8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of

The Securities Exchange Act of 1934

August 6, 2008

Date of Report (Date of earliest event reported)

NATIONWIDE HEALTH PROPERTIES, INC.

(Exact name of registrant as specified in its charter)

Maryland	1-9028	95-3997619
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

610 Newport Center Drive, Suite 1150, Newport Beach, CA	92660
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code (949) 718-4400

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition.

On August 6, 2008, we issued a press release, which sets forth our results of operations for the quarter and six months ended June 30, 2008. The press release referred to a supplemental information package that is available on our website, free of charge, at www.nhp-reit.com. A copy of the press release and the supplemental information package are attached hereto as Exhibits 99.1 and 99.2, respectively, and are incorporated herein by this reference.

Such information shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and is not incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit Number	Description
99.1	Press release dated August 6, 2008.
99.2	Supplemental information package for the quarter and six months ended June 30, 2008.

SIGNATURE

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 hereunto duly authorized.

	NATIONWIDE HEALTH PROPERTIES, INC.
Date: August 6, 2008	By:	/s/ Abdo H. Khoury
		Abdo H. Khoury
		Executive Vice President and Chief Financial & Portfolio Officer

EX-99.1

Exhibit 99.1

Contact: Abdo H. Khoury Chief Financial and Portfolio Officer (949) 718-4400

NHP REPORTS SECOND QUARTER 2008 EARNINGS

• Revenue Increases 26.7%

• Diluted FFO Per Share Increases 9.8%

• Diluted FAD Per Share Increases 5.8%

• Second Quarter Investments $250 Million

NEWPORT BEACH, CA – August 6, 2008 – Nationwide Health Properties, Inc. (NYSE: NHP) today announced results of operations and investment activity for the second quarter and the six months ended June 30, 2008.

“We continue the momentum from the first quarter, reporting strong operating results for the second quarter of 2008. Compared to the second quarter of 2007, revenue is up 26.7%, diluted FFO per share is up 9.8%, and diluted FAD per share is up 5.8%. In addition to acquiring six medical office buildings from Pacific Medical Buildings for $137 million in April, we purchased two additional medical office buildings from PMB for $61 million in May,” commented Douglas M. Pasquale, NHP’s President and Chief Executive Officer. “Including the PMB purchases, our total investments made in the second quarter totaled $250 million. In April, we completed the sale of 23 facilities to Emeritus Corporation and used a portion of the proceeds to pay off the outstanding balance on our credit facility. Our diluted FAD payout ratio and FAD coverage remain among the strongest in our sector at 80% and 1.25, respectively,” Mr. Pasquale added.

SECOND QUARTER 2008 RESULTS OF OPERATIONS

The following table presents selected financial information for the second quarter and the six months ended June 30, 2008 as compared to the same periods of 2007:

1

SELECTED FINANCIAL DATA

($ in thousands, except per share amounts)

	Three Months Ended June 30,
	2008		2007		$ Change		% Change
Revenue	$	94,017	$	74,181	$	19,836	26.7	%
Income from Continuing Operations	$	27,365	$	20,865	$	6,500	31.2	%
Net Income	$	168,013	$	87,433	$	80,580	92.2	%
Income Available to Common Stockholders Per Diluted Share	$	1.69	$	0.93	$	0.76	81.7	%
Diluted FFO	$	57,806	$	48,576	$	9,230	19.0	%
Diluted FFO Per Share	$	0.56	$	0.51	$	0.05	9.8	%
Diluted FAD	$	56,090	$	49,422	$	6,668	13.5	%
Diluted FAD Per Share	$	0.55	$	0.52	$	0.03	5.8	%
	Six Months Ended June 30,
	2008		2007		$ Change		% Change
Revenue	$	180,216	$	143,761	$	36,455	25.4	%
Income from Continuing Operations	$	51,099	$	41,178	$	9,921	24.1	%
Net Income	$	205,469	$	113,480	$	91,989	81.1	%
Income Available to Common Stockholders Per Diluted Share	$	2.08	$	1.18	$	0.90	76.3	%
Diluted FFO	$	114,099	$	95,287	$	18,812	19.7	%
Diluted FFO Per Share	$	1.12	$	1.01	$	0.11	10.9	%
Diluted FAD	$	110,671	$	96,327	$	14,344	14.9	%
Diluted FAD Per Share	$	1.09	$	1.02	$	0.07	6.9	%

Diluted Funds From Operations (“FFO”) and Diluted Funds Available for Distribution (“FAD”) are non-generally accepted accounting principles (“GAAP”) measures that we believe are important to understanding our operations. We believe diluted FFO is an important supplemental measure of operating performance because it excludes the effects of depreciation and amortization and gains (losses) from sales of facilities (both of which are based on historical costs and which may be of limited relevance in evaluating current performance). We believe diluted FAD is an important supplemental measure of operating performance because, like diluted FFO, it excludes the effects of depreciation and amortization and gains (losses) from sales of facilities (both of which are based on historical costs and which may be of limited relevance in evaluating current performance). It also excludes straight-lined rent and other non-cash items that have become more significant for us and our competitors over the last several years. We believe that net income is the most directly comparable GAAP measure to diluted FFO and diluted FAD. Reconciliations between net income and diluted FFO and net income and diluted FAD are included in the accompanying financial data. For guidance, we have also included in the accompanying financial data reconciliations between net income per share and diluted FFO and FAD per share.

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SECOND QUARTER 2008 INVESTMENT ACTIVITY

The following table summarizes our first quarter and year to date investment activity and details the second quarter 2008 investment activity:

INVESTMENT ACTIVITY 2008

($ in thousands, except per S.F.)

Investment	Q1 Total			Q2 Owned			Q2 Loans			Q2 Total			Year to Date Total
Senior Housing
Number of Facilities		14			1						1			15
Purchase Price	$	52,000		$	20,000					$	20,000		$	72,000
Initial Yield		8.1	%		8.4	%					8.4	%		8.2	%
Long-Term Care
Number of Facilities					6			1			7			7
Purchase Price				$	23,000		$	9,000		$	32,000		$	32,000
Initial Yield					9.2	%		11.1	%		9.8	%		9.8	%
Medical Office
Number of Facilities		1			8						8			9
Purchase Price	$	2,000		$	198,000					$	198,000		$	200,000
Initial Yield		7.4	%		6.2	%					6.2	%		6.2	%
Total
Number of Facilities		15			15			1			16			31
Purchase Price	$	54,000		$	241,000		$	9,000		$	250,000		$	304,000
Initial Yield		8.1	%		6.6	%		11.1	%		6.8	%		7.1	%

Pacific Medical Buildings LLC (“PMB”) Update – In February 2008, we entered into an agreement with PMB and certain of its affiliates to acquire up to 18 multi-tenant medical office buildings, including six that are currently in development, for $747.6 million, including the assumption of approximately $282.6 million of mortgage financing. During the six months ended June 30, 2008, we acquired eight of the 18 multi-tenant medical office buildings located in three states. The purchase price totaled $198.3 million, including the assumption of $96.6 million of mortgage financing and the issuance of 1,470,754 limited partnership units with a value of $47.3 million.

2008 FINANCING TRANSACTIONS

During the second quarter of 2008, we issued 315,000 shares of our common stock through our controlled equity offering program at an average price of $36.38 per share resulting in net proceeds of approximately $11.3 million. Year to date, we have issued 1.2 million shares of our common stock through our controlled equity offering program at an average price of $34.60 per share resulting in net proceeds of approximately $42.6 million.

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On April 2, 2008, we closed on the previously announced sale of 23 facilities to Emeritus Corporation for $305 million. We used a portion of the proceeds, net of the retirement of $56 million of secured debt and $30 million of short-term seller financing, to repay the entire outstanding balance on our credit facility.

2008 GUIDANCE

We are increasing by $0.01 per share the low end of our full-year 2008 diluted FFO guidance of $2.18 per share to $2.19 per share and are maintaining the high end of the range at $2.23 per share. We are increasing by $0.01 per share both the low and high end of our full-year 2008 diluted FAD guidance of $2.10 to $2.14 per share to $2.11 to $2.15 per share. Annualizing our year to date results would result in somewhat higher diluted FFO and diluted FAD per share for the year than the high end of our guidance range; however, such an analysis does not reflect certain other factors that we expect will slightly lower our diluted FFO and diluted FAD per share in future quarters. These factors include the slower than expected reinvestment of proceeds from the sale of the Emeritus assets, the issuance of 451,000 shares of common stock during the second quarter and possible increased capital expenditures and tenant improvements for medical office buildings (“MOBs”) during the remainder of the year. Our guidance includes the additional acquisitions of MOBs from Pacific Medical Buildings as well as expected mortgage loan receivable prepayments and dispositions during 2008 as described in our supplemental information package available on our website. However, while we expect to continue to make accretive acquisitions during 2008, our dilutive FFO and dilutive FAD guidance ranges do not assume any additional acquisitions or investments, impairments or capital transactions.

CONFERENCE CALL INFORMATION

We have scheduled a conference call and webcast on Thursday, August 7, 2008 at 8:30 a.m. Pacific time in order to present our performance and operating results for the quarter and six months ended June 30, 2008. The conference call is accessible by dialing 877-356-5705 and referencing conference ID number 55064086 or by logging on to our website at http://www.nhp-reit.com. The international dial-in number is 706-643-7409. The earnings release and any additional financial information that may be discussed on the conference call will also be available at the same location on our website. A digitized replay of the conference call will be available from 10:30 a.m. Pacific time (1:30 p.m. Eastern time) that day until 9:00 p.m. Pacific time (Midnight Eastern time) on Friday, September 5, 2008. Callers can access the replay by dialing 800-642-1687 or 706-645-9291 and entering conference ID number 55064086. Webcast replays will also be available on our website for at least 12 months following the conference call. Our supplemental information package for the quarter ended June 30, 2008 is available on our website, free of charge, at http://www.nhp-reit.com by selecting “Investor Relations” followed by “Financial Information” and will be included in our Current Report on Form 8-K filed August 6, 2008 with the SEC also containing this release.

4

ABOUT NATIONWIDE HEALTH PROPERTIES, INC.

Nationwide Health Properties, Inc. is a real estate investment trust that invests in senior housing facilities, long-term care facilities and medical office buildings. We have investments in 562 facilities in 43 states. For more information on Nationwide Health Properties, Inc., visit our website at http://www.nhp-reit.com.

FORWARD LOOKING STATEMENTS

Certain information contained in this release includes forward-looking statements. Forward-looking statements include statements regarding our expectations, beliefs, intentions, plans, objectives, goals, strategies, future events or performance and underlying assumptions and other statements which are not statements of historical facts. These statements may be identified, without limitation, by the use of forward-looking terminology such as “may,” “will,” “anticipates,” “expects,” “believes,” “intends,” “should” or comparable terms or the negative thereof. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those described in the statements. Risks and uncertainties associated with our business include (without limitation) the following: deterioration in the operating results or financial condition, including bankruptcies, of our tenants; non-payment or late payment of rent by our tenants; our reliance on two tenants for a significant percentage of our revenue; occupancy levels at certain facilities; our level of indebtedness; changes in the ratings of our debt securities; access to the capital markets and the cost of capital; government regulations, including changes in the reimbursement levels under the Medicare and Medicaid programs; the general distress of the healthcare industry; increasing competition in our business sector; the effect of economic and market conditions and changes in interest rates; the amount and yield of any additional investments; risks associated with acquisitions, including our ability to identify and complete favorable transactions, delays or failures in obtaining third party consents or approvals, the failure to achieve perceived benefits, unexpected costs or liabilities and potential litigation; the ability of our tenants to repay straight-line rent or loans in future periods; the ability of our tenants to obtain and maintain adequate liability and other insurance; our ability to attract new tenants for certain facilities; our ability to sell certain facilities for their book value; our ability to retain key personnel; potential liability under environmental laws; the possibility that we could be required to repurchase some of our senior notes; the rights and influence of holders of our outstanding preferred stock; changes in or inadvertent violations of tax laws and regulations and other factors that can affect real estate investment trusts and our status as a real estate investment trust; and other factors discussed from time to time in our news releases, public statements and/or filings with the Securities and Exchange Commission, especially the “Risk Factors” sections of our Annual and Quarterly Reports on Forms 10-K and 10-Q. Forward-looking information is provided by us pursuant to the safe harbor established under the Private Securities Litigation Reform Act of 1995 and should be evaluated in the context of these factors. We disclaim any intent or obligation to update these forward-looking statements.

