 million, respectively, in investment service fees of which approximately $0.2 and $0.5 million, respectively, were capitalized as part of its investment basis in the Montecito Joint Venture and the additional Windsor Manor II Communities. For the quarter and six months ended June 30, 2012, the Company incurred approximately $2.3 million and $3.9 million, respectively, in investment services fees of which approximately $2.3 million and $2.3 million, respectively, were capitalized as part of its investment basis in the CHTSunIV joint venture.

⁽²⁾  For the quarter and six months ended June 30, 2013, the Company incurred approximately $0.3 million and $0.6 million in property and construction management fees of which $0.06 and $0.08 million have been capitalized and included in real estate under development. There were no capitalized property or construction management fees for the quarter and six months ended June 30, 2012.

⁽³⁾  For the quarter and six months ended June 30, 2013, the Company incurred approximately $0.6 million and $1.6 million in asset management fees which is net of approximately $0.5 million in asset management fees that were forgone in accordance with the terms of the Expense Support Agreement for the quarter and six months ended June 30, 2013. For the quarter and six months ended June 30, 2013, the Company capitalized approximately $0.04 and $0.05 million, respectively, in asset management fees and included in real estate under development. There were no asset management fees forgone or capitalized for the quarter and six months ended June 30, 2012. See description of the Expense Support Agreement above for additional information.

18

CNL HEALTHCARE PROPERTIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SIX MONTHS ENDED JUNE 30, 2013

(UNAUDITED)

9. Related Party Arrangements (continued)

Amounts due to related parties for fees and reimbursable costs and expenses were as follows as of:

	June 30,        2013		December 31,   2012
Due to managing dealer:
Selling commissions	$	329,143	$	102,656
Marketing support fees		304,027		136,337
		633,170		238,993
Due to property manager:
Property management fees		320,974		452,131
		320,974		452,131
Due to the Advisor and its affiliates:
Asset management fees		633,297		—
Reimbursable operating expenses		723,182		242,293
Reimbursable offering costs		217,474		356,463
		1,573,953		598,756
	$	2,528,097	$	1,289,880

The Company incurs operating expenses which, in general, are related to administration of the Company on an ongoing basis. Pursuant to the advisory agreement, the Advisor shall reimburse the Company the amount by which the total operating expenses paid or incurred by the Company exceed, in any four consecutive fiscal quarters (an “Expense Year”) commencing with the Expense Year ending June 30, 2013, the greater of 2% of average invested assets or 25% of net income (as defined in the advisory agreement) (the “Limitation”), unless a majority of the Company’s independent directors determines that such excess expenses are justified based on unusual and non-recurring factors (referred to as the “Expense Cap Test”). In performing the Expense Cap Test, the Company uses operating expenses on a GAAP basis after making adjustments for the benefit of expense support under the Expense Support Agreement. For the Expense Year ended June 30, 2013, the Company did not incur operating expenses in excess of the Limitation.

In June 2013, the Company originated an acquisition, development and construction loan in the amount of $6.2 million (“ADC Loan”) to C4 Development, LLC (“Crosland Southeast”), a related party by virtue of a family relationship between a principal of the borrower and the Company’s vice chairman who recused himself from review and approval of the investment, for the development of a 22,000 square foot medical office building in Rutland, Virginia that will function as an out-patient emergency and imaging center and will be leased to Hospital Corporation of America (“HCA”). The triple-net lease with HCA is effective upon Crosland Southeast obtaining a certificate of occupancy and contains a 10 year initial term with four 5 year renewal options. As of June 30, 2013, approximately $1.8 million of the ADC Loan commitment had been funded and used for the purchase of 2.8 acres of land to develop the medical office building (“HCA Rutland”).

Concurrent with the ADC Loan, the Company also entered into a right of first refusal to acquire the HCA Rutland property with a one year term from the earlier of (a) the maturity date of the ADC Loan or (b) the date that the ADC Loan is paid in full. Based on review and assessment of the transaction structure, the Company has determined that it holds a variable interest in Crosland Southeast through the ADC Loan; however, the Company further concluded that it is not the primary beneficiary of the HCA Rutland development as the Company does not have the power to direct the activities that most significantly impact economic performance of either Crosland Southeast or the HCA Rutland development. The Company’s maximum exposure to loss as a result of its involvement with this VIE is limited to the amounts funded under the ADC Loan, which totaled approximately $1.8 million as of June 30, 2013. The Company’s exposure is limited as a result of the Company’s collateralized interest in the HCA Rutland development.

19

CNL HEALTHCARE PROPERTIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SIX MONTHS ENDED JUNE 30, 2013

(UNAUDITED)

9. Related Party Arrangements (continued)

The approximate $1.8 million of funding on the ADC Loan has been recorded as a note receivable from related party in the accompanying condensed consolidated balance sheet as of June 30, 2013 and is comprised of the following:

				Loan Principal Balance as of
Borrower (Description of Collateral Property)	Origination   Date	Maturity   Date (1)	Interest   Rate (2)	June 30, 2013		December 31,  2012
Crosland Southeast (land development)	6/27/2013	6/27/2014	16.0%	$	1,773,008	$	—
Loan origination costs					37,519		—
Accrued interest (3)					2,364		—
Total carrying amount				$	1,812,891	$	—

  FOOTNOTES:

(1) The initial term of the ADC Loan is one year with an extension option of up to six months.

(2) The interest rate is comprised of an 8% component that is paid monthly and an 8% component that is paid upon maturity of the ADC Loan.

(3) This amount is included in Other revenues in the accompanying condensed statements of operations for the quarter and six months ended June 30, 2013.

The fair value and carrying value of the Company’s note receivable from related party were both approximately $1.8 million as of June 30, 2013 based on then-current rates and spreads that a market participant would expect to obtain for similar financings. Since this methodology includes inputs that are less observable by the public and are not necessarily reflected in active markets, the measurement of the estimated fair value related to the Company’s note receivable from related party is categorized as level 3 on the three-level fair value hierarchy.

The following is a schedule of future principal maturities for the note receivable from related party for the remainder of 2013 and each of the next four years and thereafter, in the aggregate, as of June 30, 2013:

2013	$	—
2014		1,773,008
2015		—
2016		—
2017		—
Thereafter		—
Total	$	1,773,008

20

CNL HEALTHCARE PROPERTIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SIX MONTHS ENDED JUNE 30, 2013

(UNAUDITED)

9. Related Party Arrangements (continued)

In connection with the ADC Loan agreement, Crosland Southeast established an interest reserve account of approximately $0.3 million at a bank in which the Company’s chairman serves as a director. The purpose of the interest reserve account is to pay regular interest payments that will be due and payable under the ADC Loan. Moreover, Crosland Southeast will continue to make periodic payments to the interest reserve account to ensure sufficient funds to cover monthly interest payments coming due under the ADC Loan. In addition, the Company maintains an account at a bank in which the Company’s chairman serves as a director. The Company had deposits at that bank in the amount of approximately $0.4 million and $0.1 million as of June 30, 2013 and December 31, 2012, respectively.

10. Derivative Financial Instruments

In January 2013, the Company, through its Montecito Joint Venture, entered into a forward interest rate swap agreement to hedge interest rate exposure related to its variable-rate debt (“Montecito Swap”). The agreement requires the Montecito Joint Venture to pay a fixed amount based on a quoted interest rate of 1.335% from January 2015 through January 2018 based on aggregate notional values of approximately $12.4 million. The agreement further provides for the Company, through its Montecito Joint Venture, to receive a variable amount based on current LIBOR and the aforementioned notional values.

The following table summarizes the terms of the Montecito Swap and the proportion of fair value relative to the Company’s ownership percentage that has been recorded as of June 30, 2013. Amounts related to the interest rate swap are included in investments in unconsolidated entities in the accompanying condensed consolidated balance sheet as of June 30, 2013:

						Fair value asset (liability)
Notional amount		Fixed interest rate(1)		Trade date	Maturity date	June 30,     2013		December 31, 2012
$	12,421,349		1.335   %	January 17, 2013	January 15, 2018	$	130,754	$	—

FOOTNOTES:

(1) The all-in rate will be equal to 3.935%, which includes a credit spread of 2.6%.

The Montecito Swap is valued primarily based on inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, volatilities, and credit risks), and are classified as Level 2 in the fair value hierarchy. Determining fair value requires management to make certain estimates and judgments. Changes in assumptions could have a positive or negative impact on the estimated fair values of such instruments could, in turn, impact the Montecito Joint Venture’s results of operations.

The following table summarizes the gross and net amounts of the Company’s share of the Montecito Swap as presented in the accompanying condensed consolidated balance sheet as of June 30, 2013:

		Gross and net amounts of asset (liability) presented in the accompanying condensed consolidated balance sheet as of June 30, 2013						Gross amounts in the accompanying condensed consolidated balance sheet as of June 30, 2013
Notional amount		Gross amount		Offset amount		Net amount		Financial Instruments		Cash       Collateral		Net Amount
$	12,421,349	$	130,754	$	—	$	130,754	$	130,754	$	—	$	130,754

The Company, or its equity method investments, did not hold any derivative financial instruments as of December 31, 2012 or for the quarter or six months ended June 30, 2012.

21

CNL HEALTHCARE PROPERTIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SIX MONTHS ENDED JUNE 30, 2013

(UNAUDITED)

11. Stockholders’ Equity

Public Offering — As of June 30, 2013 and December 31, 2012, the Company had received aggregate offering proceeds of approximately $358.8 million (36.6 million shares) and $181.6 million (18.5 million shares), respectively, including approximately $4.4 million (0.5 million shares) and $1.7 million (0.2 million shares), respectively, received through its distribution reinvestment plan.

Distributions — During the six months ended June 30, 2013 and 2012, the Company declared cash distributions of approximately $5.0 million and $0.8 million, respectively. In addition, the Company declared and made stock distributions of 373,303 and 56,931 shares of common stock for the six months ended June 30, 2013 and 2012, respectively.

For the six months ended June 30, 2013 and 2012, 100% of distributions were considered a return of capital for federal income tax purposes. No amounts distributed to stockholders for the six months ended June 30, 2013 were required to be or have been treated by the Company as a return of capital for purposes of calculating the stockholders’ return on their invested capital as described in the Company’s advisory agreement. The distribution of new common shares to recipients is non-taxable.

Other comprehensive income — The following table reflects the effect of derivative financial instruments held through the Company’s equity method investment in the Montecito Joint Venture on the condensed consolidated statements of comprehensive loss for the quarters and six months ended June 30, 2013 and 2012, respectively:

Derivative         Financial         Instrument	Gain recognized in other comprehensive income on derivative financial instrument (Effective Portion)				Location of gain (loss) reclassified into earnings   (Effective Portion)	Gain (loss) reclassified from AOCI into earnings (Effective Portion)
	Quarter ended					Quarter ended
	June 30,   2013		June 30,   2012			June 30,   2013		June 30,   2012
Montecito Swap	$	211,166	$	—	Not applicable	$	—	$	—
Total	$	211,166	$	—		$	—	$	—

Derivative        Financial        Instrument	Gain recognized in        other comprehensive        income on  derivative financial instrument (Effective Portion)				Location of gain (loss) reclassified into earnings   (Effective Portion)	Gain (loss) reclassified from AOCI into earnings (Effective Portion)
	Six months ended					Six months ended
	June 30,   2013		June 30,   2012			June 30,   2013		June 30,   2012
Montecito Swap	$	130,754	$	—	Not applicable	$	—	$	—
Total	$	130,754	$	—		$	—	$	—

22

CNL HEALTHCARE PROPERTIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SIX MONTHS ENDED JUNE 30, 2013

(UNAUDITED)

12. Income Taxes

As of June 30, 2013 and December 31, 2012, the Company recorded current deferred tax assets and net current tax benefit (provision) related to deferred income at its TRS. The components of the income tax benefit (provision) as of the six months ended June 30, 2013 and as of December 31, 2012 are as follows:

The components of the income tax expense for the quarter and six months ended June 30, 2013 are as follows:

	Quarter     Ended June 30, 2013			Six Months     Ended June 30, 2013
Current:
Federal	$	—		$	13,312
State		—			—
Total current benefit		—			13,312
Deferred:
Federal		(25,450	)		(25,450	)
State		(5,935	)		(5,935	)
Total deferred provision		(31,385	)		(31,385	)
Income tax expense	$	(31,385	)	$	(18,073	)

The Company recorded a valuation allowance on the deferred tax assets related to its TRS where it was deemed more likely than not that future taxable income would not be sufficient to realize the related income tax benefits.

Deferred income taxes reflect the tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets as of June 30, 2013 are as follows:

Carryforwards of net operating loss	$	194,812
Prepaid rent		150,424
Valuation allowance		(345,236	)
Net deferred tax assets	$	—

A reconciliation of taxes computed at the statutory federal tax rate on income before income taxes to the benefit (provision) for income taxes is as follows:

	Six months ended June 30,
	2013			2012
Tax expense computed at federal statutory rate	$	(2,323,563)	(35.00%)	$	(1,238,792)	(35.00%)
State income tax provision, net		(5,935)	(0.09%)		—	0%
Benefit of REIT election		2,311,425	34.82%		1,238,792	35.00%
Income tax benefit (provision)	$	(18,073)	(0.27%)	$	—	0%

The tax years 2010-2012 remain subject to examination by taxing authorities throughout the United States. The Company analyzed its material tax positions and determined that it has not taken any uncertain tax positions.

23

CNL HEALTHCARE PROPERTIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SIX MONTHS ENDED JUNE 30, 2013

(UNAUDITED)

13. Variable Interest Entities (VIEs)

Consolidated VIEs – In conjunction with the acquisition of the Perennial SNFs described in Note 3, “Acquisitions,” the Company acquired six wholly-owned subsidiaries, designed as single property entities to own and lease their respective properties to single tenant operators, of which three of the properties are VIEs due to potential future buy-out options held by the respective tenants that are formula based. Arkansas SNF has an option to purchase the Perennial SNFs that are located in Batesville, Mine Creek and Searcy, Arkansas, which is exercisable during the period from the end of the third year through the end of the fifth year of the related lease period.

The Company determined it is the primary beneficiary and holds a controlling financial interest in each of these entities due to the Company’s power to direct the activities that most significantly impact the economic performance of the entities, as well as its obligation to absorb the losses and its right to receive benefits from these entities that could potentially be significant to these entities. As such, the transactions and accounts of these VIEs are included in the accompanying condensed consolidated financial statements. The Company did not own these entities as of December 31, 2012.

The aggregate carrying amount and major classifications of the consolidated assets that can be used to settle obligations of the VIEs and liabilities of the consolidated VIEs that are non-recourse to the Company are as follows:

	June 30, 2013		December 31, 2012
Assets:
Real estate investment properties, net	$	16,943,329	$	—
Intangibles, net	$	457,158	$	—
Loan costs, net	$	204,927	$	—
Other	$	13,751	$	—
Liabilities:
Mortgages and other notes payable	$	9,300,000	$	—
Accounts payable and accrued expenses	$	140,625	$	—

The Company’s maximum exposure to loss as a result of its involvement with these VIEs is limited to its net investment in these entities which totaled approximately $8.2 million as of June 30, 2013. The Company’s exposure is limited because of the non-recourse nature of the borrowings of the VIEs.

Unconsolidated VIEs - The Company determined that the borrowers under the ADC Loan on the HCA Rutland development represents a VIE due to the transaction structure; refer to Note 9, “Related Party Arrangements” for additional information.

24

CNL HEALTHCARE PROPERTIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SIX MONTHS ENDED JUNE 30, 2013

(UNAUDITED)

14. Commitments and Contingencies

In the ordinary course of business, the Company may become subject to litigation or claims. There are no material legal proceedings pending or known to be contemplated against the Company.

Refer to Note 9, “Related Party Arrangements,” for information on contingent restricted stock shares due to the Company’s Advisor in connection with the Expense Support Agreement and the Company’s commitment to fund approximately $4.4 million of additional monies to Crosland Southeast in connection with its construction loan for the HCA Rutland development.

In June 2013, the Company entered into an asset purchase agreement to acquire a portfolio of six medical office buildings for which the Company escrowed an earnest money deposit of $2.0 million as of June 30, 2013 and which as of the date of this filing is non-refundable. The acquisition is subject to certain contingencies, including completion of due diligence and obtaining financing satisfactory to the Company. There can be no assurance that any or all contingencies will be satisfied and that the transaction will ultimately be completed, which in either event the deposit would be applied toward the purchase price or forfeited.

15. Concentration of Credit Risk

Arkansas SNF, the tenant of the Perennial SNFs acquired in May 2013, accounted for approximately 12.1% of total assets as of June 30, 2013. In addition, TSMM Management, the tenant of the Primrose I and Primrose II Communities, accounted for approximately 32.1% and 46.9% of total assets as of June 30, 2013 and December 31, 2012, respectively. Failure of either tenant to pay contractual lease payments could significantly impact the Company’s results of operations and cash flow from operations which, in turn would impact its ability to pay debt service and make distributions to stockholders.

16. Subsequent Events

Equity transactions

The Company’s board of directors declared a monthly cash distribution of $0.03333 and a monthly stock distribution of 0.002500 shares on each outstanding share of common stock on July 1, 2013, and August 1, 2013. These distributions are to be paid and distributed by September 30, 2013.

During the period from July 1, 2013 through August 2, 2013, the Company received additional subscription proceeds of approximately $37.7 million (3.8 million shares).

Sale of CHTSunIV joint venture membership interest

On July 1, 2013, pursuant to a purchase and sale agreement dated December 18, 2012, between CHTSunIV and HCN, the Company completed its sale of its joint venture membership interest for a sales price of approximately $61.8 million, net of transaction costs, which reflects an aggregate gain of approximately $4.5 million.

25

CNL HEALTHCARE PROPERTIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SIX MONTHS ENDED JUNE 30, 2013

(UNAUDITED)

16. Subsequent Events (continued)

Purchase of Knoxville MOBs

On July 10, 2013, the Company completed the acquisition of four medical office buildings from affiliates of N.T. Brinkman, Inc. (“N.T. Brinkman”), an unrelated party, for an aggregate purchase price of approximately $57.3 million, excluding closing costs. The Knoxville MOBs are located on three hospital campuses of the Tennova Healthcare System, a subsidiary of Health Management Associates (“HMA”), and are comprised of the following real estate investment properties:

Knoxville Medical Office Buildings	Location	Rentable  Square Footage		Allocated   Purchase Price
Physicians Plaza A at North Knoxville Medical Center	Powell, TN		67,410		$18,124,000
Physicians Plaza B at North Knoxville Medical Center	Powell, TN		75,109		21,800,000
Jefferson Medical Commons	Jefferson City, TN		48,478		11,616,000
Central Wing Annex at Physicians Regional Medical Center	Knoxville, TN		24,650		5,775,000
			215,647		$57,315,000

The Knoxville MOBs are 100% leased under 32 non-cancelable leases with expirations ranging from 2013 through 2021, subject to additional renewal periods at the tenant’s option. Refer to Note 3, “Acquisitions,” for the pro forma impact of the July acquisition on the Company’s results of operations for the quarters and six months ended June 30, 2013 and 2012.

In addition, the Company financed a portion of the acquisition through a secured credit agreement providing for a five-year credit facility in the aggregate principal amount of approximately $38.6 million (“Knoxville MOBs Loan”), of which $35.1 million was funded in connection with the acquisition of the medical office buildings and an additional $3.5 million will be funded upon final lender approval of certain documents submitted at closing. The Knoxville MOBs Loan bears interest at a rate equal to the sum of LIBOR and 2.5% per annum, payable monthly, and matures on July 10, 2018. The Knoxville MOBs Loan contains affirmative, negative and financial covenants customary for the type of credit facility, including limitations on incurrence of additional indebtedness and debt service coverage requirements.

The Company paid to the Advisor approximately $1.1 million of investment service fees and acquisition expenses related to the acquisition of the Knoxville MOBs.

26

Item 2.   Management’s Discussion and Analysis of Financial Condition and Results of Operations

Introduction

The following discussion is based on the unaudited condensed consolidated financial statements as of June 30, 2013 and December 31, 2012. Amounts as of December 31, 2012 included in the unaudited condensed consolidated balance sheets have been derived from the audited consolidated financial statements as of that date. This information should be read in conjunction with the accompanying unaudited condensed consolidated balance sheets and the notes thereto, as well as the audited consolidated financial statements, notes and management’s discussion and analysis included in our annual report on Form 10-K for the year ended December 31, 2012.

Caution Concerning Forward-Looking Statements

Certain statements under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this Form 10-Q constitute “forward-looking statements” within the meaning of the Federal Private Securities Litigation Reform Act of 1995. The Company intends that such forward-looking statements be subject to the safe harbors created by Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are statements that do not relate strictly to historical or current facts, but reflect management’s current understandings, intentions, beliefs, plans, expectations, assumptions and/or predictions regarding the future of the Company’s business and its performance, the economy, and other future conditions and forecasts of future events, and circumstances. Forward-looking statements are typically identified by words such as “believes,” “expects,” “anticipates,” “intends,” “estimates,” “plans,” “continues,” “pro forma,” “may,” “will,” “seeks,” “should” and “could,” and words and terms of similar substance in connection with discussions of future operating or financial performance, business strategy and portfolios, projected growth prospects, cash flows, costs and financing needs, legal proceedings, amount and timing of anticipated future distributions, estimated per share value of the Company’s common stock, and other matters. The Company’s forward-looking statements are not guarantees of future performance. While the Company’s management believes its forward-looking statements are reasonable, such statements are inherently susceptible to uncertainty and changes in circumstances. As with any projection or forecast, forward-looking statements are necessarily dependent on assumptions, data and/or methods that may be incorrect or imprecise, and may not be realized. The Company’s forward-looking statements are based on management’s current expectations and although the Company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, the Company’s actual results could differ materially from those set forth in the forward-looking statements due to a variety of risks, uncertainties and other factors, many of which are beyond the Company’s ability to control or accurately predict. Given these uncertainties, the Company cautions you not to place undue reliance on such statements.

Important factors that could cause the Company’s actual results to vary materially from those expressed or implied in its forward-looking statements include, but are not limited to, government regulation, economic, strategic, political and social conditions, and the following: risks associated with the Company’s investment strategy; a worsening economic environment in the U.S. or globally, including financial market fluctuations; risks associated with real estate markets, including declining real estate values; the availability of proceeds from the Company’s offering of its shares; risks of doing business internationally, including currency risks; the Company’s failure to obtain, renew or extend necessary financing or to access the debt or equity markets; the use of debt to finance the Company’s business activities, including refinancing and interest rate risk and the Company’s failure to comply with debt covenants; the Company’s ability to identify and close on suitable investments; the failure to successfully manage growth or integrate acquired properties and operations; the Company’s ability to make necessary improvements to properties on a timely or cost-efficient basis; risks related to property expansions and renovations; risks related to development projects or acquired property value-add conversions, if applicable, including construction delays, cost overruns, the Company’s inability to obtain necessary permits, and/or public opposition to these activities; competition for properties and/or tenants; defaults on or non-renewal of leases by tenants; failure to lease properties on favorable terms or at all; the impact of current and future environmental, zoning and other governmental regulations affecting the Company’s properties; the impact of changes in accounting rules; the impact of regulations requiring periodic valuation of the Company on a per share basis; inaccuracies of the Company’s accounting estimates; unknown liabilities of acquired properties or liabilities caused by property managers or operators; material adverse actions or omissions by any joint venture partners; increases in operating costs and other expenses; uninsured losses or losses in excess of the Company’s insurance coverage; the impact of outstanding and/or potential litigation; risks associated with the Company’s tax structuring; failure to qualify for and maintain the Company’s REIT qualification; and the Company’s ability to protect its intellectual property and the value of its brand.

27

For further information regarding risks and uncertainties associated with the Company’s business and important factors that could cause the Company’s actual results to vary materially from those expressed or implied in its forward-looking statements, please refer to the factors listed and described under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the “Risk Factors” sections of the Company’s documents filed from time to time with the U.S. Securities and Exchange Commission, including, but not limited to, this and the Company’s other quarterly reports on Form 10-Q, the Company’s annual report on Form 10-K, and its registration statements on Form S-11 and the sticker supplements and amendments thereto, copies of which may be obtained from the Company’s website at http://www.cnlhealthcareproperties.com.

All written and oral forward-looking statements attributable to the Company or persons acting on its behalf are qualified in their entirety by these cautionary statements. Forward-looking statements speak only as of the date on which they are made; the Company undertakes no obligation to, and expressly disclaims any obligation to, update or revise its forward-looking statements to reflect new information, changed assumptions, the occurrence of subsequent events, or changes to future operating results over time unless otherwise required by law.

Overview

CNL Healthcare Properties, Inc., (the “Company”), is a Maryland corporation incorporated on June 8, 2010 that intends to qualify as a real estate investment trust (“REIT”) for the year ended December 31, 2012 for U.S. federal income tax purposes. The terms “us,” “we,” “our,” “Company” and “CNL Healthcare Properties” include CNL Healthcare Properties, Inc. and each of its subsidiaries.

We are externally managed and advised by CNL Healthcare Corp., (our “Advisor”). Our Advisor is responsible for managing our day-to-day affairs and for identifying and making acquisitions and investments on our behalf. We have also retained CNL Healthcare Manager Corp. (our “Property Manager”) to manage our properties under a six year property management agreement.

We intend to acquire properties primarily in the United States within the senior housing and healthcare sectors, although we may also acquire properties in the lifestyle and lodging sectors. Senior housing asset classes we may acquire include active adult communities (age-restricted and age-targeted housing), independent and assisted living facilities, continuing care retirement communities, memory care facilities and skilled nursing facilities. Healthcare asset classes we may acquire include medical office buildings, as well as other types of healthcare and wellness-related properties such as physicians’ offices, specialty medical and diagnostic service providers, specialty hospitals, walk-in clinics and outpatient surgery centers, hospitals and inpatient rehabilitative facilities, long-term acute care hospitals, pharmaceutical and medical supply manufacturing facilities, laboratories and research facilities and medical marts We expect to primarily lease our properties to third-party tenants but may also lease to wholly-owned taxable REIT subsidiaries (“TRS”) and engage independent third-party managers under management agreements to operate the properties as permitted under applicable tax regulations. We also may invest in and originate mortgage, bridge or mezzanine loans or in entities that make investments similar to the foregoing.

We believe recent demographic trends and strong supply and demand indicators present a strong case for an investment focus on the acquisition of senior housing and healthcare properties. We believe that the senior housing and healthcare sectors will continue to provide attractive opportunities as compared to other asset sectors. Our real estate investment portfolio is geographically diversified with properties in 15 states. The map below shows our current property allocations across geographic regions as of August 2, 2013:

28

Portfolio Analysis

As of June 30, 2013, our portfolio consisted of interests in 37 properties, including 29 senior housing communities, six skilled nursing facilities and two medical office buildings. Two of our 29 senior housing communities are currently under development. Of our properties held at June 30, 2013, 13 were owned through three unconsolidated joint ventures. As of August 2, 2013, we had disposed of seven senior housing communities held through an unconsolidated joint venture and acquired four additional medical office buildings, as described below in “Subsequent Events.”

Our senior housing communities, skilled nursing facilities and medical office buildings are operated by a mix of national or regional operators. The following table summarizes our investment portfolio as of August 2, 2013:

Type of Properties	Number of   Properties	Investments  in Properties  (in millions)		Percentage of Total Investments
Wholly-owned properties:
Senior housing leased (1)	10	$	157.1		36.4%
Senior housing managed (2)	6		92.4		21.4%
Senior housing developments (3)	2		16.8		3.9%
Skilled nursing leased (1)	6		56.3		13.0%
Medical office leased (1)	5		70.4		16.3%
Unconsolidated entities:
Leased Properties (4)	1		7.7		1.8%
Managed properties (4)	5		31.1		7.2%
	35	$	431.8		100%

FOOTNOTES:

(1) Properties that are leased to third-party tenants for which we report rental income from operating leases.

(2) Senior housing communities are managed pursuant to independent third-party management contracts where we report resident fees and services, and the corresponding property operating expenses.

(3) Investment amount herein represents funding to date with total development investments expected to equal approximately $21.7 million for the HarborChase Community and $21.8 million for the Dogwood Community.

(4) Properties that are owned through unconsolidated joint ventures and accounted for using the equity method. Excludes seven CHTSunIV properties held at June 30, 2013 that were sold in July 2013.

During the remainder of 2013 and beyond, we expect to continue to grow and diversify our portfolio by investing in additional senior housing communities, medical office buildings and other healthcare related properties. Refer to Note 16, “Subsequent Events,” for acquisitions through the date of this filing. We expect most will be wholly owned, although, we have and may continue to invest in joint ventures where we believe it is appropriate and beneficial. We have and may continue to invest in new property developments or properties which have not reached full stabilization. We anticipate that the types of senior housing and healthcare assets that we focus on will evolve over time based on the opportunities available to us, as well as our goal of building a portfolio with long-term growth and income generation that is diversified by asset type, operator and geographic location.

As part of our overall investment strategy, we have made and may continue to make or acquire loans (including mortgage, mezzanine or other loans) with respect to any of the asset classes in which we invest. We generally make loans to the owners of properties to enable them to acquire land, buildings, or to develop property. In exchange, the owner generally grants us a first lien or collateralized interest in a participating mortgage collateralized by the property or by interests in the entity that owns the property.

Substantially all of our revenues are derived from rental income from operating leases, resident fees and services, and interest earned on loans receivable. For the six months ended June 30, 2013, rental income from operating leases, resident fees and services, and other revenues represented 46.0%, 53.9%, and 0.1%, respectively, of total revenues as compared with 100% of total revenues being derived from rental income from operating leases for the six months ended June 30, 2012.

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While we are not directly impacted by the performance of the underlying properties leased to third party tenants, we believe that the financial and operational performance of our tenants provides an indication about the health of our tenants and their ability to pay rent. To the extent that our tenants, managers or joint venture partners experience operating difficulties and become unable to generate sufficient cash to make rent payments to us, there could be a material adverse impact on our consolidated results of operations, liquidity and/or financial condition. Our tenants and managers are contractually required to provide this information to us in accordance with their respective lease, management and joint venture agreements. Therefore, in order to mitigate the aforementioned risk, we monitor our investments through a variety of methods determined by the type of property.

When evaluating the performance of our senior housing communities and skilled nursing facilities, management reviews operating statistics of the underlying properties, including monthly revenue per occupied unit (“RevPOU”) and occupancy levels. RevPOU, which we define as total revenue divided by average number of occupied units or beds during a month, is a performance metric within the senior housing and skilled nursing sectors. This metric assists us in determining the ability to achieve market rental rates and to obtain revenues from providing care-related services. When evaluating the performance of medical office buildings or development properties, management reviews monthly financial statements, property level operating performance versus budgeted expectations, conducts periodic operational review calls with operators and conducts periodic property inspections or site visits. In addition, management reviews lease compliance relating to debt, licensure, real estate taxes, and other collateral.

As of June 30, 2013, the occupancy and RevPOU on our senior housing portfolio were approximately 87.2% and $4,829, respectively; whereas, the occupancy and RevPOU on our skilled nursing portfolio were approximately 84.7% and $5,926, respectively. Moreover, the occupancy and revenues per square foot on our medical office building portfolio were 95.0% and $2.41, respectively.

As of June 30, 2013, the HarborChase Community in Lady Lake, Florida is scheduled to be completed in the fourth quarter of 2013 and the Dogwood Community in Acworth, Georgia is scheduled to be completed in the second quarter of 2014. The percentage complete on these senior housing developments was approximately 50% and 35%, respectively.

Significant tenants

As of June 30, 2013 and December 31, 2012, and for the corresponding periods then ended, we had the following tenants that individually accounted for 10% or more of total revenues or leased more than 10% of total assets:

Tenant	Percentage of Total Revenues(1)					Percentage of Total Assets(2)
	June 30,   2013			December 31,   2012		June 30,   2013		December 31,   2012
TSMM Management; tenant of the Primrose communities (3) (“TSMM”)		42.5%			93.8%		32.1%		46.9%
Arkansas SNF Operations Acquisition III, LLC; tenant of the Perennial SNFs (4) (“Arkansas SNF”)		3.3%	(4)		n/a		12.1%		n/a

FOOTNOTES:

⁽¹⁾  Includes contractual rental income from operating leases, capital reserve income, straight-line rent adjustments and amortization of lease intangibles.

⁽²⁾  Represents net book value of real estate assets and lease intangibles associated with the property leased by the respective tenant as of the end of the period presented as a percentage of total assets.

⁽³⁾  We anticipate that the percentage of total assets leased and total revenues contributed by TSMM and Arkansas SNF will decrease during the remainder of 2013 as we raise additional funds and acquire additional properties.

⁽⁴⁾  We acquired the properties leased to Arkansas SNF in May 2013. We anticipate that the percentage of revenues from Arkansas SNF will increase during 2013 as the properties are leased for the remainder of the fiscal year.

We expect the percentage of total assets leased and total revenues contributed by our significant tenants to become less significant as we raise additional funds and acquire additional properties; however, any failure of these tenants to fulfill their obligations under their leases could have a material effect on us.

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Liquidity and Capital Resources

General

Our primary source of capital has been and is expected to continue to be proceeds we receive from our Offering. Our principal demands for funds will be for:

— the acquisition of real estate and real estate-related assets,

— the payment of offering and operating expenses,

— the payment of debt service on our outstanding indebtedness, and

— the payment of distributions.

Generally, we expect to meet cash needs for items other than acquisitions from our cash flows from operations, and we expect to meet cash needs for acquisitions from net proceeds from our Offering and financings. However, until such time as we are fully invested, we may continue to use proceeds from our Offering and financings to pay a portion of our operating expenses, distributions and debt service.

We intend to strategically leverage our real properties and possibly other assets and use debt as a means of providing additional funds for the acquisition of properties and the diversification of our portfolio. Our ability to increase our diversification through borrowing could be adversely affected by credit market conditions which result in lenders reducing or limiting funds available for loans, including loans collateralized by real estate. During times when interest rates on mortgage loans are high or financing is otherwise unavailable on a timely basis, we may purchase certain properties for cash with the intention of obtaining a mortgage loan for a portion of the purchase price at a later time.

Potential future sources of capital include proceeds from collateralized or uncollateralized financings from banks or other lenders (including revolving line of credit), proceeds from the sale of properties, other assets and undistributed operating cash flows. If necessary, we may use financings or other sources of capital in the event of unforeseen significant capital expenditures.

The number of properties, loans and other permitted investments we may acquire or make will depend on the number of shares sold through our Offering of common stock and the resulting amount of the net offering proceeds available for investment. If the number of shares sold is substantially less than the maximum amount of the Offering, we will likely make only a limited number of investments and will not achieve significant diversification of our investments.

Sources of Liquidity and Capital Resources

Common Stock Offering

To date, one of our primary sources of capital has been proceeds from our Offering. For the six months ended June 30, 2013 and 2012, we received aggregate offering proceeds of approximately $177.5 million and $69.0 million, respectively, (17.8 million shares and 6.9 million shares, respectively) including approximately $2.7 million (0.3 million shares) and $0.4 million (0.04 million shares), respectively, received through our distribution reinvestment plan. During the period July 1, 2013 through August 2, 2013, we received additional subscription proceeds of approximately $37.7 million (3.8 million shares). We expect to continue to raise capital under our Offering.

Borrowings

During the six months ended June 30, 2013, we had net repayments from debt totaling $23.3 million, which included the following: proceeds of $30.0 million from the Perennial loan, proceeds of $8.5 million from the LaPorte loan, proceeds of $5.3 million from the development property loans, re-advanced proceeds of $25.3 million from the Primrose II Bridge loan, and proceeds of $23.5 million from the Primrose II loans; offset by the early repayment of $40.0 million on the CHTSunIV mezzanine loan, total repayments of $75.0 on the Primrose II Bridge loan, and $0.9 million of scheduled repayments. As part of the repayment of the CHTSunIV mezzanine loan, we paid an exit fee of $0.8 million upon extinguishment and expensed an additional $0.2 million in unamortized loan costs as a result of our CHTSunIV mezzanine loan being repaid in full prior to its maturity date.

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We have borrowed and intend to continue borrowing money in order to acquire properties and to pay certain related fees and to cover periodic shortfalls between distributions paid and cash flows from operating activities. In general, we have pledged our assets in connection with our borrowings and target leverage ratios of debt to total assets between 40% to 60%; however, during our early growth period leverage may be higher for a period of time. As of June 30, 2013, we had an aggregate debt leverage ratio of approximately 36.4% as compared with 57.2% as of December 31, 2012. We expect that our leverage will increase as we continue to acquire additional senior living communities, medical office buildings and other healthcare related properties. More specifically, given our expectation of near term acquisitive growth, we are considering entering into a revolving credit facility as we believe this will prove more cost effective than the bridge financings used in conjunction with our prior acquisitions.

Distributions from Unconsolidated Entities

As of June 30, 2013, we had investments in 13 properties through three unconsolidated entities. We are entitled to receive quarterly preferred cash distributions from CHTSunIV and Windsor Manor and distributions on a pro rata basis for Montecito to the extent there is cash available to distribute. For the six months ended June 30, 2013, we were entitled to operating distributions of approximately $3.5 million from the operation of these entities of which approximately $1.7 million were received during the period. These distributions are generally received within 45 days after each quarter end.

In December 2012, in connection with an existing purchase option held by Sunrise Living Investments, Inc. (“Sunrise”) our venture partner on CHTSunIV, we entered into an agreement with Health Care REIT, Inc. (“HCN”), as result of a potential merger by HCN with Sunrise. Under the agreement, HCN and Sunrise were entitled to purchase our interest in CHTSunIV for an aggregate purchase price of approximately $62.5 million subject to adjustment based on the closing date and actual cash flow distribution (the “Joint Venture Disposition”). The Joint Venture Disposition was conditioned upon the merger of HCN with Sunrise, which was completed in January 2013. The sale closed on July 1, 2013 as described in “Subsequent Events” below. Our distributions for the remainder of 2013 will be impacted by the sale of our joint venture membership interest in CHTSunIV; however, we plan to reinvest the sale proceeds into additional real estate investment properties.

Net Cash Provided by Operating Activities

We generally expect to meet future cash needs for general and administrative expenses, debt service and distributions from the net operating income (“NOI”) from our properties, which primarily is rental income from operating leases, resident fees and services, and other revenues less the property operating expenses and property management fees from managed properties. We experienced positive cash flow from operating activities for the six months ended June 30, 2013 and 2012 of approximately $3.2 million and $0.5 million, respectively. The difference in cash flows from operating activities between the periods presented was primarily the result of:

— increases in total revenues and NOI for the six months ended June 30, 2013, as compared to the six months ended June 30, 2012, primarily as the result of having 24 consolidated properties in 2013 as compared with 5 consolidated properties in 2012;

— increases in distributions from our unconsolidated entities for the six months ended June 30, 2013, as compared to the six months ended June 30, 2012, primarily as the result of having three unconsolidated entities in 2013 as compared with minimal activity in 2012 as CHTSunIV was acquired on June 29, 2012;

— a reduction of general and administrative expenses as a percentage of total revenue from 37.0% for the six months ended June 30, 2012 to 16.3% for the six months ended June 30, 2013, which is attributable to economies of scale given the growth of the fund across periods; and

— a reduction in asset management fees primarily related to the Expense Support Agreement with our Advisor, described below;

— offset by an increase in acquisition fees and expenses during the six months ended June 30, 2013, in which we acquired seven consolidated properties during the period and built a pipeline of acquisitions for the remainder of 2013, compared with the six months ended June 30, 2012, in which we acquired five consolidated properties and did not close on any additional properties until December 2012. The acquisition fees and expenses were funded from proceeds of our Offering or debt proceeds and are treated as an operating expense in accordance with GAAP.

As we continue to acquire additional properties we expect that cash flows provided by operating activities will grow.

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Expense Support Agreement

As noted above, during the six months ended June 30, 2013, our cash from operations was positively impacted by the Expense Support Agreement (described in Note 9, “Related Party Arrangements”), which we entered into with our Advisor commencing on April 1, 2013 and ending on December 31, 2013. Pursuant to the Expense Support Agreement, our Advisor has agreed to forgo the payment of fees in cash and accept restricted forfeitable stock for services in an amount equal to the positive excess, if any, of (a) aggregate stockholder cash distributions declared for the applicable quarter, over (b) our aggregate modified funds from operations (as defined in the Expense Support Agreement). The expense support amount shall be determined for each calendar quarter, on a non-cumulative basis, with each such quarter-end date. For the quarter and six months ended June 30, 2013, our Advisor had forgone a total of $0.5 million in asset management fees under the terms of the Expense Support Agreement. We expect to issue approximately 0.05 million shares during the third quarter of 2013 in connection with the expense support received during the quarter ended June 30, 2013.

Operating Expense Limitation

We incur operating expenses which, in general, relate to our ongoing administration of the REIT. Pursuant to the advisory agreement, the Advisor shall reimburse or fund on our behalf the amount by which the total operating expenses paid or incurred by us exceeds, in any four consecutive fiscal quarters (an “Expense Year”) commencing with the year ended June 30, 2013, the greater of 2% of average invested assets or 25% of net income (as defined in the advisory agreement) (the “Limitation”), unless a majority of our independent directors determines that such excess expenses are justified based on unusual and non-recurring factors (referred to as the “Expense Cap Test”). In performing the Expense Cap Test, we use operating expenses on a GAAP basis after making adjustments for the benefit of expense support under the Expense Support Agreement. For the Expense Year ended June 30, 2013, we did not incur operating expenses in excess of the Limitation.

Uses of Liquidity and Capital Resources

Acquisitions

In January 2013, we, through our unconsolidated Montecito joint venture, acquired a 90% membership interest in a medical office building in Claremont, California for approximately $7.0 million. The medical office building is valued at approximately $19.8 million and has 49,984 square feet of rentable space. The occupancy for the Montecito medical office building was 92.0% as of June 30, 2013 under leases to seven tenants, anchored by the Pomona Valley Hospital Medical Center, a fully accredited 453-bed acute care hospital, which leases an aggregate of 37,871 square feet, or approximately 77% of the net rentable area.

In April 2013, we, through our unconsolidated Windsor Manor joint venture, acquired a 75% membership interest in two additional senior housing properties located in Iowa collectively valued at approximately $12.2 million (the “Windsor Manor II Communities”). The Windsor Manor II Communities feature 82 living units comprised of 62 assisted living units and 20 memory care units. In connection with the acquisition, the Windsor Manor joint venture assumed non-recourse loans encumbering the Windsor Manor II Communities with a current outstanding principal balance of approximately $6.0 million.

In May 2013, we acquired a 100% fee simple interest in land and related improvements comprising six skilled nursing facilities located in Arkansas (collectively, the “Perennial SNFs”). The Perennial SNFs have an aggregate of 868 licensed beds and 780 usable beds and are 100% leased under triple-net lease agreements having an initial term of ten years, with two five-year renewal options. The aggregate purchase price for the Perennial SNFs was approximately $56.4 million. In connection with our acquisition of the Perennial SNFs, we entered into a secured non-recourse loan agreement for a three-year term loan in the aggregate principal amount of $30.0 million.

In June 2013, we acquired the LaPorte Cancer Center, a freestanding medical office building, for a purchase price of approximately $13.1 million. The LaPorte Cancer Center is located in Westville, Indiana. Constructed in 2010, the LaPorte Cancer Center features a full-service cancer treatment center, offering chemotherapy and radiation therapy, and the only linear accelerator in Northwestern Indiana. The LaPorte Cancer Center draws patients from a wide geographic area and provides a key strategic service to the community. In connection with the acquisition of the LaPorte Cancer Center, we entered into a non-recourse loan agreement for $8.5 million, which matures on June 14, 2028.

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In June 2013, we originated an acquisition, development and construction loan (“ADC Loan”) to C4 Development, LLC (“Crosland Southeast”), a related party by virtue of a family relationship between a principal of the borrower and our vice chairman who recused himself from review and approval of the investment, for the development of a 22,000 square foot medical office building in Rutland, Virginia that will function as an out-patient emergency and imaging center and be leased to Hospital Corporation of America (“HCA”). The triple-net lease with HCA is effective upon Crosland Southeast obtaining a certificate of occupancy and contains a 10 year initial term with four 5 year renewal options. At June 30, 2013, approximately $1.8 million of the total $6.2 million ADC Loan commitment had been funded and used for the purchase of 2.8 acres of land to develop the medical office building. The initial term of the ADC Loan is one year with an extension option of up to six months and bears interest on the outstanding principal balance at a rate equal to 16% per annum with an 8% component that is paid monthly and an 8% component that is paid upon maturity of the ADC Loan. Refer to Note 9, “Related Party Arrangements” for additional information.

Development Properties

During the six months ended June 30, 2013, we funded approximately $6.4 million in development costs related to our two senior housing development projects. Pursuant to the development agreements for the communities under development, as of June 30, 2013, we had commitments to fund approximately $30.5 million in additional development and other costs. We expect to fund the remaining development costs primarily from the construction loans on each development. In addition to continued funding of our current senior housing development projects, our Advisor continues to evaluate additional senior housing development opportunities.

