EX-99.(A)(3) 9 a76341toex99-a3.txt EXHIBIT (A)(3) EXHIBIT (A)(3) ARV ASSISTED LIVING, INC. ARV PIII PURCHASE ANALYSIS [ARV LOGO] ARV PIII PURCHASE ANALYSIS VALUE COMPARISON
VALUE -------------------------------------------------------------------------------- 2000 2001 2001 REIT #1 REIT #2 ASSET UNITS ACTUAL BUDGET FORECAST APPRAISAL OFFER OFFER(C) ----- ----- ----------- ----------- ----------- ----------- ----------- -------- Chandler Villas...... 164 $ 6,050,000 $ 4,100,000 $ 5,400,000 $ 8,500,000(A) $ 5,700,000 Villa Las Posas...... 123 13,225,000 14,225,000 13,675,000 13,250,000(B) 12,500,000 --- ----------- ----------- ----------- ----------- ----------- 287 $19,275,000* $18,325,000* $19,075,000* $21,750,000 $18,200,000 =========== =========== =========== =========== =========== Value Per Unit....... $ 67,200* $ 63,900* $ 66,500* $ 75,800 $ 63,400 =========== =========== =========== =========== =========== Chandler Villas...... $ 6,350,000 $ 4,170,000 $ 5,975,000 Villa Las Posas...... 14,050,000 15,130,000 14,580,000 ----------- ----------- ----------- $20,400,000** $19,300,000** $20,555,000** =========== =========== =========== Value Per Unit....... $ 71,000** $ 67,250** $ 71,600** =========== =========== ===========
--------------- * Values include deduction for partnership administration fees. ** Value excludes deduction for partnership administration fees. (A) Appraisal date June 2000 (B) Appraisal date March 1999 (C) Offer expected by mid-July 1 ARV ASSISTED LIVING, INC. ARV PILL PURCHASE ANALYSIS KEY ASSUMPTIONS
NUMBER UNITS ------ ----- Assets Owned Communities......................................... 2 287 Growth Rates (Annual Compounded) Revenue................................................... 3% Operating Expenses........................................ 3% EBITDAR................................................... 3% Cap Ex.................................................... 5.25%
AMOUNT PER UNIT -------- -------- Cap Ex Actual 1998............................................... $608,235 $2,165 1999...................................................... $164,866 $ 587 2000...................................................... $193,140 $ 687 Budget 2001............................................... $163,496 $ 582
OWNED LEASED ASSETS ASSETS ----------- ------ Capitalization Rates Acquisition............................................... 11% 15% Terminal Value in 2010.................................... 11% 15% Discount Rate............................................. 15% 15% Operating Profits......................................... Half-Year Convention Sale........................................................ End of 2010 Cost of Sale................................................ Included in purchase price Fee to ARV on Sale.......................................... None
2 CHANDLER VILLAS 101 S. YUCCA STREET CHANDLER, AZ 85224 LICENSE NUMBER: RCI-043 [PHOTOGRAPH] Chandler Villas, located 12 miles southeast of Phoenix, offers spacious one- and two-bedroom apartments available in five floor plans. Each apartment features a kitchen and large balcony or patio. The community is comprised of 15 one- and two-story buildings situated on eight acres of beautiful park-like grounds. The community offers a grand dining room and two large recreation centers plus a pool and spa. A beauty shop, library and game room complete with billiards are all available within the community's expansive grounds. Located in a tranquil neighborhood setting, Chandler Villas is close to a number of conveniences including shopping, banks, churches and medical centers. In addition, the community is only minutes away from the cultural and recreational highlights of the greater Phoenix area. [MAP] 3 ARV ASSISTED LIVING, INC. COMMUNITY SUMMARY COMMUNITY: Chandler Villas ADDRESS: 101 S. Yucca Street Chandler, AZ 85224-8149 OWNER: ARV PIII PHYSICAL INFORMATION: Year Built:................................................. 1988 Units:...................................................... 164 Licensed Beds:.............................................. 164 Square Footage:............................................. 110,000 No. Floors:................................................. 2 No. Buildings:.............................................. 15 Sprinklered:................................................ Yes EBITDAR (AFTER MGT & ADMIN FEES): 1998........................................................ $ 747,949 1999........................................................ $ 617,395 2000........................................................ $ 745,772 2001 (Forecast)............................................. $ 534,000 EBITDAR MARGIN (AFTER MGT & ADMIN FEES): 1998........................................................ 34% 1999........................................................ 26% 2000........................................................ 28% 2001 (Forecast)............................................. 19% AVERAGE OCCUPANCY: 12/31/98.................................................... 98.1% 12/31/99.................................................... 93.8% 12/31/00.................................................... 97.4% 4/30/01..................................................... 96.3% 12/31/01 (Forecast)......................................... 95.6% ASSISTED LIVING PENETRATION: 12/31/98.................................................... 22.1% 12/31/99.................................................... 19.2% 12/31/00.................................................... 19.0% 2/28/01..................................................... 22.6% 12/31/01 (Forecast)......................................... 22.4% VALUE INFORMATION(a): Value at 12/31/00........................................... $6,034,292 Value at 12/31/01 (Forecast)................................ $4,109,091
--------------- (a) Value calculated based upon EBITDAR (after management and administration fees and $500/unit capital expenditure reserve) using an 11% capitalization rate. 4 ARV ASSISTED LIVING, INC. ESTIMATED VALUATION APRIL 2001 (With Management and Administration Fees Deduction)
CHANDLER VILLAS 164 UNITS 96.3% ----------------------------------- 2000 ACTUAL 2001 BUDGET CHANGE ----------- ----------- ------- EBITDAR Before Management & Administration Fees.......... $ 916,269 $ 678,544 (25.94)% Management Fees -- 5%.................................... (135,134) (137,642) Administration Fees -- 10%............................... (35,363) (6,902) ----------- ----------- EBITDAR After Management & Administration Fees........... 745,772 534,000 CAP EX @ $500/Unit....................................... (82,000) (82,000) ----------- ----------- NOI...................................................... $ 663,772 $ 452,000 (31.90)% CAP RATE................................................. 11.0% 11.0% ----------- ----------- Value.................................................... $ 6,034,292 $ 4,109,091 Debt..................................................... (5,096,041) (5,777,915) ----------- ----------- Net Equity Value......................................... $ 938,251 $(1,668,824) (277.87)% =========== =========== Per Unit Value........................................... $ 36,794 $ 25,055 (31.90)% =========== ===========
5 ARV ASSISTED LIVING, INC. ESTIMATED VALUATION APRIL 2001 (Without Administration Fees Deduction)
CHANDLER VILLAS 164 UNITS 96.3% ----------------------------------- 2000 ACTUAL 2001 BUDGET CHANGE ----------- ----------- ------- EBITDAR Before Management & Administration Fees.......... $ 916,269 $ 678,544 (25.94)% Management Fees -- 5%.................................... (135,134) (137,642) ----------- ----------- EBITDAR After Management & Administration Fees........... 781,135 540,902 CAP EX @ $500/Unit....................................... (82,000) (82,000) ----------- ----------- NOI...................................................... $ 699,135 $ 458,902 (34.36)% CAP RATE................................................. 11.0% 11.0% ----------- ----------- Value.................................................... $ 6,355,775 $ 4,171,836 Debt..................................................... (5,096,041) (5,777,915) ----------- ----------- Net Equity Value......................................... $ 1,259,734 $(1,606,079) (227.49)% =========== =========== Per Unit Value........................................... $ 38,755 $ 25,438 (34.36)% =========== ===========
6 ARV ASSISTED LIVING, INC. ESTIMATED VALUATION ARV PIII -- 287 UNITS (Chandler Villas & Villa Las Posas)