***Financial Tables to Follow***

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NATIONWIDE HEALTH PROPERTIES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

	Three Months Ended June 30,						Six Months Ended June 30,
	2008			2007			2008			2007
Revenue:
Triple net lease rent	$	71,529		$	66,377		$	141,530		$	128,923
Medical office building operating rent		15,939			2,810			26,870			5,573
		87,468			69,187			168,400			134,496
Interest and other income		6,549			4,994			11,816			9,265
		94,017			74,181			180,216			143,761
Expenses:
Interest and amortization of deferred financing costs		25,507			25,165			50,246			47,908
Depreciation and amortization		28,933			21,733			56,360			41,426
General and administrative		6,407			5,796			12,905			11,413
Medical office building operating expenses		6,699			1,779			11,562			3,193
		67,546			54,473			131,073			103,940
Income before minority interests, unconsolidated joint ventures and discontinued operations		26,471			19,708			49,143			39,821
Minority interests		46			81			55			63
Income from unconsolidated joint ventures		848			477			1,901			695
Gain on sale of facilities to unconsolidated joint venture		—			599			—			599
Income from continuing operations		27,365			20,865			51,099			41,178
Discontinued operations
Gain on sale of facilities, net		140,226			61,180			151,092			61,246
Income from discontinued operations		422			5,388			3,278			11,056
		140,648			66,568			154,370			72,302
Net income		168,013			87,433			205,469			113,480
Preferred stock dividends		(2,062	)		(3,791	)		(4,125	)		(7,581	)
Income available to common stockholders	$	165,951		$	83,642		$	201,344		$	105,899
Basic earnings per share (EPS):
Income from continuing operations excluding gains	$	0.26		$	0.18		$	0.49		$	0.37
Gains in income from continuing operations		—			0.01			—			0.01
Income from continuing operations		0.26			0.19			0.49			0.38
Discontinued operations		1.46			0.74			1.61			0.81
Income available to common stockholders	$	1.72		$	0.93		$	2.10		$	1.19
Diluted EPS:
Income from continuing operations excluding gains	$	0.26		$	0.18		$	0.49		$	0.36
Gain in income from continuing operations		—			0.01			—			0.01
Income from continuing operations		0.26			0.19			0.49			0.37
Discontinued operations		1.43			0.74			1.59			0.81
Income available to common stockholders	$	1.69		$	0.93		$	2.08		$	1.18
Weighted average shares outstanding for EPS:
Basic		96,351			89,761			95,813			88,979
Diluted		98,114			90,222			96,949			89,454

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NATIONWIDE HEALTH PROPERTIES, INC.

RECONCILIATIONS OF NET INCOME TO NON-GAAP FINANCIAL MEASURES

Reconciliation of Net Income to Diluted FFO

(In thousands, except per share data)

	Three Months Ended June 30,						Six Months Ended June 30,
	2008			2007			2008			2007
Net income	$	168,013		$	87,433		$	205,469		$	113,480
Series B preferred dividends		(2,062	)		(3,791	)		(4,125	)		(7,581	)
Real estate related depreciation and amortization		28,888			24,283			57,476			46,576
Depreciation in income from unconsolidated joint venture		1,131			368			2,246			532
Gains on sale of facilities		(140,226	)		(61,779	)		(151,092	)		(61,845	)
FFO available to common stockholders		55,744			46,514			109,974			91,162
Series B preferred dividends		2,062			2,062			4,125			4,125
Diluted FFO	$	57,806		$	48,576		$	114,099		$	95,287
Weighted average shares outstanding for diluted FFO:
Diluted weighted average shares outstanding		98,114			90,222			96,949			89,454
Series B preferred stock conversion		4,736			4,704			4,732			4,701
Fully diluted weighted average shares outstanding		102,850			94,926			101,681			94,155
Diluted FFO per share	$	0.56		$	0.51		$	1.12		$	1.01
Dividends declared per common share	$	0.44		$	0.41		$	0.88		$	0.82
Diluted FFO payout ratio		79	%		80	%		79	%		81	%
Diluted FFO coverage		1.27			1.24			1.27			1.23

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NATIONWIDE HEALTH PROPERTIES, INC.

RECONCILIATIONS OF NET INCOME TO NON-GAAP FINANCIAL MEASURES

Reconciliation of Net Income to Diluted FAD

(In thousands, except per share data)

	Three Months Ended June 30,						Six Months Ended June 30,
	2008			2007			2008			2007
Net income	$	168,013		$	87,433		$	205,469		$	113,480
Series B preferred dividends		(2,062	)		(3,791	)		(4,125	)		(7,581	)
Real estate related depreciation and amortization		28,888			24,283			57,476			46,576
Gains on sale of facilities		(140,226	)		(61,779	)		(151,092	)		(61,845	)
Straight-lined rent		(2,759	)		(761	)		(5,597	)		(1,698	)
Amortization of above and below market lease intangibles		(150	)		10			(274	)		47
Non-cash stock-based compensation expense		1,440			1,218			2,771			2,238
Deferred finance cost amortization		777			695			1,524			1,382
Lease commissions and tenant and capital improvements		(1,047	)		(320	)		(1,894	)		(933	)
Unconsolidated joint venture:
Real estate related depreciation and amortization		1,131			368			2,246			532
Deferred finance cost amortization		23			4			42			4
FAD available to common stockholders		54,028			47,360			106,546			92,202
Series B preferred dividends		2,062			2,062			4,125			4,125
Diluted FAD	$	56,090		$	49,422		$	110,671		$	96,327
Weighted average shares outstanding for diluted FAD:
Weighted average shares outstanding		98,114			90,222			96,949			89,454
Series B preferred stock conversion		4,736			4,704			4,732			4,701
Fully diluted weighted average shares outstanding		102,850			94,926			101,681			94,155
Diluted FAD per share	$	0.55		$	0.52		$	1.09		$	1.02
Dividends declared per common share	$	0.44		$	0.41		$	0.88		$	0.82
Diluted FAD payout ratio		80	%		79	%		81	%		80	%
Diluted FAD coverage		1.25			1.27			1.24			1.24

Reconciliation of 2008 Net Income Guidance to 2008 Diluted FFO and Diluted FAD Guidance on a Per Share Basis

	Low			High
Net income	$	2.53		$	2.57
Real estate related depreciation and amortization		1.24			1.24
Less: gains on sale		(1.56	)		(1.56	)
Dilution from convertible preferred stock		(0.02	)		(0.02	)
Diluted FFO guidance		2.19			2.23
Straight-lined rent		(0.11	)		(0.11	)
Non-cash stock-based compensation expense		0.05			0.05
Deferred finance cost amortization		0.03			0.03
Lease commissions and tenant and capital improvements		(0.05	)		(0.05	)
Diluted FAD guidance	$	2.11		$	2.15

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NATIONWIDE HEALTH PROPERTIES, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands)

	June 30, 2008			December 31, 2007
Assets
Real estate related investments:
Land	$	299,080		$	301,100
Buildings and improvements		2,930,340			2,896,876
		3,229,420			3,197,976
Less accumulated depreciation		(436,823	)		(410,865	)
Net real estate		2,792,597			2,787,111
Mortgage loans receivable, net		119,149			121,694
Investment in unconsolidated joint ventures		51,445			52,637
Net real estate related investments		2,963,191			2,961,442
Cash and cash equivalents		130,106			19,407
Receivables, net		5,361			3,808
Assets held for sale		2,597			—
Other assets		283,320			159,696
Total assets	$	3,384,575		$	3,144,353
Liabilities and Stockholders’ Equity
Unsecured senior credit facility	$	—		$	41,000
Senior notes due 2008 - 2038		1,156,500			1,166,500
Notes and bonds payable		386,314			340,150
Accounts payable and accrued liabilities		133,634			107,844
Total liabilities		1,676,448			1,655,494
Minority interest		52,871			6,166
Stockholders’ equity:
Series B convertible preferred stock		106,410			106,445
Common stock		9,660			9,481
Capital in excess of par value		1,621,224			1,565,249
Cumulative net income		1,494,220			1,288,751
Accumulated other comprehensive income		2,320			2,561
Cumulative dividends		(1,578,578	)		(1,489,794	)
Total stockholders’ equity		1,655,256			1,482,693
Total liabilities and stockholders’ equity	$	3,384,575		$	3,144,353

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EX-99.2

Supplemental Information

June 30, 2008

Disclaimer

Certain information contained in this release includes forward-looking statements. Forward-looking statements include statements regarding our expectations, beliefs, intentions, plans, objectives, goals, strategies, future events or performance and underlying assumptions and other statements which are not statements of historical facts. These statements may be identified, without limitation, by the use of forward-looking terminology such as “may,” “will,” “anticipates,” “expects,” “believes,” “intends,” “should” or comparable terms or the negative thereof.

These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those described in the statements. Risks and uncertainties associated with our business include (without limitation) the following: deterioration in the operating results or financial condition, including bankruptcies, of our tenants; non-payment or late payment of rent by our tenants; our reliance on two tenants for a significant percentage of our revenue; occupancy levels at certain facilities; our level of indebtedness; changes in the ratings of our debt securities; access to the capital markets and the cost of capital; government regulations, including changes in the reimbursement levels under the Medicare and Medicaid programs; the general distress of the healthcare industry; increasing competition in our business sector; the effect of economic and market conditions and changes in interest rates; the amount and yield of any additional investments; risks associated with acquisitions, including our ability to identify and complete favorable transactions, delays or failures in obtaining third party consents or approvals, the failure to achieve perceived benefits, unexpected costs or liabilities and potential litigation; the ability of our tenants to repay straight-line rent or loans in future periods; the ability of our tenants to obtain and maintain adequate liability and other insurance; our ability to attract new tenants for certain facilities; our ability to sell certain facilities for their

book value; our ability to retain key personnel; potential liability under environmental laws; the possibility that we could be required to repurchase some of our senior notes; the rights and influence of holders of our outstanding preferred stock; changes in or inadvertent violations of tax laws and regulations and other factors that can affect real estate investment trusts and our status as a real estate investment trust; and other factors discussed from time to time in our news releases, public statements and/or filings with the Securities and Exchange Commission, especially the “Risk Factors” sections of our Annual and Quarterly Reports on Forms 10-K and 10-Q.

Forward-looking information is provided by us pursuant to the safe harbor established under the Private Securities Litigation Reform Act of 1995 and should be evaluated in the context of these factors. We disclaim any intent or obligation to update these forward-looking statements.

June 30, 2008— 1

Contents

COMPANY FACT SHEET 3

FINANCIAL RESULTS 4

Consolidated Statement of Operations

Reconciliation of Net Income to Funds From Operations (FFO)

Reconciliation of Net Income to Funds Available for Distribution (FAD)

Reconciliation of Net Income Guidance to Diluted FFO and Diluted FAD Guidance

Consolidated Balance Sheets

Other Assets

Capitalization

Debt Maturities and Debt Composition

Interest and Fixed Charge Coverage

Unconsolidated Joint Venture Financial Statements

Financial Measures Definitions

INVESTMENTS & DISPOSITIONS 20

2nd Quarter 2008 Investments

Year to Date June 30, 2008 Investments

Expected Dispositions

Forward Capital Commitments: Acquisition Obligations, Capital Expenditures & Expansions

Lease Expirations and Mortgage Loans Receivable Principal Payments

PORTFOLIO OVERVIEW 31

Portfolio Summary

Consolidated Portfolio Performance Metrics—Same Store and Total

Tenant Benchmarks

Geographic Benchmarks

Unconsolidated JV Portfolio Performance Metrics

Medical Office Building Portfolio Performance Metrics

Portfolio Performance Measures Definitions

June 30, 2008— 2

Company Fact Sheet

Company Profile

Nationwide Health Properties, Inc. (NHP), incorporated October 1985, is a publicly traded real estate investment trust (REIT) that invests in senior housing facilities, long-term care facilities and medical office buildings throughout the United States. NHP generally acquires real estate and then leases the assets under long-term triple-net master leases to senior housing and long-term care operators and various types of leases to multiple tenants in the case of medical office buildings.

As a REIT specializing in healthcare real estate, NHP provides a focused investment strategy with a well diversified portfolio. NHP employs a conservative, long-term approach to real estate investments with an experienced professional management team having extensive operating, real estate and finance backgrounds.