Stock Issuance and Offering Costs

Under the terms of the Offering, certain affiliates are entitled to receive selling commissions of up to 7% of gross offering proceeds on all shares sold, a marketing support fee of up to 3% of gross offering proceeds, and reimbursement of actual expenses incurred in connection with the Offering. In accordance with our articles of incorporation and the advisory agreement, the total amount of selling commissions, marketing support fees, due diligence expense reimbursements, and organizational and other offering costs to be paid by us may not exceed 15% of the gross aggregate offering proceeds. During the six months ended June 30, 2013 and 2012, we paid approximately $18.5 million and $10.4 million, respectively, in stock issuance and Offering costs.

Common Stock Redemptions

We maintain a redemption plan to provide a minimum level of liquidity to stockholders. The redemption price per share is calculated based on our Offering price and the applicable number of years the stockholder held the shares as of the date of the redemption. The amount redeemed is determined by our board of directors in its sole discretion. The redemption plan generally requires that a stockholder own shares requested to be redeemed for a minimum of one year. We received and paid out $0.4 million and $0.01 million in redemption requests during the six months ended June 30, 2013 and 2012, respectively. Our board of directors exercises discretion in determining the level of request to be honored, and ultimately determined to redeem all such requests.

The following table presents a summary of requests received and shares redeemed pursuant to our stock redemption plan during the six months ended June 30, 2013:

2013 Quarters	First			Second			Total
Requests in queue		—			—			—
Redemptions requested		23,565			22,692			46,257
Shares redeemed:
Prior period requests		—			—			—
Current period requests		(23,565	)		(22,692	)		(46,257	)
Adjustments		—			—			—
Pending redemption requests		—			—			—
Average price paid per share	$	9.30		$	9.02		$	9.16

The Company is not obligated to redeem shares under the redemption plan. If the Company determines to redeem shares, at no time during a 12-month period may the number of shares the Company redeems exceed 5% of the weighted average number of shares of the Company’s outstanding common stock at the beginning of such 12-month

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period. The aggregate amount of funds under the redemption plan will be determined on a quarterly basis in the sole discretion of the board of directors of the Company, and may be less than but is not expected to exceed the aggregate proceeds from the Company’s distribution reinvestment plan. To the extent the aggregate proceeds received from the distribution reinvestment plan are not sufficient to fund redemption requests pursuant to the 5% limitation described above, the Company’s board of directors may, in its sole discretion, choose to use other sources of funds to redeem shares.

Distributions

In order to qualify as a REIT, we are required to distribute 90% of our annual REIT taxable income (excluding net capital gains) to our stockholders. To date, we have had insufficient cash flows from operating activities or funds from operations to fund our distributions; therefore, such amounts have been substantially funded from proceeds of our Offering or borrowings.

Our board of directors authorized a distribution policy providing for monthly cash distribution of $0.03333 (which is equal to an annualized distribution rate of 4%) together with stock distribution of 0.002500 shares of common stock (which is equal to an annualized distribution rate of 3%) for a total annualized distribution of 7% on each outstanding share of common stock (based on the $10.00 offering price) payable to all common stockholders of record as of the close of business on the first business day of each month. Our board authorized a policy providing for distributions of cash and stock rather than solely of cash in order to retain cash for investment opportunities.

Part of our strategy is to develop select properties and to invest in certain existing properties that have not reached full occupancy at the time of purchase. These types of investments do not fully contribute to cash flows from operating activities to the full extent that we expect over the long term holding period. Accordingly, current cash flows from operating activities may not be indicative of future results as these properties reach stabilized occupancy levels. Additionally, we believe that investing in these types of properties may enhance our Company’s valuation over the long-term. It is partially for this reason that we have elected to pay a portion of our dividend in the form of stock. Our Board has expressed the intent to increase the proportion of the dividend paid in cash over time as FFO and MFFO increase, in part, as a result of contributions from these types of assets.

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The following table represents total cash distributions declared, distributions reinvested and cash distributions per share for the six months ended June 30, 2013 and 2012.

			Distributions Paid (2)
Periods	Cash    Distributions    per Share		Total Cash     Distributions     Declared (1)		Reinvested via   DRP		Cash   Distributions net   of Reinvestment Proceeds		Stock Distributions Declared (Shares)(3)		Stock Distributions Declared (at current   offering price)		Total Cash and   Stock Distributions Declared(4)		Cash Flows Provided by Operating     Activities (5)(2)
2013 Quarters
First		$  0.09999		$ 2,099,034		$ 1,111,733		$     987,301		157,449		$ 1,574,490		$ 3,673,524		$       211,742
Second		0.09999		2,878,300		1,544,065		1,334,235		215,854		2,158,540		5,036,840		2,964,299
Total		$  0.19998		$ 4,977,334		$ 2,655,798		$  2,321,536		373,303		$ 3,733,030		$ 8,710,364		$    3,176,041
			Distributions Paid (2)
Periods	Cash Distributions per Share		Total Cash Distributions Declared (1)		Reinvested via DRP		Cash Distributions net of Reinvestment Proceeds		Stock Distributions Declared (Shares) (3)		Stock Distributions Declared (at current offering price)		Total Cash and Stock Distributions Declared(4)		Cash Flows Provided by (Used in) Operating Activities (5)(2)
2012 Quarters
First		$  0.09999		$    202,598		$    112,295		$       90,303		15,196		$   151,960		$     354,558		$    (1,954,009	)
Second		0.09999		557,865		308,872		248,993		41,735		417,350		975,215		2,450,610
Total		$  0.19998		$    760,463		$    421,167		$     339,296		56,931		$   569,310		$  1,329,773		$        496,601

FOOTNOTES:

(1) For the six months ended June 30, 2013 and 2012, 69% and 100% of total cash distributions declared to stockholders were funded with proceeds from our Offering or borrowings.

For the six months ended June 30, 2013 and 2012, 100% of distributions were considered a return of capital for federal income tax purposes. No amounts distributed to stockholders for the six months ended June 30, 2013 were required to be or have been treated by the Company as a return of capital for purposes of calculating the stockholders’ return on their invested capital as described in the Company’s advisory agreement. The distribution of new common shares to recipients is non-taxable.

(2) Represents the amount of cash used to fund distributions and the amount of distributions paid which were reinvested in additional shares through our Distribution Reinvestment Plan.

(3) The distribution of new common shares to the recipients is non-taxable. Stock distributions may cause the interest of later investors in our stock to be diluted as a result of the stock issued to earlier investors.

(4) Based on the current offering price of $10.00, stock distributions declared represented approximately 43% of the total value of distributions declared and cash distributions declared represented approximately 57% of the total value of distributions declared.

(5) Cash flows used in operating activities calculated in accordance with GAAP are not necessarily indicative of the amount of cash available to pay distributions. For example, GAAP requires that the payment of acquisition fees and costs related to business combinations be classified as a use of cash in operating activities in the statement of cash flows, which directly reduces the measure of cash flows from operations. However, acquisition fees and costs are paid for with proceeds from our offering as opposed to operating cash flows. For the six months ended June 30, 2013 and 2012, we expensed approximately $2.9 million and $2.0 million, respectively, in acquisition fees and expenses, which were paid from the proceeds of our Offering. Additionally, the board of directors also uses other measures such as FFO and MFFO in order to evaluate the level of distributions.

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Subsequent Events

On July 1, 2013, pursuant to a purchase and sale agreement dated December 18, 2012, between CHTSunIV and HCN, we completed the sale of our joint venture membership interest for a sales price of approximately $61.8 million, net of transaction costs, which reflects an aggregate gain of approximately $4.5 million.

On July 10, 2013, we reinvested a portion of the CHTSunIV proceeds and completed the acquisition of four medical office buildings in Knoxville, Tennessee for an aggregate purchase price of approximately $57.3 million, excluding closing costs (“Knoxville MOBs”). The Knoxville MOBs are located on three hospital campuses of the Tennova Healthcare System, a subsidiary of Health Management Associates (“HMA”). The Knoxville MOBs are 100% leased under 32 non-cancelable leases with expirations ranging from 2013 through 2021, subject to additional renewal periods at the tenant’s option.

In addition, we financed a portion of the Knoxville MOBs acquisition through a secured non-recourse credit agreement with a five-year term in the aggregate principal amount of approximately $38.6 million (“Knoxville MOBs Loan”), of which $35.1 million was funded in connection with the acquisition of the medical office buildings and an additional $3.5 million will be funded upon final lender approval. The Knoxville MOBs Loan bears interest at a rate equal to the sum of LIBOR and 2.5% per annum, payable monthly, and matures on July 10, 2018. The Knoxville MOBs Loan contains affirmative, negative and financial covenants customary for the type of credit facility, including limitations on incurrence of additional indebtedness and debt service coverage requirements.

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Results of Operations

The following discussion and analysis should be read in conjunction with the consolidated financial statements and the notes thereto of our Annual Report on Form 10-K for the year ended December 31, 2012.

In understanding our operating results in the accompanying condensed consolidated financial statements and our expectations about 2013 and beyond, it is important to understand how the growth in our assets has impacted our results. Operating results for the quarter and six months ended June 30, 2013 reflect our $242.2 million of consolidated investments being held for the full period, as well as additional investments of $73.4 million for a portion of the period. We anticipate using a portion of our cash on hand as of June 30, 2013, as well as additional net offering proceeds received subsequent to quarter-end through the close of our Offering to invest in additional senior living communities, medical office buildings or other healthcare related assets. As such, we anticipate additional operating income will be generated in subsequent periods due to further investment of proceeds.

We are not aware of any material trends or uncertainties, favorable or unfavorable, that may be reasonably anticipated to have a material impact on either capital resources or the revenues or income to be derived from the acquisition and operation of properties, loans and other permitted investments, other than those referred to in the risk factors identified in “Part II, Item 1A” of this report and the “Risk Factors” section of our Annual Report on Form 10-K for the year ended December 31, 2012.

Quarter and six months ended June 30, 2013 as compared to the quarter and six months ended June 30, 2012

Rental Income from Operating Leases. Rental income from operating leases was approximately $4.1 million and $7.6 million for the quarter and six months ended June 30, 2013, respectively, as compared to $1.9 million and $2.9 million for the quarter and six months ended June 30, 2012, respectively. The increase in rental income from operating leases resulted from our ownership of ten senior housing communities for the full six months ended June 30, 2013, as compared to our ownership of only five of those communities for a partial period during the six months ended June 30, 2012. In addition, we acquired six skilled nursing facilities in May 2013 and one medical office building in June 2013, which further attributed to the increase across periods.

Resident Fees and Services. Resident fees and services income was approximately $4.5 million and $8.8 million for the quarter and six months ended June 30, 2013, respectively, as a result of the five managed senior housing communities acquired in December 2012. We did not own any managed properties as of June 30, 2012. We expect increases in the future as we purchase additional managed real estate properties.

Other Revenues.  Other revenues were approximately $0.01 million for both the quarter and six months ended June 30, 2013, and there were no other revenues as of June 30, 2012. This amount is comprised of interest income on a construction loan made to Crosland Southeast for the HCA Rutland development originated in June 2013 and common area maintenance (“CAM”) revenue for the LaPorte Cancer Center acquired in June 2013. We expect increases in other revenues as these investments are held for full periods.

Property Operating Expenses. Property operating expenses were approximately $3.3 million and $6.5 million for the quarter and six months ended June 30, 2013, respectively, as a result of the five managed senior housing communities acquired in December 2012. We did not own any managed properties as of June 30, 2012. We expect increases in the future as we purchase additional managed real estate properties.

General and Administrative.  General and administrative expenses were approximately $1.6 million and $2.7 million for the quarter and six months ended June 30, 2013, respectively, as compared to approximately $0.6 million and $1.1 million for the quarter and six months ended June 30, 2012, respectively. General and administrative expenses were comprised primarily of personnel expenses of affiliates of our Advisor, directors’ and officers’ insurance, accounting and legal fees, and board of director fees. We expect that these amounts will continue to grow in aggregate dollars as our asset base increases; however, we expect these amounts to decrease as a percent of total revenues as we realize additional economies of scale.

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Acquisition Fees and Expenses. Acquisition fees and expenses were approximately $2.6 million and $3.4 million for the quarter and six months ended June 30, 2013, respectively, of which approximately $0.2 million and $0.5 million, respectively, were capitalized as investment in unconsolidated entities. We incurred approximately $2.5 million and $4.4 million for the quarter and six months ended June 30, 2012, respectively, of which $2.4 million has been capitalized as investment in unconsolidated entities for the quarter and six months ended June 30, 2012. We expect to incur additional acquisition fees and expenses in the future as we purchase additional real estate properties.

Asset Management Fees. Asset management fees were approximately $0.6 million and $1.6 million for the quarter and six months ended June 30, 2013, respectively, as compared to $0.2 million and $0.3 million in during the quarter and six months ended 2012, respectively. Asset management fees of approximately $0.5 million for the quarter and six months ended June 30, 2013 were forgone and settled with issuance of restricted stock in accordance with the Expense Support Agreement. Additional asset management fees may be credited in the second half of 2013. Asset management fees are payable at an approximate rate of 1% of average invested assets per year; therefore, these fees increased due to having made approximately $283.1 million in acquisitions subsequent to June 30, 2012, as well as, the five senior housing communities acquired during the first quarter of 2012 being operational for the full six months ended June 30, 2013. Although we expect total asset management fees will increase during the remainder of 2013, a portion of such fees may be covered under the Expense Support Agreement.

Property Management Fees. We incurred approximately $0.5 million and $0.9 million for the quarter and six months ended June 30, 2013, respectively, and $0.03 million and $0.05 million in property management fees payable to our property manager during the quarter and six months ended June 30, 2012, respectively, for services in managing our property operations. Property management fees generally range from 2% to 5% of property revenues or an oversight fee equal to 1% of property revenues for those managed by a third-party and increased as a result of the increase in rental income from operating leases and resident fees and services for managed properties from acquisitions during 2012.

Depreciation and Amortization. Depreciation and amortization expenses for the quarter and six months ended June 30, 2013 were approximately $2.6 million and $4.9 million, respectively, and $0.6 million and $0.8 million for the quarter and six months ending June 30, 2012, respectively. Depreciation and amortization expenses are comprised of depreciation and amortization of the buildings, equipment, land improvements and in-place leases related to our ten senior housing and five managed senior housing properties for a full period for the six months ended June 30, 2013, as compared to only a partial period of depreciation and amortization on five of our senior housing properties for the six months ended June 30, 2012.

Interest Expense and Loan Cost Amortization. Interest expense and loan cost amortization for the quarter and six months ended June 30, 2013 was approximately $1.8 million and $5.2 million, respectively, of which $0.1 million and $0.3 million, respectively, were capitalized as development costs relating to the two senior housing communities under development. We incurred approximately $0.8 million and $1.4 million for the quarter and year ended June 30, 2012, respectively, of which no amounts were capitalized. Approximately $2.0 million of the increase was primarily the result of an increase in our average debt outstanding to $181.5 million during 2013 from $67.4 million during the same period in 2012. In addition, during the six months ended June 30, 2013, we amortized an additional $0.7 million in loan costs relating to debt obtained subsequent to June 30, 2012 and collateralized by our real estate assets. We also recorded a write-off of approximately $0.2 million as a loss on the early extinguishment of debt and paid an exit fee of $0.8 million for the six months ended June 30, 2013 upon extinguishment of the CHTSunIV mezzanine loan prior to its maturity date.

Equity in Earnings (Loss) from Unconsolidated Entities.  Our unconsolidated entities generated earnings of approximately $1.2 million and $1.5 million for the quarter and six months ended June 30, 2013 relating to our investments in the CHTSunIV, Windsor Manor and Montecito joint ventures, as compared to a loss of approximately $0.8 million for the quarter and six months ended June 30, 2012 relating to our investment in the CHTSunIV joint venture as the Windsor Manor and Montecito joint ventures were acquired subsequent to June 30, 2012. Equity in earnings (loss) from unconsolidated entities is determined using the hypothetical liquidation at book value (“HLBV”) method of accounting, which can create significant variability in earnings or loss from the joint venture, while the cash distributions that we anticipate to receive from the joint ventures may be more consistent over time. We expect equity in earnings (loss) to be directly affected by the sale of the CHTSun IV investment in July 2013, as described above in “Sources of Liquidity and Capital Resources – Distributions from Unconsolidated Entities.”

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Income Taxes. During the quarter and six months ended June 30, 2013, we recognized state and federal income tax expense related to our properties held in taxable REIT subsidiaries of approximately $0.03 million and $0.02 million, respectively. We did not record any income tax benefit or expense during the six months ended June 30, 2012.

Funds from Operations and Modified Funds from Operations

Due to certain unique operating characteristics of real estate companies, as discussed below, the National Association Real Estate Investment Trust (“NAREIT”), promulgated a measure known as funds from operations (“FFO”), which we believe to be an appropriate supplemental measure to reflect the operating performance of a REIT. The use of FFO is recommended by the REIT industry as a supplemental performance measure. FFO is not equivalent to net income or loss as determined under GAAP.

We define FFO, a non-GAAP measure, consistent with the standards approved by the Board of Governors of NAREIT. NAREIT defines FFO as net income or loss computed in accordance with GAAP, excluding gains or losses from sales of property, real estate asset impairment write-downs, plus depreciation and amortization of real estate related assets, and after adjustments for unconsolidated partnerships and joint ventures. Our FFO calculation complies with NAREIT’s policy described above.

The historical accounting convention used for real estate assets requires straight-line depreciation of buildings and improvements, which implies that the value of real estate assets diminishes predictably over time, especially if such assets are not adequately maintained or repaired and renovated as required by relevant circumstances and/or is requested or required by lessees for operational purposes in order to maintain the value of the property. We believe that, because real estate values historically rise and fall with market conditions, including inflation, interest rates, the business cycle, unemployment and consumer spending, presentations of operating results for a REIT using historical accounting for depreciation may be less informative. Historical accounting for real estate involves the use of GAAP. Any other method of accounting for real estate such as the fair value method cannot be construed to be any more accurate or relevant than the comparable methodologies of real estate valuation found in GAAP. Nevertheless, we believe that the use of FFO, which excludes the impact of real estate related depreciation and amortization, provides a more complete understanding of our performance to investors and to management, and when compared year over year, reflects the impact on our operations from trends in occupancy rates, rental rates, operating costs, general and administrative expenses, and interest costs, which may not be immediately apparent from net income or loss. However, FFO and modified funds from operations (“MFFO”), as described below, should not be construed to be more relevant or accurate than the current GAAP methodology in calculating net income or loss in its applicability in evaluating operating performance. The method utilized to evaluate the value and performance of real estate under GAAP should be construed as a more relevant measure of operational performance and considered more prominently than the non-GAAP FFO and MFFO measures and the adjustments to GAAP in calculating FFO and MFFO.

Changes in the accounting and reporting promulgations under GAAP (for acquisition fees and expenses for business combinations from a capitalization/depreciation model) to an expensed-as-incurred model that were put into effect in 2009 and other changes to GAAP accounting for real estate subsequent to the establishment of NAREIT’s definition of FFO have prompted an increase in cash-settled expenses, specifically acquisition fees and expenses, as items that are expensed under GAAP and accounted for as operating expenses. Our management believes these fees and expenses do not affect our overall long-term operating performance. Publicly registered, non-listed REITs typically have a significant amount of acquisition activity and are substantially more dynamic during their initial years of investment and operation. While other start up entities may also experience significant acquisition activity during their initial years, we believe that non-listed REITs are unique in that they have a limited life with targeted exit strategies within a relatively limited time frame after its acquisition activity ceases. Due to the above factors and other unique features of publicly registered, non-listed REITs, the Investment Program Association (“IPA”), an industry trade group, has standardized a measure known as MFFO which the IPA has recommended as a supplemental measure for publicly registered non-listed REITs and which we believe to be another appropriate supplemental measure to reflect the operating performance of a non-listed REIT. MFFO is not equivalent to our net income or loss as determined under GAAP, and MFFO may not be a useful measure of the impact of long-term operating performance on value if we do not continue to operate with a limited life and targeted exit strategy, as currently intended. We believe that because MFFO excludes costs that we consider more reflective of investing activities and other non-operating items included in FFO and also excludes acquisition fees and expenses that affect our operations only in periods in which properties are acquired, MFFO can provide, on a going forward basis, an indication of the sustainability (that is, the capacity to continue to be maintained) of our operating performance after

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the period in which we acquired our properties and once our portfolio is in place. By providing MFFO, we believe we are presenting useful information that assists investors and analysts to better assess the sustainability of our operating performance after our properties have been acquired. We also believe that MFFO is a recognized measure of sustainable operating performance by the non-listed REIT industry.

We define MFFO, a non-GAAP measure, consistent with the IPA’s Guideline 2010-01, Supplemental Performance Measure for Publicly Registered, Non-Listed REITs: MFFO, or the Practice Guideline, issued by the IPA in November 2010. The Practice Guideline defines MFFO as FFO further adjusted for the following items, as applicable, included in the determination of GAAP net income or loss: acquisition fees and expenses; amounts relating to deferred rent receivables and amortization of above and below market leases and liabilities (which are adjusted in order to remove the impact of GAAP straight-line adjustments from rental revenues); accretion of discounts and amortization of premiums on debt investments, mark-to-market adjustments included in net income; nonrecurring gains or losses included in net income from the extinguishment or sale of debt, hedges, foreign exchange, derivatives or securities holdings where trading of such holdings is not a fundamental attribute of the business plan, and unrealized gains or losses resulting from consolidation from, or deconsolidation to, equity accounting and after adjustments for consolidated and unconsolidated partnerships and joint ventures, with such adjustments calculated to reflect MFFO on the same basis. The accretion of discounts and amortization of premiums on debt investments, nonrecurring unrealized gains and losses on hedges, foreign exchange, derivatives or securities holdings, unrealized gains and losses resulting from consolidations, as well as other listed cash flow adjustments are adjustments made to net income in calculating the cash flows provided by operating activities and, in some cases, reflect gains or losses which are unrealized and may not ultimately be realized.

Our MFFO calculation complies with the IPA’s Practice Guideline described above. In calculating MFFO, we exclude acquisition related expenses. Under GAAP, acquisition fees and expenses are characterized as operating expenses in determining operating net income or loss. These expenses are paid in cash by us. All paid and accrued acquisition fees and expenses will have negative effects on returns to investors, the potential for future distributions, and cash flows generated by us, unless earnings from operations or net sales proceeds from the disposition of other properties are generated to cover the purchase price of the property.

Our management uses MFFO and the adjustments used to calculate it in order to evaluate our performance against other non-listed REITs which have limited lives with short and defined acquisition periods and targeted exit strategies shortly thereafter. As noted above, MFFO may not be a useful measure of the impact of long-term operating performance on value if we do not continue to operate in this manner. We believe that our use of MFFO and the adjustments used to calculate it allow us to present our performance in a manner that reflects certain characteristics that are unique to non-listed REITs, such as their limited life, limited and defined acquisition period and targeted exit strategy, and hence that the use of such measures is useful to investors. For example, acquisition costs are funded from our subscription proceeds and other financing sources and not from operations. By excluding expensed acquisition costs, the use of MFFO provides information consistent with management’s analysis of the operating performance of the properties.

Presentation of this information is intended to provide useful information to investors as they compare the operating performance of different non-listed REITs, although it should be noted that not all REITs calculate FFO and MFFO the same way and as such comparisons with other REITs may not be meaningful. Furthermore, FFO and MFFO are not necessarily indicative of cash flows available to fund cash needs and should not be considered as an alternative to net income (loss) or income (loss) from continuing operations as an indication of our performance, as an alternative to cash flows from operations as an indication of its liquidity, or indicative of funds available to fund our cash needs including its ability to make distributions to our stockholders. FFO and MFFO should be reviewed in conjunction with other GAAP measurements as an indication of our performance. MFFO has limitations as a performance measure in an offering such as ours where the price of a share of common stock is a stated value and there is no net asset value determination during the offering stage and for a period thereafter. MFFO is useful in assisting management and investors in assessing the sustainability of operating performance in future operating periods, and in particular, after the offering and acquisition stages are complete and net asset value is disclosed. FFO and MFFO are not useful measures in evaluating net asset value because impairments are taken into account in determining net asset value but not in determining FFO and MFFO.

Neither the SEC, NAREIT nor any other regulatory body has passed judgment on the acceptability of the adjustments we use to calculate FFO or MFFO. In the future, the SEC, NAREIT or another regulatory body may decide to standardize the allowable adjustments across the non-listed REIT industry and we would have to adjust its calculation and characterization of FFO or MFFO.

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The following table presents a reconciliation of net loss to FFO and MFFO for the quarters and six months ended June 30, 2013 and 2012:

	Quarters ended June 30,						Six months ended June 30,
	2013			2012			2013			2012
Net loss	$	(2,829,402	)	$	(1,126,107	)	$	(6,638,750	)	$	(3,539,407	)
Adjustments:
Depreciation and amortization		2,563,452			631,883			4,882,369			842,079
FFO adjustments from unconsolidated entities: (4)		1,197,036			—			2,245,073			—
Total funds from operations		931,086			(494,224	)		488,692			(2,697,328	)
Acquisition fees and expenses (1)		2,365,781			75,772			2,944,307			1,975,185
Straight-line adjustments for leases (2)		(418,567	)		(236,626	)		(836,346	)		(344,633	)
Loss on early extinguishment of debt (3)		—			—			244,077			—
MFFO adjustments from unconsolidated entities (4)
Acquisition fees and expenses		—			735,102			321,613			735,102
Total modified funds from operations	$	2,878,300		$	80,024		$	3,162,343		$	(331,674	)
Weighted average number of shares of common stock outstanding (basic and diluted) (5)		30,811,974			6,833,099			26,758,120			4,984,881
FFO per share (basic and diluted)	$	0.03		$	(0.07	)	$	0.02		$	(0.54	)
MFFO per share (basic and diluted)	$	0.09		$	0.01		$	0.12		$	(0.07	)

FOOTNOTES:

(1) In evaluating investments in real estate, management differentiates the costs to acquire the investment from the operations derived from the investment. By adding back acquisition expenses from business combinations, management believes MFFO provides useful supplemental information of its operating performance and will also allow comparability between different real estate entities regardless of their level of acquisition activities. Acquisition expenses include payments to our Advisor or third parties. Acquisition expenses for business combinations under GAAP are considered operating expenses and as expenses included in the determination of net income (loss) and income or (loss) from continuing operations, both of which are performance measures under GAAP. All paid or accrued acquisition expenses will have negative effects on returns to investors, the potential for future distributions, and cash flows generated by us, unless earnings from operations or net sales proceeds from the disposition of properties are generated to cover the purchase price of the property.

(2) Under GAAP, rental receipts are allocated to periods using various methodologies. This may result in income recognition that is significantly different than underlying contract terms. By adjusting for these items (to reflect such payments from a GAAP accrual basis to a cash basis of disclosing the rent and lease payments), MFFO provides useful supplemental information on the realized economic impact of lease terms and debt investments, providing insight on the contractual cash flows of such lease terms and debt investments, and aligns results with management’s analysis of operating performance.

(3) Management believes that adjusting for the loss on the early extinguishment of debt is appropriate because the write-off of unamortized loan costs are non-recurring, non-cash adjustments that are not reflective of our ongoing operating performance and aligns results with management’s analysis of operating performance.

(4) This amount represents our share of the FFO or MFFO adjustments allowable under the NAREIT or IPA definitions, respectively, calculated using the HLBV method.

(5) For purposes of determining the weighted average number of shares of common stock outstanding, stock distributions are treated as if they were outstanding as of the beginning of the periods presented.

As noted above, part of our strategy is to develop select properties and to invest in certain existing properties that have not reached full occupancy at the time of purchase. These types of investments do not fully contribute to FFO and MFFO to the full extent that we expect them to over the long term holding period. Accordingly, current FFO and MFFO may not be indicative of future results as these properties reach stabilized occupancy levels. Additionally, we believe that investing in these types of properties may enhance our Company’s valuation over the long-term. It is partially for this reason that we have elected to pay a portion of our dividend in the form of stock. Our Board has expressed the intent to increase the proportion of the dividend paid in cash over time as FFO and MFFO increase, in part, as a result of contributions from these types of assets.

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Off-Balance Sheet Arrangements

The material changes during the six months ended June 30, 2013 through the date of this filing consisted of the following:

In January 2013, we, through our Montecito joint venture, acquired a 90% membership interest in a two-story medical office building in Claremont, California for approximately $7.0 million in equity. The Montecito joint venture obtained a five-year credit facility for a maximum aggregate principal amount of $35 million, of which $12.5 million was funded in connection with the acquisition of the medical office building and an additional $0.4 million was funded upon completion of certain tenant improvements. The non-recourse loan which is collateralized by the property, and future properties that may be funded under the facility, matures in January 2018 and bears interest at a rate equal to the sum of LIBOR plus 2.6% per annum, payable monthly. The loan requires interest-only payments on the outstanding principal amount through July 2014 and monthly payments thereafter of principal and interest based upon a 360-month amortization schedule. In addition, the Montecito joint venture further entered into a three-year forward starting swap with a notional amount of $12.4 million related to the credit facility balance which will bear interest at a fixed rate of 3.935% in years three through five. We and our co-venture partner have provided guarantees in proportion to our ownership percentages.

In April 2013, we, through our Windsor Manor joint venture, acquired a 75% membership interest in two additional senior housing properties located in Grinnell and Indianola, Iowa and collectively valued at approximately $12.2 million. In connection with the acquisition, the Windsor Manor joint venture assumed loans encumbering each of the properties with a current outstanding principal balance of approximately $6.0 million. The assumed loan collateralized by the Grinnell community is a 35-year, fully-amortizing, non-recourse loan in the total amount of approximately $2.8 million, which bears interest at a rate of 4.12% plus a 50 basis points mortgage insurance premium (“MIP”) and matures on September 2045. The assumed loan collateralized by the Indianola community is a 35-year, fully-amortizing, non-recourse loan in the total amount of approximately $3.2 million, which bears interest at a rate of 4.90% plus a 50 basis points MIP and matures in June 2045.

In June 2013, we originated an ADC Loan to Crosland Southeast, a related party, for the development of the HCA Rutland medical office building. In conjunction therein, we committed to advance an additional $4.4 million pursuant to the ADC Loan over the next 12 months.

In August 2013, in connection with receiving a waiver from the lender relating to a minimum occupancy requirement for the quarter ended June 30, 2013, the Windsor Manor joint venture modified its loan agreement to amend the thresholds for minimum occupancy and debt service coverage under the loan agreement, and to extend the maturity date from August 31, 2013 to June 30, 2014. As of June 30, 2013, average occupancy at the Windsor Manor joint venture fell to 79.3%, which was slightly below the 80.0% minimum requirement under the terms of the loan agreement. As of both June 30, 2013 and August 2, 2013, $12.4 million remained outstanding under the loan agreement. The modification did not change the remaining terms of the loan agreement. In connection with the modification, the Windsor Manor joint venture agreed to obtain an appraisal for the collateral assets and at its option either (i) pay down the principal balance of the loan or (ii) establish a deposit account as collateral with the lender in the amount by which 65% of the appraised value exceeds the existing loan balance, if any. The Windsor Manor joint venture will obtain the appraisal during the third quarter of 2013.

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Contractual Obligations

The following table presents our contractual obligations and the related payment periods as of June 30, 2013:

	Payments Due by Period
	2013		2014 - 2015		2016 - 2017		Thereafter		Total
ADC Loan commitment	$	4,393,933	$	—	$	—	$	—	$	4,393,933
Mortgage note payable (principal and interest)		4,947,527		20,419,668		52,725,892		137,553,376		215,646,463
Development contracts on development properties	$	30,344,000	$	156,000	$	—	$	—	$	30,500,000

Critical Accounting Policies and Estimates

See Item 1. “Financial Statements” and our Annual Report on Form 10-K for the year ended December 31, 2012 for a summary of our critical accounting policies and estimates.

Recent Accounting Pronouncements

See Item 1. “Financial Information” for a summary of the impact of recent accounting pronouncements.

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Item 3. Quantitative and Qualitative Disclosures about Market Risks

We may be exposed to interest rate changes primarily as a result of long-term debt used to acquire properties and to make loans and other permitted investments. Our interest rate risk management objectives will be to limit the impact of interest rate changes on earnings and cash flows and to lower our overall borrowing costs. To achieve our objectives, we expect to borrow primarily at fixed rates or variable rates with the lowest margins available, and in some cases, with the ability to convert variable rates to fixed rates. With regard to variable rate financing, we will assess interest rate cash flow risk by continually identifying and monitoring changes in interest rate exposures that may adversely impact expected future cash flows and by evaluating hedging opportunities.

We may be exposed to foreign currency exchange rate movements in the event that we invest outside of the United States. At such time as we have foreign investments, we will evaluate various foreign currency risk mitigating strategies in an effort to minimize any impact on earnings.

The following is a schedule as of June 30, 2013, of our fixed and variable rate debt maturities for the remainder of 2013 and each of the next four years, and thereafter (principal maturities only):

	Expected Maturities
	2013		2014		2015		2016		2017		Thereafter		Total		Fair Value
Fixed rate debt		$  1,491,674		$  3,087,301		$ 3,250,144		$3,444,671		$8,618,368		$119,965,114		$139,857,272		$ 129,159,402	(1)
Weighted average interest rate on fixed debt		4.10%		4.10%		4.09%		4.08%		3.69%		4.12%		4.09%
Variable rate debt		$              —		$              —		$     384,816		$ 29,615,184		$            —		$                —		$ 30,000,000		$ 30,000,000
Average interest rate on variable rate debt		Libor +4.25%		Libor +4.25%		Libor +4.25%		Libor +4.25%		Libor +4.25%		Libor +4.25%		Libor +4.25%

FOOTNOTES:

  (1) The estimated fair value of our fixed rate debt was determined using discounted cash flows based on market interest rates as of June 30, 2013. We determined market rates through discussions with our existing lenders pricing our loans with similar terms and current rates and spreads.

Management estimates that a hypothetical one-percentage point increase in LIBOR compared to the LIBOR rate as of June 30, 2013, would increase annual interest expense by approximately $0.3 million on our variable rate debt. This sensitivity analysis contains certain simplifying assumptions, and although it gives an indication of our exposure to changes in interest rates, it is not intended to predict future results and actual results will likely vary.

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Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures (as defined under Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, our management, including our principal executive officer and principal financial officer concluded that our disclosure controls and procedures are effective at the reasonable assurance level as of the end of the period covered by this report.

We believe, however, that a controls system, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud or error, if any, within a company have been detected.

Changes in Internal Control over Financial Reporting

During the most recent fiscal quarter, there were no changes in our internal controls over financial reporting (as defined under Rule 13a-15(f) under the Exchange Act) that have materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings - None

Item 1A. Risk Factors

There have been no material changes in our assessment of our risk factors from those set forth in our Annual Report on Form 10-K for the fiscal year ended December 31, 2012.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Unregistered Sales of Equity Securities

During the period covered by this quarterly report, we did not sell any equity securities that were not registered under the Securities Act of 1933.

Issuer Purchases of Equity Securities

The following table presents details regarding our repurchase of securities between April 1, 2013 and June 30, 2013 (in thousands except per share data):

Period	Total number of shares      purchased		Average price paid   per share		Total number of shares  purchased as part of publically     announced plan		Maximum number of shares that may yet be purchased under the plan as of      June 30, 2013 (1)
April 1, 2013 through April 30, 2013		—		—		—	119,714
May 1, 2013 through May 31, 2013		—		—		—	119,714
June 1, 2013 through June 30, 2013		22,692		9.02		22,692	191,146
Total		22,692		9.02		22,692

FOOTNOTE:

⁽¹⁾ This number represents the maximum number of shares which can be redeemed under the redemption plan without exceeding the five percent limitation in a rolling 12-month period described above. However, we are not obligated to redeem such amounts and this does not take into account the amount the board of directors has determined to redeem or whether there are sufficient proceeds under the redemption plan. Under the redemption plan, we can, at our discretion, use the full amount of the proceeds from the sale of shares under our distribution reinvestment plan attributable to any month to redeem shares presented for redemption during such month. Any amount of offering proceeds which is available for redemptions but which is unused may be carried over to the next succeeding calendar quarter for use in addition to the amount of offering proceeds and reinvestment proceeds that would otherwise be available for redemptions.

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Use of Proceeds from Registered Securities

On June 27, 2011, our Registration Statement (File No. 333-168129), covering a public offering of up to 300,000,000 shares of common stock, was declared effective by the SEC, and our Offering commenced and is ongoing. The use of proceeds from our Offering was as follows as of June 30, 2013:

	Total				Payments to   Affiliates (2)			Payments to Others
Shares registered			300,000,000
Aggregate price of offering amount registered		$	3,000,000,000
Shares sold (1)			35,781,282
Aggregate amount sold		$	354,641,658
Offering expenses (3)			(43,291,370	)	$	(30,159,149	)	$	(13,132,221	)
Net offering proceeds to the issuer			311,350,288
Proceeds from borrowings, net of loan costs			297,590,652
Total net offering proceeds and borrowings			608,940,940
Purchases of real estate and development costs			(325,390,419	)					(325,390,419	)
Repayment of borrowings			(128,710,486	)					(128,710,486	)
Investments in unconsolidated entities			(72,694,060	)					(72,694,060	)
Payment of acquisition fees and expenses			(16,133,847	)		(9,538,682	)		(6,595,165	)
Deposits on real estate			(4,358,725	)					(4,358,725	)
Payment of distributions			(2,474,029	)		(11,334	)		(2,462,695	)
Issuance of loan to related party			(1,812,891	)		(1,812,891	)
Payment of operating expenses (4)			(1,801,035	)		(1,465,520	)		(335,515	)
Redemption of common stock			(229,614	)					(229,614	)
Payment of lender deposits			(204,408	)					(204,408	)
Payment of leasing costs			(16,770	)					(16,770	)
Unused proceeds from Offering and borrowings	$		55,114,656

FOOTNOTES:

(1) Excludes 22,222 unregistered shares of our common stock sold to the Advisor in June 2010 and 401,414 shares issued as stock distributions.

(2) Represents direct or indirect payments to directors, officers, or general partners of the issuer or their associates; to persons owning 10% or more of any class of equity securities or the issuer; and to affiliates of the issuer.

(3) Offering expenses paid to affiliates includes selling commissions and marketing support fees paid to the Managing Dealer of our Offering (all or a portion of which may be paid to unaffiliated participating brokers by the Managing Dealer). Reimbursements to our Advisor of expenses of the Offering that it has incurred on our behalf from unrelated parties such as legal fees, auditing fees, printing costs, and registration fees are included in payments to others for purposes of this table.

(4) Until such time as we have sufficient operating cash flows from our assets, we will pay distributions, debt service and/or operating expenses from net proceeds of our Offering and borrowings. The amounts presented above represent the net proceeds used for such purposes as of June 30, 2013.

We intend to pay offering expenses, acquire properties and make other permitted investments with proceeds from the Offering. In addition, we have paid, and until such time as we have sufficient operating cash flows from our assets, we will continue to pay distributions and operating expenses from our net proceeds from our Offering.

48

Item 3. Defaults Upon Senior Securities - None

Item 4: Mine Safety Disclosure – Not Applicable

Item 5. Other Information - None

Item 6. Exhibits

The exhibits required by this item are set forth in the Exhibit Index attached hereto and are filed or incorporated as part of this report.

49

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized, on the 14th day of August, 2013.

CNL HEALTHCARE PROPERTIES, INC.
By:	/s/Stephen H. Mauldin
	STEPHEN H. MAULDIN
	President and Chief Executive Officer
	(Principal Executive Officer)
By:	/s/Joseph T. Johnson
	JOSEPH T. JOHNSON
	Senior Vice President, Chief Financial Officer and Treasurer
	(Principal Financial Officer)

50

EXHIBIT INDEX

Exhibit No.	Description
10.1	Guaranty of Non-Recourse Obligations (Decatur) dated as of May 8, 2013 by CNL Healthcare Properties, Inc. to and for the benefit of Keycorp Real Estate Capital Markets, Inc. (Filed herewith.)
10.2	Guaranty of Non-Recourse Obligations (Zanesville) dated as of May 8, 2013 by CNL Healthcare Properties, Inc. to and for the benefit of Keycorp Real Estate Capital Markets, Inc. (Filed herewith.)
10.3	Multifamily Note ($11,060,000) dated May 8, 2013, made by CHT Decatur IL Senior Living, LLC in favor of Keycorp Real Estate Capital Markets, Inc. (Filed herewith.)
10.4	Multifamily Note ($12,482,000.00) dated May 8, 2013, made by CHT Zanesville OH Senior Living, LLC in favor of Keycorp Real Estate Capital Markets, Inc. (Filed herewith.)
10.5	Multifamily Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing dated as of May 8, 2013 by CHT Decatur IL Senior Living, LLC, to and for the benefit of Keycorp Real Estate Capital Markets, Inc. (Filed herewith.)
10.6	Open-End Multifamily Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing dated as of May 8, 2013 by CHT Zanesville OH Senior Living, LLC, to and for the benefit of Keycorp Real Estate Capital Markets, Inc. (Filed herewith.)
31.1	Certification of Chief Executive Officer of CNL Healthcare Properties, Inc., Pursuant to Rule 13a-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. (Filed herewith.)
31.2	Certification of Chief Financial Officer of CNL Healthcare Properties, Inc., Pursuant to Rule 13a-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. (Filed herewith.)
32.1	Certification of Chief Executive Officer and Chief Financial Officer of CNL Healthcare Properties, Inc., Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (Filed herewith.)
101	The following materials from CNL Healthcare Properties, Inc. Quarterly Report on Form 10-Q for the quarter and six months ended June 30, 2013, formatted in XBRL (Extensible Business Reporting Language); (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statement of Operations, (iii) Condensed Consolidated Statement of Comprehensive Loss, (iv) Condensed Consolidated Statements of Stockholder Equity, (v) Condensed Consolidated Statement of Cash Flows, and (vi) Notes to the Condensed Consolidated Financial Statements.

* Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.

51

EX-10.1

Exhibit 10.1

GUARANTY OF NON-RECOURSE OBLIGATIONS

This GUARANTY OF NON-RECOURSE OBLIGATIONS (this “Guaranty”), dated as of May 8, 2013, is executed by the undersigned (“Guarantor”), to and for the benefit of KEYCORP REAL ESTATE CAPITAL MARKETS, INC., an Ohio corporation (“Lender”).

RECITALS:

A.        Pursuant to that certain Multifamily Loan and Security Agreement dated as of the date hereof, by and between CHT DECATUR IL SENIOR LIVING, LLC, a Delaware limited liability company (“Borrower”) and Lender (as amended, restated, replaced, supplemented or otherwise modified from time to time, the “Loan Agreement”), Lender is making a loan to Borrower in the original principal amount of Eleven Million Sixty Thousand and No/100 Dollars ($11,060,000.00) (the “Mortgage Loan”), as evidenced by that certain Multifamily Note dated as of the date hereof, executed by Borrower and made payable to the order of Lender in the amount of the Mortgage Loan (as amended, restated, replaced, supplemented or otherwise modified from time to time, the “Note”).

B.        The Note will be secured by, among other things, a Security Instrument (as defined in the Loan Agreement) encumbering the real property described in the Security Instrument (the “Property”).

C.        Guarantor has an economic interest in Borrower or will otherwise obtain a material financial benefit from the Mortgage Loan.

D.        As a condition to making the Mortgage Loan to Borrower, Lender requires that Guarantor execute this Guaranty.

NOW, THEREFORE, in order to induce Lender to make the Mortgage Loan to Borrower, and in consideration thereof, Guarantor agrees as follows:

AGREEMENTS:

1. Recitals.

The recitals set forth above are incorporated herein by reference as if fully set forth in the body of this Guaranty.

2. Defined Terms.

Capitalized terms used and not specifically defined herein have the meanings given to such terms in the Loan Agreement.

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3. Guaranteed Obligations.

Guarantor hereby absolutely, unconditionally and irrevocably guarantees to Lender the full and prompt payment and performance when due, whether at maturity or earlier, by reason of acceleration or otherwise, and at all times thereafter, of:

(a)        all amounts, obligations and liabilities owed to Lender under Article 3 (Personal Liability) of the Loan Agreement (including the payment and performance of all indemnity obligations of Borrower described in Section 3.03 (Personal Liability for Indemnity Obligations) of the Loan Agreement and including all of Borrower’s obligations under the Environmental Indemnity Agreement); and

(b)        all costs and expenses, including reasonable fees and out-of-pocket expenses of attorneys and expert witnesses, incurred by Lender in enforcing its rights under this Guaranty.

4. Survival of Guaranteed Obligations.

The obligations of Guarantor under this Guaranty shall survive any Foreclosure Event, and any recorded release or reconveyance of the Security Instrument or any release of any other security for any of the Indebtedness.