2001 FORECAST ------------------------------------------------ TOTAL CHANDLER VILLAS VILLA LAS POSAS ------------ --------------- --------------- EBITDAR(1)......................................... $ 2,727,995 $ 900,830 $ 1,827,164 Management Fees*................................... (343,912) (142,648) (201,264) CAP EX**........................................... (287,000) (164,000) (123,000) ------------ ----------- ----------- NOI................................................ $ 2,097,082 $ 594,182 $ 1,502,900 CAP RATE........................................... 11% 11% ------------ ----------- ----------- Value.............................................. $ 19,064,384 $ 5,401,653 $13,662,730 Debt............................................... (13,786,107) (5,746,562) (8,039,545) ------------ ----------- ----------- Net Equity Value................................... $ 5,278,277 $ (344,909) $ 5,623,186 ============ =========== ===========
--------------- (1) With Partnership Admin. Fees Deduction. * Management Fees -- 5% of Total Revenue ** CAP EX -- $1,000 per unit 7 ARV ASSISTED LIVING, INC. ESTIMATED VALUATION ARV PIII -- 287 UNITS (Chandler Villas & Villa Las Posas)
2001 FORECAST ------------------------------------------------ TOTAL CHANDLER VILLAS VILLA LAS POSAS ------------ --------------- --------------- EBITDAR(1)......................................... $ 2,892,096 $ 963,857 $ 1,928,238 Management Fees*................................... (343,912) (142,648) (201,264) CAP EX**........................................... (287,000) (164,000) (123,000) ------------ ----------- ----------- NOI................................................ $ 2,261,183 $ 657,209 $ 1,603,974 CAP RATE........................................... 11% 11% ------------ ----------- ----------- Value.............................................. $ 20,556,212 $ 5,974,627 $14,581,585 Debt............................................... (13,786,107) (5,746,562) (8,039,545) ------------ ----------- ----------- Net Equity Value................................... $ 6,770,105 $ 228,065 $ 6,542,040 ============ =========== ===========
--------------- (1) Without Partnership Admin. Fees Deduction. * Management Fees -- 5% of Total Revenue ** CAP EX -- $1,000 per unit 8 EXECUTIVE FINANCIAL SUMMARY FOR THE PERIOD ENDING DECEMBER 31, 2001
DESCRIPTION BUDGET PRIOR YEAR ----------- ------------ ------------ CHANDLER VILLA, LLC Rental Revenue.............................................. 2,468,806.00 2,459,908.90 AL Services................................................. 207,242.00 177,552.11 Other....................................................... 76,792.00 65,220.22 TOTAL REVENUE............................................... 2,752,840.00 2,702,681.23 OPERATING EXPENSE Payroll..................................................... 1,107,818.00 918,082.08 Variable Expense............................................ 293,529.00 232,268.78 Utilities................................................... 220,142.00 214,790.27 Other Operating Expenses.................................... 331,046.00 303,233.63 TOTAL OPERATING EXPENSE..................................... 1,952,535.00 1,668,374.76 GROSS MARGIN................................................ 800,305.00 1,034,306.47 29.1% 38.3% Other Expenses.............................................. 266,305.00 288,534.41 EBITDAR..................................................... 534,000.00 745,772.06 19.4% 27.6% EBITDA...................................................... 534,000.00 745,772.06 Interest.................................................... 485,696.00 432,295.45 D&A......................................................... 348,240.00 350,483.81 Non-Operating Inc/Exp....................................... (4,692.00) (539.18) NET INCOME (LOSS)........................................... (295,244.00) (36,468.02)
9 VILLA LAS POSAS 24 LAS POSAS ROAD CAMARILLO, CA 93010 LICENSE NUMBER: 565800476 (PICTURE) Located in the heart of Camarillo, Villa Las Posas offers 123 studio and one-bedroom apartments to seniors desiring the ultimate in retirement or assisted living. The three-story, Mediterranean-style complex is situated on over three acres of land complete with gardens and walking paths. Villa Las Posas is ideally located alongside a neighborhood park, with a nearby shopping mall, doctors' offices, library, community hospital and church. (MAP) 10 ARV ASSISTED LIVING, INC. COMMUNITY SUMMARY COMMUNITY: Villa Las Posas ADDRESS: 24 Las Posas Road Camarillo, CA 93010 OWNER: ARV PIII PHYSICAL INFORMATION: Year Built.................................................. 