Investor Highlights

??REIT structure provides opportunity to invest directly in real estate and indirectly in healthcare industry

??Quality healthcare real estate portfolio

??Long-term triple-net master leases with quality operators

??Strong affiliations with premiere hospital systems in growing medical office building markets

??Senior housing care a vital component of U.S. economy

??High dividend yield and high dividend coverage

??Financial stability

??Well positioned to take advantage of investment opportunities and to conservatively grow earnings and dividends

??NHP is one of the few healthcare REITs with investment grade ratings by Moody’s, Standard & Poors and Fitch.

Market Facts as of June 30, 2008

Closing Price Market Capitalization Enterprise Value

$31.49 $3.2 billion $5.0 billion

Dividend & Yield 52 week range Shares & OP Units

$1.76 (5.6%) $22.63 – $37.67 98.1 million

Credit Ratings

S&P BBB-

Moody’s Baa3 (positive outlook) Fitch BBB- (positive outlook)

Our Portfolio as of June 30, 2008

??$4.0 billion in healthcare real estate

??562 properties in 43 states

??259 Assisted and Independent Living

??186 Skilled Nursing

??65 Medical Office Buildings

??17 Other

??1 Assets Held For Sale

??34 Unconsolidated JV Facilities

??Over 80 multi-facility operators

WA (4%)

CA (10%)

TX (14%)

MA (6%)

WI (7%)

June 30, 2008— 3

FINANCIAL RESULTS

June 30, 2008— 4

Consolidated Statement of Operations

In thousands, except per share data

Three Months Ended June 30, Six Months Ended June 30,

2008 2007 2008 2007

Revenues:

Triple-net lease rent $71,529 $66,377 $141,530 $128,923

Medical office building operating rent 15,939 2,810 26,870 5,573

87,468 69,187 168,400 134,496

Interest and other income 6,549 4,994 11,816 9,265

94,017 74,181 180,216 143,761

Expenses:

Interest and amortization of deferred financing costs 25,507 25,165 50,246 47,908

Depreciation and amortization 28,933 21,733 56,360 41,426

General and administrative 6,407 5,796 12,905 11,413

Medical office building operating expenses 6,699 1,779 11,562 3,193

67,546 54,473 131,073 103,940

Income before minority interests and unconsolidated joint ventures 26,471 19,708 49,143 39,821

Minority interests in net loss of consolidated joint ventures 46 81 55 63

Income from unconsolidated joint ventures 848 477 1,901 695

Gain on sale of facilities to joint ventures, net — 599 — 599

Income from continuing operations 27,365 20,865 51,099 41,178

Discontinued operations:

Gain on sale of facilities, net 140,226 61,180 151,092 61,246

Income from discontinued operations 422 5,388 3,278 11,056

140,648 66,568 154,370 72,302

Net income 168,013 87,433 205,469 113,480

Preferred stock dividends (2,062) (3,791) (4,125) (7,581)

Income available to common stockholders $165,951 $83,642 $201,344 $105,899

Basic earnings per share (EPS):

Income from continuing operations $0.26 $0.19 $0.49 $0.38

Discontinued operations 1.46 0.74 1.61 0.81

Income available to common stockholders $1.72 $0.93 $2.10 $1.19

Diluted EPS:

Income from continuing operations $0.26 $0.19 $0.49 $0.37

Discontinued operations 1.43 0.74 1.59 0.81

Income $1.69 $0.93 $2.08 $1.18

Weighted average shares outstanding for EPS:

Basic 96,351 89,761 95,813 88,979

Diluted 98,114 90,222 96,949 89,454

June 30, 2008— 5

Reconciliation of Net Income to Funds From Operations (FFO)

In thousands, except per share data

Three Months Ended June 30, Six Months Ended June 30,

2008 2007 2008 2007

Net income to FFO:

Net income $168,013 $87,433 $205,469 $113,480

Preferred stock dividends (2,062) (3,791) (4,125) (7,581)

Real estate related depreciation and amortization 28,888 24,283 57,476 46,576

Depreciation in income from unconsolidated joint ventures 1,131 368 2,246 532

Gains on sale of facilities, net (140,226) (61,779) (151,092) (61,845)

FFO available to common stockholders 55,744 46,514 109,974 91,162

Series B preferred dividend add-back 2,062 2,062 4,125 4,125

Diluted FFO $57,806 $48,576 114,099 95,287

Weighted average shares outstanding for FFO:

Diluted weighted average shares outstanding 98,114 90,222 96,949 89,454

Series B preferred stock add-back 4,736 4,704 4,732 4,701

Fully diluted weighted average shares outstanding 102,850 94,926 101,681 94,155

Diluted per share amounts:

FFO $0.56 $0.51 $1.12 $1.01

Dividends declared per common share $0.44 $0.41 $0.88 $0.82

FFO payout ratio 79% 80% 79% 81%

FFO coverage 1.27 1.24 1.27 1.23

See Financial Measures Definitions

June 30, 2008— 6

Reconciliation of Net Income to Funds Available for Distribution (FAD)

In thousands, except per share data

Three Months Ended June 30, Six Months Ended June 30,

2008 2007 2008 2007

Net income to FAD:

Net income $168,013 $87,433 $205,469 $113,480

Preferred stock dividends (2,062) (3,791) (4,125) (7,581)

Real estate related depreciation and amortization 28,888 24,283 57,476 46,576

Gains on sale of facilities, net (140,226) (61,779) (151,092) (61,845)

Straight-lined rent (2,759) (761) (5,597) (1,698)

Amortization of above and below market lease intangibles (150) 10 (274) 47

Non-cash stock-based compensation expense 1,440 1,218 2,771 2,238

Deferred finance cost amortization 777 695 1,524 1,382

Lease commissions and tenant and capital improvements (1,047) (320) (1,894) (933)

NHP’s share of FAD reconciling items from unconsolidated joint ventures:

Real estate related depreciation and amortization 1,131 368 2,246 532

Deferred finance cost amortization 23 4 42 4

FAD available to common stockholders 54,028 47,360 106,546 92,202

Series B preferred dividend add-back 2,062 2,062 4,125 4,125

Diluted FAD $56,090 $49,422 110,671 96,327

Weighted average shares outstanding for FAD:

Weighted average shares outstanding 98,114 90,222 96,949 89,454

Series B preferred stock add-back 4,736 4,704 4,732 4,701

Fully diluted weighted average shares outstanding 102,850 94,926 101,681 94,155

Diluted per share amounts:

FAD $0.55 $0.52 $1.09 $1.02

Dividends declared per common share $0.44 $0.41 $0.88 $0.82

FAD payout ratio 80% 79% 81% 80%

FAD coverage 1.25 1.27 1.24 1.24

See Financial Measures Definitions

June 30, 2008— 7

Reconciliation of 2008 Net Income Guidance to Diluted FFO and Diluted FAD Guidance

All amounts on a per share basis

Low High

Net Income Guidance $2.53 $2.57

Real estate related depreciation and amortization 1.24 1.24

Less: gains on sale (1.56) (1.56)

Dilution from convertible preferred stock (0.02) (0.02)

Diluted FFO Guidance 2.19 2.23

Straight-lined rent (0.11) (0.11)

Non-cash stock-based compensation expense 0.05 0.05

Deferred finance cost amortization 0.03 0.03

Lease commissions and tenant and capital improvements (0.05) (0.05)

Diluted FAD Guidance $2.11 $2.15

See Financial Measures Definitions

June 30, 2008— 8

Consolidated Balance Sheets

In thousands

June 30, 2008 December 31, 2007

Assets

Real estate related investments:

Land $299,080 $301,100

Buildings and improvements 2,930,340 2,896,876

3,229,420 3,197,976

Less accumulated depreciation (436,823) (410,865)

Net real estate 2,792,597 2,787,111

Mortgage loans receivable, net 119,149 121,694

Investment in unconsolidated joint ventures 51,445 52,637

Net real estate related investments 2,963,191 2,961,442

Cash and cash equivalents 130,106 19,407

Receivables, net 5,361 3,808

Assets held for sale 2,597 -

Other assets 283,320 159,696

Total assets $3,384,575 $3,144,353

Liabilities and Stockholders’ Equity

Unsecured senior credit facility $- $41,000

Senior notes due 2008—2038 1,156,500 1,166,500

Notes and bonds payable 386,314 340,150

Accounts payable and accrued liabilities 133,634 107,844

Total liabilities 1,676,448 1,655,494

Minority interests 52,871 6,166

Stockholders’ equity:

Series B convertible preferred stock 106,410 106,445

Common stock 9,660 9,481

Capital in excess of par value 1,621,224 1,565,249

Cumulative net income 1,494,220 1,288,751

Accumulated other comprehensive income 2,320 2,561

Cumulative dividends (1,578,578) (1,489,794)

Total stockholders’ equity 1,655,256 1,482,693

Total liabilities and stockholders’ equity $3,384,575 $3,144,353

June 30, 2008— 9

Other Assets

In thousands

June 30, 2008 December 31, 2007

Other receivables, net $99,656 $34,379

Straight-line rent receivables, net 16,068 10,727

Deferred financing costs 16,003 17,927

Capitalized lease and loan origination costs 2,212 2,307

Intangible lease assets 110,738 58,481

Investement and restricted funds 17,244 18,024

Prepaid ground leases 10,336 10,431

Other 11,063 7,420

$283,320 $159,696

March 31, 2008— 10

Capitalization

In thousands, except stock prices and ratios

June 30, 2008 December 31, 2007

Debt

Unsecured senior credit facility $- $41,000

Senior notes 1,156,500 1,166,500

Notes and bonds payable 386,314 340,150

Consolidated debt 1,542,814 1,547,650

NHP’s share of unconsolidated debt 81,160 79,234

Total debt $1,623,974 $1,626,884

Book Capitalization

Consolidated debt $1,542,814 $1,547,650

Minority interests 52,871 6,166

Total stockholders’ equity 1,655,256 1,482,693

Consolidated book capitalization 3,250,941 3,036,509

Accumulated depreciation and amortization 436,823 410,865

Consolidated undepreciated book capitalization 3,687,764 3,447,374

NHP’s share of unconsolidated debt 81,160 79,234

NHP’s share of unconsolidated depreciation and amortization 3,949 1,703

Total undepreciated book capitalization $3,772,873 $3,528,311

Enterprise Value

Shares Price Shares Price

Common stock 96,605 $31.49 $3,042,086 94,806 $31.37 $2,974,057

Limited partnership units 1,471 $31.49 46,314 — $- -

Series B preferred stock 1,064 $148.00 157,487 1,064 $140.00 149,023

Consolidated market equity capitalization 3,245,887 3,123,080

Consolidated debt 1,542,814 1,547,650

Consolidated enterprise value 4,788,701 4,670,730

NHP’s share of unconsolidated debt 81,160 79,234

Total enterprise value $4,869,861 $4,749,964

Leverage Ratios

Consolidated debt to consolidated undepreciated book capitalization 41.8% 44.9%

Total debt to total undepreciated book capitalization 43.0% 46.1%

Consolidated debt to consolidated enterprise value 32.2% 33.1%

Total debt to total enterprise value 33.3% 34.3%

June 30, 2008— 11

Capitalization (2)

Based on total debt including NHP’s share of unconsolidated joint venture

Undepreciated Book Basis

57% Equity

43% Debt

Enterprise Value

67% Equity

33% Debt

Debt Composition

29%

71%

Secured Unsecured

4%

96%

Variable Fixed

June 30, 2008— 12

Debt Maturities and Debt Composition

In thousands

Debt Maturities

Credit Facility Senior Notes Notes and Bonds Consolidated Debt NHP’s Share of Unconsolidated Debt Total Debt

Period Principal Rate Principal Rate Principal Rate Principal Rate Principal Rate Principal Rate

Q3 2008 $- — $40,000 (1) 6.6% $- — $40,000 6.6% $- — $40,000 6.6%

Q4 2008 —— 33,500 (2) 7.6% —— 33,500 7.6% —— 33,500 7.6%

2009 —— 87,000 (3) 7.8% 39,051 6.6% 126,051 7.4% —— 126,051 7.4%

2010 ———— 72,142 5.9% 72,142 5.9% —— 72,142 5.9%

2011 —— 350,000 6.5% 5,222 7.7% 355,222 6.5% —— 355,222 6.5%

2012 —— 96,000 8.3% 46,337 7.2% 142,337 7.9% 14,000 6.0% 156,337 7.7%

2013 —— 300,000 6.3% 40,941 6.0% 340,941 6.2% —— 340,941 6.2%

2014 ———— 22,891 6.0% 22,891 6.0% 25,616 5.8% 48,507 5.9%

2015 —— 250,000 6.0% 52,869 5.7% 302,869 5.9% 34,028 5.9% 336,897 5.9%

2016 ———— 21,475 5.9% 21,475 5.9% —— 21,475 5.9%

2017 ———— 104 5.0% 104 5.0% —— 104 5.0%

2018 ———— 7,800 6.1% 7,800 6.1% —— 7,800 6.1%

Thereafter ———— 77,482 4.8% 77,482 4.8% 7,516 6.9% 84,998 5.0%

Total $- — $1,156,500 6.6% $386,314 5.9% $1,542,814 6.4% $81,160 6.0% $1,623,974 6.4%