5. Guaranty of Payment; Community Property.

Guarantor’s obligations under this Guaranty constitute a present and unconditional guaranty of payment and not merely a guaranty of collection. If Guarantor (or any Guarantor, if more than one) is a married person, and the state of residence of Guarantor or Guarantor’s spouse is a community property jurisdiction, Guarantor (or each such married Guarantor, if more than one) agrees that Lender may satisfy Guarantor’s obligations under this Guaranty to the extent of all Guarantor’s separate property and Guarantor’s interest in any community property.

6. Obligations Unsecured; Cross-Default.

The obligations of Guarantor under this Guaranty shall not be secured by the Security Instrument or the Loan Agreement. However, a default under this Guaranty shall be an Event of Default under the Loan Agreement, and a default under this Guaranty shall entitle Lender to be able to exercise all of its rights and remedies under the Loan Agreement and other Loan Documents.

7. Continuing Guaranty.

The obligations of Guarantor under this Guaranty shall be unconditional irrespective of the genuineness, validity, regularity or enforceability of any provision of this Guaranty, the Note, the Loan Agreement, the Security Instrument or any other Loan Document. Guarantor agrees that performance of the obligations hereunder shall be a primary obligation, shall not be subject to any counterclaim, set-off, recoupment, abatement, deferment or defense based upon any claim that Guarantor may have against Lender, Borrower, any other guarantor of the obligations hereunder or any other person or entity, and shall remain in full force and effect without regard

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to, and shall not be released, discharged or affected in any way by any circumstance or condition (whether or not Guarantor shall have any knowledge thereof), including:

(a)        any furnishing, exchange, substitution or release of any collateral securing repayment of the Mortgage Loan, or any failure to perfect any lien in such collateral;

(b)        any failure, omission or delay on the part of Borrower, Guarantor, any other guarantor of the obligations hereunder or Lender to conform or comply with any term of any of the Loan Documents or failure of Lender to give notice of any Event of Default;

(c)        any action or inaction by Lender under or in respect of any of the Loan Documents, any failure, lack of diligence, omission or delay on the part of Lender to perfect, enforce, assert or exercise any lien, security interest, right, power or remedy conferred upon it in any of the Loan Documents, or any other action or inaction on the part of Lender;

(d)        any Bankruptcy Event, or any voluntary or involuntary bankruptcy, insolvency, reorganization, arrangement, readjustment, assignment for the benefit of creditors, composition, receivership, liquidation, marshaling of assets and liabilities or similar events or proceedings with respect to Guarantor or any other guarantor of the obligations hereunder, or any of their respective property or creditors or any action taken by any trustee or receiver or by any court in such proceeding;

(e)        any merger or consolidation of Borrower into or with any entity or any sale, lease or Transfer of any asset of Borrower, Guarantor or any other guarantor of the obligations hereunder to any other Person;

(f)        any change in the ownership of Borrower or any change in the relationship between Borrower, Guarantor or any other guarantor of the obligations hereunder, or any termination of such relationship;

(g)        any release or discharge by operation of law of Borrower, Guarantor or any other guarantor of the obligations hereunder, any obligation or agreement contained in any of the Loan Documents; or

(h)        any other occurrence, circumstance, happening or event, whether similar or dissimilar to the foregoing, and whether seen or unforeseen, which otherwise might constitute a legal or equitable defense or discharge of the liabilities of a guarantor or surety or which otherwise might limit recourse against Borrower or Guarantor to the fullest extent permitted by law.

8. Guarantor Waivers.

Guarantor hereby waives:

(a)        the benefit of all principles or provisions of law, statutory or otherwise, which are or might be in conflict with the terms of this Guaranty (and agrees that Guarantor’s obligations shall not be affected by any circumstances, whether or not referred to in this Guaranty, which might otherwise constitute a legal or equitable discharge of a surety or a guarantor);

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Fannie Mae	06-12	© 2012 Fannie Mae

(b)        the benefits of any right of discharge under any and all statutes or other laws relating to guarantors or sureties and any other rights of sureties and guarantors;

(c)        diligence in collecting the Indebtedness, presentment, demand for payment, protest and all notices with respect to the Loan Documents and this Guaranty which may be required by statute, rule of law or otherwise to preserve Lender’s rights against Guarantor under this Guaranty, including notice of acceptance, notice of any amendment of the Loan Documents, notice of the occurrence of any Event of Default, notice of intent to accelerate, notice of acceleration, notice of dishonor, notice of foreclosure, notice of protest and notice of the incurring by Borrower of any obligation or indebtedness; and

(d)        all rights to require Lender to:

    (1)        proceed against or exhaust any collateral held by Lender to secure the repayment of the Indebtedness;

    (2)        proceed against or pursue any remedy it may now or hereafter have against Borrower or any guarantor, or, if Borrower or any guarantor is a partnership, any general partner of Borrower or general partner of any guarantor; or

    (3)        demand or require collateral security from Borrower, any other guarantor or any other Person as provided by applicable law or otherwise.

9. No Effect Upon Obligations.

At any time or from time to time and any number of times, without notice to Guarantor and without releasing, discharging or affecting the liability of Guarantor:

(a)        the time for payment of the principal of or interest on the Indebtedness may be extended or the Indebtedness may be renewed in whole or in part;

(b)        the rate of interest on or period of amortization of the Mortgage Loan or the amount of the Monthly Debt Service Payments payable under the Loan Documents may be modified;

(c)        the time for Borrower’s performance of or compliance with any covenant or agreement contained in any Loan Document, whether presently existing or hereinafter entered into, may be extended or such performance or compliance may be waived;

(d)        the maturity of the Indebtedness may be accelerated as provided in the Loan Documents;

(e)        any or all payments due under the Loan Agreement or any other Loan Document may be reduced;

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Fannie Mae	06-12	© 2012 Fannie Mae

(f)        any Loan Document may be modified or amended by Lender and Borrower in any respect, including an increase in the principal amount of the Mortgage Loan;

(g)        any amounts under the Loan Agreement or any other Loan Document may be released;

(h)        any security for the Indebtedness may be modified, exchanged, released, surrendered or otherwise dealt with or additional security may be pledged or mortgaged for the Indebtedness;

(i)        the payment of the Indebtedness or any security for the Indebtedness, or both, may be subordinated to the right to payment or the security, or both, of any other present or future creditor of Borrower;

(j)        any payments made by Borrower to Lender may be applied to the Indebtedness in such priority as Lender may determine in its discretion; and

(k)        any other terms of the Loan Documents may be modified as required by Lender.

10. Joint and Several (or Solidary) Liability.

If more than one Person executes this Guaranty as Guarantor, such Persons shall be liable for the obligations hereunder on a joint and several (solidary instead for purposes of Louisiana law) basis. Lender, in its discretion, may:

(a)        to the extent permitted by applicable law, bring suit against Guarantor, or any one or more of the Persons constituting Guarantor, and any other guarantor, jointly and severally (solidarily instead for purposes of Louisiana law), or against any one or more of them;

(b)        compromise or settle with any one or more of the Persons constituting Guarantor, or any other guarantor, for such consideration as Lender may deem proper;

(c)        discharge or release one or more of the Persons constituting Guarantor, or any other guarantor, from liability or agree not to sue such Person; and

(d)        otherwise deal with Guarantor and any guarantor, or any one or more of them, in any manner, and no such action shall impair the rights of Lender to collect from Guarantor any amount guaranteed by Guarantor under this Guaranty.

Nothing contained in this Section 10 shall in any way affect or impair the rights or obligations of Guarantor with respect to any other guarantor.

11. Subordination of Affiliated Debt.

Any indebtedness of Borrower held by Guarantor now or in the future is and shall be subordinated to the Indebtedness and any such indebtedness of Borrower shall be collected, enforced and received by Guarantor, as trustee for Lender, but without reducing or affecting in any manner the liability of Guarantor under the other provisions of this Guaranty.

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12. Subrogation.

Guarantor shall have no right of, and hereby waives any claim for, subrogation or reimbursement against Borrower or any general partner of Borrower by reason of any payment by Guarantor under this Guaranty, whether such right or claim arises at law or in equity or under any contract or statute, until the Indebtedness has been paid in full and there has expired the maximum possible period thereafter during which any payment made by Borrower to Lender with respect to the Indebtedness could be deemed a preference under the Insolvency Laws.

13. Voidable Transfer.

If any payment by Borrower is held to constitute a preference under any Insolvency Laws or similar laws, or if for any other reason Lender is required to refund any sums to Borrower, such refund shall not constitute a release of any liability of Guarantor under this Guaranty. It is the intention of Lender and Guarantor that Guarantor’s obligations under this Guaranty shall not be discharged except by Guarantor’s performance of such obligations and then only to the extent of such performance. If any payment by any Guarantor should for any reason subsequently be declared to be void or voidable under any state or federal law relating to creditors’ rights, including provisions of the Insolvency Laws relating to a Voidable Transfer, and if Lender is required to repay or restore, in whole or in part, any such Voidable Transfer, or elects to do so upon the advice of its counsel, then the obligations guaranteed hereunder shall automatically be revived, reinstated and restored by the amount of such Voidable Transfer or the amount of such Voidable Transfer that Lender is required or elects to repay or restore, including all reasonable costs, expenses and legal fees incurred by Lender in connection therewith, and shall exist as though such Voidable Transfer had never been made, and any other guarantor, if any, shall remain liable for such obligations in full.

14. Credit Report/Credit Score.

Guarantor acknowledges and agrees that Lender is authorized, no more frequently than once in any twelve (12) month period, to obtain a credit report (if applicable) on Guarantor, the cost of which shall be paid for by Guarantor. Guarantor acknowledges and agrees that Lender is authorized to obtain a Credit Score (if applicable) for Guarantor at any time at Lender’s expense.

15. Financial Reporting.

Guarantor shall deliver to Lender such Guarantor financial statements as required by Section 8.02 (Books and Records; Financial Reporting – Covenants) of the Loan Agreement.

16. Further Assurances.

Guarantor acknowledges that Lender (including its successors and assigns) may sell or transfer the Mortgage Loan, or any interest in the Mortgage Loan.

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(a)        Guarantor shall, subject to Section 16(b) below:

    (1)        do anything necessary to comply with the reasonable requirements of Lender or any Investor of the Mortgage Loan or provide, or cause to be provided, to Lender or any Investor of the Mortgage Loan within ten (10) days of the request, at Borrower’s and Guarantor’s cost and expense, such further documentation or information as Lender or Investor may reasonably require, in order to enable:

        (A)        Lender to sell the Mortgage Loan to such Investor;

        (B)         Lender to obtain a refund of any commitment fee from any such Investor; or

        (C)        any such Investor to further sell or securitize the Mortgage Loan;

    (2)        confirm that Guarantor is not in default under this Guaranty or in observing any of the covenants or agreements contained in this Guaranty (or, if Guarantor is in default, describing such default in reasonable detail); and

    (3)        execute and deliver to Lender and/or any Investor such other documentation, including any amendments, corrections, deletions or additions to this Guaranty as is reasonably required by Lender or such Investor.

(b)        Nothing in this Section 16 shall require Guarantor to do any further act that has the effect of:

    (1)        changing the essential economic terms of the Mortgage Loan set forth in the related commitment letter between Borrower and Lender;

    (2)        imposing on Borrower or Guarantor greater personal liability under the Loan Documents than that set forth in the related commitment letter between Borrower and Lender; or

    (3)        materially changing the rights and obligations of Borrower or Guarantor under the commitment letter.

17. Successors and Assigns.

Lender may assign its rights under this Guaranty in whole or in part and, upon any such assignment, all the terms and provisions of this Guaranty shall inure to the benefit of such assignee to the extent so assigned. Guarantor may not assign its rights, duties and obligations under this Guaranty, in whole or in part, without Lender’s prior written consent and any such assignment shall be deemed void ab initio. The terms used to designate any of the parties herein shall be deemed to include the heirs, legal representatives, successors and assigns of such parties.

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18. Final Agreement.

Guarantor acknowledges receipt of a copy of each of the Loan Documents and this Guaranty. THIS GUARANTY REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES WITH RESPECT TO THE SUBJECT MATTER HEREOF AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. All prior or contemporaneous agreements, understandings, representations and statements, oral or written, are merged into this Guaranty. Neither this Guaranty nor any of its provisions may be waived, modified, amended, discharged or terminated except by an agreement in writing signed by the party against which the enforcement of the waiver, modification, amendment, discharge or termination is sought, and then only to the extent set forth in that agreement.

19. Governing Law.

This Guaranty shall be governed by and construed in accordance with the substantive law of the Property Jurisdiction without regard to the application of choice of law principles that would result in the application of the laws of another jurisdiction.

20. Property Jurisdiction.

Guarantor agrees that any controversy arising under or in relation to this Guaranty shall be litigated exclusively in the Property Jurisdiction. The state and federal courts and authorities with jurisdiction in the Property Jurisdiction shall have exclusive jurisdiction over all controversies which shall arise under or in relation to this Guaranty or any other Loan Document with respect to the subject matter hereof. Guarantor irrevocably consents to service, jurisdiction and venue of such courts for any such litigation and waives any other venue to which it might be entitled by virtue of domicile, habitual residence or otherwise.

21. Time is of the Essence.

Guarantor agrees that, with respect to each and every obligation and covenant contained in this Guaranty, time is of the essence.

22. Notices.

Guarantor agrees to notify Lender of any change in Guarantor’s address within ten (10) Business Days after such change of address occurs. All notices under this Guaranty shall be:

(a)        in writing and shall be

    (1)        delivered, in person;

    (2)        mailed, postage prepaid, either by registered or certified delivery, return receipt requested;

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    (3)        sent by overnight courier; or

    (4)        sent by electronic mail with originals to follow by overnight courier;

(b)        addressed to the intended recipient at the notice addresses provided under the signature block at the end of this Guaranty; and

(c)        deemed given on the earlier to occur of:

    (1)        the date when the notice is received by the addressee; or

    (2)        if the recipient refuses or rejects delivery, the date on which the notice is so refused or rejected, as conclusively established by the records of the United States Postal Service or such express courier service.

23. Construction.

(a)        Any reference in this Guaranty to an “Exhibit” or “Schedule” or a “Section” or an “Article” shall, unless otherwise explicitly provided, be construed as referring, respectively, to an exhibit or schedule attached to this Guaranty or to a Section or Article of this Guaranty.

(b)        Any reference in this Guaranty to a statute or regulation shall be construed as referring to that statute or regulation as amended from time to time.

(c)        Use of the singular in this Guaranty includes the plural and use of the plural includes the singular.

(d)        As used in this Guaranty, the term “including” means “including, but not limited to” or “including, without limitation,” and is for example only, and not a limitation.

(e)        Whenever Guarantor’s knowledge is implicated in this Guaranty or the phrase “to Guarantor’s knowledge” or a similar phrase is used in this Guaranty, Guarantor’s knowledge or such phrase(s) shall be interpreted to mean to the best of Guarantor’s knowledge after reasonable and diligent inquiry and investigation.

(f)        Unless otherwise provided in this Guaranty, if Lender’s approval, designation, determination, selection, estimate, action or decision is required, permitted or contemplated hereunder, such approval, designation, determination, selection, estimate, action or decision shall be made in Lender’s sole and absolute discretion.

(g)        All references in this Guaranty to a separate instrument or agreement shall include such instrument or agreement as the same may be amended or supplemented from time to time pursuant to the applicable provisions thereof.

(h)        “Lender may” shall mean at Lender’s discretion, but shall not be an obligation.

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24. WAIVER OF JURY TRIAL.

TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, EACH OF GUARANTOR AND LENDER (A) AGREES NOT TO ELECT A TRIAL BY JURY WITH RESPECT TO ANY ISSUE ARISING OUT OF THIS GUARANTY OR ANY LOAN DOCUMENT OR THE RELATIONSHIP BETWEEN THE PARTIES AS GUARANTOR AND LENDER THAT IS TRIABLE OF RIGHT BY A JURY AND (B) WAIVES ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO SUCH ISSUE TO THE EXTENT THAT ANY SUCH RIGHT EXISTS NOW OR IN THE FUTURE. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS SEPARATELY GIVEN BY GUARANTOR AND LENDER, KNOWINGLY AND VOLUNTARILY WITH THE BENEFIT OF COMPETENT LEGAL COUNSEL.

25. Schedules.

The schedules, if any, attached to this Guaranty are incorporated fully into this Guaranty by this reference and each constitutes a substantive part of this Guaranty.

ATTACHED SCHEDULE. The following Schedule is attached to this Guaranty:

             ¨        Schedule 1                Modifications to Guaranty

[Remainder of Page Intentionally Blank]

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IN WITNESS WHEREOF, Guarantor has signed and delivered this Guaranty under seal (where applicable) or has caused this Guaranty to be signed and delivered under seal (where applicable) by its duly authorized representative. Where applicable law so provides, Guarantor intends that this Guaranty shall be deemed to be signed and delivered as a sealed instrument.

GUARANTOR:

CNL HEALTHCARE PROPERTIES, INC., a

Maryland corporation

By:       /s/ Joshua J. Taube

Name:  Joshua J. Taube

Title:    Vice President

Address for Notices to Guarantor:

CNL Center at City Commons

450 South Orange Avenue, Suite 1200

Orlando, Florida 32801

Attn: Holly Greer, SVP and General Counsel

Email address:  holly.greer@cnl.com

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SCHEDULE 1 TO

GUARANTY OF NON-RECOURSE OBLIGATIONS

State-Specific Provisions

[Intentionally Omitted]

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EX-10.2

Exhibit 10.2

GUARANTY OF NON-RECOURSE OBLIGATIONS

This GUARANTY OF NON-RECOURSE OBLIGATIONS (this “Guaranty”), dated as of May 8, 2013, is executed by the undersigned (“Guarantor”), to and for the benefit of KEYCORP REAL ESTATE CAPITAL MARKETS, INC., an Ohio corporation (“Lender”).

RECITALS:

A.        Pursuant to that certain Multifamily Loan and Security Agreement dated as of the date hereof, by and between CHT ZANESVILLE OH SENIOR LIVING, LLC, a Delaware limited liability company (“Borrower”) and Lender (as amended, restated, replaced, supplemented or otherwise modified from time to time, the “Loan Agreement”), Lender is making a loan to Borrower in the original principal amount of Twelve Million Four Hundred Eighty-Two Thousand and No/100 Dollars ($12,482,000.00) (the “Mortgage Loan”), as evidenced by that certain Multifamily Note dated as of the date hereof, executed by Borrower and made payable to the order of Lender in the amount of the Mortgage Loan (as amended, restated, replaced, supplemented or otherwise modified from time to time, the “Note”).

B.        The Note will be secured by, among other things, a Security Instrument (as defined in the Loan Agreement) encumbering the real property described in the Security Instrument (the “Property”).

C.        Guarantor has an economic interest in Borrower or will otherwise obtain a material financial benefit from the Mortgage Loan.

D.        As a condition to making the Mortgage Loan to Borrower, Lender requires that Guarantor execute this Guaranty.

NOW, THEREFORE, in order to induce Lender to make the Mortgage Loan to Borrower, and in consideration thereof, Guarantor agrees as follows:

AGREEMENTS:

1. Recitals.

The recitals set forth above are incorporated herein by reference as if fully set forth in the body of this Guaranty.

2. Defined Terms.

Capitalized terms used and not specifically defined herein have the meanings given to such terms in the Loan Agreement.

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3. Guaranteed Obligations.

Guarantor hereby absolutely, unconditionally and irrevocably guarantees to Lender the full and prompt payment and performance when due, whether at maturity or earlier, by reason of acceleration or otherwise, and at all times thereafter, of:

 (a)        all amounts, obligations and liabilities owed to Lender under Article 3 (Personal Liability) of the Loan Agreement (including the payment and performance of all indemnity obligations of Borrower described in Section 3.03 (Personal Liability for Indemnity Obligations) of the Loan Agreement and including all of Borrower’s obligations under the Environmental Indemnity Agreement); and

 (b)        all costs and expenses, including reasonable fees and out-of-pocket expenses of attorneys and expert witnesses, incurred by Lender in enforcing its rights under this Guaranty.

4. Survival of Guaranteed Obligations.

The obligations of Guarantor under this Guaranty shall survive any Foreclosure Event, and any recorded release or reconveyance of the Security Instrument or any release of any other security for any of the Indebtedness.

5. Guaranty of Payment; Community Property.

Guarantor’s obligations under this Guaranty constitute a present and unconditional guaranty of payment and not merely a guaranty of collection. If Guarantor (or any Guarantor, if more than one) is a married person, and the state of residence of Guarantor or Guarantor’s spouse is a community property jurisdiction, Guarantor (or each such married Guarantor, if more than one) agrees that Lender may satisfy Guarantor’s obligations under this Guaranty to the extent of all Guarantor’s separate property and Guarantor’s interest in any community property.

6. Obligations Unsecured; Cross-Default.

The obligations of Guarantor under this Guaranty shall not be secured by the Security Instrument or the Loan Agreement. However, a default under this Guaranty shall be an Event of Default under the Loan Agreement, and a default under this Guaranty shall entitle Lender to be able to exercise all of its rights and remedies under the Loan Agreement and other Loan Documents.

7. Continuing Guaranty.

The obligations of Guarantor under this Guaranty shall be unconditional irrespective of the genuineness, validity, regularity or enforceability of any provision of this Guaranty, the Note, the Loan Agreement, the Security Instrument or any other Loan Document. Guarantor agrees that performance of the obligations hereunder shall be a primary obligation, shall not be subject to any counterclaim, set-off, recoupment, abatement, deferment or defense based upon any claim that Guarantor may have against Lender, Borrower, any other guarantor of the obligations hereunder or any other person or entity, and shall remain in full force and effect without regard

Guaranty of Non-Recourse Obligations	Form 6015	Page 2
Fannie Mae	06-12	© 2012 Fannie Mae

to, and shall not be released, discharged or affected in any way by any circumstance or condition (whether or not Guarantor shall have any knowledge thereof), including:

(a)        any furnishing, exchange, substitution or release of any collateral securing repayment of the Mortgage Loan, or any failure to perfect any lien in such collateral;

(b)        any failure, omission or delay on the part of Borrower, Guarantor, any other guarantor of the obligations hereunder or Lender to conform or comply with any term of any of the Loan Documents or failure of Lender to give notice of any Event of Default;

(c)        any action or inaction by Lender under or in respect of any of the Loan Documents, any failure, lack of diligence, omission or delay on the part of Lender to perfect, enforce, assert or exercise any lien, security interest, right, power or remedy conferred upon it in any of the Loan Documents, or any other action or inaction on the part of Lender;

(d)        any Bankruptcy Event, or any voluntary or involuntary bankruptcy, insolvency, reorganization, arrangement, readjustment, assignment for the benefit of creditors, composition, receivership, liquidation, marshaling of assets and liabilities or similar events or proceedings with respect to Guarantor or any other guarantor of the obligations hereunder, or any of their respective property or creditors or any action taken by any trustee or receiver or by any court in such proceeding;

(e)        any merger or consolidation of Borrower into or with any entity or any sale, lease or Transfer of any asset of Borrower, Guarantor or any other guarantor of the obligations hereunder to any other Person;

(f)        any change in the ownership of Borrower or any change in the relationship between Borrower, Guarantor or any other guarantor of the obligations hereunder, or any termination of such relationship;

(g)        any release or discharge by operation of law of Borrower, Guarantor or any other guarantor of the obligations hereunder, any obligation or agreement contained in any of the Loan Documents; or

(h)        any other occurrence, circumstance, happening or event, whether similar or dissimilar to the foregoing, and whether seen or unforeseen, which otherwise might constitute a legal or equitable defense or discharge of the liabilities of a guarantor or surety or which otherwise might limit recourse against Borrower or Guarantor to the fullest extent permitted by law.

8. Guarantor Waivers.

Guarantor hereby waives:

(a)        the benefit of all principles or provisions of law, statutory or otherwise, which are or might be in conflict with the terms of this Guaranty (and agrees that Guarantor’s obligations shall not be affected by any circumstances, whether or not referred to in this Guaranty, which might otherwise constitute a legal or equitable discharge of a surety or a guarantor);

Guaranty of Non-Recourse Obligations	Form 6015	Page 3
Fannie Mae	06-12	© 2012 Fannie Mae

(b)        the benefits of any right of discharge under any and all statutes or other laws relating to guarantors or sureties and any other rights of sureties and guarantors;

(c)        diligence in collecting the Indebtedness, presentment, demand for payment, protest and all notices with respect to the Loan Documents and this Guaranty which may be required by statute, rule of law or otherwise to preserve Lender’s rights against Guarantor under this Guaranty, including notice of acceptance, notice of any amendment of the Loan Documents, notice of the occurrence of any Event of Default, notice of intent to accelerate, notice of acceleration, notice of dishonor, notice of foreclosure, notice of protest and notice of the incurring by Borrower of any obligation or indebtedness; and

(d)        all rights to require Lender to:

    (1)        proceed against or exhaust any collateral held by Lender to secure the repayment of the Indebtedness;

    (2)        proceed against or pursue any remedy it may now or hereafter have against Borrower or any guarantor, or, if Borrower or any guarantor is a partnership, any general partner of Borrower or general partner of any guarantor; or

    (3)        demand or require collateral security from Borrower, any other guarantor or any other Person as provided by applicable law or otherwise.

9. No Effect Upon Obligations.

At any time or from time to time and any number of times, without notice to Guarantor and without releasing, discharging or affecting the liability of Guarantor:

(a)        the time for payment of the principal of or interest on the Indebtedness may be extended or the Indebtedness may be renewed in whole or in part;

(b)        the rate of interest on or period of amortization of the Mortgage Loan or the amount of the Monthly Debt Service Payments payable under the Loan Documents may be modified;

(c)        the time for Borrower’s performance of or compliance with any covenant or agreement contained in any Loan Document, whether presently existing or hereinafter entered into, may be extended or such performance or compliance may be waived;

(d)        the maturity of the Indebtedness may be accelerated as provided in the Loan Documents;

(e)        any or all payments due under the Loan Agreement or any other Loan Document may be reduced;

Guaranty of Non-Recourse Obligations	Form 6015	Page 4
Fannie Mae	06-12	© 2012 Fannie Mae

(f)        any Loan Document may be modified or amended by Lender and Borrower in any respect, including an increase in the principal amount of the Mortgage Loan;

(g)        any amounts under the Loan Agreement or any other Loan Document may be released;

(h)        any security for the Indebtedness may be modified, exchanged, released, surrendered or otherwise dealt with or additional security may be pledged or mortgaged for the Indebtedness;

(i)        the payment of the Indebtedness or any security for the Indebtedness, or both, may be subordinated to the right to payment or the security, or both, of any other present or future creditor of Borrower;

(j)        any payments made by Borrower to Lender may be applied to the Indebtedness in such priority as Lender may determine in its discretion; and

(k)        any other terms of the Loan Documents may be modified as required by Lender.

10. Joint and Several (or Solidary) Liability.

If more than one Person executes this Guaranty as Guarantor, such Persons shall be liable for the obligations hereunder on a joint and several (solidary instead for purposes of Louisiana law) basis. Lender, in its discretion, may:

(a)        to the extent permitted by applicable law, bring suit against Guarantor, or any one or more of the Persons constituting Guarantor, and any other guarantor, jointly and severally (solidarily instead for purposes of Louisiana law), or against any one or more of them;

(b)        compromise or settle with any one or more of the Persons constituting Guarantor, or any other guarantor, for such consideration as Lender may deem proper;

(c)        discharge or release one or more of the Persons constituting Guarantor, or any other guarantor, from liability or agree not to sue such Person; and

(d)        otherwise deal with Guarantor and any guarantor, or any one or more of them, in any manner, and no such action shall impair the rights of Lender to collect from Guarantor any amount guaranteed by Guarantor under this Guaranty.

Nothing contained in this Section 10 shall in any way affect or impair the rights or obligations of Guarantor with respect to any other guarantor.

11. Subordination of Affiliated Debt.

Any indebtedness of Borrower held by Guarantor now or in the future is and shall be subordinated to the Indebtedness and any such indebtedness of Borrower shall be collected, enforced and received by Guarantor, as trustee for Lender, but without reducing or affecting in any manner the liability of Guarantor under the other provisions of this Guaranty.

Guaranty of Non-Recourse Obligations	Form 6015	Page 5
Fannie Mae	06-12	© 2012 Fannie Mae

12. Subrogation.

Guarantor shall have no right of, and hereby waives any claim for, subrogation or reimbursement against Borrower or any general partner of Borrower by reason of any payment by Guarantor under this Guaranty, whether such right or claim arises at law or in equity or under any contract or statute, until the Indebtedness has been paid in full and there has expired the maximum possible period thereafter during which any payment made by Borrower to Lender with respect to the Indebtedness could be deemed a preference under the Insolvency Laws.

13. Voidable Transfer.

If any payment by Borrower is held to constitute a preference under any Insolvency Laws or similar laws, or if for any other reason Lender is required to refund any sums to Borrower, such refund shall not constitute a release of any liability of Guarantor under this Guaranty. It is the intention of Lender and Guarantor that Guarantor’s obligations under this Guaranty shall not be discharged except by Guarantor’s performance of such obligations and then only to the extent of such performance. If any payment by any Guarantor should for any reason subsequently be declared to be void or voidable under any state or federal law relating to creditors’ rights, including provisions of the Insolvency Laws relating to a Voidable Transfer, and if Lender is required to repay or restore, in whole or in part, any such Voidable Transfer, or elects to do so upon the advice of its counsel, then the obligations guaranteed hereunder shall automatically be revived, reinstated and restored by the amount of such Voidable Transfer or the amount of such Voidable Transfer that Lender is required or elects to repay or restore, including all reasonable costs, expenses and legal fees incurred by Lender in connection therewith, and shall exist as though such Voidable Transfer had never been made, and any other guarantor, if any, shall remain liable for such obligations in full.

14. Credit Report/Credit Score.

Guarantor acknowledges and agrees that Lender is authorized, no more frequently than once in any twelve (12) month period, to obtain a credit report (if applicable) on Guarantor, the cost of which shall be paid for by Guarantor. Guarantor acknowledges and agrees that Lender is authorized to obtain a Credit Score (if applicable) for Guarantor at any time at Lender’s expense.

15. Financial Reporting.

Guarantor shall deliver to Lender such Guarantor financial statements as required by Section 8.02 (Books and Records; Financial Reporting – Covenants) of the Loan Agreement.

16. Further Assurances.

Guarantor acknowledges that Lender (including its successors and assigns) may sell or transfer the Mortgage Loan, or any interest in the Mortgage Loan.

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Fannie Mae	06-12	© 2012 Fannie Mae

(a)        Guarantor shall, subject to Section 16(b) below:

    (1)        do anything necessary to comply with the reasonable requirements of Lender or any Investor of the Mortgage Loan or provide, or cause to be provided, to Lender or any Investor of the Mortgage Loan within ten (10) days of the request, at Borrower’s and Guarantor’s cost and expense, such further documentation or information as Lender or Investor may reasonably require, in order to enable:

        (A)        Lender to sell the Mortgage Loan to such Investor;

        (B)         Lender to obtain a refund of any commitment fee from any such Investor; or

        (C)        any such Investor to further sell or securitize the Mortgage Loan;

    (2)        confirm that Guarantor is not in default under this Guaranty or in observing any of the covenants or agreements contained in this Guaranty (or, if Guarantor is in default, describing such default in reasonable detail); and

    (3)        execute and deliver to Lender and/or any Investor such other documentation, including any amendments, corrections, deletions or additions to this Guaranty as is reasonably required by Lender or such Investor.

(b)         Nothing in this Section 16 shall require Guarantor to do any further act that has the effect of:

    (1)        changing the essential economic terms of the Mortgage Loan set forth in the related commitment letter between Borrower and Lender;

    (2)        imposing on Borrower or Guarantor greater personal liability under the Loan Documents than that set forth in the related commitment letter between Borrower and Lender; or

    (3)        materially changing the rights and obligations of Borrower or Guarantor under the commitment letter.

17. Successors and Assigns.

Lender may assign its rights under this Guaranty in whole or in part and, upon any such assignment, all the terms and provisions of this Guaranty shall inure to the benefit of such assignee to the extent so assigned. Guarantor may not assign its rights, duties and obligations under this Guaranty, in whole or in part, without Lender’s prior written consent and any such assignment shall be deemed void ab initio. The terms used to designate any of the parties herein shall be deemed to include the heirs, legal representatives, successors and assigns of such parties.

Guaranty of Non-Recourse Obligations	Form 6015	Page 7
Fannie Mae	06-12	© 2012 Fannie Mae

18. Final Agreement.

Guarantor acknowledges receipt of a copy of each of the Loan Documents and this Guaranty. THIS GUARANTY REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES WITH RESPECT TO THE SUBJECT MATTER HEREOF AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. All prior or contemporaneous agreements, understandings, representations and statements, oral or written, are merged into this Guaranty. Neither this Guaranty nor any of its provisions may be waived, modified, amended, discharged or terminated except by an agreement in writing signed by the party against which the enforcement of the waiver, modification, amendment, discharge or termination is sought, and then only to the extent set forth in that agreement.

19. Governing Law.

This Guaranty shall be governed by and construed in accordance with the substantive law of the Property Jurisdiction without regard to the application of choice of law principles that would result in the application of the laws of another jurisdiction.

20. Property Jurisdiction.

Guarantor agrees that any controversy arising under or in relation to this Guaranty shall be litigated exclusively in the Property Jurisdiction. The state and federal courts and authorities with jurisdiction in the Property Jurisdiction shall have exclusive jurisdiction over all controversies which shall arise under or in relation to this Guaranty or any other Loan Document with respect to the subject matter hereof. Guarantor irrevocably consents to service, jurisdiction and venue of such courts for any such litigation and waives any other venue to which it might be entitled by virtue of domicile, habitual residence or otherwise.

21. Time is of the Essence.

Guarantor agrees that, with respect to each and every obligation and covenant contained in this Guaranty, time is of the essence.

22. Notices.

Guarantor agrees to notify Lender of any change in Guarantor’s address within ten (10) Business Days after such change of address occurs. All notices under this Guaranty shall be:

(a)        in writing and shall be

    (1)        delivered, in person;

    (2)        mailed, postage prepaid, either by registered or certified delivery, return receipt requested;

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Fannie Mae	06-12	© 2012 Fannie Mae

    (3)        sent by overnight courier; or

    (4)        sent by electronic mail with originals to follow by overnight courier;

(b)        addressed to the intended recipient at the notice addresses provided under the signature block at the end of this Guaranty; and

(c)        deemed given on the earlier to occur of:

    (1)        the date when the notice is received by the addressee; or

    (2)        if the recipient refuses or rejects delivery, the date on which the notice is so refused or rejected, as conclusively established by the records of the United States Postal Service or such express courier service.

23. Construction.

(a)        Any reference in this Guaranty to an “Exhibit” or “Schedule” or a “Section” or an “Article” shall, unless otherwise explicitly provided, be construed as referring, respectively, to an exhibit or schedule attached to this Guaranty or to a Section or Article of this Guaranty.

(b)        Any reference in this Guaranty to a statute or regulation shall be construed as referring to that statute or regulation as amended from time to time.

(c)        Use of the singular in this Guaranty includes the plural and use of the plural includes the singular.

(d)        As used in this Guaranty, the term “including” means “including, but not limited to” or “including, without limitation,” and is for example only, and not a limitation.

(e)        Whenever Guarantor’s knowledge is implicated in this Guaranty or the phrase “to Guarantor’s knowledge” or a similar phrase is used in this Guaranty, Guarantor’s knowledge or such phrase(s) shall be interpreted to mean to the best of Guarantor’s knowledge after reasonable and diligent inquiry and investigation.

(f)        Unless otherwise provided in this Guaranty, if Lender’s approval, designation, determination, selection, estimate, action or decision is required, permitted or contemplated hereunder, such approval, designation, determination, selection, estimate, action or decision shall be made in Lender’s sole and absolute discretion.

(g)        All references in this Guaranty to a separate instrument or agreement shall include such instrument or agreement as the same may be amended or supplemented from time to time pursuant to the applicable provisions thereof.

(h)        “Lender may” shall mean at Lender’s discretion, but shall not be an obligation.

Guaranty of Non-Recourse Obligations	Form 6015	Page 9
Fannie Mae	06-12	© 2012 Fannie Mae

24. WAIVER OF JURY TRIAL.

TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, EACH OF GUARANTOR AND LENDER (A) AGREES NOT TO ELECT A TRIAL BY JURY WITH RESPECT TO ANY ISSUE ARISING OUT OF THIS GUARANTY OR ANY LOAN DOCUMENT OR THE RELATIONSHIP BETWEEN THE PARTIES AS GUARANTOR AND LENDER THAT IS TRIABLE OF RIGHT BY A JURY AND (B) WAIVES ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO SUCH ISSUE TO THE EXTENT THAT ANY SUCH RIGHT EXISTS NOW OR IN THE FUTURE. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS SEPARATELY GIVEN BY GUARANTOR AND LENDER, KNOWINGLY AND VOLUNTARILY WITH THE BENEFIT OF COMPETENT LEGAL COUNSEL.

25. Schedules.

The schedules, if any, attached to this Guaranty are incorporated fully into this Guaranty by this reference and each constitutes a substantive part of this Guaranty.

ATTACHED SCHEDULE. The following Schedule is attached to this Guaranty:

¨ Schedule1                 Modifications to Guaranty

[Remainder of Page Intentionally Blank]

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Fannie Mae	06-12	© 2012 Fannie Mae

IN WITNESS WHEREOF, Guarantor has signed and delivered this Guaranty under seal (where applicable) or has caused this Guaranty to be signed and delivered under seal (where applicable) by its duly authorized representative. Where applicable law so provides, Guarantor intends that this Guaranty shall be deemed to be signed and delivered as a sealed instrument.

GUARANTOR:

CNL HEALTHCARE PROPERTIES, INC., a Maryland corporation

By:     /s/ Joshua J. Taube

Name: Joshua J. Taube

Title:  Vice President

Address for Notices to Guarantor:

CNL Center at City Commons

450 South Orange Avenue, Suite 1200

Orlando, Florida 32801

Attn: Holly Greer, SVP and General Counsel

Email address: holly.greer@cnl.com

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Fannie Mae	06-12	© 2012 Fannie Mae

SCHEDULE 1 TO

GUARANTY OF NON-RECOURSE OBLIGATIONS

State-Specific Provisions

[Intentionally Omitted]

Guaranty of Non-Recourse Obligations	Form 6015	Page Sch. 1-1
Fannie Mae	06-12	© 2012 Fannie Mae

EX-10.3

Exhibit 10.3

MULTIFAMILY NOTE

US $11,060,000.00 May 8, 2013

FOR VALUE RECEIVED, the undersigned (“Borrower”) promises to pay to the order of KEYCORP REAL ESTATE CAPITAL MARKETS, INC., an Ohio corporation (“Lender”), the principal amount of Eleven Million Sixty Thousand and No/100 Dollars (US $11,060,000.00) (the “Mortgage Loan”), together with interest thereon accruing at the Interest Rate on the unpaid principal balance from the date the Mortgage Loan proceeds are disbursed until fully paid in accordance with the terms hereof and of that certain Multifamily Loan and Security Agreement dated as of the date hereof, by and between Borrower and Lender (as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time, the “Loan Agreement”).

1. Defined Terms.

Capitalized terms used and not specifically defined in this Multifamily Note (this “Note”) have the meanings given to such terms in the Loan Agreement.

2. Repayment.

Borrower agrees to pay the principal amount of the Mortgage Loan and interest on the principal amount of the Mortgage Loan from time to time outstanding at the Interest Rate or such other rate or rates and at the times specified in the Loan Agreement, together with all other amounts due to Lender under the Loan Documents. The outstanding balance of the Mortgage Loan and all accrued and unpaid interest thereon shall be due and payable on the Maturity Date, together with all other amounts due to Lender under the Loan Documents.

3. Security.

The Mortgage Loan evidenced by this Note, together with all other Indebtedness is secured by, among other things, the Security Instrument, the Loan Agreement and the other Loan Documents. All of the terms, covenants and conditions contained in the Loan Agreement, the Security Instrument and the other Loan Documents are hereby made part of this Note to the same extent and with the same force as if they were fully set forth herein. In the event of a conflict or inconsistency between the terms of this Note and the Loan Agreement, the terms and provisions of the Loan Agreement shall govern.

4. Acceleration.

In accordance with the Loan Agreement, if an Event of Default has occurred and is continuing, the entire unpaid principal balance of the Mortgage Loan, any accrued and unpaid interest, including interest accruing at the Default Rate, the Prepayment Premium (if applicable), and all other amounts payable under this Note, the Loan Agreement and any other Loan Document shall at once become due and payable, at the option of Lender, without any prior notice to Borrower, unless applicable law requires otherwise (and in such case, after satisfactory notice has been given).

Multifamily Note – Multistate	Form 6010	Page 1
Fannie Mae	06-12	© 2012 Fannie Mae

5. Personal Liability.

The provisions of Article 3 (Personal Liability) of the Loan Agreement are hereby incorporated by reference into this Note to the same extent and with the same force as if fully set forth herein.

6. Governing Law.

This Note shall be governed in accordance with the terms and provisions of Section 15.01 (Governing Law; Consent to Jurisdiction and Venue) of the Loan Agreement.

7. Waivers.

Presentment, demand for payment, notice of nonpayment and dishonor, protest and notice of protest, notice of acceleration, notice of intent to demand or accelerate payment or maturity, presentment for payment, notice of nonpayment, grace and diligence in collecting the Indebtedness are waived by Borrower, for and on behalf of itself, Guarantor and Key Principal, and all endorsers and guarantors of this Note and all other third party obligors or others who may become liable for the payment of all or any part of the Indebtedness.

8. Commercial Purpose.

Borrower represents that the Indebtedness is being incurred by Borrower solely for the purpose of carrying on a business or commercial enterprise or activity, and not for agricultural, personal, family or household purposes.

9. Construction; Joint and Several (or Solidary, as applicable) Liability.

(a)        Section 15.08 (Construction) of the Loan Agreement is hereby incorporated herein as if fully set forth in the body of this Note.

(b)        If more than one Person executes this Note as Borrower, the obligations of such Person shall be joint and several (solidary instead for purposes of Louisiana law).

10. Notices.

All Notices required or permitted to be given by Lender to Borrower pursuant to this Note shall be given in accordance with Section 15.02 (Notice) of the Loan Agreement.

11. Time is of the Essence.

Borrower agrees that, with respect to each and every obligation and covenant contained in this Note, time is of the essence.

Multifamily Note – Multistate	Form 6010	Page 2
Fannie Mae	06-12	© 2012 Fannie Mae

12. Loan Charges Savings Clause.

Borrower agrees to pay an effective rate of interest equal to the sum of the Interest Rate and any additional rate of interest resulting from any other charges of interest or in the nature of interest paid or to be paid in connection with the Mortgage Loan and any other fees or amounts to be paid by Borrower pursuant to any of the other Loan Documents. Neither this Note, the Loan Agreement nor any of the other Loan Documents shall be construed to create a contract for the use, forbearance or detention of money requiring payment of interest at a rate greater than the maximum interest rate permitted to be charged under applicable law. It is expressly stipulated and agreed to be the intent of Borrower and Lender at all times to comply with all applicable laws governing the maximum rate or amount of interest payable on the Indebtedness evidenced by this Note and the other Loan Documents. If any applicable law limiting the amount of interest or other charges permitted to be collected from Borrower is interpreted so that any interest or other charge or amount provided for in any Loan Document, whether considered separately or together with other charges or amounts provided for in any other Loan Document, or otherwise charged, taken, reserved or received in connection with the Mortgage Loan, or on acceleration of the maturity of the Mortgage Loan or as a result of any prepayment by Borrower or otherwise, violates that law, and Borrower is entitled to the benefit of that law, that interest or charge is hereby reduced to the extent necessary to eliminate any such violation. Amounts, if any, previously paid to Lender in excess of the permitted amounts shall be applied by Lender to reduce the unpaid principal balance of the Mortgage Loan without the payment of any prepayment premium (or, if the Mortgage Loan has been or would thereby be paid in full, shall be refunded to Borrower), and the provisions of the Loan Agreement and any other Loan Documents immediately shall be deemed reformed and the amounts thereafter collectible under the Loan Agreement and any other Loan Documents reduced, without the necessity of the execution of any new documents, so as to comply with any applicable law, but so as to permit the recovery of the fullest amount otherwise payable under the Loan Documents. For the purpose of determining whether any applicable law limiting the amount of interest or other charges permitted to be collected from Borrower has been violated, all Indebtedness that constitutes interest, as well as all other charges made in connection with the Indebtedness that constitute interest, and any amount paid or agreed to be paid to Lender for the use, forbearance or detention of the Indebtedness, shall be deemed to be allocated and spread ratably over the stated term of the Mortgage Loan. Unless otherwise required by applicable law, such allocation and spreading shall be effected in such a manner that the rate of interest so computed is uniform throughout the stated term of the Mortgage Loan.