1997 Units....................................................... 123 Licensed Beds............................................... 140 Square Footage.............................................. 89,000 No. Floors.................................................. 3 No. Buildings............................................... 1 Sprinklered................................................. Yes EBITDAR (AFTER MGT & ADMIN FEES): 1998........................................................ $ 864,231 1999........................................................ $ 1,290,473 2000........................................................ $ 1,516,518 2001 (Forecast)............................................. $ 1,625,103 EBITDAR MARGIN (AFTER MGT & ADMIN FEES): 1998........................................................ 33% 1999........................................................ 38% 2000........................................................ 40% 2001 (Forecast)............................................. 41% AVERAGE OCCUPANCY: 12/31/98.................................................... 81.3% 12/31/99.................................................... 98.6% 12/31/00.................................................... 98.1% 4/30/01..................................................... 97.6% 12/31/01 (Forecast)......................................... 99.1% ASSISTED LIVING PENETRATION: 12/31/98.................................................... 31.1% 12/31/99.................................................... 35.1% 12/31/00.................................................... 42.0% 2/28/01..................................................... 49.2% 12/31/01 (Forecast)......................................... 40.1% VALUE INFORMATION(A): Value at 12/31/00........................................... $13,224,399 Value at 12/31/01 (Forecast)................................ $14,214,568
--------------- (a) Value calculated based upon EBITDAR (after management and administration fees and $500/unit capital expenditure reserve) using an 11% capitalization rate. 11 ARV ASSISTED LIVING, INC. ESTIMATED VALUATION APRIL 2001 (With Management and Administration Fees Deduction)
VILLA LAS POSAS 123 UNIT 97.6% ---------------------------------- 2000 ACTUAL 2001 BUDGET CHANGE ----------- ----------- ------ EBITDAR Before Management & Administration Fees............ $ 1,795,887 $ 1,925,167 7.20% Management Fees -- 5%...................................... (189,502) (199,200) Administration Fees -- 10%................................. (90,201) (100,865) ----------- ----------- EBITDAR After Management & Administration Fees............. 1,516,184 1,625,103 CAP EX @ $500/Unit......................................... (61,500) (61,500) ----------- ----------- NOI........................................................ $ 1,454,684 $ 1,563,603 7.49% CAP RATE................................................... 11.0% 11.0% ----------- ----------- Value...................................................... $13,224,399 $14,214,568 Debt....................................................... (8,080,798) (8,047,021) ----------- ----------- Net Equity Value........................................... $ 5,143,601 $ 6,167,547 19.91% =========== =========== Per Unit Value............................................. $ 107,515 $ 115,566 7.49% =========== ===========
12 ARV ASSISTED LIVING, INC. ESTIMATED VALUATION APRIL 2001 (Without Administration Fees Deduction)
VILLA LAS POSAS 123 UNIT 97.6% ---------------------------------- 2000 ACTUAL 2001 BUDGET CHANGE ----------- ----------- ------ EBITDAR Before Management & Administration Fees............ $ 1,795,887 $ 1,925,167 7.20% Management Fees -- 5%...................................... (189,502) (199,200) ----------- ----------- EBITDAR After Management & Administration Fees............. 1,606,385 1,725,968 CAP EX @ $500/Unit......................................... (61,500) (61,500) ----------- ----------- NOI........................................................ $ 1,544,885 $ 1,664,468 7.74% CAP RATE................................................... 11.0% 11.0% ----------- ----------- Value...................................................... $14,044,411 $15,131,523 Debt....................................................... (8,080,798) (8,047,021) ----------- ----------- Net Equity Value........................................... $ 5,963,613 $ 7,084,502 18.80% =========== =========== Per Unit Value............................................. $ 114,182 $ 123,021 7.74% =========== ===========