Weighted average

maturity in years — 4.0 8.0 5.0 7.4 5.1

Debt Composition

June 30, 2008 December 31, 2007

Principal Rate % of Total Principal Rate % of Total

Fixed rate debt

Senior notes $1,156,500 6.6% 71.2% $1,166,500 6.6% 71.7%

Notes and bonds 324,031 6.1% 20.0% 277,930 6.3% 17.1%

NHP’s share of unconsolidated debt 81,160 6.0% 5.0% 79,234 6.0% 4.9%

Total fixed rate debt 1,561,691 6.5% 96.2% 1,523,664 6.5% 93.7%

Variable rate debt

Credit facility ——— 41,000 5.5% 2.5%

Notes and bonds 62,283 5.1% 3.8% 62,220 5.7% 3.8%

Total variable rate debt 62,283 5.1% 3.8% 103,220 5.6% 6.3%

Total debt $1,623,974 6.4% 100.0% $1,626,884 6.5% 100.0%

(1) Notes putable July of 2008, 2013, 2018, 2023 and 2028 with a final maturity in 2038 (2) Notes putable November of 2008, 2013, 2018 and 2023 with a final maturity in 2028

(3) Includes $55 million of notes putable October of 2009, 2012, 2017 and 2027 with a final maturity in 2037

June 30, 2008— 13

Interest and Fixed Charge Coverage

In thousands

Three Months Ended June 30, Six Months Ended June 30,

2008 2007 2008 2007

Reconciliation of Net Income to EBITDA:

Net income $168,013 $87,433 $205,469 $113,480

Interest and amortization of deferred financing costs in continuing operations 25,507 25,165 50,246 47,908

Interest and amortization of deferred financing costs in discontinued operations 6 1,110 1,004 2,189

Depreciation and amortization in continuing operations 28,933 21,733 56,360 41,426

Depreciation and amortization in discontinued operations 80 2,660 1,366 5,368

Consolidated EBITDA 222,539 138,101 314,445 210,371

NHP’s share of EBITDA reconciling items from unconsolidated joint ventures:

Interest and amortization of deferred financing costs 1,247 342 2,460 342

Depreciation and amortization 1,131 368 2,246 532

Total EBITDA 224,917 138,811 319,151 211,245

Gains on sale of facilities, net (140,226) (61,779) (151,092) (61,845)

Adjusted Total EBITDA $84,691 $77,032 $168,059 $149,400

Adjusted Consolidated EBITDA $82,313 $76,322 $163,353 $148,526

Interest Expense:

Consolidated interest expense (including discontinued operations) $24,737 $25,580 $49,726 $48,715

NHP’s share of interest expense from unconsolidated joint ventures 1,223 337 2,418 337

Total interest expense 25,960 25,917 52,144 49,052

Fixed Charges:

Consolidated interest expense (including discontinued operations) $24,737 $25,580 $49,726 $48,715

Preferred stock dividends 2,062 3,791 4,125 7,581

Consolidated fixed charges 26,799 29,371 53,851 56,296

NHP’s share of interest expense from unconsolidated joint ventures 1,223 337 2,418 337

Total fixed charges $28,022 $29,708 $56,269 $56,633

Consolidated Adjusted Interest Coverage Ratio 3.33 2.98 3.29 3.05

Total Adjusted Interest Coverage Ratio 3.26 2.97 3.22 3.05

Consolidated Adjusted Fixed Charge Coverage Ratio 3.07 2.60 3.03 2.64

Total Adjusted Fixed Charge Coverage Ratio 3.02 2.59 2.99 2.64

June 30, 2008— 14

Unconsolidated Joint Venture Financial Statements

In thousands

Balance Sheet

June 30, 2008 December 31, 2007

Assets

Land $35,042 $35,042

Buildings and improvements 501,018 496,188

Gross real estate 536,060 531,230

Accumulated depreciation (15,795) (6,811)

Net real estate 520,265 524,419

Cash 4,301 3,689

Receivables — -

Other assets 6,261 2,825

Total assets $530,827 $530,933

Liabilities and equity

Notes payable $324,641 $316,935

Accounts payable and accrued liabilities 3,285 3,461

Total liabilities 327,926 320,396

Equity contributions 225,920 215,970

Retained earnings 2,288 1,761

Distributions (25,819) (7,194)

Other comprehensive income 512 -

Total equity 202,901 210,537

Total liabilities and equity $530,827 $530,933

NHP’s investment in joint venture $50,610 (1) $52,637

(1) Excludes NHP’s investment in PMB Real Estate Services LLC

(“PMBRES”). NHP’s investment in PMBRES was $835,000 at June 30, 2008.

June 30, 2008— 15

Unconsolidated Joint Venture Financial Statements (2)

Income Statement

Three Months Ended June 30, Six Months Ended June 30,

2008 2007 2008 2007

Revenues

Rent $11,263 $3,824 $22,490 $5,000

Interest and other income 17 10 44 12

Total revenues 11,280 3,834 22,534 5,012

Expenses

Interest and amortization of deferred finance costs 4,987 1,366 9,841 1,366

Depreciation and amortization 4,524 1,472 8,984 2,127

General and administrative* 1,625 492 3,182 564

Total expenses 11,136 3,330 22,007 4,057

Net income $144 $504 $527 $955

NHP Income and FFO from Joint Venture

Share of net income—25% $38 $126 $134 $239

Management fee* 975 351 1,932 456

Income from joint venture (1) 1,013 477 2,066 695

Share of depreciation—25% 1,131 368 2,246 532

FFO from joint venture $2,144 $845 $4,312 $1,227

* NHP’s management fee is included in the joint venture’s general and administrative expense

(1) Excludes NHP’s loss from PMBRES NHP’s share of the loss from PMBRES was $165,000 for the three and six months ended June 30, 2008.

June 30, 2008— 16

Financial Measures Definitions

Adjusted EBITDA:

We believe that adjusted EBITDA is an important supplemental operating and liquidity measure primarily because it is used in the calculation of the Adjusted Interest Coverage Ratio and the Adjusted Fixed Charge Coverage Ratio and we present it solely for the purpose of being used in those calculations. Adjusted EBITDA is calculated by adding back any gains and losses on the sale of real estate and any impairments to EBITDA for a given period. We believe adjusted EBITDA is most useful as a liquidity measure in the ratio calculations noted above to enable investors to determine and compare a company’s ability to meet its interest and Fixed Charges obligations. However, the methodology for calculating it makes net income the most directly comparable GAAP measure. As such, we believe investors should consider adjusted EBITDA, cash flows from operating activities and net income when evaluating our ability to meet our interest and Fixed Charges obligations. The usefulness of adjusted EBITDA is limited because it doesn’t reflect, among other things, required principal payments, cash expenditures, capital expenditures or capital commitments. Adjusted EBITDA does not represent net income or cash flows from operations as defined by GAAP and should not considered as an alternative to either of those measures. Our calculation of Adjusted EBITDA may not be comparable to similar measures reported by other companies.

Adjusted Fixed Charge Coverage Ratio:

We believe that the adjusted fixed charge coverage ratio is an important supplemental liquidity measure that reflects a company’s ability to meet its interest and preferred dividend payment obligations and allows investors to compare interest and dividend paying capabilities among different companies. We calculate the adjusted fixed charge coverage ratio by dividing Adjusted EBITDA by Fixed Charges. In addition, credit rating agencies utilize similar ratios in evaluating the credit ratings on our debt instruments. This ratio’s usefulness is limited by the same factors that limit the usefulness of the components Adjusted EBITDA and Fixed Charges. Our calculation of the adjusted fixed charge coverage ratio should not be considered an alternative to the ratio of earnings to fixed charges as defined by Item 503(d) of Regulation S-K and it may not be comparable to similar ratios reported by other companies.

Adjusted Interest Coverage Ratio:

We believe that the adjusted interest coverage ratio is an important supplemental liquidity measure that reflects a company’s ability to meet its interest payment obligations and allows investors to compare interest paying capabilities among different companies. We calculate the adjusted interest coverage ratio by dividing Adjusted EBITDA by interest expense (including capitalized interest, if any). In addition, credit rating agencies utilize similar ratios in evaluating the credit ratings on our debt instruments. This ratio’s usefulness is limited by the same factors that limit the usefulness of the component Adjusted EBITDA. Our calculations of the adjusted interest coverage ratio may not be comparable to similar ratios reported by other companies.

EBITDA:

We believe that EBITDA is an important supplemental operating and liquidity measure primarily because it is used in the calculation of Adjusted EBITDA which is in turn used in the calculation of the Adjusted Interest Coverage Ratio and the Adjusted Fixed Charge Coverage Ratio and we present it solely for the purpose of being used in those calculations. EBITDA is calculated by adding interest, taxes, depreciation and amortization to net income. The real estate industry uses EBITDA as a non-GAAP measure of both operating performance and liquidity. We believe it is most useful as a liquidity measure in the ratio calculations noted above to enable investors to determine and compare a company’s ability to meet its interest and Fixed Charges obligations. However, the methodology for calculating it makes net income the most directly comparable GAAP measure. As such, we believe investors should consider EBITDA, cash flows from operating activities and net income when evaluating our ability to meet our interest and Fixed Charges obligations. The usefulness of EBITDA is limited because it doesn’t reflect, among other things, required principal payments, cash expenditures, capital expenditures or capital commitments. EBITDA does not represent net income or cash flows from operations as defined by GAAP and should not considered as an alternative to either of those measures. Our calculation of EBITDA may not be comparable to similar measures reported by other companies.

June 30, 2008— 17

Financial Measures Definitions (2)

FAD Payout Ratio and FFO Coverage:

The FAD payout ratio is calculated by dividing the common dividend per share by diluted FAD per share for any given period. FAD coverage is calculated by dividing diluted FAD per share by the common dividend per share for any given period. We believe that both of these amounts are important supplemental liquidity measures that enable investors to compare dividend security among REITs.

Fixed Charges:

Fixed charges is a measure of the total interest and preferred stock dividend obligations of a company. It is calculated by adding interest expense (including capitalized interest, if any) and preferred stock dividends for any given period and is utilized in calculating the Adjusted Fixed Charge Coverage Ratio. It’s usefulness is limited as, among other things, it does not include required principal payments or any other contractual obligations a company may have. Our calculation of fixed charges should not be considered an alternative to fixed charges as defined by Item 503(d) of Regulation S-K and it may not be comparable to fixed charges reported by other companies.

Funds Available for Distribution (“FAD”):

While net income and its related per share amounts as defined by generally accepted accounting principles (“GAAP”) are the most appropriate earnings measures, we believe that FAD and its related per share amounts are important supplemental measures of operating performance. GAAP requires the use of straight-line depreciation of historical costs and implies that real estate values diminish predictably and ratably over time. However, real estate values have historically risen and fallen based on various market conditions and other factors. FFO was developed as a supplemental measure of operating performance primarily in order to exclude historical cost based depreciation and amortization and its effects as it does not generally reflect the actual change in value of real estate over time. FAD was developed as a supplemental measure of operating performance primarily to exclude non-cash revenues and expenses that are included in FFO. FAD is defined as net income (computed in accordance with GAAP) excluding gains and losses from the sale of real estate plus real estate related depreciation and amortization, plus or minus straight-lined rent (plus cash in excess of rent or minus rent in excess of cash), plus or minus amortization of above or

below market lease intangibles, plus non-cash stock based compensation, plus deferred finance cost amortization plus any impairments minus lease commissions, tenant improvements and capital improvements paid. The same adjustments are made to reflect our share of these same items from unconsolidated joint ventures. We believe that the use of FAD and its related per share amounts and FFO and its related per share amounts in conjunction with the required GAAP disclosures provides investors with a more comprehensive understanding of the operating results of a real estate investment trust (“REIT”) and enables investors to compare the operating results between REITs without having to account for differences caused by different depreciation assumptions and different non-cash revenues and expenses. Additionally, FAD is widely used by industry analysts as a measure of operating performance for equity REITs. FAD does not represent cash flow from operating activities or net income as defined by GAAP and, therefore should not be considered as an alternative to cash flow as a measure of liquidity or net income as the primary indicator of operating performance. Our calculations of FAD may not be comparable to FAD reported by other REITs or analysts that define it differently than we do.