13. WAIVER OF TRIAL BY JURY.

TO THE MAXIMUM EXTENT PERMITTED BY LAW, EACH OF BORROWER AND LENDER (A) AGREES NOT TO ELECT A TRIAL BY JURY WITH RESPECT TO ANY ISSUE ARISING OUT OF THIS NOTE OR THE RELATIONSHIP BETWEEN THE PARTIES AS LENDER AND BORROWER THAT IS TRIABLE OF RIGHT BY A JURY AND (B) WAIVES ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO SUCH ISSUE TO THE EXTENT THAT ANY SUCH RIGHT EXISTS NOW OR IN THE FUTURE. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS SEPARATELY GIVEN BY EACH PARTY, KNOWINGLY AND VOLUNTARILY WITH THE BENEFIT OF COMPETENT LEGAL COUNSEL.

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Fannie Mae	06-12	© 2012 Fannie Mae

14. Receipt of Loan Documents.

Borrower acknowledges receipt of a copy of each of the Loan Documents.

15. Incorporation of Schedules.

The schedules, if any, attached to this Note are incorporated fully into this Note by this reference and each constitutes a substantive part of this Note.

ATTACHED SCHEDULE. The following Schedule is attached to this Note:

¨ Schedule1                 Modifications to Note

[Remainder of Page Intentionally Blank]

Multifamily Note – Multistate	Form 6010	Page 4
Fannie Mae	06-12	© 2012 Fannie Mae

IN WITNESS WHEREOF, Borrower has signed and delivered this Note under seal (where applicable) or has caused this Note to be signed and delivered under seal (where applicable) by its duly authorized representative. Where applicable law so provides, Borrower intends that this Note shall be deemed to be signed and delivered as a sealed instrument.

BORROWER:
CHT DECATUR IL SENIOR LIVING, LLC, a Delaware limited liability company
By:	/s/ Joshua J. Taube
Name:	Joshua J. Taube
Title:	Vice President

This Note was executed by Borrower in the State of Florida. Accordingly, documentary stamp tax in the amount of $2,450.00 has been, or will be, paid directly to the Florida Department of Revenue upon execution and delivery of the Note by Borrower.

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Fannie Mae	06-12	© 2012 Fannie Mae

PAY TO THE ORDER OF FANNIE MAE

WITHOUT RECOURSE.

KEYCORP REAL ESTATE CAPITAL MARKETS, INC., an Ohio corporation
By: /s/ Crystal L. Williams
Name:	Crystal L. Williams
Title:	Vice President
Date:	May 8, 2013

Multifamily Note – Multistate	Form 6010	Page 6
Fannie Mae	06-12	© 2012 Fannie Mae

EX-10.4

Exhibit 10.4

MULTIFAMILY NOTE

US $12,482,000.00 May 8, 2013

FOR VALUE RECEIVED, the undersigned (“Borrower”) promises to pay to the order of KEYCORP REAL ESTATE CAPITAL MARKETS, INC., an Ohio corporation (“Lender”), the principal amount of Twelve Million Four Hundred Eighty-Two Thousand and No/100 Dollars (US $12,482,000.00) (the “Mortgage Loan”), together with interest thereon accruing at the Interest Rate on the unpaid principal balance from the date the Mortgage Loan proceeds are disbursed until fully paid in accordance with the terms hereof and of that certain Multifamily Loan and Security Agreement dated as of the date hereof, by and between Borrower and Lender (as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time, the “Loan Agreement”).

1. Defined Terms.

Capitalized terms used and not specifically defined in this Multifamily Note (this “Note”) have the meanings given to such terms in the Loan Agreement.

2. Repayment.

Borrower agrees to pay the principal amount of the Mortgage Loan and interest on the principal amount of the Mortgage Loan from time to time outstanding at the Interest Rate or such other rate or rates and at the times specified in the Loan Agreement, together with all other amounts due to Lender under the Loan Documents. The outstanding balance of the Mortgage Loan and all accrued and unpaid interest thereon shall be due and payable on the Maturity Date, together with all other amounts due to Lender under the Loan Documents.

3. Security.

The Mortgage Loan evidenced by this Note, together with all other Indebtedness is secured by, among other things, the Security Instrument, the Loan Agreement and the other Loan Documents. All of the terms, covenants and conditions contained in the Loan Agreement, the Security Instrument and the other Loan Documents are hereby made part of this Note to the same extent and with the same force as if they were fully set forth herein. In the event of a conflict or inconsistency between the terms of this Note and the Loan Agreement, the terms and provisions of the Loan Agreement shall govern.

4. Acceleration.

In accordance with the Loan Agreement, if an Event of Default has occurred and is continuing, the entire unpaid principal balance of the Mortgage Loan, any accrued and unpaid interest, including interest accruing at the Default Rate, the Prepayment Premium (if applicable), and all other amounts payable under this Note, the Loan Agreement and any other Loan Document shall at once become due and payable, at the option of Lender, without any prior notice to Borrower, unless applicable law requires otherwise (and in such case, after satisfactory notice has been given).

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5. Personal Liability.

The provisions of Article 3 (Personal Liability) of the Loan Agreement are hereby incorporated by reference into this Note to the same extent and with the same force as if fully set forth herein.

6. Governing Law.

This Note shall be governed in accordance with the terms and provisions of Section 15.01 (Governing Law; Consent to Jurisdiction and Venue) of the Loan Agreement.

7. Waivers.

Presentment, demand for payment, notice of nonpayment and dishonor, protest and notice of protest, notice of acceleration, notice of intent to demand or accelerate payment or maturity, presentment for payment, notice of nonpayment, grace and diligence in collecting the Indebtedness are waived by Borrower, for and on behalf of itself, Guarantor and Key Principal, and all endorsers and guarantors of this Note and all other third party obligors or others who may become liable for the payment of all or any part of the Indebtedness.

8. Commercial Purpose.

Borrower represents that the Indebtedness is being incurred by Borrower solely for the purpose of carrying on a business or commercial enterprise or activity, and not for agricultural, personal, family or household purposes.

9. Construction; Joint and Several (or Solidary, as applicable) Liability.

(a)        Section 15.08 (Construction) of the Loan Agreement is hereby incorporated herein as if fully set forth in the body of this Note.

(b)        If more than one Person executes this Note as Borrower, the obligations of such Person shall be joint and several (solidary instead for purposes of Louisiana law).

10. Notices.

All Notices required or permitted to be given by Lender to Borrower pursuant to this Note shall be given in accordance with Section 15.02 (Notice) of the Loan Agreement.

11. Time is of the Essence.

Borrower agrees that, with respect to each and every obligation and covenant contained in this Note, time is of the essence.

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12. Loan Charges Savings Clause.

Borrower agrees to pay an effective rate of interest equal to the sum of the Interest Rate and any additional rate of interest resulting from any other charges of interest or in the nature of interest paid or to be paid in connection with the Mortgage Loan and any other fees or amounts to be paid by Borrower pursuant to any of the other Loan Documents. Neither this Note, the Loan Agreement nor any of the other Loan Documents shall be construed to create a contract for the use, forbearance or detention of money requiring payment of interest at a rate greater than the maximum interest rate permitted to be charged under applicable law. It is expressly stipulated and agreed to be the intent of Borrower and Lender at all times to comply with all applicable laws governing the maximum rate or amount of interest payable on the Indebtedness evidenced by this Note and the other Loan Documents. If any applicable law limiting the amount of interest or other charges permitted to be collected from Borrower is interpreted so that any interest or other charge or amount provided for in any Loan Document, whether considered separately or together with other charges or amounts provided for in any other Loan Document, or otherwise charged, taken, reserved or received in connection with the Mortgage Loan, or on acceleration of the maturity of the Mortgage Loan or as a result of any prepayment by Borrower or otherwise, violates that law, and Borrower is entitled to the benefit of that law, that interest or charge is hereby reduced to the extent necessary to eliminate any such violation. Amounts, if any, previously paid to Lender in excess of the permitted amounts shall be applied by Lender to reduce the unpaid principal balance of the Mortgage Loan without the payment of any prepayment premium (or, if the Mortgage Loan has been or would thereby be paid in full, shall be refunded to Borrower), and the provisions of the Loan Agreement and any other Loan Documents immediately shall be deemed reformed and the amounts thereafter collectible under the Loan Agreement and any other Loan Documents reduced, without the necessity of the execution of any new documents, so as to comply with any applicable law, but so as to permit the recovery of the fullest amount otherwise payable under the Loan Documents. For the purpose of determining whether any applicable law limiting the amount of interest or other charges permitted to be collected from Borrower has been violated, all Indebtedness that constitutes interest, as well as all other charges made in connection with the Indebtedness that constitute interest, and any amount paid or agreed to be paid to Lender for the use, forbearance or detention of the Indebtedness, shall be deemed to be allocated and spread ratably over the stated term of the Mortgage Loan. Unless otherwise required by applicable law, such allocation and spreading shall be effected in such a manner that the rate of interest so computed is uniform throughout the stated term of the Mortgage Loan.

13. WAIVER OF TRIAL BY JURY.

TO THE MAXIMUM EXTENT PERMITTED BY LAW, EACH OF BORROWER AND LENDER (A) AGREES NOT TO ELECT A TRIAL BY JURY WITH RESPECT TO ANY ISSUE ARISING OUT OF THIS NOTE OR THE RELATIONSHIP BETWEEN THE PARTIES AS LENDER AND BORROWER THAT IS TRIABLE OF RIGHT BY A JURY AND (B) WAIVES ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO SUCH ISSUE TO THE EXTENT THAT ANY SUCH RIGHT EXISTS NOW OR IN THE FUTURE. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS SEPARATELY GIVEN BY EACH PARTY, KNOWINGLY AND VOLUNTARILY WITH THE BENEFIT OF COMPETENT LEGAL COUNSEL.

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14. Receipt of Loan Documents.

Borrower acknowledges receipt of a copy of each of the Loan Documents.

15. Incorporation of Schedules.

The schedules, if any, attached to this Note are incorporated fully into this Note by this reference and each constitutes a substantive part of this Note.

ATTACHED SCHEDULE. The following Schedule is attached to this Note:

¨         Schedule1                 Modifications to Note

[Remainder of Page Intentionally Blank]

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IN WITNESS WHEREOF, Borrower has signed and delivered this Note under seal (where applicable) or has caused this Note to be signed and delivered under seal (where applicable) by its duly authorized representative. Where applicable law so provides, Borrower intends that this Note shall be deemed to be signed and delivered as a sealed instrument.

BORROWER:
CHT ZANESVILLE OH SENIOR LIVING, LLC, a Delaware limited liability company
By:	/s/ Joshua J. Taube
Name:	Joshua J. Taube
Title:	Vice President

This Note was executed by Borrower in the State of Florida. Accordingly, documentary stamp tax in the amount of $2,450.00 has been, or will be, paid directly to the Florida Department of Revenue upon execution and delivery of the Note by Borrower.

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PAY TO THE ORDER OF FANNIE MAE

WITHOUT RECOURSE.

KEYCORP REAL ESTATE CAPITAL MARKETS, INC., an Ohio corporation
By:	/s/ Crystal L. Williams
Name:	Crystal L. Williams
Title:	Vice President
Date:	May 8, 2013

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EX-10.5

Exhibit 10.5

Prepared by, and after recording

return to:

James J. Schwert, Esquire

Oppenheimer Wolff & Donnelly LLP

Campbell Mithun Tower – Suite 2000

222 S. Ninth Street

Minneapolis, MN 55402-3338

MULTIFAMILY MORTGAGE,

ASSIGNMENT OF LEASES AND RENTS,

SECURITY AGREEMENT

AND FIXTURE FILING

(ILLINOIS)

THIS SECURITY INSTRUMENT IS NOT TO BE USED FOR

MULTIFAMILY PROPERTIES CONTAINING FIVE (5) OR SIX (6)

RESIDENTIAL UNITS IF ANY RESIDENTIAL UNIT

IS OWNER-OCCUPIED PROPERTY

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MULTIFAMILY MORTGAGE,

ASSIGNMENT OF LEASES AND RENTS,

SECURITY AGREEMENT AND

FIXTURE FILING

This MULTIFAMILY MORTGAGE, ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT AND FIXTURE FILING (as amended, restated, replaced, supplemented, or otherwise modified from time to time, the “Security Instrument”) dated as of May 8, 2013, is executed by CHT DECATUR IL SENIOR LIVING, LLC, a limited liability company organized and existing under the laws of Delaware, as mortgagor (“Borrower”), to and for the benefit of KEYCORP REAL ESTATE CAPITAL MARKETS, INC., a corporation organized and existing under the laws of Ohio, as mortgagee (“Lender”).

Borrower, in consideration of (a) the loan in the original principal amount of $11,060,000.00 (the “Mortgage Loan”) evidenced by that certain Multifamily Note dated as of the date of this Security Instrument, executed by Borrower and made payable to the order of Lender, which matures on June 1, 2020 (the “Maturity Date”), and which shall accrue interest (i) prior to the occurrence of an Event of Default (as defined in this Security Instrument) at a per annum rate of interest equal to three and eighty-one one-hundredths percent (3.81%) (the “Interest Rate”) and (ii) from and after the Maturity Date or upon the occurrence and during the continuance of an Event of Default at a per annum rate of interest equal to the Interest Rate plus four percent (4.00%) (the “Default Rate”), (as amended, restated, replaced, supplemented, or otherwise modified from time to time, the “Note”), and (b) that certain Multifamily Loan and Security Agreement dated as of the date of this Security Instrument, executed by and between Borrower and Lender (as amended, restated, replaced, supplemented or otherwise modified from time to time, the “Loan Agreement”), and to secure to Lender the repayment of the Indebtedness (as defined in this Security Instrument), and all renewals, extensions and modifications thereof, and the performance of the covenants and agreements of Borrower contained in the Loan Documents (as defined in the Loan Agreement), excluding the Environmental Indemnity Agreement (as defined in this Security Instrument), irrevocably and unconditionally mortgages, grants, assigns, remises, releases, warrants and conveys to Lender the Mortgaged Property (as defined in this Security Instrument), including the real property located in the County of Macon, State of Illinois, and described in Exhibit A attached to this Security Instrument and incorporated by reference (the “Land”), to have and to hold such Mortgaged Property unto Lender and Lender’s successors and assigns, forever; Borrower hereby releasing, relinquishing and waiving, to the fullest extent allowed by law, all rights and benefits, if any, under and by virtue of the homestead exemption laws of the Property Jurisdiction (as defined in this Security Instrument), if applicable.

Borrower represents and warrants that Borrower is lawfully seized of the Mortgaged Property and has the right, power and authority to mortgage, grant, assign, remise, release, warrant and convey the Mortgaged Property, and that the Mortgaged Property is not encumbered

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by any Lien (as defined in this Security Instrument) other than Permitted Encumbrances (as defined in this Security Instrument). Borrower covenants that Borrower will warrant and defend the title to the Mortgaged Property against all claims and demands other than Permitted Encumbrances.

Borrower and Lender, by its acceptance hereof, each covenants and agrees as follows:

1. Defined Terms.

Capitalized terms used and not specifically defined herein have the meanings given to such terms in the Loan Agreement. All terms used and not specifically defined herein, but which are otherwise defined by the UCC, shall have the meanings assigned to them by the UCC. The following terms, when used in this Security Instrument, shall have the following meanings:

“Condemnation Action” means any action or proceeding, however characterized or named, relating to any condemnation or other taking, or conveyance in lieu thereof, of all or any part of the Mortgaged Property, whether direct or indirect.

“Enforcement Costs” means all expenses and costs, including reasonable attorneys’ fees and expenses, fees and out-of-pocket expenses of expert witnesses and costs of investigation, incurred by Lender as a result of any Event of Default under the Loan Agreement or in connection with efforts to collect any amount due under the Loan Documents, or to enforce the provisions of the Loan Agreement or any of the other Loan Documents, including those incurred in post-judgment collection efforts and in any bankruptcy or insolvency proceeding (including any action for relief from the automatic stay of any bankruptcy proceeding or Foreclosure Event) or judicial or non-judicial foreclosure proceeding, to the extent permitted by law.

“Environmental Indemnity Agreement” means that certain Environmental Indemnity Agreement dated as of the date of this Security Instrument, executed by Borrower to and for the benefit of Lender, as the same may be amended, restated, replaced, supplemented, or otherwise modified from time to time.

“Environmental Laws” has the meaning set forth in the Environmental Indemnity Agreement.

“Event of Default” has the meaning set forth in the Loan Agreement.

“Fixtures” means all Goods that are so attached or affixed to the Land or the Improvements as to constitute a fixture under the laws of the Property Jurisdiction.

“Goods” means all of Borrower’s present and hereafter acquired right, title and interest in all goods which are used now or in the future in connection with the ownership, management, or operation of the Land or the Improvements or are located on the Land or in the Improvements, including inventory; furniture; furnishings; machinery, equipment, engines, boilers, incinerators, and installed building materials; systems and equipment for the purpose of supplying or

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distributing heating, cooling, electricity, gas, water, air, or light; antennas, cable, wiring, and conduits used in connection with radio, television, security, fire prevention, or fire detection, or otherwise used to carry electronic signals; telephone systems and equipment; elevators and related machinery and equipment; fire detection, prevention and extinguishing systems and apparatus; security and access control systems and apparatus; plumbing systems; water heaters, ranges, stoves, microwave ovens, refrigerators, dishwashers, garbage disposers, washers, dryers, and other appliances; light fixtures, awnings, storm windows, and storm doors; pictures, screens, blinds, shades, curtains, and curtain rods; mirrors, cabinets, paneling, rugs, and floor and wall coverings; fences, trees, and plants; swimming pools; exercise equipment; supplies; tools; books and records (whether in written or electronic form); websites, URLs, blogs, and social network pages; computer equipment (hardware and software); and other tangible personal property which is used now or in the future in connection with the ownership, management, or operation of the Land or the Improvements or are located on the Land or in the Improvements.

“Imposition Deposits” means deposits in an amount sufficient to accumulate with Lender the entire sum required to pay the Impositions when due.

“Impositions” means

(a)        any water and sewer charges which, if not paid, may result in a lien on all or any part of the Mortgaged Property;

(b)        the premiums for fire and other casualty insurance, liability insurance, rent loss insurance and such other insurance as Lender may require under the Loan Agreement;

(c)        Taxes; and

(d)        amounts for other charges and expenses assessed against the Mortgaged Property which Lender at any time reasonably deems necessary to protect the Mortgaged Property, to prevent the imposition of liens on the Mortgaged Property, or otherwise to protect Lender’s interests, all as reasonably determined from time to time by Lender.

“Improvements” means the buildings, structures, improvements, and alterations now constructed or at any time in the future constructed or placed upon the Land, including any future replacements, facilities, and additions and other construction on the Land.

“Indebtedness” means the principal of, interest on, and all other amounts due at any time under the Note, the Loan Agreement, this Security Instrument or any other Loan Document (other than the Environmental Indemnity Agreement and Guaranty), including Prepayment Premiums, late charges, interest charged at the Default Rate, and accrued interest as provided in the Loan Agreement and this Security Instrument, advances, costs and expenses to perform the obligations of Borrower or to protect the Mortgaged Property or the security of this Security Instrument, all other monetary obligations of Borrower under the Loan Documents (other than the Environmental Indemnity Agreement), including amounts due as a result of any indemnification obligations, and any Enforcement Costs.

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“Land” means the real property described in Exhibit A.

“Leases” means all present and future leases, subleases, licenses, concessions or grants or other possessory interests now or hereafter in force, whether oral or written, covering or affecting the Mortgaged Property, or any portion of the Mortgaged Property (including proprietary leases or occupancy agreements if Borrower is a cooperative housing corporation), and all modifications, extensions or renewals thereof.

“Lien” means any claim or charge against property for payment of a debt or an amount owed for services rendered, including any mortgage, deed of trust, deed to secure debt, security interest, tax lien, any materialman’s or mechanic’s lien, or any lien of a Governmental Authority, including any lien in connection with the payment of utilities, or any other encumbrance.

“Mortgaged Property” means all of Borrower’s present and hereafter acquired right, title and interest, if any, in and to all of the following:

(a)        the Land;

(b)        the Improvements;

(c)        the Personalty;

(d)        current and future rights, including air rights, development rights, zoning rights and other similar rights or interests, easements, tenements, rights-of-way, strips and gores of land, streets, alleys, roads, sewer rights, waters, watercourses, and appurtenances related to or benefitting the Land or the Improvements, or both, and all rights-of-way, streets, alleys and roads which may have been or may in the future be vacated;

(e)        insurance policies relating to the Mortgaged Property (and any unearned premiums) and all proceeds paid or to be paid by any insurer of the Land, the Improvements, the Personalty, or any other part of the Mortgaged Property, whether or not Borrower obtained the insurance pursuant to Lender’s requirements;

(f)        awards, payments and other compensation made or to be made by any municipal, state or federal authority with respect to the Land, the Improvements, the Personalty, or any other part of the Mortgaged Property, including any awards or settlements resulting from (1) Condemnation Actions, (2) any damage to the Mortgaged Property caused by governmental action that does not result in a Condemnation Action, or (3) the total or partial taking of the Land, the Improvements, the Personalty, or any other part of the Mortgaged Property under the power of eminent domain or otherwise and including any conveyance in lieu thereof;

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(g)        contracts, options and other agreements for the sale of the Land, the Improvements, the Personalty, or any other part of the Mortgaged Property entered into by Borrower now or in the future, including cash or securities deposited to secure performance by parties of their obligations;

(h)        Leases and Lease guaranties, letters of credit and any other supporting obligation for any of the Leases given in connection with any of the Leases, and all Rents;

(i)        earnings, royalties, accounts receivable, issues and profits from the Land, the Improvements or any other part of the Mortgaged Property, and all undisbursed proceeds of the Mortgage Loan and, if Borrower is a cooperative housing corporation, maintenance charges or assessments payable by shareholders or residents;

(j)        Imposition Deposits;

(k)        refunds or rebates of Impositions by any municipal, state or federal authority or insurance company (other than refunds applicable to periods before the real property tax year in which this Security Instrument is dated);

(l)        tenant security deposits;

(m)        names under or by which any of the above Mortgaged Property may be operated or known, and all trademarks, trade names, and goodwill relating to any of the Mortgaged Property;

(n)        Collateral Accounts and all Collateral Account Funds;

(o)        products, and all cash and non-cash proceeds from the conversion, voluntary or involuntary, of any of the above into cash or liquidated claims, and the right to collect such proceeds; and

(p)        all of Borrower’s right, title and interest in the oil, gas, minerals, mineral interests, royalties, overriding royalties, production payments, net profit interests and other interests and estates in, under and on the Mortgaged Property and other oil, gas and mineral interests with which any of the foregoing interests or estates are pooled or unitized.

“Permitted Encumbrance” means only the easements, restrictions and other matters listed in a schedule of exceptions to coverage in the Title Policy and Taxes for the current tax year that are not yet due and payable.

“Permitted Equipment Financing” means, with respect to the Mortgaged Property, equipment lease or other purchase money financing incurred in the ordinary course of business for acquisition of additional or replacement equipment or other personal property or to refinance Permitted Equipment Financing, in an amount not to exceed two percent (2%) of the Loan Amount, less normal outstanding account payable balances.

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“Personalty” means all of Borrower’s present and hereafter acquired right, title and interest in all Goods, accounts, choses of action, chattel paper, documents, general intangibles (including Software), payment intangibles, instruments, investment property, letter of credit rights, supporting obligations, computer information, source codes, object codes, records and data, all telephone numbers or listings, claims (including claims for indemnity or breach of warranty), deposit accounts and other property or assets of any kind or nature related to the Land or the Improvements now or in the future, including operating agreements, surveys, plans and specifications and contracts for architectural, engineering and construction services relating to the Land or the Improvements, and all other intangible property and rights relating to the operation of, or used in connection with, the Land or the Improvements, including all governmental permits relating to any activities on the Land.

“Prepayment Premium” has the meaning set forth in the Loan Agreement.

“Property Jurisdiction” means the jurisdiction in which the Land is located.

“Rents” means all rents (whether from residential or non-residential space), revenues and other income from the Land or the Improvements, including subsidy payments received from any sources, including payments under any “Housing Assistance Payments Contract” or other rental subsidy agreement (if any), parking fees, laundry and vending machine income and fees and charges for food, health care and other services provided at the Mortgaged Property, whether now due, past due, or to become due, and tenant security deposits.

“Software” means a computer program and any supporting information provided in connection with a transaction relating to the program. The term does not include any computer program that is included in the definition of Goods.

“Taxes” means all taxes, assessments, vault rentals and other charges, if any, general, special or otherwise, including assessments for schools, public betterments and general or local improvements, which are levied, assessed or imposed by any public authority or quasi-public authority, and which, if not paid, may become a lien, on the Land or the Improvements or any taxes upon any Loan Document.

“Title Policy” has the meaning set forth in the Loan Agreement.

“UCC” means the Uniform Commercial Code in effect in the Property Jurisdiction, as amended from time to time.

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“UCC Collateral” means any or all of that portion of the Mortgaged Property in which a security interest may be granted under the UCC and in which Borrower has any present or hereafter acquired right, title or interest.

2. Security Agreement; Fixture Filing.

(a)        To secure to Lender, the repayment of the Indebtedness, and all renewals, extensions and modifications thereof, and the performance of the covenants and agreements of Borrower contained in the Loan Documents, Borrower hereby pledges, assigns, and grants to Lender a continuing security interest in the UCC Collateral. This Security Instrument constitutes a security agreement and a financing statement under the UCC. This Security Instrument also constitutes a financing statement pursuant to the terms of the UCC with respect to any part of the Mortgaged Property that is or may become a Fixture under applicable law, and will be recorded as a “fixture filing” in accordance with the UCC. Borrower hereby authorizes Lender to file financing statements, continuation statements and financing statement amendments in such form as Lender may require to perfect or continue the perfection of this security interest without the signature of Borrower. If an Event of Default has occurred and is continuing, Lender shall have the remedies of a secured party under the UCC or otherwise provided at law or in equity, in addition to all remedies provided by this Security Instrument and in any Loan Document. Lender may exercise any or all of its remedies against the UCC Collateral separately or together, and in any order, without in any way affecting the availability or validity of Lender’s other remedies. For purposes of the UCC, the debtor is Borrower and the secured party is Lender. The name and address of the debtor and secured party are set forth after Borrower’s signature below which are the addresses from which information on the security interest may be obtained.

(b)        Borrower represents and warrants that: (1) Borrower maintains its chief executive office at the location set forth after Borrower’s signature below, and Borrower will notify Lender in writing of any change in its chief executive office within five (5) days of such change; (2) Borrower is the record owner of the Mortgaged Property; (3) Borrower’s state of incorporation, organization, or formation, if applicable, is as set forth on Page 1 of this Security Instrument; (4) Borrower’s exact legal name is as set forth on Page 1 of this Security Instrument; (5) Borrower’s organizational identification number, if applicable, is as set forth after Borrower’s signature below; (6) Borrower is the owner of the UCC Collateral subject to no liens, charges or encumbrances other than the lien hereof and Permitted Equipment Financing; (7) except as expressly provided in the Loan Agreement, the UCC Collateral will not be removed from the Mortgaged Property without the consent of Lender, except for replacement in the ordinary course of business; and (8) no financing statement covering any of the UCC Collateral or any proceeds thereof is on file in any public office except pursuant hereto.

(c)        All property of every kind acquired by Borrower after the date of this Security Instrument which by the terms of this Security Instrument shall be subject to the lien and the security interest created hereby, shall immediately upon the acquisition thereof by Borrower and without further conveyance or assignment become subject to the lien and security interest created

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by this Security Instrument. Nevertheless, Borrower shall execute, acknowledge, deliver and record or file, as appropriate, all and every such further deeds of trust, mortgages, deeds to secure debt, security agreements, financing statements, assignments and assurances as Lender shall require for accomplishing the purposes of this Security Instrument and to comply with the rerecording requirements of the UCC.

3. Assignment of Leases and Rents; Appointment of Receiver; Lender in Possession.

(a)        As part of the consideration for the Indebtedness, Borrower absolutely and unconditionally assigns and transfers to Lender all Leases and Rents. It is the intention of Borrower to establish present, absolute and irrevocable transfers and assignments to Lender of all Leases and Rents and to authorize and empower Lender to collect and receive all Rents without the necessity of further action on the part of Borrower. Borrower and Lender intend the assignments of Leases and Rents to be effective immediately and to constitute absolute present assignments, and not assignments for additional security only. Only for purposes of giving effect to these absolute assignments of Leases and Rents, and for no other purpose, the Leases and Rents shall not be deemed to be a part of the Mortgaged Property. However, if these present, absolute and unconditional assignments of Leases and Rents are not enforceable by their terms under the laws of the Property Jurisdiction, then each of the Leases and Rents shall be included as part of the Mortgaged Property, and it is the intention of Borrower, in such circumstance, that this Security Instrument create and perfect a lien on each of the Leases and Rents in favor of Lender, which liens shall be effective as of the date of this Security Instrument.

(b)        Until an Event of Default has occurred and is continuing, but subject to the limitations set forth in the Loan Documents, Borrower shall have a revocable license to exercise all rights, power and authority granted to Borrower under the Leases (including the right, power and authority to modify the terms of any Lease, extend or terminate any Lease, or enter into new Leases, subject to the limitations set forth in the Loan Documents), and to collect and receive all Rents, to hold all Rents in trust for the benefit of Lender, and to apply all Rents to pay the Monthly Debt Service Payments and the other amounts then due and payable under the other Loan Documents, including Imposition Deposits, and to pay the current costs and expenses of managing, operating and maintaining the Mortgaged Property, including utilities and Impositions (to the extent not included in Imposition Deposits), tenant improvements and other capital expenditures. So long as no Event of Default has occurred and is continuing (and no event which, with the giving of notice or the passage of time, or both, would constitute an Event of Default has occurred and is continuing), the Rents remaining after application pursuant to the preceding sentence may be retained and distributed by Borrower free and clear of, and released from, Lender’s rights with respect to Rents under this Security Instrument.

(c)        If an Event of Default has occurred and is continuing, without the necessity of Lender entering upon and taking and maintaining control of the Mortgaged Property directly, by a receiver, or by any other manner or proceeding permitted by the laws of the Property Jurisdiction, the revocable license granted to Borrower pursuant to Section 3(b) shall

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automatically terminate, and Lender shall immediately have all rights, powers and authority granted to Borrower under any Lease (including the right, power and authority to modify the terms of any such Lease, or extend or terminate any such Lease) and, without notice, Lender shall be entitled to all Rents as they become due and payable, including Rents then due and unpaid. During the continuance of an Event of Default, Borrower authorizes Lender to collect, sue for and compromise Rents and directs each tenant of the Mortgaged Property to pay all Rents to, or as directed by, Lender, and Borrower shall, upon Borrower’s receipt of any Rents from any sources, pay the total amount of such receipts to Lender. Although the foregoing rights of Lender are self-effecting, at any time during the continuance of an Event of Default, Lender may make demand for all Rents, and Lender may give, and Borrower hereby irrevocably authorizes Lender to give, notice to all tenants of the Mortgaged Property instructing them to pay all Rents to Lender. No tenant shall be obligated to inquire further as to the occurrence or continuance of an Event of Default, and no tenant shall be obligated to pay to Borrower any amounts that are actually paid to Lender in response to such a notice. Any such notice by Lender shall be delivered to each tenant personally, by mail or by delivering such demand to each rental unit.

(d)        If an Event of Default has occurred and is continuing, Lender may, regardless of the adequacy of Lender’s security or the solvency of Borrower, and even in the absence of waste, enter upon, take and maintain full control of the Mortgaged Property, and may exclude Borrower and its agents and employees therefrom, in order to perform all acts that Lender, in its discretion, determines to be necessary or desirable for the operation and maintenance of the Mortgaged Property, including the execution, cancellation or modification of Leases, the collection of all Rents (including through use of a lockbox, at Lender’s election), the making of repairs to the Mortgaged Property and the execution or termination of contracts providing for the management, operation or maintenance of the Mortgaged Property, for the purposes of enforcing this assignment of Rents, protecting the Mortgaged Property or the security of this Security Instrument and the Mortgage Loan, or for such other purposes as Lender in its discretion may deem necessary or desirable.

(e)        Notwithstanding any other right provided Lender under this Security Instrument or any other Loan Document, if an Event of Default has occurred and is continuing, and regardless of the adequacy of Lender’s security or Borrower’s solvency, and without the necessity of giving prior notice (oral or written) to Borrower, Lender may apply to any court having jurisdiction for the appointment of a receiver for the Mortgaged Property to take any or all of the actions set forth in Section 3. If Lender elects to seek the appointment of a receiver for the Mortgaged Property at any time after an Event of Default has occurred and is continuing, Borrower, by its execution of this Security Instrument, expressly consents to the appointment of such receiver, including the appointment of a receiver ex parte, if permitted by applicable law. Borrower consents to shortened time consideration of a motion to appoint a receiver. Lender or the receiver, as applicable, shall be entitled to receive a reasonable fee for managing the Mortgaged Property and such fee shall become an additional part of the Indebtedness. Immediately upon appointment of a receiver or Lender’s entry upon and taking possession and control of the Mortgaged Property, possession of the Mortgaged Property and all documents,

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records (including records on electronic or magnetic media), accounts, surveys, plans, and specifications relating to the Mortgaged Property, and all security deposits and prepaid Rents, shall be surrendered to Lender or the receiver, as applicable. If Lender or receiver takes possession and control of the Mortgaged Property, Lender or receiver may exclude Borrower and its representatives from the Mortgaged Property.

(f)        The acceptance by Lender of the assignments of the Leases and Rents pursuant to this Section 3 shall not at any time or in any event obligate Lender to take any action under any Loan Document or to expend any money or to incur any expense. Lender shall not be liable in any way for any injury or damage to person or property sustained by any Person in, on or about the Mortgaged Property. Prior to Lender’s actual entry upon and taking possession and control of the Land and Improvements, Lender shall not be:

(1)        obligated to perform any of the terms, covenants and conditions contained in any Lease (or otherwise have any obligation with respect to any Lease);

(2)        obligated to appear in or defend any action or proceeding relating to any Lease or the Mortgaged Property; or

(3)        responsible for the operation, control, care, management or repair of the Mortgaged Property or any portion of the Mortgaged Property.

The execution of this Security Instrument shall constitute conclusive evidence that all responsibility for the operation, control, care, management and repair of the Mortgaged Property is and shall be that of Borrower, prior to such actual entry and taking possession and control by Lender of the Land and Improvements.

(g)        Lender shall be liable to account only to Borrower and only for Rents actually received by Lender. Lender shall not be liable to Borrower, anyone claiming under or through Borrower or anyone having an interest in the Mortgaged Property by reason of any act or omission of Lender under this Section 3, and Borrower hereby releases and discharges Lender from any such liability to the fullest extent permitted by law, provided that Lender shall not be released from liability that occurs as a result of Lender’s gross negligence or willful misconduct as determined by a court of competent jurisdiction pursuant to a final, non-appealable court order. If the Rents are not sufficient to meet the costs of taking control of and managing the Mortgaged Property and collecting the Rents, any funds expended by Lender for such purposes shall be added to, and become a part of, the principal balance of the Indebtedness, be immediately due and payable, and bear interest at the Default Rate from the date of disbursement until fully paid. Any entering upon and taking control of the Mortgaged Property by Lender or the receiver, and any application of Rents as provided in this Security Instrument, shall not cure or waive any Event of Default or invalidate any other right or remedy of Lender under applicable law or provided for in this Security Instrument or any Loan Document.

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Illinois	12-12	© 2012 Fannie Mae

4. Protection of Lender’s Security.

(a)        Advances, disbursements and expenditures made by Lender for the following purposes, whether before and during a foreclosure, and at any time prior to sale, and, where applicable, after sale, and during the pendency of any related proceedings, for the following purposes, shall, in addition to those otherwise authorized by this Security Instrument, constitute “Protective Advances”:

(1)        all advances by Lender in accordance with the terms of this Security Instrument to: (A) preserve or maintain, repair, restore or rebuild the improvements upon the Mortgaged Property; (B) preserve the lien of this Security Instrument or the priority thereof; or (C) enforce this Security Instrument, as referred to in Subsection (b)(5) of Section 5/15-1302 of the Illinois Mortgage Foreclosure Law, 735 ILCS 5/15-1101 et seq., as from time to time amended (the “Act”);

(2)        payments by Lender of: (A) when due, installments of principal, interest or other obligations in accordance with the terms of any prior lien or encumbrance; (B) when due, installments of real estate taxes and assessments, general and special and all other taxes and assessments of any kind or nature whatsoever which are assessed or imposed upon the mortgaged real estate or any part thereof; (C) other obligations authorized by this Security Instrument; or (D) with court approval, any other amounts in connection with other liens, encumbrances or interests reasonably necessary to preserve the status of title to the Mortgaged Property, as referred to in Section 5/15-1505 of the Act;

(3)        advances by Lender in settlement or compromise of any claims asserted by claimants under any prior liens;

(4)        reasonable attorneys’ fees and other costs incurred: (A) in connection with the foreclosure of this Security Instrument as referred to in Section 5/15-1504(d)(2) and 5/15-1510 of the Act; (B) in connection with any action, suit or proceeding brought by or against Lender for the enforcement of this Security Instrument or arising from the interest of Lender hereunder or under any of the other Loan Documents; or (C) in the preparation for the commencement or defense of any such foreclosure or other action;

(5)        Lender’s fees and costs, including reasonable attorneys’ fees, arising between the entry of judgment of foreclosure and the confirmation hearing as referred to in Subsection (b)(1) of Section 5/15-1508 of the Act;

(6)        advances of any amount required to make up a deficiency in deposits for installments of taxes and assessments and insurance premiums as may be authorized by this Security Instrument;

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(7)        expenses deductible from proceeds of sale as referred to in Subsections (a) and (b) of Section 5/15-1512 of the Act; and

(8)        expenses incurred and expenditures made by Lender for any one (1) or more of the following: (A) premiums for casualty and liability insurance paid by Lender whether or not Lender or a receiver is in possession, if reasonably required, in reasonable amounts, and all renewals thereof, without regard to the limitation to maintaining of existing insurance in effect at the time any receiver or mortgagee takes possession of the Mortgaged Property imposed by Subsection (c)(1) of Section 5/15-1704 of the Act; (B) repair or restoration of damage or destruction in excess of available insurance proceeds or condemnation awards; (C) payments required or deemed by Lender to be for the benefit of the Mortgaged Property under any grant or declaration of easement, easement agreement, agreement with any adjoining land owners or instruments creating covenants or restrictions for the benefit of or affecting the Mortgaged Property; (D) shared or common expense assessments payable to any association or corporation in which the owner of the mortgaged real estate is a member in any way affecting the Mortgaged Property; (E) pursuant to any lease or other agreement for occupancy of the mortgaged real estate.

(b)        All Protective Advances shall be so much additional Indebtedness, and shall become immediately due and payable without notice and with interest thereon from the date of the advance until paid at the Default Rate.

(c)        This Security Instrument shall be a lien for all Protective Advances as to subsequent purchasers and judgment creditors from the time this Security Instrument is recorded pursuant to Subsection (b)(5) of Section 5/15-1302 of the Act.

(d)        All Protective Advances shall, except to the extent, if any, that any of the same is clearly contrary to or inconsistent with the provisions of the Act, apply to and be included in the:

(1)        determination of the amount of Indebtedness at any time;

(2)        indebtedness found due and owing to Lender in the judgment of foreclosure and any subsequent supplemental judgments, orders, adjudications or findings by the court of any additional indebtedness becoming due after such entry of judgment, it being agreed that in any foreclosure judgment, the court may reserve jurisdiction for such purpose;

(3)        determination of amounts deductible from sale proceeds pursuant to Section 5/15-1512 of the Act;

(4)        application of income in the hands of any receiver or mortgagee in possession; and

(5)        computation of any deficiency judgment pursuant to Subsections (b)(2) and (e) of Section 5/15-1508 and Section 5/15-1511 of the Act.

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5. Default; Acceleration; Remedies.

(a)        If an Event of Default has occurred and is continuing, Lender, at its option, may declare the Indebtedness to be immediately due and payable without further demand, and may either with or without entry or taking possession as herein provided or otherwise, proceed by any action at law or suit in equity or any other appropriate proceedings, whether for the specific performance of any agreement contained herein, or for an injunction against the violation of any of the terms hereof, or in aid of the exercise of any power granted hereby or by law (1) to enforce payment of the Mortgage Loan; (2) to foreclose this Security Instrument judicially or non-judicially; (3) to enforce or exercise any right under any Loan Document; and (4) to pursue any one (1) or more other remedies provided in this Security Instrument or in any other Loan Document or otherwise afforded by applicable law. Each right and remedy provided in this Security Instrument or any other Loan Document is distinct from all other rights or remedies under this Security Instrument or any other Loan Document or otherwise afforded by applicable law, and each shall be cumulative and may be exercised concurrently, independently, or successively, in any order. Borrower has the right to bring an action to assert the nonexistence of an Event of Default or any other defense of Borrower to acceleration and sale.

(b)        In connection with any sale made under or by virtue of this Security Instrument, the whole of the Mortgaged Property may be sold in one (1) parcel as an entirety or in separate lots or parcels at the same or different times, all as Lender may determine in its sole discretion. Lender shall have the right to become the purchaser at any such sale. In the event of any such sale, the outstanding principal amount of the Mortgage Loan and the other Indebtedness, if not previously due, shall be and become immediately due and payable without demand or notice of any kind. If the Mortgaged Property is sold for an amount less than the amount outstanding under the Indebtedness, the deficiency shall be determined by the purchase price at the sale or sales. To the extent not prohibited by applicable law, Borrower waives all rights, claims, and defenses with respect to Lender’s ability to obtain a deficiency judgment. Borrower acknowledges that the Mortgaged Property does not constitute agricultural real estate, as defined in Section 5/15-1201 of the Act, or residential real estate, as defined in Section 5/15-1219 of the Act.

(c)        Borrower acknowledges and agrees that the proceeds of any sale shall be applied as determined by Lender unless otherwise required by applicable law.

(d)        In connection with the exercise of Lender’s rights and remedies under this Security Instrument and any other Loan Document, there shall be allowed and included as Indebtedness: (1) all expenditures and expenses authorized by applicable law and all other expenditures and expenses which may be paid or incurred by or on behalf of Lender for reasonable legal fees, appraisal fees, outlays for documentary and expert evidence, stenographic

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charges and publication costs; (2) all expenses of any environmental site assessments, environmental audits, environmental remediation costs, appraisals, surveys, engineering studies, wetlands delineations, flood plain studies, and any other similar testing or investigation deemed necessary or advisable by Lender incurred in preparation for, contemplation of or in connection with the exercise of Lender’s rights and remedies under the Loan Documents; and (3) costs (which may be reasonably estimated as to items to be expended in connection with the exercise of Lender’s rights and remedies under the Loan Documents) of procuring all abstracts of title, title searches and examinations, title insurance policies, and similar data and assurance with respect to title as Lender may deem reasonably necessary either to prosecute any suit or to evidence the true conditions of the title to or the value of the Mortgaged Property to bidders at any sale which may be held in connection with the exercise of Lender’s rights and remedies under the Loan Documents. All expenditures and expenses of the nature mentioned in this Section 5, and such other expenses and fees as may be incurred in the protection of the Mortgaged Property and rents and income therefrom and the maintenance of the lien of this Security Instrument, including the fees of any attorney employed by Lender in any litigation or proceedings affecting this Security Instrument, the Note, the other Loan Documents, or the Mortgaged Property, including bankruptcy proceedings, any Foreclosure Event, or in preparation of the commencement or defense of any proceedings or threatened suit or proceeding, or otherwise in dealing specifically therewith, shall be so much additional Indebtedness and shall be immediately due and payable by Borrower, with interest thereon at the Default Rate until paid. Without limiting the generality of the foregoing, all expenses incurred by Lender which are of the type referred to in the Act, whether incurred before or after any decree or judgment of foreclosure, and whether or not enumerated in this Security Instrument, shall be added to the Indebtedness and/or by any judgment of foreclosure.

(e)        Any action taken by Lender pursuant to the provisions of this Section 5 shall comply with the laws of the Property Jurisdiction including the Act. Such applicable laws shall take precedence over the provisions of this Section 5, but shall not invalidate or render unenforceable any other provision of any Loan Document that can be construed in a manner consistent with any applicable law. If any provision of this Security Instrument shall grant to Lender (including Lender acting as a mortgagee-in-possession), or a receiver appointed pursuant to the provisions of this Security Instrument any powers, rights or remedies prior to, upon, during the continuance of or following an Event of Default that are more limited than the powers, rights, or remedies that would otherwise be vested in such party under any applicable law in the absence of said provision, such party shall be vested with the powers, rights, and remedies granted in such applicable law to the full extent permitted by law.