13 ARV ASSISTED LIVING, INC. ESTIMATED VALUATION ARV PIII -- 287 UNITS (Chandler Villas & Villa Las Posas)
2001 FORECAST ------------------------------------------------ TOTAL CHANDLER VILLAS VILLA LAS POSAS ------------ --------------- --------------- EBITDAR(1)......................................... $ 2,727,995 $ 900,830 $ 1,827,164 Management Fees*................................... (343,912) (142,648) (201,264) CAP EX**........................................... (287,000) (164,000) (123,000) ------------ ----------- ----------- NOI................................................ $ 2,097,082 $ 594,182 $ 1,502,900 CAP RATE........................................... 11% 11% ------------ ----------- ----------- Value.............................................. $ 19,064,384 $ 5,401,653 $13,662,730 Debt............................................... (13,786,107) (5,746,562) (8,039,545) ------------ ----------- ----------- Net Equity Value................................... $ 5,278,277 $ (344,909) $ 5,623,186 ============ =========== ===========
--------------- (1) With Partnership Admin. Fees Deduction. * Management Fees -- 5% of Total Revenue ** CAP EX -- $1,000 per unit 14 ARV ASSISTED LIVING, INC. ESTIMATED VALUATION ARV PIII -- 287 UNITS (Chandler Villas & Villa Las Posas)
2001 FORECAST ------------------------------------------------ TOTAL CHANDLER VILLAS VILLA LAS POSAS ------------ --------------- --------------- EBITDAR(1)......................................... $ 2,892,096 $ 963,857 $ 1,928,238 Management Fees*................................... (343,912) (142,648) (201,264) CAP EX**........................................... (287,000) (164,000) (123,000) ------------ ----------- ----------- NOI................................................ $ 2,261,183 $ 657,209 $ 1,603,974 CAP RATE........................................... 11% 11% ------------ ----------- ----------- Value.............................................. $ 20,556,212 $ 5,974,627 $14,581,585 Debt............................................... (13,786,107) (5,746,562) (8,039,545) ------------ ----------- ----------- Net Equity Value................................... $ 6,770,105 $ 228,065 $ 6,542,040 ============ =========== ===========
--------------- (1) Without Partnership Admin. Fees Deduction. * Management Fees -- 5% of Total Revenue ** CAP EX -- $1,000 per unit 15 EXECUTIVE FINANCIAL SUMMARY FOR THE PERIOD ENDING DECEMBER 31, 2001
DESCRIPTION BUDGET PRIOR YEAR ----------- ------------ ------------ VILLA LAS POSAS, LLC Rental Revenue.............................................. 3,463,611.00 3,276,358.43 AL Services................................................. 464,931.00 468,809.43 Other....................................................... 55,448.00 44,875.15 TOTAL REVENUE............................................... 3,983,990.00 3,790,043.01 OPERATING EXPENSE Payroll..................................................... 1,250,869.00 1,141,774.62 Variable Expense............................................ 320,595.00 370,943.85 Utilities................................................... 135,878.00 127,932.03 Other Operating Expenses.................................... 182,590.00 196,234.97 TOTAL OPERATING EXPENSE..................................... 1,889,932.00 1,836,885.47 Gross Margin................................................ 2,094,058.00 1,953,157.54 52.6% 51.5% Other Expenses.............................................. 468,955.00 436,638.83 EBITDAR..................................................... 1,625,103.00 1,516,518.71 40.8% 40.0% EBITDA...................................................... 1,625,103.00 1,516,518.71 Interest.................................................... 717,339.00 704,992.79 D&A......................................................... 669,540.00 657,179.47 NET INCOME (LOSS)........................................... 238,224.00 154,638.30
16 ARV ASSISTED LIVING, INC. CAPITAL EXPENDITURES HISTORY ARV PIII