Funds from Operations (“FFO”):

While net income and its related per share amounts as defined by generally accepted accounting principles (“GAAP”) are the most appropriate earnings measures, we believe that FFO and its related per share amounts are important supplemental measures of operating performance. GAAP requires the use of straight-line depreciation of historical costs and implies that real estate values diminish predictably and ratably over time. However, real estate values have historically risen and fallen based on various market conditions and other factors. FFO was developed as a supplemental measure of operating performance primarily in order to exclude historical cost based depreciation and amortization and its effects as it does not generally reflect the actual change in value of real estate over time. We calculate FFO in accordance with the National Association of Real Estate Investment Trusts’ definition. FFO is defined as net income (computed in accordance with GAAP) excluding gains and losses from the sale of real estate plus real estate related depreciation and amortization. The same adjustments are made to reflect our share of gains and losses from the sale of real estate and real estate related depreciation and amortization from unconsolidated joint ventures. We believe that the use of FFO and its related per share amounts in conjunction with the required GAAP disclosures provides investors with a

June 30, 2008— 18

Financial Measures Definitions (3)

more comprehensive understanding of the operating results of a real estate investment trust (“REIT”) and enables investors to compare the operating results between REITs without having to account for differences caused by different depreciation assumptions. Additionally, FFO is widely used by industry analysts as a measure of operating performance for equity REITs. FFO does not represent cash flow from operating activities or net income as defined by GAAP and, therefore should not be considered as an alternative to cash flow as a measure of liquidity or net income as the primary indicator of operating performance. Our calculations of FFO may not be comparable to FFO reported by other REITs that do not define the term in accordance with the NAREIT definition or that interpret that definition differently than we do.

Gross Investment:

We define Gross Investment as our total investment in a property which includes land, building, improvements, equipment as well as any other identifiable assets included in the caption Other Assets on our balance sheets. Items classified in Other Assets generally pertain to our medical office buildings and may include such things as tenant improvements, leasing commissions, above/(below) market lease value, lease in place value and other items.

Normalized FAD:

Normalized FAD excludes from FAD any material one-time items reflected in the financial statements for a given period.

Normalized FFO:

The NAREIT definition of FFO doesn’t exclude impairments of assets. We believe that impairments are equivalent to losses on sale that are taken early due to the current requirements of GAAP, therefore we generally present Normalized FFO, which excludes impairments, for any period where our net income includes an impairment. We also exclude any material one-time items reflected in the financial statements for a given period.

June 30, 2008— 19

INVESTMENTS & DISPOSITIONS

June 30, 2008— 20

2nd Quarter 2008 Investments

Gross investment in thousands

Facilities Number of Beds/Units/ Square Feet Average Age Gross Investment Investment Per Bed/Unit Square Foot Initial Yield

Owned Facilities

Assisted and independent living facilities 1 203 44 $20,000 $99,000 8.4%

Skilled nursing facilities 6 514 26 23,000 $45,000 9.2%

Total senior housing and long-term care 7 717 31 43,000 $60,000 8.8%

Medical office buildings 8 527,505 9 198,000 $375 6.2%

Total acquisitions 15 717 527,505 241,000 6.6%

Capital expenditures ——— 8,000

Total investments 15 717 527,505 249,000

Loans

Skilled nursing facilities 1 130 35 7,000 $54,000 10.0%

Total senior housing and long-term care 1 130 35 7,000 $54,000 10.0%

Other loans —— 2,000 14.0%

Total loans 1 130 35 9,000 11.1%

Total Consolidated

Assisted and independent living facilities 1 203 44 20,000 $99,000 8.4%

Skilled nursing facilities 7 644 27 30,000 $47,000 9.4%

Total senior housing and long-term care 8 847 31 50,000 $59,000 9.0%

Other loans 2,000 14.0%

Medical office buildings 8 527,505 9 198,000 $375 6.2%

Total acquisitions 16 847 527,505 250,000 6.8%

Capital expenditures —— 8,000

Total investments 16 847 527,505 258,000

Unconsolidated Joint Venture

Capital expenditures —— 3,000

Total investments —— 3,000

Total Investments

Assisted and independent living facilities 1 203 44 20,000 $99,000 8.4%

Skilled nursing facilities 6 514 27 23,000 $45,000 9.2%

Total senior housing and long-term care 7 717 32 43,000 $60,000 8.8%

Medical office buildings 8 — 527,505 9 198,000 $375 6.2%

Total real estate acquisitions 15 717 527,505 241,000 6.6%

Total loans 1 130 35 9,000 11.1%

Total acquisitions 16 847 527,505 250,000 6.8%

Capital expenditures —— 11,000

Total investments 16 847 527,505 $261,000

June 30, 2008— 21

MOB ACQUISITION | Pacific Medical Buildings California MOBs (April 2008)

Location California

Key Stats Purchase Price: $137M Average Age: 9 years

Price per SQFT: $392 No. of Facilities: 6

Lease: Multi-Tenant Facility Type: MOB

Rentable Square Feet: 337,983

Occupancy: 95.2%

June 30, 2008— 22

MOB ACQUISITION | Pacific Medical Buildings Nevada MOB (May 2008)

Location Nevada

Key Stats Purchase Price: $28M Average Age: 7 years

Price per SQFT: $316 No. of Facilities: 1

Lease: Multi-Tenant Facility Type: MOB

Rentable Square Feet: 84,666

Occupancy: 90.1%

June 30, 2008— 23

MOB ACQUISITION | Pacific Medical Buildings Oregon MOB (June 2008)

Location Oregon

Key Stats Purchase Price: $33M Average Age: 5 years

Price per SQFT: $315 No. of Facilities: 1

Lease: Multi-Tenant Facility Type: MOB

Rentable Square Feet: 104,856

Occupancy: 92.7%

June 30, 2008— 24

ALF ACQUISITION | Tennessee (April 2008)

Portfolio Location Tennessee

Key Stats Purchase Price: $20M No. of Facilities: 1

Price per unit ($000s): $99 Facility Type: ALF

Lease: Triple-Net, NHP # of units: 203

Ownership: 100% NHP EBITDARM Coverage: 1.4x

Occupancy: 93%

June 30, 2008— 25

SNF ACQUISITION | Indiana Portfolio (June 2008)

Portfolio Location Indiana

Key Stats Purchase Price: $23M No. of Facilities: 6

Price per Unit ($000s): $45 Facility Type: SNF

Lease: Triple-Net, NHP # of beds: 514

Ownership: 100% NHP EBITDARM coverage: 2.0x

Occupancy: 82%

June 30, 2008— 26

Year to Date June 30, 2008 Investments

Gross investment in thousands

Facilities Number of Beds/Units Building Square Feet Average Age Gross Investment Investment Per Bed/Unit Square Foot Initial Yield

Owned Facilities

Assisted and independent living facilities 15 418 27 $42,000 $100,000 8.8%

Skilled nursing facilities 6 514 26 23,000 $45,000 9.2%

Total senior housing and long-term care 21 932 26 65,000 $70,000 8.9%

Medical office buildings 9 — 555,662 9 200,000 $360 6.2%

Total acquisitions 30 932 555,662 265,000 6.9%

Capital expenditures ——— 17,000

Total investments 30 932 555,662 282,000

Loans

Skilled nursing facilities 1 130 35 7,000 $54,000 10.0%

Total senior housing and long-term care 1 130 35 7,000 $54,000 10.0%

Other loans —— 32,000 7.8%

Total loans 1 130 35 39,000 8.2%

Total Consolidated

Assisted and independent living facilities 15 418 27 42,000 $100,000 8.9%

Skilled nursing facilities 7 644 27 30,000 $47,000 9.4%

Total senior housing and long-term care 22 1,062 27 72,000 $68,000 9.1%

Other loans 32,000 7.8%

Medical office buildings 9 — 555,662 9 200,000 $360 6.2%

Total acquisitions 31 1,062 555,662 304,000 7.1%

Capital expenditures ——— 17,000

Total investments 31 1,062 555,662 321,000

Unconsolidated Joint Venture

Capital expenditures —— 5,000

Total investments —— 5,000

Total Investments

Assisted and independent living facilities 15 418 27 42,000 $100,000 8.8%

Skilled nursing facilities 6 514 27 23,000 $45,000 9.2%

Total senior housing and long-term care 21 932 27 65,000 $70,000 8.9%

Medical office buildings 9 — 555,662 9 200,000 $360 6.2%

Total real estate acquisitions 30 932 555,662 265,000 6.9%

Total loans 1 130 — 35 39,000 8.2%

Total acquisitions 31 1,062 555,662 304,000 7.1%

Capital expenditures ——— 22,000

Total investments 31 1,062 555,662 $326,000

June 30, 2008— 27

Expected Dispositions

Actual Revenue Full Year Revenue Gross Proceeds Gain Investment Required at 8.5% Assumed Yield % Financing From Proceeds

Through June 30, 2008

Purchase options $1,891,000 $2,131,000 $23,722,000 $14,314,000 $25,071,000 95%

Loan payoffs 954,000 1,023,000 9,035,000 89,000 12,035,000 75%

Asset Recycling 384,000 1,469,000 4,500,000 1,736,000 17,282,000 26%

Lease Restructuring 52,000 125,000 — 1,471,000

Strategic asset sales 13,601,000 18,134,000 305,000,000 134,583,000 213,341,000 143%

$16,882,000 $22,882,000 $342,257,000 $150,722,000 $269,200,000 127%

Projected for the Remainder of 2008

Certain [A]

Purchase options $340,000 $1,052,000 $8,647,000 $4,027,000 $12,376,000 70%

Total certain $340,000 $1,052,000 $8,647,000 $4,027,000 $12,376,000 70%

High [B]

Purchase options $452,000 $2,026,000 $20,250,000 $7,276,000 $23,835,000 85%

Loan payoffs* 665,000 2,684,000 23,080,000 9,902,000 31,576,000 73%

Lease restructuring 192,000 240,000 —— 2,824,000

Total high $1,309,000 $4,950,000 $43,330,000 $17,178,000 $58,235,000 74%

Total Actual & Projected 2008

Total actual $16,882,000 $22,882,000 $342,257,000 $150,722,000 $269,200,000 127%

Total certain 340,000 1,052,000 8,647,000 4,027,000 12,376,000 70%

Total high 1,309,000 4,950,000 43,330,000 17,178,000 58,235,000 74%

$18,531,000 $28,884,000 $394,234,000 $171,927,000 $339,811,000 116%

*The gain on the loan payoff represents the gain deferred at the time we financed the sale of the facilities

[A] Projected dispositions categorized as “Certain” represent items where NHP received written notice from the tenant or entered into agreements related to the facilities [B] Projected dispositions categorized as “High” represent items where NHP estimates a high probability of disposition based on an analysis of facility performance, the tenant’s financial condition and current financing options available

June 30, 2008— 28

Forward Capital Commitments | Acquisition Obligations, Capital Expenditures & Expansions

Operator/Manager Est. Take Down Beds/Units/SQFT Property Type Amount ($000s) Est. NOI ($000s) Initial Yield

NHP Consolidated Acquisition Obligations

PMB—Chula Vista, CA Nov 2008 67,000 MOB $22,738 $1,429 6.3%

PMB—Reno, NV Nov 2008 60,953 MOB $16,808 $1,056 6.3%

PMB—Poway, CA Dec 2008 172,000 MOB $90,095 $5,264 5.8%

PMB—Mission Viejo, CA Dec 2008 136,732 MOB $96,080 $5,606 5.8%

PMB—Honolulu, HI Dec 2008 92,650 MOB $28,281 $1,975 7.0%

2008 Total $254,001 $15,330 6.0%

PMB—Reno, NV Apr 2009 91,937 MOB $21,684 $1,375 6.3%

PMB—Burbank, CA Jul 2009 93,772 MOB $58,231 $3,399 5.8%

PMB—Orange, CA Jul 2009 125,970 MOB $86,470 $5,035 5.8%

PMB—Pomona, CA Sep 2009 70,000 MOB $37,500 $2,625 7.0%

PMB—Pasadena, CA Jan 2010 183,652 MOB $104,547 $6,093 5.8%

PMB—Gilbert, AZ Jun 2010 63,973 MOB $24,355 $1,463 6.0%

Willowcreek—Hillsboro, OR Jun 2014 230 ALF $59,000 $4,720 8.0%

Remaining Total $391,787 $24,710 6.3%

NHP Consolidated Total Acquisition Obligations $645,788 $40,040 6.2%

Original Commitment Amount Funded through 6/30/2008 Remaining Commitment Additional NOI Avg. Yield on Funded Amount