6. Waiver of Statute of Limitations and Marshaling.

Borrower hereby waives the right to assert any statute of limitations as a bar to the enforcement of the lien of this Security Instrument or to any action brought to enforce any Loan Document. Notwithstanding the existence of any other security interests in the Mortgaged Property held by Lender or by any other party, Lender shall have the right to determine the order

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in which any or all of the Mortgaged Property shall be subjected to the remedies provided in this Security Instrument and/or any other Loan Document or by applicable law. Lender shall have the right to determine the order in which any or all portions of the Indebtedness are satisfied from the proceeds realized upon the exercise of such remedies. Borrower, for itself and all who may claim by, through or under it, and any party who now or in the future acquires a security interest in the Mortgaged Property and who has actual or constructive notice of this Security Instrument, waives any and all right to require the marshaling of assets or to require that any of the Mortgaged Property be sold in the inverse order of alienation or that any of the Mortgaged Property be sold in parcels (at the same time or different times) in connection with the exercise of any of the remedies provided in this Security Instrument or any other Loan Document, or afforded by applicable law.

7. Waiver of Redemption; Rights of Tenants.

(a)        Borrower hereby covenants and agrees that it will not at any time apply for, insist upon, plead, avail itself, or in any manner claim or take any advantage of, any appraisement, stay, exemption or extension law or any so-called “Moratorium Law” now or at any time hereafter enacted or in force in order to prevent or hinder the enforcement or foreclosure of this Security Instrument. Without limiting the foregoing:

(1)        Borrower, for itself and all Persons who may claim by, through or under Borrower, hereby expressly waives any so-called “Moratorium Law” and any and all rights of reinstatement and redemption, if any, under any order or decree of foreclosure of this Security Instrument, it being the intent hereof that any and all such “Moratorium Laws”, and all rights of reinstatement and redemption of Borrower and of all other Persons claiming by, through or under Borrower are and shall be deemed to be hereby waived to the fullest extent permitted by the laws of the Property Jurisdiction;

(2)        Borrower shall not invoke or utilize any such law or laws or otherwise hinder, delay or impede the execution of any right, power remedy herein or otherwise granted or delegated to Lender but will suffer and permit the execution of every such right, power and remedy as though no such law or laws had been made or enacted; and

(3)        if Borrower is a trust, Borrower represents that the provisions of this Section 7 (including the waiver of reinstatement and redemption rights) were made at the express direction of Borrower’s beneficiaries and the persons having the power of direction over Borrower, and are made on behalf of the trust estate of Borrower and all beneficiaries of Borrower, as well as all other persons mentioned above.

(b)        Lender shall have the right and option to commence a civil action to foreclose this Security Instrument and to obtain a decree of foreclosure and sale subject to the rights of any tenant or tenants of the Mortgaged Property having an interest in the Mortgaged Property prior to that of Lender. The failure to join any such tenant or tenants of the Mortgaged Property as party

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defendant or defendants in any such civil action or the failure of any decree of foreclosure and sale to foreclose their rights shall not be asserted by Borrower as a defense in any civil action instituted to collect the Indebtedness, or any part thereof or any deficiency remaining unpaid after foreclosure and sale of the Mortgaged Property, any statute or rule of law at any time existing to the contrary notwithstanding.

8. Notice.

(a)      All notices under this Security Instrument shall be:

  (1)      in writing, and shall be (A) delivered, in person, (B) mailed, postage prepaid, either by registered or certified delivery, return receipt requested, or (C) sent by overnight express courier;

  (2)      addressed to the intended recipient at its respective address set forth at the end of this Security Instrument; and

  (3)      deemed given on the earlier to occur of:

  (A)        the date when the notice is received by the addressee; or

  (B)        if the recipient refuses or rejects delivery, the date on which the notice is so refused or rejected, as conclusively established by the records of the United States Postal Service or such express courier service.

(b)      Any party to this Security Instrument may change the address to which notices intended for it are to be directed by means of notice given to the other party in accordance with this Section 8.

(c)      Any required notice under this Security Instrument which does not specify how notices are to be given shall be given in accordance with this Section 8.

9. Mortgagee-in-Possession.

Borrower acknowledges and agrees that the exercise by Lender of any of the rights conferred in this Security Instrument shall not be construed to make Lender a mortgagee-in-possession of the Mortgaged Property so long as Lender has not itself entered into actual possession of the Land and Improvements.

10. Release.

Upon payment in full of the Indebtedness, Lender shall cause the release of this Security Instrument and Borrower shall pay Lender’s costs incurred in connection with such release.

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Illinois	12-12	© 2012 Fannie Mae

11. Governing Law; Consent to Jurisdiction and Venue.

This Security Instrument shall be governed by the laws of the Property Jurisdiction without giving effect to any choice of law provisions thereof that would result in the application of the laws of another jurisdiction. Borrower agrees that any controversy arising under or in relation to this Security Instrument shall be litigated exclusively in the Property Jurisdiction. The state and federal courts and authorities with jurisdiction in the Property Jurisdiction shall have exclusive jurisdiction over all controversies that arise under or in relation to any security for the Indebtedness. Borrower irrevocably consents to service, jurisdiction, and venue of such courts for any such litigation and waives any other venue to which it might be entitled by virtue of domicile, habitual residence or otherwise.

12. Miscellaneous Provisions.

(a)      This Security Instrument shall bind, and the rights granted by this Security Instrument shall benefit, the successors and assigns of Lender. This Security Instrument shall bind, and the obligations granted by this Security Instrument shall inure to, any permitted successors and assigns of Borrower under the Loan Agreement. If more than one (1) person or entity signs this Security Instrument as Borrower, the obligations of such persons and entities shall be joint and several. The relationship between Lender and Borrower shall be solely that of creditor and debtor, respectively, and nothing contained in this Security Instrument shall create any other relationship between Lender and Borrower. No creditor of any party to this Security Instrument and no other person shall be a third party beneficiary of this Security Instrument or any other Loan Document.

(b)      The invalidity or unenforceability of any provision of this Security Instrument or any other Loan Document shall not affect the validity or enforceability of any other provision of this Security Instrument or of any other Loan Document, all of which shall remain in full force and effect. This Security Instrument contains the complete and entire agreement among the parties as to the matters covered, rights granted and the obligations assumed in this Security Instrument. This Security Instrument may not be amended or modified except by written agreement signed by the parties hereto.

(c)      The following rules of construction shall apply to this Security Instrument:

  (1)        The captions and headings of the sections of this Security Instrument are for convenience only and shall be disregarded in construing this Security Instrument.

  (2)        Any reference in this Security Instrument to an “Exhibit” or “Schedule” or a “Section” or an “Article” shall, unless otherwise explicitly provided, be construed as referring, respectively, to an exhibit or schedule attached to this Security Instrument or to a Section or Article of this Security Instrument.

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Illinois	12-12	© 2012 Fannie Mae

(3)        Any reference in this Security Instrument to a statute or regulation shall be construed as referring to that statute or regulation as amended from time to time.

(4)        Use of the singular in this Security Instrument includes the plural and use of the plural includes the singular.

(5)        As used in this Security Instrument, the term “including” means “including, but not limited to” or “including, without limitation,” and is for example only, and not a limitation.

(6)        Whenever Borrower’s knowledge is implicated in this Security Instrument or the phrase “to Borrower’s knowledge” or a similar phrase is used in this Security Instrument, Borrower’s knowledge or such phrase(s) shall be interpreted to mean to the best of Borrower’s knowledge after reasonable and diligent inquiry and investigation.

(7)        Unless otherwise provided in this Security Instrument, if Lender’s approval, designation, determination, selection, estimate, action or decision is required, permitted or contemplated hereunder, such approval, designation, determination, selection, estimate, action or decision shall be made in Lender’s sole and absolute discretion.

(8)        All references in this Security Instrument to a separate instrument or agreement shall include such instrument or agreement as the same may be amended or supplemented from time to time pursuant to the applicable provisions thereof.

(9)        “Lender may” shall mean at Lender’s discretion, but shall not be an obligation.

13. Time is of the Essence.

Borrower agrees that, with respect to each and every obligation and covenant contained in this Security Instrument and the other Loan Documents, time is of the essence.

14. WAIVER OF TRIAL BY JURY.

TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, EACH OF BORROWER AND LENDER (BY ITS ACCEPTANCE HEREOF) (A) COVENANTS AND AGREES NOT TO ELECT A TRIAL BY JURY WITH RESPECT TO ANY ISSUE ARISING OUT OF THIS SECURITY INSTRUMENT OR THE RELATIONSHIP BETWEEN THE PARTIES AS BORROWER AND LENDER THAT IS TRIABLE OF RIGHT BY A JURY AND (B) WAIVES ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO SUCH ISSUE TO THE EXTENT THAT ANY SUCH RIGHT EXISTS NOW OR IN THE FUTURE. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS SEPARATELY GIVEN BY EACH OF BORROWER AND LENDER, KNOWINGLY AND VOLUNTARILY WITH THE BENEFIT OF COMPETENT LEGAL COUNSEL.

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ATTACHED EXHIBITS. The following Exhibits are attached to this Security Instrument and incorporated fully herein by reference:

|X|	Exhibit A	Description of the Land (required)
|X|	Exhibit B	Modifications to Security Instrument (Seniors Housing)
|X|	Exhibit C	Modifications to Security Instrument (Cross-Default and Cross-Collateralization: Multi-Note)
|X|	Exhibit D	Borrower Projects

[Remainder of Page Intentionally Blank]

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IN WITNESS WHEREOF, Borrower has signed and delivered this Security Instrument under seal (where applicable) or has caused this Security Instrument to be signed and delivered by its duly authorized representative under seal (where applicable). Where applicable law so provides, Borrower intends that this Security Instrument shall be deemed to be signed and delivered as a sealed instrument.

BORROWER:

CHT DECATUR IL SENIOR LIVING, LLC, a Delaware limited liability company

By:       /s/ Joshua J. Taube

Name:  Joshua J. Taube

Title:    Vice President

The name, chief executive office and organizational identification number of Borrower (as Debtor under any applicable Uniform Commercial Code) are:

Debtor Name/Record Owner: CHT Decatur IL Senior Living, LLC

Debtor Chief Executive Office Address:

c/o Healthcare Properties, Inc.

CNL Center at City Commons

450 South Orange Avenue, Suite 1200

Orlando, Florida 32801

Debtor Organizational ID Number: 5234656

The name and chief executive office of Lender (as Secured Party) are:

Secured Party Name: KeyCorp Real Estate Capital Markets, Inc.

Secured Party Chief Executive Office Address:

11501 Outlook Street, Suite 300

Overland Park, Kansas 66211

Mailcode: KS-01-11-0501

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Illinois	12-12	© 2012 Fannie Mae

STATE OF FLORIDA

COUNTY OF ORANGE

The foregoing instrument was acknowledged before me this 15th day of April, 2013 by Joshua J. Taube, the Vice President of CHT DECATUR IL SENIOR LIVING, LLC, a Delaware limited liability company, on behalf of the limited liability company.

/s/ Cathleen A. Coffey

Notary Public

(SEAL)

Printed Name: Cathleen A. Coffey

My Commission Expires: September 24, 2013

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Illinois	12-12	© 2012 Fannie Mae

EXHIBIT A

DESCRIPTION OF THE LAND

(Intentionally Omitted)

EXHIBIT B

MODIFICATIONS TO SECURITY INSTRUMENT

(Seniors Housing)

(Intentionally Omitted)

EXHIBIT C

MODIFICATIONS TO SECURITY INSTRUMENT

(Cross-Default and Cross-Collateralization: Multi-Note)

(Intentionally Omitted)

EXHIBIT D

TO

MODIFICATIONS TO MULTIFAMILY SECURITY INSTRUMENT

(Cross-Default and Cross-Collateralization: Multi-Note)

(Intentionally Omitted)

Modifications to Security Instrument (Cross-Default and Cross-Collateralization: Multi-Note)	Form 6305
Fannie Mae	12-12	© 2012 Fannie Mae

EX-10.6

Exhibit 10.6

OPEN-END MULTIFAMILY MORTGAGE,

ASSIGNMENT OF LEASES AND RENTS,

SECURITY AGREEMENT

AND FIXTURE FILING

(OHIO)

Fannie Mae Multifamily Security Instrument	Form 6025.OH
Ohio	12-12	© 2012 Fannie Mae

OPEN-END MULTIFAMILY MORTGAGE,

ASSIGNMENT OF LEASES AND RENTS,

SECURITY AGREEMENT

AND FIXTURE FILING

This OPEN-END MULTIFAMILY MORTGAGE, ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT AND FIXTURE FILING (as amended, restated, replaced, supplemented, or otherwise modified from time to time, the “Security Instrument”) dated as of May 8, 2013, is executed by CHT ZANESVILLE OH SENIOR LIVING, LLC, a limited liability company, organized and existing under the laws of Delaware, as mortgagor (“Borrower”), to and for the benefit of KEYCORP REAL ESTATE CAPITAL MARKETS, INC., a corporation organized and existing under the laws of Ohio, as mortgagee (“Lender”).

Borrower, in consideration of (i) the loan in the original principal amount of $12,482,000.00 (the “Mortgage Loan”) evidenced by that certain Multifamily Note dated as of the date of this Security Instrument, executed by Borrower and made payable to the order of Lender (as amended, restated, replaced, supplemented, or otherwise modified from time to time, the “Note”), and (ii) that certain Multifamily Loan and Security Agreement dated as of the date of this Security Instrument, executed by and between Borrower and Lender (as amended, restated, replaced, supplemented or otherwise modified from time to time, the “Loan Agreement”), and to secure to Lender the repayment of the Indebtedness (as defined in this Security Instrument), and all renewals, extensions and modifications thereof, and the performance of the covenants and agreements of Borrower contained in the Loan Documents (as defined in the Loan Agreement), excluding the Environmental Indemnity Agreement (as defined in this Security Instrument), irrevocably and unconditionally mortgages, grants, assigns, remises, releases, warrants and conveys to and for the benefit of Lender the Mortgaged Property (as defined in this Security Instrument), including the real property located in the County of Muskingum, State of Ohio, and described in Exhibit A attached to this Security Instrument and incorporated by reference (the “Land”), to have and to hold such Mortgaged Property unto Lender and Lender’s successors and assigns, forever; Borrower hereby releasing, relinquishing and waiving, to the fullest extent allowed by law, all rights and benefits, if any, under and by virtue of the homestead exemption laws of the Property Jurisdiction (as defined in this Security Instrument), if applicable.

If Borrower keeps, observes and performs all of the covenants and conditions of this Security Instrument on its part to be kept and performed and pays, or causes to be paid, to Lender the Note as to both principal and interest, the last payment of which is due June 1, 2020, as provided in the Loan Agreement, and all extensions and renewals thereof, and all of the other Indebtedness, and repays any loans and advances hereafter made by Lender under the terms hereof, then this Security Instrument will be void; otherwise it will remain in effect. The intent of the preceding sentence is that if all of the Indebtedness is paid in full, then this Security Instrument will be void; otherwise the Security Instrument will remain in effect.

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Borrower represents and warrants that Borrower is lawfully seized of the Mortgaged Property and has the right, power and authority to mortgage, grant, assign, remise, release, warrant and convey the Mortgaged Property, and that the Mortgaged Property is not encumbered by any Lien (as defined in this Security Instrument) other than Permitted Encumbrances (as defined in this Security Instrument). Borrower covenants that Borrower will warrant and defend the title to the Mortgaged Property against all claims and demands other than Permitted Encumbrances.

Borrower and Lender, by its acceptance hereof, each covenants and agrees as follows:

1. Defined Terms.

Capitalized terms used and not specifically defined herein have the meanings given to such terms in the Loan Agreement. All terms used and not specifically defined herein, but which are otherwise defined by the UCC, shall have the meanings assigned to them by the UCC. The following terms, when used in this Security Instrument, shall have the following meanings:

“Condemnation Action” means any action or proceeding, however characterized or named, relating to any condemnation or other taking, or conveyance in lieu thereof, of all or any part of the Mortgaged Property, whether direct or indirect.

“Enforcement Costs” means all expenses and costs, including reasonable attorneys’ fees and expenses, fees and out-of-pocket expenses of expert witnesses and costs of investigation, incurred by Lender as a result of any Event of Default under the Loan Agreement or in connection with efforts to collect any amount due under the Loan Documents, or to enforce the provisions of the Loan Agreement or any of the other Loan Documents, including those incurred in post-judgment collection efforts and in any bankruptcy or insolvency proceeding (including any action for relief from the automatic stay of any bankruptcy proceeding or Foreclosure Event) or judicial or non-judicial foreclosure proceeding, to the extent permitted by law.

“Environmental Indemnity Agreement” means that certain Environmental Indemnity Agreement dated as of the date of this Security Instrument, executed by Borrower to and for the benefit of Lender, as the same may be amended, restated, replaced, supplemented, or otherwise modified from time to time.

“Environmental Laws” has the meaning set forth in the Environmental Indemnity Agreement.

“Event of Default” has the meaning set forth in the Loan Agreement.

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“Fixtures” means all Goods that are so attached or affixed to the Land or the Improvements as to constitute a fixture under the laws of the Property Jurisdiction.

“Goods” means all of Borrower’s present and hereafter acquired right, title and interest in all goods which are used now or in the future in connection with the ownership, management, or operation of the Land or the Improvements or are located on the Land or in the Improvements, including inventory; furniture; furnishings; machinery, equipment, engines, boilers, incinerators, and installed building materials; systems and equipment for the purpose of supplying or distributing heating, cooling, electricity, gas, water, air, or light; antennas, cable, wiring, and conduits used in connection with radio, television, security, fire prevention, or fire detection, or otherwise used to carry electronic signals; telephone systems and equipment; elevators and related machinery and equipment; fire detection, prevention and extinguishing systems and apparatus; security and access control systems and apparatus; plumbing systems; water heaters, ranges, stoves, microwave ovens, refrigerators, dishwashers, garbage disposers, washers, dryers, and other appliances; light fixtures, awnings, storm windows, and storm doors; pictures, screens, blinds, shades, curtains, and curtain rods; mirrors, cabinets, paneling, rugs, and floor and wall coverings; fences, trees, and plants; swimming pools; exercise equipment; supplies; tools; books and records (whether in written or electronic form); websites, URLs, blogs, and social network pages; computer equipment (hardware and software); and other tangible personal property which is used now or in the future in connection with the ownership, management, or operation of the Land or the Improvements or are located on the Land or in the Improvements.

“Imposition Deposits” means deposits in an amount sufficient to accumulate with Lender the entire sum required to pay the Impositions when due.

“Impositions” means

(a)        any water and sewer charges which, if not paid, may result in a lien on all or any part of the Mortgaged Property;

(b)        the premiums for fire and other casualty insurance, liability insurance, rent loss insurance and such other insurance as Lender may require under the Loan Agreement;

(c)        Taxes; and

(d)        amounts for other charges and expenses assessed against the Mortgaged Property which Lender at any time reasonably deems necessary to protect the Mortgaged Property, to prevent the imposition of liens on the Mortgaged Property, or otherwise to protect Lender’s interests, all as reasonably determined from time to time by Lender.

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“Improvements” means the buildings, structures, improvements, and alterations now constructed or at any time in the future constructed or placed upon the Land, including any future replacements, facilities, and additions and other construction on the Land.

“Indebtedness” means the principal of, interest on, and all other amounts due at any time under the Note, the Loan Agreement, this Security Instrument or any other Loan Document (other than the Environmental Indemnity Agreement and Guaranty), including Prepayment Premiums, late charges, interest charged at the Default Rate, and accrued interest as provided in the Loan Agreement and this Security Instrument, advances, costs and expenses to perform the obligations of Borrower or to protect the Mortgaged Property or the security of this Security Instrument, all other monetary obligations of Borrower under the Loan Documents (other than the Environmental Indemnity Agreement), including amounts due as a result of any indemnification obligations, and any Enforcement Costs.

“Land” means the real property described in Exhibit A.

“Leases” means all present and future leases, subleases, licenses, concessions or grants or other possessory interests now or hereafter in force, whether oral or written, covering or affecting the Mortgaged Property, or any portion of the Mortgaged Property (including proprietary leases or occupancy agreements if Borrower is a cooperative housing corporation), and all modifications, extensions or renewals thereof.

“Lien” means any claim or charge against property for payment of a debt or an amount owed for services rendered, including any mortgage, deed of trust, deed to secure debt, security interest, tax lien, any materialman’s or mechanic’s lien, or any lien of a Governmental Authority, including any lien in connection with the payment of utilities, or any other encumbrance.

“Mortgaged Property” means all of Borrower’s present and hereafter acquired right, title and interest, if any, in and to all of the following:

(a)        the Land;

(b)        the Improvements;

(c)        the Personalty;

(d)        current and future rights, including air rights, development rights, zoning rights and other similar rights or interests, easements, tenements, rights-of-way, strips and gores of land, streets, alleys, roads, sewer rights, waters, watercourses, and appurtenances related to or benefitting the Land or the Improvements, or both, and all rights-of-way, streets, alleys and roads which may have been or may in the future be vacated;

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(e)        insurance policies relating to the Mortgaged Property (and any unearned premiums) and all proceeds paid or to be paid by any insurer of the Land, the Improvements, the Personalty, or any other part of the Mortgaged Property, whether or not Borrower obtained the insurance pursuant to Lender’s requirements;

(f)         awards, payments and other compensation made or to be made by any municipal, state or federal authority with respect to the Land, the Improvements, the Personalty, or any other part of the Mortgaged Property, including any awards or settlements resulting from (1) Condemnation Actions, (2) any damage to the Mortgaged Property caused by governmental action that does not result in a Condemnation Action, or (3) the total or partial taking of the Land, the Improvements, the Personalty, or any other part of the Mortgaged Property under the power of eminent domain or otherwise and including any conveyance in lieu thereof;

(g)        contracts, options and other agreements for the sale of the Land, the Improvements, the Personalty, or any other part of the Mortgaged Property entered into by Borrower now or in the future, including cash or securities deposited to secure performance by parties of their obligations;

(h)        Leases and Lease guaranties, letters of credit and any other supporting obligation for any of the Leases given in connection with any of the Leases, and all Rents;

(i)         earnings, royalties, accounts receivable, issues and profits from the Land, the Improvements or any other part of the Mortgaged Property, and all undisbursed proceeds of the Mortgage Loan and, if Borrower is a cooperative housing corporation, maintenance charges or assessments payable by shareholders or residents;

(j)         Imposition Deposits;

(k)        refunds or rebates of Impositions by any municipal, state or federal authority or insurance company (other than refunds applicable to periods before the real property tax year in which this Security Instrument is dated);

(l)         tenant security deposits;

(m)        names under or by which any of the above Mortgaged Property may be operated or known, and all trademarks, trade names, and goodwill relating to any of the Mortgaged Property;

(n)        Collateral Accounts and all Collateral Account Funds;

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(o)        products, and all cash and non-cash proceeds from the conversion, voluntary or involuntary, of any of the above into cash or liquidated claims, and the right to collect such proceeds; and

(p)        all of Borrower’s right, title and interest in the oil, gas, minerals, mineral interests, royalties, overriding royalties, production payments, net profit interests and other interests and estates in, under and on the Mortgaged Property and other oil, gas and mineral interests with which any of the foregoing interests or estates are pooled or unitized.

“Permitted Encumbrance” means only the easements, restrictions and other matters listed in a schedule of exceptions to coverage in the Title Policy and Taxes for the current tax year that are not yet due and payable.

“Permitted Equipment Financing” means, with respect to the Mortgaged Property, equipment lease or other purchase money financing incurred in the ordinary course of business for acquisition of additional or replacement equipment or other personal property or to refinance Permitted Equipment Financing, in an amount not to exceed two percent (2%) of the Loan Amount, less normal outstanding account payable balances.

“Personalty” means all of Borrower’s present and hereafter acquired right, title and interest in all Goods, accounts, choses of action, chattel paper, documents, general intangibles (including Software), payment intangibles, instruments, investment property, letter of credit rights, supporting obligations, computer information, source codes, object codes, records and data, all telephone numbers or listings, claims (including claims for indemnity or breach of warranty), deposit accounts and other property or assets of any kind or nature related to the Land or the Improvements now or in the future, including operating agreements, surveys, plans and specifications and contracts for architectural, engineering and construction services relating to the Land or the Improvements, and all other intangible property and rights relating to the operation of, or used in connection with, the Land or the Improvements, including all governmental permits relating to any activities on the Land.

“Prepayment Premium” has the meaning set forth in the Loan Agreement.

“Property Jurisdiction” means the jurisdiction in which the Land is located.

“Rents” means all rents (whether from residential or non-residential space), revenues and other income from the Land or the Improvements, including subsidy payments received from any sources, including payments under any “Housing Assistance Payments Contract” or other rental subsidy agreement (if any), parking fees, laundry and vending machine income and fees and charges for food, health care and other services provided at the Mortgaged Property, whether now due, past due, or to become due, and tenant security deposits.

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“Software” means a computer program and any supporting information provided in connection with a transaction relating to the program. The term does not include any computer program that is included in the definition of Goods.

“Taxes” means all taxes, assessments, vault rentals and other charges, if any, general, special or otherwise, including assessments for schools, public betterments and general or local improvements, which are levied, assessed or imposed by any public authority or quasi-public authority, and which, if not paid, may become a lien, on the Land or the Improvements or any taxes upon any Loan Document.

“Title Policy” has the meaning set forth in the Loan Agreement.

“UCC” means the Uniform Commercial Code in effect in the Property Jurisdiction, as amended from time to time.

“UCC Collateral” means any or all of that portion of the Mortgaged Property in which a security interest may be granted under the UCC and in which Borrower has any present or hereafter acquired right, title or interest.

2. Security Agreement; Fixture Filing.

(a)        To secure to Lender, the repayment of the Indebtedness, and all renewals, extensions and modifications thereof, and the performance of the covenants and agreements of Borrower contained in the Loan Documents, Borrower hereby pledges, assigns, and grants to Lender a continuing security interest in the UCC Collateral. This Security Instrument constitutes a security agreement and a financing statement under the UCC. This Security Instrument also constitutes a financing statement pursuant to the terms of the UCC with respect to any part of the Mortgaged Property that is or may become a Fixture under applicable law, and will be recorded as a “fixture filing” in accordance with the UCC. Borrower hereby authorizes Lender to file financing statements, continuation statements and financing statement amendments in such form as Lender may require to perfect or continue the perfection of this security interest without the signature of Borrower. If an Event of Default has occurred and is continuing, Lender shall have the remedies of a secured party under the UCC or otherwise provided at law or in equity, in addition to all remedies provided by this Security Instrument and in any Loan Document. Lender may exercise any or all of its remedies against the UCC Collateral separately or together, and in any order, without in any way affecting the availability or validity of Lender’s other remedies. For purposes of the UCC, the debtor is Borrower and the secured party is Lender. The name and address of the debtor and secured party are set forth after Borrower’s signature below which are the addresses from which information on the security interest may be obtained.

(b)        Borrower represents and warrants that: (1) Borrower maintains its chief executive office at the location set forth after Borrower’s signature below, and Borrower will notify Lender

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in writing of any change in its chief executive office within five (5) days of such change; (2) Borrower is the record owner of the Mortgaged Property; (3) Borrower’s state of incorporation, organization, or formation, if applicable, is as set forth on Page 1 of this Security Instrument; (4) Borrower’s exact legal name is as set forth on Page 1 of this Security Instrument; (5) Borrower’s organizational identification number, if applicable, is as set forth after Borrower’s signature below; (6) Borrower is the owner of the UCC Collateral subject to no liens, charges or encumbrances other than the lien hereof and Permitted Equipment Financing; (7) except as expressly provided in the Loan Agreement, the UCC Collateral will not be removed from the Mortgaged Property without the consent of Lender, except for replacement in the ordinary course of business; and (8) no financing statement covering any of the UCC Collateral or any proceeds thereof is on file in any public office except pursuant hereto.

(c)        All property of every kind acquired by Borrower after the date of this Security Instrument which by the terms of this Security Instrument shall be subject to the lien and the security interest created hereby, shall immediately upon the acquisition thereof by Borrower and without further conveyance or assignment become subject to the lien and security interest created by this Security Instrument. Nevertheless, Borrower shall execute, acknowledge, deliver and record or file, as appropriate, all and every such further deeds of trust, mortgages, deeds to secure debt, security agreements, financing statements, assignments and assurances as Lender shall require for accomplishing the purposes of this Security Instrument and to comply with the rerecording requirements of the UCC.

3. Assignment of Leases and Rents; Appointment of Receiver; Lender in Possession.

(a)        As part of the consideration for the Indebtedness, Borrower absolutely and unconditionally assigns and transfers to Lender all Leases and Rents. It is the intention of Borrower to establish present, absolute and irrevocable transfers and assignments to Lender of all Leases and Rents and to authorize and empower Lender to collect and receive all Rents without the necessity of further action on the part of Borrower. Borrower and Lender intend the assignments of Leases and Rents to be effective immediately and to constitute absolute present assignments, and not assignments for additional security only. Only for purposes of giving effect to these absolute assignments of Leases and Rents, and for no other purpose, the Leases and Rents shall not be deemed to be a part of the Mortgaged Property. However, if these present, absolute and unconditional assignments of Leases and Rents are not enforceable by their terms under the laws of the Property Jurisdiction, then each of the Leases and Rents shall be included as part of the Mortgaged Property, and it is the intention of Borrower, in such circumstance, that this Security Instrument create and perfect a lien on each of the Leases and Rents in favor of Lender, which liens shall be effective as of the date of this Security Instrument.

(b)        Until an Event of Default has occurred and is continuing, but subject to the limitations set forth in the Loan Documents, Borrower shall have a revocable license to exercise

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all rights, power and authority granted to Borrower under the Leases (including the right, power and authority to modify the terms of any Lease, extend or terminate any Lease, or enter into new Leases, subject to the limitations set forth in the Loan Documents), and to collect and receive all Rents, to hold all Rents in trust for the benefit of Lender, and to apply all Rents to pay the Monthly Debt Service Payments and the other amounts then due and payable under the other Loan Documents, including Imposition Deposits, and to pay the current costs and expenses of managing, operating and maintaining the Mortgaged Property, including utilities and Impositions (to the extent not included in Imposition Deposits), tenant improvements and other capital expenditures. So long as no Event of Default has occurred and is continuing (and no event which, with the giving of notice or the passage of time, or both, would constitute an Event of Default has occurred and is continuing), the Rents remaining after application pursuant to the preceding sentence may be retained and distributed by Borrower free and clear of, and released from, Lender’s rights with respect to Rents under this Security Instrument.

(c)        If an Event of Default has occurred and is continuing, without the necessity of Lender entering upon and taking and maintaining control of the Mortgaged Property directly, by a receiver, or by any other manner or proceeding permitted by the laws of the Property Jurisdiction, the revocable license granted to Borrower pursuant to Section 3(b) shall automatically terminate, and Lender shall immediately have all rights, powers and authority granted to Borrower under any Lease (including the right, power and authority to modify the terms of any such Lease, or extend or terminate any such Lease) and, without notice, Lender shall be entitled to all Rents as they become due and payable, including Rents then due and unpaid. During the continuance of an Event of Default, Borrower authorizes Lender to collect, sue for and compromise Rents and directs each tenant of the Mortgaged Property to pay all Rents to, or as directed by, Lender, and Borrower shall, upon Borrower’s receipt of any Rents from any sources, pay the total amount of such receipts to Lender. Although the foregoing rights of Lender are self-effecting, at any time during the continuance of an Event of Default, Lender may make demand for all Rents, and Lender may give, and Borrower hereby irrevocably authorizes Lender to give, notice to all tenants of the Mortgaged Property instructing them to pay all Rents to Lender. No tenant shall be obligated to inquire further as to the occurrence or continuance of an Event of Default, and no tenant shall be obligated to pay to Borrower any amounts that are actually paid to Lender in response to such a notice. Any such notice by Lender shall be delivered to each tenant personally, by mail or by delivering such demand to each rental unit.

(d)        If an Event of Default has occurred and is continuing, Lender may, regardless of the adequacy of Lender’s security or the solvency of Borrower, and even in the absence of waste, enter upon, take and maintain full control of the Mortgaged Property, and may exclude Borrower and its agents and employees therefrom, in order to perform all acts that Lender, in its discretion, determines to be necessary or desirable for the operation and maintenance of the Mortgaged Property, including the execution, cancellation or modification of Leases, the collection of all Rents (including through use of a lockbox, at Lender’s election), the making of repairs to the

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Mortgaged Property and the execution or termination of contracts providing for the management, operation or maintenance of the Mortgaged Property, for the purposes of enforcing this assignment of Rents, protecting the Mortgaged Property or the security of this Security Instrument and the Mortgage Loan, or for such other purposes as Lender in its discretion may deem necessary or desirable.

(e)        Notwithstanding any other right provided Lender under this Security Instrument or any other Loan Document, if an Event of Default has occurred and is continuing, and regardless of the adequacy of Lender’s security or Borrower’s solvency, and without the necessity of giving prior notice (oral or written) to Borrower, Lender may apply to any court having jurisdiction for the appointment of a receiver for the Mortgaged Property to take any or all of the actions set forth in Section 3. If Lender elects to seek the appointment of a receiver for the Mortgaged Property at any time after an Event of Default has occurred and is continuing, Borrower, by its execution of this Security Instrument, expressly consents to the appointment of such receiver, including the appointment of a receiver ex parte, if permitted by applicable law. Borrower consents to shortened time consideration of a motion to appoint a receiver. Lender or the receiver, as applicable, shall be entitled to receive a reasonable fee for managing the Mortgaged Property and such fee shall become an additional part of the Indebtedness. Immediately upon appointment of a receiver or Lender’s entry upon and taking possession and control of the Mortgaged Property, possession of the Mortgaged Property and all documents, records (including records on electronic or magnetic media), accounts, surveys, plans, and specifications relating to the Mortgaged Property, and all security deposits and prepaid Rents, shall be surrendered to Lender or the receiver, as applicable. If Lender or receiver takes possession and control of the Mortgaged Property, Lender or receiver may exclude Borrower and its representatives from the Mortgaged Property.

(f)        The acceptance by Lender of the assignments of the Leases and Rents pursuant to this Section 3 shall not at any time or in any event obligate Lender to take any action under any Loan Document or to expend any money or to incur any expense. Lender shall not be liable in any way for any injury or damage to person or property sustained by any Person in, on or about the Mortgaged Property. Prior to Lender’s actual entry upon and taking possession and control of the Land and Improvements, Lender shall not be:

    (1)        obligated to perform any of the terms, covenants and conditions contained in any Lease (or otherwise have any obligation with respect to any Lease);

    (2)        obligated to appear in or defend any action or proceeding relating to any Lease or the Mortgaged Property; or

    (3)        responsible for the operation, control, care, management or repair of the Mortgaged Property or any portion of the Mortgaged Property.

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The execution of this Security Instrument shall constitute conclusive evidence that all responsibility for the operation, control, care, management and repair of the Mortgaged Property is and shall be that of Borrower, prior to such actual entry and taking possession and control by Lender of the Land and Improvements.

(g)        Lender shall be liable to account only to Borrower and only for Rents actually received by Lender. Lender shall not be liable to Borrower, anyone claiming under or through Borrower or anyone having an interest in the Mortgaged Property by reason of any act or omission of Lender under this Section 3, and Borrower hereby releases and discharges Lender from any such liability to the fullest extent permitted by law, provided that Lender shall not be released from liability that occurs as a result of Lender’s gross negligence or willful misconduct as determined by a court of competent jurisdiction pursuant to a final, non-appealable court order. If the Rents are not sufficient to meet the costs of taking control of and managing the Mortgaged Property and collecting the Rents, any funds expended by Lender for such purposes shall be added to, and become a part of, the principal balance of the Indebtedness, be immediately due and payable, and bear interest at the Default Rate from the date of disbursement until fully paid. Any entering upon and taking control of the Mortgaged Property by Lender or the receiver, and any application of Rents as provided in this Security Instrument, shall not cure or waive any Event of Default or invalidate any other right or remedy of Lender under applicable law or provided for in this Security Instrument or any Loan Document.

4. Protection of Lender’s Security.

If Borrower fails to perform any of its obligations under this Security Instrument or any other Loan Document, or any action or proceeding is commenced that purports to affect the Mortgaged Property, Lender’s security, rights or interests under this Security Instrument or any Loan Document (including eminent domain, insolvency, code enforcement, civil or criminal forfeiture, enforcement of Environmental Laws, fraudulent conveyance or reorganizations or proceedings involving a debtor or decedent), Lender may, at its option, make such appearances, disburse or pay such sums and take such actions, whether before or after an Event of Default or whether directly or to any receiver for the Mortgaged Property, as Lender reasonably deems necessary to perform such obligations of Borrower and to protect the Mortgaged Property or Lender’s security, rights or interests in the Mortgaged Property or the Mortgage Loan, including:

(a)        paying fees and out-of-pocket expenses of attorneys, accountants, inspectors and consultants;

(b)        entering upon the Mortgaged Property to make repairs or secure the Mortgaged Property;

(c)        obtaining (or force-placing) the insurance required by the Loan Documents; and

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(d)        paying any amounts required under any of the Loan Documents that Borrower has failed to pay.

Any amounts so disbursed or paid by Lender shall be added to, and become part of, the principal balance of the Indebtedness, be immediately due and payable and bear interest at the Default Rate from the date of disbursement until fully paid. The provisions of this Section 4 shall not be deemed to obligate or require Lender to incur any expense or take any action.

5. Default; Acceleration; Remedies.

(a)        If an Event of Default has occurred and is continuing, Lender, at its option, may declare the Indebtedness to be immediately due and payable without further demand, and may either with or without entry or taking possession as herein provided or otherwise, proceed by suit or suits at law or in equity or any other appropriate proceeding or remedy (1) to enforce payment of the Mortgage Loan; (2) to foreclose this Security Instrument judicially or non-judicially; (3) to enforce or exercise any right under any Loan Document; and (4) to pursue any one (1) or more other remedies provided in this Security Instrument or in any other Loan Document or otherwise afforded by applicable law. Each right and remedy provided in this Security Instrument or any other Loan Document is distinct from all other rights or remedies under this Security Instrument or any other Loan Document or otherwise afforded by applicable law, and each shall be cumulative and may be exercised concurrently, independently, or successively, in any order. Borrower has the right to bring an action to assert the nonexistence of an Event of Default or any other defense of Borrower to acceleration and sale.

(b)        In connection with any sale made under or by virtue of this Security Instrument, the whole of the Mortgaged Property may be sold in one (1) parcel as an entirety or in separate lots or parcels at the same or different times, all as Lender may determine in its sole discretion. Lender shall have the right to become the purchaser at any such sale. In the event of any such sale, the outstanding principal amount of the Mortgage Loan and the other Indebtedness, if not previously due, shall be and become immediately due and payable without demand or notice of any kind. If the Mortgaged Property is sold for an amount less than the amount outstanding under the Indebtedness, the deficiency shall be determined by the purchase price at the sale or sales. To the extent not prohibited by applicable law, Borrower waives all rights, claims, and defenses with respect to Lender’s ability to obtain a deficiency judgment.

(c)        Borrower acknowledges and agrees that the proceeds of any sale shall be applied as determined by Lender unless otherwise required by applicable law.

(d)        In connection with the exercise of Lender’s rights and remedies under this Security Instrument and any other Loan Document, there shall be allowed and included as Indebtedness: (1) all expenditures and expenses authorized by applicable law and all other

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expenditures and expenses which may be paid or incurred by or on behalf of Lender for reasonable legal fees, appraisal fees, outlays for documentary and expert evidence, stenographic charges and publication costs; (2) all expenses of any environmental site assessments, environmental audits, environmental remediation costs, appraisals, surveys, engineering studies, wetlands delineations, flood plain studies, and any other similar testing or investigation deemed necessary or advisable by Lender incurred in preparation for, contemplation of or in connection with the exercise of Lender’s rights and remedies under the Loan Documents; and (3) costs (which may be reasonably estimated as to items to be expended in connection with the exercise of Lender’s rights and remedies under the Loan Documents) of procuring all abstracts of title, title searches and examinations, title insurance policies, and similar data and assurance with respect to title as Lender may deem reasonably necessary either to prosecute any suit or to evidence the true conditions of the title to or the value of the Mortgaged Property to bidders at any sale which may be held in connection with the exercise of Lender’s rights and remedies under the Loan Documents. All expenditures and expenses of the nature mentioned in this Section 5, and such other expenses and fees as may be incurred in the protection of the Mortgaged Property and rents and income therefrom and the maintenance of the lien of this Security Instrument, including the fees of any attorney employed by Lender in any litigation or proceedings affecting this Security Instrument, the Note, the other Loan Documents, or the Mortgaged Property, including bankruptcy proceedings, any Foreclosure Event, or in preparation of the commencement or defense of any proceedings or threatened suit or proceeding, or otherwise in dealing specifically therewith, shall be so much additional Indebtedness and shall be immediately due and payable by Borrower, with interest thereon at the Default Rate until paid.

(e)        Any action taken by Lender pursuant to the provisions of this Section 5 shall comply with the laws of the Property Jurisdiction. Such applicable laws shall take precedence over the provisions of this Section 5, but shall not invalidate or render unenforceable any other provision of any Loan Document that can be construed in a manner consistent with any applicable law. If any provision of this Security Instrument shall grant to Lender (including Lender acting as a mortgagee-in-possession), or a receiver appointed pursuant to the provisions of this Security Instrument any powers, rights or remedies prior to, upon, during the continuance of or following an Event of Default that are more limited than the powers, rights, or remedies that would otherwise be vested in such party under any applicable law in the absence of said provision, such party shall be vested with the powers, rights, and remedies granted in such applicable law to the full extent permitted by law.

6. Waiver of Statute of Limitations and Marshaling.

Borrower hereby waives the right to assert any statute of limitations as a bar to the enforcement of the lien of this Security Instrument or to any action brought to enforce any Loan Document. Notwithstanding the existence of any other security interests in the Mortgaged Property held by Lender or by any other party, Lender shall have the right to determine the order

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in which any or all of the Mortgaged Property shall be subjected to the remedies provided in this Security Instrument and/or any other Loan Document or by applicable law. Lender shall have the right to determine the order in which any or all portions of the Indebtedness are satisfied from the proceeds realized upon the exercise of such remedies. Borrower, for itself and all who may claim by, through or under it, and any party who now or in the future acquires a security interest in the Mortgaged Property and who has actual or constructive notice of this Security Instrument, waives any and all right to require the marshaling of assets or to require that any of the Mortgaged Property be sold in the inverse order of alienation or that any of the Mortgaged Property be sold in parcels (at the same time or different times) in connection with the exercise of any of the remedies provided in this Security Instrument or any other Loan Document, or afforded by applicable law.

7. Waiver of Redemption; Rights of Tenants.

(a)        Borrower hereby covenants and agrees that it will not at any time apply for, insist upon, plead, avail itself, or in any manner claim or take any advantage of, any appraisement, stay, exemption or extension law or any so-called “Moratorium Law” now or at any time hereafter enacted or in force in order to prevent or hinder the enforcement or foreclosure of this Security Instrument. Without limiting the foregoing:

    (1)        Borrower, for itself and all Persons who may claim by, through or under Borrower, hereby expressly waives any so-called “Moratorium Law” and any and all rights of reinstatement and redemption, if any, under any order or decree of foreclosure of this Security Instrument, it being the intent hereof that any and all such “Moratorium Laws”, and all rights of reinstatement and redemption of Borrower and of all other Persons claiming by, through or under Borrower are and shall be deemed to be hereby waived to the fullest extent permitted by the laws of the Property Jurisdiction;

    (2)        Borrower shall not invoke or utilize any such law or laws or otherwise hinder, delay or impede the execution of any right, power remedy herein or otherwise granted or delegated to Lender but will suffer and permit the execution of every such right, power and remedy as though no such law or laws had been made or enacted; and

    (3)        if Borrower is a trust, Borrower represents that the provisions of this Section 7 (including the waiver of reinstatement and redemption rights) were made at the express direction of Borrower’s beneficiaries and the persons having the power of direction over Borrower, and are made on behalf of the trust estate of Borrower and all beneficiaries of Borrower, as well as all other persons mentioned above.

(b)        Lender shall have the right to foreclose subject to the rights of any tenant or tenants of the Mortgaged Property having an interest in the Mortgaged Property prior to that of

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Lender. The failure to join any such tenant or tenants of the Mortgaged Property as party defendant or defendants in any such civil action or the failure of any decree of foreclosure and sale to foreclose their rights shall not be asserted by Borrower as a defense in any civil action instituted to collect the Indebtedness, or any part thereof or any deficiency remaining unpaid after foreclosure and sale of the Mortgaged Property, any statute or rule of law at any time existing to the contrary notwithstanding.

8. Notice.

(a)        All notices under this Security Instrument shall be:

    (1)        in writing, and shall be (A) delivered, in person, (B) mailed, postage prepaid, either by registered or certified delivery, return receipt requested, or (C) sent by overnight express courier;

    (2)        addressed to the intended recipient at its respective address set forth at the end of this Security Instrument; and

    (3)        deemed given on the earlier to occur of:

    (A)        the date when the notice is received by the addressee; or

    (B)        if the recipient refuses or rejects delivery, the date on which the notice is so refused or rejected, as conclusively established by the records of the United States Postal Service or such express courier service.

(b)        Any party to this Security Instrument may change the address to which notices intended for it are to be directed by means of notice given to the other party in accordance with this Section 8.

(c)        Any required notice under this Security Instrument which does not specify how notices are to be given shall be given in accordance with this Section 8.