$ CAPITAL EXPENDITURES CAP-X PER UNIT ---------------------------------------------------------------- ------------------------------------------ AVAILABLE 1997 1998 1999 2000 2001 1997 1998 1999 2000 2001 ARV P111 UNITS ACTUAL ACTUAL ACTUAL ACTUAL BUDGET ACTUAL ACTUAL ACTUAL ACTUAL BUDGET -------- --------- -------- -------- -------- -------- -------- ------ ------ ------ ------ ------ Villas Las Posas [a]................ 122 N/A 584,996 17,016 39,915 61,200 N/A $4,795 $139 $327 $502 Chandler Villas...... 159 110,430 23,240 147,870 153,225 102,296 $695 $ 146 $930 $964 $643 TOTAL................ 281 $110,430 $608,235 $164,886 $193,140 $163,496 $695 $2,165 $587 $687 $582
--------------- [a] Community under construction. 17 ARV ASSISTED LIVING, INC. MORTGAGES BY MATURITY DATE -- NON-ARV-CONSOLIDATED AS OF MAY 31 2001
MATURITY BALANCE AT TYPE OF COMMUNITY NAME LENDER NAME DATE 31-MAY-01 RATE INTEREST RATE -------------- ----------- -------- ------------ -------- ------------- PARTNERSHIP OWNED COMMUNITIES (ARV IS GENERAL PARTNER) Chandler Villas.............. Red Mortgage Capital Feb-36 $ 5,775,397 Fixed 8.06% Villa Las Posas.............. Banc One Jan-02 $ 8,039,545 Fixed 9.15% ------------ TOTAL DUE PARTNERSHIP OWNED COMMUNITIES (PIII)......... $ 13,814,942 ============ APARTMENTS PARTNERSHIP OWNED COMMUNITIES (ARV IS GENERAL PARTNER) Meadow View/Springboro....... Bank United May-10 $ 3,556,450 Fixed 9.125% Inn at Woodbridge............ General Electric Credit Corporation May-12 $ 3,722,248 Fixed 10.00% Inn at Woodbridge............ Orange County Housing Authority Jun-28 $ 560,510 Fixed 3.00% ------------ TOTAL DUE PARTNERSHIP OWNED COMMUNITIES (APARTMENTS)... $ 7,839,208 ------------ TOTAL ARV NON-CONSOLIDATED MATURITIES................. $ 21,654,150 ============ Total Fixed Rate Maturities................. 100% $ 21,654,150 Fixed Total Variable Rate Maturities................. 0% $ 0 Variable ------------ TOTAL MATURITIES............. $ 21,654,150 ============ MATURITIES BY YEAR ------------------------------------------------------------------ 2001........................................................................ $ 0 2002........................................................................ $ 8,039,545 2003........................................................................ $ 0 2004........................................................................ $ 0 Thereafter.................................................................. $ 13,614,605 ------------ TOTAL....................................................................... $ 21,654,150 ============
18 (ARV ASSISTED LIVING LOGO) MEMO
TO: Douglas Pasquale FROM: Douglas Armstrong DATE: June 22, 2001 SUBJECT: Chandler Villas
PREPAYMENT PENALTY The Chandler Villas promissory note provides that the borrower may not prepay the note, in whole or in part, prior to March 1, 2006. Commencing on March 1, 2006, the note may be prepaid provided such prepayment is accompanied by a prepayment penalty calculated as follows:
PREPAYMENT PERIODS PREPAYMENT PENALTY ------------------ ------------------ March 1, 2006 through February 28, 2007..................... 5% March 1, 2007 through February 29, 2008..................... 4% March 1, 2008 through February 28, 2009..................... 3% March 1, 2009 through February 28, 2010..................... 2% March 1, 2010 through February 28, 2011..................... 1% March 1, 2011 and thereafter................................ None
ARVP III VOTING REQUIREMENTS The ARVP III Limited Partnership Agreement provides that no General Partner may conduct the sale of substantially all of the partnership assets except on a Majority Vote of the Limited Partners. "Majority Vote" is defined as the vote or written consent of Limited Partners who own more than fifty percent (50%) of the partnership interests. 19 AMERICAN RETIREMENT VILLAS PROPERTIES III PARTNERSHIP INFORMATION OPENED: October-89 CLOSED: December-92 UNITS: 18,666 PRICE: $1,000/Unit MINIMUM INVESTMENT: $5,000/$2,000 IRA DISTRIBUTIONS FOR SAMPLE $5,000 (5 UNIT) INVESTMENT:* CASH FLOW FROM OPERATIONS: $2,284 PROCEEDS OF SALE/REFINANCE: $3,882 TOTAL TO DATE: $6,166 --------------- * Based on an Investment made in October of 1989. Life-to-date distributions will vary as much as ($850) for a $5,000 investment depending on date of investment. AMERICAN RETIREMENT VILLAS PROPERTIES III PARTNERSHIP SCHEDULE K-1 DATA