Expansion, Renovation & Capital Expenditures

NHP Consolidated $178,392 $40,111 $138,281 $3,530 8.8%

Unconsolidated Joint Venture $23,917 $4,110 $19,808 $339 8.3%

Combined Expansion, Renovation & Capex Total $202,309 $44,221 $158,088 $3,869 8.7%

June 30, 2008— 29

Lease Expirations and Mortgage Loans Receivable Principal Payments

Dollars in thousands

Consolidated Lease Expirations

Assisted and Independent Skilled Nursing Continuing Care Other Triple Net Consolidated Triple-Net

Year Minimum Rent Number of Facilities Minimum Rent Number of Facilities Minimum Rent Number of Facilities Minimum Rent Number of Facilities Minimum Rent Percent of Total Number of Facilities

2008 $- — $1,168 2 $- — $- — $1,168 1% 2

2009 343 6 3,503 7 ———— 3,846 2% 13

2010 4,575 6 8,322 18 551 1 —— 13,448 5% 25

2011 —— 8,611 21 ———— 8,611 3% 21

2012 7,586 8 3,255 7 1,511 1 1,800 1 14,152 5% 17

2013 11,499 11 2,418 5 363 1 —— 14,280 5% 17

2014 8,346 12 1,077 3 4,872 3 —— 14,295 6% 18

2015 1,756 4 3,627 5 —— 3,152 1 8,535 3% 10

2016 10,614 10 15,724 32 —— 2,505 5 28,843 11% 47

2017 2,510 9 5,029 15 —— 1,863 1 9,402 4% 25

Thereafter 108,381 184 29,793 52 4,103 4 2,221 5 144,498 55% 245

$155,610 250 $82,527 167 $11,400 10 $11,541 13 $261,078 100% 440

Unconsolidated JV Lease Expirations Mortgage Loans Receivable

Assisted and Independent Skilled Nursing Continuing Care Total JV Consolidated

Year Minimum Rent Number of Facilities Minimum Rent Number of Facilities Minimum Rent Number of Facilities Minimum Rent Percent of Total Number of Facilities Principal Payments Percent of Total Number of Facilities

2008 $- — $- — $- — $- —— $28,893 20% 7

2009 ————————— 39,597 28% 11

2010 ————————— 14,745 10% 3

2011 ————————— 658 1% -

2012 5,643 6 ———— 5,643 13% 6 715 1% -

2013 ————————— 16,027 11% 1

2014 ————————— 842 1% -

2015 ————————— 3,036 2% 1

2016 1,262 1 ———— 1,262 3% 1 9,758 7% 2

2017 ————————— 578 0% -

Thereafter 13,316 12 20,928 14 2,480 1 36,724 84% 27 27,579 19% 4

$20,221 19 $20,928 14 $2,480 1 $43,629 100% 34 $142,428 100% 29

June 30, 2008— 30

PORTFOLIO OVERVIEW

June 30, 2008— 31

Portfolio Summary

Gross investment, NOI and security deposits in thousands

Number of Facilities Number of Beds/Units Building Square Feet Gross Investment Investment Per Bed/Unit/ Square Foot Percentage of Investment by Category NOI Percentage of NOI by Category

Owned Facilities

Assisted and independent living facilities 250 17,778 $1,700,744 $96,000 49% $85,405 51%

Skilled nursing facilities 166 18,444 865,161 $47,000 25% 43,955 26%

Continuing care retirement communities 10 1,952 124,792 $64,000 4% 6,076 4%

Specialty hospitals 7 303 72,589 $240,000 2% 4,019 2%

Total senior housing and long-term care 433 38,477 2,763,286 $72,000 80% 139,455 83%

Triple-net medical office buildings 6 266,483 55,396 $208 2% 2,075 1%

Total triple-net 439 38,477 266,483 2,818,682 82% 141,530 84%

Multi-tenant medical office buildings 59 2,670,198 528,955 $198 15% 15,308 9%

Total owned 498 38,477 2,936,681 3,347,637 97% 156,838 93%

Mortgage Loans Receivable

Assisted and independent living facilities 9 668 47,555 $71,000 1% 2,823 2%

Skilled nursing facilities 20 2,805 62,483 $22,000 2% 3,896 2%

Continuing care retirement communities — 180 9,111 $51,000 0% 366 0%

Total mortgage loans receivable 29 3,653 119,149 $33,000 3% 7,085 4%

Other Income 4,731 3%

Assets Held for Sale 1 130 2,597 0%

Total Consolidated Portfolio 528 42,260 2,936,681 $3,469,383 100% $168,654 100%

Consolidated Portfolio by Type

Assisted and independent living facilities 259 18,446 $1,748,299 $95,000 50% $88,228 52%

Skilled nursing facilities 186 21,249 927,644 $44,000 27% 47,851 28%

Continuing care retirement communities 10 2,132 133,903 $63,000 4% 6,442 4%

Specialty hospitals 7 303 72,589 $240,000 2% 4,019 2%

Total senior housing and long-term care 462 42,130 2,882,435 $68,000 83% 146,540 86%

Medical office buildings 65 2,936,681 584,351 $199 17% 17,383 10%

Total owned and mortgage loans receivable 527 42,130 2,936,681 3,466,786 100% 163,923 96%

Other income 4,731 3%

Assets held for sale 1 130 2,597 0%

Total consolidated 528 42,260 2,936,681 3,469,383 100% 168,654 100%

Unconsolidated JV Ownership

Assisted and independent living facilities 19 1,806 252,247 $140,000 47% 10,622 47%

Skilled nursing facilities 14 1,884 254,143 $135,000 47% 10,626 47%

Continuing care retirement communities 1 148 29,670 $200,000 6% 1,242 6%

Total JV owned 34 3,838 536,060 $140,000 100% 22,490 100%

Other income 44 0%

Total JV 22,534 100%

Total Portfolio 562 46,098 2,936,681 $4,005,443 $191,188

* Multi-tenant medical office building gross investment includes $118,217 of amounts classified as other assets

Triple-Net Leased Security Information

Security Deposits Percentage with Impounds

Consolidated JV Consolidated JV

Owned Mortgages Total Owned Owned Mortgages Total Owned

Bank letters of credit $54,104 $2,584 $56,688 $9,900 Master leases 84% 100%

Cash deposits 24,214 850 25,064 81 Property tax 68% 45% 67% 74%

$78,318 $3,434 $81,752 $9,981 Cap ex 46% 14% 44% 59%

June 30, 2008— 32

Portfolio Performance Summary

Gross investment and annualized cash rent in thousands

Number of Facilities Average Age Gross Investment Annualized Cash Rent/NOI Current Yield Occupancy EBITDARM Coverage

Owned Facilities

Assisted and independent living facilities 250 12 $1,700,744 $162,961 9.6% 83.6% 1.26x

Skilled nursing facilities 166 27 865,161 87,549 10.1% 82.5% 2.06x

Continuing care retirement communities 10 24 124,792 12,104 9.7% 84.5% 1.63x

Specialty hospitals 7 16 72,589 7,837 10.8% 71.8% 2.49x

Total senior housing and long-term care 433 18 2,763,286 270,451 9.8% 83.1% 1.57x

Triple-net medical office buildings 6 9 55,396 4,150 7.5% 84.9%

Total triple-net 439 2,818,682 274,601 9.7%

Multi-tenant medical office buildings 59 12 528,955 35,715 6.8% 91.9%

Total owned 498 17 3,347,637 310,315 9.3%

Mortgage Loans Receivable

Assisted and independent living facilities 9 12 47,555 5,374 11.3% 87.5% 1.39x

Skilled nursing facilities 20 34 62,483 8,240 13.2% 90.2% 2.27x

Continuing care retirement communities — 36 9,111 729 8.0% 92.4% 3.89x

Total mortgage loans receivable 29 25 119,149 14,343 12.0% 89.8% 2.10x

Assets Held for Sale 1 41 2,597 298 11.5% 88.0% 1.37x

Total NHP Consolidated Portfolio 528 17 $3,469,383 $324,956 9.4% 1.59x

Consolidated Portfolio by Type

Assisted and independent living facilities 259 12 $1,748,299 $169,455 9.7% 83.7% 1.25x

Skilled nursing facilities 186 28 927,644 96,044 10.4% 93.0% 2.10x

Continuing care retirement communities 10 25 133,903 12,833 9.6% 85.2% 1.75x

Specialty hospitals 7 16 72,589 7,837 10.8% 71.8% 2.49x

Total senior housing and long-term care 462 18 2,882,435 286,170 9.9% 83.4% 1.59x

Medical Office Buildings 65 9 584,351 39,864 6.8% 90.8%

Assets held for sale 1 41 2,597 298 11.5% 88.0% 1.37x

Total consolidated 528 17 3,469,383 326,332 9.4%

Unconsolidated JV Ownership

Assisted and independent living facilities 19 12 252,247 21,035 8.3% 86.8% 1.19x

Skilled nursing facilities 14 19 254,142 21,053 8.3% 91.4% 1.80x

Continuing care retirement communities 1 11 29,670 2,480 8.4% 89.8% 1.64x

Total JV owned 34 14 536,060 44,568 8.3% 89.0% 1.50x

Total Portfolio 562 17 $4,005,443 $369,524 9.2% 1.58x

* Medical office building cost per square foot and gross investment reflects total purchase price including amounts classified as other assets

June 30, 2008— 33

Portfolio Performance Summary (2)

Asset Type

(based on investment)

Independent and Assisted Living

50%

Skilled Nursing

27%

Other

6%

MOBs

17%

Pay Source

Medicaid

17%

Medicare

9%

Private Pay

74%

Locations

(based on revenue)

WA (4%)

CA (10%)

TX (14%)

WI (7%)

MA (6%)

Tenant/Operator

(based on revenue)

Top 5 = 39% Top 10 = 56% Top 15 = 64%

June 30, 2008— 34

Portfolio Performance Summary | Asset Class Composition Trends

6.0%

2.0%

30.0%

62.0%

4Q06

7.0%

2.0%

30.0%

61.0%

1Q07

7.0%

2.0%

29.0%

62.0%

2Q07

7.0%

2.0%

28.0%

63.0%

3Q07

6.0%

11.0%

27.0%

56.0%

4Q07

6.0%

11.0%

27.0%

56.0%

1Q08

6.0%

17.0%

27.0%

50.0%

2Q08

ALF

SNF

MOB

Other

June 30, 2008— 35

Portfolio Performance Summary | Private Pay Composition Trends

12.0%

23.0%

65.0%

4Q06

11.0%

21.0%

68.0%

1Q07

11.0%

18.0%

71.0%

2Q07

11.0%

18.0%

71.0%

3Q07

10.0%

19.0%

71.0%

4Q07

10.0%

19.0%

71.0%

1Q08

9.3%

16.8%

74.0%

2Q08

Private

Medicaid

Medicare

June 30, 2008— 36

Portfolio Performance Summary | Top Tenant Concentration Trends

76% 67% 50%

4Q06

75% 65% 48%

1Q07

73% 65% 49%

2Q07

71% 64% 49%

3Q07

69% 61% 46%

4Q07

66% 57% 41%

1Q08

64% 56% 39%

2Q08

Top 5

Top 10

Top 15

June 30, 2008— 37

Consolidated Portfolio Performance by Asset Type (excluding MOBs)

SAME PROPERTY (PERFORMANCE) TOTAL

JUN 2008 MAR 2008 Q/Q Chg JUN 2007 Y/Y Chg JUN 2008 MAR 2008 JUN 2007

Assisted and independent living

Annualized Facility Revenue ($000s) $545,466 $543,048 0.4% $514,812 6.0% $600,234 $668,802 $670,703

Occupancy 84.5% 86.0% -1.6% 85.8% -1.4% 83.6% 84.9% 83.4%

Monthly revenue per occupied bed/unit $3,013 $3,005 0.3% $2,939 2.5% $2,976 $3,067 $2,993