9. Mortgagee-in-Possession.

Borrower acknowledges and agrees that the exercise by Lender of any of the rights conferred in this Security Instrument shall not be construed to make Lender a mortgagee-in-possession of the Mortgaged Property so long as Lender has not itself entered into actual possession of the Land and Improvements.

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10. Release.

Upon payment in full of the Indebtedness, Lender shall cause the release of this Security Instrument and Borrower shall pay Lender’s costs incurred in connection with such release.

11. Ohio State Specific Provisions.

(a)        Lender is authorized and empowered to take all actions that a mortgagee is permitted to take under Section 1311.14 of the Revised Code of Ohio, as amended, for the protection of Lender’s interest in the Mortgaged Property.

(b)        Borrower and Lender confirm that all amounts disbursed by Lender under Section 4 for payment of Taxes, insurance premiums and other costs and expenses in connection with the operation, protection or preservation of the Mortgaged Property or in this Security Instrument are intended to comply with Section 5301.233 of the Revised Code of Ohio.

(c)        With respect to any agreement by Borrower in this Security Instrument or the other Loan Documents to pay Lender’s attorneys’ fees and disbursements incurred in connection with the Mortgage Loan, Borrower agrees that each Loan Document is a “contract of indebtedness” and that the attorneys’ fees and disbursements referenced are those which are a reasonable amount, all as contemplated by Ohio Revised Code Section 1319.02, as such section may hereafter be amended. Borrower further agrees that the indebtedness incurred in connection with the Mortgage Loan is not incurred for purposes that are primarily personal, family or household and confirms that the total amount owed on the contract of indebtedness exceeds One Hundred Thousand and No/100 Dollars ($100,000.00).

(d)        This Security Instrument will secure unpaid balances of any loan advances, whether obligatory or not, made by Lender to Borrower, or, if more than one (1), any one (1) of them, after this Security Instrument is delivered for record to the extent that the total unpaid loan indebtedness, exclusive of interest thereon, does not exceed the maximum amount of unpaid loan indebtedness which may be outstanding at any time, which is two hundred percent (200%) of the original principal amount of the Note. This Security Instrument is given to secure repayment of advances made pursuant to the Indebtedness which advances are obligatory.

12. Governing Law; Consent to Jurisdiction and Venue.

This Security Instrument shall be governed by the laws of the Property Jurisdiction without giving effect to any choice of law provisions thereof that would result in the application of the laws of another jurisdiction. Borrower agrees that any controversy arising under or in relation to this Security Instrument shall be litigated exclusively in the Property Jurisdiction. The state and federal courts and authorities with jurisdiction in the Property Jurisdiction shall have exclusive jurisdiction over all controversies that arise under or in relation to any security for

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Ohio	12-12	© 2012 Fannie Mae

the Indebtedness. Borrower irrevocably consents to service, jurisdiction, and venue of such courts for any such litigation and waives any other venue to which it might be entitled by virtue of domicile, habitual residence or otherwise.

13. Miscellaneous Provisions.

(a)        This Security Instrument shall bind, and the rights granted by this Security Instrument shall benefit, the successors and assigns of Lender. This Security Instrument shall bind, and the obligations granted by this Security Instrument shall inure to, any permitted successors and assigns of Borrower under the Loan Agreement. If more than one (1) person or entity signs this Security Instrument as Borrower, the obligations of such persons and entities shall be joint and several. The relationship between Lender and Borrower shall be solely that of creditor and debtor, respectively, and nothing contained in this Security Instrument shall create any other relationship between Lender and Borrower. No creditor of any party to this Security Instrument and no other person shall be a third party beneficiary of this Security Instrument or any other Loan Document.

(b)        The invalidity or unenforceability of any provision of this Security Instrument or any other Loan Document shall not affect the validity or enforceability of any other provision of this Security Instrument or of any other Loan Document, all of which shall remain in full force and effect. This Security Instrument contains the complete and entire agreement among the parties as to the matters covered, rights granted and the obligations assumed in this Security Instrument. This Security Instrument may not be amended or modified except by written agreement signed by the parties hereto.

(c)        The following rules of construction shall apply to this Security Instrument:

    (1)        The captions and headings of the sections of this Security Instrument are for convenience only and shall be disregarded in construing this Security Instrument.

    (2)        Any reference in this Security Instrument to an “Exhibit” or “Schedule” or a “Section” or an “Article” shall, unless otherwise explicitly provided, be construed as referring, respectively, to an exhibit or schedule attached to this Security Instrument or to a Section or Article of this Security Instrument.

    (3)        Any reference in this Security Instrument to a statute or regulation shall be construed as referring to that statute or regulation as amended from time to time.

    (4)        Use of the singular in this Security Instrument includes the plural and use of the plural includes the singular.

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    (5)        As used in this Security Instrument, the term “including” means “including, but not limited to” or “including, without limitation,” and is for example only, and not a limitation.

    (6)        Whenever Borrower’s knowledge is implicated in this Security Instrument or the phrase “to Borrower’s knowledge” or a similar phrase is used in this Security Instrument, Borrower’s knowledge or such phrase(s) shall be interpreted to mean to the best of Borrower’s knowledge after reasonable and diligent inquiry and investigation.

    (7)        Unless otherwise provided in this Security Instrument, if Lender’s approval, designation, determination, selection, estimate, action or decision is required, permitted or contemplated hereunder, such approval, designation, determination, selection, estimate, action or decision shall be made in Lender’s sole and absolute discretion.

    (8)        All references in this Security Instrument to a separate instrument or agreement shall include such instrument or agreement as the same may be amended or supplemented from time to time pursuant to the applicable provisions thereof.

    (9)        “Lender may” shall mean at Lender’s discretion, but shall not be an obligation.

14. Time is of the Essence.

Borrower agrees that, with respect to each and every obligation and covenant contained in this Security Instrument and the other Loan Documents, time is of the essence.

15. WAIVER OF TRIAL BY JURY.

TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, EACH OF BORROWER AND LENDER (BY ITS ACCEPTANCE HEREOF) (A) COVENANTS AND AGREES NOT TO ELECT A TRIAL BY JURY WITH RESPECT TO ANY ISSUE ARISING OUT OF THIS SECURITY INSTRUMENT OR THE RELATIONSHIP BETWEEN THE PARTIES AS BORROWER AND LENDER THAT IS TRIABLE OF RIGHT BY A JURY AND (B) WAIVES ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO SUCH ISSUE TO THE EXTENT THAT ANY SUCH RIGHT EXISTS NOW OR IN THE FUTURE. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS SEPARATELY GIVEN BY EACH OF BORROWER AND LENDER, KNOWINGLY AND VOLUNTARILY WITH THE BENEFIT OF COMPETENT LEGAL COUNSEL.

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ATTACHED EXHIBITS. The following Exhibits are attached to this Security Instrument and incorporated fully herein by reference:

|X|                     Exhibit A	Description of the Land (required)
|X|                    Exhibit B	Modifications to Security Instrument (Seniors Housing)
|X|                    Exhibit C	Modifications to Security Instrument (Cross-Default and Cross-Collateralization: Multi-Note)
|X|        Exhibit D	Borrower Projects

[Remainder of Page Intentionally Blank]

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IN WITNESS WHEREOF, Borrower has signed and delivered this Security Instrument under seal (where applicable) or has caused this Security Instrument to be signed and delivered by its duly authorized representative under seal (where applicable). Where applicable law so provides, Borrower intends that this Security Instrument shall be deemed to be signed and delivered as a sealed instrument.

BORROWER:

CHT ZANESVILLE OH SENIOR LIVING, LLC, a

Delaware limited liability company

By:      /s/ Joshua J. Taube

Name: Joshua J. Taube

Title:   Vice President

The name, chief executive office and organizational

identification number of Borrower (as Debtor under any

applicable Uniform Commercial Code) are:

Debtor Name/Record Owner: CHT Zanesville OH Senior

Living, LLC

Debtor Chief Executive Office Address:

c/o Healthcare Properties, Inc.

CNL Center at City Commons

450 South Orange Avenue, Suite 1200

Orlando, Florida 32801

Debtor Organizational ID Number: 5234712

The name and chief executive office of Lender (as

Secured Party) are:

Secured Party Name: KeyCorp Real Estate Capital

Markets, Inc.

Secured Party Chief Executive Office Address:

11501 Outlook Street, Suite 300

Overland Park, Kansas 66211

Mailcode: KS-01-11-0501

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STATE OF FLORIDA

COUNTY OF ORANGE

The foregoing instrument was acknowledged before me this 15th day of April, 2013 by Joshua J. Taube, the Vice President of CHT ZANESVILLE OH SENIOR LIVING, LLC, a Delaware limited liability company, on behalf of the limited liability company.

/s/ Cathleen A. Coffey

Notary Public

(SEAL)

Printed Name: Cathleen A. Coffey

My Commission Expires: September 24, 2013

Prepared by, and after recording

return to:

James J. Schwert, Esquire

Oppenheimer Wolff & Donnelly LLP

Campbell Mithun Tower – Suite 2000

222 South Ninth Street

Minneapolis, MN 55402-3338

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EXHIBIT A

DESCRIPTION OF THE LAND

[Intentionally Omitted]

EXHIBIT B

MODIFICATIONS TO SECURITY INSTRUMENT

(Seniors Housing)

[Intentionally Omitted]

EXHIBIT C

MODIFICATIONS TO SECURITY INSTRUMENT

(Cross-Default and Cross-Collateralization: Multi-Note)

[Intentionally Omitted]

EXHIBIT D

TO

MODIFICATIONS TO MULTIFAMILY SECURITY INSTRUMENT

(Cross-Default and Cross-Collateralization: Multi-Note)

[Intentionally Omitted]

Modifications to Security Instrument (Cross- Default and Cross-Collateralization: Multi-Note)	Form 6305
Fannie Mae	12-12	© 2012 Fannie Mae

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

OF CNL HEALTHCARE PROPERTIES, INC.

PURSUANT TO RULE 13a-14(a), AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Stephen H. Mauldin, certify that:

1. I have reviewed this quarterly report on Form 10-Q of CNL Healthcare Properties, Inc. (the “Registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

4. The Registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5. The Registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Date:  August 14, 2013	By:	/s/Stephen H. Mauldin
		STEPHEN H. MAULDIN
		President and Chief Executive Officer
		(Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

OF CNL HEALTHCARE PROPERTIES, INC.

PURSUANT TO RULE 13a-14(a), AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Joseph T. Johnson, certify that:

1. I have reviewed this quarterly report on Form 10-Q of CNL Healthcare Properties, Inc. (the “Registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

4. The Registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5. The Registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Date:  August 14, 2013	By:	/s/Joseph T. Johnson
		JOSEPH T. JOHNSON
		Senior Vice President, Chief Financial Officer and Treasurer
		(Principal Financial Officer)

EX-32.1

EXHIBIT 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of CNL Healthcare Properties, Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2013, as filed with the United States Securities and Exchange Commission on the date hereof (the “Report”), I, Stephen H. Mauldin, Chief Executive Officer and Joseph T. Johnson, Chief Financial Officer of the Company, each certify, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:  August 14, 2013	By:		/s/Stephen H. Mauldin
			STEPHEN H. MAULDIN
			President and Chief Executive Officer
Date:  August 14, 2013	By:		/s/Joseph T. Johnson
			JOSEPH T. JOHNSON
		Senior Vice President, Chief Financial Officer and Treasurer

XML

Variable Interest Entities (VIEs) - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	Jun. 30, 2013
Variable Interest Entity [Line Items]
Maximum exposure to loss VIEs limits	$ 8.2

XML

Concentration of Credit Risk - Additional Information (Detail)	1 Months Ended
	Jun. 30, 2013	Dec. 31, 2012
Perennial Communities
Concentration Risk [Line Items]
Percentage of total assets	12.10%
Primrose Communities
Concentration Risk [Line Items]
Percentage of total assets	32.10%	46.90%

XML

Related Party Arrangements

6 Months Ended

Jun. 30, 2013

Related Party Arrangements

9. Related Party Arrangements

In March 2013, the Company’s board of directors approved an amendment to the advisory agreement with the Advisor that will provide for payments of asset management fees based on a percentage of the average real estate values as defined in the agreement rather than amounts as of the end of the preceding month.

In March 2013, the Company entered into the Expense Support Agreement with the Advisor pursuant to which the Advisor has agreed to accept certain payments in the form of forfeitable restricted common stock of the Company in lieu of cash for services rendered and applicable asset management fees and specified expenses owed by the Company to the Advisor under the advisory agreement. The term of the Expense Support Agreement runs from April 1, 2013 until December 31, 2013, subject to the right of the Advisor to terminate the Expense Support Agreement upon 30 days’ written notice to the Company. The term of the Expense Support Agreement may be extended by the mutual consent of the Company and the Advisor.

Commencing on April 1, 2013, the Advisor shall provide expense support to the Company through forgoing the payment of fees in cash and acceptance of restricted stock for services in an amount equal to the positive excess, if any, of (a) aggregate stockholder cash distributions declared for the applicable quarter, over (b) the Company’s aggregate modified funds from operations (as defined in the Expense Support Agreement). The expense support amount shall be determined for each calendar quarter of the Company, on a non-cumulative basis, with each such quarter-end date (“Determination Date”).

In exchange for services rendered under the advisory agreement and in consideration of the expense support provided by the Advisor, the Company shall issue to the Advisor, within 45 days following each Determination Date, a number of shares of restricted stock equal to the quotient of the expense support amount for the preceding quarter divided by the then-current public offering price per share of common stock, on the terms and conditions and subject to the restrictions set forth in the Expense Support Agreement. Any amounts deferred, and for which restricted stock shares are issued, pursuant to the Expense Support Agreement will be permanently waived by the Advisor and the Company will have no obligation to pay such amounts. The restricted stock is subordinated and forfeited to the extent that shareholders do not receive their original invested capital back with at least a 6% annualized return of investment upon ultimate liquidity of the company.

For the quarter and six months ended June 30, 2013, approximately $0.5 million in asset management fees were forgone in accordance with the terms of the Expense Support Agreement. As of June 30, 2013, the Advisor had forgone a total of $0.5 million in asset management fees under the terms of the Expense Support Agreement. The Company expects to issue approximately 0.05 million shares during the third quarter of 2013 in connection with the expense support received during the quarter ended June 30, 2013.

As of June 30, 2013, the Advisor is not entitled to any dividends or other distributions with respect to the Restricted Stock shares and no compensation expense has been recognized for the quarter and six months ended June 30, 2013.

For the quarters and six months ended June 30, 2013 and 2012, the Company incurred the following fees in connection with its Offering:

	Quarter ended June 30,				Six months ended June 30,
	2013		2012		2013		2012
Selling commissions	$	2,221,835	$	2,510,749	$	3,917,433	$	4,432,183
Marketing support fees		3,039,569		1,217,197		5,210,451		2,040,669
Total Offering expenses	$	5,261,404	$	3,727,946	$	9,127,884	$	6,472,852

For the quarters and six months ended June 30, 2013 and 2012, the Company incurred the following fees and reimbursable expenses as follows:

	Quarter ended June 30,				Six months ended June 30,
	2013		2012		2013		2012
Reimbursable expenses:
Offering costs	$	1,244,417	$	2,022,653	$	2,022,147	$	3,427,346
Operating expenses		744,116		407,337		1,348,268		824,043
	$	1,988,533	$	2,429,990	$	3,370,415	$	4,251,389
Investment services fees (1)	$	1,545,768	$	2,301,311	$	1,866,281	$	3,856,236
Property management fees (2)		320,974		33,137		583,767		49,215
Asset management fees (3)		633,297		210,125		1,633,817		280,167
Total reimbursable expenses, net	$	2,500,039	$	2,544,573	$	4,083,865	$	4,185,618

FOOTNOTES:

⁽¹⁾  For the quarter and six months ended June 30, 2013, the Company incurred approximately $1.5 million and $1.9 million, respectively, in investment service fees of which approximately $0.2 and $0.5 million, respectively, were capitalized as part of its investment basis in the Montecito Joint Venture and the additional Windsor Manor II Communities. For the quarter and six months ended June 30, 2012, the Company incurred approximately $2.3 million and $3.9 million, respectively, in investment services fees of which approximately $2.3 million and $2.3 million, respectively, were capitalized as part of its investment basis in the CHTSunIV joint venture.

⁽²⁾  For the quarter and six months ended June 30, 2013, the Company incurred approximately $0.3 million and $0.6 million in property and construction management fees of which $0.06 and $0.08 million have been capitalized and included in real estate under development. There were no capitalized property or construction management fees for the quarter and six months ended June 30, 2012.

⁽³⁾  For the quarter and six months ended June 30, 2013, the Company incurred approximately $0.6 million and $1.6 million in asset management fees which is net of approximately $0.5 million in asset management fees that were forgone in accordance with the terms of the Expense Support Agreement for the quarter and six months ended June 30, 2013. For the quarter and six months ended June 30, 2013, the Company capitalized approximately $0.04 and $0.05 million, respectively, in asset management fees and included in real estate under development. There were no asset management fees forgone or capitalized for the quarter and six months ended June 30, 2012. See description of the Expense Support Agreement above for additional information.

Amounts due to related parties for fees and reimbursable costs and expenses were as follows as of:

	June 30,        2013		December 31,   2012
Due to managing dealer:
Selling commissions	$	329,143	$	102,656
Marketing support fees		304,027		136,337
		633,170		238,993
Due to property manager:
Property management fees		320,974		452,131
		320,974		452,131
Due to the Advisor and its affiliates:
Asset management fees		633,297		—
Reimbursable operating expenses		723,182		242,293
Reimbursable offering costs		217,474		356,463
		1,573,953		598,756
	$	2,528,097	$	1,289,880

The Company incurs operating expenses which, in general, are related to administration of the Company on an ongoing basis. Pursuant to the advisory agreement, the Advisor shall reimburse the Company the amount by which the total operating expenses paid or incurred by the Company exceed, in any four consecutive fiscal quarters (an “Expense Year”) commencing with the Expense Year ending June 30, 2013, the greater of 2% of average invested assets or 25% of net income (as defined in the advisory agreement) (the “Limitation”), unless a majority of the Company’s independent directors determines that such excess expenses are justified based on unusual and non-recurring factors (referred to as the “Expense Cap Test”). In performing the Expense Cap Test, the Company uses operating expenses on a GAAP basis after making adjustments for the benefit of expense support under the Expense Support Agreement. For the Expense Year ended June 30, 2013, the Company did not incur operating expenses in excess of the Limitation.

In June 2013, the Company originated an acquisition, development and construction loan in the amount of $6.2 million (“ADC Loan”) to C4 Development, LLC (“Crosland Southeast”), a related party by virtue of a family relationship between a principal of the borrower and the Company’s vice chairman who recused himself from review and approval of the investment, for the development of a 22,000 square foot medical office building in Rutland, Virginia that will function as an out-patient emergency and imaging center and will be leased to Hospital Corporation of America (“HCA”). The triple-net lease with HCA is effective upon Crosland Southeast obtaining a certificate of occupancy and contains a 10 year initial term with four 5 year renewal options. As of June 30, 2013, approximately $1.8 million of the ADC Loan commitment had been funded and used for the purchase of 2.8 acres of land to develop the medical office building (“HCA Rutland”).

Concurrent with the ADC Loan, the Company also entered into a right of first refusal to acquire the HCA Rutland property with a one year term from the earlier of (a) the maturity date of the ADC Loan or (b) the date that the ADC Loan is paid in full. Based on review and assessment of the transaction structure, the Company has determined that it holds a variable interest in Crosland Southeast through the ADC Loan; however, the Company further concluded that it is not the primary beneficiary of the HCA Rutland development as the Company does not have the power to direct the activities that most significantly impact economic performance of either Crosland Southeast or the HCA Rutland development. The Company’s maximum exposure to loss as a result of its involvement with this VIE is limited to the amounts funded under the ADC Loan, which totaled approximately $1.8 million as of June 30, 2013. The Company’s exposure is limited as a result of the Company’s collateralized interest in the HCA Rutland development.

The approximate $1.8 million of funding on the ADC Loan has been recorded as a note receivable from related party in the accompanying condensed consolidated balance sheet as of June 30, 2013 and is comprised of the following:

				Loan Principal Balance as of
Borrower (Description of Collateral Property)	Origination   Date	Maturity   Date (1)	Interest   Rate (2)	June 30, 2013		December 31,  2012
Crosland Southeast (land development)	6/27/2013	6/27/2014	16.0%	$	1,773,008	$	—
Loan origination costs					37,519		—
Accrued interest (3)					2,364		—
Total carrying amount				$	1,812,891	$	—

  FOOTNOTES:

(1) The initial term of the ADC Loan is one year with an extension option of up to six months.

(2) The interest rate is comprised of an 8% component that is paid monthly and an 8% component that is paid upon maturity of the ADC Loan.

(3) This amount is included in Other revenues in the accompanying condensed statements of operations for the quarter and six months ended June 30, 2013.

The fair value and carrying value of the Company’s note receivable from related party were both approximately $1.8 million as of June 30, 2013 based on then-current rates and spreads that a market participant would expect to obtain for similar financings. Since this methodology includes inputs that are less observable by the public and are not necessarily reflected in active markets, the measurement of the estimated fair value related to the Company’s note receivable from related party is categorized as level 3 on the three-level fair value hierarchy.

The following is a schedule of future principal maturities for the note receivable from related party for the remainder of 2013 and each of the next four years and thereafter, in the aggregate, as of June 30, 2013:

2013	$	—
2014		1,773,008
2015		—
2016		—
2017		—
Thereafter		—
Total	$	1,773,008

In connection with the ADC Loan agreement, Crosland Southeast established an interest reserve account of approximately $0.3 million at a bank in which the Company’s chairman serves as a director. The purpose of the interest reserve account is to pay regular interest payments that will be due and payable under the ADC Loan. Moreover, Crosland Southeast will continue to make periodic payments to the interest reserve account to ensure sufficient funds to cover monthly interest payments coming due under the ADC Loan. In addition, the Company maintains an account at a bank in which the Company’s chairman serves as a director. The Company had deposits at that bank in the amount of approximately $0.4 million and $0.1 million as of June 30, 2013 and December 31, 2012, respectively.

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Unconsolidated Entities - Additional Information (Detail) (USD $)	1 Months Ended	6 Months Ended		1 Months Ended		1 Months Ended
	Jan. 31, 2013 Montecito Joint Venture sqft	Jun. 30, 2013 Montecito Joint Venture	Jun. 30, 2013 Montecito Joint Venture Funded upon completion of certain tenant improvements	Apr. 30, 2013 Windsor Manor II Communities Property Loan	Jun. 30, 2013 Montecito and Windsor Manor Joint Ventures	Dec. 31, 2012 CHTSunIV	Jan. 31, 2013 Interest Rate Swap Montecito Joint Venture
Variable Interest Entity [Line Items]
Business acquisition, ownership interest acquired	90.00%			75.00%
Capital of joint venture	$ 7,000,000
Co-venture partner's interest in the acquired business	10.00%
Business acquisition, total acquisition price	19,800,000			12,200,000
Total rentable area	48,984
Credit facility, term period		5 years
Credit facility, maximum borrowing capacity	35,000,000
Proceed from credit facility		12,500,000	400,000
Credit facility maturity date		2018-01
Interest accrues on loan in addition to LIBOR		2.60%
Loan payable period		360 months
Notional amount of derivative contract							12,400,000
Derivative contract, fixed interest rate							3.935%
Number of properties acquired				2
Number of living units in acquisition				82
Number of assisted living units in acquisition				62
Number of memory living units in acquisition				20
Number of loans assumed				2
Loans current outstanding principal amount				6,000,000
Acquisition fees and expenses capitalized as investment unconsolidated entities					500,000
Aggregate sales price of unconsolidated entity						$ 62,500,000
Sale of business closing date						Jul. 01, 2013

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)	3 Months Ended			6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012		Jun. 30, 2013	Jun. 30, 2012
Revenues:
Rental income from operating leases	$ 4,068,800	$ 1,922,467		$ 7,553,207	$ 2,863,982
Resident fees and services	4,527,377			8,845,095
Other revenues	12,838			12,838
Total revenues	8,609,015	1,922,467		16,411,140	2,863,982
Expenses:
Property operating expenses	3,330,765			6,547,848
General and administrative	1,567,696	575,352		2,676,728	1,059,400
Acquisition fees and expenses	2,365,781	75,772		2,944,307	1,975,185
Asset management fees	598,034	210,125		1,586,654	280,167
Property management fees	485,786	33,137		941,375	49,515
Depreciation and amortization	2,563,452	631,883		4,882,369	842,079
Total expenses, net	10,911,514	1,526,269		19,579,281	4,206,346
Operating income (loss)	(2,302,499)	396,198		(3,168,141)	(1,342,364)
Other income (expense):
Interest and other income	788	5,245		1,923	5,346
Interest expense and loan cost amortization	(1,678,058)	(753,922)		(4,914,594)	(1,428,761)
Equity in earnings (loss) from unconsolidated entities	1,181,752	(773,628)	[1]	1,460,135	(773,628)	[1]
Total other income (expense)	(495,518)	(1,522,305)		(3,452,536)	(2,197,043)
Loss before income taxes	(2,798,017)	(1,126,107)		(6,620,677)	(3,539,407)
Income tax expense	(31,385)			(18,073)
Net loss	$ (2,829,402)	$ (1,126,107)		$ (6,638,750)	$ (3,539,407)
Net loss per share of common stock (basic and diluted)	$ (0.09)	$ (0.16)		$ (0.25)	$ (0.71)
Weighted average number of shares of common stock outstanding (basic and diluted)	30,811,974	6,833,099		26,758,120	4,984,881

[1] Represents operating data from the date of acquisition through the end of the period presented.

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Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2013

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Basis of Presentation and Consolidation — The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and note disclosures required by generally accepted accounting principles in the United States (“GAAP”). The unaudited condensed consolidated financial statements reflect all normal recurring adjustments, which, in the opinion of management, are necessary for the fair statement of the Company’s results for the interim period presented. Operating results for the quarter or six months ended June 30, 2013 may not be indicative of the results that may be expected for the year ending December 31, 2013. Amounts as of December 31, 2012 included in the unaudited condensed consolidated financial statements have been derived from audited consolidated financial statements as of that date but do not include all disclosures required by GAAP. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012.

The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.

Reclassifications — Certain prior period amounts in the unaudited condensed consolidated financial statements have been reclassified to conform to the current period presentation with no effect on previously reported total assets and total liabilities, net loss or stockholders’ equity.

Derivative Financial Instruments — The Company, through an unconsolidated equity method investment, uses a derivative financial instrument to partially offset the effect of fluctuating interest rates on the cash flows associated with the unconsolidated equity method investment’s variable-rate debt. Upon entry into a derivative, the Company, through its unconsolidated equity method investment, formally designates and documents the financial instrument as a hedge of a specific underlying exposure, as well as the risk management objectives and strategies for undertaking the hedge transaction. The Company, through its unconsolidated equity method investment, accounts for derivatives through the use of a fair value concept whereby the derivative positions are stated at fair value in the accompanying condensed consolidated balance sheets. The fair value of derivatives used to hedge or modify risk fluctuates over time. As such, the fair value amounts should not be viewed in isolation, but rather in relation to the cash flows or fair value of the underlying hedged transaction and to the overall reduction in the exposure relating to adverse fluctuations in interest rates on the variable-rate debt.

The Company’s realized and unrealized gain (loss) on derivative financial instruments designated by the unconsolidated equity method investment as cash flow hedges are reported as a component of other comprehensive income (loss), a component of stockholders’ equity, in the accompanying condensed consolidated statements of comprehensive income (loss) to the extent they are effective; reclassified into earnings on the same line item associated with the hedged transaction and in the same period the hedged transaction affects earnings. Any ineffective portions of cash flow hedges are reported in the accompanying condensed consolidated statements of operations as derivative gain (loss). Realized and unrealized gain (loss) on derivative financial instruments designated as cash flow hedges that are entered into by the Company’s equity method investments are also reported as a component of the Company’s other comprehensive income (loss) in proportion to the Company’s ownership percentage in the investment, with reclassifications and ineffective portions being included in equity in earnings (loss) of unconsolidated entities in the accompanying condensed consolidated statements of operations.

Shares Based Payments to Non-Employees — In connection with the expense support and restricted stock agreement (the “Expense Support Agreement”) described in Note 9, “Related Party Arrangements,” the Company may issue subordinated forfeitable restricted stock (“Restricted Stock”) to the Advisor on a quarterly basis in exchange for providing expense support in the event that cash distributions declared exceed modified funds from operations as defined by the Expense Support Agreement. No Restricted Stock has been issued as of June 30, 2013, however, the Company expects to issue approximately 0.05 million shares during the third quarter of 2013 in connection with expense support of $0.5 million that was provided during the quarter ended June 30, 2013.

The Restricted Stock is forfeited if shareholders do not ultimately receive their original invested capital back with at least a 6% annualized return of investment upon a future liquidity event of the Company. As a result of the uncertainty whether the Restricted Stock shares ever vest since there is no ability to determine whether the economic hurdle and liquidation event conditions will be met, the shares granted will have no value upon issuance. The achievement of these hurdles is subject to many factors including future market conditions, valuations for the Company and its assets and the performance of the Company’s various assets and is not within the control of the Advisor. Upon issuance of Restricted Stock, the Company measures the fair value at its then-current lowest aggregate fair value pursuant to ASC 505-50. However, given that performance is outside the control of the Advisor and involves both market conditions and counterparty performance conditions, the shares are treated as unissued for accounting purposes and a fair value of zero is recognized as compensation expense until the instruments vest.

On the date in which the Advisor satisfies the vesting criteria, the Company remeasures the fair value of the Restricted Stock pursuant to ASC 505-50 and records expense equal to the difference between the original fair value and that of the remeasurement date. Until such time, the Company concludes there would be no fair value recognition of expense and no adjustment to stockholders’ equity related to the issuance of Restricted Stock to the Advisor in lieu of payment in cash for advisory services.

Pursuant to the Expense Support Agreement, the Advisor shall be the record owner of the Restricted Stock until the shares of common stock are sold or otherwise disposed of, and shall be entitled to all of the rights of a stockholder of the Company including, without limitation, the right to vote such shares (to the extent permitted by the Articles) and receive all dividends and other distributions paid with respect to such shares. All dividends or other distributions actually paid to the Advisor in connection with the Restricted Stock shall vest immediately and will not be subject to forfeiture. As such, the Company recognizes expense related to the dividends on the Restricted Stock shares as declared.

The Company will only include the Restricted Stock in the calculation of diluted earnings per share to the extent their effect is dilutive and the vesting conditions have been satisfied as of the reporting date.

Adopted Accounting Pronouncements — In February 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No. 2013-02, “Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income (AOCI).” This update clarified the guidance in subtopic 220 and requires preparers to report, in one place, information about reclassifications out of AOCI. The ASU also requires companies to report changes in AOCI balances. Effective January 1, 2013, the Company adopted this ASU. The adoption of this update did not have a material impact on the Company’s financial position, results of operations or cash flows.

In December 2011, the FASB issued ASU No. 2011-11, “Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities (Topic 210).” This ASU also serves to amend the disclosure requirements in FASB ASU 815, “Derivatives and Hedging.” This ASU will require companies to provide both net amounts (those that are offset) and gross information (as if amounts are not offset) in notes to the financial statements. In January 2013, the FASB issued ASU No. 2013-01, Balance Sheet (Topic 210): Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities”, that clarifies which instruments and transactions are subject to the offsetting disclosure requirement within the scope of ASU 2011-11. This ASU is effective for interim and annual periods beginning on or after January 1, 2013. The adoption of this ASU did not have a material effect on the Company’s financial statements and disclosures. See Note 10. “Derivative Financial Instruments” for additional information.

In December 2011, the FASB issued ASU No. 2011-10, “Property, Plant, and Equipment (Topic 360): Derecognition of in Substance Real Estate – a Scope Clarification.” This update clarified the guidance in subtopic 360-20 as it applies to the derecognition of in substance real estate when the parent ceases to have a controlling financial interest in a subsidiary that is in substance real estate because of a default by the subsidiary on its nonrecourse debt. The amendments in this update are effective for fiscal years, and interim periods within those years, beginning on or after June 15, 2012. The Company has determined that the impact of this update will not have a material impact on the Company’s financial position, results of operations or cash flows.

Recent Accounting Pronouncements — In February 2013, the FASB issued ASU No. 2013-04, “Liabilities (Topic 405): Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation is Fixed at the Reporting Date.” This update clarified the guidance in subtopic 405 and requires entities to measure obligations resulting from joint and several liability arrangements for which total obligation is fixed at the reporting date. Entities are required to measure the obligation as the amount that the reporting entity agreed to pay on the basis of its arrangement among its co-obligors plus any additional amount the reporting entity expects to pay on behalf of its co-obligors. Additionally, the guidance requires entities to disclose the nature and amount of the obligations as well as other information about those obligations. The amendments in this update are effective for fiscal years, and interim periods within those years, beginning on or after December 15, 2013 for public entities. The Company has determined that the impact of this update will not have a material impact on the Company’s financial position, results of operations or cash flows.

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Subsequent Events

6 Months Ended

Jun. 30, 2013

Subsequent Events

16. Subsequent Events

Equity transactions

The Company’s board of directors declared a monthly cash distribution of $0.03333 and a monthly stock distribution of 0.002500 shares on each outstanding share of common stock on July 1, 2013, and August 1, 2013. These distributions are to be paid and distributed by September 30, 2013.

During the period from July 1, 2013 through August 2, 2013, the Company received additional subscription proceeds of approximately $37.7 million (3.8 million shares).

Sale of CHTSunIV joint venture membership interest

On July 1, 2013, pursuant to a purchase and sale agreement dated December 18, 2012, between CHTSunIV and HCN, the Company completed its sale of its joint venture membership interest for a sales price of approximately $61.8 million, net of transaction costs, which reflects an aggregate gain of approximately $4.5 million.

Purchase of Knoxville MOBs

On July 10, 2013, the Company completed the acquisition of four medical office buildings from affiliates of N.T. Brinkman, Inc. (“N.T. Brinkman”), an unrelated party, for an aggregate purchase price of approximately $57.3 million, excluding closing costs. The Knoxville MOBs are located on three hospital campuses of the Tennova Healthcare System, a subsidiary of Health Management Associates (“HMA”), and are comprised of the following real estate investment properties:

Knoxville Medical Office Buildings	Location	Rentable  Square Footage		Allocated   Purchase Price
Physicians Plaza A at North Knoxville Medical Center	Powell, TN		67,410		$18,124,000
Physicians Plaza B at North Knoxville Medical Center	Powell, TN		75,109		21,800,000
Jefferson Medical Commons	Jefferson City, TN		48,478		11,616,000
Central Wing Annex at Physicians Regional Medical Center	Knoxville, TN		24,650		5,775,000
			215,647		$57,315,000

The Knoxville MOBs are 100% leased under 32 non-cancelable leases with expirations ranging from 2013 through 2021, subject to additional renewal periods at the tenant’s option. Refer to Note 3, “Acquisitions,” for the pro forma impact of the July acquisition on the Company’s results of operations for the quarters and six months ended June 30, 2013 and 2012.

In addition, the Company financed a portion of the acquisition through a secured credit agreement providing for a five-year credit facility in the aggregate principal amount of approximately $38.6 million (“Knoxville MOBs Loan”), of which $35.1 million was funded in connection with the acquisition of the medical office buildings and an additional $3.5 million will be funded upon final lender approval of certain documents submitted at closing. The Knoxville MOBs Loan bears interest at a rate equal to the sum of LIBOR and 2.5% per annum, payable monthly, and matures on July 10, 2018. The Knoxville MOBs Loan contains affirmative, negative and financial covenants customary for the type of credit facility, including limitations on incurrence of additional indebtedness and debt service coverage requirements.

The Company paid to the Advisor approximately $1.1 million of investment service fees and acquisition expenses related to the acquisition of the Knoxville MOBs.

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Amounts Related to Interest Rate Swap Included in Unconsolidated Entities in Condensed Consolidated Balance Sheet (Detail) (Montecito Joint Venture, Interest Rate Swap, USD $)	6 Months Ended
	Jun. 30, 2013
Montecito Joint Venture | Interest Rate Swap
Derivative [Line Items]
Notional amount	$ 12,421,349
Fixed interest rate	1.335%	[1]
Trade date	Jan. 17, 2013
Maturity date	Jan. 15, 2018
Fair value asset (liability)	$ 130,754

[1] The all-in rate will be equal to 3.935%, which includes a credit spread of 2.6%.

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Indebtedness - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	6 Months Ended			1 Months Ended			1 Months Ended
	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2012	Mar. 31, 2013 Mezzanine Loan Agreement	Jun. 30, 2013 Mortgage Note Payable	Jun. 30, 2013 Other notes	May 31, 2013 Secured Term Loan	Jun. 30, 2013 Term Loan Agreement	May 31, 2013 Primrose II Communities Bridge Loan
Debt Instrument [Line Items]
Extinguishment of debt				$ 40
Unamortized loan costs - Wrote off				0.2
Exit fee upon repayment of loan				0.8
Prepaid principal balance of loan				2.00%
Repayment of loan advances	75
Loan advances	6.2	25.3
Loan obtained							30.0	8.5	23.5
Interest on Loan accrues-Fixed rate									3.81%
Loan payable period							3 years		30 years
Debt instrument, maturity date							May 31, 2016	Jun. 14, 2028	Jun. 01, 2020
Interest accrues on loan in addition to LIBOR							4.25%
Principal payment commencement date							May 10, 2015
Amortization of loan							25 years
Amortization rate of loan							6.00%
Interest accrued on loan								4.25%
Debt instrument,interest rate terms								The loan bears interest at a rate of 4.25% for the first seven years and, thereafter, at a rate subject to changes in an independent index which is the weekly average yield on the 7-year International SWAPs and Derivatives Association ("ISDA") mid-market par SWAP rates.
Carrying value of notes payable			$ 193.2		$ 159.2	$ 169.9

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Derivative Financial Instruments

6 Months Ended

Jun. 30, 2013

Derivative Financial Instruments

10. Derivative Financial Instruments

In January 2013, the Company, through its Montecito Joint Venture, entered into a forward interest rate swap agreement to hedge interest rate exposure related to its variable-rate debt (“Montecito Swap”). The agreement requires the Montecito Joint Venture to pay a fixed amount based on a quoted interest rate of 1.335% from January 2015 through January 2018 based on aggregate notional values of approximately $12.4 million. The agreement further provides for the Company, through its Montecito Joint Venture, to receive a variable amount based on current LIBOR and the aforementioned notional values.

The following table summarizes the terms of the Montecito Swap and the proportion of fair value relative to the Company’s ownership percentage that has been recorded as of June 30, 2013. Amounts related to the interest rate swap are included in investments in unconsolidated entities in the accompanying condensed consolidated balance sheet as of June 30, 2013:

						Fair value asset (liability)
Notional amount		Fixed interest rate(1)		Trade date	Maturity date	June 30,     2013		December 31, 2012
$	12,421,349		1.335   %	January 17, 2013	January 15, 2018	$	130,754	$	—

FOOTNOTES:

(1) The all-in rate will be equal to 3.935%, which includes a credit spread of 2.6%.

The Montecito Swap is valued primarily based on inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, volatilities, and credit risks), and are classified as Level 2 in the fair value hierarchy. Determining fair value requires management to make certain estimates and judgments. Changes in assumptions could have a positive or negative impact on the estimated fair values of such instruments could, in turn, impact the Montecito Joint Venture’s results of operations.

The following table summarizes the gross and net amounts of the Company’s share of the Montecito Swap as presented in the accompanying condensed consolidated balance sheet as of June 30, 2013:

		Gross and net amounts of asset (liability) presented in the accompanying condensed consolidated balance sheet as of June 30, 2013						Gross amounts in the accompanying condensed consolidated balance sheet as of June 30, 2013
Notional amount		Gross amount		Offset amount		Net amount		Financial Instruments		Cash       Collateral		Net Amount
$	12,421,349	$	130,754	$	—	$	130,754	$	130,754	$	—	$	130,754

The Company, or its equity method investments, did not hold any derivative financial instruments as of December 31, 2012 or for the quarter or six months ended June 30, 2012.

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Schedule of Net Book Value of Intangibles (Detail) (USD $)	Jun. 30, 2013	Dec. 31, 2012
Finite-Lived Intangible Assets And Liabilities [Line Items]
Less: accumulated amortization	$ (1,115,379)	$ (140,863)
Intangibles, net	9,279,426	7,024,470
In place lease intangibles
Finite-Lived Intangible Assets And Liabilities [Line Items]
Gross carrying amount	$ 10,394,805	$ 7,165,333

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Acquisition of Medical Office Buildings from Affiliates (Detail) (USD $)	6 Months Ended	1 Months Ended
	Jun. 30, 2013	Jul. 10, 2013 Subsequent Event sqft	Jul. 10, 2013 Subsequent Event Physicians Plaza A at North Knoxville Medical Center sqft	Jul. 10, 2013 Subsequent Event Physicians Plaza B at North Knoxville Medical Center sqft	Jul. 10, 2013 Subsequent Event Jefferson Medical Commons sqft	Jul. 10, 2013 Subsequent Event Central Wing Annex at Physicians Regional Medical Center sqft
Business Acquisition [Line Items]
Location			Powell, TN	Powell, TN	Jefferson City, TN	Knoxville, TN
Rentable Square Footage		215,647	67,410	75,109	48,478	24,650
Allocated Purchase Price	$ 69,455,100	$ 57,315,000	$ 18,124,000	$ 21,800,000	$ 11,616,000	$ 5,775,000

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Schedule of Future Principal Payments and Maturity (Detail) (USD $)	Jun. 30, 2013
Debt Instrument [Line Items]
2013	$ 1,491,674
2014	3,087,301
2015	3,634,960
2016	33,059,855
2017	8,618,368
Thereafter	119,965,114
Future principal payments and maturity	$ 169,857,272

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Organization - Additional Information (Detail) (USD $)	6 Months Ended	12 Months Ended		1 Months Ended
	Jun. 30, 2013	Dec. 31, 2012	Jun. 27, 2011	Jun. 30, 2011 IPO
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items]
CNL properties Trust, Inc. organized date	Jun. 08, 2010
Common stock shares initial public offering	$ 177,507,467	$ 168,266,307		$ 3,000,000,000
Common stock offering price per share			$ 10.00
Offering price for reinvestment plan			$ 9.50
Initial public offering termination date	Jun. 27, 2014
Extension period of current offering	180 days

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Acquisitions (Tables)

6 Months Ended

Jun. 30, 2013

Schedule of Purchase Price Allocation

The following summarizes the allocation of the purchase price for the above properties, and the estimated fair values of the assets acquired as of June 30, 2013 and 2012:

	June 30, 2013		June 30, 2012
Land and land improvements	$	2,999,600	$	5,746,081
Buildings and building improvements		59,693,800		75,680,273
Furniture and equipment		3,549,000		933,313
In place lease intangibles (1)		3,212,700		1,690,333
	$	69,455,100	$	84,050,000

FOOTNOTES:

(1) At the acquisition date, the weighted-average amortization period on the acquired lease intangibles was approximately 11.4 years and 10 years, respectively.

Schedule of Unaudited Proforma Results of Operations

The following table presents the unaudited pro forma results of operations for the Company as if each of the properties (including the Knoxville MOBs) were acquired as of January 1, 2012 and owned during the quarter and six months ended June 30, 2013 and 2012:

	(Unaudited) Quarter ended June 30,						(Unaudited) Six months  ended June 30,
	2013			2012			2013			2012
Revenues	$	10,963,230		$	4,858,933		$	21,703,963		$	9,744,721
Net loss (1)	$	(845,210	)	$	(560,651	)	$	(3,743,104	)	$	(3,927,082	)
Income (loss) per share of common stock (basic and diluted)	$	(0.02	)	$	(0.07	)	$	(0.12	)	$	(0.39	)
Weighted average number of shares of common stock outstanding (basic and diluted)(2)		34,903,153			7,617,081			31,361,964			10,121,510

FOOTNOTES:

(1) The pro forma results for the quarter and six months ended June 30, 2013, were adjusted to exclude approximately $3.2 million of acquisition related expenses directly attributable to the acquisition of the eleven properties, of which approximately $1.8 million was included in the condensed consolidated statement of operations for the quarter and six months ended June 30, 2013, and approximately $1.4 million was incurred subsequently in July 2013. The pro forma results for the quarter and six months ended June 30, 2012 were adjusted to include these charges as if the properties had been acquired on January 1, 2012.

(2) As a result of the properties being treated as operational since January 1, 2012, the Company assumed approximately 5.1 million shares were issued as of January 1, 2012. Consequently the weighted average shares outstanding was adjusted to reflect this amount of shares being issued on January 1, 2012 instead of actual dates on which the shares were issued, and such shares were treated as outstanding as of the beginning of the period presented.