CAPITAL CAPITAL CAPITAL ACCOUNT AT CONTRIBUTED WITHDRAWALS ACCOUNT BEGINNING DURING INCOME AND AT END YEAR OF YEAR YEAR (LOSS) DISTRIBUTIONS OF YEAR ---- ---------- ----------- ------ ------------- ------- 1989....................................... 0 5,000 70 (59) 5,011 1990....................................... 5,011 0 (154) (188) 4,669 1991....................................... 4,669 0 (192) (341) 4,136 1992....................................... 4,136 0 (15) (313) 3,808 1993....................................... 3,808 0 (338) (175) 3,295 1994....................................... 3,295 0 (170) (750) 2,375 1995....................................... 2,375 0 (783) (75) 1,517 1996....................................... 1,517 0 (245) (125) 1,147 1997....................................... 1,147 0 106 0 1,253 1998....................................... 1,253 0 (362) (250) 641 1999....................................... 641 0 1,332 (2,603) (630) 2000....................................... (630) 0 (17) (106) (753) (768) (4,985) 2001 Distributions......................... (1,181) Total Cash Distributions................... (6,166)
20 AMERICAN RETIREMENT VILLAS PROPERTIES III SECONDARY SALES HISTORY The following chart reflects all sales submitted for transfer wherein a sales price per unit was reported: 2001
QUARTER ENDING UNITS SOLD LOW HIGH AVERAGE -------------- ---------- ---- ---- ------- January 31, 2001............................................ 201.000 $350 $416 $355 February 28, 2001........................................... 10.000 $461 $461 $461 March 31, 2001.............................................. 12.000 $265 $350 $279 April 30, 2001.............................................. 10.000 $265 $265 $265 May 31, 2001................................................ 10.000 $140 $140 $140
21 ARV ASSISTED LIVING, INC. FINANCIAL STATEMENT VILLA LAS POSAS FOR THE PERIOD ENDING AUGUST 31, 2001
AUG YTD 2001 FORECAST --------- ------------- TOTAL REVENUE 2,681,599 $4,022,399 --------- ---------- TOTAL PAYROLL RELATED 802,291 $1,203,437 --------- ---------- TOTAL VARIABLE EXPENSE 208,787 $ 313,180 --------- ---------- OTHER EXPENSES 349,021 523,530 --------- ---------- TOTAL PROFESSIONAL FEES 218,554 $ 327,831 --------- ---------- EBITDAR 1,102,946 $1,654,420 EBITDAR PERCENT 41.1% 41.1% 80005 Interest Income (320) $ (480) --------- ---------- TOTAL NON-OPERATING INCOME/EXPENSE (320) $ (480) --------- ---------- 83005 Interest Expense 491,167 $ 736,751 --------- ---------- TOTAL INTEREST EXPENSE 491,167 $ 736,751 --------- ---------- EBTDA 612,099 $ 918,149 EBTDA PERCENT 26.4% 22.8% 77505 Depreciation 337,796 $ 506,694 78005 Amortization 77,625 $ 116,437 --------- ---------- TOTAL DEPRECIATION & AMORTIZATION 415,421 $ 623,131 --------- ---------- NET INCOME (LOSS) 196,678 $ 295,018 ========= ==========
ARV ASSISTED LIVING, INC. FINANCIAL STATEMENT CHANDLER VILLAS FOR THE PERIOD ENDING AUGUST 31, 2001
AUG YTD 2001 FORECAST --------- ------------- TOTAL REVENUE 1,932,843 $2,899,264 --------- ---------- TOTAL PAYROLL RELATED 721,870 $1,082,805 --------- ---------- TOTAL VARIABLE EXPENSE 183,018 $ 274,527 --------- ---------- OTHER EXPENSES 407,221 610,832 --------- ---------- TOTAL PROFESSIONAL FEES 129,818 $ 194,728 --------- ---------- EBITDAR 490,915 $ 736,373 EBITDAR PERCENT 25.4% 25.4% 80005 Interest Income (6,158) $ (9,238) --------- ---------- TOTAL NON-OPERATING INCOME/EXPENSE 60,263 $ 90,394 --------- ---------- 83005 Interest Expense 308,756 $ 463,134 83025 Int. Exp. MIP 16,867 $ 25,300 --------- ---------- TOTAL INTEREST EXPENSE 325,622 $ 488,434 --------- ---------- EBTDA 105,030 $ 157,545 EBTDA PERCENT 6.2% 5.4% 87010 Extraordinary Items - Net Tax 66,421 $ 66,421 77505 Depreciation 114,759 $ 172,139 78005 Amortization 4,975 $ 7,462 --------- ---------- TOTAL DEPRECIATION & AMORTIZATION 119,734 $ 179,601 --------- ---------- NET INCOME (LOSS) (81,125) $ (88,477) ========= ==========
ARV ASSISTED LIVING, INC. PIII INVESTMENT ANALYSIS (CHANDLER VILLAS & VILLA LAS POSAS) UNLEVERED RETURNS