Annualized Facility EBITDARM ($000s) $197,018 $197,208 -0.1% $194,771 1.2% $210,982 $239,724 $247,602

Facility EBITDARM % 36.1% 36.3% -0.2% 37.8% -1.7% 35.1% 35.8% 36.9%

NHP Annualized Cash Rent ($000s) $153,667 $151,676 1.3% $147,314 4.3% $169,455 $183,278 $184,580

Facility EBITDARM coverage 1.28x 1.30x -1.4% 1.32x -3.0% 1.25x 1.31x 1.34x

Facility EBITDAR coverage 1.10x 1.12x -1.5% 1.15x -3.7% 1.07x 1.13x 1.16x

Facility EBITDAR—Capex coverage 1.04x 1.06x -1.5% 1.08x -4.0% 1.00x 1.06x 1.10x

Skilled nursing facilities

Annualized Facility Revenues ($000s) $1,032,804 $1,022,424 1.0% $980,876 5.3% $1,223,861 $1,226,093 $1,382.137

Occupancy 82.6% 83.1% -0.6% 82.5% 0.1% 82.3% 82.8% 82.6%

Monthly revenue per occupied bed/unit $6,036 $5,934 1.7% $5,707 5.8% $6,011 $6,030 $5,543

Q-Mix (Private + Medicare) 46.0% 43.9% 2.1% 41.2% 4.8% 46.5% 44.1% 41.3%

Annualized Facility EBITDARM ($000s) $172,131 $171,229 0.5% $160,075 7.5% $202,033 $205,343 $224,680

16.7% 16.7% -0.1% 16.3% 0.3% 16.5% 16.7% 16.3%

NHP Annualized Cash Rent ($000s) $82,755 $82,165 0.7% $80,298 3.1% $96,044 $95,983 $106,508

Facility EBITDARM coverage 2.08x 2.08x -0.2% 1.99 4.3% 2.10x 2.14x 2.11x

Facility EBITDAR coverage 1.46x 1.46x -0.4% 1.38x 5.3% 1.47x 1.50x 1.46x

Facility EBITDAR—Capex coverage 1.37x 1.37x -0.4% 1.29x 5.8% 1.38x 1.41x 1.38x

June 30, 2008— 38

Consolidated Portfolio Performance (excluding MOBs)

SAME PROPERTY (PERFORMANCE) TOTAL

JUN 2008 MAR 2008 Q/Q Chg JUN 2007 Y/Y Chg JUN 2008 MAR 2008 JUN 2007

NHP Consolidated Portfolio (excluding MOBs)

Annualized Facility Revenue ($000s) $1,754,939 $1,737,441 1.0% $1,661,453 5.6% $2,004,567 $2,071,794 $2,239,431

Occupancy 83.8% 84.9% -1.2% 84.4% -0.6% 83.0% 84.3% 81.2%

Monthly revenue per occupied bed/unit $4,675 $4,623 1.1% 4,478 4.4% 4,669 4,652 4,471

Annualized Facility EBITDARM ($000s) $410,755 $408,331 0.6% $393,610 4.4% $454,754 $484,859 $514,207

Facility EBITDARM % 23.4% 23.5% -0.1% 23.7% -0.3% 22.7% 23.4% 23.0%

Total NHP Annualized Cash Rent ($000s) $256,198 $253,996 0.9% $248,101 3.3% $285,829 $299,983 $314,625

NHP Rent (Payor Mix)

Private 71.0% 69.8% 1.1% 69.4% 1.6% 70.2% 70.5% 68.5%

Medicare 10.4% 10.7% -0.3% 11.0% -0.6% 10.6% 10.4% 11.3%

Medicaid 18.5% 19.3% -0.8% 19.5% -0.9% 19.2% 19.0% 20.2%

Other 0.1% 0.2% 0.0% 0.1% 0.0% 0.1% 0.2% 0.1%

Total NHP Annualized Cash Rent 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%

Facility EBITDARM coverage 1.60x 1.61x -0.4% 1.59x 0.6% 1.59x 1.62x 1.64x

Facility EBITDAR coverage 1.26x 1.27x -0.5% 1.26x 0.3% 1.24x 1.27x 1.28x

Facility EBITDAR—Capex coverage 1.19x 1.19x -0.5% 1.18x 0.3% 1.17x 1.20x 1.22x

ALF/ILF SNF Total

Total Portfolio Facility Payor Mix JUN 2008 MAR 2008 JUN 2007 JUN 2008 MAR 2008 JUN 2007 JUN 2008 MAR 2008

JUN 2007

Private 99.0% 99.0% 98.9% 20.2% 17.4% 17.6% 49.1% 48.9% 45.8%

Medicare 0.1% 0.1% 0.3% 26.1% 26.9% 26.8% 17.7% 17.6% 18.4%

Medicaid 0.8% 0.9% 0.8% 53.3% 55.3% 55.3% 32.8% 33.2% 35.6%

Other 0.0% 0.0% 0.0% 0.3% 0.5% 0.3% 0.4% 0.3% 0.2%

Total Tenant Revenue 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%

Q-Mix (Private + Medicare) 99.1% 99.2% 99.3% 46.3% 44.2% 44.4% 66.8% 66.5% 64.2%

* Excludes assets held for sale, medical office buildings and JV assets

June 30, 2008— 39

Tenant Concentration

Gross investment and annualized cash rent in thousands

Tenant Concentration Number of Facilities Number of Beds/Units Inservice Gross Investment Percent by Investment Annualized Cash Rent/NOI Percent by Cash Rent Average Age Remaining Term EBITDARM Coverage

1 Brookdale Senior Living [A] 96 5,619 $464,195 13.4% $51,116 15.7% 13 14.1 1.47x

2 Hearthstone Senior Services 32 3,122 431,297 12.4% 35,774 11.0% 9 13.0 1.17x

3 Wingate Healthcare 19 2,528 241,387 7.0% 20,238 6.2% 20 11.5 1.82x

4 Senior Services of America 17 1,258 119,939 3.5% 10,779 3.3% 14 13.0 1.15x

5 Laureate Group 9 1,526 118,946 3.4% 10,715 3.3% 15 4.6 1.43x

Top 5 173 14,,053 1,375,764 39.7% 128,622 39.4% 13 13.6 1.41x

6 Carillon Assisted Living 9 928 105,847 3.1% 8,612 2.6% 7 13.5 1.35x

7 Beverly Enterprises 28 3,100 103,417 3.0% 14,364 4.4% 31 6.0 2.12x

8 Magnolia Health Systems 24 2,019 100,132 2.9% 9,263 2.8% 22 18.6 1.84x

9 Atria Senior Living 11 1,567 87,984 2.5% 15,115 4.6% 28 12.7 1.16x

10 Emeritus Corporation [A] 6 533 70,177 2.0% 6,656 2.0% 10 8.3 1.14x

Top 10 251 22,200 1,843,321 53.1% 182,632 56.0% 15 14.0 1.45x

11 Nexion Health Management 19 2,144 63,000 1.8% 7,524 2.3% 24 4.4 2.06x

12 Primrose Retirement Associates 8 429 55,016 1.6% 4,377 1.3% 8 13.6 1.13x

13 Epic Group 7 892 52,367 1.5% 4,380 1.3% 35 7.8 1.99x

14 Trans Healthcare 7 1,062 46,676 1.4% 5,533 1.7% 40 1.8 0.79x

15 HEALTHSOUTH [A] 2 120 45,645 1.3% 4,933 1.5% 17 5.7 1.25x

Top 15 294 26,847 2,106,024 60.7% 209,379 64.2% 16 12.8 1.46x

Assets Held For Sale 1 130 2,597 0.1% 298 0.1% 41 8.2 1.37x

Other—Senior Housing and

Long-Term Care Tenants 168 13,989 776,411 22.4% 76,791 23.5% 21 11.4 2.00x

Medical Office Buildings 65 584,351 16.8% 39,864 12.2% 9

Total NHP Consolidated Portfolio 528 40,966 $3,469,383 100.0% $326,332 100.0% 17 12.3 1.59x

* Performance metrics exclude assets held for sale and JV assets

[A] Public company tenant

June 30, 2008— 40

Geographic Performance Metrics

Gross investment and annualized cash rent in thousands

Number of Facilities Number of Beds/Units Inservice Gross Investment Percent by Investment Annualized Cash Rent Percent by Cash Rent Medicaid as Percent of Cash Rent [A]

1 Texas 59 5,935 $460,831 16.0% $41,475 14.5% 3.5%

2 California 23 2,505 284,878 9.9% $26,780 9.4% 1.5%

3 Massachusetts 19 2,421 215,769 7.5% $18,422 6.4% 3.3%

4 Wisconsin 49 2,837 210,494 7.3% $19,582 6.8% 1.4%

5 Washington 16 1,465 203,635 7.1% $10,978 3.8% 0.7%

Top 5 166 15,163 1,375,607 47.7% 117,237 40.9% 10.5%

6 Tennessee 21 1,811 176,697 6.1% $14,942 5.2% 1.4%

7 Florida 25 2,320 154,367 5.4% $13,157 4.6% 1.5%

8 Indiana 29 1,829 133,650 4.6% $8,628 3.0% 1.5%

9 Ohio 17 1,578 124,928 4.3% $12,914 4.5% 1.3%

10 North Carolina 11 1,120 111,135 3.9% $9,450 3.3% 0.5%

Top 10 269 23,821 2,076,383 72.0% 176,329 61.6% 16.6%

11 Michigan 15 1,072 106,027 3.7% $10,023 3.5% 1.2%

12 New York 6 846 101,437 3.5% $9,780 3.4% 1.2%

13 Missouri 16 1,130 95,476 3.3% $5,392 1.9% 0.8%

14 Minnesota 13 889 64,404 2.2% $5,542 1.9% 1.0%

15 Alabama 6 557 58,780 2.0% $3,799 1.3% 0.0%

Top 15 325 28,315 2,502,507 86.7% 210,865 73.6% 20.9%

Other States 138 12,651 382,525 13.3% 75,603 26.4% 11.8%

Total 463 40,966 $2,885,032 100.0% $286,468 100.0% 32.6%

Medical Office Buildings 65 584,351 39,864

Total NHP Consolidated Portfolio 528 3,469,383 326,332

* Performance metrics exclude assets held for sale, medical office buildings and JV assets

[A] Medicaid as a percent of cash rent represents an estimate of the portion of NHP’s total senior housing and long-term care portfolio total rental income derived from the underlying Medicaid reimbursement of our tenants and borrowers (Medicaid income of our tenant divided by total income of our tenant multiplied by the rent or interest paid to NHP)

June 30, 2008— 41

Geographic Performance Metrics

Gross investment and annualized cash rent in thousands

Number of Facilities Number of Beds/Units Inservice Gross Investment Annualized Cash Rent EBITDARM Coverage Revenue per occupied bed/unit Average Age Remaining Term % SNF by Cash Rent

1 Texas 59 5,935 $460,831 $41,475 1.70x $4,369 14 8.7 25.9%

2 California 23 2,505 284,878 26,780 1.15x 5,498 12 10.5 16.3%

3 Massachusetts 19 2,421 215,769 18,422 1.88x 6,838 23 11.0 82.3%

4 Wisconsin 49 2,837 210,494 19,582 1.48x 3,186 17 10.5 16.2%

5 Washington 16 1,465 203,635 10,978 2.00x 5,050 18 16.2 37.2%

Top 5 166 15,163 1,375,607 117,237 1.59x 4,857 16 11.4 32.0%

6 Tennessee 21 1,811 176,697 14,942 1.07x 3,909 13 9.1 16.1%

7 Florida 25 2,320 154,367 13,157 1.90x 5,047 19 10.0 21.0%

8 Indiana 29 1,829 133,650 8,628 1.68x 4,499 19 16.5 74.6%

9 Ohio 17 1,578 124,928 12,914 1.01x 5,013 16 8.3 23.4%

10 North Carolina 11 1,120 111,135 9,450 1.46x 3,306 7 13.0 3.7%

Top 10 296 23,821 2,076,383 176,329 1.53x 4,719 16 11.4 29.8%

11 Michigan 15 1,072 106,027 10,023 1.65x 6,212 10 11.9 6.0%

12 New York 6 846 101,437 9,780 1.40x 6,516 16 9.9 50.4%

13 Missouri 16 1,130 95,476 5,392 1.97x 5,236 19 6.4 99.0%

14 Minnesota 13 889 64,404 5,542 1.36x 4,101 24 10.9 40.3%

15 Alabama 6 557 58,780 3,799 0.75x 2,331 7 9.7 0.0%

Top 15 325 28,315 2,502,507 210,865 1.52x 4,793 16 10.8 31.1%

Other States 138 12,651 382,525 75,603 1.80x 5,245 19 8.5 24.9%

Total 463 40,966 $2,885,032 $286,468 1.59x $4,669 17 12.3 29.5%

Medical Office Buildings 65 584,351 39,864 9

Total NHP Consolidated Portfolio 528 3,469,383 326,332 17

* Performance metrics exclude assets held for sale, medical office buildings and JV assets