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Subsequent Events (Tables)

6 Months Ended

Jun. 30, 2013

Acquisitions of Properties

Consolidated Entities — During the six months ended June 30, 2013, the Company acquired the following seven single-tenant triple-net leased properties:

Property/Description	Location	Date of   Acquisition	Allocated   Purchase Price
Perennial Skilled Nursing Facilities (“Perennial SNFs”)
Bates Healthcare Center	Batesville, AR	5/31/2013	$	6,205,650
One skilled nursing facility
Broadway Healthcare Center	West Memphis, AR	5/31/2013		11,798,650
One skilled nursing facility
Jonesboro Healthcare Center	Jonesboro, AR	5/31/2013		15,232,050
One skilled nursing facility
Magnolia Healthcare Center	Magnolia, AR	5/31/2013		11,847,150
One skilled nursing facility
Mine Creek Healthcare Center	Nashville, AR	5/31/2013		3,373,500
One skilled nursing facility
Searcy Healthcare Center	Searcy, AR	5/31/2013		7,898,100
One skilled nursing facility
Medical Office Building
LaPorte Cancer Center	Westville, IN	6/14/2013		13,100,000
One medical office building
			$	69,455,100

Knoxville Medical Office Buildings

Acquisitions of Properties

The Knoxville MOBs are located on three hospital campuses of the Tennova Healthcare System, a subsidiary of Health Management Associates (“HMA”), and are comprised of the following real estate investment properties:

Knoxville Medical Office Buildings	Location	Rentable  Square Footage		Allocated   Purchase Price
Physicians Plaza A at North Knoxville Medical Center	Powell, TN		67,410		$18,124,000
Physicians Plaza B at North Knoxville Medical Center	Powell, TN		75,109		21,800,000
Jefferson Medical Commons	Jefferson City, TN		48,478		11,616,000
Central Wing Annex at Physicians Regional Medical Center	Knoxville, TN		24,650		5,775,000
			215,647		$57,315,000

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Schedule of Real Estate Investment Properties (Detail) (USD $)	Jun. 30, 2013	Dec. 31, 2012
Real Estate Properties [Line Items]
Real estate investment properties, net	$ 292,822,471	$ 230,410,959
Real estate under development, including land	16,844,776	8,461,571
Total real estate assets, net	309,667,247	238,872,530
Real Estate Investment Properties
Real Estate Properties [Line Items]
Land and land improvements	19,178,506	16,162,081
Building and building improvements	271,020,835	211,321,273
Equipment	8,492,935	4,887,313
Less: accumulated depreciation	(5,869,805)	(1,959,708)
Real estate investment properties, net	292,822,471	230,410,959
Real estate under development, including land	16,844,776	8,461,571
Total real estate assets, net	$ 309,667,247	$ 238,872,530

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Derivative Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2013

Interest Rate Swap and Proportion of Fair Value Relative to Company's Ownership Percentage

The following table summarizes the terms of the Montecito Swap and the proportion of fair value relative to the Company’s ownership percentage that has been recorded as of June 30, 2013. Amounts related to the interest rate swap are included in investments in unconsolidated entities in the accompanying condensed consolidated balance sheet as of June 30, 2013:

						Fair value asset (liability)
Notional amount		Fixed interest rate(1)		Trade date	Maturity date	June 30,     2013		December 31, 2012
$	12,421,349		1.335   %	January 17, 2013	January 15, 2018	$	130,754	$	—

FOOTNOTES:

(1) The all-in rate will be equal to 3.935%, which includes a credit spread of 2.6%.

Summary of Gross and Net Amounts of Interest Rate Swap Derivatives Presented in Condensed Consolidated Balance Sheet

The following table summarizes the gross and net amounts of the Company’s share of the Montecito Swap as presented in the accompanying condensed consolidated balance sheet as of June 30, 2013:

		Gross and net amounts of asset (liability) presented in the accompanying condensed consolidated balance sheet as of June 30, 2013						Gross amounts in the accompanying condensed consolidated balance sheet as of June 30, 2013
Notional amount		Gross amount		Offset amount		Net amount		Financial Instruments		Cash       Collateral		Net Amount
$	12,421,349	$	130,754	$	—	$	130,754	$	130,754	$	—	$	130,754

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Acquisitions of Properties (Detail) (USD $)	6 Months Ended
	Jun. 30, 2013
Business Acquisition [Line Items]
Allocated Purchase Price	$ 69,455,100
Bates Healthcare Center
Business Acquisition [Line Items]
Location	Batesville, AR
Date of Acquisition	May 31, 2013
Allocated Purchase Price	6,205,650
Broadway Healthcare Center
Business Acquisition [Line Items]
Location	West Memphis, AR
Date of Acquisition	May 31, 2013
Allocated Purchase Price	11,798,650
Jonesboro Healthcare Center
Business Acquisition [Line Items]
Location	Jonesboro, AR
Date of Acquisition	May 31, 2013
Allocated Purchase Price	15,232,050
Magnolia Healthcare Center
Business Acquisition [Line Items]
Location	Magnolia, AR
Date of Acquisition	May 31, 2013
Allocated Purchase Price	11,847,150
Mine Creek Healthcare Center
Business Acquisition [Line Items]
Location	Nashville, AR
Date of Acquisition	May 31, 2013
Allocated Purchase Price	3,373,500
Searcy Healthcare Center
Business Acquisition [Line Items]
Location	Searcy, AR
Date of Acquisition	May 31, 2013
Allocated Purchase Price	7,898,100
LaPorte Cancer Center
Business Acquisition [Line Items]
Location	Westville, IN
Date of Acquisition	Jun. 14, 2013
Allocated Purchase Price	$ 13,100,000

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Intangibles Net - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Finite-Lived Intangible Assets And Liabilities [Line Items]
Amortization expense on Intangible Assets	$ 0.50	$ 0.04	$ 1.00	$ 0.06

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Unconsolidated Entities (Tables)

6 Months Ended

Jun. 30, 2013

Summarized Operating Data of Unconsolidated Entities

The following table presents condensed financial information for each of the Company’s unconsolidated entities as of and for the quarter and six months ended June 30, 2013:

	For the quarter ended June 30, 2013
	Montecito(2)			CHTSunIV(4)		Windsor Manor		Total
Revenues	$	452,712		$	12,183,182	$	2,509,978	$	15,145,872
Operating income (loss)	$	158,276	(3)	$	3,877,329	$	(74,298)	$	3,961,307
Net income (loss)	$	54,486		$	379,551	$	(319,010)	$	115,027
Income (loss) allocable to other venture partners (1)	$	5,447		$	(507,556)	$	(588,653)	$	(1,090,762)
Income allocable to the Company (1)	$	49,039		$	887,107	$	269,643	$	1,205,789
Amortization of capitalized acquisition costs		(1,876)			(18,174)		(3,987)		(24,037)
Equity in earnings of unconsolidated entities	$	47,163		$	868,933	$	265,656	$	1,181,752
Distributions declared to the Company	$	342,158		$	1,507,987	$	5,301	$	1,855,446
Distributions received by the Company	$	—		$	1,486,500	$	175,095	$	1,661,595

	For the six months ended June 30, 2013
	Montecito(2)			CHTSunIV(4)		Windsor Manor		Total
Revenues	$	808,741		$	24,107,268	$	3,283,221	$	28,199,230
Operating income (loss)	$	(55,125)	(3)	$	7,483,713	$	5,803	$	7,434,391
Net loss	$	(238,559)		$	(46,380)	$	(492,014)	$	(776,953)
Loss allocable to other venture partners (1)	$	(23,856)		$	(1,365,854)	$	(894,414)	$	(2,284,124)
Income (loss) allocable to the Company (1)	$	(214,703)		$	1,319,474	$	402,400	$	1,507,171
Amortization of capitalized acquisition costs		(3,813)			(36,347)		(6,876)		(47,036)
Equity (loss) in earnings of unconsolidated entities	$	(218,516)		$	1,283,127	$	395,524	$	1,460,135
Distributions declared to the Company	$	342,158		$	2,990,282	$	180,396	$	3,512,836
Distributions received by the Company	$	—		$	2,954,639	$	223,985	$	3,178,624

  FOOTNOTES:

(1) Income (loss) is allocated between the Company and its joint venture partner using the HLBV method of accounting.

(2) Represents operating results from the date of acquisition through the end of the periods presented.

(3) Includes approximately $0.1 and $0.5 million of non-recurring acquisition expenses incurred by the joint venture for the quarter and six months ended June 30, 2013.

(4) In July 2013, the Company completed its sale of its joint venture membership interest in CHTSunIV. Refer to Note 16, “Subsequent Events,” for additional information.

The following tables present financial information for the Company’s unconsolidated entities as of and for the quarter and six months ended June 30, 2012:

	Quarter ended   June 30, 2012 (2)			Six months ended   June 30, 2012 (2)
Revenues	$	—		$	—
Operating loss	$	(1,372,635	)	$	(1,372,635	)
Net loss	$	(1,433,935	)	$	(1,433,935	)
Loss allocable to other venture partners (1)	$	(660,307	)	$	(660,307	)
Loss allocable to the Company (1)	$	(773,628	)	$	(773,628	)
Amortization of capitalized acquisition costs		—			—
Loss in earnings of unconsolidated entities	$	(773,628	)	$	(773,628	)

FOOTNOTES:

(1) Income is allocated between the Company and its joint venture partner using the HLBV method of accounting.

(2) Represents operating data from the date of acquisition through the end of the period presented.

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Funding on ADC Loan as Note Receivable from Related Parties (Parenthetical) (Detail)	Jun. 30, 2013
Paid monthly
Related Party Transaction [Line Items]
Interest Rate	8.00%
Paid up on maturity
Related Party Transaction [Line Items]
Interest Rate	8.00%

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Components of Benefit or Provision for Income Taxes (Detail) (USD $)	3 Months Ended	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2013
Current:
Federal		$ 13,312
State
Total current benefit		13,312
Deferred:
Federal	(25,450)	(25,450)
State	(5,935)	(5,935)
Total deferred provision	(31,385)	(31,385)
Income tax expense	$ (31,385)	$ (18,073)

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Funding on ADC Loan as Note Receivable from Related Parties (Detail) (USD $)	6 Months Ended
	Jun. 30, 2013
Related Party Transaction [Line Items]
Note receivable from related party	$ 1,812,891
Loan origination costs	37,519
Accrued interest	2,364	[1]
Crosland Southeast (land development)
Related Party Transaction [Line Items]
Origination Date	Jun. 27, 2013
Maturity Date	Jun. 27, 2014	[2]
Interest Rate	16.00%	[3]
Note receivable from related party	$ 1,773,008

[1] This amount is included in Other revenues in the accompanying condensed statements of operations for the quarter and six months ended June 30, 2013.

[2] The initial term of the ADC Loan is one year with an extension option of up to six months.

[3] The interest rate is comprised of an 8% component that is paid monthly and an 8% component that is paid upon maturity of the ADC Loan.

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Schedule of Purchase Price Allocation (Parenthetical) (Detail)	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012
Schedule of Business Acquisitions, Purchase Price Allocation [Line Items]
Weighted-average amortization period on the acquired lease intangibles	11 years 4 months 24 days	10 years

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Summary of Gross and Net Amounts of Interest Rate Swap Presented in Condensed Consolidated Balance Sheet (Detail) (Montecito Joint Venture, Interest Rate Swap, USD $)	Jun. 30, 2013
Montecito Joint Venture | Interest Rate Swap
Derivative [Line Items]
Notional amount	$ 12,421,349
Amounts of asset (liability) presented in the accompanying condensed consolidated balance sheet, Gross amount	130,754
Amounts of asset (liability) presented in the accompanying condensed consolidated balance sheet, Offset amount
Amounts of asset (liability) presented in the accompanying condensed consolidated balance sheet, Net amount	130,754
Gross Amounts in Accompanying Condensed Consolidated Balance Sheet, Financial Instruments	130,754
Gross Amounts in Accompanying Condensed Consolidated Balance Sheet, Cash Collateral
Gross Amounts in Accompanying Condensed Consolidated Balance Sheet, Net Amount	$ 130,754

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Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2013

Basis of Presentation and Consolidation

Basis of Presentation and Consolidation — The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and note disclosures required by generally accepted accounting principles in the United States (“GAAP”). The unaudited condensed consolidated financial statements reflect all normal recurring adjustments, which, in the opinion of management, are necessary for the fair statement of the Company’s results for the interim period presented. Operating results for the quarter or six months ended June 30, 2013 may not be indicative of the results that may be expected for the year ending December 31, 2013. Amounts as of December 31, 2012 included in the unaudited condensed consolidated financial statements have been derived from audited consolidated financial statements as of that date but do not include all disclosures required by GAAP. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012.

The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.

Reclassifications

Reclassifications — Certain prior period amounts in the unaudited condensed consolidated financial statements have been reclassified to conform to the current period presentation with no effect on previously reported total assets and total liabilities, net loss or stockholders’ equity.

Derivative Financial Instruments

Derivative Financial Instruments — The Company, through an unconsolidated equity method investment, uses a derivative financial instrument to partially offset the effect of fluctuating interest rates on the cash flows associated with the unconsolidated equity method investment’s variable-rate debt. Upon entry into a derivative, the Company, through its unconsolidated equity method investment, formally designates and documents the financial instrument as a hedge of a specific underlying exposure, as well as the risk management objectives and strategies for undertaking the hedge transaction. The Company, through its unconsolidated equity method investment, accounts for derivatives through the use of a fair value concept whereby the derivative positions are stated at fair value in the accompanying condensed consolidated balance sheets. The fair value of derivatives used to hedge or modify risk fluctuates over time. As such, the fair value amounts should not be viewed in isolation, but rather in relation to the cash flows or fair value of the underlying hedged transaction and to the overall reduction in the exposure relating to adverse fluctuations in interest rates on the variable-rate debt.

The Company’s realized and unrealized gain (loss) on derivative financial instruments designated by the unconsolidated equity method investment as cash flow hedges are reported as a component of other comprehensive income (loss), a component of stockholders’ equity, in the accompanying condensed consolidated statements of comprehensive income (loss) to the extent they are effective; reclassified into earnings on the same line item associated with the hedged transaction and in the same period the hedged transaction affects earnings. Any ineffective portions of cash flow hedges are reported in the accompanying condensed consolidated statements of operations as derivative gain (loss). Realized and unrealized gain (loss) on derivative financial instruments designated as cash flow hedges that are entered into by the Company’s equity method investments are also reported as a component of the Company’s other comprehensive income (loss) in proportion to the Company’s ownership percentage in the investment, with reclassifications and ineffective portions being included in equity in earnings (loss) of unconsolidated entities in the accompanying condensed consolidated statements of operations.

Shares Based Payments to Non-Employees

Shares Based Payments to Non-Employees — In connection with the expense support and restricted stock agreement (the “Expense Support Agreement”) described in Note 9, “Related Party Arrangements,” the Company may issue subordinated forfeitable restricted stock (“Restricted Stock”) to the Advisor on a quarterly basis in exchange for providing expense support in the event that cash distributions declared exceed modified funds from operations as defined by the Expense Support Agreement. No Restricted Stock has been issued as of June 30, 2013, however, the Company expects to issue approximately 0.05 million shares during the third quarter of 2013 in connection with expense support of $0.5 million that was provided during the quarter ended June 30, 2013.

The Restricted Stock is forfeited if shareholders do not ultimately receive their original invested capital back with at least a 6% annualized return of investment upon a future liquidity event of the Company. As a result of the uncertainty whether the Restricted Stock shares ever vest since there is no ability to determine whether the economic hurdle and liquidation event conditions will be met, the shares granted will have no value upon issuance. The achievement of these hurdles is subject to many factors including future market conditions, valuations for the Company and its assets and the performance of the Company’s various assets and is not within the control of the Advisor. Upon issuance of Restricted Stock, the Company measures the fair value at its then-current lowest aggregate fair value pursuant to ASC 505-50. However, given that performance is outside the control of the Advisor and involves both market conditions and counterparty performance conditions, the shares are treated as unissued for accounting purposes and a fair value of zero is recognized as compensation expense until the instruments vest.

On the date in which the Advisor satisfies the vesting criteria, the Company remeasures the fair value of the Restricted Stock pursuant to ASC 505-50 and records expense equal to the difference between the original fair value and that of the remeasurement date. Until such time, the Company concludes there would be no fair value recognition of expense and no adjustment to stockholders’ equity related to the issuance of Restricted Stock to the Advisor in lieu of payment in cash for advisory services.

Pursuant to the Expense Support Agreement, the Advisor shall be the record owner of the Restricted Stock until the shares of common stock are sold or otherwise disposed of, and shall be entitled to all of the rights of a stockholder of the Company including, without limitation, the right to vote such shares (to the extent permitted by the Articles) and receive all dividends and other distributions paid with respect to such shares. All dividends or other distributions actually paid to the Advisor in connection with the Restricted Stock shall vest immediately and will not be subject to forfeiture. As such, the Company recognizes expense related to the dividends on the Restricted Stock shares as declared.

The Company will only include the Restricted Stock in the calculation of diluted earnings per share to the extent their effect is dilutive and the vesting conditions have been satisfied as of the reporting date.

Adopted Accounting Pronouncements

Adopted Accounting Pronouncements — In February 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No. 2013-02, “Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income (AOCI).” This update clarified the guidance in subtopic 220 and requires preparers to report, in one place, information about reclassifications out of AOCI. The ASU also requires companies to report changes in AOCI balances. Effective January 1, 2013, the Company adopted this ASU. The adoption of this update did not have a material impact on the Company’s financial position, results of operations or cash flows.

In December 2011, the FASB issued ASU No. 2011-11, “Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities (Topic 210).” This ASU also serves to amend the disclosure requirements in FASB ASU 815, “Derivatives and Hedging.” This ASU will require companies to provide both net amounts (those that are offset) and gross information (as if amounts are not offset) in notes to the financial statements. In January 2013, the FASB issued ASU No. 2013-01, Balance Sheet (Topic 210): Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities”, that clarifies which instruments and transactions are subject to the offsetting disclosure requirement within the scope of ASU 2011-11. This ASU is effective for interim and annual periods beginning on or after January 1, 2013. The adoption of this ASU did not have a material effect on the Company’s financial statements and disclosures. See Note 10. “Derivative Financial Instruments” for additional information.

In December 2011, the FASB issued ASU No. 2011-10, “Property, Plant, and Equipment (Topic 360): Derecognition of in Substance Real Estate – a Scope Clarification.” This update clarified the guidance in subtopic 360-20 as it applies to the derecognition of in substance real estate when the parent ceases to have a controlling financial interest in a subsidiary that is in substance real estate because of a default by the subsidiary on its nonrecourse debt. The amendments in this update are effective for fiscal years, and interim periods within those years, beginning on or after June 15, 2012. The Company has determined that the impact of this update will not have a material impact on the Company’s financial position, results of operations or cash flows.

Recent Accounting Pronouncements

Recent Accounting Pronouncements — In February 2013, the FASB issued ASU No. 2013-04, “Liabilities (Topic 405): Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation is Fixed at the Reporting Date.” This update clarified the guidance in subtopic 405 and requires entities to measure obligations resulting from joint and several liability arrangements for which total obligation is fixed at the reporting date. Entities are required to measure the obligation as the amount that the reporting entity agreed to pay on the basis of its arrangement among its co-obligors plus any additional amount the reporting entity expects to pay on behalf of its co-obligors. Additionally, the guidance requires entities to disclose the nature and amount of the obligations as well as other information about those obligations. The amendments in this update are effective for fiscal years, and interim periods within those years, beginning on or after December 15, 2013 for public entities. The Company has determined that the impact of this update will not have a material impact on the Company’s financial position, results of operations or cash flows.

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CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (USD $)	Total	Common Stock	Capital in Excess of Par Value	Accumulated Loss	Accumulated Distributions	Accumulated Other Comprehensive Income
Beginning Balance at Dec. 31, 2011	$ 9,702,387	$ 13,576	$ 11,504,283	$ (1,759,580)	$ (55,892)
Beginning Balance (in shares) at Dec. 31, 2011		1,357,572
Stock issues (in shares)		16,850,196
Stock issues	168,266,307	168,503	168,097,804
Stock distributions		2,398	(2,398)
Stock distributions, shares		239,785
Redemption of common stock	(10,474)	(10)	(10,464)
Redemption of common stock, shares		(1,049)
Stock issuance and offering costs	(23,389,230)		(23,389,230)
Net loss	(10,720,758)			(10,720,758)
Cash distributions, declared and paid or reinvested ($0.19998 per share)	(3,197,400)				(3,197,400)
Ending Balance at Dec. 31, 2012	140,650,832	184,467	156,199,995	(12,480,338)	(3,253,292)
Ending Balance (in shares) at Dec. 31, 2012	18,446,504	18,446,504
Stock issues (in shares)		17,782,961
Stock issues	177,507,467	177,830	177,329,637
Stock distributions		3,733	(3,733)
Stock distributions, shares		373,303
Redemption of common stock	(423,773)	(478)	(423,295)
Redemption of common stock, shares		(46,257)
Stock issuance and offering costs	(18,780,397)		(18,780,397)
Net loss	(6,638,750)			(6,638,750)
Other comprehensive income	130,754					130,754
Cash distributions, declared and paid or reinvested ($0.19998 per share)	(4,977,334)				(4,977,334)
Ending Balance at Jun. 30, 2013	$ 287,468,799	$ 365,552	$ 314,322,207	$ (19,119,088)	$ (8,230,626)	$ 130,754
Ending Balance (in shares) at Jun. 30, 2013	36,556,511	36,556,511

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012
Operating activities:
Net cash flows provided by operating activities	$ 3,176,041	$ 496,601
Investing activities:
Acquisition of properties	(69,455,100)	(83,650,000)
Development of properties	(6,390,705)
Investment in unconsolidated entities	(12,175,524)	(59,269,271)
Changes in restricted cash	(782,774)	(39,400)
Capital expenditures	(79,203)
Deposits on real estate	(4,358,725)
Issuance of note receivable to related party	(1,812,891)
Other		(9,087)
Net cash flows used in investing activities	(95,054,922)	(142,967,758)
Financing activities:
Subscriptions received for common stock through public offering	174,851,669	68,533,285
Payment of stock issuance costs	(18,525,209)	(10,418,795)
Distributions to stockholders, net of distribution reinvestments	(2,321,536)	(339,296)
Redemption of common stock	(219,140)	(10,474)
Proceeds from mortgage note payable	92,615,761	111,400,000
Principal payment on mortgage note payable	(115,910,080)	(21,522,000)
Lender deposits	(66,907)
Payment of loan costs	(1,692,771)	(2,091,152)
Net cash flows provided by financing activities	128,731,787	145,551,568
Net increase in cash	36,852,906	3,080,411
Cash at beginning of period	18,261,750	10,001,872
Cash at end of period	55,114,656	13,082,283
Amounts incurred but not paid (including amounts due to related parties):
Stock issuance and offering costs	850,644	196,753
Loan costs	169,307
Accrued development costs	2,222,001
Redemptions payable	204,633
Construction management fee	44,024
Stock distributions (at par)	3,733	570
Loan cost amortization capitalized on development properties	31,240
Unrealized gain on derivative financial instrument	$ 130,754

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Acquisitions

6 Months Ended

Jun. 30, 2013

Acquisitions

3. Acquisitions

Consolidated Entities — During the six months ended June 30, 2013, the Company acquired the following seven single-tenant triple-net leased properties:

Property/Description	Location	Date of   Acquisition	Allocated   Purchase Price
Perennial Skilled Nursing Facilities (“Perennial SNFs”)
Bates Healthcare Center	Batesville, AR	5/31/2013	$	6,205,650
One skilled nursing facility
Broadway Healthcare Center	West Memphis, AR	5/31/2013		11,798,650
One skilled nursing facility
Jonesboro Healthcare Center	Jonesboro, AR	5/31/2013		15,232,050
One skilled nursing facility
Magnolia Healthcare Center	Magnolia, AR	5/31/2013		11,847,150
One skilled nursing facility
Mine Creek Healthcare Center	Nashville, AR	5/31/2013		3,373,500
One skilled nursing facility
Searcy Healthcare Center	Searcy, AR	5/31/2013		7,898,100
One skilled nursing facility
Medical Office Building
LaPorte Cancer Center	Westville, IN	6/14/2013		13,100,000
One medical office building
			$	69,455,100

For the six months ended June 30, 2013, the Company paid to the Advisor approximately $1.3 million of investment service fees and acquisition expenses related to the acquisition of the Perennial SNFs and the LaPorte Cancer Center.

The following summarizes the allocation of the purchase price for the above properties, and the estimated fair values of the assets acquired as of June 30, 2013 and 2012:

	June 30, 2013		June 30, 2012
Land and land improvements	$	2,999,600	$	5,746,081
Buildings and building improvements		59,693,800		75,680,273
Furniture and equipment		3,549,000		933,313
In place lease intangibles (1)		3,212,700		1,690,333
	$	69,455,100	$	84,050,000

FOOTNOTES:

(1) At the acquisition date, the weighted-average amortization period on the acquired lease intangibles was approximately 11.4 years and 10 years, respectively.

The revenues and net losses (including deductions for acquisition fees and expenses and depreciation and amortization expense) attributable to the properties included in the Company’s condensed consolidated statements of operations were approximately $0.6 million and $(1.6) million, respectively, for the quarter and six months ended June 30, 2013; and approximately $1.9 million and $0.3 million, respectively, and $2.9 million and $(1.6) million, respectively, for the quarter and six months ended June 30, 2012.

In July 2013, the Company acquired a portfolio of four medical office buildings in Knoxville, Tennessee (the “Knoxville MOBs”), see Note 16, “Subsequent Events,” for additional information.

The following table presents the unaudited pro forma results of operations for the Company as if each of the properties (including the Knoxville MOBs) were acquired as of January 1, 2012 and owned during the quarter and six months ended June 30, 2013 and 2012:

	(Unaudited) Quarter ended June 30,						(Unaudited) Six months  ended June 30,
	2013			2012			2013			2012
Revenues	$	10,963,230		$	4,858,933		$	21,703,963		$	9,744,721
Net loss (1)	$	(845,210	)	$	(560,651	)	$	(3,743,104	)	$	(3,927,082	)
Income (loss) per share of common stock (basic and diluted)	$	(0.02	)	$	(0.07	)	$	(0.12	)	$	(0.39	)
Weighted average number of shares of common stock outstanding (basic and diluted)(2)		34,903,153			7,617,081			31,361,964			10,121,510

FOOTNOTES:

(1) The pro forma results for the quarter and six months ended June 30, 2013, were adjusted to exclude approximately $3.2 million of acquisition related expenses directly attributable to the acquisition of the eleven properties, of which approximately $1.8 million was included in the condensed consolidated statement of operations for the quarter and six months ended June 30, 2013, and approximately $1.4 million was incurred subsequently in July 2013. The pro forma results for the quarter and six months ended June 30, 2012 were adjusted to include these charges as if the properties had been acquired on January 1, 2012.

(2) As a result of the properties being treated as operational since January 1, 2012, the Company assumed approximately 5.1 million shares were issued as of January 1, 2012. Consequently the weighted average shares outstanding was adjusted to reflect this amount of shares being issued on January 1, 2012 instead of actual dates on which the shares were issued, and such shares were treated as outstanding as of the beginning of the period presented.

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Significant Components of Deferred Tax Assets (Detail) (USD $)	Jun. 30, 2013
Schedule of Deferred Tax Assets and Liabilities [Line Items]
Carryforwards of net operating loss	$ 194,812
Prepaid rent	150,424
Valuation allowance	(345,236)
Net deferred tax assets

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Organization

6 Months Ended

Jun. 30, 2013

Organization

1. Organization

CNL Healthcare Properties, Inc. (the “Company”) is a Maryland corporation incorporated on June 8, 2010 that intends to elect to be taxed as a real estate investment trust (“REIT”) for U.S. federal income tax purposes for the year ended December 31, 2012.

The Company’s investment focus is on acquiring properties within the senior housing and healthcare sectors primarily in the United States. Senior housing asset classes the Company may acquire include active adult communities (age-restricted and age-targeted housing), independent and assisted living facilities, continuing care retirement communities, memory care facilities and skilled nursing facilities. Healthcare asset classes the Company may acquire include medical office buildings, as well as other types of healthcare and wellness-related properties such as physicians’ offices, specialty medical and diagnostic service providers, specialty hospitals, walk-in clinics and outpatient surgery centers, hospitals and inpatient rehabilitative facilities, long-term acute care hospitals, pharmaceutical and medical supply manufacturing facilities, laboratories and research facilities and medical marts. The Company expects to primarily lease its properties to third-party tenants but may also lease to wholly-owned taxable REIT subsidiaries (“TRS”) and engage independent third-party managers under management agreements to operate the properties as permitted under applicable tax regulations. The Company also may invest in and originate mortgage, bridge or mezzanine loans or in entities that make investments similar to the foregoing.

On June 27, 2011, the Company commenced its initial public offering of up to $3.0 billion of shares of common stock (the “Offering”), including shares being offered from its distribution reinvestment plan (the “Reinvestment Plan”), pursuant to a registration statement on Form S-11 under the Securities Act of 1933. The shares are being offered at $10.00 per share, or $9.50 per share pursuant to the Reinvestment Plan, unless changed by the board of directors. The Company plans to extend the Offering through June 27, 2014. In certain cases, the current Offering could be extended by an additional 180 days.

The Company is externally managed and advised by CNL Healthcare Corp., (the “Advisor”), a Florida corporation. The Advisor is responsible for managing the Company’s day-to-day affairs and for identifying and making acquisitions and investments on its behalf. The Company has also retained CNL Healthcare Manager Corp., (the “Property Manager”) to manage its properties under a six year property management agreement.

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Acquisitions - Additional Information (Detail) (USD $)	3 Months Ended		6 Months Ended		1 Months Ended	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012	Jul. 10, 2013 Subsequent Event Building	Jun. 30, 2013 Perennial Communities
Business Acquisition [Line Items]
Acquisition related expenses	$ 2,365,781	$ 75,772	$ 2,944,307	$ 1,975,185	$ 1,100,000	$ 1,300,000
Revenues attributable to properties	600,000	1,900,000	600,000	2,900,000
Net income (loss) attributable to properties	$ (1,600,000)	$ 300,000	$ (1,600,000)	$ (1,600,000)
Number of acquisitions					4

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Real Estate Investment Properties, net (Tables)

6 Months Ended

Jun. 30, 2013

Schedule of Real Estate Investment Properties

As of June 30, 2013 and December 31, 2012, real estate investment properties consisted of the following:

	June 30,              2013			December 31,   2012
Land and land improvements	$	19,178,506		$	16,162,081
Building and building improvements		271,020,835			211,321,273
Equipment		8,492,935			4,887,313
Less: accumulated depreciation		(5,869,805	)		(1,959,708	)
Real estate investment properties, net		292,822,471			230,410,959
Real estate under development, including land		16,844,776			8,461,571
Total real estate assets, net	$	309,667,247		$	238,872,530

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Indebtedness (Tables)

6 Months Ended

Jun. 30, 2013

Schedule of Future Principal Payments and Maturity

Maturities of indebtedness for the remainder of 2013 and each of the next four years and thereafter, in the aggregate, as of June 30, 2013 were as follows:

2013	$	1,491,674
2014		3,087,301
2015		3,634,960
2016		33,059,855
2017		8,618,368
Thereafter		119,965,114
	$	169,857,272

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Effect of Derivative Financial Instruments (Detail) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Derivative Instruments, Gain (Loss) [Line Items]
Gain (loss) reclassified from AOCI into earnings (Effective Portion)
Derivative instruments, loss recognized in other comprehensive income, effective portion	211,166		130,754
Interest Rate Swap
Derivative Instruments, Gain (Loss) [Line Items]
Gain (loss) reclassified from AOCI into earnings (Effective Portion)
Derivative instruments, loss recognized in other comprehensive income, effective portion	$ 211,166		$ 130,754

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Variable Interest Entities (VIEs) (Tables)

6 Months Ended

Jun. 30, 2013

Aggregate Carrying Amount and Major Classifications of Consolidated Assets

The aggregate carrying amount and major classifications of the consolidated assets that can be used to settle obligations of the VIEs and liabilities of the consolidated VIEs that are non-recourse to the Company are as follows:

	June 30, 2013		December 31, 2012
Assets:
Real estate investment properties, net	$	16,943,329	$	—
Intangibles, net	$	457,158	$	—
Loan costs, net	$	204,927	$	—
Other	$	13,751	$	—
Liabilities:
Mortgages and other notes payable	$	9,300,000	$	—
Accounts payable and accrued expenses	$	140,625	$	—

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Stockholders' Equity - Additional Information (Detail) (USD $)	6 Months Ended		12 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Dec. 31, 2012
Stockholders Equity [Line Items]
Aggregate offering proceeds received from public offering	$ 358,800,000		$ 181,600,000
Shares issued from public offering	36,600,000		18,500,000
Cash distribution declared	4,977,334	800,000	3,197,400
Percentage of cash distribution considered as return of capital	100.00%	100.00%
Reinvestment Plan
Stockholders Equity [Line Items]
Aggregate offering proceeds received from public offering	$ 4,400,000		$ 1,700,000
Shares issued from public offering	500,000		200,000
Common Stock
Stockholders Equity [Line Items]
Stock distributions, shares	373,303	56,931

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Summarized Operating Data of Unconsolidated Entities Income Statement (Parenthetical) (Detail) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Schedule of Equity Method Investments [Line Items]
Acquisition fees and expenses	$ 2,365,781	$ 75,772	$ 2,944,307	$ 1,975,185
Montecito Joint Venture
Schedule of Equity Method Investments [Line Items]
Acquisition fees and expenses	$ 100,000		$ 500,000

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Schedule of Estimated Future Amortization (Detail) (USD $)	Jun. 30, 2013
Finite-Lived Intangible Assets And Liabilities [Line Items]
2013	$ 1,074,674
2014	2,149,349
2015	1,357,749
2016	566,149
2017	566,149
Thereafter	3,565,356
Total	$ 9,279,426

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Schedule of Unaudited Proforma Results of Operations (Parenthetical) (Detail) (USD $) Share data in Millions, unless otherwise specified	1 Months Ended	3 Months Ended		6 Months Ended		3 Months Ended	6 Months Ended	3 Months Ended	6 Months Ended	1 Months Ended
	Jan. 31, 2012	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013 Eliminations	Jun. 30, 2013 Eliminations	Jun. 30, 2013 Eliminations Condensed consolidated statement of operations	Jun. 30, 2013 Eliminations Condensed consolidated statement of operations	Jul. 10, 2013 Subsequent Event	Jul. 31, 2013 Subsequent Event Eliminations
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items]
Acquisition related expenses		$ 2,365,781	$ 75,772	$ 2,944,307	$ 1,975,185	$ 3,200,000	$ 3,200,000	$ 1,800,000	$ 1,800,000	$ 1,100,000	$ 1,400,000
Shares issued to fund acquisition	5.1

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CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)	Jun. 30, 2013	Dec. 31, 2012
Real estate investment properties, net	$ 292,822,471	$ 230,410,959
Real estate under development, including land	16,844,776	8,461,571
Cash	55,114,656	18,261,750
Intangibles, net	9,279,426	7,024,470
Loan costs, net	3,973,359	3,338,286
Other assets	3,733,726	3,984,849
Deferred rent	1,679,718	843,370
Restricted cash	1,392,682	609,908
Mortgage and other notes payable	169,857,272	193,151,591
Accounts payable and accrued expenses	6,661,602	2,685,000
Due to related parties	2,528,097	1,289,880
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	200,000,000	200,000,000
Preferred stock, shares unissued	200,000,000	200,000,000
Excess shares, par value	$ 0.01	$ 0.01
Excess shares, shares authorized	300,000,000	300,000,000
Excess shares, shares unissued	300,000,000	300,000,000
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	1,120,000,000	1,120,000,000
Common stock, shares issued	36,611,960	18,447,553
Common stock, shares outstanding	36,556,511	18,446,504
VIEs
Real estate investment properties, net	16,943,329	0
Real estate under development, including land	16,597,176	8,399,079
Cash	28,989	8,734
Intangibles, net	457,158	0
Loan costs, net	746,272	548,157
Other assets	4,876	230,536
Deferred rent	8,615	0
Restricted cash	236,590	236,000
Mortgage and other notes payable	14,559,761	2,000
Accounts payable and accrued expenses	2,377,260	318,047
Due to related parties	$ 90,279	$ 71,482

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Operating Leases

6 Months Ended

Jun. 30, 2013

Operating Leases

6. Operating Leases

As described in Note 3, “Acquisitions,” the Company acquired seven single-tenant properties that were 100% leased under operating leases during the six months ended June 30, 2013.

The Perennial Communities are operated by a subsidiary of Arkansas SNF Operations Acquisition III, LLC (“Arkansas SNF”) under triple-net lease agreements having an initial term of ten years, with two five-year renewal options. In the initial year, the aggregate minimum annual rent for the Perennial SNFs is approximately $5.54 million, and the average effective annual rental per usable bed is approximately $7,100. Annual base rent is equal to the properties’ lease basis multiplied by the initial lease rate of 9.75% and will escalate thereafter pursuant to the lease agreements. Annual capital reserve income is paid to the Company based on $500 per bed each year.

The LaPorte Cancer Center is leased to Michiana Hematology Oncology, P.C., the largest independent oncology practice in Indiana, under a 20-year triple-net lease, which will expire on October 31, 2030, with current annual base rent of approximately $1.04 million. Holladay Properties, the largest private healthcare property management and development group in the United States, manages the building under a property management agreement having an initial term of two years, with automatic renewals of one year each unless terminated by either party.

Under the terms of the aforementioned lease agreements, each tenant is responsible for the payment of property taxes, general liability insurance, utilities, repairs and maintenance, including structural and roof expenses. Each tenant is expected to pay real estate taxes directly to taxing authorities. However, if the tenant does not pay, the Company will be liable. The total annualized property tax assessed on these properties as of June 30, 2013 was approximately $1.4 million.

As of June 30, 2013, the Company owned 17 real estate investment properties that were 100% leased under operating leases. The following is a schedule of future minimum lease payments to be received under non-cancellable operating leases for the remainder of 2013 and each of the next four years and thereafter, in the aggregate, as of June 30, 2013:

2013	$	10,911,827
2014		22,091,325
2015		22,488,690
2016		22,964,927
2017		23,470,940
Thereafter		126,034,377
	$	227,962,086

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Net loss	$ (2,829,402)	$ (1,126,107)	$ (6,638,750)	$ (3,539,407)
Other comprehensive income:
Unrealized gain on derivative financial instrument	211,166		130,754
Total other comprehensive income	211,166		130,754
Comprehensive loss	$ (2,618,236)	$ (1,126,107)	$ (6,507,996)	$ (3,539,407)

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Related Party Arrangements - Additional Information (Detail) (USD $) Share data in Millions, unless otherwise specified	1 Months Ended	3 Months Ended		6 Months Ended
	Jun. 30, 2013 acre	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013 sqft RenewalOptions	Jun. 30, 2012	Mar. 31, 2013	Dec. 31, 2012
Related Party Transaction [Line Items]
Annualized return of investment				6.00%
Asset management fees		$ 598,034	$ 210,125	$ 1,586,654	$ 280,167
Expense under Support Agreement		500,000		500,000
Shares Based Payments to Non-Employees				0.05
Operating expenses reimbursement as percentage average invested assets				2.00%
Operating expenses reimbursement as percentage of net income				25.00%
Area of land acquired for development				22,000
Initial term of triple net lease agreements				10 years
Additional five-year renewal options				4
Number of years under each renewal option				5 years
Purchase of land	1,800,000
Total construction loan	6,200,000	6,200,000		6,200,000		25,300,000
Acres of Land purchased for development	2.8
Operating Losses due to involvement with VIE	1,800,000	1,800,000		1,800,000
Note receivable from related party	1,812,891	1,812,891		1,812,891
Establishment of interest reserve account	1,392,682	1,392,682		1,392,682			609,908
Bank Deposits	400,000	400,000		400,000			100,000
Deferred Amount
Related Party Transaction [Line Items]
Asset management fees		500,000		500,000
Interest Reserve | ADC Loan
Related Party Transaction [Line Items]
Establishment of interest reserve account	300,000	300,000		300,000
Fair Value
Related Party Transaction [Line Items]
Note receivable from related party	$ 1,800,000	$ 1,800,000		$ 1,800,000
Minimum
Related Party Transaction [Line Items]
Initial term of triple net lease agreements				10 years

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CONDENSED CONSOLIDATED BALANCE SHEETS (USD $)	Jun. 30, 2013	Dec. 31, 2012
Real estate assets:
Real estate investment properties, net (including VIEs $16,943,329 and $0, respectively)	$ 292,822,471	$ 230,410,959
Real estate under development, including land (including VIEs $16,597,176 and $8,399,079, respectively)	16,844,776	8,461,571
Total real estate assets, net	309,667,247	238,872,530
Investment in unconsolidated entities	75,267,852	64,560,061
Cash (including VIEs $28,989 and $8,734, respectively)	55,114,656	18,261,750
Intangibles, net (including VIEs $457,158 and $0, respectively)	9,279,426	7,024,470
Deposits	4,594,213	282,079
Loan costs, net (including VIEs $746,272 and $548,157, respectively)	3,973,359	3,338,286
Other assets (including VIEs $4,876 and $230,536, respectively)	3,733,726	3,984,849
Note receivable from related party	1,812,891
Deferred rent (including VIEs $8,615 and $0, respectively)	1,679,718	843,370
Restricted cash (including VIEs $236,590 and $236,000, respectively)	1,392,682	609,908
Total assets	466,515,770	337,777,303
LIABILITIES AND STOCKHOLDERS' EQUITY
Mortgage and other notes payable (including VIEs $14,559,761 and $2,000, respectively)	169,857,272	193,151,591
Accounts payable and accrued expenses (including VIEs $2,377,260 and $318,047, respectively)	6,661,602	2,685,000
Due to related parties (including VIEs $90,279 and $71,482, respectively)	2,528,097	1,289,880
Total liabilities	179,046,971	197,126,471
Commitments and contingencies (Note 14)
Stockholders' equity:
Preferred stock, $0.01 par value per share, 200,000,000 shares authorized and unissued
Excess shares, $0.01 par value per share, 300,000,000 shares authorized and unissued
Common stock, $0.01 par value per share, 1,120,000,000 shares authorized; 36,611,960 and 18,447,553 shares issued and 36,556,511 and 18,446,504 shares outstanding as of June 30, 2013 and December 31, 2012, respectively	365,552	184,467
Capital in excess of par value	314,322,207	156,199,995
Accumulated loss	(19,119,088)	(12,480,338)
Accumulated other comprehensive income	130,754
Accumulated distributions	(8,230,626)	(3,253,292)
Total stockholders' equity	287,468,799	140,650,832
Total liabilities and stockholders' equity	$ 466,515,770	$ 337,777,303

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Operating Leases - Additional Information (Detail) (USD $)	6 Months Ended
	Jun. 30, 2013 Property Contract
Operating Leased Assets [Line Items]
Real estate investment properties, percentage leased under operating leases	100.00%
Initial term of triple net lease agreements	10 years
Number of renewal options	2
Period of renewal options	5 years
Aggregate minimum annual rent	$ 5,540,000
Average effective annual rental per usable bed	7,100
Lease rate in initial lease year	9.75%
Annual capital reserve income paid to the company, per bed	500
Total annualized property tax	1,400,000
Number of real estate investment properties owned	17
LaPorte Cancer Center
Operating Leased Assets [Line Items]
Initial term of triple net lease agreements	20 years
Lease, expiration date	Oct. 31, 2030
Initial term of property management	2 years
Period of automatic renewal	1 year
Base rent of operating lease	$ 1,040,000
Single Tenant Properties
Operating Leased Assets [Line Items]
Number of real estate investment properties acquired	7
Real estate investment properties, percentage leased under operating leases	100.00%

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Subsequent Events - Additional Information (Detail) (USD $)	3 Months Ended		6 Months Ended		1 Months Ended		6 Months Ended	1 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012	Jul. 31, 2013 Distribution Declared	Aug. 02, 2013 Distribution Declared	Jun. 30, 2013 Distribution Declared	Jul. 31, 2013 Subsequent Event Leases	Jul. 10, 2013 Subsequent Event Location Building	Jul. 31, 2013 Subsequent Event Minimum	Jul. 31, 2013 Subsequent Event Maximum	Jul. 10, 2013 Subsequent Event Five-year credit facility	Jul. 10, 2013 Subsequent Event Five-year credit facility Funded upon final lender approval	Jul. 10, 2013 Subsequent Event Five-year credit facility Knoxville Medical Office Buildings	Aug. 02, 2013 Subsequent Event Additional Subscription Proceeds
Subsequent Event [Line Items]
Monthly cash distribution					$ 0.03333	$ 0.03333
Monthly stock distribution, shares					0.002500	0.002500
Cash and stock distribution to be paid and distributed, date							Sep. 30, 2013
Additional subscription received															$ 37,700,000
Additional subscription proceeds received, shares															3,800,000
Sale of joint venture membership interest								61,800,000
Gain from sale of joint venture membership interest								4,500,000
Number of acquisitions									4
Aggregate purchase price			69,455,100						57,315,000
Number of locations Knoxville MOB's are located									3
Percentage leased under operating leases	100.00%		100.00%					100.00%
Non-cancelable lease, expiration year										2013	2021
Number of non-cancelable leases								32
Credit facility , period												5 years
Credit facility, aggregate principal amount												38,600,000
Proceeds from line of credit													3,500,000	35,100,000
Credit facility, interest rate												2.50%
Credit facility, maturity date												Jul. 10, 2018
Acquisition related expenses	$ 2,365,781	$ 75,772	$ 2,944,307	$ 1,975,185					$ 1,100,000

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Aggregate Carrying Amount and Major Classifications of Consolidated Assets and Liabilities (Detail) (USD $)	Jun. 30, 2013	Dec. 31, 2012
Variable Interest Entity [Line Items]
Real estate investment properties, net	$ 292,822,471	$ 230,410,959
Intangibles, net	9,279,426	7,024,470
VIEs
Variable Interest Entity [Line Items]
Real estate investment properties, net	16,943,329	0
Intangibles, net	457,158	0
Loan costs, net	204,927
Other	13,751
Mortgages and other notes payable	9,300,000
Accounts payable and accrued expenses	$ 140,625

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Intangibles, net (Tables)

6 Months Ended

Jun. 30, 2013

Schedule of Net Book Value of Intangibles

The gross carrying amount and accumulated amortization of the Company’s intangible assets as of June 30, 2013 are as follows:

	June 30,        2013			December 31,   2012
In place lease intangibles	$	10,394,805		$	7,165,333
Less: accumulated amortization		(1,115,379	)		(140,863	)
Intangibles, net	$	9,279,426		$	7,024,470

Schedule of Estimated Future Amortization

The estimated future amortization for the Company’s intangible assets as of June 30, 2013 was as follows:

2013	$	1,074,674
2014		2,149,349
2015		1,357,749
2016		566,149
2017		566,149
Thereafter		3,565,356
	$	9,279,426

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Concentration of Credit Risk

6 Months Ended

Jun. 30, 2013

Concentration of Credit Risk

15. Concentration of Credit Risk

Arkansas SNF, the tenant of the Perennial SNFs acquired in May 2013, accounted for approximately 12.1% of total assets as of June 30, 2013. In addition, TSMM Management, the tenant of the Primrose I and Primrose II Communities, accounted for approximately 32.1% and 46.9% of total assets as of June 30, 2013 and December 31, 2012, respectively. Failure of either tenant to pay contractual lease payments could significantly impact the Company’s results of operations and cash flow from operations which, in turn would impact its ability to pay debt service and make distributions to stockholders.