ASSUMES 3% GROWTH -----> ---------------------------------------------------------------------------------------------- ACTUAL ACTUAL FORECAST FORECAST FORECAST FORECAST 1999 2000 2001 2002 2003 2004 DEC YTD DEC YTD DEC YTD DEC YTD DEC YTD DEC YTD ---------------------------------------------------------------------------------------------- Total Revenue 5,792,582 6,492,724 6,921,663 7,129,313 7,343,192 7,563,488 --------------------------------------------------------------------------------------------------------------------------------- EBITDAR (Excld Mgt & Admin Fees) 2,369,506 2,704,660 2,736,876 2,818,982 2,903,552 2,990,658 --------------------------------------------------------------------------------------------------------------------------------- 5.0% Mgt Fee 289,629 324,636 346,083 356,466 367,160 378,174 --------------------------------------------------------------------------------------------------------------------------------- Partnership Admin fee 91,225 124,783 116,465 126,252 111,868 120,317 --------------------------------------------------------------------------------------------------------------------------------- Less Capital Expenditures 166,886 193,140 163,496 287,000 295,610 304,478 --------------------------------------------------------------------------------------------------------------------------------- Un-levered Net Cash Flow 1,821,766 2,062,101 2,110,832 2,049,265 2,128,914 2,187,688 --------------------------------------------------------------------------------------------------------------------------------- Cash on cash return based on $17.5 million invested* 10.4% 11.8% 12.1% 11.7% 12.2% 12.5% =============================================================================================
-------------------------------------------------------------------------------------------- FORECAST FORECAST FORECAST FORECAST FORECAST FORECAST 2005 2006 2007 2008 2009 2010 DEC YTD DEC YTD DEC YTD DEC YTD DEC YTD DEC YTD -------------------------------------------------------------------------------------------- Total Revenue 7,790,393 8,024,104 8,264,828 8,512,772 8,768,156 9,031,200 ------------------------------------------------------------------------------------------------------------------------------- EBITDAR (Excld Mgt & Admin Fees) 3,080,378 3,172,789 3,267,973 3,366,012 3,466,993 3,571,002 ------------------------------------------------------------------------------------------------------------------------------- 5.0% Mgt Fee 389,520 401,205 413,241 425,639 438,408 451,560 ------------------------------------------------------------------------------------------------------------------------------- Partnership Admin fee 129,065 138,124 147,507 157,228 167,303 177,746 ------------------------------------------------------------------------------------------------------------------------------- Less Capital Expenditures 313,612 323,020 332,711 342,692 352,973 363,562 ------------------------------------------------------------------------------------------------------------------------------- Un-levered Net Cash Flow 2,248,181 2,310,440 2,374,514 2,440,454 2,508,309 2,578,134 ------------------------------------------------------------------------------------------------------------------------------- Cash on cash return based on $17.5 million invested* 12.8% 13.2% 13.6% 13.9% 14.3% 14.7% ============================================================================================= * Investment Calculation: $360/unit x 18,666 units $ 6,720,000 Assumed Debt $ 13,770,000 ------------ Gross Investment $ 20,490,000 Less Net Working Capital ($ 3,030,000) ------------ Net $ 17,460,000 ============
ARVPIII LIQUIDATION ANALYSIS Value of Real Estate Assets $ 19,200,000 Less: Selling costs @ 5% (960,000) Prepayment penalties (290,000) Mortgages (13,770,000) ------------ Net Proceeds from Real Estate $ 4,180,000 Net Working Capital Cash Net of Liabilities 2,170,000 Claremont Note -- Impounds 785,000 Other 75,000 ------------ $ 3,030,000 ------------ ARVPIII Net Liquidation Value $ 7,210,000 General and Special Partners Distribution (1%) (72,000) ------------ Estimated Unitholder Distribution $ 7,138,000 ------------ Value Per Unit @ 18,666 Units $ 382.41(A) ============ ARV $360 Offer as a Percentage of Liquidation Value 94.14% ============ C3 Capital Offer as a Percentage of Liquidation Value 78.45% ============
(A) Assuming it would take one year to complete liquidation of the Partnership at the values indicated above (this assumption appears conservative given the best offer on the real estate is $18,200,000 or $1,000,000 less than the $19,200,000 reflected above), the present value at a 10% discount rate of the liquidation value is $347.65 and ARV's offer as a percentage of the discounted liquidation value is $103.55%.