Sunrise Announces Development Agreement with The Carlyle Group

McLean, Va.--Sunrise Senior Living, Inc. (NYSE: SRZ), today announced that it has entered into an agreement with affiliates of The Carlyle Group ("Carlyle"), a global private equity investment firm, to develop two senior living communities in the United States (one in California and one in Illinois) with a resident capacity of 167, both of which are currently under construction.

Carlyle will own 75 percent of the newly developed communities and Sunrise will own 25 percent and will operate the communities under long-term management contracts. Development costs of approximately $40 million will be funded through contributions by each partner based on its percentage interest (total contributed equity of approximately $10 million), with the balance funded by construction loans provided by third-party lenders. Pursuant to the terms of the agreement, Sunrise will be reimbursed approximately $9 million for development expenses incurred on the properties.

"We are pleased to be partnering with Carlyle and believe continued investments by sophisticated capital sources reflect our abilities as an operator and the solid long-term fundamentals of the senior care industry," said Paul Klaassen, Sunrise Senior Living chairman and CEO. "This agreement will allow us to recoup the majority of our capital invested in these developments, resulting in debt reduction, cash proceeds and most importantly a stream of revenues based on long-term management contracts."

"Our investment will allow us to benefit from the improving demographics in the 75+ year-old age cohort and the positive supply and demand fundamentals in each market," said Robert Stuckey, a Managing Director with The Carlyle Group and head of the U.S. Real Estate Team. "By partnering with an industry leader, we believe the success of our investment is greatly enhanced and we look forward to a rewarding long-term relationship with Sunrise. This is our second investment in the sector in the past 60 days and we look forward to finding similar opportunities in the near-term."

Sunrise Senior Living is the nation's largest provider of senior living services. The McLean, Va.- based Company, which employs more than 30,000 people, has over 360 senior living communities either open or under construction in the United States, United Kingdom and Canada with a combined resident capacity of more than 40,000. Sunrise communities offer a full range of personalized senior living services, from independent living, to assisted living, to care for individuals with Alzheimer's and other forms of memory loss and nursing and rehabilitative care. Sunrise's senior living services are delivered by staff trained to encourage the independence, preserve the dignity, enable freedom of choice and protect the privacy of residents.

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