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Schedule of Unaudited Proforma Results of Operations (Detail) (USD $)	3 Months Ended				6 Months Ended
	Jun. 30, 2013		Jun. 30, 2012		Jun. 30, 2013		Jun. 30, 2012
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items]
Revenues	$ 10,963,230		$ 4,858,933		$ 21,703,963		$ 9,744,721
Net loss	$ (845,210)	[1]	$ (560,651)	[1]	$ (3,743,104)	[1]	$ (3,927,082)	[1]
Income (loss) per share of common stock (basic and diluted)	$ (0.02)		$ (0.07)		$ (0.12)		$ (0.39)
Weighted average number of shares of common stock outstanding (basic and diluted)	34,903,153	[2]	7,617,081	[2]	31,361,964	[2]	10,121,510	[2]

[1] The pro forma results for the quarter and six months ended June 30, 2013, were adjusted to exclude approximately $3.2 million of acquisition related expenses directly attributable to the acquisition of the eleven properties, of which approximately $1.8 million was included in the condensed consolidated statement of operations for the quarter and six months ended June 30, 2013, and approximately $1.4 million was incurred subsequently in July 2013. The pro forma results for the quarter and six months ended June 30, 2012 were adjusted to include these charges as if the properties had been acquired on January 1, 2012.

[2] As a result of the properties being treated as operational since January 1, 2012, the Company assumed approximately 5.1 million shares were issued as of January 1, 2012. Consequently the weighted average shares outstanding was adjusted to reflect this amount of shares being issued on January 1, 2012 instead of actual dates on which the shares were issued, and such shares were treated as outstanding as of the beginning of the period presented.

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Commitments and Contingencies - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	1 Months Ended
	Jun. 30, 2013 Building
Commitments and Contingencies [Line Items]
Amount of additional money to fund to construction loan	$ 4.4
Number of Acquisitions	6
Earnest money deposit	$ 2.0

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Summarized Operating Data of Unconsolidated Entities Income Statement (Detail) (USD $)	3 Months Ended				6 Months Ended
	Jun. 30, 2013		Jun. 30, 2012		Jun. 30, 2013		Jun. 30, 2012
Schedule of Equity Method Investments [Line Items]
Revenues	$ 15,145,872				$ 28,199,230
Operating income (loss)	3,961,307		(1,372,635)	[1]	7,434,391		(1,372,635)	[1]
Net income (loss)	115,027		(1,433,935)	[1]	(776,953)		(1,433,935)	[1]
Income (loss) allocable to other venture partners	(1,090,762)	[2]	(660,307)	[1],[3]	(2,284,124)	[2]	(660,307)	[1],[3]
Income (loss) allocable to the Company	1,205,789	[2]	(773,628)	[1],[3]	1,507,171	[2]	(773,628)	[1],[3]
Amortization of capitalized acquisition costs	(24,037)				(47,036)
Equity (loss) in earnings of unconsolidated entities	1,181,752		(773,628)	[1]	1,460,135		(773,628)	[1]
Distributions declared to the Company	1,855,446				3,512,836
Distributions received by the Company	1,661,595				3,178,624
Montecito Joint Venture
Schedule of Equity Method Investments [Line Items]
Revenues	452,712	[4]			808,741	[4]
Operating income (loss)	158,276	[4],[5]			(55,125)	[4],[5]
Net income (loss)	54,486	[4]			(238,559)	[4]
Income (loss) allocable to other venture partners	5,447	[2],[4]			(23,856)	[2],[4]
Income (loss) allocable to the Company	49,039	[2],[4]			(214,703)	[2],[4]
Amortization of capitalized acquisition costs	(1,876)	[4]			(3,813)	[4]
Equity (loss) in earnings of unconsolidated entities	47,163	[4]			(218,516)	[4]
Distributions declared to the Company	342,158	[4]			342,158	[4]
CHTSunIV
Schedule of Equity Method Investments [Line Items]
Revenues	12,183,182	[6]			24,107,268	[6]
Operating income (loss)	3,877,329	[6]			7,483,713	[6]
Net income (loss)	379,551	[6]			(46,380)	[6]
Income (loss) allocable to other venture partners	(507,556)	[2],[6]			(1,365,854)	[2],[6]
Income (loss) allocable to the Company	887,107	[2],[6]			1,319,474	[2],[6]
Amortization of capitalized acquisition costs	(18,174)	[6]			(36,347)	[6]
Equity (loss) in earnings of unconsolidated entities	868,933	[6]			1,283,127	[6]
Distributions declared to the Company	1,507,987	[6]			2,990,282	[6]
Distributions received by the Company	1,486,500	[6]			2,954,639	[6]
Windsor Manor
Schedule of Equity Method Investments [Line Items]
Revenues	2,509,978				3,283,221
Operating income (loss)	(74,298)				5,803
Net income (loss)	(319,010)				(492,014)
Income (loss) allocable to other venture partners	(588,653)	[2]			(894,414)	[2]
Income (loss) allocable to the Company	269,643	[2]			402,400	[2]
Amortization of capitalized acquisition costs	(3,987)				(6,876)
Equity (loss) in earnings of unconsolidated entities	265,656				395,524
Distributions declared to the Company	5,301				180,396
Distributions received by the Company	$ 175,095				$ 223,985

[1] Represents operating data from the date of acquisition through the end of the period presented.

[2] Income (loss) is allocated between the Company and its joint venture partner using the HLBV method of accounting.

[3] Income is allocated between the Company and its joint venture partner using the HLBV method of accounting.

[4] Represents operating results from the date of acquisition through the end of the periods presented.

[5] Includes approximately $0.1 and $0.5 million of non-recurring acquisition expenses incurred by the joint venture for the quarter and six months ended June 30, 2013.

[6] In July 2013, the Company completed its sale of its joint venture membership interest in CHTSunIV. Refer to Note 16, "Subsequent Events," for additional information.

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Schedule of Future Principal Maturities (Detail) (USD $)	Jun. 30, 2013
Schedule Of Future Minimum Rental Payments For Operating Leases [Line Items]
Total	$ 1,812,891
Crosland Southeast (land development)
Schedule Of Future Minimum Rental Payments For Operating Leases [Line Items]
2013
2014	1,773,008
2015
2016
2017
Thereafter
Total	$ 1,773,008

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Summary of Significant Accounting Policies - Additional Information (Detail) (USD $) Share data in Millions, unless otherwise specified	3 Months Ended	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2013
Share-based Goods and Nonemployee Services Transaction [Line Items]
Shares expected to be issued in third quarter of 2013		0.05
Expense support of shares issuable	$ 500,000	$ 500,000
Annualized return of investment		6.00%
Restricted Stock
Share-based Goods and Nonemployee Services Transaction [Line Items]
Fair value of compensation expense		$ 0

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Stockholders' Equity (Tables)

6 Months Ended

Jun. 30, 2013

Effect of Derivative Financial Instruments

The following table reflects the effect of derivative financial instruments held through the Company’s equity method investment in the Montecito Joint Venture on the condensed consolidated statements of comprehensive loss for the quarters and six months ended June 30, 2013 and 2012, respectively:

Derivative         Financial         Instrument	Gain recognized in other comprehensive income on derivative financial instrument (Effective Portion)				Location of gain (loss) reclassified into earnings   (Effective Portion)	Gain (loss) reclassified from AOCI into earnings (Effective Portion)
	Quarter ended					Quarter ended
	June 30,   2013		June 30,   2012			June 30,   2013		June 30,   2012
Montecito Swap	$	211,166	$	—	Not applicable	$	—	$	—
Total	$	211,166	$	—		$	—	$	—

Derivative        Financial        Instrument	Gain recognized in        other comprehensive        income on  derivative financial instrument (Effective Portion)				Location of gain (loss) reclassified into earnings   (Effective Portion)	Gain (loss) reclassified from AOCI into earnings (Effective Portion)
	Six months ended					Six months ended
	June 30,   2013		June 30,   2012			June 30,   2013		June 30,   2012
Montecito Swap	$	130,754	$	—	Not applicable	$	—	$	—
Total	$	130,754	$	—		$	—	$	—

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Income Taxes (Tables)

6 Months Ended

Jun. 30, 2013

Components of Benefit or Provision for Income Taxes

The components of the income tax expense for the quarter and six months ended June 30, 2013 are as follows:

	Quarter     Ended June 30, 2013			Six Months     Ended June 30, 2013
Current:
Federal	$	—		$	13,312
State		—			—
Total current benefit		—			13,312
Deferred:
Federal		(25,450	)		(25,450	)
State		(5,935	)		(5,935	)
Total deferred provision		(31,385	)		(31,385	)
Income tax expense	$	(31,385	)	$	(18,073	)

Significant Components of Deferred Tax Assets

Significant components of the Company’s deferred tax assets as of June 30, 2013 are as follows:

Carryforwards of net operating loss	$	194,812
Prepaid rent		150,424
Valuation allowance		(345,236	)
Net deferred tax assets	$	—

Reconciliation of Income Taxes

A reconciliation of taxes computed at the statutory federal tax rate on income before income taxes to the benefit (provision) for income taxes is as follows:

	Six months ended June 30,
	2013			2012
Tax expense computed at federal statutory rate	$	(2,323,563)	(35.00%)	$	(1,238,792)	(35.00%)
State income tax provision, net		(5,935)	(0.09%)		—	0%
Benefit of REIT election		2,311,425	34.82%		1,238,792	35.00%
Income tax benefit (provision)	$	(18,073)	(0.27%)	$	—	0%

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Intangibles, net

6 Months Ended

Jun. 30, 2013

Intangibles, net

5. Intangibles, net

The gross carrying amount and accumulated amortization of the Company’s intangible assets as of June 30, 2013 are as follows:

	June 30,        2013			December 31,   2012
In place lease intangibles	$	10,394,805		$	7,165,333
Less: accumulated amortization		(1,115,379	)		(140,863	)
Intangibles, net	$	9,279,426		$	7,024,470

Amortization expense on the Company’s intangible assets was approximately $0.5 million and $1.0 million for the quarter and six months ended June 30, 2013, respectively; and approximately $0.04 million and $0.06 million for the quarter and six months ended June 30, 2012, respectively.

The estimated future amortization for the Company’s intangible assets as of June 30, 2013 was as follows:

2013	$	1,074,674
2014		2,149,349
2015		1,357,749
2016		566,149
2017		566,149
Thereafter		3,565,356
	$	9,279,426

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Schedule of Amounts Due to Related Parties (Detail) (USD $)	Jun. 30, 2013	Dec. 31, 2012
Transactions with Third Party [Line Items]
Selling commissions	$ 329,143	$ 102,656
Marketing support fees	304,027	136,337
Due To Related Party Fees And Commissions, Total	633,170	238,993
Asset management fees	633,297
Reimbursable operating expenses	723,182	242,293
Reimbursable offering costs	217,474	356,463
Due To Related Party Reimbursable Costs Current And Noncurrent, Total	1,573,953	598,756
Due to related parties	2,528,097	1,289,880
Property manager
Transactions with Third Party [Line Items]
Property management fees	320,974	452,131
Property management fees	$ 320,974	$ 452,131

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Operating Leases (Tables)

6 Months Ended

Jun. 30, 2013

Schedule of Future Minimum Lease Payments

The following is a schedule of future minimum lease payments to be received under non-cancellable operating leases for the remainder of 2013 and each of the next four years and thereafter, in the aggregate, as of June 30, 2013:

2013	$	10,911,827
2014		22,091,325
2015		22,488,690
2016		22,964,927
2017		23,470,940
Thereafter		126,034,377
	$	227,962,086

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Schedule of Purchase Price Allocation (Detail) (USD $)	Jun. 30, 2013		Jun. 30, 2012
Schedule of Business Acquisitions, Purchase Price Allocation [Line Items]
Land and land improvements	$ 2,999,600		$ 5,746,081
Buildings and building improvements	59,693,800		75,680,273
Furniture and equipment	3,549,000		933,313
In place lease intangibles	3,212,700	[1]	1,690,333	[1]
Total Purchase Price Allocation	$ 69,455,100		$ 84,050,000

[1] At the acquisition date, the weighted-average amortization period on the acquired lease intangibles was approximately 11.4 years and 10 years, respectively.

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Indebtedness

6 Months Ended

Jun. 30, 2013

Indebtedness

8. Indebtedness

In March 2013, the Company extinguished the outstanding balance of $40 million of its mezzanine loan prior to its scheduled expiration. In connection therewith, the Company wrote-off approximately $0.2 million in unamortized loan costs as interest expense and loss on the early extinguishment of debt. Both the unamortized loan costs and the exit fee are included in interest expense and loan cost amortization in the accompanying condensed consolidated statement of operations for the six months ended June 30, 2013. In addition, the Company paid an exit fee of $0.8 million or 2.0% upon extinguishment of the CHTSunIV mezzanine loan.

During the six months ended June 30, 2013, the Company repaid approximately $75 million (including $25.3 million that was re-advanced in March 2013 pursuant to a loan modification) on the Primrose II bridge loan of which approximately $23.5 million was funded with permanent financing obtained during the period.

In May 2013, the Company obtained long-term financing for two of the five Primrose II Communities located in Decatur, Illinois and Zanesville, Ohio. Each of these properties entered into a combined loan and security agreement with an aggregate original principal amount of approximately $23.5 million (collectively, the “Primrose II Loans”). The Company has guaranteed the Primrose II Loans pursuant to standard non-recourse carve-out guarantees. Interest on the outstanding principal balance of the Primrose II Loans accrues at a fixed rate of 3.81% per annum. Beginning on July 1, 2013, the Primrose II Loans are payable in equal monthly installments of principal and interest based on a 30-year amortization schedule, with all outstanding principal, plus all accrued and unpaid interest, due and payable on June 1, 2020.

In May 2013, in connection with the Perennial SNFs acquisition, the Company entered into a secured non-recourse loan agreement for a three-year term loan in the aggregate principal amount of $30.0 million (the “Perennial Loan”). The Perennial Loan matures on May 31, 2016 and may be prepaid in whole or in part without penalty except for any breakage costs. Interest on the outstanding principal balance of the Perennial Loan accrues at a rate equal to LIBOR plus 4.25%. In addition to each monthly interest payment, the Company is required to make monthly principal payments commencing May 10, 2015 through the maturity date in an amount sufficient to amortize the loan on a 25-year schedule at a per annum rate of 6%.

In June 2013, in connection with the LaPorte Cancer Center acquisition, the Company entered into a non-recourse loan agreement for $8.5 million, which matures on June 14, 2028 (“LaPorte Loan”). The loan bears interest at a rate of 4.25% for the first seven years and, thereafter, at a rate subject to changes in an independent index which is the weekly average yield on the 7-year International SWAPs and Derivatives Association (“ISDA”) mid-market par SWAP rates.

The Company’s loans contain customary affirmative, negative and financial covenants including limitations on incurrence of additional indebtedness, minimum occupancy at the properties, debt service coverage and minimum tangible net worth. As of June 30, 2013, the Company was in compliance with the aforementioned financial covenants.

Maturities of indebtedness for the remainder of 2013 and each of the next four years and thereafter, in the aggregate, as of June 30, 2013 were as follows:

2013	$	1,491,674
2014		3,087,301
2015		3,634,960
2016		33,059,855
2017		8,618,368
Thereafter		119,965,114
	$	169,857,272

The fair value and carrying value of mortgage and other notes payable were approximately $159.2 million and $169.9 million as of June 30, 2013, respectively, and both were approximately $193.2 million as of December 31, 2012 based on then-current rates and spreads the Company would expect to obtain for similar borrowings. Since this methodology includes inputs that are less observable by the public and are not necessarily reflected in active markets, the measurement of the estimated fair values related to the Company’s mortgage note payable is categorized as level 3 on the three-level fair value hierarchy. The estimated fair value of accounts payable and accrued expenses approximates the carrying value as of June 30, 2013 and December 31, 2012 because of the relatively short maturities of the obligations.

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Reconciliation of Income Taxes (Detail) (USD $)	3 Months Ended	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2013	Jun. 30, 2012
Reconciliation Of Income Taxes [Line Items]
Tax expense computed at federal statutory rate		$ (2,323,563)	$ (1,238,792)
State income tax provision, net		(5,935)
Benefit of REIT election		2,311,425	1,238,792
Income tax benefit (provision)	$ (31,385)	$ (18,073)
Tax expense computed at federal statutory rate		(35.00%)	(35.00%)
State income tax provision, net		(0.09%)	0.00%
Benefit of REIT election		34.82%	35.00%
Income tax benefit (provision)		(0.27%)	0.00%

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Real Estate Investment Properties, net

6 Months Ended

Jun. 30, 2013

Real Estate Investment Properties, net

4. Real Estate Investment Properties, net

As of June 30, 2013 and December 31, 2012, real estate investment properties consisted of the following:

	June 30,              2013			December 31,   2012
Land and land improvements	$	19,178,506		$	16,162,081
Building and building improvements		271,020,835			211,321,273
Equipment		8,492,935			4,887,313
Less: accumulated depreciation		(5,869,805	)		(1,959,708	)
Real estate investment properties, net		292,822,471			230,410,959
Real estate under development, including land		16,844,776			8,461,571
Total real estate assets, net	$	309,667,247		$	238,872,530

Depreciation expense on the Company’s real estate investment properties, net was approximately $2.1 million and $3.9 million for the quarter and six months ended June 30, 2013, respectively; and approximately $0.6 million and $0.8 million for the quarter and six months ended June 30, 2012, respectively.

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CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) (USD $)	6 Months Ended	12 Months Ended
	Jun. 30, 2013	Dec. 31, 2012
Cash distributions, declared and paid per share	$ 0.19998	$ 0.39996

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Schedule of Future Minimum Lease Payments (Detail) (USD $)	Jun. 30, 2013
Long-term Purchase Commitment [Line Items]
2013	$ 10,911,827
2014	22,091,325
2015	22,488,690
2016	22,964,927
2017	23,470,940
Thereafter	126,034,377
Total	$ 227,962,086

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Real Estate Investment Properties Net - Additional Information (Detail) (Real Estate Investment Properties, USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Real Estate Investment Properties
Real Estate Properties [Line Items]
Depreciation expense	$ 2.1	$ 0.6	$ 3.9	$ 0.8

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Related Party Arrangements (Tables)

6 Months Ended

Jun. 30, 2013

Related Party Arrangement, Fees and Expenses Incurred

For the quarters and six months ended June 30, 2013 and 2012, the Company incurred the following fees and reimbursable expenses as follows:

	Quarter ended June 30,				Six months ended June 30,
	2013		2012		2013		2012
Reimbursable expenses:
Offering costs	$	1,244,417	$	2,022,653	$	2,022,147	$	3,427,346
Operating expenses		744,116		407,337		1,348,268		824,043
	$	1,988,533	$	2,429,990	$	3,370,415	$	4,251,389
Investment services fees (1)	$	1,545,768	$	2,301,311	$	1,866,281	$	3,856,236
Property management fees (2)		320,974		33,137		583,767		49,215
Asset management fees (3)		633,297		210,125		1,633,817		280,167
Total reimbursable expenses, net	$	2,500,039	$	2,544,573	$	4,083,865	$	4,185,618

FOOTNOTES:

⁽¹⁾  For the quarter and six months ended June 30, 2013, the Company incurred approximately $1.5 million and $1.9 million, respectively, in investment service fees of which approximately $0.2 and $0.5 million, respectively, were capitalized as part of its investment basis in the Montecito Joint Venture and the additional Windsor Manor II Communities. For the quarter and six months ended June 30, 2012, the Company incurred approximately $2.3 million and $3.9 million, respectively, in investment services fees of which approximately $2.3 million and $2.3 million, respectively, were capitalized as part of its investment basis in the CHTSunIV joint venture.

⁽²⁾  For the quarter and six months ended June 30, 2013, the Company incurred approximately $0.3 million and $0.6 million in property and construction management fees of which $0.06 and $0.08 million have been capitalized and included in real estate under development. There were no capitalized property or construction management fees for the quarter and six months ended June 30, 2012.

⁽³⁾  For the quarter and six months ended June 30, 2013, the Company incurred approximately $0.6 million and $1.6 million in asset management fees which is net of approximately $0.5 million in asset management fees that were forgone in accordance with the terms of the Expense Support Agreement for the quarter and six months ended June 30, 2013. For the quarter and six months ended June 30, 2013, the Company capitalized approximately $0.04 and $0.05 million, respectively, in asset management fees and included in real estate under development. There were no asset management fees forgone or capitalized for the quarter and six months ended June 30, 2012. See description of the Expense Support Agreement above for additional information.

Funding on ADC Loan as Note Receivable from Related Parties

The approximate $1.8 million of funding on the ADC Loan has been recorded as a note receivable from related party in the accompanying condensed consolidated balance sheet as of June 30, 2013 and is comprised of the following:

				Loan Principal Balance as of
Borrower (Description of Collateral Property)	Origination   Date	Maturity   Date (1)	Interest   Rate (2)	June 30, 2013		December 31,  2012
Crosland Southeast (land development)	6/27/2013	6/27/2014	16.0%	$	1,773,008	$	—
Loan origination costs					37,519		—
Accrued interest (3)					2,364		—
Total carrying amount				$	1,812,891	$	—

  FOOTNOTES:

(1) The initial term of the ADC Loan is one year with an extension option of up to six months.

(2) The interest rate is comprised of an 8% component that is paid monthly and an 8% component that is paid upon maturity of the ADC Loan.

(3) This amount is included in Other revenues in the accompanying condensed statements of operations for the quarter and six months ended June 30, 2013.

Schedule of Future Principal Maturities

The following is a schedule of future principal maturities for the note receivable from related party for the remainder of 2013 and each of the next four years and thereafter, in the aggregate, as of June 30, 2013:

2013	$	—
2014		1,773,008
2015		—
2016		—
2017		—
Thereafter		—
Total	$	1,773,008

Public Offering

Related Party Arrangement, Fees and Expenses Incurred

For the quarters and six months ended June 30, 2013 and 2012, the Company incurred the following fees in connection with its Offering:

	Quarter ended June 30,				Six months ended June 30,
	2013		2012		2013		2012
Selling commissions	$	2,221,835	$	2,510,749	$	3,917,433	$	4,432,183
Marketing support fees		3,039,569		1,217,197		5,210,451		2,040,669
Total Offering expenses	$	5,261,404	$	3,727,946	$	9,127,884	$	6,472,852

Property manager

Related Party Arrangement, Fees and Expenses Incurred

Amounts due to related parties for fees and reimbursable costs and expenses were as follows as of:

	June 30,         2013		December 31,    2012
Due to managing dealer:
Selling commissions	$	329,143	$	102,656
Marketing support fees		304,027		136,337
		633,170		238,993
Due to property manager:
Property management fees		320,974		452,131
		320,974		452,131
Due to the Advisor and its affiliates:
Asset management fees		633,297		—
Reimbursable operating expenses		723,182		242,293
Reimbursable offering costs		217,474		356,463
		1,573,953		598,756
	$	2,528,097	$	1,289,880

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Derivative Financial Instruments - Additional Information (Detail) (Montecito Joint Venture, Interest Rate Swap, USD $)	6 Months Ended
	Jun. 30, 2013
Derivative [Line Items]
Derivative contract, inception date	Jan. 17, 2013
Derivative contract, fixed interest rate	1.335%	[1]
Notional amount of derivative contract	$ 12,421,349
Minimum
Derivative [Line Items]
Fixed interest rate, base period	2015-01
Maximum
Derivative [Line Items]
Fixed interest rate, base period	2018-01

[1] The all-in rate will be equal to 3.935%, which includes a credit spread of 2.6%.

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Fees in Connection with Offering (Detail) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Related Party Transaction [Line Items]
Selling commissions	$ 2,221,835	$ 2,510,749	$ 3,917,433	$ 4,432,183
Marketing support fees	3,039,569	1,217,197	5,210,451	2,040,669
Total Offering expenses	$ 5,261,404	$ 3,727,946	$ 9,127,884	$ 6,472,852

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Stockholders' Equity

6 Months Ended

Jun. 30, 2013

Stockholders' Equity

11. Stockholders’ Equity

Public Offering — As of June 30, 2013 and December 31, 2012, the Company had received aggregate offering proceeds of approximately $358.8 million (36.6 million shares) and $181.6 million (18.5 million shares), respectively, including approximately $4.4 million (0.5 million shares) and $1.7 million (0.2 million shares), respectively, received through its distribution reinvestment plan.

Distributions — During the six months ended June 30, 2013 and 2012, the Company declared cash distributions of approximately $5.0 million and $0.8 million, respectively. In addition, the Company declared and made stock distributions of 373,303 and 56,931 shares of common stock for the six months ended June 30, 2013 and 2012, respectively.

For the six months ended June 30, 2013 and 2012, 100% of distributions were considered a return of capital for federal income tax purposes. No amounts distributed to stockholders for the six months ended June 30, 2013 were required to be or have been treated by the Company as a return of capital for purposes of calculating the stockholders’ return on their invested capital as described in the Company’s advisory agreement. The distribution of new common shares to recipients is non-taxable.

Other comprehensive income — The following table reflects the effect of derivative financial instruments held through the Company’s equity method investment in the Montecito Joint Venture on the condensed consolidated statements of comprehensive loss for the quarters and six months ended June 30, 2013 and 2012, respectively:

Derivative         Financial         Instrument	Gain recognized in other comprehensive income on derivative financial instrument (Effective Portion)				Location of gain (loss) reclassified into earnings   (Effective Portion)	Gain (loss) reclassified from AOCI into earnings (Effective Portion)
	Quarter ended					Quarter ended
	June 30,   2013		June 30,   2012			June 30,   2013		June 30,   2012
Montecito Swap	$	211,166	$	—	Not applicable	$	—	$	—
Total	$	211,166	$	—		$	—	$	—

Derivative        Financial        Instrument	Gain recognized in        other comprehensive        income on  derivative financial instrument (Effective Portion)				Location of gain (loss) reclassified into earnings   (Effective Portion)	Gain (loss) reclassified from AOCI into earnings (Effective Portion)
	Six months ended					Six months ended
	June 30,   2013		June 30,   2012			June 30,   2013		June 30,   2012
Montecito Swap	$	130,754	$	—	Not applicable	$	—	$	—
Total	$	130,754	$	—		$	—	$	—

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Unconsolidated Entities

6 Months Ended

Jun. 30, 2013

Unconsolidated Entities

7. Unconsolidated Entities

In January 2013, the Company acquired a 90% membership interest in a two-story medical office building in Claremont, California for approximately $7.0 million in equity through a joint venture (“Montecito Joint Venture”) formed by the Company and its co-venture partner, an unrelated party, that holds the remaining 10% interest. Under the terms of the venture agreement, operating cash flows will be distributed to the Company and its co-venture partner on a pro rata basis. The Company accounts for this investment under the equity method of accounting because the decisions that significantly impact the entity are shared between the Company and its co-venture partner. The total acquisition price for the medical office building was approximately $19.8 million. The medical office building consists of a single two-story building having a total net rentable area of 48,984 square feet.

The Montecito Joint Venture obtained a five-year credit facility for a maximum aggregate principal amount of $35 million, of which $12.5 million was funded in connection with the acquisition of the medical office building and an additional $0.4 million was funded upon completion of certain tenant improvements. The non-recourse loan which is collateralized by the property and future properties that may be funded under the facility matures in January 2018 and bears interest at a rate equal to the sum of LIBOR plus 2.6% per annum, payable monthly. The loan requires interest-only payments on the outstanding principal amount through July 2014 and monthly payments thereafter of principal and interest based upon a 360-month amortization schedule. In addition, the Montecito Joint Venture further entered into a three-year forward starting swap with a notional amount of $12.4 million related to the credit facility balance which will bear interest at a fixed rate of 3.935% in years three through five. Refer to Note 10, “Derivative Financial Instruments” for additional information.

In April 2013, the Company, through its Windsor Manor joint venture, acquired a 75% membership interest in two additional senior housing properties located in Iowa collectively valued at approximately $12.2 million (the “Windsor Manor II Communities”). The Windsor Manor II Communities feature 82 living units comprised of 62 assisted living units and 20 memory care units. In connection with the acquisition, the Windsor Manor joint venture assumed two non-recourse loans encumbering the Windsor Manor II Communities with total outstanding principal balances of approximately $6.0 million.

For the six months ended June 30, 2013, the Company capitalized approximately $0.5 million of investment service fees and acquisition expenses related to the Company’s investment in the Montecito and Windsor Manor joint ventures. The acquisition fees and expenses create an outside basis difference that are allocated to the assets of the investee and, if assigned to depreciable or amortizable assets, the basis differences are then amortized as a component of equity in earnings (loss) of unconsolidated entities.

In December 2012, in connection with an existing purchase option held by Sunrise Living Investments, Inc. (“Sunrise”) on CHTSunIV, another unconsolidated entity, the Company entered into a sale agreement with Health Care REIT, Inc. (“HCN”), as result of a potential merger by HCN with Sunrise. Under the agreement, HCN and Sunrise were entitled to purchase the Company’s interest in CHTSunIV for an aggregate purchase price of approximately $62.5 million subject to adjustment based on the closing date and actual cash flow distribution (the “Joint Venture Dispositions”). The Joint Venture Dispositions were conditioned upon the merger of HCN with Sunrise, which was completed in January 2013. The sale of CHTSunIV closed on July 1, 2013 as described in Note 16, “Subsequent Events.”

The following table presents condensed financial information for each of the Company’s unconsolidated entities as of and for the quarter and six months ended June 30, 2013:

	For the quarter ended June 30, 2013
	Montecito(2)			CHTSunIV(4)		Windsor Manor		Total
Revenues	$	452,712		$	12,183,182	$	2,509,978	$	15,145,872
Operating income (loss)	$	158,276	(3)	$	3,877,329	$	(74,298)	$	3,961,307
Net income (loss)	$	54,486		$	379,551	$	(319,010)	$	115,027
Income (loss) allocable to other venture partners (1)	$	5,447		$	(507,556)	$	(588,653)	$	(1,090,762)
Income allocable to the Company (1)	$	49,039		$	887,107	$	269,643	$	1,205,789
Amortization of capitalized acquisition costs		(1,876)			(18,174)		(3,987)		(24,037)
Equity in earnings of unconsolidated entities	$	47,163		$	868,933	$	265,656	$	1,181,752
Distributions declared to the Company	$	342,158		$	1,507,987	$	5,301	$	1,855,446
Distributions received by the Company	$	—		$	1,486,500	$	175,095	$	1,661,595

	For the six months ended June 30, 2013
	Montecito(2)			CHTSunIV(4)		Windsor Manor		Total
Revenues	$	808,741		$	24,107,268	$	3,283,221	$	28,199,230
Operating income (loss)	$	(55,125)	(3)	$	7,483,713	$	5,803	$	7,434,391
Net loss	$	(238,559)		$	(46,380)	$	(492,014)	$	(776,953)
Loss allocable to other venture partners (1)	$	(23,856)		$	(1,365,854)	$	(894,414)	$	(2,284,124)
Income (loss) allocable to the Company (1)	$	(214,703)		$	1,319,474	$	402,400	$	1,507,171
Amortization of capitalized acquisition costs		(3,813)			(36,347)		(6,876)		(47,036)
Equity (loss) in earnings of unconsolidated entities	$	(218,516)		$	1,283,127	$	395,524	$	1,460,135
Distributions declared to the Company	$	342,158		$	2,990,282	$	180,396	$	3,512,836
Distributions received by the Company	$	—		$	2,954,639	$	223,985	$	3,178,624

  FOOTNOTES:

(1) Income (loss) is allocated between the Company and its joint venture partner using the HLBV method of accounting.

(2) Represents operating results from the date of acquisition through the end of the periods presented.

(3) Includes approximately $0.1 and $0.5 million of non-recurring acquisition expenses incurred by the joint venture for the quarter and six months ended June 30, 2013.

(4) In July 2013, the Company completed its sale of its joint venture membership interest in CHTSunIV. Refer to Note 16, “Subsequent Events,” for additional information.

The following tables present financial information for the Company’s unconsolidated entities as of and for the quarter and six months ended June 30, 2012:

	Quarter ended   June 30, 2012 (2)			Six months ended   June 30, 2012 (2)
Revenues	$	—		$	—
Operating loss	$	(1,372,635	)	$	(1,372,635	)
Net loss	$	(1,433,935	)	$	(1,433,935	)
Loss allocable to other venture partners (1)	$	(660,307	)	$	(660,307	)
Loss allocable to the Company (1)	$	(773,628	)	$	(773,628	)
Amortization of capitalized acquisition costs		—			—
Loss in earnings of unconsolidated entities	$	(773,628	)	$	(773,628	)

FOOTNOTES:

(1) Income is allocated between the Company and its joint venture partner using the HLBV method of accounting.

(2) Represents operating data from the date of acquisition through the end of the period presented.

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Amounts Related to Interest Rate Swap Included in Unconsolidated Entities in Condensed Consolidated Balance Sheet (Parenthetical) (Detail)	Jun. 30, 2013
Derivative [Line Items]
Total interest rate	3.935%
Credit spread rate	2.60%

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2013

Commitments and Contingencies

14. Commitments and Contingencies

In the ordinary course of business, the Company may become subject to litigation or claims. There are no material legal proceedings pending or known to be contemplated against the Company.

Refer to Note 9, “Related Party Arrangements,” for information on contingent restricted stock shares due to the Company’s Advisor in connection with the Expense Support Agreement and the Company’s commitment to fund approximately $4.4 million of additional monies to Crosland Southeast in connection with its construction loan for the HCA Rutland development.

In June 2013, the Company entered into an asset purchase agreement to acquire a portfolio of six medical office buildings for which the Company escrowed an earnest money deposit of $2.0 million as of June 30, 2013 and which as of the date of this filing is non-refundable. The acquisition is subject to certain contingencies, including completion of due diligence and obtaining financing satisfactory to the Company. There can be no assurance that any or all contingencies will be satisfied and that the transaction will ultimately be completed, which in either event the deposit would be applied toward the purchase price or forfeited.

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Income Taxes

6 Months Ended

Jun. 30, 2013

Income Taxes

12. Income Taxes

As of June 30, 2013 and December 31, 2012, the Company recorded current deferred tax assets and net current tax benefit (provision) related to deferred income at its TRS. The components of the income tax benefit (provision) as of the six months ended June 30, 2013 and as of December 31, 2012 are as follows:

The components of the income tax expense for the quarter and six months ended June 30, 2013 are as follows:

	Quarter     Ended June 30, 2013			Six Months     Ended June 30, 2013
Current:
Federal	$	—		$	13,312
State		—			—
Total current benefit		—			13,312
Deferred:
Federal		(25,450	)		(25,450	)
State		(5,935	)		(5,935	)
Total deferred provision		(31,385	)		(31,385	)
Income tax expense	$	(31,385	)	$	(18,073	)

The Company recorded a valuation allowance on the deferred tax assets related to its TRS where it was deemed more likely than not that future taxable income would not be sufficient to realize the related income tax benefits.

Deferred income taxes reflect the tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets as of June 30, 2013 are as follows:

Carryforwards of net operating loss	$	194,812
Prepaid rent		150,424
Valuation allowance		(345,236	)
Net deferred tax assets	$	—

A reconciliation of taxes computed at the statutory federal tax rate on income before income taxes to the benefit (provision) for income taxes is as follows:

	Six months ended June 30,
	2013			2012
Tax expense computed at federal statutory rate	$	(2,323,563)	(35.00%)	$	(1,238,792)	(35.00%)
State income tax provision, net		(5,935)	(0.09%)		—	0%
Benefit of REIT election		2,311,425	34.82%		1,238,792	35.00%
Income tax benefit (provision)	$	(18,073)	(0.27%)	$	—	0%

The tax years 2010-2012 remain subject to examination by taxing authorities throughout the United States. The Company analyzed its material tax positions and determined that it has not taken any uncertain tax positions.

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Document and Entity Information	6 Months Ended
	Jun. 30, 2013	Aug. 02, 2013
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2013
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q2
Entity Registrant Name	CNL Healthcare Properties, Inc.
Entity Central Index Key	0001496454
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		40,326,053

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Variable Interest Entities (VIEs)

6 Months Ended

Jun. 30, 2013

Variable Interest Entities (VIEs)

13. Variable Interest Entities (VIEs)

Consolidated VIEs – In conjunction with the acquisition of the Perennial SNFs described in Note 3, “Acquisitions,” the Company acquired six wholly-owned subsidiaries, designed as single property entities to own and lease their respective properties to single tenant operators, of which three of the properties are VIEs due to potential future buy-out options held by the respective tenants that are formula based. Arkansas SNF has an option to purchase the Perennial SNFs that are located in Batesville, Mine Creek and Searcy, Arkansas, which is exercisable during the period from the end of the third year through the end of the fifth year of the related lease period.

The Company determined it is the primary beneficiary and holds a controlling financial interest in each of these entities due to the Company’s power to direct the activities that most significantly impact the economic performance of the entities, as well as its obligation to absorb the losses and its right to receive benefits from these entities that could potentially be significant to these entities. As such, the transactions and accounts of these VIEs are included in the accompanying condensed consolidated financial statements. The Company did not own these entities as of December 31, 2012.

The aggregate carrying amount and major classifications of the consolidated assets that can be used to settle obligations of the VIEs and liabilities of the consolidated VIEs that are non-recourse to the Company are as follows:

	June 30, 2013		December 31, 2012
Assets:
Real estate investment properties, net	$	16,943,329	$	—
Intangibles, net	$	457,158	$	—
Loan costs, net	$	204,927	$	—
Other	$	13,751	$	—
Liabilities:
Mortgages and other notes payable	$	9,300,000	$	—
Accounts payable and accrued expenses	$	140,625	$	—

The Company’s maximum exposure to loss as a result of its involvement with these VIEs is limited to its net investment in these entities which totaled approximately $8.2 million as of June 30, 2013. The Company’s exposure is limited because of the non-recourse nature of the borrowings of the VIEs.

Unconsolidated VIEs - The Company determined that the borrowers under the ADC Loan on the HCA Rutland development represents a VIE due to the transaction structure; refer to Note 9, “Related Party Arrangements” for additional information.

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Schedule of Fees and Reimbursable Expenses (Parenthetical) (Detail) (USD $)	3 Months Ended				6 Months Ended
	Jun. 30, 2013		Jun. 30, 2012		Jun. 30, 2013		Jun. 30, 2012
Related Party Transaction [Line Items]
Investment services fees	$ 1,545,768	[1]	$ 2,301,311	[1]	$ 1,866,281	[1]	$ 3,856,236	[1]
Asset management fees	598,034		210,125		1,586,654		280,167
Expense under Support Agreement	500,000				500,000
Reimbursable expenses
Related Party Transaction [Line Items]
Property management fees capitalized	300,000				600,000
Asset management fees	633,297	[2]	210,125	[2]	1,633,817	[2]	280,167	[2]
Investment service fees capitalized as part of investment
Related Party Transaction [Line Items]
Investment service fees capitalized	200,000		2,300,000		500,000		2,300,000
Construction management fees capitalized	60,000				80,000
Asset management fees capitalized	$ 40,000				$ 50,000

[1] For the quarter and six months ended June 30, 2013, the Company incurred approximately $1.5 million and $1.9 million, respectively, in investment service fees of which approximately $0.2 and $0.5 million, respectively, were capitalized as part of its investment basis in the Montecito Joint Venture and the additional Windsor Manor II Communities. For the quarter and six months ended June 30, 2012, the Company incurred approximately $2.3 million and $3.9 million, respectively, in investment services fees of which approximately $2.3 million and $2.3 million, respectively, were capitalized as part of its investment basis in the CHTSunIV joint venture.

[2] For the quarter and six months ended June 30, 2013, the Company incurred approximately $0.6 million and $1.6 million in asset management fees which is net of approximately $0.5 million in asset management fees that were forgone in accordance with the terms of the Expense Support Agreement for the quarter and six months ended June 30, 2013. For the quarter and six months ended June 30, 2013, the Company capitalized approximately $0.04 and $0.05 million, respectively, in asset management fees and included in real estate under development. There were no asset management fees forgone or capitalized for the quarter and six months ended June 30, 2012. See description of the Expense Support Agreement above for additional information.

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Schedule of Fees and Reimbursable Expenses (Detail) (USD $)	3 Months Ended				6 Months Ended
	Jun. 30, 2013		Jun. 30, 2012		Jun. 30, 2013		Jun. 30, 2012
Related Party Transaction [Line Items]
Offering costs	$ 1,244,417		$ 2,022,653		$ 2,022,147		$ 3,427,346
Operating expenses	744,116		407,337		1,348,268		824,043
Total reimbursable expenses	1,988,533		2,429,990		3,370,415		4,251,389
Investment services fees	1,545,768	[1]	2,301,311	[1]	1,866,281	[1]	3,856,236	[1]
Property management fees	485,786		33,137		941,375		49,515
Asset management fees	598,034		210,125		1,586,654		280,167
Total reimbursable expenses, net	2,500,039		2,544,573		4,083,865		4,185,618
Reimbursable expenses
Related Party Transaction [Line Items]
Property management fees	320,974	[2]	33,137	[2]	583,767	[2]	49,215	[2]
Asset management fees	$ 633,297	[3]	$ 210,125	[3]	$ 1,633,817	[3]	$ 280,167	[3]

[1] For the quarter and six months ended June 30, 2013, the Company incurred approximately $1.5 million and $1.9 million, respectively, in investment service fees of which approximately $0.2 and $0.5 million, respectively, were capitalized as part of its investment basis in the Montecito Joint Venture and the additional Windsor Manor II Communities. For the quarter and six months ended June 30, 2012, the Company incurred approximately $2.3 million and $3.9 million, respectively, in investment services fees of which approximately $2.3 million and $2.3 million, respectively, were capitalized as part of its investment basis in the CHTSunIV joint venture.

[2] For the quarter and six months ended June 30, 2013, the Company incurred approximately $0.3 million and $0.6 million in property and construction management fees of which $0.06 and $0.08 million have been capitalized and included in real estate under development. There were no capitalized property or construction management fees for the quarter and six months ended June 30, 2012.

[3] For the quarter and six months ended June 30, 2013, the Company incurred approximately $0.6 million and $1.6 million in asset management fees which is net of approximately $0.5 million in asset management fees that were forgone in accordance with the terms of the Expense Support Agreement for the quarter and six months ended June 30, 2013. For the quarter and six months ended June 30, 2013, the Company capitalized approximately $0.04 and $0.05 million, respectively, in asset management fees and included in real estate under development. There were no asset management fees forgone or capitalized for the quarter and six months ended June 30, 2012. See description of the Expense Support Agreement above for additional information.