Note: Lease terms for NHP facilities generally are between ten and fifteen years with renewal options, if exercised, that add ten to fifteen additional years. In general, NHP receives contractual rent escalators in the range of 1.5% to 2.5% for skilled nursing assets and 2.0% to 3.0% for assisted living assets

June 30, 2008— 42

Unconsolidated JV Portfolio Performance Metrics

Assisted and Independent Living

JUN 2008 Skilled Nursing

JUN 2008 CCRC JUN 2008 Total Portfolio JUN 2008

Unconsolidated JV Portfolio

Annualized Facility Revenue ($000s) $72,910 $153,909 $13,329 $240,148

Occupancy 86.8% 91.4% 89.8% 89.0%

Monthly revenue per occupied bed/unit $3,596 $7,475 $7,965 $5,645

Q-Mix (Private + Medicare) 98.5% 63.7% 100.0% 76.3%

Annualized Facility EBITDARM ($000s) $25,043 $37,916 $4,067 $67,026

Facility EBITDARM % 34.3% 24.6% 30.5% 27.9%

Total JV Annualized Cash Rent ($000s) 21,035 21,053 2,480 44,568

JV Rent (Payor Mix)

Private 98.5% 39.6% 72.0% 69.2%

Medicare 0.0% 24.1% 28.0% 12.9%

Medicaid 1.5% 36.3% 0.0% 17.8%

Other 0.0% 0.0% 0.0% 0.0%

Total JV Annualized Cash Rent 100.0% 100.0% 100.0% 100.0%

Facility EBITDARM coverage 1.19x 1.80x 1.64x 1.50x

Facility EBITDAR coverage 1.02x 1.44x 1.37x 1.23x

Facility EBITDAR—Capex coverage 0.96x 1.41x 1.35x 1.19x

June 30, 2008— 43

Medical Office Building Portfolio Performance Metrics

Gross investment dollars in thousands

Ownership Number of Facilities Gross Investment Gross Investment per SQFT Percent On Campus Average Age Rentable SQFT Current Year Occupancy Prior Year Change

BROE I—90% 20 $57,091 76 60.0% 20 752,793 85.3% 81.9% 3.4%

BROE II—95% 16 94,945 170 100.0% 15 558,707 91.9%

McShane—95% 7 46,337 115 57.1% 15 404,227 89.0%

NHP Multi-Tenant—100% 16 330,582 346 75.0% 10 954,471 97.1%

NHP Triple-Net—100% 6 55,396 208 16.7% 9 265,784 84.9%

Total MOB Portfolio 65 $584,351 $199 69.2% 9 2,935,982 90.8%

Annualized Revenue Annualized Cash Rent/NOI Operating Margin

Current Year Prior Year % Change Current Year Prior Year % Change Current Year Prior Year Change

BROE I—90% $10,990 $11,018 -0.3% $5,237 $4,767 9.9% 47.7% 43.3% 4.4%

BROE II—95% 11,544 6,151 53.3%

McShane—95% 6,883 3,390 49.2%

NHP Multi-Tenant—100% 32,574 20,937 64.3%

NHP Triple-Net—100% 4,150 4,150

Total MOB Portfolio $66,141 $39,864 57.6%

MOBs by state Number of Facilities Gross Investment Percent by Investment Gross Investment per SQFT Building Square Feet Percent by Square Feet

1 California 6 $137,365 23.5% $406 337,983 11.5%

2 Washington 7 118,493 20.3% $323 366,483 12.5%

3 Illinois 12 67,114 11.5% $175 383,058 13.1%

4 Missouri 7 46,337 7.9% $115 404,227 13.8%

5 Louisiana 8 31,403 5.4% $82 384,588 13.1%

Top 5 40 400,711 68.6% $214 1,876,339 63.9%

6 Oregon 1 33,205 5.7% $317 104,856 3.6%

7 Texas 7 32,346 5.5% $110 293,453 10.0%

8 Nevada 1 27,793 4.8% $328 84,666 2.9%

9 South Carolina 2 16,362 2.8% $149 109,704 3.7%

10 Alabama 1 16,706 2.9% $273 61,219 2.1%

Top 10 52 527,123 90.2% $208 2,530,237 86.2%

11 Indiana 4 15,725 2.7% $282 55,814 1.9%

12 Ohio 1 13,519 2.3% $202 66,776 2.3%

13 Georgia 3 10,051 1.7% $82 123,294 4.2%

14 Florida 1 6,588 1.1% $177 37,266 1.3%

15 Virginia 3 6,795 1.2% $104 65,315 2.2%

Top 15 64 579,801 99.2% $201 2,878,702 98.1%

Other States 1 4,550 0.8% $79 57,280 2.0%

Medical Office Buildings 65 $584,351 100.0% $199 2,935,982 100.0%

June 30, 2008— 44

Portfolio Performance Measures Definitions

Annualized Cash Rent/NOI:

The most recent monthly total cash rent due from our tenants as of the end of the current reporting period multiplied by twelve. For our multi-tenant medical office building portfolio, NOI rather than cash rent is annualized. We use Annualized Cash Rent to calculate our EBITDARM, EBITDAR and EBITDAR –Capex coverages.

Facility EBITDAR:

Earnings before interest, taxes, depreciation, amortization and rent on an annualized basis. We believe EBITDAR is a good estimate of facility cash flows after payment of management fees. We use a standardized imputed management fee equal to 5% of the revenues our tenants or borrowers generate at each individual facility (Facility Revenues) which we believe represents typical management fees for our senior housing and long-term care portfolios. We receive periodic facility financial information from our tenants that we utilize to calculate EBITDAR. All facility financial information was derived solely from information provided by our tenants and borrowers and we have not verified such information. We use EBITDAR to calculate the EBITDAR (cash flow) coverage for our portfolio.

Facility EBITDAR Coverage:

Annualized EBITDAR divided by Annualized Cash Rent. This ratio is a measure of a facility’s ability to cover its cash rent obligations. EBITDAR Coverage of 1.0X would indicate the EBITDAR is just sufficient to pay the cash rent. The higher the coverage, the better able a facility is to meet its rent obligations. This is the mid-range coverage calculation we utilize.

Facility EBITDARM:

Earnings before interest, taxes, depreciation, amortization, rent and management fees on an annualized basis. We believe EBITDARM is a good estimate of facility cash flows before payment of management fees. We use a standardized imputed management fee equal to 5% of the revenues our tenants or borrowers generate at each individual facility (Facility Revenues) which we believe represents typical management fees for our senior housing and long-term care portfolios. We receive periodic facility financial information from our tenants that we utilize to calculate EBITDARM. All facility financial information was derived solely from information provided by our tenants and borrowers and we have not verified such information. We use EBITDARM to calculate the EBITDARM (cash flow before management fee) coverage for our portfolio.

Facility EBITDARM Coverage:

Annualized EBITDARM divided by Annualized Cash Rent. This ratio is a measure of a facility’s ability to cover its cash rent obligations assuming it doesn’t have to pay its management fee. EBITDARM Coverage of 1.0X would indicate the EBITDARM is just sufficient to pay the cash rent. The higher the coverage, the better able a facility is to meet its rent obligations. This is the least restrictive coverage measure we utilize.

Facility EBITDAR—Capex:

Earnings before interest, taxes, depreciation, amortization and rent less minimum capital expenditures (capex) calculated on an annualized basis. We believe EBITDAR is a good estimate of facility cash flows after a reserve for minimum capital expenditures required to maintain a facility. We use a standardized imputed capital expenditure schedule in our calculations based on the type, size and age of each facility which we believe represents typical minimum capital expenditures for our senior housing and long-term care portfolios. We receive periodic facility financial information from our tenants that we utilize to calculate EBITDAR—Capex. All facility financial information was derived solely from information provided by our tenants and borrowers and we have not verified such information. We use EBITDAR—Capex to calculate the EBITDAR – Capex (cash flow after reserves for minimum capex requirements) coverage for our portfolio.

Facility EBITDAR—Capex Coverage:

Annualized EBITDAR—Capex divided by Annualized Cash Rent. This ratio is a measure of a facility’s ability to cover its cash rent obligations after it makes the minimum capital expenditures required to maintain the facility. EBITDAR

- Capex Coverage of 1.0X would indicate the EBITDAR—Capex is just sufficient to pay the cash rent. The higher the coverage, the better able a facility is to meet its rent obligations. This is the most restrictive coverage measure we utilize.

Facility Revenues:

The revenues generated by each individual facility on an annualized basis. We receive periodic facility financial information from our tenants that we utilize to calculate Facility Revenues. All facility financial information was derived solely from information provided by our tenants and borrowers and we have not verified such information.

June 30, 2008— 45

Portfolio Performance Measures Definitions (2)

Gross Investment:

We define Gross Investment as our total investment in a property which includes land, building, improvements, equipment as well as any other identifiable assets included in the caption Other Assets on our balance sheets. Items classified in Other Assets generally pertain to our medical office buildings and may include such things as tenant improvements, leasing commissions, above/(below) market lease value, lease in place value and other items.

Monthly Revenue per Occupied Bed/Unit:

For our senior housing and long-term care portfolio, monthly revenue per occupied bed or unit is derived by determining the monthly revenue generated by each individual facility divided by the total number of actual resident days for a 30-day month. All facility performance data were derived solely from information provided by our tenants and borrowers and we have not verified such information.

Occupancy:

For our senior housing and long-term care portfolio, occupancy represents a facility’s actual resident days (total number of beds or units occupied multiplied by the number of days in the period) divided by the total resident capacity (total number of beds or units in service for the period multiplied by the number of days in the period). For medical office buildings, facility occupancy represents the leased square feet divided by the total rentable square feet. In all cases (senior housing, long-term care and medical office buildings), the reporting period represents the month prior to quarter end. All facility performance data were derived solely from information provided by our tenants and borrowers and we have not verified such information.

NOI:

Net operating income (“NOI”) is a non-GAAP supplemental financial measure used to evaluate the operating performance of our facilities. We define NOI for our triple-net leases segment as rent revenues. For our multi-tenant leases segment, we define NOI as revenues minus medical office building operating expenses. In some cases, revenue for medical office buildings includes expense reimbursements for common area maintenance charges. NOI excludes interest expense and amortization of deferred financing costs, depreciation and amortization expense, general and administrative expense and discontinued operations. We present NOI as it effectively presents our portfolio on a “net” rent basis and provides relevant and useful information as

NOI (continued): it measures the operating performance at the facility level on an unleveraged basis. We use NOI to make decisions about resource allocations and to assess the property level performance of our properties. Furthermore, we believe that NOI provides investors relevant and useful information because it measures the operating performance of our real estate at the property level on an unleveraged basis. We believe that net income is the GAAP measure that is most directly comparable to NOI. However, NOI should not be considered as an alternative to net income as the primary indicator of operating performance as it excludes the items described above. Additionally, NOI as presented above may not be comparable to other REITs or companies as their definitions of NOI may differ from ours.

Q-Mix:

For our long-term care portfolio, Q-Mix (abbreviation for Quality-Mix) refers to the combination of a Tenant’s private and medicare revenues as a percentage of total revenues. As private and medicare rates are generally higher at long-term care facilities, Tenants can oftentimes improve margins by selectively targeting medicare and private-pay residents. As such, an increase in the Q-Mix generally results in a corresponding increase in a Tenant’s total revenues.

Rentable Square Feet:

For our medical office building portfolio, rentable square feet represents the area measured to the inside finished surface of the dominant portion of the permanent outer building walls, excluding any major vertical penetrations of the floor. An add-on or load factor is used to charge the tenant for a percentage of the common areas, so that the total rentable square footage for the building is equal to sum of each floor’s rentable area.

Same Property (Performance):

Results shown under the Same Property caption present the financial or other performance measures for only those facilities that were in our portfolio for more than twelve month at the end of all periods presented.

June 30, 2008— 46